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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. McLaughlin v. Okumura (12/11/2009) sp-6440
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| LORIMER L. and PAMELA F. | ) |
| McLAUGHLIN, | ) Supreme Court No. S- 12708/12777 |
| ) | |
| Appellants, | ) Superior Court No. 4FA-92-01039 CI |
| ) | |
| v. | ) O P I N I O N |
| ) | |
| MASAYOSHI OKUMURA, | ) No. 6440 December 11, 2009 |
| ) | |
| Appellee. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Mark I. Wood, Judge.
Appearances: Robert John, Law Office of
Robert John, Fairbanks, for Appellants.
Masayoshi Okumura, pro se, Tokyo, Japan.
Before: Fabe, Chief Justice, Eastaugh,
Carpeneti, Winfree, and Christen, Justices.
FABE, Chief Justice.
I. INTRODUCTION
Upon learning that judgment debtors Lorimer and Pamela
McLaughlin were about to receive settlement proceeds related to
the malpractice of their former attorney Arthur Robson, judgment
creditor Masayoshi Okumura renewed his efforts to execute on his
fraud judgment against them after nine years of inactivity. The
superior court granted Okumuras motion for a new writ of
execution, allowing him to execute on the McLaughlins settlement
proceeds. Attorney Michael MacDonald, who claimed to have
assisted in obtaining those settlement proceeds, moved to have
his 40% contingency fee subtracted from the proceeds prior to
Okumuras levy, and the superior court denied his request. The
superior court also refused to prevent Okumura from executing
against a piece of real estate owned by the McLaughlins. The
McLaughlins appeal each of these three decisions.
Because Okumuras reasons for not executing sooner were
sufficient, we affirm the superior courts grant of Okumuras new
writ of execution. For the same reason, we affirm the superior
courts subsequent refusal to prevent Okumura from executing on
the debtors real estate. And because MacDonald has not
adequately demonstrated that he has a claim to 40% of the
McLaughlins settlement proceeds, we also affirm the superior
courts denial of his requested fee.
II. FACTS AND PROCEEDINGS
A. Background Facts and Prior Proceedings1
Lorimer and Pamela McLaughlin purchased a historic gold
camp near Fairbanks in 1982 and lost title to it via foreclosure
in 1990 due to malpractice by their attorney, Arthur Robson.
Believing that they still had viable title, the McLaughlins,
still represented by Robson, contracted with foreign investor
Masayoshi Okumura to build an Aurorium facility on the land where
tourists could view the Northern Lights. Apparently acting on
Robsons advice, the McLaughlins did not tell Okumura about the
foreclosure. The land was repossessed and Okumura sued the
McLaughlins. Robson defended the McLaughlins without revealing
his own culpability, and in 1993 Okumura obtained a total
judgment of $1,008,536.05 against the McLaughlins for fraud.
Still represented by Robson, the McLaughlins filed for
Chapter 7 bankruptcy in 1993. The McLaughlins debt to Okumura
was not discharged in their bankruptcy case because it was
considered to have resulted from fraud.2 Okumura has levied on
his judgment against the McLaughlins, but the judgment has not
yet been entirely satisfied.
While the McLaughlins bankruptcy case was pending,
Okumura sued Robson for his role in the botched Aurorium deal.
Robson was defended in that suit by law firm Hughes, Thorsness,
Gantz, Powell & Brundin (Hughes Thorsness). It would later be
alleged that in the course of its representation of Robson and in
furtherance of Robsons fraudulent scheme to avoid personal
liability, Hughes Thorsness prepared for Robsons signature a
pleading in the McLaughlins bankruptcy case withdrawing the
McLaughlins motion to clarify that they still owned legal
malpractice claims against Robson.3 This withdrawal was later
reversed and the bankruptcy court held that Robson could be sued
by the McLaughlins and their bankruptcy estate, but this did not
occur until after Robson had already settled with Okumura for
$900,000 and thereby exhausted his liability insurance. Okumuras
judgment against the McLaughlins was deemed partially satisfied
and reduced by $900,000 due to Okumuras settlement with Robson.
The McLaughlins subsequently sued Robson for
malpractice and fraud, subject to a court-approved agreement that
any recovery would be split evenly between them and their
bankruptcy estate. Attorney Michael MacDonald pursued the claim
under a contingency fee agreement. The McLaughlins obtained a
$3,571,429.33 judgment against Robson in 2001, which we affirmed
on appeal in 2002.4
Robsons liability insurance already having been
exhausted, the McLaughlins executed on Robsons assets, including
his unlitigated claims for contribution against attorney Ken
Lougee and law firm Hughes Thorsness.5 The McLaughlins asserted
that Robson had claims for contribution against Lougee and Hughes
Thorsness for the role they allegedly played in the malpractice
and fraud that ultimately resulted in the McLaughlins judgment
against Robson.
Accordingly, the McLaughlins and their bankruptcy
trustee sued Lougee and Hughes Thorsness as assignees of Robsons
claims for contribution. Attorney Michael Flanigan pursued these
claims under a 40% contingency fee agreement approved by the
bankruptcy court. Following a dismissal, appeal, reversal, and
remand,6 in 2006 the parties agreed to a settlement. The
bankruptcy trustee sought permission from the bankruptcy court to
settle the claims against Lougee and Hughes Thorsness for
$160,000. Forty percent of the settlement proceeds were to go to
Flanigan pursuant to his fee agreement, with the remainder to be
split evenly between the McLaughlins and their bankruptcy estate.
The bankruptcy court approved this arrangement in December 2006.
B. This Case
The current controversy arose when Okumura renewed his
attempts to collect on his 1993 judgment against the McLaughlins
after receiving notice of the Lougee settlement in late 2006.
Okumura moved for a new writ of execution and a writ of
attachment against the McLaughlins anticipated share of the
Lougee settlement proceeds. Superior Court Judge Mark I. Wood
granted Okumuras motion for a writ of execution, which was issued
in February 2007. The McLaughlins appeal, arguing that Okumura
was not entitled to a new writ because he had not shown good
cause for his delaying execution on the judgment against them for
more than five years.
Subsequently, MacDonald, who had represented the
McLaughlins in their malpractice suit against Robson, filed a
motion requesting that 40% of the McLaughlins share of the Lougee
settlement be released directly to him as attorneys fees rather
than being subject to execution by Okumura. The superior court
denied this request, and the McLaughlins appeal.
Finally, in May 2007 Okumura attempted to execute
against a piece of real property held by Pamela McLaughlin, and
the McLaughlins moved to quash Okumuras writ of execution and
cancel the public sale of the property. The superior court
denied their motion and the McLaughlins appeal, arguing once
again that Okumura had not shown good cause for delaying
execution on the judgment against them for more than five years.
This appeal, which was filed separately, was consolidated with
the appeal of the first two issues.
III. STANDARDS OF REVIEW
The McLaughlins argue that the superior court erred in
allowing Okumura to execute on his judgment against them after
more than five years. The superior courts decision to allow
execution on a judgment more than five years old is a mixed
question of law and fact.7 On appeal, [q]uestions of law are
reviewed de novo, and [q]uestions of fact are reviewed under the
clearly erroneous standard.8
The McLaughlins also contend that the superior court
erred in holding that MacDonalds attorneys lien did not apply to
the McLaughlins settlement proceeds from the Lougee litigation.
To the extent that the resolution of this issue depends on
questions of fact, we employ the clearly erroneous standard of
review.9 But once factual questions are resolved, [t]he question
of [lien] priority is a legal one, to which we apply our
independent judgment, and we will adopt the rule of law that is
most persuasive in light of precedent, reason, and policy.10
IV. DISCUSSION
A. The Superior Court Did Not Err in Granting Okumura a
New Writ of Execution With Which To Collect on His 1993
Judgment Against the McLaughlins.
1. Proceedings
After receiving notice of the pending Lougee settlement
in November 2006, Okumura, whose 1993 judgment against the
McLaughlins had not been fully satisfied or discharged in
bankruptcy, moved for a renewed writ of execution on the judgment
under Alaska Civil Rule 69(d)(1)11 and a writ of attachment
against the McLaughlins anticipated share of the Lougee
settlement proceeds under Alaska Civil Rule 69(d)(5).12 Okumuras
original writ of execution had expired, and he apparently had not
executed on the judgment since 1997, nine years earlier.
Explaining the nine-year delay since his last attempt to execute
on the judgment, Okumura asserted13 that he had garnished Lorimer
McLaughlins wages through September 1997 but that [e]fforts to
locate nonexempt assets of the debtors were unsuccessful after
that date and he had lost track of the [McLaughlins] physical
address and whereabouts.
Both Flanigan, who represented the McLaughlins and
their bankruptcy estate in the Lougee litigation, and MacDonald,
who pursued the McLaughlins claim against Robson, opposed
Okumuras attempt to execute. Through MacDonald, the McLaughlins
contended that Okumura could not show good cause for his nine-
year delay in execution under both Civil Rule 69(d)(1), which
requires a judgment creditor in Okumuras position to state the
reasons for failure to obtain a writ for a period of five years,
and AS 09.35.020, which provides that execution on a judgment
after five years may issue only if the court determines that
there are just and sufficient reasons for the failure to obtain
the writ of execution within five years. The McLaughlins argued
that Okumuras failure to execute on his judgment within the five-
year period following his last execution was not justified
because during that period he could have levied on the
McLaughlins cause of action against Robson, their judgment
against Robson, the money they levied from Robson, or the claim
for contribution against Lougee and Hughes Thorsness that they
levied from Robson. They also argued that the equities in this
case favored them because Okumura received all of Robsons
insurance money, some of which should have gone to satisfy their
malpractice judgment against Robson.
Okumura responded, asserting that his delay in
execution was justified because [f]or all practical purposes,
[the McLaughlins] had no visible presence in Alaska after 1998
and [a]wareness of litigation and knowledge of tangible assets in
[the McLaughlins] possession are not synonymous. In February
2007 Superior Court Judge Mark I. Wood granted Okumuras motion
for a writ of execution. The federal bankruptcy court released
the McLaughlins $44,485.33 share of the Lougee settlement to the
clerk of the superior court rather than to the McLaughlins.
Okumuras writ of execution issued on February 13, 2007.
The McLaughlins filed a motion for reconsideration,
which the superior court denied in March 2007. The superior
court explained that Okumura had attempted to locate the
McLaughlins at three different times using the postal service and
that [w]ithout knowledge of their whereabouts, Okumura was unable
to determine what, if any assets were available to be levied
under the judgment. It found these to be just and sufficient
reasons for Okumuras failure to execute and declined to impose a
higher burden of proof on Okumura. It further stated that
Okumura cannot be found to have had knowledge of the McLaughlins
court case against attorney Robson without some evidence that
Okumura was actually aware of the case.
The McLaughlins now appeal, arguing that the superior
court erred in granting Okumuras motion for a writ of execution14
because Okumura did not provide sufficient justification for his
nine-year delay and because allowing execution would be
inequitable given the history of this case.
2. Executing on a judgment after a lapse of five
years or more
The requirements for executing on a judgment after a
lapse of five years or more are provided in Alaska Civil Rule
69(d) and AS 09.35.020. Civil Rule 69(d) mandates that,
[w]henever a period of five years shall elapse without an
execution being issued on a judgment, a judgment creditor seeking
to execute must file a motion specifying, among other things, the
reasons for failure to obtain a writ for a period of five years.
Alaska Statute 09.35.020, which Civil Rule 69(d) implements,15
provides:
When a period of five years has elapsed after
the entry of judgment and without an
execution being issued on the judgment, no
execution may issue except by order of the
court in which judgment is entered. The court
shall grant the motion if the court
determines that there are just and sufficient
reasons for the failure to obtain the writ of
execution within five years after the entry
of judgment.
Alaska Statute 09.35.020 does not impose a definitive
statute of limitations on the execution of judgments but leaves
the balancing of rights and duties between the parties to the
discretion of the trial court.16 We have said that [i]f a
judgment creditor seeks to execute upon a valid judgment after a
lapse of five years . . . good cause must be demonstrated for the
delay,17 but also that a creditor may be able to demonstrate any
number of valid reasons supporting its decision to delay formal
execution.18
We have found good cause for a creditors delay in
several different situations: where execution would be futile
because no assets were available to be executed upon,19 where
there existed a high level of animosity between the parties,20
where the debtors appeal of the judgment at issue was still
ongoing,21 and where the party opposing the execution of judgment
was in control of the preconditions to the filing of the motion
to execute.22
The McLaughlins rely heavily on Magden v. Alaska USA
Federal Credit Union.23 In Magden, we affirmed the granting of a
creditors motion for a writ of execution after more than five
years because the debtor had offered no evidence in her
opposition that [during the relevant five-year period] she
possessed any non-exempt assets upon which [the creditor] could
execute which meant that any attempts by [the creditor] to
enforce the judgment would have been futile.24 That is, in Magden
we held that a debtors lack of assets may constitute good cause
for a creditors delay in execution.
But the McLaughlins take Magden several steps further
by interpreting it to mean that [i]f there were assets to levy
and they were not levied, then just and sufficient reason[s] for
failure to execute cannot be shown and thus that it was incumbent
on Okumura to prove . . . that the McLaughlins had no assets
available for execution during the five-year period. But such a
broad reading of Magden is unwarranted and would be inconsistent
with our statement that a creditor may be able to demonstrate any
number of valid reasons supporting its decision to delay formal
execution.25 A debtors lack of assets is not the only possible
just and sufficient reason for a creditors delay in execution.26
As the superior court recognized when rejecting the
McLaughlins motion for reconsideration, [i]n any situation,
whether assets are available or otherwise, the judgment creditor
need only demonstrate just and sufficient reasons to the
satisfaction of the court.
3. The reasons Okumura presented for his delay in
execution were just and sufficient.
The superior court found that Okumuras inability to
locate the McLaughlins set out just and sufficient reasons for
Okumuras failure to levy against any assets. We agree.
Okumuras attorney stated via affidavit that Okumura
executed on his judgment against the McLaughlins by garnishing
Lorimer McLaughlins wages from 1996 through September 1997, but
that efforts to locate non exempt assets of the debtors after
that were unsuccessful. Okumuras attorney further claimed that
[r]equests through the postal service for a current mailing
address for the debtor[s] [were] unsuccessful [in] 1998 and in
March 2003 and that [a] later request was returned by the postal
service indicating that no forwarding address was available for
the debtors. The McLaughlins were eventually personally served
with Okumuras writ of execution in Kailua Kona, Hawaii. Though
Okumura did not present any documentation of his efforts to find
the McLaughlins beyond the affidavit of his attorney, the
superior court did not clearly err in finding that Okumura did in
fact try and fail to locate the McLaughlins, who had moved out of
state. Nor did the superior court err in determining that
Okumuras inability to locate the McLaughlins constituted a just
and sufficient reason for his delay in execution.
The McLaughlins argue that the superior court clearly
erred in finding that there was insufficient evidence to show
that Okumura had been aware that the McLaughlins possessed the
Robson and Lougee causes of action. They contend that Okumura
cannot show just and sufficient reasons for his delay because he
failed to execute on those assets. But whether or not Okumura
was aware that the McLaughlins possessed causes of action, he was
justified in waiting until tangible funds actually became
available for execution.
4. The McLaughlins equitable argument
The McLaughlins argue that allowing Okumura to execute
on their settlement proceeds would be unfair because they engaged
in extensive efforts and thereby brought the [Lougee] litigation
to fruition. But the fact that a debtor has expended effort in
obtaining funds does not somehow exempt those funds from
execution otherwise execution would rarely be possible.
The McLaughlins also argue that allowing Okumura to
execute would be inequitable because Okumura pocketed $900,000
from attorney Robson through Robsons insurance, some of which
should have gone to the McLaughlins. They cite out-of-state
authority for the proposition that writs of execution should be
quashed where illegalities or inequities disfavor further
enforcement of the judgment.27 But where a court exercises its
equitable power to restrain execution on a judgment, it should be
because inequity would arise from execution, not because the
underlying judgment is itself inequitable.28 The McLaughlins
essentially argue that Okumuras judgment against them is itself
inequitable because Okumura received Robsons insurance proceeds.
But the proper way to make such an attack on the underlying
judgment would be through an appeal of that judgment or a Civil
Rule 60(b) motion. More importantly, this issue has already been
litigated the McLaughlins asked both the superior court and the
bankruptcy court to declare Okumuras judgment against them
satisfied following his settlement with Robson, and although the
superior court reduced the judgment, both courts declined to
declare the judgment entirely satisfied.
Accordingly, we affirm the superior courts decision to
grant Okumura a new writ of execution.
B. The Superior Court Did Not Err in Allowing Okumura To
Execute on a Piece of Pamela McLaughlins Real Property.
1. Proceedings
Following Okumuras receipt of the Lougee settlement
proceeds, an updated writ of execution was issued on May 3, 2007
that reflected the remaining balance of Okumuras judgment against
the McLaughlins. Okumura then began the process of executing
against a piece of real property in Fairbanks owned by Pamela
McLaughlin.
The McLaughlins objected, moving to quash the writ of
execution and cancel the notice of public sale of the property,
arguing that Okumura had not shown good cause under Civil Rule
69(d)(1) and AS 09.35.02029 for his delay in executing on that
piece of property. Okumura responded that he had already
satisfied his burden of showing good cause for his delay in
execution during the litigation discussed above surrounding his
request for a new writ of execution. He also asserted that he
had good cause for not previously executing against the Fairbanks
property because the McLaughlins had listed no real estate in
their bankruptcy proceeding and because the property had changed
hands several times over the previous decade.
The McLaughlins responded that [t]he prior ruling of
the court on the previous Civil Rule 69(d) issue is not
dispositive because the existence of the Fairbanks property had
not been brought to light during the previous litigation over
whether Okumura had good cause for his delay. MacDonald asserted
that the existence of the real property certainly would have been
raised as part of the defenses raised the last time around but
that the McLaughlins did not advise [him] that they had any real
estate in Fairbanks. The McLaughlins also contended that the
various transfers of the Fairbanks property did not excuse
Okumuras failure to timely execute on it because regardless of
the transfers, as a matter of law, [Okumura] had a judgment lien
against the [property] by virtue of [his] recorded judgment.
The superior court denied the McLaughlins motion to
quash the writ of execution and cancel the public sale,
explaining that Okumura had already shown just and sufficient
reasons after a more than five year lapse in obtaining a writ of
execution and that he was not required to once again make a
showing under Civil Rule 69(d) until 5 years have elapsed since
the issuance of a writ of execution. The McLaughlins appeal.
2. Okumura was not required to show separate good
cause for his delay in executing against Pamela
McLaughlins real property because he had already
obtained a new writ of execution.
The McLaughlins argue that the trial courts
piggybacking the real-property execution on top of its rationale
for justifying the settlement-monies execution puts the cart
before the horse. They seem to assume that AS 09.35.020s
requirement that a creditor show good cause for a five-year-or-
more delay in execution is asset-specific that is, that a
creditor must show separate good cause for delay related to each
piece of the debtors property he wishes to levy. Thus, they
reason, Okumura must show separate good cause for his delay in
execution on the Fairbanks property despite the fact that he
already made a good cause showing in order to obtain the February
2007 writ of execution just a couple months earlier. But the
plain language of AS 09.35.020 simply does not support this
interpretation, and the McLaughlins cite no other authority for
it.
Alaska Statute 09.35.020 requires a creditor to show
good cause for delay in order to obtain a new writ of execution
[w]hen a period of five years has elapsed after the entry of
judgment and without an execution being issued on the judgment.30
Okumura satisfied this requirement and obtained a new writ of
execution in February 2007. That writ of execution allowed
Okumura to levy any of the McLaughlins non-exempt assets to
satisfy his judgment. Accordingly, it was simply not necessary
for Okumura to once again make a showing of good cause under
AS 09.35.020 in May 2007 when he sought to levy the Fairbanks
property a period of five years had not elapsed without an
execution being issued. The McLaughlins only recourse was to
pursue their appeal of the superior courts granting of Okumuras
February 2007 writ of execution discussed above.
The McLaughlins also contend that the failure of
Okumura to have discovered the real property and executed upon it
during the five-year-period after judgment not only defeats the
real-property execution but also completely undermines any claim
of just cause and due diligence in regard to the settlement-
monies execution. That is, they argue that the February 2007 writ
of execution should not have issued because Okumura could not
show good cause for his delay in execution given his failure to
execute against the Fairbanks property during the five-year
period. But the McLaughlins admittedly did not bring up the
existence of the Fairbanks property during the litigation
surrounding the February 2007 writ of execution, so that argument
is waived.
Accordingly, we affirm the superior courts denial of
the McLaughlins motion to quash Okumuras writ of execution and
cancel the public sale of Pamela McLaughlins Fairbanks real
property. We need not examine whether Okumura had separate good
cause for not previously executing on the Fairbanks property.
C. The Superior Court Did Not Err in Concluding that
MacDonald Was Not Entitled To Receive 40% of the
McLaughlins Settlement Proceeds from the Lougee
Litigation as Attorneys Fees.
1. Proceedings
In 1996 the McLaughlins entered into a fee agreement
with MacDonald specifying that he would pursue their malpractice
claims against Robson on a 40% contingency fee basis. In 2000
the bankruptcy court approved of an arrangement whereby the
McLaughlins bankruptcy trustee would
(1) employ Michael MacDonald, attorney for
Pamela and Lorim[e]r McLaughlin,
individually, to pursue the estates causes of
action against Arthur Lyle Robson (Robson),
(and other responsible parties arising out of
Robsons representation of the debtors) on a
contingency fee basis (1/3 prior to appeal,
40% after appeal, and 50% after appeal
concludes), plus costs; and (2) share the
litigation proceeds, net of such fees and
costs, with the debtor on a 50-50 basis.
The bankruptcy trustee agreed to split the proceeds of any
recovery with the McLaughlins because of the nagging issues as to
the extent to which the pre-petition and post-petition
malpractice belonged to the [McLaughlins] versus the Trustee, and
because the [McLaughlins] were more familiar with the underlying
facts. MacDonald prosecuted the suit against Robson, which
resulted in a $3,571,429.33 judgment in 2001. MacDonald
successfully defended that judgment against Robsons appeal in
2002.31 MacDonald levied the Lougee cause of action from Robson
in 2003. In 2004 MacDonald applied to the bankruptcy court for
payment of 50% fees (the judgment having been affirmed on appeal)
on the bankruptcy estates 50% share of $168,768.47 that had been
levied from Robson up to that point.
Also in 2004 the bankruptcy trustee applied for and was
granted permission to employ Flanigan as special counsel to
pursue the estates causes of action against Ken Lougee, and his
firm Hughes Thorsness, et al. on a 40% contingency fee basis plus
costs. The application stated that Flanigan has a separate fee
agreement with the Debtors, on the same 40% term as the trustee.
The application further stated that [t]here is no overlap between
the attorney fees owed attorneys MacDonald and Flanigan. In
other words, MacDonald will not claim an attorney fee on any
recovery from the Lougee litigation. Flanigan pursued the Lougee
litigation, which ended in a settlement that was approved by the
bankruptcy court in December 2006. Flanigan received 40% of the
$160,000 total settlement, and the remainder was to be split
evenly between the McLaughlins and their bankruptcy estate
(meaning, effectively, that the estate and the McLaughlins each
paid a 40% contingency fee to Flanigan on their share). The
McLaughlins $44,485.33 portion of the settlement money was
released to the superior court rather than to the McLaughlins due
to Okumuras writ of attachment.
After Okumura obtained his February 2007 writ of
execution but before he actually received the McLaughlins
$44,485.33 share of the Lougee settlement, MacDonald filed a
motion with the superior court requesting that 40% of the
$44,485.33 be released directly to him as attorneys fees.
Because his 1996 fee agreement with the McLaughlins specified
that he was entitled to 40% of any recovery on the McLaughlins
judgment against Robson, and because the Lougee cause of action
was levied from Robson pursuant to that judgment, MacDonald
argued that he was entitled to 40% of the McLaughlins share of
the Lougee settlement.
Okumura opposed MacDonalds motion, arguing that [t]he
origin and disbursement of [the Lougee settlement] funds have
already been determined by the Bankruptcy Court and that
MacDonalds motion was a second effort to recover [] fees from
funds that have already been subject to another attorneys
contingency fee. Okumura pointed out the language in the
bankruptcy trustees application to retain Flanigan stating that
MacDonald will not claim an attorney fee on any recovery from the
Lougee litigation and noted that MacDonald had not objected to
that language.
MacDonald countered that [t]he bankruptcy Trustees fees
are separate and distinct from the [McLaughlins] and that the fee
approval application quoted by Okumura relate[d] to approval of
attorneys fees for the bankruptcy trustees one half of the
settlement with Hughes Thorsness, not the fees that might be
owing to MacDonald & Levengood by the McLaughlin[]s from their
one half of the recovery. He also appealed to equity, arguing
that his fee request was justified because [t]here [was] only a
comparatively small recovery on the [Robson] claim when compared
to the amount of work that was put in by [his] firm and if it
were not for the efforts of [his] firm there would be nothing for
[Okumura] to levy.
In April 2007 the superior court denied MacDonalds
motion for attorneys fees. The McLaughlins appeal.
2. MacDonald does not have a perfected claim to an
additional 40% of the McLaughlins share of the
Lougee settlement.
As Okumura pointed out below, MacDonald was served with
a document in which counsel for the bankruptcy trustee clearly
stated to the bankruptcy court: There is no overlap between the
attorney fees owed attorneys MacDonald and Flanigan. In other
words, MacDonald will not claim an attorney fee on any recovery
from the Lougee litigation. (Emphasis added.) If MacDonald did
not agree with this seemingly unambiguous statement, he had the
opportunity to correct it. But the bankruptcy court approved
Flanigans fee agreement as well as the Lougee settlement and
payout schedule with no objection from MacDonald and no
indication of the existence of a side agreement under which
MacDonald would receive a separate 40% fee from the McLaughlins
share of the settlement on top of Flanigans 40% fee.
Moreover, as Okumura noted below, if MacDonald were to
recover his requested fees, the McLaughlins share of the Lougee
settlement would have been subject to the separate contingency
fees of two attorneys that is, the McLaughlins share of the
Lougee settlement would have been reduced first by the payment of
a 40% fee to Flanigan, and then further reduced by the payment of
a 40% fee to MacDonald, for a total fee of 64%. The fact that
under such an arrangement the McLaughlins would be entitled to
only 36% of the money recovered on their behalf (leaving aside
Okumuras claim to it) is enough to cast serious doubt on
MacDonalds claim for fees. If both the Robson and Lougee causes
of action had been pursued by the same attorney, that attorney
would not be entitled to recover two separate 40% contingency
fees from the Lougee settlement proceeds absent a very clear
agreement to that effect. No such clear agreement was shown to
the superior court or to this court on appeal.
Lastly, MacDonald has not demonstrated that he has a
properly perfected statutory attorneys lien. The only statutory
lien provision possibly applicable to this case is
AS 34.35.430(a)(4), which allows for an attorneys lien upon a
judgment . . . from the giving of notice of the lien to the party
against whom the judgment is given and filing the original with
the clerk where the judgment is entered and docketed. MacDonald
obtained a judgment against Robson on behalf of the McLaughlins,
but there is no evidence that he ever perfected a statutory
attorneys lien on that judgment. The only attorneys lien in the
record is inexplicably captioned with Okumuras original 1992
lawsuit against the McLaughlins rather than the McLaughlins
lawsuit against Robson, and it was apparently recorded rather
than filed with the clerk of court. MacDonald had the burden of
showing that he had a valid, properly perfected attorneys lien
that would cover the Lougee settlement proceeds. He did not do
so.
Accordingly, the superior court did not err in denying
MacDonalds claim for an additional 40% fee on the McLaughlins
share of the Lougee settlement.
V. CONCLUSION
For the foregoing reasons, we AFFIRM the superior
courts grant of Okumuras request for a new writ of execution, as
well as the superior courts refusal to prevent Okumura from
executing on Pamela McLaughlins Fairbanks real estate. We also
AFFIRM the superior courts denial of MacDonalds request for
attorneys fees in the amount of 40% of the McLaughlins share of
the Lougee settlement proceeds.
_______________________________
1 Much of this factual background is derived from our
opinions in two prior related cases, Compton v. Chatanika Gold
Camp Props., 988 P.2d 598, 599-600 (Alaska 1999) and McLaughlin
v. Lougee, 137 P.3d 267, 268-69 (Alaska 2006).
2 See 11 U.S.C. 523(a)(2)(A) (2006) (debts resulting
from fraud by the debtor are not dischargeable in bankruptcy).
3 This factual issue was never fully litigated because
the McLaughlins action against Hughes Thorsness and Ken Lougee,
an attorney at the firm, ended in a settlement following our
remand in McLaughlin, 137 P.3d at 269, 280 (reversing the
superior courts grant of defendant Hughes Thorsnesss 12(b)(6)
motion for failure to state a claim and remanding for further
proceedings).
4 Robson v. McLaughlin, Mem. Op. & J. No. 1114, 2002 WL
31630774 (Alaska, November 20, 2002).
5 We adopt the parties practice of referring to this as
the Lougee cause of action and the ensuing litigation and
settlement as the Lougee litigation and Lougee settlement.
6 McLaughlin, 137 P.3d at 280.
7 20 P.3d 583, 584 (Alaska 2001) (citations omitted).
Alaska
8 Id.
9 Id.
10 Falconer v. Adams, 20 P.3d 583, 584 (Alaska 2001)
(citations omitted).
11 Alaska Rule of Civil Procedure 69(d)(1):
Whenever a period of five years shall elapse
without an execution being issued on a
judgment, no execution shall issue except on
order of the court in the following manner:
(1) The judgment creditor shall file a
motion supported by affidavit with the court
where the judgment is entered for leave to
issue an execution. The motion and affidavit
shall state the names of the parties to the
judgment, the date of its entry, the reasons
for failure to obtain a writ for a period of
five years and the amount claimed to be due
thereon or the particular property of which
possession was adjudged to the judgment
creditor remaining undelivered.
12 Alaska Rule of Civil Procedure 69(d)(5):
At the time of filing the motion for leave to
issue execution or at any time thereafter
before the final order is entered, the
judgment creditor may cause the property of
the judgment debtor to be attached and held
during the time said motion is pending and
until the final order is entered. Such
attachment shall be made in accordance with
these rules and applicable statutes, and for
the purpose of such attachment the judgment
shall be deemed an implied contract for the
direct payment of money. In the event that
the court shall order that execution be
issued, it shall further order that any
property of the judgment debtor attached
hereunder shall be sold for the satisfaction
of such execution and the peace officer shall
apply the property attached by the peace
officer or the proceeds thereof upon the
execution.
13 Okumura was represented in the proceedings below by an
attorney, John Connors, though Okumura appears before us pro se.
14 The McLaughlins point on appeal regarding this issue
states that [t]he trial court erred in granting [Okumuras] Motion
for Writ of Attachment against the McLaughlins share of the
Lougee settlement, and it is Okumuras motion for a writ of
attachment that they include in their excerpt. But their
argument on appeal focuses on whether the superior court erred in
granting Okumuras motion for a writ of execution given his multi-
year delay, not whether the superior court erred in allowing
Okumura to attach the Lougee settlement proceeds, specifically.
15 Brotherton v. Brotherton, 142 P.3d 1187, 1190 (Alaska
2006) (Alaska Statute 09.35.020 is implemented by Civil Rule
69(d).).
16 Id. at 1191 n.19.
17 State, Dept of Revenue, Child Support Enforcement Div.
ex rel. Inman v. Dean, 902 P.2d 1321, 1325 (Alaska 1995).
18 Id. (emphasis added).
19 Brotherton, 142 P.3d at 1190 n.14 (citing Magden v.
Alaska USA Fed. Credit Union, 36 P.3d 659, 662 (Alaska 2001)).
20 Id. at 1190-91.
21 Id. at 1191.
22 Id. at 1190 n.14 (citing Guttchen v. Gabriel, 49 P.3d
223, 227 (Alaska 2002)).
23 36 P.3d 659 (Alaska 2001).
24 Id. at 662.
25 State, Dept of Revenue, Child Support Enforcement Div.
ex rel. Inman v. Dean, 902 P.2d 1321, 1325 (Alaska 1995)
(emphasis added).
26 Alaska R. Civ. P. 69(d). For example, in Brotherton v.
Brotherton we held that a creditor had good cause for her delay
in execution despite the fact that she did not show that the
debtor lacked assets. 142 P.3d at 1190-91.
27 The McLaughlins cite Schmidt v. Bretzlaff, 528 N.W.2d
760, 762 (Mich. App. 1995) (stating that [a] writ of execution
will be quashed if it would be illegal or inequitable to permit
its further use or enforcement, but reversing lower courts
decision to quash writ based on promissory estoppel) and
Creditors Adjustment Co. v. Newman, 197 P. 334, 337-38 (Cal.
1921) (stating that [t]he right of the court to recall the
execution cannot be doubted if the issuance was improperly or
inadvertently made or authority therefore revoked, but affirming
lower courts vacation of writ of execution based on res
judicata).
28 See 30 Am. Jur. 2d Executions, Etc. 272 (footnotes
omitted):
Courts have the equitable power to restrain
execution upon a judgment in a proper case.
For example, if allowing the execution to
proceed would result in an injustice, a court
may invoke its equitable power to restrain
the execution. . . . However, a court will
not restrain the execution on a judgment
simply on the ground that it was unjust,
irregular, or erroneous, or because the court
could, in deciding the same case, have come
to a different conclusion than the court
entering the judgment.
29 See supra subpart IV.A.2.
30 See supra subpart IV.A.2.
31 Robson v. McLaughlin, Mem. Op. & J. No. 1114, 2002 WL
31630774 (Alaska, November 20, 2002).
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