Wojtalewicz & Hohman Law Firm, Ltd., f/n/a Wojtalewicz, Hohman & Schoep, Chtd., Respondent, vs. Linda Schoep, et al., Appellants.

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480 A. 08, subd. 3 (1998).

 

STATE OF MINNESOTA
IN COURT OF APPEALS
C2-99-1146

Wojtalewicz & Hohman Law Firm, Ltd.,
f/n/a Wojtalewicz, Hohman & Schoep, Chtd.,
Respondent,

vs.

Linda Schoep, et al.,
Appellants.

 

Filed January 18, 2000
Affirmed
Shumaker, Judge

Swift County District Court
File No. C09943

Brian Wojtalewicz, Harry D. Hohman, 139 North Miles, P.O. Box 123, Appleton, MN 56208-0123 (for respondent)

Linda Schoep, DeAnna McCashin, 1321 Broadway, Suite 100, Alexandria MN 56308 (for appellants)

Considered and decided by Shumaker, Presiding Judge, Lansing, Judge, and Halbrooks, Judge.

U N P U B L I S H E D   O P I N I O N

SHUMAKER,

Judge

Appellants Linda Schoep and DeAnna McCashin appeal the district court's denial of their motion to dismiss for lack of subject matter jurisdiction, alleging that the district court does not have jurisdiction to decide an attorney lien action between two law firms when the underlying cases are pending in other courts, including federal court and workers' compensation court. We affirm.

FACTS

The law firm of Wojtalewicz, Hohman, & Schoep, Chtd. was formed in 1988. The owners of the firm were Brian Wojtalewicz, Harry Hohman, and Linda Schoep. DeAnna McCashin joined the firm as an associate in the Alexandria branch office in 1995.

On April 1, 1998, Schoep and McCashin notified Wojtalewicz and Hohman that they were leaving the firm to form their own firm. Letters were sent to each of appellants' clients informing them that they could choose to stay with respondent Wojtalewicz & Hohman Law Firm and receive legal services from one of the other attorneys at the firm, or follow appellants to their new firm. All but two of appellants' clients chose to continue receiving legal services from appellants. The firm of Schoep & McCashin, Chtd. was formed on May 1, 1998.

On January 6, 1999, respondent firm served a Summons and Petition on Attorney Liens Pursuant to Minn. Stat. § 481.13 upon appellants, alleging that appellants refused to divide and distribute fees pursuant to an Employment Agreement on client cases they took with them. Respondent firm subsequently filed the action in district court. The Petition asked the district court to establish, determine, and enforce respondent's lien rights under Minn. Stat. § 481.13 in a number of workers' compensation cases that originated with Wojtalewicz, Hohman & Schoep, Chtd. but were currently with appellants. Respondent firm then notified the Office of Administrative Hearings, Workers' Compensation Division (OAH) and insurers on each file that the Petition was pending in district court, so that the OAH would not act on the individual lien notices.

Appellants filed motions to dismiss in district court, alleging that respondent firm's petition failed to state a claim upon which relief can be granted, the district court lacked subject matter jurisdiction to determine liens on causes of action pending in other courts, lack of proper venue, and respondent firm's improper attempt to convert a potential contract action into a summary proceeding under the attorney's lien statute. The district court denied appellants' motion. Appellants appeal the subject matter jurisdiction issue.[1]

D E C I S I O N

Subject matter jurisdiction is a court's jurisdiction over the nature of the case and the type of relief sought. BLACK'S LAW DICTIONARY 857 (7th ed. 1979). The existence of subject matter jurisdiction is a question of law subject to de novo review on appeal. Federal-Hoffman, Inc. v. Fackler, 549 N.W.2d 93, 96 (Minn. App. 1996), review denied (Minn. Aug. 20, 1996). If it appears by suggestion of the parties or otherwise that the court lacks jurisdiction of the subject matter it shall dismiss the action. Minn. R. Civ. P. 12.08(c).

Respondent brought this action as an attorney lien claim under Minn. Stat. § 481.13.[2] Appellants argue that the district court does not have jurisdiction over an attorney lien action when the underlying action is a workers' compensation matter because determination of attorney fees in workers' compensation cases is, by statute, within the initial and exclusive jurisdiction of the compensation judge hearing the underlying case.[3] Respondent argues that the district court does have jurisdiction over a lien action between law firms, even when the underlying action is a workers' compensation matter.

A district court has jurisdiction over an attorney lien action between law firms.[4] See In re L-tryptophan cases, 518 N.W.2d 616 (Minn. App. 1994) (law firm entitled to lien when attorneys employed by the firm leave to form own firm and take clients with them); Ashford v. Interstate Trucking Corp. of Am., Inc., 524 N.W.2d 500 (Minn. App. 1994) (attorney who rightfully withdraws from representing a client entitled to a lien against client's new attorney for value of his services). An attorney lien action may be brought either summarily in the underlying proceeding or in a separate equitable action. Boline v. Doty, 345 N.W.2d 285, 289 (Minn. App. 1984); Minn. Stat. § 481.13(3). A separate equitable proceeding need not be brought in the same court system or jurisdiction as the underlying action. See Schroeder, Siegfried, Ryan & Vidas v. Modern Elec. Prods., Inc., 295 N.W.2d 514 (Minn. 1980) (attorney who did patent work for client before U.S. Patent Office brought separate equitable action to enforce lien in Minnesota district court); Williams v. The Dow Chem. Co., 415 N.W.2d 20 (Minn. App. 1987) (attorney lien action under Section 481.13 can be brought in district court even though underlying case is in federal district court). Respondent firm properly chose to bring one separate equitable proceeding to establish, determine, and enforce its lien rights on more than 180 pending workers' compensation cases. The district court has jurisdiction over the nature of the case.

Minn. Stat. Section 481.13 differentiates between establishing a lien, determining its amount, and enforcing the lien. Boline, 345 N.W.2d at 289. An attorney lien may be established and the amount determined either "summarily" in the action or proceeding or in a separate equitable proceeding. Id. at 289-90. Therefore, the district court has jurisdiction to establish whether or not respondent is entitled to a lien in each workers' compensation case and to calculate a formula for determining the amount of respondent firm's attorney lien in each case. The district court does not, however, have jurisdiction to determine the specific amount of the lien in each underlying workers' compensation case.

Determination of the amount of attorney fees owing in workers' compensation cases is governed entirely by statute and is within the exclusive jurisdiction of the workers' compensation court. Quam v. State, 391 N.W.2d 803, 805 (Minn. 1986); Minn. Stat. § 176.081, subd. 1. Here, the workers' compensation courts have jurisdiction to determine the amount of attorney fees owing as the files are completed, but do not have jurisdiction to establish a formula for determining respondent firm's lien. See Grivno v. Al's Body Works, Inc., 30 W.C.D. 1 (Minn. Workers' Comp. Ct. App. 1975) (Worker's compensation court of appeals had no jurisdiction to decide what the agreement was between the parties' attorneys as to allocation of attorney fees). Upon determining attorney fees, the workers' compensation court can apportion the fee between appellants and respondent firm pursuant to the formula determined by the district court. The district court then has jurisdiction to enforce the lien. See Boline, 345 N.W.2d at 289 (when enforcing a lien, a separate equitable proceeding is always required).

Because the district court has jurisdiction to establish whether respondent firm is entitled to a lien in each underlying case and the formula for determining the amount of the lien, and the workers' compensation court has jurisdiction to determine the amount of attorney fees owing and the specific amount of any liens, the two courts have concurrent jurisdiction. Workers' compensation court of appeals (WCCA) and Minnesota Supreme Court decisions support concurrent jurisdiction. See Strande v. Woman's Club of Minneapolis, 518 N.W.2d 555 (Minn. 1994) (holding that while fee dispute might have been resolved by compensation judge had problem surfaced before fee was paid, employee must now either petition WCCA for review of fees or bring an action in district court); Edquist v. Browning-Ferris, 380 N.W.2d 787 (Minn. 1986) (affirming workers' compensation judge's determination that Minn. Stat. §§ 176.081 and 481.13 create a lien for attorney fees); Bakke v. Cooperating Community Program, 49 W.C.D. 481 (Minn. Workers' Comp. Ct. App. 1993) (remanding to compensation judge for a hearing and determination on whether to award fees to employee's former law firm, current attorney, or to distribute the amount between them based on the reasonable value of the legal services provided respectively); Gross v. Franzen, 41 W.C.D. 97 (Minn. Workers' Comp. Ct. App.) (affirming compensation judge's allocation of attorney fees between an employee's former and current attorneys), aff'd mem., 428 N.W.2d 396 (Minn. 1988).

Affirmed.

[1] On August 17, 1999, this court issued an order dismissing those parts of the appeal from the district court's order denying appellants' motion to dismiss for lack of venue and failure to state a claim as not appealable, but allowing the appeal of the denial of the motion to dismiss for lack of subject matter jurisdiction.

[2] The attorney lien statute provides, in part:

An attorney has a lien for compensation whether the agreement therefor be expressed or implied:
(1) Upon the cause of action * * * ;
(2) Upon a judgment * * * ;
(3) The liens provided by clauses (1) and (2) may be established, and the amount thereof determined, by the court, summarily, in the action or proceeding, on the application of the lien claimant * * * , or such liens may be enforced, and the amount thereof determined, by the court, in an action for equitable relief brought for that purpose.

Minn. Stat. § 481.13 (1998).

[3] The workers' compensation statute providing for attorney fees provides, in part:

Subdivision 1. Limitation of fees. (a) * * * All fees * * *, must be calculated according to the formula under this subdivision, * * *
. * * * *
(c) If the employer or the insurer or the defendant is given written notice of claims for legal services or disbursements, the claim shall be a lien against the amount paid or payable as compensation.
* * * *
Subd. 3. Review. A party that is dissatisfied with its attorney fees may file an application for review by the workers' compensation court of appeals. * * * The workers' compensation court of appeals shall have the authority to raise the issue of the attorney fees at any time upon its own motion and shall have continuing jurisdiction over attorney fees.
* * * *
Subd. 11. When fees due. Attorney fees and other disbursement for a proceedings under this chapter shall not be due or paid until the issue for which the fee or disbursement was incurred has been resolved.

Minn. Stat. § 176.081 (1998) (emphasis added).

[4] Appellants argue that respondent firm has no right to an attorney's lien, even on cases which originated with respondent firm, because it is not the attorney of record in the cases. This argument has no merit. An attorney who has rendered services in an action, although not of record therein, is entitled to the benefit of the attorney lien statute. Meacham v. Ballard & Co., 184 Minn. 607, 612, 240 N.W. 540, 542 (Minn. 1931).