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HALL v. MID-CENTURY INS. CO.5/24/1991
The opinion of the court was delivered by
This case is presented to us with a Janus-like characterization. The plaintiff, attorney Robert Hadley Hall, who is appealing, informs us that the issue relates to conversion of a $50,000 missing endorsement draft under K.S.A. 84-3-116(b) and K.S.A. 84-3-419(1)(c) of the Uniform Commercial Code.
The defendants, Mid-Century Insurance Co., Inc., (Mid-Century) and Bank IV Olathe, N.A. (Bank IV), contend: (1) The case arose from an attorney fee dispute between Hall and Gary L. Sloan, members of the Gary L. Sloan Law Offices, (2) the fee controversy has been resolved, and (3) the appeal is moot and should be dismissed.
Our jurisdiction is under K.S.A. 20-3018(c) upon transfer from the Court of Appeals.
The trial court granted the Bank IV and Mid-Century motions for summary judgment. While Hall's appeal was pending, a motion to dismiss as moot was filed by Mid-Century. Bank IV joined in the motion. The Court of Appeals denied the motion with leave to raise the issue when the appeal is heard on the merits.
We agree with the attorney fee dispute characterization. The issues are moot. The appeal is dismissed.
Facts
Mike Moles sued Susan LaPlant in an automobile personal injury action. Moles was represented by the Gary L. Sloan Law Offices. (Sloan and Hall are associated attorneys.) Moles' personal injury case was settled for $50,000. Under the settlement, Moles agreed to pay attorney fees and expenses of $24,862.65. As a result of the settlement, an insurance draft was issued to "Mike Moles, Gary L. Sloan and Robert Hall, his attorneys."
Before the Moles settlement draft was issued, Hall had contractually agreed with Sloan that any fee Hall earned would be deposited in the Gary L. Sloan general account. Sloan and Hall also agreed that after disbursement of expenses, 50% of the fee would belong to Hall and 50% of the fee would belong to Sloan. Hall claimed that he was entitled to $11,691.32 of the Moles fee.
Hall sued Sloan and Sloan's wife to recover this fee. Hall added a fraud count based upon a scheme to defraud him by negotiating the check without his authority. Hall also sued Bank IV and Mid-Century on one count of statutory conversion under K.S.A. 84-3-419. Hall claimed $50,000 from each, plus punitive damages and attorney fees.
The draft carried the purported endorsement of Mike Moles and the following restrictive endorsement: "Pay to the order of Bank IV Olathe, KS, For Deposit Only, 114-289-501, Gary L. Sloan, Attorney-at-Law Trust Account." Hall did not endorse the draft. The Gary L. Sloan Law Offices, on that same day, negotiated the draft to Bank IV. It was accepted for deposit and Gary L. Sloan's trust account was credited for $50,000.
Mid-Century purchased the $50,000 draft. Bank IV gave the trust account final credit in the amount of $50,000 and allowed Gary L. Sloan or his agent to write a check on the trust account
in the amount of $24,862.65 payable to Gary L. Sloan and deposited into the Gary L. Sloan general account.
The Sloan/Hall September 2, 1987, practice of law agreement stated in pertinent part:
"RE: Agreement regarding our association in the practice of law at 222 South Cherry, Olathe, Kansas
"Dear Robert:
"This letter will confirm our verbal agreement and will serve as the contractual arrangement concerning our relationship as associate attorneys in the practice of law at 222 South Cherry, Olathe, Kansas, effective as of September 2, 1987. You have agreed to associate with me in the prac
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