Faye Ellis v. Anderson Tully Company ( 1997 )

IN THE SUPREME COURT OF MISSISSIPPI
NO. 97-CA-00896-SCT
FAYE ELLIS, CONSERVATOR OF THE ESTATE OF
SUSAN LONG GRIFFIN
v.
ANDERSON TULLY COMPANY
DATE OF JUDGMENT: 02/05/97
TRIAL JUDGE: HON. VICKI R. BARNES
COURT FROM WHICH APPEALED: WARREN COUNTY CHANCERY COURT
ATTORNEYS FOR APPELLANT: PAUL SNOW
CHARLES E. GRIFFIN
ATTORNEY FOR APPELLEE: KENNETH B. RECTOR
NATURE OF THE CASE: CIVIL - PERSONAL INJURY
DISPOSITION: AFFIRMED - 12/31/98
MOTION FOR REHEARING FILED:
MANDATE ISSUED: 3/3/99
EN BANC.
WALLER, JUSTICE, FOR THE COURT:
INTRODUCTION
¶1. This action arose from an automobile accident on August 14, 1993. Susan Long Griffin was a
passenger in a vehicle driven by Namie J. Tuggle. Faye Ellis, Griffin's mother and appointed conservator,
filed a lawsuit on behalf of Griffin against Tuggle and Isle of Capri Casino seeking general damages for
Griffin's injuries.
¶2. Griffin was covered by a plan of medical insurance through her husband's employer, Anderson Tully
Company (ATCO). ATCO paid the majority of Griffin's medical expenses under the plan.
¶3. On May 4, 1995, ATCO filed a "Complaint for Declaratory Judgment" in Warren County Circuit Court
seeking clarification of the rights and obligations of all parties connected with the accident. Before the circuit
judge resolved this claim, Tuggle and his insurers interpleaded the policy limits of Tuggle's $100,000 policy
in Warren County Chancery Court. The Chancellor held ATCO was entitled to receive the entirety of the
fund based on the subrogation agreement in ATCO's group benefit plan. The Chancellor ordered the
interpleaded funds not be distributed until the resolution of Ellis's circuit court law suit against Tuggle,
subject to Tuggle's insurer having the right to reclaim the funds if there were a finding of non-liability. Ellis
filed a motion to reconsider asking the Chancellor to address the issue of attorneys' fees. The Chancellor
found Ellis's attorneys were not entitled to any fees from the interpleaded funds. Ellis now appeals.
FACTS OF THE CASE
¶4. On August 14, 1993, Griffin was a passenger in a vehicle driven by Tuggle. Tuggle ran off the road after
he and Griffin left the Isle of Capri Casino. In the accident Griffin suffered severe permanent brain injuries
and incurred substantial medical expenses. Tuggle's negligence was allegedly a proximate cause of the
accident and Griffin's injuries. Allegedly the Isle of Capri Casino served Tuggle alcoholic beverages to the
point where he was visibly intoxicated. Intoxicated, Tuggle left the Isle of Capri Casino and the accident
occurred.
¶5. Griffin was covered by a plan of medical insurance through her husband's employer, ATCO. ATCO
paid the majority of Griffin's medical expenses under the plan.
¶6. ATCO's medical group benefit plan provides the following:
In the event any hospital service or medical benefit is provided or any payment is made to a member
under this Document, the Claims Service Manager shall be subrogated and succeed to the member's
or dependent's right of recovery against any person or organization, and the member shall execute and
deliver such instruments and take such other actions as the Service Manager may require to secure
such rights. Neither the member nor the dependent will do anything to prejudice the rights given the
Claims Service Manager by this paragraph without its consent.
¶7. At the time of the accident, Tuggle had liability insurance coverage of $100,000 through Kemper
National Insurance Company and American Mutual Insurance Company. Griffin's husband was also
covered by an under insured motorist policy from State Farm Insurance Company for $26,000. (1)
¶8. On May 4, 1995, ATCO filed a "Complaint for Declaratory Judgment" in Warren County Circuit Court
seeking clarification of the rights and obligations of all parties connected with the accident. Before the circuit
judge resolved this claim, Tuggle and his insurers interpleaded the policy limits of Tuggle's $100,000 policy
in Warren County Chancery Court. Without issuing a final decision, the circuit judge sent the case to
Warren County Chancery Court for a determination of the rights of the parties in the pending interpleader
action.(2)
¶9. On August 8, 1996 Faye Ellis, as Griffin's conservator, filed a lawsuit on behalf of Griffin against Tuggle
and the Isle of Capri Casino seeking general damages for Griffin's injuries.
¶10. ATCO and Ellis filed an answer to the interpleader and cross-claimed against each other for the
insurance funds. Both parties also filed motions for summary judgment. The Chancellor held ATCO was
entitled to receive the entirety of the fund based on the subrogation agreement in ATCO's group benefit
plan. The Chancellor ordered the funds not be distributed until after the resolution of Ellis's Circuit Court suit
against Tuggle, subject to Tuggle's insurer's right to recover the funds upon a finding of non-liability.
¶11. Ellis filed a motion to reconsider and asked the Chancellor to address the issue of attorneys' fees. The
Chancellor found Ellis's attorneys did not have a lien on the interpleaded funds and they were not entitled to
collect fees from the interpleaded funds to satisfy the one-third contingency fee agreement with Ellis. The
basis for the Chancellor's decision was there had been no recovery of funds by Ellis and the doctrines of
quantum meruit and quasi-contract did not apply.
¶12. Ellis appealed the Chancellor's decision listing six assignments of error.
I. WHETHER ATCO'S CLAIM IS BARRED BY THE STATUTE OF LIMITATIONS
II. WHETHER MISSISSIPPI STATE LAW APPLIES INSTEAD OF ERISA
III. WHETHER THE FACTS OF THIS PARTICULAR CASE CONSTITUTE AN
EXCEPTION TO THE GENERAL RULE, NO MATTER WHAT LAW APPLIES
IV. WHETHER THE FEDERAL COMMON LAW UNDER ERISA ADOPTS THE
"MADE WHOLE" RULE
V. WHETHER SUNBEAM-OSTER CO., INC. GROUP BENEFIT PLAN FOR
SALARIED & NON-BARGAINING HOURLY EMPLOYEES v. WHITEHURST IS
DISTINGUISHABLE
VI. WHETHER ATCO SHOULD BE REQUIRED TO PAY THE REASONABLE COSTS
OF COLLECTION
DISCUSSION OF LAW
¶13. In affirming the decision below, we find it necessary to address only assignments I and VI of Ellis's
assignments of error. Ellis's other assignments of error have no merit.
I. WHETHER ATCO'S CLAIM IS BARRED BY THE STATUTE OF LIMITATIONS
¶14. This Court uses a de novo standard of review when passing on questions of law. Mississippi Farm
Bureau Cas. Ins. Co. v. Curtis, 678 So. 2d 983, 987 (Miss. 1996).
¶15. Ellis argues ATCO's claim to the interpleaded funds is barred by the statute of limitations because
ATCO failed to file suit against Tuggle within three years of the date of the accident.
¶16. A time line of the events will be helpful in addressing the statute of limitations question.
August 14, 1993 Griffin's accident
May 4, 1995 Declaratory Judgment suit by ATCO
March 26, 1996 Insurance funds interpleaded by Tuggle
August 8, 1996 Ellis sues Tuggle
August 14, 1996 Three year statute of limitations ends
¶17. Both parties have ignored the determinative factor for the statute of limitations question. In its
declaratory judgment suit filed March 4, 1996, ATCO asked for a declaration of the rights and obligations
of all parties. This proceeding was brought well within three years of the date of the accident. This action
was appropriate since ATCO had paid Griffin's medical expenses, but had not obtained a subrogation
agreement from Ellis. By asking for a declaratory judgment, ATCO asserted its rights to any funds paid to
Ellis for Griffin's medical expenses. ATCO did so within the three year statute of limitations and thus is not
barred from collecting any funds paid to Ellis under the subrogation agreement.
¶18. For this reason, Ellis's claim that ATCO's right to the interpleaded funds is barred by the statute of
limitations has no merit.
VI. WHETHER ATCO SHOULD BE REQUIRED TO PAY THE REASONABLE COSTS
OF COLLECTION
¶19. "The standard for review of the award of attorneys' fees is abuse of discretion, and such awards must
be supported by credible evidence." Regency Nissan, Inc. v. Jenkins, 678 So. 2d 95, 103 (Miss. 1995).
¶20. Ellis argues the Chancellor erred in determining Ellis could not recover attorneys' fees from the
interpleaded funds.
¶21. Ellis's attorneys assert they have a lien on the interpleaded funds awarded to ATCO in the amount of
one-third of the $100,000 based on their one-third contingency fee agreement with Ellis. The Chancellor
found Ellis's attorneys would be entitled to a contingency fee only when Ellis received a recovery. Because
there was no recovery by Ellis, her attorneys were not entitled to any portion of the $100,000 in
interpleaded funds.
¶22. The Chancellor based her decision on this Court's holding in Magee v. Smith, 639 So. 2d 1258(Miss. 1994). In Magee, we stated in the context of a contingency fee contract, if there is no recovery for
the client, there is no basis for a contingency fee award. Magee, 639 So. 2d at 1261. Citing Reid v.
Johnson, 106 So. 2d 624, 627 (Fla. Dist. Ct. App. 1958), we further stated the "burden is upon the
attorney to establish clearly the contract under which he is entitled to retain his client's money as fees." Id.
¶23. The Chancellor correctly reasoned because Ellis had yet to recover any money for Griffin, the
contingency on which the contract was based -- recovery-- had not occurred. With no recovery, Ellis's
attorney's rights had not vested. See Tyson v. Moore, 613 So. 2d 817, 824 (Miss. 1992) (holding
reasonable interpretation of contingency fee contract would be attorney's right to recover cannot vest until
recovery).
¶24. The Chancellor also found Ellis's attorneys were not entitled to any recovery under a quantum meruit
or unjust enrichment theory. We have found quantum meruit is a possible method for determining attorneys'
fees. Duggins v. Guardianship of Washington, 632 So. 2d 420, 431 (Miss. 1993). In order for a
quantum meruit award to be proper, the claimant must have a reasonable expectation of payment for
services. The claimant's measure of recovery is the reasonable value of the services. Estate of Johnson v.
Adkins, 513 So. 2d 922, 926 (Miss. 1987).
¶25. To collect under an unjust enrichment or quasi-contract theory, the claimant must show "there is no
legal contract but . . . the person sought to be charged is in possession of money or property which in good
conscience and justice he should not retain, but should deliver to another." Estate of Johnson, 513 So. 2d
at 926 (quoting Hans v. Hans 482 So. 2d 117, 1122 (Miss.1986)).
¶26. The Chancellor found ATCO acted within a reasonable time to lay claim to the funds. In doing so,
ATCO acted by and through an attorney to protect its rights and did not rely on the work of Ellis's
attorneys. For these reasons the Chancellor found Ellis's attorneys did not have either a quantum meruit or
quasi-contract claim to a portion of the interpleaded funds.
¶27. The Chancellor's findings are well supported by the record and we find the Chancellor did not abuse
her discretion in refusing to award Ellis's attorneys a portion of the interpleaded funds as attorneys' fees.
This assignment has no merit.
CONCLUSION
¶28. ATCO's claim to the interpleaded funds is not barred by the three year statute of limitations. ATCO
filed a declaratory judgment action well within the three year period to protect its rights. The Chancellor did
not abuse her discretion in denying Ellis's attorneys' claim to a portion of the interpleaded funds. The
decision of the Chancellor below is affirmed.
¶29. AFFIRMED.
PRATHER, C.J., PITTMAN, P.J., BANKS, ROBERTS, SMITH AND MILLS, JJ., CONCUR.
McRAE, J., DISSENTS WITH SEPARATE WRITTEN OPINION JOINED BY SULLIVAN,
P.J.
McRAE, JUSTICE, DISSENTING:
¶30. The majority misconstrues that this is a claim of the attorney, not that of Ellis, the party to the litigation.
Ellis simply seeks the right to attorneys fees before the insurance company may claim its subrogation on the
back of Ellis' lawsuit for liability. This case is strictly a contest between Ellis and the insurance company as
to who gets what money. The lawyer is required to fight the casea fact the Chancellor held back to see
whether or not they would even get any money. If there was no liability, there would be no claim by either
Ellis or the insurance company; therefore, Tuggle's insurance company would reclaim all of the funds. In this
case, the insurance company not only piggy-backed on Ellis' claim and her attorneys' service, but also used
Ellis to determine if they were entitled to the money. Such action is unjust under Dunnam v. State Farm
Mut. Auto. Ins. Co., 366 So. 2d 668, 672 (Miss. 1979), which held that Dunnam was "legally entitled to
full recovery of the amount of her judgment" before the insurance company was entitled to subrogation.
Given the above analysis, justice is only attainable if Ellis' attorneys' liens are primary to the subrogation
claim of ATCO. Accordingly, I dissent.
SULLIVAN, P.J., JOINS THIS OPINION.
1. This $26,000 from State Farm was not addressed by the Chancellor and is not addressed by ATCO.
Ellis states in a prefatory note to her brief that State Farm is in the process of tendering $25,000 into the
Warren County Chancery Court. No mention of where this money is or its status is found anywhere in the
record.
2. The only evidence in the record of the resolution of the Circuit Court claim is found in the Chancellor's
findings. "On September 20, 1996 the Warren County Circuit Court dismissed the claim pending therein
and yielded to the Warren County Chancery Court to determine the distribution of the $100,000 in
insurance benefits."