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Ferguson Firm, PLLC v. Teller & Associates, PLLC

Court of Appeals of Washington, Division 1

December 30, 2013

The FERGUSON FIRM, PLLC, Respondent,
v.
TELLER & ASSOCIATES, PLLC, Defendant, and Brian J. Waid, d/b/a Law Office of Brian J. Waid, Appellant Attorney Lien Claimant.

Page 510

John Rolfing Muenster, Muenster & Koenig, Bainbridge Island, WA, for Respondent.

Kelby Dahmer Fletcher, Stokes Lawrence, Seattle, WA, for Other Parties.

DWYER, J.

[178 Wn.App. 624] ¶ 1 The Ferguson Firm, PLLC (Ferguson), sued Teller & Associates, PLLC (Teller), over a fee dispute.[1] Brian J. Waid d/b/a Law Office of Brian J. Waid (Waid) represented Ferguson throughout much of the dispute, but eventually withdrew because of a conflict with the firm's principal, Sandra Ferguson. Soon after withdrawing, Waid filed an attorney's lien in the amount of $78,350.85 for legal services provided to Ferguson. Thereafter, Ferguson moved for a summary dismissal of [178 Wn.App. 625] Waid's lien, which the trial court granted. The court also directed the clerk to disburse to Ferguson the sum of $78,350.85 held in the court registry, together with accrued interest. Waid then filed a notice of appeal from that order and— more than three weeks after the order was entered— filed a motion to stay the disbursement to Ferguson of the funds in the court registry and for approval of a supersedeas bond. The trial court denied Waid's motion, holding that— because the funds had already been disbursed— the motion was moot. Although Waid's motion was moot when the trial court considered it, money remains in the court registry to which Waid's lien could attach.[2] Thus, the issue of the propriety of the trial court's ruling on the validity of Waid's lien is not moot. Because the trial court erroneously ruled that the money in the court registry was not " proceeds" of Ferguson's action against Teller, we reverse the trial court's order invalidating Waid's lien and remand to the trial court for further proceedings.

I

¶ 2 Sandra Ferguson is the principal of The Ferguson Firm, PLLC. Her firm began representing a group of clients in an employment discrimination case (hereinafter underlying matter) in August 2009. The clients agreed to a contingency fee arrangement but were unable to advance litigation costs and so, with their consent, Ferguson approached multiple law firms, seeking a co-counsel willing to advance litigation costs and able to represent the clients in the event that she was suspended from practicing law by the Supreme Court. Stephen Teller's firm, Teller & Associates, PLLC, was one of the firms that Ferguson approached. After negotiating with Ferguson, Teller agreed to jointly represent the clients and to advance all litigation costs. While Teller and Ferguson were jointly representing the clients, Ferguson was, in fact, suspended from practicing [178 Wn.App. 626] law for 90 days and subsequently withdrew from the case. See In re Disciplinary Proceeding Against Ferguson, 170 Wash.2d 916, 246 P.3d 1236 (2011). During the period of Ferguson's suspension, the clients— represented solely by Teller— accepted a settlement offer.

¶ 3 Subsequently, Ferguson and Teller disputed the manner in which the contingent fee resulting from the settlement should be divided, and Ferguson served a notice of lien for attorney fees on Teller. On May 4, 2011, Ferguson hired Waid to represent her in the fee dispute with Teller. The fee agreement

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between Ferguson and Waid provides that Waid " shall have a lien against any proceeds recovered by, or on behalf of, [Ferguson] in connection with the claims arising out of [the fee dispute with Teller], including pursuant to RCW 60.40.010, et seq. " Waid invoiced Ferguson each month for services provided with no objection from Ferguson.

¶ 4 On May 27, 2011, Ferguson, seeking 90 percent of the contingent fee, sued Teller to resolve the fee dispute. Both parties agreed to deposit the full amount of the contingent fee— $530,107.58— into the superior court registry. On January 30, 2012, the superior court granted Teller's motion for summary judgment, dismissing all of Ferguson's claims and ordering that the disputed funds be divided equally between Ferguson and Teller.

¶ 5 On February 9, Teller filed a motion seeking the disbursement of the funds, which required that Ferguson's response be filed by noon on February 15. However, Ferguson had retained a new attorney to replace Waid and wanted the new attorney to prepare the opposition papers, so long as an additional three weeks was granted to prepare the response. On February 10, Ferguson threatened to bring a legal malpractice claim against Waid. Waid then informed Ferguson that he was required to withdraw from representation. Waid filed a notice of withdrawal, moved for permission to withdraw immediately, and moved to continue the hearing on Teller's motion pursuant to Ferguson's instructions. The court granted Ferguson's request for an additional 30 days and authorized Waid's immediate withdrawal.

[178 Wn.App. 627] ¶ 6 On February 14, Waid filed an attorney's lien in the amount of $78,350.85. On February 16, the trial court entered an order of partial disbursement in which it determined that Teller was entitled to receive his 50 percent share, but ordered that $101,000.74 of Ferguson's share would remain in the court registry until further notice because issues relating to the calculation of fees, costs, and interest had not yet been resolved. The trial court also ordered that an additional $78,350.85 would remain in the registry until further court order in order to protect Waid's lien. Lastly, it ordered that the remaining portion of Ferguson's 50 percent share— $85,702.20— be disbursed to her. Ferguson, on the same day, filed an emergency motion in this court to stay the order of partial disbursement. Our commissioner granted a temporary stay and directed the parties to provide additional briefing on the issue.

¶ 7 On February 21, Ferguson appealed from the trial court's summary judgment order and the related orders granted in favor of Teller. She additionally moved the trial court to set a supersedeas bond amount in order to stay the partial disbursement to Teller. On March 22, our commissioner issued a ruling extending the temporary stay an additional 14 days and informing Ferguson that she was required to post a bond, cash, or alternate security approved by the trial court in order to stay enforcement of the order. Ferguson and Teller then agreed that $290,905.53 of the amount on deposit in the court registry would serve as Ferguson's supersedeas bond pending the outcome of the appeal. They also agreed that $78,350.85, representing the amount of Waid's lien, would remain in the registry pending further order of the trial court.[3]

¶ 8 Thereafter, on July 12, Ferguson moved to have the trial court summarily set aside Waid's attorney's lien. On [178 Wn.App. 628] July 30, the trial court granted the motion and directed the clerk to disburse to Ferguson the sum of $78,350.85 held in the court registry, ...


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