Abrams v. Southeastern Municipal Bonds Inc. , 138 F. App'x 88 ( 2005 )


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  •                                                                   F I L E D
    United States Court of Appeals
    Tenth Circuit
    UNITED STATES COURT OF APPEALS
    June 22, 2005
    TENTH CIRCUIT
    PATRICK FISHER
    Clerk
    NATALIE ABRAMS, individually and on
    behalf of all others similarly situated;
    EATON VANCE HIGH YIELD
    MUNICIPALS TRUST,
    Plaintiffs,
    v.
    SOUTHEASTERN MUNICIPAL
    BONDS INC.; FIRST UNITED
    SECURITIES GROUP OF
    CALIFORNIA, INC.; MICHAEL
    SIEMER; GREAT WESTERN SAVINGS
    BANK; OVERTON & SYKES, P.C.;
    BORIS, KLUEGER & NEMKOV, P.C.;                     No. 02-1473
    WATROUS EHLERS & THOMPSON;                  (D.C. No. 89-N-150 (CBS))
    RANCHO LORRAINE LIMITED                           (D. Colorado)
    PARTNERSHIP; CALKINS, KRAMER,
    GRIMSHAW & HARRING, P.C.,
    Defendants,
    FREDERIC B. O'NEAL,
    Appellee,
    ROBERT T. LEGO,
    Attorney Lien Claimant -
    Appellant.
    ORDER AND JUDGMENT*
    Before HENRY, HOLLOWAY and ANDERSON, Circuit Judges.
    _________________________________
    This is a class action filed in the United States District Court for the District of
    Colorado. The action alleged violations of federal securities laws and averred various
    state law claims as well. These claims sought monetary damages for fraud and securities
    law violations involving the sale of municipal bonds. There was subject matter
    jurisdiction under 
    28 U.S.C. § 1331
     and Fed. R. Civ. P. 23 regarding class actions.
    The instant appeal is from an order granting the motion of appellee Frederic B.
    O’Neal to strike a notice of attorney’s lien filed by appellant Robert T. Lego. All matters
    involving the original parties to this case have been settled. All that remained in the district
    court was the matter of attorneys’ fees, and most disputes relating to fees were also settled,
    with the exception of the lien claimed by Mr. Lego. In the memorandum and order from
    which this appeal by Lego has been taken, the district judge thus summed up the general
    nature of the issues presented on appeal: “This case has come down to a contest among
    lawyers concerning a division of the monies which each lawyer or law firm should receive
    from the proceeds paid by Defendant Michael Siemer in settlement of plaintiffs’ and others’
    *
    This order and judgment is not binding precedent, except under the doctrines of
    law of the case, res judicata, and collateral estoppel. This court generally disfavors the
    citation of orders and judgments; nevertheless, an order and judgment may be cited under
    the terms and conditions of 10th Cir. R. 36.3.
    -2-
    claims against Siemer in this and related litigation.”
    This court has jurisdiction over this appeal, being an appeal from a final decision of
    the district court pursuant to 
    28 U.S.C. § 1291
    .
    I
    The underlying action was brought by Ms. Natalie Abrams in 1989 alleging securities
    fraud relating to the issuance of a 1986 special district bond issue for the Barr Lake
    Metropolitan District, which is located in Adams County, Colorado. The action was certified
    as a class action. Among the defendants in the case was one Michael Siemer, who was at
    first represented by Mr. Lego, the current appellant.         Lego represented Siemer for
    approximately 18 months, after which time he moved for leave to withdraw from the
    representation, citing Siemer’s failure to pay Lego’s fees and failure to cooperate in his own
    defense.
    In December 1991, approximately one year after Lego’s withdrawal had been
    approved by the court, the plaintiff class took a default judgment against Siemer in the
    amount of $14,270,000. Primary counsel for the plaintiff class was the Pendleton firm
    which, beginning in 1990, also represented the plaintiffs in another federal class action (“the
    Denver bank case”) against some of the same defendants that the Abrams class had sued.
    A judgment against Siemer in excess of $5.4 million was entered in that action in 1994.
    In the meantime, Lego had sued Siemer in state court for his unpaid fees, and in
    December 1991 Lego also obtained a default judgment against Siemer. Lego then began
    -3-
    efforts to collect his judgment from Siemer and uncovered information which led to the
    discovery of substantial assets. Lego retained appellee O’Neal, a Florida attorney, to
    represent him in his collection efforts. Later, Lego and O’Neal joined forces with the
    Pendleton firm, whose interest was in collecting the two judgments the firm had obtained for
    the plaintiff classes against Siemer in this action and the Denver bank case. The parties
    eventually entered into a comprehensive agreement to govern their efforts and especially to
    establish priorities among the Siemer creditors. Styled “Co-Counsel and Contingency Fee
    Agreement” (hereinafter the Co-Counsel Agreement), it was executed in November 1998 and
    presented to the district court for approval under the rules pertaining to class actions. The
    district court approved the Co-Counsel Agreement in March 1989.
    As the district court observed, the major provisions of the Co-Counsel Agreement
    established
    (1) the terms on which each group of plaintiffs/judgment creditors would
    advance costs, recover those costs, and divide the proceeds of their collection
    efforts, (2) the division of responsibilities between O’Neal and the Pendleton
    Firm, and (3) the terms on which the two law firms would share attorney fees.
    II Joint App. at 519. The Agreement also included a provision requiring disclosure to the
    clients of the retention of and fee arrangements for any additional lawyers.
    Lego was not identified in this Agreement as either a client or an attorney, but he
    signed as an “additional party.” The Agreement recognized that Lego had incurred expenses
    in his efforts to collect his judgment and afforded first priority to reimbursement of those
    expenses. The Agreement gave similar priority to Lego over the plaintiff classes in
    -4-
    allocation of net proceeds after payment of expenses. The district judge noted that this
    “remarkable priority” was based on the “background information” Lego and O’Neal had
    developed and “the continued efforts Lego will make to further the interests of all parties.”
    
    Id. at 520
    . Lego was also to receive a two per cent finder’s fee on the clients’ ultimate
    recovery from Siemer after costs and attorneys’ fees were paid.
    By the terms of the Co-Counsel Agreement, O’Neal became counsel for the class
    action plaintiffs/judgment creditors in their collection effort and was to have primary
    responsibility for the collection efforts in Florida, where Siemer assets had been identified,
    with the assistance of the Pendleton firm. In July 1999, Lego reached a settlement with
    Siemer, but Lego continued to work on the collection efforts being pursued by O’Neal and
    the Pendleton firm on behalf of the class action plaintiffs. Lego’s continued involvement in
    these efforts is one of two projects for which Lego presently claims that he is entitled to
    recover from O’Neal, which we will refer to as the joint collection project.
    Beginning in the late fall of 1999, O’Neal and the Pendleton firm began to have
    serious disagreements about the collection efforts in Florida, which involved the pursuit of
    several separate actions. The lawyers came to have different views about the likelihood of
    success and consequently over the extent to which they should recommend that the clients
    compromise their judgment claims to reach settlement. This seems to have led to serious
    deterioration of the relationship between O’Neal and the Pendleton firm. As a result, the
    Pendleton firm retained another Florida firm, the Litchford firm, to pursue settlement
    -5-
    negotiations with Siemer and to aid in the several cases pending in Florida state courts.
    The plaintiffs reached a settlement with Siemer for $6.25 million in the spring of
    2000. That settlement, however, did not resolve the simmering dispute among the attorneys.
    It is not necessary to relate all the machinations in detail. Mr. Lego claims that in March
    2000, he and Mr. O’Neal orally agreed that Lego would represent O’Neal as his attorney in
    the emerging fee dispute, which we will refer to as the fee dispute project. Lego further
    contends that one year after the March 2000 oral agreement regarding the fee dispute project,
    he and O’Neal executed a memorandum memorializing their pre-existing agreement for Lego
    to represent O’Neal in the joint collection project. (This would have been about one year
    after that project had culminated in a settlement with Siemer, as noted supra.) That
    document made no mention of the alleged agreement regarding the fee dispute project. It is
    undisputed that O’Neal hired a different Denver attorney, Mr. Hoffman, to represent him in
    the fee dispute, and that Mr. Hoffman also represented Lego in that matter.
    Among other issues, the court had to determine the total amount of fees to be awarded
    so that the remainder of the settlement proceeds could be distributed to class members. The
    court referred all pending motions to a magistrate judge. In November 2001, two days of
    testimony were heard by Magistrate Judge Shaffer on the attorneys’ fees issues, which at that
    time primarily concerned the proportion of the proceeds to be awarded as fees and the
    division of that sum among the Pendleton firm, the Litchford firm, and O’Neal. Hoffman
    represented both O’Neal and Lego at this hearing. The parties had not finished presenting
    -6-
    their evidence after two days, and the magistrate judge set a date in January 2002 for
    resumption of the evidentiary hearing. In the interim, however, the Pendleton firm, the
    Litchford firm, and O’Neal reached an agreement as to how the fee award to be determined
    should be divided among them and submitted a joint application for the court’s approval
    reflecting the terms of their agreement.
    The agreement among those attorneys apparently triggered the instant dispute between
    Lego and O’Neal, however. On January 4, 2002, Mr. Hoffman filed a motion to withdraw
    from representing both, citing the emergence of a conflict between the two concerning the
    fee dispute. That motion was duly granted. On January 14, 2002, Lego filed his original
    notice of attorney’s lien, which he soon amended to add a claim based on the theory of
    quantum meruit. In the amended notice, Lego alleged that he was owed over $500,000 in
    fees and expenses.1 The lien was claimed only against O’Neal, not against the settlement
    funds which were about to be disbursed to the plaintiff class. O’Neal filed an objection to
    the notices of lien.
    After receiving supplemental briefing by Lego and O’Neal, the magistrate judge
    recommended granting O’Neal’s motion to strike Lego’s notice of attorney’s lien. Lego
    objected to the recommendation. The district judge issued his Order Accepting Magistrate
    Judge’s Recommendation on September 18, 2002, and judgment was entered, followed by
    1
    Rounded to the nearest thousand, Lego’s claims were for $207,000 on the joint
    collection project, which included some $188,000 in fees and $19,000 in unreimbursed
    expenses, and $303,000 on the fee dispute project, comprising $152,000 in fees and
    $151,000 in expenses.
    -7-
    this appeal. Because the district judge reviewed the magistrate judge’s recommendation de
    novo, our review focuses on the district judge’s order.
    II
    The district judge first addressed what he called Lego’s “overarching” objection – that
    the magistrate judge had deprived him of due process by recommending striking Lego’s
    claimed lien without taking further testimony. The judge noted that Lego had been present
    at the two days of evidentiary hearing before the magistrate judge and had been represented
    at those hearings by Mr. Hoffman. The judge concluded that Lego did not have a plausible
    claim of deprivation of due process during the time that he was represented by Mr. Hoffman.
    As to events occurring after that, the judge reached the same conclusion. The judge
    observed that the magistrate judge had Lego’s notices of lien, O’Neal’s motions to strike, and
    Lego’s responses in opposition to those motions. In addition, the record before the
    magistrate judge included the testimony from the November hearing and extensive
    documentation. Lego had added to that record two detailed affidavits submitted with Lego’s
    objections to the magistrate judge’s recommendations.
    The district judge concluded that this record was adequate for his review and that
    Lego had enjoyed a meaningful opportunity to develop his case. The judge observed:
    The only discernible utility of a further evidentiary hearing would be (1) to
    allow O’Neal and Lego to cross examine one another and (2) to let the court
    make credibility determinations based on the demeanor of the two men and on
    how much further damage they could inflict on one another during cross
    -8-
    examination. For reasons stated both in this order and in the magistrate
    judge’s recommendations, the contemporaneous documentation of events,
    which the court regards as far more persuasive than Lego’s or O’Neal’s self-
    serving recollections, casts serious and irremediable doubt on the credibility
    of both men. In view of my disposition of Lego’s objections, a continued
    evidentiary hearing is neither required by the Due Process Clause nor needed
    to develop a complete record.
    II Joint App. 527.
    Proceeding to the merits of the controversy, the district judge found that Lego’s
    evidence was insufficient to prove that he had ever been an attorney for O’Neal. Lego
    alleged that he and O’Neal had reached an oral agreement in November 1999 for O’Neal to
    “fairly compensate” Lego for his services. On March 1, 2001, their agreement was reduced
    to writing. II Joint App. 632-35. This “letter agreement” provided for Lego to receive “fair
    compensation” for, inter alia, work done as O’Neal’s “associate counsel” and work done for
    O’Neal, and it specified that Lego had always worked on “this project” as a “temporary
    ‘contract lawyer’” for O’Neal and not as attorney for the plaintiff class. The district judge
    accepted this as the agreement between the two parties to this appeal for purposes of his
    analysis, although in a footnote the judge made clear that he thought the writing was really
    an attempt to avoid ethical problems involved in Lego representing the plaintiff class or
    having a fee splitting agreement with O’Neal.
    The ethical pitfalls to which the judge referred arose from Lego’s representation of
    Siemer in this case in 1989 and 1990. The judge said that if Lego had sought approval to be
    retained as additional class counsel the court would have been compelled to reject the
    -9-
    proposal for this reason, and he thus rejected “Lego’s ethically obtuse attempt to argue that
    his representation of Siemer would be ‘factually and legally distinct’ and thus not
    ‘substantially related’ to” representation of the plaintiff class. Because the collection efforts
    were part of the same lawsuit, they were part of the “same matter” as that term is used in the
    applicable ethical rule.2
    The letter agreement said that Lego would receive “fair compensation” from O’Neal,
    to be determined by reference to the ethical rule’s guidelines for reasonable fees and with
    O’Neal to decide what hourly rate would be reasonable. The main problem with Lego’s
    reliance on the letter agreement, the judge said, was “that it suffers from a critical analytical
    gap concerning the identity of the client. No reasonable interpretation of the facts here
    supports any common-sense inference that Lego was an ‘attorney’ who assisted O’Neal, as
    a ‘client,’ to obtain a judgment” on the joint collection project. Instead, the plaintiff classes
    were “the only conceivable ‘clients.’” II Joint App. at 529-30. The judge noted that Lego had
    actually submitted a billing statement dated June 15, 2000, which specifically referred to
    services for the plaintiff classes and which included time spent before O’Neal had even been
    retained. Also, the judge rejected Lego’s reliance on the “ancient case” of Lathrop v. Hallett,
    
    77 P. 1095
     (Colo. Ct. App. 1904), in which the court had held that a person in the position
    2
    Rule 1.9(a) of the Colo. Rules of Prof. Conduct provides:
    A lawyer who has formerly represented a client in a matter shall not thereafter
    represent another person in the same or a substantially related matter in which that
    person’s interests are materially adverse to the interests of the former client unless
    the former client consents after consultation.
    - 10 -
    of a “contract lawyer” could not put a lien on the recovery of the party to the lawsuit for want
    of an attorney-client relationship and would have to look to the lawyer who hired her for her
    fees. The court there referred to the hiring, primary lawyer as the “client,” language on
    which Lego relied, but the judge termed that obiter dicta.
    The court then moved on to Lego’s claim for fees for work purportedly done for
    O’Neal in the fee dispute project. Lego claimed just over $300,000 in fees for this work.
    The judge noted that the evidence of the existence of such an agreement was “in sharp
    conflict.” Because of the “contradictions, evasions, and half-truths” in their statements and
    claims, neither man had any credibility with the magistrate judge, or with him, the judge said.
    Studying the evidence as a whole, the judge found the evidence of an agreement wanting.
    First, he found it “raises eyebrows” for two attorneys who were already in the middle of a fee
    dispute to have only an oral agreement under which one was to provide legal services to the
    other. Second, there was a “scarcity of objective evidence” to support the quantity of work
    Lego claimed to have performed in this aspect of the matter. O’Neal had counsel of record
    in the fee dispute, after all, and that was Hoffman. Also, before retaining Hoffman, O’Neal
    had submitted two filings pro se. The judge found Lego’s evidence to be sketchy and
    ambiguous and therefore insufficient.
    III
    We first consider O’Neal’s contention that this appeal is now moot. In an affidavit
    submitted in an appendix to his brief, O’Neal states that, as a result of Lego’s failure to
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    obtain a stay of the award of attorneys’ fees, the fees have been paid from the settlement
    proceeds. He asserts that there is consequently “no money, property, choses in action, or
    claims and demands” to which a lien could attach.
    Mr. Lego, in turn, protests that Mr. O’Neal has acted improperly by submitting this
    affidavit because it was not in the record before the district court when that court issued the
    judgment from which Lego has appealed. This contention is meritless. Although of course
    the principle cited by Lego is a cornerstone of appellate procedure, O’Neal’s submission
    comes within an exception to that fundamental rule. Mootness is a matter of jurisdiction and
    may, in proper circumstances, be raised in this manner:
    Of course it is proper for a party to provide additional facts when that party has
    an objectively reasonable, good faith argument that subsequent events have
    rendered the controversy moot. Indeed, we depend on the parties for such
    information, and it is axiomatic that subsequent events will not be reflected in
    the district court record.
    Morganroth & Morganroth v. DeLorean, 
    213 F.3d 1301
    , 1309 (10th Cir. 2000).
    So, we turn to the merits of Mr. O’Neal’s argument that this matter is now moot.
    Because “the existence of a live controversy is a constitutional prerequisite
    to federal court jurisdiction,” the court must determine whether a case is moot
    before proceeding to the merits. “A case is moot when issues presented are no
    longer ‘live’ or the parties lack a legally cognizable interest in the outcome.”
    The crucial question is whether “granting a present determination of the issues
    offered . . . will have some effect in the real world.” “[A]n actual controversy
    must be extant at all stages of review, not merely at the time the complaint is
    filed.” The parties must continue to have a personal stake in the outcome
    throughout the case.
    Citizens For Responsible Government v. Davidson, 
    236 F.3d 1174
    , 1181-82 (10th Cir. 2000)
    - 12 -
    (internal citations omitted).
    As reflected in Davidson, as a general rule an interest in attorneys’ fees will not satisfy
    the case or controversy requirement where the underlying claim has become moot. 
    236 F.3d at 1183
    . This general rule must be applied with caution, however, because it is limited by
    the principle that “‘the expiration of the underlying cause of action does not moot a
    controversy over attorney’s fees already incurred.’” 
    Id.
     (quoting Dahlem v. Board of
    Education, 
    901 F.2d 1508
    , 1511 (10th Cir. 1990)). In the instant case, even Mr. O’Neal’s
    challenge to our jurisdiction recognizes that this is a case of the second type, one in which
    there is – or at least was – a live controversy over fees alleged to have been already incurred.
    The contention of mootness is focused much more narrowly on the fact that Mr. Lego has
    claimed the benefit of a charging lien under Colorado law and the fact that the district court
    has since approved the disbursement of fees in accordance with its prior orders so that there
    is no longer a fund in court to which the lien might attach.
    No authority is cited for O’Neal’s argument that this matter is moot, except for the
    applicable attorney’s lien statute, 
    Colo. Rev. Stat. § 12-5-119
    , and Davidson. These
    authorities are cited only for general propositions and do not address the specific issue
    presented here. Arguing that this controversy is not moot, Lego cites Out of Line Sports, Inc.
    v. Rollerblade, Inc., 
    213 F.3d 500
     (10th Cir. 2000), which was an appeal from an order to
    enforce an attorney’s lien. In that case, the party opposing the lien claimant had acquiesced
    in the release of the funds against which the lien had been asserted. We held that the appeal
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    was moot because the party had voluntarily acted to effect the release of the funds, going
    beyond what had been required by the district court’s rulings. We said that “[t]he test of
    whether an appeal is moot is whether the party acted voluntarily or because of the actual or
    implied compulsion of judicial power.” 
    Id. at 502
    .
    In the instant case, Lego asserts that he did not perform any act analogous to that of
    the appellant in Out of Line Sports and that his appeal is therefore not moot. We agree that
    the distinction between that case and this one is material. We could not hold this appeal
    moot based on that authority. There remains, however, the larger question whether this court
    could provide meaningful relief to the appellant under the circumstances.
    We conclude that the appeal is not moot because equitable relief is available should
    appellant prevail on the merits. Because O’Neal accepted the funds with notice of Lego’s
    claimed lien, under Colorado law O’Neal may be liable for enforcement of Lego’s claim on
    equitable principles. See In re Marriage of Smith, 
    687 P.2d 519
     (Colo. Ct. App. 1984);
    Berger v. Dixon & Snow, P.C., 
    868 P.2d 1149
    , 1154 (Colo. Ct. App. 1994) (“an attorney who
    accepts fees with the knowledge that the award on which those fees depend could be later
    reversed, vacated, modified, or otherwise set aside may be ordered to restore the fees”).
    IV
    Lego’s first contention on the merits is that he was deprived of due process because
    the district court did not hold an additional evidentiary hearing at which he could have
    testified. Lego’s characterization of the court’s decision not to hear testimony as a denial of
    - 14 -
    due process is hyperbolic.
    The procedures for summary judgment in civil cases are but one example of the
    principle that due process does not always require that the court hear direct, live testimony
    from every litigant. A district court’s decision whether to conduct hearings in order to
    resolve motions – even those which are vigorously disputed and may directly determine the
    outcome of the litigation – is reviewed for abuse of discretion. See Mitchael v. Intracorp,
    Inc., 
    179 F.3d 847
    , 854 (10th Cir. 1999) (decision to exclude evidence at the summary
    judgment stage reviewed for abuse of discretion like other evidentiary rulings).
    To determine whether the district judge abused his discretion, we must inquire into
    what Lego contends that his evidence would have shown. Lego’s briefs provide only limited
    assistance in this crucial inquiry. We do understand, nevertheless, that Lego’s contentions
    include matters covered in the affidavits he submitted to the trial court and issues discussed
    later in this opinion as well. But it is of no force at all to assert, as Lego does, that neither
    the magistrate judge nor the district judge heard any testimony directly from “any of Lego’s
    witnesses,”3 when we are given nary a hint as to the identity of the witnesses, much less a
    proffer as to the testimony that Lego would have elicited from them. This issue is very
    similar to a ruling at trial excluding evidence, and Lego would have done well to note the
    requirement of an offer of proof under Fed. R. Evid. 103(a).
    We conclude from examination of Mr. Lego’s prolix affidavits that he submitted at
    3
    Opening Brief of Appellant at 17.
    - 15 -
    various times to the district court and from the sparse suggestions in his appellate briefs that
    his testimony would have added little and, as the district judge indicated, would likely not
    have carried great weight. The record shows that Lego and O’Neal have offered several
    explanations for their relationship. There are too many inconsistencies and contradictions
    for any testimony to have resolved. We conclude that Lego’s positions could not have been
    significantly advanced by further evidentiary hearings; at least it is impossible for us to
    conclude otherwise on this record.
    V
    Mr. Lego further contends that the district court erred in concluding that he was
    actually representing the plaintiff class in his efforts on the joint collection project. Lego
    strenuously urges that he never intended to represent the class and that the district court
    should have accepted the memorandum of agreement which he and O’Neal executed (and
    other evidence he cites) as proof that Lego did indeed represent O’Neal instead.
    Reviewing the district judge’s analysis and holding in the particular circumstances
    presented, we conclude that no abuse of discretion has been shown. Abuse of discretion is
    the proper standard of review because the ruling at issue was one declining to grant equitable
    relief.4 We hold that it was not an abuse of discretion to decline to enforce the claimed
    attorney’s lien because Lego’s evidence that O’Neal was his client for whom he rendered
    legal services on the joint collection project was insufficient and unpersuasive.
    Enforcement of an attorney’s lien is a form of equitable relief. See In re Marriage
    4
    of Rosenberg, 
    690 P.2d 1293
    , 1294 (Colo. Ct. App. 1984).
    - 16 -
    Lego’s argument on this issue is an unusual one. He does not contend, for example,
    that he was retained to represent O’Neal on issues ancillary to O’Neal’s representation of the
    plaintiff class. Instead, Lego contends that he was retained to assist O’Neal in the latter’s
    representation of the class and that he functioned as a temporary contract lawyer for O’Neal.
    His argument that such a relationship results in O’Neal having been his client is based
    entirely on dictum in Lathrop v. Hallett, 
    77 P. 1095
     (Colo. Ct. App. 1904).
    In Lathrop, an attorney, Mr. Kingsley, was employed by the executor of an estate to
    defend an action contesting the will. Kingsley employed another attorney, the appellant
    Lathrop, to assist him in the matter. The defense was successful, but Mr. Kingsley failed to
    compensate Ms. Lathrop for her services. Lathrop then brought a separate action against the
    executor (and a beneficiary), attempting to assert an attorney’s lien against the estate to
    obtain payment of her fees. Relief was denied and attorney Lathrop appealed. The appellate
    court held that although Kingsley, the attorney retained by the executor, could retain Lathrop
    at his own expense to assist in the case, the attorney did not have the authority to employ
    Lathrop at the expense of his client, the executor. The appellate court went on to hold that
    Lathrop’s recourse was against Kingsley, the attorney who had hired her, and not against
    Kingsley’s client, the executor.
    In the course of its discussion to this effect, however, the Lathrop court made one
    passing reference to the primary attorney, Kingsley, as the “client” of the attorney whom he
    hired to assist him. This portion of the opinion is obviously dictum, as the district judge
    - 17 -
    noted. We agree with the district judge that this earlier dictum from the intermediate
    appellate court is not convincing on the current state of Colorado law.5 As a general rule, we
    give deferential consideration to both the “holdings and the considered dicta of the State
    Courts.” Colorado Visionary Academy v. Medtronic, Inc., 
    397 F.3d 867
    , 871 (10th Cir.
    2005). The almost casual use of the term “client” in Lathrop, however, was not accompanied
    by any discussion of the import of the use of the term nor by any other indication that the
    usage was “considered.” We are not aware of a single other authority that supports Lego’s
    position that an attorney who hires another attorney to assist on a project is the client of his
    hireling. We believe that the notion is fundamentally contrary to the general understanding
    of bench and bar. We therefore conclude that we are not bound by the Lathrop dictum: “The
    dictum of an intermediate state court is weak authority at best, especially when it is an
    unelaborated hint that if taken seriously would be contrary to settled doctrine that the court
    does not discuss.” Sutton v. A. O. Smith Co., 
    165 F.3d 561
    , 564 (7th Cir. 1999) (emphasis
    added); see also Manalis Finance Co. v. United States, 
    611 F.2d 1270
    , 1272-73 (9th Cir.
    1980); Infomax Office Systems v. MBO Binder & Co., 
    976 F.Supp. 1247
    , 1252 (S.D. Iowa
    1997).
    It is well established that state law applies to this issue. Donaldson, Hoffman &
    5
    Goldstein v. Gaudio, 
    260 F.2d 333
     (10th Cir. 1958). Both parties assume that Colorado
    law should govern, and we thus do not address whether the state of performance might
    have been Florida, nor whether its law should instead apply. See Democratic Central
    Comm. v. Washington Met. Area Transit Commission, 
    941 F.2d 1217
    , 1219 (D.C. 1991)
    (“existence and effect of an attorney’s lien” is governed by the law of the place of
    performance).
    - 18 -
    We note authorities from other jurisdictions do not support Lego’s reliance on a literal
    reading of the Lathrop dictum. See Democratic Central Comm. v. Washington Met. Area
    Transit Commission, 
    941 F.2d 1217
    , 1219-20 (D.C. 1991); Harvey L. Lerer, Inc. v. Eighth
    Judicial Dist. Court, 
    901 P.2d 643
    , 646 (Nev. 1995). The general rule is that a temporary or
    contract lawyer “who performs legal services for or on behalf of clients of the firm is subject
    to duties to the firm’s clients similar to those of lawyers generally, such as those of
    competence and diligence . . . and confidentiality . . . .” Restatement (Third) of the Law
    Governing Lawyers § 9, comment g (2000). A lawyer not regularly in practice with a firm
    may be hired to provide services to the firm as his client, id., but again Lego does not contend
    that he was performing services for O’Neal that were distinguishable in nature from the
    services that O’Neal was providing for the plaintiff class. Instead, he simply relies on
    Lathrop as establishing his contention that a temporary lawyer who works on the clients’
    project in the assistance of another lawyer is in an attorney-client relationship with that
    lawyer. We are not aware of any authority other than the Lathrop dictum that supports this
    argument. Like the district judge, we are not persuaded by the argument that this is the rule
    in Colorado.
    Furthermore, we need not base our decision in this case wholly on our view that the
    Lathrop dictum is not controlling. Assuming arguendo that the dictum is controlling, and
    thus that O’Neal was Lego’s client (which would, we believe, be contrary to the law
    generally prevailing in other states), we still conclude that the district judge did not abuse his
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    discretion in refusing to enforce an attorney’s lien in this case. Lego’s admissions that he
    was working on the joint collection project as a temporary attorney for O’Neal shows that
    he was attempting to do indirectly that which he could not have done directly, namely to
    represent the plaintiffs against Siemer in the same litigation in which he had previously
    represented Siemer.
    The district judge specifically said that he would not have, and believed that he could
    not have, approved such an arrangement had it been proposed to him. Yet, Mr. Lego offered
    his services for the benefit of the plaintiff class, without the court’s approval, and then turned
    to the same court to seek equitable relief in the form of enforcement of an attorney’s lien.
    We hold that the district judge was clearly within the scope of his discretion in refusing to
    permit this maneuver.
    In sum, Lego’s argument that O’Neal was his client for the services Lego rendered
    in connection with the joint collection project is untenable. The district court therefore
    clearly was correct to strike the notice of attorney’s lien as to that portion of the work Lego
    performed.
    VI
    Analysis in the context of the fee dispute project is necessarily different in that it is
    apparent that the efforts of Lego and O’Neal were not for the benefit of the plaintiff class.
    Work that Lego did on this project was directly for the benefit of O’Neal (and also for
    himself since he expected to be compensated by O’Neal). This by itself, however, is
    - 20 -
    insufficient to establish that O’Neal was Lego’s client. It is common for lawyers to join
    forces in projects, whether they are in the same law firm or not, but it is not usually the case
    in such arrangements that one attorney is the client of another. Nor is the fact that the project
    involves resolution of a fee dispute sufficient by itself to convert what had been a
    collaborative effort by two lawyers into an attorney-client relationship.
    The district court held that the evidence of an attorney-client relationship was
    insufficient. The court noted that Lego claimed entitlement to the “princely sum” of
    $302,975.63 for the fee dispute project, although apparently the judge viewed the request as
    really for some $70,000 less because Lego had (for reasons unknown) included fees claimed
    by Mr. Hoffman. This sum was allegedly due under an oral agreement.
    The district judge cited the failure to reduce the agreement to writing as a factor
    raising doubt as to the existence of the alleged agreement. The judge said that this concern
    was acute because of the amount of fees claimed and the fact that this project was itself a
    dispute over legal fees. Lego contends that the failure to reduce the terms to writing should
    not be of concern because he and O’Neal operated in an atmosphere of trust and confidence.
    Lego’s response does little to alleviate the concern expressed by the district judge.
    We may accept that Lego and O’Neal did indeed operate in an atmosphere of trust and
    confidence in the beginning of their relationship, but the timing of the alleged oral agreement
    in the context of their relationship raises very serious doubts about Lego’s representations.
    Lego says that the oral agreement was reached in March 2000. Just weeks earlier, in
    - 21 -
    February 2000, O’Neal had purported to terminate his relationship, whatever it was, with
    Lego by sending him a memorandum. In this memo O’Neal made a number of statements
    that Lego insists were incorrect and which O’Neal later retracted in a missive explaining that
    later conversations with Lego had refreshed his recollection so that he realized his previous
    statements were inaccurate.6 These statements included several references to their supposed
    agreement to share O’Neal’s anticipated portion of the contingency fee that the Co-Counsel
    Agreement provided for. Lego has since vigorously denied that there ever was such an
    agreement. We need not (and indeed, are not equipped to) delve into this dispute to
    determine if there had been such an understanding. We share the concern and the skepticism
    of the district judge that two experienced attorneys, who were enmeshed in a high stakes and
    very contentious fee dispute and who had just come to realize that they had widely different
    views of the terms of the oral agreement under which they had been operating, would come
    to a new agreement and would decide not to put its terms in writing.
    Additionally, it is still unclear just what the terms of the alleged agreement are. In the
    memo allegedly memorializing the two attorneys’ agreement on the joint collection project
    (executed nearly two years after the two allegedly began working under an oral agreement),
    it was left to O’Neal’s discretion to determine the hourly rate at which he would compensate
    Lego and to determine what was a reasonable number of hours for Lego to have expended.
    The purported oral agreement for Lego to represent O’Neal in the fee dispute project lacks
    No doubt these were among the inconsistencies that led the district judge to
    6
    conclude that neither party to this dispute was fully credible.
    - 22 -
    even this specificity. Thus, while Lego’s calculations presumably are based on an hourly
    rate, we are not informed what that rate is, how it was determined, or by whom it was
    determined.
    The district judge also cited the paucity of evidence in the record to support the
    contention that Lego had spent such a substantial number of hours as O’Neal’s attorney and
    the lack of evidence in the record to support the contention that he had acted as O’Neal’s
    attorney at all. Lego admits that he did not submit any pleadings or other papers to the court
    in his name as O’Neal’s attorney but asserts that his role simply did not require that. But as
    the court pointed out, before Hoffman was retained, O’Neal filed some papers in the fee
    dispute in his name. Because Lego was admitted to practice before the district court and
    O’Neal was not, it is indeed strange that such papers would have been filed in O’Neal’s name
    if Lego truly were acting as O’Neal’s attorney.
    Lego also contends that the record supports his position because he did appear in court
    on a few occasions. Like the district court, however, we are troubled by the statements by
    Lego made at these few court appearances shown in the record. Most telling, in one
    appearance Lego informed the court that O’Neal had retained counsel to represent him in the
    fee dispute and that counsel was Mr. Hoffman. On other occasions Lego identified himself
    as O’Neal’s associate.
    Not only does this record evidence cast severe doubt on Lego’s position, but the last
    mentioned incident raises the question whether Lego’s position on his capacity is the same
    - 23 -
    with respect to the fee dispute project as it is on the joint collection project. As we noted,
    Lego does not maintain in this court (and as far as we can determine did not in the district
    court) that his work on the joint collection project was materially different from the work an
    associate at a law firm might do at the direction of a partner of the firm. Instead, Lego
    argued that because he was a temporarily retained attorney not of the same firm, Colorado
    law as stated in Lathrop viewed O’Neal as his client. As to the fee dispute project, Lego
    similarly has offered nothing that justifies treating the relationship as a true attorney-client
    relationship, as opposed to simply two attorneys who had joined forces in a common project.
    As a result, we again conclude that the district judge did not abuse his discretion in
    declining to afford equitable relief. Lego’s evidence of the existence of an attorney-client
    relationship was insufficient and unpersuasive.
    VII
    We need not address other contentions made in the briefs. Nor need we separately
    address Lego’s claim for quantum meruit recovery. Under that equitable theory it is still
    necessary to establish that the legal work was performed for a client in order for the statutory
    attorney’s lien to be available, as is evident from the language of the attorney’s lien statute.
    The statute provides for an attorney’s lien to secure payment for “any fees or balance of fees
    due or to become due from any client.” 
    Colo. Rev. Stat. § 12-5-119
     (emphasis added).
    The evidence of an attorney-client relationship was insufficient to support Mr. Lego’s
    notice of lien under any theory, and the district court did not abuse its discretion by failing
    - 24 -
    to specify that the quantum meruit claim failed on this basis, along with the other claims. We
    emphasize that we decide only that the district court did not abuse its discretion in declining
    to enforce an attorney’s lien. Our study of the record shows that Mr. O’Neal has several
    times affirmed that he had some relationship with Mr. Lego in which Mr. Lego performed
    legal services with the expectation and understanding that he would be paid therefor by Mr.
    O’Neal. We offer no opinion on the validity or enforceability of any other claims that Mr.
    Lego may have.
    The judgment of the district court is AFFIRMED.
    ENTERED FOR THE COURT
    William J. Holloway, Jr.
    Circuit Judge
    - 25 -