Eastmond v. Earl

OPINION

BENCH, Judge:

Plaintiff M. Dirk Eastmond appeals the circuit court’s entry of summary judgment in favor of defendant, David D. Earl. Defendant Connie Neilson discharged her obligation to Eastmond in bankruptcy and is therefore not a party to this appeal. We reverse and remand.

FACTS

In reviewing summary judgment, we consider the facts and all reasonable inferences therefrom in a light most favorable to the losing party. Ciet v. Kaufman, 902 P.2d 153, 155 (Utah App.1995).

Eastmond is a licensed attorney who represented Neilson in a paternity and child support action against Earl in district court. Thereafter, pursuant to a contingent fee contract, Eastmond again represented Neilson in another action in district court to collect back child support. Under the agreement, Eastmond was to receive one-third of all delinquent child support collected. Judgment was entered against Earl in the amount of $9,447.75, and Eastmond filed a notice of attorney lien. The notice of attorney lien contained a mailing certifícate stating that copies had been sent to both Neilson and Earl. Earl contends he made payments on the judgment directly to Neilson.

Subsequently, on July 30, 1987, Eastmond filed, in circuit court, this breach of contract and quantum meruit action seeking to enforce his attorney lien against Neilson and Earl.¹ On August 13, 1987, Eastmond served a summons and complaint on Neilson. She later filed for bankruptcy, listing East-mond as a creditor.

Earl was served with a summons and complaint on February 9, 1992. Earl and East-mond both moved for summary judgment. The trial court granted Earl’s motion for summary judgment on two grounds: (1) Earl was not served within 120 days after the complaint was filed pursuant to Utah R.Civ.P. 4; and (2) a contingent fee taken from child support is against public policy in that child support is the right of the child rather than the custodial parent.

STANDARD OF REVIEW

Summary judgment is appropriate only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Utah R.Civ.P. 56(c); CIG Exploration, Inc. v. State Tax Comm’n, 897 P.2d 1214, 1215 (Utah 1995), cert. denied, — U.S. -, 116 S.Ct. 699, 133 L.Ed.2d 656 (1996). When no disputed issues of material fact exist, a challenge to summary judgment presents only a question of law, which we review for correctness. CIG Exploration, 897 P.2d at 1215.

ANALYSIS

A. Service of Process

The applicable rule provides that “[i]n any action brought against two or more defendants on which service has been obtained upon one of them within the 120 days or such longer period as may be allowed by the court, the other or others may be served or appear at any time prior to trial.” Utah R.Civ.P. 4(b). Since co-defendant Neilson was served within 120 days of the filing of the complaint, Earl could be served anytime “prior to trial.” Id. The trial court therefore erred in basing its summary judgment on a violation of Rule 4.

B. Public Policy

The trial court also based summary judgment on the premise that it is against public policy to allow a contingent fee to be taken from child support as it is the child’s right and not the right of the custodial parent. At least one jurisdiction has held that public policy forbids an attorney lien from taking any part of support paid for a child. See Fuqua v. Fuqua, 88 Wash.2d 100, 558 P.2d 801, 804 (1977) (en banc). However, the Utah Supreme Court has expressly allowed an attorney lien to be satisfied from child support payments. Hampton v. Hampton, 85 Utah 338, 345-46, 39 P.2d 703, 706 (1935).

Hampton involved a divorce action in which the trial court awarded the plaintiff a judgment of $60 per month for alimony and child support and $75 for attorney fees. Hampton, 39 P.2d at 704. The defendant paid the $60 monthly support payments through the court and the plaintiffs attorney withdrew $60 from the court for his fee by virtue of his attorney lien. The Utah Supreme Court upheld the attorney’s withdrawal of the alimony and child support payment, holding an attorney lien “applies to all causes of action, judgments, and proceeds thereof in favor of an attorney’s client. It makes no exception. It applies to all clients, regardless of wealth or poverty or needs.” Id. 39 P.2d at 706.

The attorney lien statute applicable in this case is identical to that in Hampton.² Because the Utah Supreme Court has allowed an attorney lien to be satisfied from a child support obligation, it follows that an attorney hen based upon a contingent fee agreement is permissible.

To be enforceable, and before a defendant can be liable to a plaintiffs attorney, a notice of attorney hen must be given to the defendant, and the attorney must first attempt to collect from the party receiving the proceeds. See Lundy v. Cappuccio, 54 Utah 420, 427-28, 181 P. 165, 167-68 (1919) (holding defendant who settled with plaintiff with knowledge of plaintiffs attorney hen may be hable to attorney for hen amount if attorney is unable to cohect from party receiving proceeds); see also Potter v. Ajax Mining Co., 19 Utah 421, 432, 57 P. 270, 272 (1899) (holding defendant who had notice of plaintiffs attorney hen could not fraudulently defeat hen by setthng directly with plaintiff without knowledge of plaintiffs attorney); Munro v. Munro, 168 Mich.App. 138, 424 N.W.2d 16, 17-18 (1988) (holding attorney hen is not enforceable against third party unless actual notice of hen or circumstances known to third party are such that third party should have inquired as to attorney’s claim). In the case at bar, Eastmond filed his hen against the judgment he obtained on behalf of Neilson. The mailing certificate, which is part of the notice, states that a copy was sent to both Neilson and Earl. Earl does not deny, by sworn statement, that he received notice of Eastmond’s attorney hen.

Earl contends he made payments to Neil-son on the child support judgment. Such payments, however, would have been made after Earl received notice of Eastmond’s attorney hen. Earl was unable to cohect from Neilson since she discharged her obhgation in bankruptcy. Thus, following Lundy, Eastmond was free to pursue his remedy solely from Earl. See Lundy, 181 P. at 167-68.

CONCLUSION

For the foregoing reasons, we reverse the trial court’s grant of summary judgment in favor of defendant Earl and remand the case for further proceedings consistent with this opinion.

WILKINS, J., concurs.

1 . Although not argued by the parties, the dissent raises a jurisdictional issue. State v. Child Support Enforcement, 888 P.2d 690, 693 (Utah App. 1993), involved an assignee’s attempt to collect back child support in circuit court. Child Support Enforcement held that district courts have exclusive subject matter jurisdiction over collection of past due child support. Id. The present case is not an action to collect child support. Rather, this is a breach of contract action to enforce an attorney lien. See Neilson v. Neilson, 780 P.2d 1264, 1270-71 (Utah App.1989) (holding attorney lien must generally be enforced by separate action). Child Support Enforcement is therefore readily distinguishable.

2 . Utah Code Ann. § 78-51-41 (1987) provided as follows:

The compensation of an attorney and counsel- or for his services is governed by agreement, express or implied, which is not restrained by law. From the commencement of an action, or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon his client's cause of action or counterclaim, which attaches to a verdict, report, decision or judgment in his client’s favor and to the proceeds thereof in whosoever hands they may come, and cannot be affected by any settlement between the parties before or after judgment.