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Linder v. Lewis, Roca, Scoville & Beauchamp

Supreme Court of Arizona

December 17, 1958

Milton LINDER, individually and as assignees of Louis S. Marches and/or Marches Packing Co., Inc., Appellant,
LEWIS, ROCA, SCOVILLE & BEAUCHAMP, a copartnership, and Strock & Co., Inc., Appellees.

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[85 Ariz. 121] Trew, Woodford & Dodd, Phoenix, for appellant.

Lewis, Roca, Scoville & Beauchamp, Phoenix, for appellee, Lewis, Roca, Scoville & Beauchamp.

Phil J. Munch, Phoenix, for appellee, S. Strock & Co., Inc.


This is an action in garnishment wherein S. Strock & Co., Inc., as the garnishor alleged a fraudulent conveyance; and Lewis, Roca, Scoville & Beauchamp intervened, asserting an attorney's lien. Judgment was entered in their favor and this appeal followed. Such facts as are necessary to understand the questions presented will be stated in light most favorable to appellees, the prevailing parties in the court below.

In the year of 1952, one Louis S. Marches employed Harold R. Scoville, attorney at law of the firm of Lewis, Roca, Scoville & Beauchamp, to bring an action for malicious prosecution against one Jack Tolmachoff. This action ultimately resulted in a verdict and judgment in favor of Marches in the sum of $15,000. At or near that time, Marches was seemingly heavily indebted to others, it being established on the trial of the garnishment that at least nine judgments were unsatisfied and outstanding against him in Arizona. One was the judgment in favor of appellee S. Strock & Co., Inc.

Shortly after obtaining his judgment, Marches left Arizona and went to Los Angeles, California. There he engaged appellant Milton Linder, a Los Angeles attorney, to collect the judgment. To that end he executed an absolute conveyance to Linder, which recited tht for a valuable consideration Marches 'has assigned, sold and transferred, and hereby does assign, sell and transfer to Milton Linder the judgment.' Among other things, he appeared in supplemental creditors' proceedings in the Superior Court of Maricopa County, Arizona, in propria persona as assignee of Marches. He entered into discussions with Harold R. Scoville in regard to Scoville's attorney's lien for legal services performed in obtaining the judgment. He represented to both Scoville and K. Donald Wren, attorney for Jack Tolmachoff, that he was the purchaser of the judgment for a valuable consideration and the owner thereof. Further discussions with Wren terminated in an understanding that Tolmachoff would pay the judgment in full. Consequently, on April 15, 1956, Linder came to Phoenix, Arizona, from California. He arrived in Phoenix by plane at 10:00 o'clock a. m. and was the in possession of a return-trip ticket to Los Angeles on a flight leaving at 12:00 noon. Directly upon [85 Ariz. 122] his arrival, he went to Wren's office and received payment of the entire judgment, together with interest and costs, but just after leaving Wren's office, he was served with the writ of garnishment by S. Strock & Co., Inc. Although Linder as garnishee was charged under the pertinent Arizona statutes with the responsibility for the fund until a determination of the respective rights therein, Gillespie Land & Irrigation Co. v. Jones, 63 Ariz. 535, 164 P.2d 456, upon his return to California he paid over the proceeds less his expenses and charges to a second assignee, a woman by the name of Grace Thomas about whom more will be said later.

In his sworn affidavit in answer to the garnishment, Linder set forth that Louis S. Marches had no interest in the assignment or in the named action by Marches against Tolmachoff and that Milton Linder did not have, nor did he have at the time of the service of the writ, in his possession any effects of Louis S. Marches. Lewis,

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Roca, Scoville & Beauchamp intervened in the garnishment proceedings and asserted a prior right to a portion of the proceeds of the judgment by virtue of an attorney's charging lien. After several hearings, judgment was entered in favor of both garnishor S. Strock & Co., Inc., and intervenors in the full amount of their claims.

Appellant first contends, with which contention we will deal summarily, that the trial court erred in denying his motion to quash the garnishment for the reason that service of the garnishment was fraudulently obtained by enticing him into the territorial jurisdiction of the Superior Court of Maricopa County. Linder testified that Wren promised that if he [Linder] came to Phoenix to collect the funds due on the judgment, his presence in Phoenix would not be disclosed to Marches' creditors. Wren denied making any such representations. There being a direct conflict in the evidence, it is sufficient to say that the trial court's determination of the fact is binding here.

We will now consider the position of intervenors Lewis, Roca, Scoville & Beauchamp. On January 17, 1955, long before Linder came to Arizona and collected the judgment, Scoville wrote a letter to Linder concerning his fee arrangements with Marches. Since the letter accurately summarizes the testimony of Scoville at the trial, the pertinent parts are quoted.

'* * * Louis is fully aware that we undertook the false arrest case only after considerable conversation as to a fair method of compensation. I was well aware then of the problems of collection in the event we were able to secure a substantial judgment. Louis was insistent on bringing the action as a matter of principle to him and without regard to the practical aspects of being sure of recovery.

[85 Ariz. 123] 'I believe you know that I had successfully defended Louis in the criminal case. I asked Louis to get other counsel for the civil suit, but at his insistence finally agreed to take the case upon the basis of a fee minimum time charge, with a retainer thereon, plus an additional contingent fee in the event of collection of any judgment obtained. Louis agreed that we should undertake the work with a firm charge on a fee minimum basis of $15 per hour and at that rate for court time, with a retainer on account thereof in the sum of $500, which Louis paid, plus one-third of any monies recovered.' (Emphasis supplied).

Intervenors' rights are dependent upon the intention of the parties to create a charging lien, Barnes v. Shattuck, 13 Ariz. 338, 114 P. 952, affirmed Barnes v. Alexander, 232 U.S. 117, 34 S.Ct. 276, 58 L.Ed. 530, or as has been said, it must appear that the parties looked to the fund itself for the payment of the attorney. Button's Estate v. Anderson, 112 Vt. 531, 28 A.2d 404, 143 A.L.R. 195.

It is evident that the terms of compensation are divisible. (1) Scoville was to receive a minimum fee of $15 per hour with a retainer on account in the sum of $500. Here, the intention of the parties is clear. This was the personal responsibility of Marches. (2) But in the event the litigation terminated favorably, the situation was different. Scoville was to receive as an additional fee one third of any monies recovered. The trial court could have found an intention of the parties to create a charging lien which was to be paid from 'any monies recovered.'

Where an attorney has a charging lien against a fund, a portion to the amount of his claim belongs to the attorney and cannot be assigned by the judgment creditor, and whoever receives it under an assignment is, in justice, to be considered as holding to the attorney's use and benefit. Anderson v. Star-Bair Oil Co.,34 Wyo. 332, 243 P. 394. We hold that the assignment made by Marches to Linder did not in any manner affect the charge against the fund in favor of ...

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