FILED: December 27, 2000

DONALD B. POTTER,

Appellant,

v.

SCHLESSER COMPANY, INC.,

Respondent.

Appeal from Circuit Court, Multnomah County.

Nely Johnson, Judge.

Argued and submitted January 20, 2000.

Michael H. Bloom argued the cause and filed the briefs for appellant.

Michael E. Farnell argued the cause for respondent. With him on the brief was Hagen, Dye, Hirschy & DiLorenzo, P.C.

Before Haselton, Presiding Judge, and Wollheim and Kistler, Judges.

WOLLHEIM, J.

Affirmed.

WOLLHEIM, J.

Plaintiff appeals from a summary judgment in favor of defendant on plaintiff's claim for damages on the attorney's lien statute, ORS 87.445, and from the denial of plaintiff's motion for summary judgment on that claim. The trial court entered an ORCP 67 B judgment in defendant's favor on the claim. On appeal, plaintiff contends that the trial court erred in concluding that plaintiff had no recourse against defendant under ORS 87.445. Because we conclude that the statutory scheme for the creation and enforcement of an attorney's lien provides plaintiff with no cause of action against defendant, we affirm.

On review of cross-motions for summary judgment, we examine whether there are any disputed issues of material fact and whether either party was entitled to summary judgment as a matter of law. Hood Technology Corp. v. OR-OSHA, 168 Or App 293, 295, 7 P3d 564 (2000). The material facts are not in dispute. Plaintiff, an attorney, represented George Hunt in an action for racial discrimination against defendant. That action was filed in federal court in December 1996. In February 1997, Hunt and plaintiff entered into a retainer agreement entitling plaintiff to one third "of all amounts recovered in the event of a settlement after Complaint is filed and more than 14 days before any scheduled trial or hearing date[.]" On September 4, 1997, Steven Schlesser, president of defendant Schlesser Co., Inc., met privately with Hunt and entered into an agreement to settle the racial discrimination action for the sum of $12,000. Schlesser made out a check to Hunt in that amount, and Hunt cashed it that same day. During their meeting, Schlesser asked Hunt if he intended to pay plaintiff, and Hunt responded that his relations with plaintiff were his business. Schlesser and Hunt then drafted an additional signed and notarized document stating that Schlesser had "expressed his concern to [Hunt] that he inform his attorney, Don Potter, that he has settled the case." By the following day, plaintiff apparently had received information about the settlement and filed in the federal court a "Notice of Claim of Attorney's Lien Under ORS 87.445," asserting his entitlement to a portion of the settlement proceeds in accordance with his retainer agreement.

In November 1997, plaintiff initiated this action in state court to enforce his attorney's lien against defendant Schlesser Co., Inc. (1) Hunt is not a party to this action. Plaintiff asserted that defendant violated ORS 87.475 by paying Hunt $12,000 in settlement of Hunt's case against defendant without first satisfying plaintiff's lien and that plaintiff suffered damages in the amount of $6,568.86. Plaintiff moved for partial summary judgment on his attorney's lien claim, arguing that his lien was enforceable against defendant as a matter of law. Defendant moved for summary judgment on the same claim, asserting that any lien plaintiff might have under the attorney's lien statutes was not enforceable against defendant. The trial court denied plaintiff's motion and granted defendant's motion for summary judgment on plaintiff's attorney's lien claim, concluding that there is no statutory authority for enforcement of attorney liens against third parties when settlement occurs before judgment.

On appeal, plaintiff asserts that the trial court erred in its interpretation of the relevant statutes. At issue are ORS 87.430 through ORS 87.490, which provide for attorney's liens. ORS 87.445 provides for what is generally known as an attorney's charging lien:

"An attorney has a lien upon actions, suits and proceedings after the commencement thereof, and judgments, decrees, orders and awards entered therein in the client's favor and the proceeds thereof to the extent of fees and compensation specially agreed upon with the client, or if there is no agreement, for the reasonable value of the services of the attorney."

The question presented here is what becomes of a lien when the case is settled with no judgment, decree, order or award. ORS 87.480 gives attorneys "the same right and power over actions, suits, proceedings, judgments, decrees, orders and awards to enforce their liens as their clients have for the amount due thereon to them." However, settlements extinguish the "actions, suits, proceedings" in question, yet do not result in "judgments, decrees, orders and awards." ORS 87.445.

ORS 87.475 makes specific provisions for cases that are settled:

"(1) Except as provided in subsections (3) and (4) of this section, the lien created by ORS 87.445 is not affected by a settlement between the parties to the action, suit or proceeding before or after judgment, decree, order or award.

"(2) Except as provided in subsections (3) and (4) of this section, a party to the action, suit or proceeding, or any other person, does not have the right to satisfy the lien created by ORS 87.445 or any judgment, decree, order or award entered in the action, suit or proceeding until the lien, and claim of the attorney for fees based thereon, is satisfied in full.

"(3) A judgment debtor may pay the full amount of a judgment or decree into court and the clerk of the court shall thereupon fully satisfy the judgment or decree on the record and the judgment debtor shall be thereby released from any further claims thereunder.

"(4) If more than one attorney appears of record for a litigant, the satisfaction of the lien created by ORS 87.445 by any one of the attorneys is conclusive evidence that the lien is fully satisfied." (Emphasis added.)

Subsection 2 of ORS 87.475 does address some aspects of enforcement of liens created under ORS 87.445, but only in situations where a "judgment, decree, order or award" has been entered in the action. (2) That did not occur in this case. ORS 87.450 also bears on the enforcement of liens created under ORS 87.445. It provides, in part:

"(1) When an attorney claims a lien under ORS 87.445, if the judgment or decree is for a sum of money only, the attorney must file a notice of claim of lien with the clerk of the court that issues the judgment or decree within three years after the judgment or decree is given. The clerk shall enter the notice in the records of the action or suit and shall also make a note of the filing of the notice in the judgment docket of the court.

"(2) When an attorney files a notice of claim of lien under subsection (1) of this section, the attorney shall send forthwith a copy of the notice to the client by registered or certified mail sent to the client at the last-known address of the client."

ORS 87.455 and ORS 87.460 similarly make provisions for foreclosure of liens under ORS 87.445 where a judgment awards personal or real property.

We conclude that plaintiff had a lien on the federal court action, Hunt v. Schlesser, after that action had been commenced. ORS 87.445. At the time that the action was filed, the lien was "for the reasonable value of the services of the attorney," but when plaintiff and Hunt executed a retainer agreement in February 1997, the lien was for the "fees and compensation specially agreed upon" by plaintiff and Hunt. Id.

ORS 87.475(1) makes it clear that Hunt's settlement with Schlesser of the underlying action did not extinguish plaintiff's lien, as neither of the exceptions in subsection (3) or (4) of that statute is implicated in this case. Given that there was no longer an action, suit, or proceeding to which the lien could attach, it therefore attached to "the proceeds thereof," i.e., the settlement. ORS 87.445. However, the limitation found in ORS 87.475(2) that prevents a party from satisfying a judgment, decree, order or award without first satisfying the attorney's lien does not prevent a party from settling a case without first satisfying the attorney's lien. Nor do any of the notice provisions found in ORS 87.450 through 87.460 apply when an action settles before a judgment is entered. Thus, the statutory scheme it contains no explicit provision that either would require an attorney to give notice of a lien to a client's opponent before a settlement is paid to the attorney's client, and contains no explicit provision that a party settling with another party must first satisfy an attorney's lien before turning settlement money over to the attorney's client.

Plaintiff argues that ORS 87.475 "as a whole" is intended to "prevent party-opponents from avoiding an attorney's lien by settling directly with the attorney's client." Plaintiff thus suggests that we interpret ORS 87.475(2) as applying to a prejudgment settlement as well to "any judgment, decree, order or award[.]" Even assuming that plaintiff is correct about the legislative intent, the legislature's failure to include any language in the statute to that effect would preclude us from interpreting the statute as plaintiff urges, because we are unable to "insert what has been omitted" into a statute. ORS 174.010.

Plaintiff also argues that ORS 87.480, which provides attorneys with "the same right and power over actions, suits, proceedings, judgments, decrees, orders and awards to enforce their liens as their clients have for the amounts due thereon to them," gives an attorney the right to sue the client's party-opponent to enforce an attorney's lien. Since there are no "judgments, decrees, orders and awards" involved in cases that settle at an early stage, an attorney's right under ORS 87.480 is "the same right and power over actions, suits [and] proceedings * * * as [the attorney's] client." The attorney's client has no right or power over an action initiated by the attorney against the settling defendant, as the client is not even a party to the later proceeding. Nothing in the text of ORS 87.480 gives an attorney the right to initiate a separate proceeding against a client's party-opponent after a case has settled to enforce an ORS 87.445 attorney's lien. (3) Cf. Willhite v. Biff's Seafood Restaurant, Inc., 124 Or App 360, 364, 862 P2d 580 (1993) (Attorney's lien "is not a statutory right to a separate or additional source for an attorney fee. Rather, the attorney's rights are coextensive with the client's.").

We conclude that nothing in the text of the attorney's lien statutes points to mechanism for an attorney to enforce a lien against a client's party-opponent when the client has settled with that party before judgment. However, we view statutory text in context, which includes prior versions of the same statute as well as case law interpreting the statute. We therefore turn to the context of the attorney's lien statutes to determine what, if any, enforcement mechanism exists for attorneys in plaintiff's position.

Oregon's first statute pertaining to attorney's charging liens was enacted in 1862, and provided:

"An attorney has a lien for his compensation, whether specially agreed upon or implied, as provided in this section:

"* * * * *

"3. Upon money in the hands of the adverse party, in an action, suit or proceeding, in which the attorney was employed, from the time of giving notice of the lien to that party;

"4. Upon a judgment or decree, to the extent of the costs included therein, or if there be a special agreement, to the extent of the compensation specially agreed on, from the giving notice thereof of the party against whom the judgment or decree is given, and filing the original with the clerk where such judgment or decree is entered and docketed.

"This lien is, however, subordinate to the rights existing between the parties to the action, suit or proceeding." General Laws of Oregon, ch 14,