Opinion
40884.
DECIDED OCTOBER 9, 1964.
Action by attorneys for fees. Chatham Superior Court. Before Judge McWhorter.
Charles L. Sparkman, for plaintiffs in error.
The petition for attorney's fees, alleging the plaintiffs' performance of all the contracted services for which the defendant had given them two promissory notes, namely: services in connection with a divorce action against the defendant, which notes she refused to pay upon demand, where the case was in default, demanded a judgment for liquidated damages in the total amount of the notes less the amount awarded as attorney's fees in the divorce action.
DECIDED OCTOBER 9, 1964.
Grady L. Dickey and Joseph B. Bergen brought an action against Mary Louise Budreau Mingledorff to recover $10,000 damages on two notes given them for their professional services as attorneys. The petition as amended alleged substantially as follows: That on March 14, 1963, the plaintiffs entered into a written contract with the defendant whereby they agreed to represent her in a pending divorce action in consideration of two promissory notes in favor of the plaintiffs, in the amounts of $8,000 and $2,000, copies of which are attached as exhibits to the petition; that these notes are payable on demand under the terms of the contract, a copy of which is attached as an exhibit to the petition, providing as follows: "1. That for and in consideration of the sum of $2,000, cash in hand, to be paid by the client as soon as possible after the sealing and delivering of these presents, the sufficiency whereof is hereby acknowledged by the attorney as an advance payment on a fee for legal services performed or to be performed with or without court or administrative action or litigation, but said sum is to be paid not later than the final termination of the client's divorce action now pending in the event of a lump sum alimony award, and if a lump sum is not awarded, to be paid in monthly installments of 50% of any monthly alimony payments awarded; and, 2. That for and in consideration of the client agreeing to pay the attorney an additional cash fee for legal services in the sum of $8,000, the sufficiency whereof is hereby acknowledged by the attorney, plus any balance due on the above $2,000, to be paid on the same basis, unless other assets are received from any source, including any interest available in property known as Dutch Island and Sylvon Island in said county, whereupon the full balance on said amounts shall become due and payable in full; but in such event, insofar as said islands are concerned, only upon conclusion of any litigation involving Dutch Island; and, 3. [Stricken]. 4. [Stricken]. 5. That for and in consideration of mutual covenants and promises from one to the other and the mutuality of the premises, and for other good and valuable consideration the client and the attorney do hereby agree, covenant, and contract as follows: (A) The client retains the attorney to represent the client as attorney at law of the client to perform all necessary and appropriate legal services (and to institute appropriate or necessary action or actions or other legal proceedings to completion) in the name of the client (to enforce the claim of the client against the proper defendant or respondent) (to recover damages sustained by the client) (or) (to defend the client) as a result of a divorce action now pending against the client and in connection with Dutch Island and Sylvon Island, but under the condition set forth hereinafter insofar as said islands are concerned, and empowers the attorney to effect a compromise in said matter, or to institute such proceedings or legal action as may be advisable in his judgment; and, (B) The client hereby agrees to pay the attorney for services in connection with said islands a fee to be negotiated with other out-of-town counsel previously engaged, and agreeable with the within attorneys, if settled at any time prior to instituting such proceeding or action and without such proceeding or action, or a fee also to be so negotiated and agreeable with the within attorneys after any settlement, verdict, or recovery amount in said action or proceeding after being instituted, or a fee likewise so negotiated and so agreeable after any settlement or recovery with or without such proceedings or action, or verdict, in the event of counter or cross claims made by any party or parties, should the said out-of-town counsel also appear as an attorney in said claims on behalf of the client; if not, then the within attorneys are to represent the client in said claims on a straight 33 1/3% contingency fee basis; and, in addition, the client hereby agrees to pay all court costs, fees, expenses and disbursements, as they occur, which are not or are not found to be the obligation of others, in the performance of said services and in said proceedings or action from the date of this agreement, and to pay through the attorney all obligations which have occurred in connection with said occurrences before this agreement. (C) It is agreed that the attorney may retain his fee in full out of the amount finally collected by any proceeding or action, or settlement before or after such proceeding or action or judgment for his services, disbursements and obligations incurred, and which the client has not paid in full, before any division of said proceeds; and the attorney is hereby given a lien on the aforesaid claim, or action, any sum recovered by way of settlement and on any judgment, decree, execution, garnishments, or by any other proceedings whatsoever that may be recovered thereon to insure the sums and shares hereinbefore mentioned due to the attorney or through the attorney, and the client expressly assigns to attorney, pro tanto, that is to say, for so much as may be necessary to pay said costs, fees, expenses, disbursements and obligations which are not the obligation of others, the aforesaid claim of the client and any sum realized by way of settlement, judgment, decree, execution, garnishments, or any proceedings whatsoever. (D) The client agrees that no settlement will be made except in the presence of the attorney and with the approval of the attorney and without the attorney receiving his share of said settlement for services rendered in accordance with this agreement; and, should said matter be settled in violation of this agreement, the client agrees to pay the attorney the aforesaid sums and shares in full for services rendered to the date of said settlement, and should the claim or the defense of the client, as the case may be, be discontinued by the client for any reason whatsoever without settlement in accordance with this agreement, the aforesaid cash advances paid by client shall be kept by the attorney in full for such services to the date of the discontinuance. 6. The aforesaid Paragraphs 1, 2 and 5, and Subparagraphs A-D as not deleted, are expressly included in the within agreement, and Paragraphs 3 and 4 and Subparagraphs none as deleted, are expressly excluded from this agreement. 7. The attorney accepts and will accept the aforesaid payments on the conditions hereinbefore enumerated. 8. The client hereby binds the executors, legal representatives, assigns, and successors of the client to this agreement, and hereby states: All of the above contract has been read and all of its terms are fully understood."
The petition further alleged that the plaintiffs had performed all their obligations under the contract; that on April 11, 1963, the defendant advised the plaintiffs that she was not going to pay the plaintiffs the $10,000 and that she has breached the contract by a continued refusal to comply with the plaintiffs' demands for payment of the notes which are past due; that the plaintiffs claim a lien, for their professional services in connection with the aforesaid divorce action, upon the sum of $8,000 which the defendant received on deposit in the registry of the court following the verdict and judgment rendered in her favor in that action. The petition prayed for judgment against the defendant in the amount of $10,000 plus 5% interest and for the award to them of the $8,000 on deposit in the registry of the court by the foreclosure of their attorneys' lien thereinbefore filed and separately recorded.
See Record, p. 19, prayer (b).
On May 8, 1964, the court entered the following order: "On March 26, 1964, the court entered a default in this cause, fixing April 3, 1964, as the date for determining the amount of attorney's fees that should be awarded to plaintiffs and against the defendant. The court feels that its position is sustained by Annotated Code Sections 9-611, 9-615, and 9-616, and cases cited. These cases establish that where there is a rupture of relation between attorneys and client, the attorneys are entitled to recover for services rendered up to the date of the rupture on a quantum meruit basis, and this is so in the case of a written contract, and attorneys' fees are considered as unliquidated damages. See Studdard v. Evans, 108 Ga. App. 819 (see page 823); Copeland v. Eubanks, 175 Ga. 198; Lee v. Garland, 208 Ga. 251, motion for rehearing, page 253; and Young v. John Deere Plow Co., 102 Ga. App. 132 (2b). The hearing set in the order of March 26, 1964, was had and plaintiffs only appeared. They admitted that at the conclusion of the divorce proceeding before the Domestic Relations Division of this court they asked for a $10,000 fee and were awarded $3,000 as a fee. Disregarding the question as to whether by applying for a fee in the divorce action plaintiffs have estopped themselves from asking for more fee, the court is certain that whatever is awarded in this case should be credited with the $3,000. To state it differently, that amount should be taken into consideration because unquestionably it covered services rendered for the benefit of client. The court does not feel the attorneys are entitled to recover the full amount of $10,000 sued for in this suit in addition to the amount heretofore awarded.
"The court is of the opinion that unless the two paragraphs of the contract dealing with the two portions of the fee are severable and not entire, plaintiffs would not be entitled to recover anything in the present suit. It is against the public policy of this State to enter into a contract for a `contingent fee in a divorce and alimony case and also to assign an alimony judgment previous to its rendition.' Keefer v. Keefer, 140 Ga. 18; Evans v. Hartley, 57 Ga. App. 598. Paragraph 1 deals solely with the $2,000 portion of the fee represented by the $2,000 note sued upon. This amount was to be paid `cash' — or `as soon as possible' — or `not later than the final determination of the client's divorce action then pending.' If the client was awarded a lump sum as alimony, then the $2,000 was payable if it had not been previously paid. If the client was awarded monthly installments of alimony, then the $2,000 was payable at the rate of 50% of each installment until paid. The liability was fixed and certain regardless of whether alimony was recovered or not recovered. The terms of payment were merely the method and in the court's opinion were not an assignment of alimony before it was rendered nor was it contingent upon the recovery of alimony. This portion of the fee was in the nature of a retainer to cover services in investigating client's case before trial, and, in the opinion of the court, is severable from the rest of the contract. Pretrial services to the extent of $2,000 was certainly shown by plaintiffs' testimony and, in the court's opinion, plaintiffs are entitled to be awarded this amount in addition to the $3,000 already awarded. In regard to the $8,000 portion of the fee specified in paragraph 2, the court is not so confident. The contract was drawn by plaintiffs and must be most strongly construed against them. This portion of the fee certainly included services to be rendered in connection with the litigation of certain islands referred to. Otherwise, it would have been useless to refer to the islands. This portion of the fee was due and payable from other assets when said assets became available; if other assets did not become available, then out of the assets or monies derived through the island litigation, but payment was deferrable to the conclusion of that litigation. The law, one of the island suits being in the nature of an ejectment and the main question being title, would give client's attorneys a lien on any recovery whether as plaintiff or as defendant, and an assignment in advance would be valid; but if any portion of the $8,000 was to cover services in the divorce case, in the court's opinion, under the ruling of the Keefer case and others following it, such an assignment would be invalid and unenforceable. The plaintiffs contend that the total fee of $10,000 was to cover services only in the divorce case. If the court adopted this construction, it could not award any fee. In regard to the $2,000 portion of the fee, plaintiffs' evidence shows that the defendant could not raise the $2,000 at once but hoped to do so shortly. She even offered to sell her car in order to make a cash payment, which the attorneys did not require, and they then fixed the method of payment as above stated. This seems to enforce the court's opinion that the provision of the contract as to the $2,000 portion of the fee was severable from the others. The court should protect and aid attorneys in the collection of fees so far as the law will allow it to do so. In line with that policy and with its construction of the contract, though contrary to that of plaintiffs, the court will award an additional $2,000 fee to that already awarded, thus making the total compensation of the attorneys $5,000 instead of $3,000 in connection with the divorce action. To award the $8,000 or any portion thereof would, in the court's opinion, jeopardize its judgment and the court should always avoid rendering an illegal judgment whether the defendant be in default or not. However, the court feels that it should protect the plaintiffs to the extent hereinafter afforded because plaintiffs are resident creditors of Georgia and the defendant is a non-resident of Georgia. Her petition for removal to the Federal court, copy of which is of record in this case, clearly shows this. It is, therefore, considered, ordered, and adjudged that in addition to the $3,000 heretofore awarded Grady L. Dickey and Joseph B. Bergen do have and recover of Mary Louise Budreau Mingledorff the sum of $2,000, together with interest at the rate of 6% per annum from March 14. 1963. It is further considered, ordered, and adjudged that Ben P. Axson, clerk of this court, out of the funds in the registry of the court, paid therein as alimony for the defendant, Mary Louise Budreau Mingledorff, do pay said $2,000 together with interest and all costs of these proceedings, but only and not until the time for filing appeal to this judgment has expired, and then only upon supplementary order of some judge of this court. It is further considered, ordered, and adjudged that Mary Louise Budreau Mingledorff be and she is hereby enjoined from withdrawing any portion of the alimony paid into the registry of this court without first having an order from some judge of this court after notice to Grady L. Dickey and Joseph B. Bergen, so that any interest or right they may have to the monies in the registry of this court of Mary Louise Budreau Mingledorff may be protected and said monies be impounded until the final conclusion of this case."
The plaintiffs assign sixteen grounds of error on the court's judgment.
Where an ex contractu action based upon a liquidated demand is in default, judgment may be entered in favor of the plaintiff without the introduction of evidence, as if every item and paragraph of the petition were supported by proper evidence. Code Ann. § 110-401 (as amended by Ga. L. 1962, pp. 687, 688). The allegations of the petition must still, of course, set forth a cause of action in order to support a recovery thereon. Nix v. Luke, 96 Ga. App. 123 (1) ( 99 S.E.2d 446).
The plaintiffs' demand was for liquidated damages since the claim was based upon the promissory notes and the contract rather than the reasonable amount of their services. The recovery of attorney's fees on a quantum meruit basis is permitted only where no fee has been agreed upon, Code § 3-107, Iteld v. Karp, 85 Ga. App. 835, 838 (1) ( 70 S.E.2d 378), or where the attorney cannot render the balance of the agreed service due to any of the contingencies provided in Code § 9-611. The petition shows that the fee was agreed upon and contracted for in both the written contract and the promissory notes and it alleges that the plaintiffs performed all of their obligations under the contract by representing the defendant in the divorce action to its conclusion. These allegations, to which no defensive pleadings were filed, must be accepted as true. While the contract provides that the plaintiff attorneys were retained to perform all necessary and appropriate services, etc., "as a result of a divorce action now pending against the client and in connection with Dutch Island and Sylvon Island . . . ," it goes on to state "but under the condition set forth hereinafter insofar as said islands are concerned . . ." This condition is set forth in section 5 (b), namely: that the fee for services in connection with the islands is to be negotiated with any out-of-town counsel which might be involved; otherwise, such services would be on a straight 33 1/3% contingency fee basis. This, in addition to the stipulation regarding payment of the $2,000 note in conjunction with the termination of the divorce action, indicates that the services for which the notes were given were those in connection with the divorce action.
The fact that the contract gives the plaintiffs a lien on any sum recovered from any judgment or decree, which would include the judgment for attorney's fees, does not make the contract void as against public policy as an assignment of alimony. The lien is merely security for the payment of the notes, which established the amount of the plaintiff's fee and created an obligation independent of the factor of an award for attorney's fees or the amount awarded. The petition thus stated a cause of action for the entire amount of both notes.
The court, while erring in not allowing recovery on the $8,000 note, was correct in its ruling that the plaintiffs are entitled to the $3,000 awarded for attorney's fees under the alimony judgment. This amount must be deducted from the $10,000 to which the plaintiffs are entitled, however. "`Temporary alimony is awarded to the wife, among other things, for the purpose of enabling her to contest all of the issues between herself and her husband in a proceeding for divorce and alimony.' Twilley v. Twilley, 195 Ga. 297 ( 24 S.E.2d 46). Where a judgment provides that attorney's fees be paid to the attorney of record, such a provision will be construed as a judgment for the wife for the amount stated, and such payment may be enforced by contempt proceedings. Blackburn v. Blackburn, 201 Ga. 793 (1) ( 41 S.E.2d 519)." Coleman v. Coleman, 205 Ga. 92, 93 ( 52 S.E.2d 438); Harrison v. Harrison, 208 Ga. 70 (2) ( 65 S.E.2d 173). The plaintiffs were therefore not unconditionally entitled to the $3,000 attorney's fee judgment since they were awarded to the defendant to be used in paying the plaintiffs the contracted amount for their services.
The judgment of the court is reversed and remanded for entry of a judgment in the amount prayed for in the petition less the $3,000 awarded as attorney's fees. Judgment reversed with direction. Frankum and Pannell, JJ., concur.