Judith K. Schermer v. Municipal Building Commission
2014 U.S. App. LEXIS 415
| 8th Cir. | 2014Background
- Four security guards employed by the Minneapolis Municipal Building Commission were terminated in 2011; they sued under Minn. Stat. § 383B.751 and 42 U.S.C. § 1983.
- Judith K. and Daniel W. Schermer represented the guards under a fee agreement.
- The district court ordered the Commission to show cause or reinstate; the Commission chose reinstatement and issued back-pay checks to the guards that did not list the Schermers.
- The Schermers, with the § 1983 action still pending, moved in district court to establish an attorneys’ lien against the Commission under Minn. Stat. § 481.13.
- The district court denied the lien, reasoning equity did not warrant it because the Schermers had not sought collection from their clients.
- The Eighth Circuit reversed, holding the statutory attorneys’ lien attached at commencement of representation and the Commission had notice and therefore is liable to the attorneys despite paying the clients directly.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the denial of an attorneys’ lien is immediately appealable | Schermers: lien denial is a collateral order that is effectively unreviewable and thus appealable | Commission: appeal should await final judgment | Court: collateral order doctrine applies; this order was appealable |
| Whether Minn. Stat. § 481.13 creates an attorneys’ lien without prerequisite collection attempts from the client | Schermers: statute creates lien "from the commencement" of representation and attaches to money/property affected by the action | Commission: equitable discretion could deny lien absent attempted collection from client | Court: statutory lien attaches at commencement; no prior collection attempt required |
| Whether equitable considerations permit denying the lien after the Commission paid the clients | Schermers: statutory scheme preempts equitable override; Commission had notice and remains liable | Commission: equity warrants denying lien because attorneys didn’t pursue clients and Commission acted in good faith | Court: statute governs; equitable discretion cannot defeat the lien; Commission, charged with notice, remains liable |
Key Cases Cited
- Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100 (2009) (defines collateral order doctrine scope)
- Swint v. Chambers Cnty. Comm’n, 514 U.S. 35 (1995) (collateral orders must be conclusive, separate from merits, effectively unreviewable)
- Abney v. United States, 431 U.S. 651 (1977) (discusses irreparable loss and appealability)
- Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541 (1949) (origin of collateral order doctrine principles)
- Sanders v. Providence Washington Ins. Co., 442 F.2d 1317 (8th Cir. 1971) (attorneys’ lien appeals held collateral orders)
- Sutton v. N.Y.C. Transit Auth., 462 F.3d 157 (2d Cir. 2006) (orders adjudicating attorney’s fees treated as collateral orders)
- Kubu v. Kabes, 172 N.W. 496 (Minn. 1919) (Minnesota precedent that defendant who pays plaintiff despite notice of lien remains liable to attorney)