No. 12188
I N THE SUPREME C U T O THE STATE O M N A A
OR F F OTN
1972
WYOMING F R BUREAU M T A INSURANCE
AM UU L
COMPANY, a c o r p o r a t i o n ,
P l a i n t i f f and Respondent,
W L E E. M N A E , RALPH M R H L , BEATTY ,
ATR ODL AS AT
JOHN M. BEATTY and MYRTIE M. BEATTY,
Defendants and A p p e l l a n t s .
Appeal from: D i s t r i c t Court of t h e Tenth J u d i c i a l D i s t r i c t ,
Honorable LeRoy L. McKinnon, Judge p r e s i d i n g .
Counsel of Record:
For Appellants :
Walter E. Mondale argued, Lewistown, Montana.
S t a n l e y M. Doyle argued, Polson, Montana.
For Respondent :
Robert L. Johnson and William Berger, Lewistown, Montana.
William Berger argued, Lewistown, Montana.
Submitted: September 22, 1972
Decided :
Filed :
PER CURIAM:
This is an action by a subrogated insurer against an
attorney to determine their respective rights to settlement
proceeds paid on behalf of a negligent third party in an auto-
mobile accident. From a judgment in favor of the subrogated
insurer entered by the distklct court of Fergus County, the
Honorable LeRoy L. McKinnon, district judge, the attorney
appeals.
On March 15, 1965, a collision occurred between a motor
vehicle driven by Betty McDaniels and a motor vehicle driven by
Myrtie Beatty in which the owner, Ralph Beatty, and John Beatty
were passengers. McDaniel's liability insurer was State Farm
Mutual Automobile Insurance Company, while the Beatty vehicle
was covered by collision and medical payments insurance by Wyoming
Farm Bureau Mutual Insurance Company. Wyoming paid the Beattys
a total of $1,291.66 in collision and medical payment claims and
became subrogated in this amount to the rights of the Beattys
against McDaniels.
The Beattys employed attorney Mondale to prosecute their
claims for injuries against McDaniels. He filed suit for damages
thereon which was ultimately settled for the sum of $4,931.00
which was paid by McDaniel's liability insurer, State Farm.
Attorney Mondale was paid an attorney's fee for these services
by his clients, the Beattys.
In the meantime, Wyoming Farm Bureau had notified State
Farm of its subrogation rights by reason of its payment of
$1,291.66 to the Beattys. State Farm advised Wyoming Farm
Bureau that it would reimburse the latter when the Beattys' suit
against McDaniels was concluded.
Subsequently State Farm made out three drafts totalling
$1,291.66 in payment of Wyoming Farm Bureau's subrogation
claims. Named as joint payees thereon were the respective
Beattys, Wyoming Farm Bureau, and attorney Mondale. The latter's
name was included thereon at his request.
The instant action arose when Wyoming Farm Bureau refused
to pay attorney Mondale an attorney's fee from the settlement
proceeds of $1,291.66 represented by the three drafts. Wyoming
Farm Bureau instituted suit for declaratory judgment naming attor-
ney Mondale and the three Beattys as defendants. Tkpurpose of
the suit was to determine the respective rights of the subro-
gated insurer, Wyoming Farm Bureau, and attorney Mondale to the
settlement proceeds.
Essentially Wyoming Farm Bureau contended it was entitled
to the entire proceeds by reason of its subrogation rights de-
rived from its payment of that amount to the Beattys under the
collision and medical payments coverage in their policy. Attor-
ney Mondale, on the other hand, claimed that he was entitled to
a reasonable attorney's fee from the settlement proceeds and an
attorney's lien on such proceeds to secure payment.
A trial was held before a jury in the district court of
Fergus County before Honorable LeRoy L. McKinnon, district judge.
The testimony concerning whether attorney Mondale had been em-
ployed by Wyoming Farm Bureau to handle their subrogation claim
was conflicting. A special interrogatory was submitted to the
jury in lieu of a general verdict which read as follows:
"Do you find that an express contract of employ-
ment was entered into by defendant Walter E.
Mondale and plaintiff Wyoming Farm Bureau Mutual
Insurance Company?"
The jury returned the answer, "No."
Thereupon attorney Mondale requested the court to
determine, without a jury, whether an implied contract of
employment existed. Findings of fact, conclusions of law and
judgment were entered by Judge McKinnon to the effect that all
issues in the case had been determined by the jury leaving
nothing for determination by the court. Judgment was entered
for plaintiff for the full amount of settlement proceeds. De-
fendant Mondale now appeals that judgment to this Court.
The ultimate issue for review is whether attorney
Mondale is entitled to an attorney's fee and lien from the
settlement proceeds.
This appeal is controlled by our decision in Sisters of
Charity v. Nichols, 157 Mont. 106, 483 P.2d 279, and cases cited
therein. It is the fact of an attorney's employment that gives
rise to his right to compensation. The jury found no express
contract of employment on the basis of substantial, though conflict-
ing, evidence and attorney Mondale is concluded thereby. There
is no evidence in this case on which an implied contract of
employment can be based. Even if we assume that the subrogated
insurer derived an incidental benefit from the attorney's services
which is far from clear in this case, such incidental benefit,
in itself, does not create an implied contract by the subrogated
insurer to pay an attorney's fee. Nor is there any evidence in
this case that would give rise to an equitable lien absent em-
ployment. Judge McKinnon was correct in finding that the jury
resolved the only ultimate issue of fact in this case and that
plaintiff was entitled to judgment.
The judgment of the district court is affirmed.