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12/30/92 DISTRICT COLUMBIA REDEVELOPMENT LAND

December 30, 1992

DISTRICT OF COLUMBIA REDEVELOPMENT LAND AGENCY, APPELLANT/CROSS-APPELLEE
v.
LANDON G. DOWDEY, APPELLEE/CROSS-APPELLANT



Appeal from the Superior Court of the District of Columbia; (Hon. Robert I. Richter, Motions Judge); (Hon. Harold L. Cushenberry, Jr., Trial Judge)

Before Terry, Steadman, and Wagner, Associate Judges.

The opinion of the court was delivered by: Wagner

WAGNER, Associate Judge : The District of Columbia Redevelopment Land Agency (RLA) appeals from a judgment of the trial court holding that RLA deprived appellee, Landon G. Dowdey (Dowdey), of just compensation for his attorney's lien on real property which RLA acquired on behalf of the government by eminent domain, and awarding Dowdey a judgment for $56,601.16 with interest at the rate of six percent per annum from March 29, 1973. Appellee cross-appeals from the denial of his requests for interest at prevailing market rates and attorney's fees.

On appeal, RLA contends that the trial court erred in entering judgment for appellee because: (1) the District of Columbia does not recognize attorney's liens, and the lien, if any, did not attach before RLA took the property; and (2) res judicata and collateral estoppel principles bar appellee's claim against RLA. In his cross-appeal, appellee contends that the trial court erred in applying the statutory interest rate instead of the rates which would provide just and reasonable compensation for his interest. We hold that: (1) appellee acquired an attorney's lien by contract prior to condemnation of his client's property which transferred to the funds deposited by RLA into the registry of the court at the commencement of the condemnation proceeding; (2) although on notice of appellee's claim, RLA failed to join him in the proceeding as required by statute as a result of which appellee was not compensated for his property; (3) appellee/cross-appellant is not entitled to attorney's fees; and (4) appellee/cross-appellant is entitled to a determination of the amount of interest which will compensate him for the property taken. Therefore, we affirm the judgment of the trial court, except for its ruling on the amount of interest awarded and remand for consideration of the question consistent with this opinion.

I.

The events out of which the present controversy arises commenced in early 1972. William C. and Sofrona Baylies (the Baylies) retained Dowdey to resist foreclosure on their real property located at 1711-14th Street, N.W. in the District of Columbia until the anticipated condemnation of the property by RLA. It is undisputed that the Baylies and Dowdey made an oral agreement for attorney's fees under the terms of which the Baylies were to pay appellee one-third of the equity in the 14th Street property which Dowdey either preserved or recovered on their behalf. *fn1 On April 24, 1972, Dowdey filed an action in the Superior Court of the District of Columbia on behalf of the Baylies to prevent foreclosure on the property. *fn2 Dowdey's efforts were successful in that foreclosure was delayed until RLA filed suit for condemnation of the property in the United States District Court for the District of Columbia. *fn3 In accordance with the condemnation statute, RLA deposited into the court registry $290,000 "to the use of the persons entitled" for 1711-14th Street, N.W., representing the estimated fair compensation. *fn4

The same day that RLA filed suit, Dowdey filed an action in the United States District Court for the District of Columbia against the Baylies seeking a declaration and enforcement of an attorney's lien against the Baylies' equity in the property. *fn5 Although RLA knew of Dowdey's claim in the property, it never joined him as a party in the condemnation proceeding. *fn6 On March 29, 1973, the District Court ordered release of the $290,000 deposited by RLA to Shenandoah and Title Company (Shenandoah), purportedly the authorized agent for Title Insurance Company of Minnesota (Minnesota Title). The order required Shenandoah to distribute the proceeds for payment and discharge of "all taxes, assessments, liens and encumbrances against the property on the date of taking" and the redemption of any tax sales thereof, with the balance to be paid over to the parties entitled to it. Dowdey did not receive any money for his claim.

Two years later, on April 4, 1975, the district court entered judgment for Dowdey against the Baylies in the amount of $56,601.16, representing the amount of Dowdey's "attorney's lien against the sum deposited in the Registry of the Court in lieu of property condemned . . . " *fn7 The district court (J. Gasch) made the following finding of fact in that action which is pertinent to the arguments on appeal:

is entitled to an attorney's lien against defendant's equity in premises 1711-14th Street, N.W., in the amount of Fifty-six Thousand and Six Hundred One Dollars and sixteen cents ($56,601.16).

The court also found that the funds deposited by RLA for the property were disbursed without payment to Dowdey, although the defendants had actual notice of Dowdey's claim. *fn8 The Baylies never paid the judgment, and Dowdey filed other actions in an effort to collect the fee.

On August 3, 1976, Dowdey sued RLA's title insurance company, Minnesota Title, in the United States District Court for the District of Columbia, alleging that Minnesota Title wrongfully disbursed the proceeds of the condemnation funds without paying Dowdey even though it was on noticed of Dowdey's suit to declare and enforce an attorney's lien. *fn9 Following a trial by the court, the district court entered judgment for Minnesota Title in 1980, finding that Dowdey failed to establish that Minnesota Title authorized Shenandoah to disburse the condemnation proceeds from the 14th Street property and that Shenandoah had acted on behalf of the Baylies, rather than Minnesota Title, in making the disbursement. Pertinent to arguments raised on appeal by RLA, the district court in its Memorandum Opinion (J. Parker) also rendered the following interpretation of Judge Gasch's order in Dowdey v. Baylies:

Judge Gasch did not view Dowdey's claim as a charge or encumbrance against the 14th Street property. Rather, he found that a lien attached to the Baylieses' share of the proceeds in accordance with the parties' agreement and there fore rendered a money judgment against Baylies and his wife.

Dowdey appealed from the judgment in the Minnesota Title litigation. The United States court of Appeals for the District of Columbia circuit affirmed the trial court's decision, *fn10 stating in its unpublished order:

Substantially for reasons stated by the District court, we agree with the result reached in this case. In particular, we find no solid ground for disturbing the District court's Conclusion that (1) appellant Dowdey's lien attached to the Baylies' share of the condemnation proceeds rather than to the property that was the subject of the condemnation proceedings, . . .

Thus, Dowdey was unable to recover the amount of his lien from Minnesota Title. *fn11

On March 27, 1987, Dowdey filed the complaint in Superior Court against RLA out of which the present appeal arises. The case was tried by the court on stipulated facts. The trial court determined that Dowdey had an equitable lien on the property which was perfected before RLA's condemnation action and that RLA deprived appellee of his property without just compensation by failing to join him in the condemnation proceeding pursuant to Fed. R. Civ. P. 71A (c)(2). The trial Judge accepted as the law of the case ...


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