Court Opinion

ID: 6894690
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:48:24.148175+00
Date Added: 2024-06-11T16:05:56.509938
License: Public Domain

EVANS, Circuit Judge
(dissenting).
Liens for services rendered are commonly allowed by the statutes of the different states. The extent and character of the lien and the property covered thereby, vary somewhat in the different states. The general purpose, however, is the same. It is to protect one who has rendered valuable work or service for another, and to prevent compensation, for such service from being defeated.
The lien for legal services, while traceable to the same motive, differs somewhat because of the nature of the services rendered and the results accomplished. Services which give rise to the more widely known mechanic’s lien, frequently, if not universally, depend for their existence on a building situated on real estate the title to which is readily lienable. The lawyer’s services are not physical in character— they produce no building or other physical property.
There are two outstanding features to such a lien. One is its creation, its existence ; the other is the method provided and the steps required for its protection. This is usually through the giving or filing of a notice. In the case of the mechanic’s lien, the employee protects his lien by filing the same with the register of deeds or other public official. This notice warns all who thereafter deal with the property. The attorney’s lien is protected by the attorney’s giving written notice to the debt- or or his client’s adversary and it effectual-ip prevents such adversary’s defeating the claim of the attorney. In all cases, whether the lien be to protect the mechanic or the attorney, the state statute must be examined and the scope and extent of the lien thereby determined. However worthy the claim may be or the extent of the services rendered, the lienholder must rely upon the terms of the statute for the extent and character of his lien protection.
The present case involves an alleged lien under the Illinois statute. A study of the Illinois Lien Act (quoted in the majority opinion) is therefore necessary. Eliminating the unnecessary words from the statute we find it to be as follows:
“Attorneys at law shall have a lien upon all * * * causes of action, including all claims for unliquidated damages, which may be placed in their hands by their clients for suit * * * for the amount of any fee which may have been agreed upon by and between such attorneys and their clients.”
The lien thus given, however, is only protected “provided, however, such attorneys shall serve notice in writing * * * upon the party against whom their clients *623may have such * * * causes of action.” The attorney claiming the lien is required to state that he claims a lien and the extent of this interest. When such notice is given, said adversary can settle the cause of action without protecting the lienholder, only at his peril. He can not avoid the lien by settling with the client.
It is hardly necessary to discuss the possibility of abuse under this statute by irresponsible or unethical lawyers. Nor need we go at length into the reasons which caused the legislature of Illinois (as well as other states that have passed somewhat similar statutes) to protect attorneys from defendants who otherwise might overreach the client and obtain releases without adequate payments in this large field of legal disputes known as personal injury litigation. It is sufficient, if we take the law as it is and apply it to the facts as shown in the petition for enforcement of appellant’s lien.
The present case would present no difficulty, in the writer’s opinion, but for the fact that the “cause of action” which arose upon the death of Mr. Scott, was enforceable by two different administrators. The deceased, Scott, was working for the defendant railroad when he met his death. It is alleged the defendant was guilty of negligence and a cause of action arose upon Scott’s death against the defendant, his employer. The proceeds of said cause of action were payable to his widow and the children of the deceased, who had been married three times. He left one child, ten years of age, a daughter of his first wife, which child resided in Illinois at the time of Scott’s death. He left a second child, a son, two years old, born of his second marriage, which child also resided in Illinois. Scott also left his widow, his third wife, who resided in Indiana. His death occurred in Indiana. It was therefore legally permissible to secure the appointment of an administrator in Illinois and also to have one appointed in Indiana.
The father of the deceased, doubtless interested in his grandchildren, sought administration in Illinois. The widow, living in Indiana, secured her own appointment in that State. Both administrators were presumably authorized to employ counsel and to bring suit and both exercised this right. Chicago, R. I. & P. Ry. Co. v. Schendel, 270 U.S. 611, 46 S.Ct. 420, 70 L.Ed. 757, 53 A.L.R. 1265.
It is needless and useless for us to weigh or to speculate over the possible recovery of a suit brought in Chicago, as against the possible recovery, in a suit brought in the state court in Indiana. Doubtless defendant, the railroad company, which had to pay the damages, was vitally interested in this phase of the litigation and had the benefit of much experience in such matters.
At any rate, with the two suits pending, the railroad decided to settle and did settle the Indiana suit, and to ignore the Federal court action pending in Chicago. Our inquiry is limited to the sole question of whether petitioner’s lien on the cause of action was defeated by the defendant railroad company’s settling with the admin-istratrix in Indiana.
I think it was not. While the employer, the railroad, had the right to settle its case and without bringing the petitioner into the picture, it could not- defeat, by such a settlement, the lien which said attorney had acquired. Bennett v. Chicago & E. I. R. Co., 327 Ill.App. 76, 63 N.E.2d 527.
Plaintiff’s cause of action is not against any Indiana beneficiary who received the money in the settlement of the Indiana case. It is asserted, and exists, against the railroad company which had notice of the existence of petitioner’s lien. It is seemingly beyond dispute that there was but one cause of action, although two parties, the two administrators could each maintain an action to enforce it. Petitioner had a valid lien on that cause of action. It could not be defeated by the defendant nor the client. When notice of its existence was given the defendant railroad, that party had to recognize its existence. It could settle with the others who also had an interest in the cause of action, but it could not by so settling with one or more of the interested, aggrieved parties, satisfy or extinguish the valid lien of petitioner. It is indeed difficult to distinguish between the interest of a valid lienholder’s interest in the cause of action and the *624interest of the client who has an interest and who liened his interest.
As stated by the Court in Standidge v. Chicago Rys. Co., 254 Ill. 524, 98 N.E. 963, 996, 40 L.R.A.,N.S., 529, Ann.Cas.1913C, 65,
“A settlement may be made with a claimant, under this statute, to the same extent and with like effect as it could have been made before the statute was enacted, the only difference being that under the statute a party, in settling with an attorney’s client, must take into account his liability to the attorney for whatever amount of fees would accrue under his contract at the time of the settlement.”
Quite pertinent is the language of the court in Baker v. Baker, 258 Ill. 420, 101 N.E. 588,
“By serving the notice claiming a lien the attorney in effect becomes a joint claimant with his client in any judgment or decree that may be rendered, or in the proceeds of any settlement that may be made by the client, and to the extent of the amount of his fee has the same interest in such proceeds, judgment, or decree as his client, and is entitled to his pro rata share thereof. In short, when the notice claiming a lien is served on the defendant or debtor under this statute, it has the effect of an assignment of an interest in any judgment or decree that may be rendered or in the proceeds of any settlement that may be made by the client, and is such an assignment that the defendant or debtor is bound to respect, This creates a new and a substantial right in favor of the attorney, and divests the client of substantial rights that he' theretofore possessed.”
Whether defendant concluded to settle the Indiana suit even though it had later to settle with petitioner rather than take a chance on a much larger award in the Chicago court, is not for us to speculate over. Suffice it to say, it could not avoid petitioner’s lien by so -settling.
Counsel for appellee relies heavily upon the Bremer decision, 317 Ill. 580, 148 N.E. 241. The decision is not one to invite- confidence. A bad factual situation often makes for an unfortunate legal holding. The decision is out of line with many Illinois decisions on the same subject (See annotations to statute, in Chapt. 13, Sec. 14, Smith-Hurd, Illinois Annotated Statutes.) It is clearly violative of the statute.
The conclusion reached could well have been predicated on the holding that the facts disclosed the appointment of a public administrator was unauthorized. An order of such appointment was void. The public administrator had no authority upon the facts disclosed to maintain suit on the death claim. Having no authority to bring the action he was without authority to employ counsel to bring such an action and create a lien against the cause of action therefor. The unconscionable conduct of the public administrator aroused the judge’s righteous indignation and he wrote said indignation into the opinion. I think the opinion should be read as holding the public administrator could not employ the counsel and bring the action to recover for a death upon the facts shown in that case to exist.
If the opinion in this case goes further than to hold the appointment of the public administrator was unauthorized and void, which is as far as it needed to go, its dictum is contrary to the holdings of the other Illinois courts, from whose opinions the above quotations are made.
I can not escape the logic of the language used' by the court in the late case of Bennett v. Chicago & E. I. R. Co., 327 Ill.App. 76, 82, 63 N.E.2d 527, 530,
“In view of our conclusion that plaintiff’s contract with the first administrator was a valid undertaking, and that the railroad company had knowledge thereof and notice that he claimed a lien by reason thereof, it would logically follow that when the railroad company settled the claim with the second administrator without notifying plaintiff, it did so at its peril and should therefore be subjected to the liability contemplated by the statute * * * ”
The validity of the attorney’s lien must stand two tests: (a) Did the Illinois administrator have authority to employ counsel to enforce -the cause of action arising out of the death of the deceased employee? *625(b) If so, could the lien which arose by reason of such employment be defeated or extinguished without the holder’s consent?
The first question must be answered in the affirmative; the second inquiry, in the negative.
In disposing of the case, emphasis should be given to the fact that appellant’s claim is against the railroad which settled its liability for negligence with knowledge of the existence of appellant’s lien and in defiance of it. Common professional courtesy supports the plain language of the statute in this case, in saying to the railroad, you acted at your peril.
It is hardly necessary to say that I dissent from the conclusion reached by my brethren.