Court Opinion

ID: 9550470
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:35:39.093793+00
Date Added: 2024-06-11T15:21:34.548000
License: Public Domain

ANDREWS, Judge (dissenting). I dissent. The trial court has concluded (1) that “[t]he contingency fee contract between the Davises and Horn is reasonable and valid;” (2) that “[t]he contingency contract entitled Horn to a one-third fee upon the gross amount of the recovery, and the amount of one-third of the gross recovery representing Horn’s attorney fee is not subject to the set-off in favor of Citizen’s Bank;” (3) that “[t]he attorney’s charging lien is superior to and has first priority over all other claimants, relating back and taking effect from the time of commencement of Horn’s services;” and (4) that “Horn shall recover one-third of $349,998.04 plus interest earned thereon as his attorney’s fees herein,” or $116,666.01. I disagree. Budagher v. Sunnyland Enterprises, Inc., 90 N.M. 365, 563 P.2d 1158 (1977), interpreting a mortgage note contract, establishes that, in New Mexico, when the reasonableness of attorneys’ fees is challenged, it is incumbent upon the court to determine the value of the services rendered. In this case, the trial court found that the contingency fee agreement was not unreasonable nor unconscionable but “was a reasonable fee agreement under the circumstances.” Apparently this finding refers to the fact that, since the Davises had not complied with the fee arrangement for the trial and had not paid hourly billings on a monthly basis, where the original fee agreement did not contemplate an appeal, the modification of the agreement after the judgment created unique “circumstances” justifying this arrangement. I agree that a contract for attorneys’ compensation made during the existence of the attorney-client relationship is unique; but in'my opinion such uniqueness qualifies the transaction for closer scrutiny by the courts, and is valid and enforceable only if fair and equitable. See Anno. “Validity and Effect of Contract for Attorney’s Compensation Made After Inception of Attorney-client Relationship.” 13 A.L.R.3d 701. In the instant case the trial court found that the fee was reasonable. The issue on appeal, then, is whether such finding is supported by substantial evidence. This issue alone should be discussed,1 with a decision as to whether the standard in Randolph v. Schuyler, 284 N.C. 496, 201 S.E.2d 833 (1974) should be followed. To flatly denounce the “Randolph” rule and announce that reasonableness and the reasonable value of work to to be performed are distinguishable concepts is to avoid the issue presented by this appeal, and is contrary to Budagher. Following the “Randolph” rule, my review of this evidence leads me to conclude that the attorney did not meet his burden in showing that the attorney fee is unreasonably excessive. The position of the Davises and Horn did change “[ajfter the attorney client relationship was born,” and the Dávises do stand in a different relationship with their attorney than they do with any other party. This contingent fee contract was entered into after the trial, while the client, an appellee, was deeply indebted to the lawyer. This fact presents an element of coercion which colors the entire transaction. The trial court found that in “his defense of the judgment on appeal, Horn filed all necessary pleadings including a thirty-nine page brief in the Court of Appeals.” This finding alone suggests an upper limit on the reasonable value of services rendered, which, in my opinion, does not support an award of $116,000 in attorneys’ fees. I agree that there is substantial evidence in the record to suggest that the chances for a successful defense of the judgment on appeal were small, and that this is a factor which is to be considered in determining whether the fees charged were reasonable. Schafer v. Knuth, 309 Mich. 133, 14 N.W.2d 809 (1933), Oxborough v. S. T. Martin, 169 Minn. 72, 201 N.W. 809 (1926). However, the probability of success in any legal action is not subject to precise quantification; and since the attorney bears the burden of showing that the fee is reasonable, such uncertainty must be resolved in favor of the client. An award of fees which is many times greater than the reasonable value of the services performed cannot be supported by any subjective evaluation of the case as being a “long shot” or a “dog.” As to the set-off issue, Forrest Currell Lumber Company v. Thomas, 82 N.M. 789, 487 P.2d 491 (1971), contains the basic rule for an attorney’s charging lien and its priority: The lien of an attorney for services rendered in an action relates back to, and takes effect from, the time of the commencement of the services, when it attaches to a judgment, it is superior to the claim of a creditor in whose favor execution has been levied, or to a subsequent attachement, garnishment, or trustee process, or other liens on the money or property involved, subsequent in point of time. [Quoting Hannah Paint Mfg. Co. v. Rodey, Dickason, Sloan, Akin & Robb, 298 F.2d 371 (10th Cir. 1962).] [Emphasis added.] Applying the rule of the Thomas case here, we have a situation in which the original verdict and the bank’s set-off are prior in time to the fee agreement on which the attorney is suing. If the charging lien relates back in time to the commencement of the services, this lien goes back only to the time of the appeal since only the appellant services are covered by the agreement under which Horn is seeking his charging lien. Therefore, the set-off can be said to have attached to the judgment prior to the origination of any claim by the attorney and is therefore superior to it. See Fidelity National Bank v. Great American Insurance Co., No. 76-2125-26 (10th Cir. June 19, 1978). Whether the test is one of reasonableness or reasonable value of services rendered, this contract should fail. As stated by the Texas Supreme Court in Archer v. Griffith, 390 S.W.2d 735, 739 (Tex.1964): The relation between an attorney and his client is highly fiduciary in nature, and their dealings with each other are subject to the same scrutiny, intendments and imputations as a transaction between an ordinary trustee and his cestui que trust. “The burden of establishing its perfect fairness, adequacy, and equity, is thrown upon the attorney, upon the general rule, that he who bargains in a matter of advantage with a person, placing a confidence in him, is bound to show that a reasonable use has been made of that confidence; a rule applying equally to all persons standing in confidential relations with each other.” Story, Equity Jurisprudence, 7th ed. 1857, § 311.  . We should not as appellants suggest, make an independent review of the reasonableness of the fee.