Childs v. Mid-Century Insurance

Citations: 55 Ark. App. 168; 934 S.W.2d 533; 1996 Ark. App. LEXIS 754Docket: CA 95-1198

Court: Court of Appeals of Arkansas; December 4, 1996; Arkansas; State Appellate Court

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Callis L. Childs appeals a chancery court decision denying his claim for an attorney’s lien on funds from Mid-Century Insurance Company related to his representation of James Trezvant, Jr. Childs argues that the chancellor erred by not recognizing an attorney’s lien and by concluding he did not represent Trezvant in the dispute with Mid-Century. The facts indicate that Trezvant was injured in an accident on May 24, 1993, and signed a retainer agreement with Childs on June 1, 1993, entitling Childs to 40% of any recovery. Despite Childs notifying the insurance adjuster of his representation, Trezvant subsequently informed the insurer on June 3 that he had terminated Childs and sought to settle the claim directly. Trezvant later sent a letter stating he had only retained Childs for a potential claim against General Motors, not against Mid-Century. Childs attempted to assert a lien after the settlement was reached on August 24, but Mid-Century refused to acknowledge it, citing the lack of a court-approved lien prior to the settlement. The chancery court found Childs did not comply with the attorney’s lien statute and ruled against his claims for relief, leading to this appeal where Childs seeks 40% of the $7,500 settlement.

Mr. Childs seeks relief under Ark. Code Ann. 16-22-304(a)(1), which establishes that an attorney can create a lien on a client's cause of action following proper written notice to the adverse party. This notice must be signed by both the client and the attorney and served via certified mail, with a return receipt required to confirm delivery. Mr. Childs admits he did not provide the necessary written notice with Mr. Trezvant's signature before the settlement but contends he substantially complied by notifying Mid-Century Insurance of his representation. 

The court must evaluate two relevant cases: Metropolitan Life Ins. Co. v. Paul K. Roberts, where the court upheld an attorney’s lien despite the absence of the client's signature on the notice, finding substantial compliance through written notification of representation; and Gary Eubanks and Associates v. Black and White Cab, where the attorney’s lien was deemed invalid due to failure to meet statutory requirements, including lack of signatures and proper notice. 

In the case at hand, the court concluded that Mr. Childs did not substantially comply with the statute, as the letter he relied upon lacked Mr. Trezvant's signature and did not inform Mid-Century Insurance of any lien. Furthermore, Mr. Trezvant subsequently informed Ms. Henderson that Mr. Childs did not represent him, undermining Mr. Childs's position. The chancery court's ruling that Mr. Childs failed to establish a valid attorney’s lien is affirmed.

Mr. Trezvant denied Mr. Childs as his attorney and communicated this to Ms. Henderson, leading the chancellor to conclude that substantial compliance was not achieved. Mr. Childs argued that the chancery court erred in stating he did not represent Mr. Trezvant; however, the court did not make such a determination. It found that even if an attorney-client relationship existed, Mid-Century Insurance was not liable due to Mr. Childs’s failure to comply with Ark. Code Ann. 16-22-304(a)(1). The appellate court affirmed the chancery court's findings, stating they were not clearly erroneous, adhering to the precedent that such decisions are only reversed in cases of clear error. Additionally, the court addressed Mr. Childs' claim about noncompliance with Rule 4-2(a)(4) of the Arkansas Rules of the Supreme Court, finding that the appellee's brief met substantial compliance despite some deviations. All arguments were considered before the opinion was issued, resulting in an affirmation of the chancery court's decision.