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Haskins Law Firm v. American National Property & Casualty Co.
Citations: 304 Ark. 684; 804 S.W.2d 714; 1991 Ark. LEXIS 128Docket: 90-239
Court: Supreme Court of Arkansas; March 4, 1991; Arkansas; State Supreme Court
Dispute under the Attorney’s Lien Law, Ark. Code Ann. 16-22-301-304, involves Ms. Fritzi Ketcher-Montgomery, injured in a collision with James L. Redditt, insured by ANPAC. Initially represented by The Haskins Law Firm (Haskins) under a 33.33% contingent fee agreement, Ms. Ketcher-Montgomery terminated Haskins on November 20, 1985, hiring Guy Jones, Jr. Subsequently, Haskins notified ANPAC of the termination while asserting an attorney’s lien. Jones communicated with Haskins regarding a lien settlement, offering to guarantee $4,000 for Haskins' claim, which Haskins accepted. In October 1987, the case settled for $50,000, but Haskins received no notice of the settlement. Two years later, upon learning of the settlement, Haskins sought $4,000 from Jones and Ms. Ketcher-Montgomery, and when payment was denied, filed suit against ANPAC, Jones, and Ms. Ketcher-Montgomery for $16,666.66, one-third of the settlement. ANPAC denied allegations and sought indemnification from Ms. Ketcher-Montgomery and Jones. Haskins' motion for summary judgment against ANPAC was denied, but they were awarded $4,000 against Jones. Haskins appeals for a reversal and full judgment against ANPAC, citing Lockley v. Easley as precedent. However, key differences exist: in Lockley, there was no counsel substitution or alternative fee agreement, and the attorney acted without knowledge of the client's subsequent recovery at the time of billing. The previous case concluded that the attorney's lien rights remained intact despite the billing for services, a point not similarly applicable to Haskins' situation. An attorney, unaware of a material fact during a client settlement, retains the right to claim a contingent portion of a recovery made without his knowledge, as established in Schaefer v. Arkansas Medical Society. A compromise agreement is binding only on matters the parties intended to include. In the case discussed, attorney Easley could not be inferred to accept a minimal payment for substantial recovery. Haskins explicitly agreed to a settlement of $4,000 for its fees, relinquishing any claim to a percentage of future recoveries. The attorney’s lien statute applies to any settlement, indicating that Haskins substituted its original fee agreement for a fixed sum, thus extinguishing the original agreement upon execution of the new contract. Haskins argued that if the new agreement breached the original, it could revert to its initial terms; however, general contract principles assert that a valid substituted contract extinguishes the original agreement and does not allow for revival upon breach. The intent was clear that Haskins released its rights under the original contract for a specific payment. Haskins also claimed recourse against other parties to the settlement, specifically ANPAC, under the attorney’s lien statutes. Although Haskins is correct in its ability to pursue ANPAC, the substituted contract limits Haskins to the agreed $4,000 fee. The court modified the trial court’s order to hold both Jones and ANPAC responsible for the $4,000 judgment, allowing ANPAC to seek reimbursement from Jones and Mrs. Ketcher-Montgomery. The decision was affirmed as modified.