Clark v. Jones Gledhill Fuhrman Gourley
44477
| Idaho | Dec 27, 2017Background
- Eric R. Clark (and his firm) represented plaintiffs in Forbush; Jones Gledhill represented certain defendants. Clark later withdrew and asserted an attorney charging lien under I.C. § 3-205 by letter to Jones Gledhill before a $1,000,000 settlement was paid to plaintiffs’ counsel (Spence).
- Jones Gledhill forwarded the settlement check to the Spence firm without listing Clark as a payee; Spence informed Clark it was holding the disputed portion in trust.
- Clark sued Jones Gledhill alleging it breached a duty to protect his claimed lien and sought at least $500,000 in damages; he did not initiate lien foreclosure proceedings to reduce his claimed lien to a judgment or court order.
- Jones Gledhill moved to dismiss under I.R.C.P. 12(b)(6); the district court dismissed, sealed certain documents, denied Clark leave to amend, and awarded fees to Jones Gledhill under I.C. § 12-121.
- The Idaho Supreme Court affirmed dismissal and the fee award, holding (inter alia) that a charging lien under I.C. § 3-205 must be foreclosed via affirmative adjudicative steps (either ancillary in the original action or by independent action) before an attorney can obtain an enforceable recovery against proceeds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Clark stated a tort claim for damages based on Jones Gledhill’s failure to "protect" his § 3-205 lien | Clark: § 3-205 created a lien that Jones Gledhill breached by not listing him as payee and by delivering the check to Spence; thus Jones Gledhill is liable for damages | Jones Gledhill: § 3-205 does not create a personal tort cause of action against third parties and Clark failed to plead enforceable lien foreclosure or conversion | Held: No actionable tort pleaded; § 3-205 does not itself create a tort remedy and Clark failed to plead conversion or other common-law tort elements against Jones Gledhill |
| Whether a charging lien attached and was enforceable without foreclosure when a fund exists | Clark: If a fund exists, foreclosure steps are unnecessary; lien attachment to proceeds suffices | Jones Gledhill: Even where attachment occurs, the lien must be foreclosed by adjudication to be enforceable | Held: Attachment occurred upon settlement, but enforceability requires affirmative adjudicative foreclosure (ancillary petition or independent action) regardless of fund status |
| Whether Clark could bring conversion claim against Jones Gledhill for delivery of funds to Spence | Clark: Alleged conversion of fees by defendants and/or plaintiffs | Jones Gledhill: Delivery to Spence did not appropriate proceeds to Jones Gledhill; Spence held disputed funds in trust | Held: Conversion claim fails—Clark lacked possession or right of possession and Jones Gledhill did not appropriate proceeds; Spence's custody preserved the res |
| Whether district court abused discretion in awarding attorney fees under I.C. § 12-121 | Clark: Appeal argued misapplication of precedent and that foreclosure was unnecessary | Jones Gledhill: Suit was frivolous, unreasonable, and without foundation | Held: Court did not abuse discretion; fees appropriate because Clark pursued untenable theory and failed to cite supporting authority; appellate fees awarded to Jones Gledhill |
Key Cases Cited
- Skelton v. Spencer, 102 Idaho 69, 625 P.2d 1072 (Idaho 1981) (charging lien may be foreclosed in the original action or by independent action; equitable foreclosure is tried to the court)
- Frazee v. Frazee, 104 Idaho 463, 660 P.2d 928 (Idaho 1983) (attorney must take affirmative adjudicative steps to foreclose charging lien and prove reasonableness of fees; lien cannot be used to levy on strangers without adjudication)
- Hansbrough v. D.W. Standrod & Co., 49 Idaho 216, 286 P. 923 (Idaho 1930) (attorney may have conversion claim where actions impair lien security; lienholder can sue third parties who appropriate the secured property)
- Montane Res. Assocs. v. Greene, 132 Idaho 458, 974 P.2d 510 (Idaho 1999) (certain statutory lien schemes operate in rem and do not create personal liability)
- Pierson v. Sewell, 97 Idaho 38, 539 P.2d 590 (Idaho 1975) (lien foreclosure statutes are in rem and do not impose personal liability on owners)