This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
In Re the Marriage of:
Theodore Duane Slaton,
Ryan & Grinde, Ltd.,
Sharon Therese Slaton,
n/k/a Sharon Therese Vandehey,
Filed November 28, 2000
Winona County District Court
File No. F698612
Kristine L. Dicke, Ryan & Grinde, Ltd., 407 14th Street N.W., Post Office Box 6667, Rochester, MN 55903 (attorney pro se)
Cindy K. Telstad, Streater & Murphy, P.A., 64-68 East Fourth Street, P.O. Box 310, Winona, MN 55987 (for respondent)
Considered and decided by Kalitowski, Presiding Judge, Amundson, Judge, and Halbrooks, Judge.
U N P U B L I S H E D O P I N I O N
Appellant law firm challenges district court's granting of respondent wife's motion wherein wife received the sale proceeds of certain property free and clear of law firm's lien. The law firm alleges (1) its lien is valid under Minn. Stat. § 481.13 (1998); (2) its lien attaches to the parties' marital property; and (c) the parties' stipulation was a collusive attempt to defeat its lien. Wife contends that the law firm's acquisition of a lien against marital property awarded to the non-client spouse is contrary to public policy. We affirm.
Theodore Slaton (Slaton) retained appellant Ryan and Grinde, Ltd. (the firm), to represent him in the dissolution of his marriage to respondent, Sharon Vandehey (Vandehey). An order for temporary relief set Slaton’s monthly maintenance and child-support obligations, and stated that any arrearage would be subject to calculation and adjustment of allocation of assets at the time of the final hearing.
Vandehey sought to have Slaton found in contempt of court for his failure to pay child support and maintenance, and requested that the inventory of the parties' business be sold, that the sale proceeds be divided equally between the parties, and that, Slaton's share be reduced, if necessary, to pay his support and maintenance arrears.
The court found Slaton in contempt of court, but reserved sanctions pending Slaton's ability to purge himself of the contempt by making the past-due payments. The district court also ordered that the parties' business inventory be sold to or through an auction service. Shortly after the hearing, the firm withdrew as counsel for Slaton and served a notice of lien upon Slaton, the business, Vandehey's attorney, and the auction service. The notice stated that the firm intended to assert a lien in the amount of $9,282.18 on Slaton's interest in all personal property and assets of the business and all after-acquired property and proceeds from the sale of business assets.
Two months after the filing of the lien, the parties stipulated to various issues including (a) that the then current amount of arrears totaled $11,413; (b) that Vandehey would receive the first $20,000 from the net sale proceeds; (c) Slaton would be entitled to the next $20,000 of proceeds, if any; and (d) the parties would share equally any proceeds received in excess of $40,000. The agreement provided that Slaton's share, if any, would be reduced by his then existing arrears.
The business inventory was sold by auction for $19,985. Vandehey's attorney moved to (1) have all net proceeds received from the sale declared the sole property of Vandehey, free and clear of any lien asserted by the firm, and (2) that Slaton's share of the net proceeds paid to her to satisfy Slaton's arrears would take priority over any lien or claim asserted by the firm.
The district court granted Vandehey's motion and ordered that the net proceeds derived from the sale of marital property, in accordance with the judgment was her sole property free and clear of any lien asserted by the firm. This appeal followed.
This court is not bound by and need not give deference to a trial court's decision on a purely legal issue. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984). A reviewing court need not defer to the district court's application of the law when the material facts are not in dispute. Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn. 1989).
The firm contends that the trial court erred as a matter of law in holding that Slaton had no interest in marital property awarded to Vandehey and, therefore, no interest to which the firm's claimed lien attached. The firm's claim for the establishment and enforcement of an attorney's lien against Slaton is governed by Minn. Stat. § 481.13 (1998). An attorney has a lien for compensation
(1) Upon the cause of action from the time of the service of the summons therein, or the commencement of the proceeding, and upon the interest of the attorney's client in any money or property involved in or affected by any action or proceeding in which the attorney may have been employed, from the commencement of the action or proceeding, and, as against third parties, from the time of filing the notice of such lien claim, as provided in this section;
(2) Upon a judgment, * * * the lien shall extend to the amount thereof from the time of giving notice of the claim to the judgment debtor, but this lien is subordinate to the rights existing between the parties to the action or proceeding.
Minn. Stat. § 481.13.
The statute provides for two types of liens: liens on causes of action and liens on judgments. The two types of liens are not mutually exclusive, and both sections may apply. Williams v. Dow Chem. Co., 415 N.W.2d 20, 25 (Minn. App. 1987). Also, liens on judgments are subordinate to the rights existing between the parties to the proceeding. Minn. Stat. § 481.13 (2). Here, the firm did not specify if it filed a lien on the cause of action or on the judgment. Both types of liens may be established, and the lien amount summarily determined, by the court, in the action or proceeding, “on the application of the lien claimant or of any person or party interested in the property subject to lien.” Minn. Stat. § 481.13(3).
An attorney receives a lien "upon the interest of his client." Williams, 415 N.W.2d at 26. An attorney's lien on his client's interest in litigation does not give an attorney the right to claim a lien against any third party involved in the litigation. Id. Here, the district court properly concluded that Vandehey was not the firm's client, and thus that the firm's lien did not entitle it to priority over Vandehey's interest in the proceeds of the business inventory. Moreover, in a marriage dissolution, respective property rights generally are not established until entry of the judgment and until the parties' rights are determined by the judgment and decree, there is no marital property to which an attorney's lien may attach. Akers v. Akers, 233 Minn. 133, 142, 46 N.W.2d 87, 92 (1951). The Akers court noted:
In a divorce suit no property comes into the picture unless a divorce is granted; then, incidental thereto, property rights are adjusted, and an attorney's lien may be impressed. The divorce—the cause of action- is not susceptible of a lien.
Id. (quotation omitted). The district court properly concluded that although Slaton retained an interest in the business inventory after receiving notice of the attorney's lien, his interest remained subject to the court's final division of all the parties' marital property in the judgment.
The Akers court suggests that a married person's ownership interest in marital property is undetermined until entry of judgment and decree. Id. This, of course, is a legal fiction since each spouse is deemed to have a common vested ownership interest in marital property, with the extent of the ownership finally determined by the court in accordance with Minn. Stat. § 518.58. See Minn. Stat. § 518.54, subd. 5 (1998). However, Akers specifically holds that in a dissolution proceeding there is no marital property available to which an attorney's lien may attach. Akers, 233 Minn. at 132, 46 N.W.2d at 92. Here, the district court properly granted Vandehey's motion by awarding her the property free of the attorney lien.
The firm contends that its lien is superior to Vandehey's lien, which resulted from the accumulation of unpaid child support and spousal maintenance. The firm argues that its lien is first in time since as of the lien filing date the judgment had not yet been entered. Generally, the rule applied to determine the priority of liens is "first in time is first in right." Gould v. City of St. Paul, 120 Minn. 172, 176, 139 N.W. 293, 294 (1913). The firm argues that it had priority over Vandehey's interest in the proceeds because Vandehey had received notice of the lien claim before entry of the judgment. Since an attorney lien cannot attach to marital property awarded to the non-client spouse, it is unnecessary to discuss the issue of priority.
Vandehey contends that the firm's acquisition of a lien against property awarded to the non-client spouse is contrary to public policy. The firm claims its lien is paramount to Vandehey’s interest in the business inventory. Following this theory, a party to a marriage dissolution action would always take any property subject to a potential claim or lien by the opposing party's attorney. This is nonsensical. Who would enter into a property settlement fearing that their interest in the property could be eliminated by the opposing party's attorney's lien on the property? The answer being obvious, it is not surprising that the firm fails to provide any relevant legal authority or rational argument for refuting the public policy concern. But even with that, "[t]he function of the court of appeals is limited to identifying errors and then correcting them." Sefkow v. Sefkow, 427 N.W.2d 203, 210 (Minn. 1988). The law being clear about the attachment of liens, it is unnecessary for us to delve into policy analysis as Vandehey suggests.
The firm contends that Slaton and Vandehey's stipulation, in which the parties agreed that the first $20,000 of the net proceeds from the sale of the business inventory were to be Vandehey's sole property, was a collusive attempt to defeat the firm's lien. Further, they argue that no lien, whether on the cause of action or judgment, can be defeated due to the collusive conduct of the parties.
A reviewing court considers "only those issues that the record shows were presented and considered by the trial court in deciding the matter before it." Thiele v. Stich, 425 N.W.2d 580, 582 (Minn.1988) (quoting Thayer v. American Fin. Advisers, Inc., 322 N.W.2d 599, 604 (Minn. 1982). Yet, this court has discretion to address any issue as justice requires. Minn. R. Civ. App. P. 103.04.
The issues of collusion and fraud were not raised at the trial court level. The firm had the opportunity to raise these issues at the motion hearing; in fact, the court specifically inquired whether counsel was asserting that the court's order was intended to circumvent the attorney lien. Counsel replied in the negative. The firm now argues that the motion hearing taken as a whole reflects the fact that the issues of fraud and collusion were presented and considered. Further, they argue that they were not concerned that the court had orchestrated a collusive agreement, but that the parties had done so. Courts are rightfully suspicious of vague or unspecific fraud claims. See generally Westgor v. Grimm, 318 N.W.2d 56, 58 (Minn. 1982) (noting that general allegations of breach of fiduciary duty are insufficient because such claims must be stated with particularity). The firm's submission to this court of matters not presented to the trial court is improper, and we decline to discuss the issues of fraud or collusion.
 Notice of an attorney's lien against a "client's interest in real estate involved in or affected by the action or proceeding" must be filed with the appropriate county recorder or registrar of titles. Minn. Stat. § 481.13(4)(1998). An attorney lien against a client's interest in personal property, however, "shall be filed in the same manner as provided by law for the filing of a security interest." Id.; See Minn. Stat. § 336.9-401(1)(d)(1998)(providing that a security interest in personal property must be filed with the secretary of state). The firm concedes that they did not file notice in accordance with the filing of a security interest; the only "notice" received by Vandehey was the notice of lien served upon her. We hold that the firm's failure to file notice with the secretary of state is not fatal.