Opinion
No. A03-815.
Filed January 27, 2004.
Appeal from the District Court, Hennepin County, File No. Ct 03-1283.
Robert M. Smith, (for respondent).
Kay Nord Hunt, Barry A. O'Neil, Christopher R. Grote, Lommen, Nelson, Cole Stageberg, P.A., (for appellants).
Considered and decided by Lansing, Presiding Judge; Minge, Judge; and Wright, Judge.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2002).
UNPUBLISHED OPINION
Appellant attorney challenges the subject matter jurisdiction of the district court to consider the respondent attorney's claim for fees and expenses for legal services performed in preparation for a personal injury suit. Because respondent's claim is solely against appellant and not against appellant's client, because any recovery is payable from fees appellant has already received pursuant to approval by the Colorado court, and because the parties are Minnesota residents, we affirm the district court's determination that it has jurisdiction. Because this is an interlocutory appeal and the district court must first address the claims that are made, we do not reach the merits of respondent's claims or appellant's defenses.
FACTS
On August 25, 1998, Gordon Thomas, a resident of Colorado, suffered severe and permanent head injuries in a motorcycle accident that occurred in the state of Wyoming. Respondent Roger Alderson, a Minnesota attorney, learned of the accident through a friend traveling with Thomas. Alderson went to Wyoming and to Idaho, where Thomas was hospitalized, and met with David Thomas, the father of Gordon Thomas. Alderson discussed the importance of retaining an attorney, said he could not handle a claim of this size, and referred him to appellant David Homolka as an attorney who could handle such a large personal injury case. On August 28, 1998, as a result of Alderson's referral, David Thomas, as father of Gordon Thomas, signed a retainer agreement with Homolka, authorizing Homolka to represent his son in a suit seeking compensation for injuries.
Homolka assisted David Thomas and Audrey Thomas, his wife and the mother of Gordon, in retaining Colorado counsel and they commenced guardianship and conservatorship proceedings in Boulder County probate court in the State of Colorado. This resulted in the appointment of the Thomases as guardians and conservators. Homolka then associated with a Wyoming law firm and another Minnesota law firm and commenced litigation in the state of Wyoming on behalf of Gordon Thomas and against those who were responsible for causing his accident.
Homolka and Alderson are both practicing Minnesota attorneys and long-term personal and business acquaintances. Alderson represents that he had previously referred several personal injury cases to Homolka and that Homolka paid him for his involvement. Here, Alderson claims that after the retainer was signed, he performed substantial services that began in August 1998 and extended through November 1999. He also claims that this was done at the direction of Homolka, and with the knowledge and participation of David Thomas as guardian and conservator. Homolka, on the other hand, claims David Thomas never consented to Alderson's representation or his receiving any fee for work on the case.
In December 1999, without the knowledge of Alderson, Homolka moved the probate court in Colorado to approve a partial settlement of the Thomas case. David Thomas submitted all costs, attorney fees, child support payments, and trust distributions for approval. On March 24, 2000, the Colorado probate court issued an order granting leave to settle the personal injury claim, authorizing the dismissal of the Wyoming court action, and approving the distribution of more than $1.1 million for attorney fees and legal costs. The petition and order did not expressly allocate any fees or costs to Alderson or to the Wyoming attorney or the other Minnesota attorneys. Homolka did not pay Alderson for his services or expenditures. The other attorneys were paid.
Alderson commenced this action against Homolka in December 2002, asserting breach of contract and quantum meruit causes of action, alleging entitlement to attorney fees and expenses for legal services performed. Homolka brought motions seeking dismissal of Alderson's claims pursuant to Rules 12.02(a), (e), and Rule 56 of the Minnesota Rules of Civil Procedure. The district court denied all motions. This interlocutory appeal follows, based solely on Homolka's contention that the district court did not have subject matter jurisdiction.
DECISION
An interlocutory order denying a motion to dismiss for lack of subject matter jurisdiction is subject to immediate appeal. McGowan v. Our Savior's Lutheran Church, 527 N.W.2d 830, 833 (Minn. 1995). Subject matter jurisdiction is a question of law which this court reviews de novo. Shaw v. Bd. of Regents of Univ. of Minn., 594 N.W.2d 187, 190 (Minn. App. 1999), review denied (Minn. July 28, 1999). "Whenever it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter, the court shall dismiss the action." Minn. R. Civ. P. 12.08(c).
Homolka argues that Alderson's claims should be dismissed pursuant to Minn. R. Civ. P. 12.02(a) because the distribution of settlement proceeds from the Gordon Thomas estate is subject to the exclusive jurisdiction of the Boulder County, Colorado probate court. Homolka asserts the district court in Minnesota is without subject matter jurisdiction.
In Colorado, after notice has been served in a conservatorship proceeding, the court where the petition was filed has "[e]xclusive jurisdiction to determine the need for a conservatorship or other protective order," "[e]xclusive jurisdiction to determine how the estate of the protected person . . . must be . . . distributed to or for the use of the protected person," and "[c]oncurrent jurisdiction to determine the validity of claims against the person or estate of the protected persons. . . ." Colo. Rev. Stat. § 15-14-402 (2002). Colorado courts follow this statute. See Sweeney v. Summers, 571 P.2d 1067, 1070 (Colo. 1977). Exclusive jurisdiction over the disbursements from the estate of Gordon Thomas is vested in the Boulder County, Colorado probate court.
Claims against probate-court-appointed fiduciaries in their personal capacity are not exclusively within the jurisdiction of the probate court. In Colorado, this issue arose in Rothchild Co. v. Alps, 513 P.2d 237, 239 (Colo. Ct. App. 1973). There, attorneys sued the conservator in district court for further attorney fees, claiming that the conservator had separately agreed to pay for fees above those recovered from the probate court. Id. at 238. The Colorado Court of Appeals concluded the probate court had no jurisdiction over the conservator in his individual capacity. Id. at 239. It follows that the probate court does not have exclusive jurisdiction over a breach of contract claim for fees between two attorneys in their individual capacities.
Here, Alderson is not challenging disbursements from the estate, obligations of the injured party or his family, or any obligations of the trust or conservatorship they may have established. He does not object to the Colorado probate court's approval of the settlement petition that included a payment of more than $1.1 million in attorney fees to Homolka. Alderson is not demanding fees from the estate, but from Homolka in his individual capacity. The Boulder County, Colorado probate court does not have exclusive jurisdiction over disbursements from a third-party attorney to another third-party attorney.
Minnesota caselaw is parallel to Colorado's. Our courts recognize that courts sitting in probate exercise exclusive jurisdiction over how estates are administered, expended, and disbursed. Pangalos v. Halpern, 247 Minn. 80, 84, 76 N.W.2d 702, 705 (1956) (noting probate court is vested with "plenary and exclusive original jurisdiction over the estates of deceased persons in all matter relating to their complete administration, and this includes the power to allow attorney's fees"); accord In re Hudson's Guardianship, 226 Minn. 532, 538, 33 N.W.2d 848, 853 (1948); Kemmetmueller v. Zachman, 220 Minn. 44, 46, 18 N.W.2d 590, 591 (1945). But Minnesota courts also recognize that if claims are not against the estate, those claims are outside the exclusive jurisdiction of the probate court. In O'Brien v. Lien, 160 Minn. 276, 280, 199 N.W. 914, 915 (1924), the court stated that claims based on the alleged acts of a devisee, and not on the law of descent, must be determined by some other tribunal than the probate court. This rule was reinforced in State ex rel. Larson v. Probate Court of Hennepin County, 204 Minn. 5, 15-16, 283 N.W. 545, 550 (1939). There, an attorney brought suit for breach of contract against a representative after the representative refused to pay the attorney. Id. at 7, 283 N.W. at 546. The Minnesota Supreme Court determined the attorney's action for breach of contract must be "determined by a court of general jurisdiction and not by the probate court," stating the probate court does not possess independent jurisdiction over controversies with strangers claiming adversely or over collateral actions. Id. at 8-9, 17, 283 N.W. at 547, 551. The same jurisdictional conclusion would result if a paralegal, a court reporter, or a legal research service were suing for fees for services performed.
Here, a third-party Minnesota attorney is asserting a claim against another Minnesota attorney for money that was once apart of an estate under the jurisdiction of probate court. Since the distribution order had been issued, and funds distributed, Homolka had control and possession over the funds, and jurisdiction of the Colorado probate court relating to those funds ended. Thus, Alderson's claim against Homolka regarding those funds could be brought in district court in Minnesota.
Homolka also challenges Alderson's claim for attorney fees on the grounds that it violates Minn. R. Prof. Conduct 1.5(e), and is precluded by the decision of Christensen v. Eggen, 577 N.W.2d 221 (Minn. 1998). We recognize the limits on fee splitting and the enforceability of any claim by Alderson absent a written agreement or consent of the guardian. However, those issues should be addressed in the first instance by the district court and we do not reach them on appeal.