Attorney Fees Case Analysis

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Although DeWitt Ross and Stevens may have won its action, the victory may be a Pyrrhic one for family law practitioners generally.

Even if the court ultimately holds that subsec. (3)(a) is constitutional, clients have been given enormous leverage in fee disputes with attorneys until that happens.

Obviously, an attorney would rather have an hour-and-a-half hearing before a judge than a jury trial, or a constitutional challenge to the hearing in the court of appeals (and possibly Supreme Court).

Attorneys should expect that savvy litigious clients will use Judge Dykman’s dissent in attempts to extract concessions on their bills.

Fortunately, there is a wealth or authority that clients do not have a right to a jury trial in these cases.

Dykman’s dissent is correct in his analysis, but he is asking the wrong question.

Dykman finds that, at common law, an attorney-client fee dispute was an action at law, and thus, there is a right to a jury trial. Every other jurisdiction that has considered the issue has found, as he did, that there is a right to jury. Lester v. Dawson, 491 S.E.2d 240 (S.C. 1997); Olson v. Areta, 346 N.W.2d 178 (Minn.App.1984); Litman v. Fine, et al., 517 So.2d 88 (Fla.App. 3 Dist. 1987).

However, the correct question to ask is whether, at common law, Wisconsin recognized attorney liens in divorce proceeds. That question was left unanswered by the Supreme Court in Stasey v. Miller, 168 Wis.2d 37, 61, 483 N.W.2d 221 (1992).

The only Wisconsin court to have considered the question explicitly in a published decision, however, has found that there is a common law attorney lien to divorce proceeds. Edl v. Kinast, 207 B.R. 611 (W.D.Wis.1997).

While the law throughout the country is settled that there is a right to a jury trial in a fee dispute between an attorney and client, it is equally clear that suits to establish or enforce attorney liens are of an equitable nature, and not triable by jury. Furthermore, this has been found to apply to divorce proceedings by the two courts that considered the issue. In re Marriage of Rosenberg, 690 P.2d 1293 (Colo.App.1984); Kleager v. Schaneman, 322 N.W.2d 659 (Neb.1982).

Thus, the resounding weight of authority all supports the following conclusion: an attorney can obtain a lien on a client’s proceeds in a divorce, pursuant to the statute and without a jury trial.

Furthermore, even if there were no persuasive authority on this question, common sense suggests that there is a common law attorney’s lien on divorce proceeds.

In 1848, a husband of substantial means who desired a divorce would have had no trouble finding counsel. But how would his wife have obtained counsel, or initiated a divorce, unless her attorney could get a lien on her proceeds?

So, even if there is no 19th century precedent that expressly holds that attorneys were entitled to liens on divorce proceeds at common law, it seems unlikely that women would have been able to obtain counsel unless they were.

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The only caveat is that, for there to be an award pursuant to judicial finding only, there must be proceeds. Attorney fees cannot be awarded, without a jury trial, in an amount that exceeds the client’s assets awarded in the divorce. The lien would exceed the proceeds, and this would run counter to the underlying assumption of the attorney’s lien — that the attorney’s skill created the property.

Thus, if the only asset awarded to a client in divorce is a $500 bank account, the court may not enter judgment against him for $501, unless a jury is empaneled.

Otherwise, the procedures in sec. 767.23(3)(a) are constitutional.

Until this issue is finally set to rest, however, no attorney should enter court for a hearing on fees without having copies of Edl, Kleager, and Rosenberg at his fingertips.

– David Ziemer

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David Ziemer can be reached by email.