Phyllis J. Outlaw & Associates v. Graham

RODOWSKY, J. The appellant, Phyllis J. Outlaw & Associates (Outlaw), is a law firm. By this action, Outlaw seeks to recover compensation for professional services in litigation, filed in the Circuit Court for Prince George’s County, involving personal injuries to appellee, Kahlita Graham (Kahlita), daughter of appellee, Joyce Graham (Joyce), collectively, “the Grahams.” The Grahams terminated Outlaw’s representation and engaged as counsel two other appellees, Walter E. Laake, Jr., Esquire (Laake) and Joseph, Greenwald & Laake, P.A. (the Firm). When the Firm effected a settlement with the remaining appellee, Government Employees Insurance Company (GEI-CO), Outlaw unsuccessfully sought to freeze or seize the settlement funds to the extent of Outlaw’s claim for services.

The instant interlocutory appeal was noted by Outlaw from an order which (1) denied a preliminary injunction, (2) denied a garnishment on original process, and (3) “authorized” the “Defendants” to distribute the settlement proceeds. For the reasons set forth below, we shall affirm in part and dismiss the appeal in part. On October 2, 2001, Kahlita, then age nineteen, suffered personal injuries in an automobile accident. She was a pas ¹⁸ senger in a car owned by Kim Boone and driven by Bryan Boone.

The Boone car was struck by an automobile, driven by Beth Anderson Smith and owned by Charles T. Smith, which failed to stop at a stop sign. As a result of the collision, Kahlita suffered, inter alia, a concussion and closed head injury, resulting in cognitive impairment. Joyce engaged Outlaw to represent the Grahams. On October 9, 2001, Joyce, “on behalf of Kahlita,” signed a retainer agreement with Outlaw.

It provided for a contingent fee of thirty-three and one-third percent if recovery were by settlement and forty percent if an action were filed in court. If Outlaw’s services were terminated prior to completion of the case, the agreement provided for an hourly rate of $255. There was a flat fee of $695 for processing Personal Injury Protection (PIP) or medical payment claims. The retainer agreement further contained the following provisions: “Should Client terminate the services of Attorney prior to settlement and employ other counsel in this matter, then said termination shall be in writing, signed by Client.

Client hereby authorizes said other counsel to pay directly to Attorney such sums as may be due and owing Attorney for professional services rendered and for costs accumulated and paid by Attorney, through the effective date of termination, and to withhold such sums from any settlement, judgment, or verdict as may be necessary to adequately protect and fully compensate Attorney. Client further gives a lien on Client’s lawsuit arising from the incident which forms the basis of this retainer to Attorney against any and all proceeds of any settlement, judgment, or verdict which may be paid to other counsel or Client in connection with that lawsuit.” The Smiths’ (i.e., the adverse) vehicle in the October 2, 2001 accident was insured against liability for $50,000 per person. The Grahams’ suit against the Smiths settled for policy limits, and, on October 15, 2004, Outlaw disbursed that settlement, retaining a $16,500 fee. ¹⁹ More than two years after the accident, Outlaw also filed suit for Kahlita against the City of Laurel and Prince George’s County, alleging that the stop sign which the adverse driver failed to obey was obscured by vegetation which the defendants, allegedly negligently, had failed to clear. The court (Shepherd, J.) dismissed that action on August 2, 2004, because notice of the claim was untimely.

On behalf of Kahlita, Outlaw, on September 30, 2004, filed suit against the Boones (ie., the host driver and owner) and against GEICO, their underinsured motorist insurance carrier. The Grahams terminated their representation by Outlaw on April 4, 2005, and engaged the Firm. After an exchange of correspondence between Outlaw on the one hand and the Grahams and the Firm on the other, Outlaw transferred the client’s file and escrowed funds later that month or in early May. By certified mail dated July 1, 2005, to the Grahams, the Firm, and GEICO, Outlaw served notice “of a statutory attorney’s lien for legal fees due on proceeds to be awarded to Kahlita[.]” The notice expressly included “proceeds of any settlement,” and was obviously intended to comply with Maryland Rule 2-652, as amended effective January 1, 2003, which, as so amended, implements Maryland Code (2000, 2004 Repl.

Vol.), § 10-501 of the Business Occupations and Professions Article (BOP). 1 Following up that notice, and expressly relying on Rule 2-652(c)(1), Outlaw, on July 8, 2005, filed a motion in Graham v. Boone, seeking an adjudication of the rights of the parties in relation to the asserted lien. The court (Lamas ²⁰ ney, J.), on November 18, 2005, denied that motion, as supplemented, finding that there was no lien. 2 Thereafter, Kahlita settled with GEICO for $225,000. Those funds were transmitted on December 12 by GEICO to the Firm. Outlaw alleges that it was on December 16 that GEICO advised it of the settlement and disbursement of the check to the Firm.

Outlaw brought the present action on December 19, 2005, by a two-count complaint. Accompanying the complaint were motions for a temporary restraining order and preliminary injunction, and for the issuance of a writ of attachment. Outlaw’s complaint alleged, and its affidavit supporting injunctive relief affirmed, that Outlaw had devoted 425.55 hours to the Grahams’ claims so that, at the hourly rate of $255, Outlaw claimed a total of $108,515.73 for legal services. This was said to represent eighty percent of all of the legal work needed to bring the underinsured motorist matter to trial.

In Count I of the complaint, Outlaw sued the Grahams for breach of contract. In Count II, Outlaw named GEICO, Laake, and the Firm as defendants. The relief sought was a declaratory judgment for “80% of all legal fees recovered and/or disbursed to [the Grahams] ... or alternatively, judgment against the Defendants” for $108,515.73, with interest, costs, attorney’s fees, “and such other relief as this Court deems just and appropriate.” Count II alleged that, pursuant to the Maryland Rules of Professional Conduct (MRPC), Rule 1.15, 3 Laake ²¹ and the Firm were “required to escrow funds in dispute until the dispute is resolved.” The court (McKee, J.), acting ex parte as permitted by Maryland Rule 15-504(b), issued a temporary restraining order, freezing the settlement proceeds in the hands of the Firm and setting a hearing on a preliminary injunction for ten days thereafter, December 29. In their written opposition to Outlaw’s request for an injunction, the appellees argued that there was no retainer agreement between Outlaw and Kahlita, that Outlaw had no charging lien, and that Outlaw had been discharged for cause, so that it was unlikely that Outlaw could prevail on the merits.

The appellees further argued that harm to Outlaw would not be irreparable, and that the balance of convenience and public policy favored the appellees. At the December 29 hearing, Outlaw disclaimed relying on a charging lien, but instead based its argument on, inter alia, MRPC 1.15. The court (Nichols, J.) signed an order that day, which was entered January 5, 2006, denying injunctive relief, denying an attachment before judgment, and ordering “that the Defendants are hereby authorized to distribute the settlement proceeds that are the subject of this action accordingly.” 4 From that order this appeal timely was noted. 5 Subsequently, the Firm disbursed the settlement proceeds to its client(s) and itself. ²² I Maryland Code (1974, 2002 Repl.Vol.), § 12-308(3)(i) of the Courts and Judicial Proceedings Article (CJ), confers on this Court jurisdiction to hear an appeal from an interlocutory order which grants or dissolves an injunction. In this case, however, the issue of Outlaw’s entitlement to an injunction, which would have enjoined the Firm from disbursing the proceeds of the settlement received from GEICO, is clearly moot.

Because that disbursement has already been made, this Court cannot order that requested relief. Numerous Maryland decisions illustrate the rule. They include Mercy Hosp., Inc. v. Jackson, 306 Md. 556, 561 , 510 A.2d 562, 564-65 (1986) (dismissing appeal as moot because patient no longer required medical treatment that included a blood transfusion, to which she refused to consent; the Court concluded “[njothing that we say will bind the parties to any future course of action or will affect or remedy what has already taken place”); National Collegiate Athletic Ass’n v. Tucker, 300 Md. 156, 158-59 , 476 A.2d 1160, 1161 (1984) (after lacrosse season, dismissing, as moot, appeal from injunction allowing allegedly ineligible lacrosse players to participate in intercollegiate games); Hagerstown Reprod. Health Servs. v. Fritz, 295 Md. 268 , 454 A.2d 846 (holding, as moot, appeal from circuit court injunction prohibiting abortion where abortion performed during appellate stay), cert. denied, 463 U.S. 1208 , 103 S.Ct. 3538 , 77 L.Ed.2d 1389 (1983); Attorney General v. Anne Arundel County Sch.

Bus Contractors Ass’n, 286 Md. 324, 327-28 , 407 A.2d 749, 752 (1979) (dismissing appeal as moot, because the activities which the Attorney General sought to have enjoined were discontinued); Lloyd v. Board of Sup’rs of Elections of Baltimore County, 206 Md. 36, 39 , 111 A.2d 379, 380 (1954) (dismissing appeal by candidate as moot, because the primary election had already concluded and “[t]he chronology of the case makes it apparent that nothing this Court could do, by reversal or otherwise, could undo or remedy that which has already occurred”); Banner v. Home Sales Co. D, 201 Md. 425, 428 , 94 A.2d 264, 265 (1953) (stating “the general rule is ‘that the court should confine itself to the ²³ particular relief sought in the case before it, and refrain from deciding abstract, moot questions of law, which may remain after that relief has ceased to be possible’ ” (quoting Whitman v. Chesapeake & Potomac Tel. Co., 147 Md. 279, 281 , 128 A. 39, 39 (1925))); Munder v. Purcell, 188 Md. 115, 118-19 , 52 A.2d 923, 925 (1947) (dismissing appeal as moot because the order of the Public Service Commission at issue was rescinded). Appellees, referring to Rules 2 — 632(f) and 8-425(a) to demonstrate the potential availability to Outlaw of a stay, pointed out in their brief to this Court that Outlaw did not seek a stay from the circuit court, or from this Court. In its reply brief, Outlaw argues that, under the Rules, endeavoring to obtain a stay is not mandatory.

This rejoinder misses the mark. Mootness in this case results from events, consistent with the circuit court’s denial of an injunction, having outrun and rendered impracticable the relief sought by Outlaw from this Court. Consequently, we dismiss the interlocutory appeal from the denial of injunctive relief. II Outlaw also appeals the circuit court’s rejection of its application for a writ of attachment before judgment, under which it sought to garnish, to the extent of some $108,000, credits in the hands of the Firm that were due to its client(s).

CJ § 12-303(2) authorizes an appeal from an interlocutory order “granting or denying a motion to quash a writ of attachment.” There was no motion to quash a writ of attachment in the instant matter. Nevertheless, we conclude that the ruling is appealable. A Section 12-303(2) is explainable in terms of the prior practice concerning attachments before judgment. See generally 9B Maryland Code (1957, 1971 Repl.Vol.), Chapter 1100, Subtitle G. Under that practice, attachment before judgment was commenced by filing a declaration, an affidavit setting forth ²⁴ the grounds of entitlement to an attachment on original process, any documentary evidence of the claim, instructions to the sheriff, and, in certain cases, a bond.

See Rule G42. “Upon filing of the documents required by Rule G42 ... the clerk shall issue a unit of attachment against the property of the defendantRule G44 (emphasis added). Upon issuance of the writ, the sheriff could seize property, Rule G46, or, on a writ of attachment by way of garnishment, seize credits in the hands of a garnishee. Rule G47. No pre-seizure notice to the defendant was required by rule.

Once the seizure had been accomplished, however, the defendant or garnishee could file a motion to quash the writ. Rule G51. If no interested person contested the seizure or, if a motion to quash was