Certiorari to the Colorado Court of Appeals. Court of Appeals
Case No. 12CA1878.
dispute regarding an attorney's charging lien, a
contingent fee plaintiff's former attorneys asserted a
lien against any settlement or judgment entered in the
underlying action and in favor of the plaintiff. After the
underlying action was settled, successor counsel moved to
void the lien, and initial counsel moved to strike successor
counsel's motion and to compel arbitration, based on an
arbitration clause contained in initial counsel's
contingent fee agreement with the plaintiff.
supreme court concludes that successor counsel's motion
to void the lien at issue was properly filed in the
underlying action and that the underlying action was a "
proper civil action" within the meaning of section
12-5-119, C.R.S. (2015). As a result, the court further
concludes that the lien dispute was between initial and
successor counsel and that therefore, the matter (1) was not
subject to arbitration pursuant to the arbitration clause in
initial counsel's contingent fee agreement with the
plaintiff and (2) was properly before the district court.
Finally, the court concludes that the record supports the
district court's finding that initial counsel was not
entitled to recover the fees that it was seeking.
the court reverses the judgment of the court of appeals and
remands this case for further proceedings consistent with
for Petitioners: Fisher & Associates P.C., Jacob C.
Eisenstein, Denver, Colorado.
for Respondents: Mintz Law Firm, LLC, Robin E. Scully
for Amicus Curiae Colorado Trial Lawyers Association: Ogborn
Mihm, LLC, Anna N. Martinez, Denver, Colorado.
[¶1] This case presents several novel issues
arising from a dispute regarding an attorney's charging
lien. After a contingent fee plaintiff's initial
attorneys were discharged for cause and replaced by successor
counsel, initial counsel asserted a lien against any
settlement or judgment entered in the underlying action and
in favor of the plaintiff. The underlying action was
subsequently settled, and successor counsel filed a motion to
void the lien. Initial counsel responded by moving to strike
successor counsel's motion and to compel arbitration,
based on an arbitration clause contained in initial
counsel's contingent fee agreement with the plaintiff.
[¶2] The district court ultimately concluded
that this dispute was between initial and successor counsel,
and thus, the arbitration clause contained in initial
counsel's contingent fee agreement with the plaintiff did
not apply. Having thus determined that the matter was
properly before it, the court proceeded to determine whether
initial counsel was entitled to any of the fees that it was
seeking to recover. The court concluded that initial counsel
was not entitled to such fees because it had been discharged
for cause, and under the express terms of the contingent fee
agreement, it had forfeited the right to those fees.
[¶3] Initial counsel appealed, and a
division of the court of appeals reversed. Martinez v.
Mintz, No. 12CA1878, slip op. at 10, (Colo.App. Nov. 21,
2013). As pertinent here, the division concluded that the
present dispute was between initial counsel and the
plaintiff. slip op. at 6. Accordingly, the division concluded
that the matter was subject to arbitration and that the
district court had erred in denying initial counsel's
motion to compel arbitration and in ruling on the merits of
the issues presented. slip op. at 8-9.
[¶4] We granted certiorari and now
reverse. We conclude that successor
counsel's motion to void the lien at issue was properly
filed in the underlying action and that the underlying action
was a " proper civil action" within the meaning of
section 12-5-119, C.R.S. (2015). In light of this
determination, we further conclude that the lien dispute was
between initial and successor counsel and that therefore, the
matter (1) was not subject to arbitration pursuant to the
arbitration clause in initial counsel's contingent fee
agreement with the plaintiff and (2) was properly before the
district court. Finally, we conclude that the record supports
the district court's finding that initial counsel was not
entitled to recover the fees that it was seeking.
[¶5] Accordingly, we reverse the judgment of
the court of appeals and remand this case for further
proceedings consistent with this opinion.
Facts and Procedural History
[¶6] After April Martinez fell in a
stairwell at her apartment complex and injured her knee, she
hired the respondents, Mintz Law Firm, LLC and Eric Krajewski
(collectively, " Mintz" ), to represent her in a
personal injury action. April later died from pulmonary
emboli that had formed in her leg and moved into her lung.
[¶7] Thereafter, April's mother,
petitioner Ramona Martinez (" Ms. Martinez" ),
retained Mintz to pursue a wrongful death action against the
apartment complex, and Ms. Martinez and Mintz entered into a
contingent fee agreement (the " Mintz-Martinez
Agreement" ) to document the engagement. As pertinent
here, this agreement entitled Mintz to 33-1/3% of the gross
recovery collected if the matter settled out of court. The
agreement further provided, " In the event the Client
terminates this contingent fee agreement without wrongful
conduct by the Attorney which would cause the Attorney to
forfeit any fee," Mintz could ask the court to order Ms.
Martinez to pay a fee based on the reasonable value of the
services that Mintz had provided. And the agreement stated,
" In the event of a dispute between Attorney and Client
concerning any aspect of the Attorney/Client relationship
including controversies over Attorney's fees, . . . said
dispute shall be submitted to final and binding arbitration
pursuant to the Uniform Arbitration Act of 1975 as adopted by
Colorado . . . ."
[¶8] Prior to filing a lawsuit on Ms.
Martinez's behalf, Mintz received a $100,000 settlement
offer from the apartment complex, but Mintz rejected that
offer by making an $850,000 written counteroffer. (Ms.
Martinez later testified that Mintz had rejected the offer
without her authority.)
[¶9] The apartment complex did not accept
the counteroffer, and after a lengthy delay, Mintz filed a
wrongful death action on Ms. Martinez's behalf against
the complex. Several days later, however, Ms. Martinez
discharged Mintz and hired petitioner Stevens Law Offices
(" Stevens" ) to represent her. Stevens notified
Mintz in writing of Ms. Martinez's decision, after which
Mintz filed a notice of lien on any settlement or judgment
entered in the wrongful death case and in favor of Ms.
Martinez. The claimed lien was in the amount of $33,333.33 in
attorney fees and $1,530.21 in costs. The fee amount was
based on the $100,000 offer that Mintz had previously
[¶10] Stevens proceeded to litigate Ms.
Martinez's wrongful death action and ultimately settled
it for $110,000. Upon receipt of the settlement funds,
Stevens deposited its 40% contractually agreed upon
contingency fee into its trust account and disbursed the
remaining 60%, less costs, to Ms. Martinez.
[¶11] Thereafter, Stevens filed a motion in
the underlying wrongful death action to void Mintz's
attorney's lien. In response, Mintz filed a " Motion
to Compel Arbitration and Motion to Strike Motion to Void
Attorney's Lien." In these motions, Mintz argued
that Stevens did not have standing to move to void the lien
because the instant dispute was between Mintz and Ms.
Martinez and not between Mintz and Stevens. Mintz further
asserted that the dispute was subject to the arbitration
clause in the Mintz-Martinez Agreement and that even if
Stevens' motion were amended to substitute Ms. Martinez
as the movant, the court " must refer the dispute to
arbitration as required by the contract and applicable
[¶12] The district court denied Mintz's
motions. The court noted that Mintz purported to hold an
enforceable lien against all third parties, including
Stevens. Thus, Stevens had standing to challenge the lien. In
addition, the court found that the Mintz-Martinez Agreement
did not purport to bind anyone other than Mintz and Ms.
Martinez, and therefore, the arbitration clause did not apply
to the present dispute. The court thus concluded that it had
jurisdiction and ordered Mintz to file a response to
Stevens' motion to void Mintz's attorney's lien.
[¶13] The matter proceeded to an evidentiary
hearing after which the court reaffirmed its prior ruling
that because the dispute was not between Ms. Martinez and
Mintz, it was not subject to the arbitration clause. In
addition, the court found that Mintz had been terminated for
cause, and therefore, under the terms of the Mintz-Martinez
Agreement, Mintz had forfeited any entitlement to attorney
fees. Finally, the court found that Mintz's lien on the
settlement funds held by Stevens was frivolous, and the court
awarded Stevens fees and costs.
[¶14] Mintz appealed, and a division of the
court of appeals reversed. Martinez, slip op. at 10. As
pertinent here, the division concluded, contrary to the
district court, that the dispute over the funds at issue was
between Mintz and Ms. Martinez and not between Mintz and
Stevens. slip op. at 6. The division thus concluded that the
arbitration clause of the Mintz-Martinez Agreement continued
to apply and that " any issues regarding the
reasonableness of the agreement and whether Mintz had
forfeited its fee or had been terminated for cause were
matters for the arbitrator." slip op. at 8-9.
[¶15] We subsequently granted Ms.
Martinez's and ...