Dixie Power & Wаter, Inc., appeals from a grant of summary judgment in favor of Transamerica Cash Reserve, Inc., and First National Bank of Boston (collectively referred to as “Transamerica”) for monies owed Transаmerica by Darrell G. Hafen and from the trial court’s denial of its post-judgment objections to the findings of fact and conclusions of law. Dixie claims, inter alia, that the trial court erred in find *25 ing as a matter of law that Dixiе was the alter ego of co-defendant Darrell G. Hafen and in denying Dixie’s counsel an attorney’s lien against funds of Dixie that were claimed by Transamerica. We reverse the trial court’s alter ego holding аnd the summary judgment based on that holding, affirm the denial of an attorney’s lien, and find no reason to reach the other issues raised on appeal.
Transamerica Cash Reserve, Inc., a money market mutual fund, аnd First National Bank of Boston, the transfer agent for Transamerica, brought this action against Hafen, Transworld Securities, S.A., and Dixie Power & Water, Inc., to recover monies Hafen allegedly obtained from Trans-america via a series of fraudulent transactions. Testimony elicited at a hearing indicated that Hafen had made deposits purporting to total $1,465,000 to the Trans-america money market fund. On these deposits, Transamerica ultimately collected only $12,000. Before Transamerica was aware of the true nature of Hafen’s deposits, he had withdrawn $406,380.75 from the account. The suit against Hafen and Dixie was part of the effort by Transamerica to recover its losses.
In addition to claiming directly against Hafen, Transamerica asserted that Dixie was the alter ego of Hafen. Transamerica moved for a prejudgment writ of attachment against any funds owned by the various defendants then on deposit at First Security Bank’s office in St. George. Dixie had funds on deposit with First Security. The district court granted Transameriea’s motion, finding as a matter of law that Dixie is Hafen’s alter ego and that Dixie’s assets are, in fact, Hafen’s and are reachable by Hafen’s creditors.
According to the record, Hafen’s stock ownership gave him complete control of Dixie. However, Dixie was not involved in Hafen’s scheme, and none of Dixie’s assets, including the money on deposit with First Security, was obtained as a result of Hafen’s fraudulent activities. In fact, Dixie’s funds оn deposit at First Security were the proceeds of a legitimate sale of water rights owned by Dixie. The court based its alter ego decision on a finding that no corporate formalities were observed by Hafen, his family, or the other shareholders of Dixie. Specifically, the evidence showed that there were no shareholders’ meetings, no board of directors’ meetings, and no tax returns filed for Dixie and thаt Dixie's secretary, Hafen’s son, knew almost nothing of Dixie’s business affairs.
Following the grant of the writ of attachment, Dixie’s counsel, Scott A. Gubler, filed a notice of an attorney’s lien, claiming a portion of the attаched funds as due for fees. The court ruled that an attorney’s lien should be impressed on the attached funds. Transamerica then moved to amend that ruling, arguing that the assets attached did not belong to Dixie but to Hаfen and were therefore not properly subject to attachment. The court agreed and ordered the lien discharged.
Transamerica moved for summary judgment on its complaint, seeking payment оf Hafen’s debt from Dixie’s assets based on the pleadings, evidence, and live testimony. The district court granted the motion on the premise that Dixie was the alter ego of Hafen.
On appeal, Dixie challеnges several rulings of the district court. We need only consider two of those claims: first, the finding that Dixie was the alter ego of Hafen, thus permitting Transamerica to reach its assets, and second, the denial of the request for an attorney’s lien on Dixie’s funds.
We note the applicable standard of review. Summary judgment is proper only when no genuine issue of material fact exists and the moving party is entitled to judgment as a mаtter of law.
E.g., Utah State Retirement Office v. Salt Lake County,
We first address the trial court’s determination that Dixie’s assets should be treated as Hafen’s. In the usual case, the corporation is viewed as a legal entity distinct from its shareholders. Under the equitable “alter ego” doctrine as it originally evolved, courts would, upon a proper showing, disregard the integrity of the corporation and view a controlling shareholder as indistinguishable from the corporation, thereby permitting creditors of the corporation to reach the assets of a controlling shareholder.
See Dockstader v. Walker,
We have said that to invoke the equitable alter ego doctrine,
there must be a concurrence of' two circumstances: (1) there must be such a unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist, viz., the corporation is, in fact, the alter ego of onе or a few individuals; and (2) the observance of the corporate form would sanction a fraud, promote injustice, or an inequitable result would follow.
Norman v. Murray First Thrift & Loan Co.,
We have also said, “[t]he [alter ego] test’s second prong is addressed to the conscience of the court, and the circumstances under which it will be met will vary with each case.”
Messick,
Here, the corporation was a stranger to the alleged defrauding of Transamerica by Hafen. Transamerica did not rely оn the existence of Dixie in its dealings with Hafen, and the money in Dixie’s bank account was entirely unrelated to Hafen’s Trans-america activities. Under these circumstances, the second requirement of the аlter ego doctrine was not satisfied and Dix *27 ie’s assets were not subject to direct levy by Hafen’s creditors on that ground.
We next consider Dixie’s counsel’s contention that the trial court erred by discharging his lien on Dixiе’s assets. We question the way in which this issue comes to us. Gubler filed his lien a few days after the court ruled that Dixie was Hafen’s alter ego. The court initially granted the lien but stayed that order and revoked it in its order granting summary judgment to Transamerica on the alter ego issue. Now Gubler attempts to bring this appeal on behalf of Dixie, challenging the alter ego determination and, at the same time, attempts to appeаl the order invalidating his lien against Dixie’s funds. The conflict in his position is obvious. In an attempt to forestall just this situation, we held in
Midvale Motors, Inc. v. Saunders,
Gubler relies on section 78-51-41 of the Code, which provides for attorney’s liens in certain circumstances. 1 Counsel’s reliance is misplaced. Section 78-51-41 clearly allows attorneys to attach only the proceeds of the work he or she has performed, that is, the proceeds of a judgment obtained in his or her client’s favor. Here, the attempt is merely to levy on a client’s existing аssets. That is not authorized by section 78-51-41.
For the foregoing reasons, we reverse the summary judgment and remand for further proceedings in accordance with this opinion. We affirm the denial of the attorney’s lien.
Notes
. Section 78-51-41 reads:
The compensation of an attorney and counselor for his [or her] services is governed by agreement, express or implied, which is not restrained by law. From the commenсement of an action, or the service of an answer containing a counterclaim, the attorney who appears for a party has a lien upon his [or her] client's cause of action оr counterclaim, which attaches to a verdict, report, decision or judgment in his [or her] client's favor and to the proceeds thereof in whosesoever hands they may come, and cannot be affected by any settlement between the parties before or after judgment.
Utah Code Ann. § 78-51-41 (1987) (amended Supp.1989).