Lauren Adams & Adams, Brady & Jackson, PLLC v. Howard

2014 Ark. App. 328

436 S.W.3d 473

Lauren ADAMS and Adams, Brady & Jackson, PLLC, Appellants

v.Gary HOWARD, Individually and as the Administrator of the Estate of Odis Howard, Deceased, Appellee.

No. CV–13–935.

Court of Appeals of Arkansas.

May 28, 2014.

Tamra Cochran, Rogers, for appellants.

Harry McDermott, Fayetteville, for appellees.

ROBERT J. GLADWIN, Chief Judge.

Appellant Lauren Adams and her law firm, Adams, Brady & Jackson, PLLC, appeal from an order that established the manner in which they could recover their fee for representing appellee Gary Howard.¹ We affirm the court's order.

I. Background

The events leading to this case began over fifteen years ago and have generated two prior appeals: Howard v. Adams, 2009 Ark. App. 621, 332 S.W.3d 24 ( Howard I ), and Howard v. Adams, 2012 Ark. App. 562, 424 S.W.3d 337 ( Howard II ). The case history can be found in those opinions, but we will reiterate the relevant facts for ease of understanding.

In 2002, Adams represented Gary Howard in a suit against his stepmother, Mabel Howard. The purpose of the suit was to recover approximately forty-six acres of land from a trust that held the assets of Gary's late father, Odis. Gary had been a beneficiary and co- trustee with Mabel, but, with the assistance of attorney Bill Watkins, Mabel amended the trust to reduce Gary's beneficial interest and eliminate his role as trustee.

Adams successfully recovered the realty in February 2005 and placed the property into Odis's estate, of which Gary was the sole heir. Mabel's dower and homestead interests as Odis's widow were later settled for $110,500.

Once the property was recovered, a dispute arose over Adams's fee. Gary insisted that Adams had promised to collect her fees via a legal-malpractice claim against Watkins. Adams denied making that arrangement and said that the terms of her representation were governed by the following contingency-fee contract:

[Adams] will be entitled to the following percentages of any damages award collected on behalf of [Gary]:

33% of all amounts recovered after filing suit.

According to Adams, the terms of this agreement meant that her fee would be one-third of the property's $1.8 million value as of the date it was recovered in February 2005. She filed a claim against Odis's estate for “33% of the real property recovered or the sum of $613,333,” and an attorney-fee lien for “33% of the proceeds derived from the [46 acres] including but not limited to sale proceeds....”

In August 2005, Gary sued Adams for breach of contract, deceit, and negligence, claiming that she had wrongfully sought her attorney's fees from the estate rather than from Watkins's malpractice insurer. In a pretrial order dated February 16, 2007, the court ruled that Adams's attorney-fee lien was “properly in place against the real estate.” However, the court found that questions remained over whether Adams had agreed to collect part of her fees from Watkins's malpractice carrier. The court declared that Gary must try his case to a jury if he wished to offset Adams's fee claim.

The trial was held in January 2011, and the jury awarded no damages to Gary or the estate. While the case was on appeal, Gary continued his long-standing efforts to sell the forty-six acres. The property's worth had purportedly dropped after being appraised at $2 million in 2006, and, as of 2011, it still had not sold. Adams's attorney-fee lien therefore remained unsatisfied.

In March 2011, Adams asked the court to establish her fee as $613,333, given that Gary's lawsuit yielded no offsets. Gary responded that, if the property were sold, Adams should recover a third of any sales price, less the $110,500 paid to Mabel. He also claimed that Adams should receive “one-third of the real estate itself” as her fee.

On July 24, 2013, the circuit court entered an order that allowed Adams to foreclose on her attorney-fee lien. The court ruled, however, that Adams's fee would be based on the price of the land in an upcoming sale:

It is the decision of the Court that, because of the wording of the contract, [Adams is] entitled to foreclose [her] lien against the real estate, but that at a sale of the real estate, whether by forced sale on the courthouse steps or on the open market, [Adams] is entitled to receive 33% of the net sales price of the real estate.

Further, the amount previously paid to Mabel Howard for her interest is to be deducted from the full sales price of the real estate, after which time the 33% will be set aside to Adams.... In other words, the entire $110,500 will not come from the 33% set aside to Adams ... but will be deducted from the total sales price prior to the computation of the 33% that will represent [Adams's] lien....

Adams appeals from that order.²

II. Interest in Land

Adams argues first that Gary is barred from claiming that her fee should consist of an ownership interest in the forty-six acres. We need not address this point. The circuit court did not grant Adams an ownership interest in the property but permitted a monetary recovery in the form of a percentage of the property's sales price. Any discussion of this issue would therefore be academic. Our court does not decide academic questions. See Kuelbs v. Hill, 2010 Ark. App. 427, 379 S.W.3d 47.

III. Method of Calculating the Fee

Adams argues next that the court erred in calculating her fee as a percentage of the property's future sales proceeds. She contends that her fee should be established as $613,333—one-third of the property's $1.8 million value at the time it was recovered in February 2005. We disagree.

Adams's contract with Gary did not establish a method of calculating her fee; it simply stated that the fee would be one-third of the “amount recovered.” Given that she was hired to recover real property and—as she herself argues—her fee was to be paid in dollars, Adams should have realized that the property must be sold at some point to satisfy her lien. She therefore took the risk that the amount of her fee would depend on the proceeds generated by the property's sale. Consistent with this, Adams filed her lien for thirty-three percent of the “proceeds” from the property. Thus, the circuit court could reasonably have concluded that Adams's fee would not be fixed until a sale of the property occurred.

Adams relies on Simler v. Conner, 352 F.2d 138 (10th Cir.1965), Rector v. Compton, 62 Ark. 279, 36 S.W. 898 (1896), and other authorities for the proposition that her fee should be determined as of the date she recovered the property. While those cases bear similarities to the situation before us, the facts here are unique with regard to the parties' representation contract. Given the circumstances, we cannot say that the circuit court clearly erred in the method it employed to establish the amount of Adams's lien. See May Constr. Co., Inc. v. Town Creek Constr. & Dev., LLC, 2011 Ark. 281, 383 S.W.3d 389 (applying the clearly erroneous standard in reviewing the calculation of a lien amount).

IV. Legal Bar and Estoppel

Adams asserts that Gary is barred by law of the case, laches, and judicial estoppel from claiming that her contingency fee should be calculated on the future sales price of the property. We see no bar to Gary's claims.

Law of the case prohibits a court from reconsidering issues of law and fact that have already been decided on appeal, as well as those that might have been presented, but were not, in a prior appeal. Carter v. Cline, 2013 Ark. 398, 430 S.W.3d 22. According to Adams, law of the case prevents Gary from challenging the February 2007 order that validated her fee because he failed to challenge the fee in his prior appeals. However, the February 2007 order, by its own terms, was limited to the issue of whether Adams's lien was properly in place. It did not set Adams's fee amount or establish a method of calculating her fee. Consequently, the amount of Adams's fee could not have been challenged by Gary in the earlier appeals.

With regard to laches, it is an equitable doctrine that requires a detrimental change in position by one party and an unreasonable delay by the other party. See Gable v. Anthony, 2010 Ark.App. 757, 2010 WL 4525401. The application of laches is based on the particular circumstances of each case and is a question of fact for the trial court. See id.

Adams argues that Gary delayed in challenging her fee and precluded her from “pursuing a partition action to enforce her ownership...