Court Opinion

ID: 9791882
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:19:57.561932+00
Date Added: 2024-06-11T07:35:47.782209
License: Public Domain

Justice MULLARKEY
concurring in part and dissenting in part:
The parties have given us only a glimpse of a very complicated set of cases filed in the Pueblo County District Court concerning the construction of the Pueblo waste-water treatment facility. Apparently H.E. Chapman Construction Company, Inc. (Chapman) brought a lawsuit in 1987 against MCI Constructors, Inc. (MCI) and other defendants but the pleadings are not before us. Chapman and MCI eventually entered into a settlement agreement to resolve the claims brought by Chapman against MCI. Although Judith Ward Mat-tox represented Chapman in the Pueblo lawsuit, Chapman entered into the settlement agreement without consulting Mattox and without other legal representation. When Mattox learned of the settlement agreement, she moved to withdraw as Chapman's counsel. That motion was granted as was her motion for enforcement of her attorney’s lien against the $150,000 which MCI agreed to pay as part of the settlement agreement.
MCI claims that the trial court erred in enforcing the attorney’s lien and in holding MCI in contempt because Chapman did not satisfy the terms of the settlement agreement. Specifically, MCI claims that Chapman was not entitled to the $150,000 under the terms of the settlement agreement until it supplied MCI with lien waivers from its subcontractors. MCI asserts that Chapman has not supplied the subcontractors’ lien waivers and therefore Chapman is not entitled to be paid.
The trial court found that Chapman had met its obligations under the settlement agreement. It made this finding by inference when, on February 20, 1990, it granted Mattox’s motion to enforce her attorney’s lien and it made the finding expressly during the contempt hearing on May 31, 1990. At that hearing, the trial court en*46gaged in the following exchange with Mr. Beltzer, counsel for the defendants:
THE COURT: ... The settlement I was informed of that you requested of me is that I dismiss with prejudice against Chapman or against the defendants for Chapman in this case; isn’t that correct? MR. BELTZER: I believe so, Your Hon- or.
THE COURT: You have, or your clients got exactly what they wanted from me in that dismissal, is that right, based upon that settlement?
MR. BELTZER: Your Honor, I, unfortu-' nately, was not involved in that.
THE COURT: Well, that’s what my file shows; isn’t that correct?
MR. BELTZER: Okay. I will accept that, Your Honor.
The trial court then found that the settlement required “a release or a discharge or a dismissal with prejudice of the claims Chapman is asserting against MCI and the other two defendants.” The court further stated that “[a]s a result of a settlement agreement I was asked to dismiss all claims by Chapman against MCI, Federal and National Union Fire Insurance Company with prejudice — which means it could not be litigated again — which I did.”
The majority, however, finds that Chapman did not comply with the settlement agreement because it did not furnish MCI with lien waivers from its subcontractors. Not only is this conclusion contrary to defense counsel’s concession and the trial court’s finding but it also conflicts with the position taken by the United States Fidelity & Guarantee Company (USF & G). This company moved to intervene in the trial court on February 7, 1990, as the assignee of Chapman and filed a claim for declaratory judgment asking that the settlement agreement be construed. USF & G contends that the settlement agreement was satisfied by Chapman when Chapman dismissed its claims against MCI. USF & G further alleges that liens on public works projects are created by statute, that “lien” is a term of art, and that there are no liens to be waived in this case because “the statutory requirements for creating subcontractors’ liens on the Pueblo Wastewa-ter Treatment Plant Project were intentionally and knowingly avoided and intentionally and knowingly replaced with a ‘special bond.’ ” The trial court granted USF & G’s motion to intervene but the record before us is silent on its disposition of USF & G’s request for declaratory judgment.
In my view, then, the majority’s construction of the settlement agreement is not supported by the record. Accordingly, I see no reason to conclude that the trial court abused its discretion.
If the trial court correctly ruled that Chapman fulfilled its part of the settlement agreement, then it correctly enforced Mat-tox’s lien on the $150,000 paid by MCI as its part of the settlement. In Colorado, a lawyer is automatically entitled to a lien on money, property, or other “fruits” due a client from the suit once a suit is commenced. See § 12-5-119, 5 C.R.S. (1985). Ranes v. Molen, 31 B.R. 70, 72 (Bankr.D.Colo.1983). This lien attaches immediately upon judgment. Ranes v. Molen, 31 B.R. at 72. Thus, no notice is required between the attorney and client with respect to the attorney’s lien. Collins v. Thuringer, 92 Colo. 433, 21 P.2d 709 (1933). With respect to third parties who may have an interest in the outcome of the case, the attorney is required to file a notice of intent to claim lien in order to gain priority. § 12-5-119, 5 C.R.S. (1985). Thus, when a lawyer gives proper notice, as Maddox apparently did, her lien on the client’s assets takes priority over third party claims dependent upon the outcome of the lawsuit. Ranes v. Molen, 31 B.R. at 72. Furthermore, this lien is chargeable against any person who, at the time notice of intent to claim a lien is given, holds monies or property which become proceeds of a judgment to be entered in the future. In re Marriage of Smith, 687 P.2d 519, 520 (Colo.Ct.App.1984). Thus, the trial court did not abuse its discretion in enforcing Maddox’s lien.
With respect to the contempt finding, however, I agree with the majority’s conclusion that the trial court abused its discretion. We discussed the standards for *47civil contempt in People v. Lockhart, 699 P.2d 1332, 1336 (Colo.1985):
A court may enter a finding of civil contempt for refusal to obey a court order under C.R.C.P. 107 only if it finds that a party who has a duty to obey a court order and a present ability to obey the order has refused to perform the act required. In re People in the Interest of Murley, 124 Colo. 581, 239 P.2d 706 (1951); In re Marriage of Harris, 670 P.2d 446 (Colo.App.1983); Marshall v. Marshall, 35 Colo.App. 442, 536 P.2d 845 (1975). A party may be held in contempt only for refusal to do exactly what the court order requires. Eatchel v. Lanphere, 170 Colo. 545, 463 P.2d 457 (1970). A party may not be held in contempt for refusal to do that which he is unable to do or that which the court has not ordered him to do.
Here the trial court’s March 22, 1990 order directed MCI and the two insurance companies to:
pay to Judith Ward Mattox the amount of $44,277.75 from the funds held in escrow in settlement of the above-captioned matter, such payment to be made within ten (10) days after the date of this Order.
The defendants were not able to do “exactly” what the court ordered. They could not pay out the funds held in escrow but directed the law firm holding the funds to interplead the funds into the registry of the court. The law firm did so and the defendants were not in contempt under the Lock-hart test.
For these reasons, I concur in part in, and dissent in part from, the majority opinion.