Court Opinion

ID: 3181202
Source: CourtListenerOpinion
Date Created: 2016-02-29 20:33:06.876057+00
Date Added: 2024-06-11T14:30:14.589609
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DAVID A. KOHLES, INC. P.S., a
Washington professional services                 No. 73614-1-1
corporation,
                                                 DIVISION ONE
                    Appellant,
                                                 UNPUBLISHED OPINION
             v.

MICHAEL COOK, individually; DONNA
COOK, individually; and the marital
community composed of MICHAEL
COOK and DONNA COOK; AND IN
REM AGAINST ANY ALL PAYMENTS
RECEIVED BY MICHAEL COOK AND
DONNA COOK FROM THE
DEPARTMENT OF LABOR AND                                                           C

INDUSTRIES ON ACCOUNT OF
WORKER'S COMPENSATION
BENEFITS,

                     Respondents.                FILED: February 29, 2016

      Trickey, J. — David A. Kohles appeals the order denying his motion for
summary judgment and directing Donna Cook, the surviving spouse of one of
Kohles' former clients, to pay Kohles $100 per month as a result of an attorney's
lien. Cook did not file a cross-appeal. Although Kohles presented the foreclosure

of his attorney's lien in the form of a motion for summary judgment, it is clear that
the trial court ultimately resolved the enforcement of the lien by means of an
equitable proceeding on written declarations and oral argument. Because an
attorney lien foreclosure is an equitable proceeding and the trial court did not
abuse its discretion by fashioning its equitable remedy, we affirm.
No. 73614-1-1/2

                                        FACTS

      Kohles and the trial court rely upon the following material facts.1

       In January 2005, Michael Cook retained Kohles to provide legal services on

his behalf for his industrial insurance claims. Michael2 entered into an attorney fee

agreement, which provided the terms of compensation to Kohles. Michael agreed
to compensate Kohles on a contingent fee basis. According to the terms of the

agreement, Kohles would receive: (1) 30 percent of the gross benefits, including
awards of any nature where no prior award has been made; (2) 30 percent of all
time loss payments; and (3) 15 percent ofthe pension reserve awarded to Michael.
       Kohles represented Michael and achieved settlements on claims with
Snohomish County and the Department of Labor and Industries. The dollar
amounts were as follows: (1) a cash payment of $37,000; (2) permanent partial
disability benefits totaling $35,787.90; and (3) permanent total disability benefits
for which the pension reserve amount was $238,255.
       In March 2013, Michael and Donna filed for bankruptcy. Kohles filed an
adversary suit in the bankruptcy proceeding to determine the validity, priority, and
extent of his attorney's lien on payment proceeds from the Department of Labor
and Industries and/or Snohomish County.

1 Much of Donna Cook's response brief is devoted to relitigating factual disputes.
However, Cook failed to file a notice of appeal as required by RAP 5.1(d), which provides,
"A party seeking cross review must file a notice of appeal or a notice for discretionary
review within the time allowed." Prose litigants are held to the same standard as attorneys
and must comply with all procedural rules on appeal. In re Marriage of Olson, 69 Wn.
App. 621, 626, 850 P.2d 527 (1993). For these reasons, we do not consider her factual
challenges.                                                  «,,,..              *   , •*
2Due to the similarity in names, we use Michael and Donna Cook s first names for clarity.
No. 73614-1-1/3

      In December 2013, the bankruptcy court entered an order granting Kohles'

motion for summary judgment in the adversary suit. The order provided: (1) that

Kohles had a valid and perfected lien created by RCW 60.40.010(1 )(d) that

secured the contingency fee, which he is owed under the fee agreement; (2) that
such lien attached to all past and future payments made by the Department of
Labor and Industries and/or Snohomish County to Michael and/or Donna because

of work performed by Kohles, including Kohles' representation of Michael in any
claim or appeal process; and (3) that the lien attached to any proceeds as defined
by RCW 60.40.010, the attorney's lien statute.
       In June 2014, Kohles filed an in rem complaint in the Snohomish County
Superior Court against Michael and Donna. The complaint sought foreclosure of
Kohles' attorney's lien on the worker's compensation benefits and injunctive relief.
       In August 2014, Michael died due to causes unrelated to his industrial
injuries. As Michael's survivor, Donna continued to receive Michael's pension
benefits in the amount of $3,175.08 per month.

       In February 2015, Kohles moved for summary judgment. He argued that
he was entitled to foreclose his attorney's lien on the payments from the
Department of Labor and Industries and Snohomish County. He requested that
the trial court enforce his lien by entering an order requiring Donna to change her
 address with the Department of Labor and Industries so that the payments would
 be sent directly to Kohles for him to deduct a portion of each payment. He provided
 several declarations in support of his motion.
No. 73614-1-1/4

       Donna, acting pro se, opposed Kohles' motion. She disputed a number of

assertions in Kohles' declaration, including that Michael retained Kohles and that

the settlement was a result of Kohles' legal services.      Donna also provided

declarations in support of her position.

       The trial court held hearings on Kohles' motion on March 10,2015, and April

10, 2015. Following these hearings, the trial court entered findings of fact and

conclusions of law regarding the fee agreement and Kohles' legal services. The

trial court rejected Donna's arguments that the settlement was not the result of

Kohles' legal services. It concluded that the contingent fee due to Kohles was
$5,507.38 on the permanent partial disability and $35,738.25 on the pension. It

also concluded that Kohles had an attorney's lien on the settlement funds.

       The trial court rejected Kohles' request for judgment in rem against the
settlement proceeds.3 It concluded that chapter 60.40 RCW does not provide a
process for foreclosure of such personal property lien. It also rejected Kohles'
request for prejudgment interest. The court concluded, however, that as a court
of equity, it could order Donna to pay a monthly feeto Kohles toward the contingent
fee obligation of $41,245.63. In determining the amount of the monthly fee, the
court considered Donna's financial situation.

       The court entered an order denying Kohles' motion for summary judgment

and ordering Donna to remit payments in the amount of $100 per month to Kohles.
Kohles moved for reconsideration, which the court denied.

3 Donna has not challenged the use of an in rem proceeding for the foreclosure of an
attorney's lien against the proceeds of an action, and we express no opinion on that
question.
No. 73614-1-1/5

       Kohles appeals. Donna did not file a notice of cross-appeal.

                                       ANALYSIS

                             Attorney's Lien Enforcement

       Kohles argues that the trial court erred in ruling that he could not foreclose

on his attorney's lien because chapter 60.40 RCW does not provide a mechanism
for foreclosure.      He contends that the attorney's lien statute "explicitly

contemplate^] enforcement ofattorney's liens," thatthe court "may imply a remedy
for the right created by RCW 60.40.010," and that "[cjase law provides guidance
and authority for foreclosing attorney's liens in Washington."4 Kohles asks this
court to reverse the decision of the trial court and hold that he "isentitled to enforce

his attorney's lien under RCW 60.40.010."5
       In making these arguments, Kohles overlooks the fact that, notwithstanding
its conclusion that the statute does not provide a process for foreclosure, the trial
court engaged in an equitable proceeding to enforce his attorney's lien. After
concluding that Kohles had a valid attorney's lien on the settlement funds, the court
ordered Donna to pay Kohles $100 per month because ofthis lien.
        The statute and case law provide limited guidance on the form of the
proceedings appropriate to enforce an attorney's lien, especially as a charging
(nonpossessory) lien against the proceeds of an action under RCW
60.40.010(1 )(d). But the trial court has broad discretion. "Where an attorney lien
is claimed against a judgment, the court has a right to determine all questions
affecting the judgment in some form of proceeding." King County v. Seawest Inv.

 4Br. of Appellant David A. Kohles, Inc. P.S. at 14, 19, 21 (boldface omitted).
 5Br. ofAppellant David A. Kohles, Inc. P.S. at 29.
No. 73614-1-1/6

Assocs., LLC. 141 Wash. App. 304, 314, 170 P.3d 53 (2007). "A proceeding to

enforce a lien is an equitable proceeding." Seawest. 141 Wash. App. at 314. "Courts

have broad discretion when fashioning equitable remedies, and we review those

remedies for an abuse of discretion." Seawest, 141 Wash. App. at 314. A trial court

abuses its discretion when its decision is manifestly unreasonable or based on

untenable grounds. Seawest. 141 Wash. App. at 314.

       The trial court's decision to adjudicate the attorney's lien based on the

documentary evidence and argument presented by both parties was a tenable

choice. Kohles does not argue otherwise. For all practical purposes, the trial court

decided to impose an equitable remedy as part of an equitable proceeding

enforcing the attorney's lien. In these circumstances, we conclude that the trial

court was not compelled to apply the summary judgment standards, and had the

authority to engage in an equitable proceeding to adjudicate the enforcement of

Kohles' attorney's lien.6

       Likewise, the trial court's decision to enforce this lien by requiring monthly

payments in the amount of$100 was notan abuse ofdiscretion. In fashioning this
remedy, the court properly considered all the equities, including Donna's budget

and financial situation.

       Kohles argues that the court erred by considering Donna's financial
situation, because a debtor's financial situation "is never legally relevant" to

6Further, we have no verbatim or narrative report of proceedings that might help to explain
how the trial court arrived at its decision to utilize an equitable proceeding to enforce
Kohles' attorney's lien. The appellant bears the burden of providing an adequate record
on appeal. Dash Point Village Assocs. v. Exxon Corp., 86 Wash. App. 596, 612, 937 P.2d
1149 (1997); RAP 9.2(b).
No. 73614-1-1/7

whether a secured lienholder is entitled to foreclose on its security interest.7 But

he cites no compelling authority for this proposition. Donna's financial situation

was a relevant and proper consideration in this equitable proceeding.

       Finally, Kohles argues that the court erred in ruling that he was not entitled

to prejudgment interest.   He contends that the trial court should have awarded

prejudgment interest because his claim was liquidated.        But a court has broad

discretion to fashion equitable remedies. Kohles provides no authority requiring

the court to award prejudgment interest under these circumstances, especially

where a large portion of the settlement proceeds took the form of monthly pension

payments under the Industrial Insurance Act, Title 51 RCW. Kohles does not

establish that the contingent fees for such installment payments were due and

owing until each installment payment was received. As Donna points out, the

settlement did notgenerate any pension fund available to her to pay attorneyfees.8

       We affirm.

WE CONCUR:

7 Br. of Appellant David A. Kohles, Inc. P.S. at 28-29 (boldface omitted).
8 We also note that Donna has not raised any statutory or administrative limitations on
contingent attorney fees that may apply to an industrial insurance award and we express
no opinion on how any such limitations may be implicated by Kohles' attempt to enforce
his attorney's lien against the settlement proceeds.