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Paid in Pennies, Lawyer Takes Fee Fight to Court
Mark Donald
Texas Lawyer
July 5, 2005
His secretary quickly entered his office, seeming alarmed by the goings-on in the reception area. "We have a problem," she told Ken Tarlton, a Mineral Wells, Texas, solo.
Two unknown women were in the process of hauling into his law office 20 sacks of unrolled pennies totaling $1,000 in loose change. "They were under instructions to dump the pennies out of the canvas bags and return the bags to the bank," Tarlton recalls. "I asked them who gave them the instructions. They said Michael Powell."
Tarlton just shook his head; he had filed a Motion for Enforcement of a court order against Powell, a real estate agent, for his alleged failure to abide by the terms of Powell's 2001 divorce decree. Judge Jerry D. Ray, who presided over the 29th District Court of Palo Pinto County, Texas, had ordered that Powell pay Tarlton $1,000 in attorney fees by Nov. 1, 2003. Although the penny drop seemed a purposefully impractical method of payment, it was timely, occurring two days before the deadline. Powell would later contend that he was just complying with the court's order -- in his own small way.
Tarlton would have none of it: He says he told the women to remove the pennies, but after phoning Powell, they refused. Rather than pour 100,000 pennies on the floor of his reception room, they agreed to leave the money inside the bank bags. Days later, Tarlton took the bags to a bank, which converted the coins into a check but charged him a redemption fee of $100 to do so.
Tarlton says he was not going to let Powell get away with flaunting the court's order or the trouble it had caused him. On Nov. 4, 2003, he filed another Motion for Enforcement against Powell, this time asking the court to hold Powell in contempt or require him to pay the $100 redemption fee, plus additional attorney fees and court costs.
At the hearing on the motion, Powell maintained that the $1,000 in unrolled pennies was legal tender timely delivered and sufficient to satisfy the court's order.
Although Ray refused to hold Powell in contempt, he ordered Powell to pay for Tarlton's time, court costs and redemption fee.
"One of the consequences of your chicanery is to incur the expenses associated with it," said the judge. "This time it's $533." To exclude the possibility that Powell might again ante up in pennies, the judge specifically directed that Powell pay by cashier's check, money order or "folding money."
But the ruling didn't end the litigation. Powell appealed the order to Eastland, Texas' 11th Court of Appeals, contending that the trial court had no legal basis to order him to pay $533. On June 23, the 11th Court released its opinion in In Re: Marriage of Powell.
"Did he [Powell] fail to follow the court's ruling in some way?" asks Eastland solo Gary D. Peak, who represents Powell on appeal. "Just because the court doesn't like the way you follow its order, doesn't mean you did something wrong. Powell followed the court's ruling down to the letter."
Tarlton sees the appeal as nothing short of payback, which he says is obvious from Powell's comments about him during the hearing. Peak claims that animus is coming from both parties. "There is simply bad blood between these two folks -- and there has been for a long time."
MOTIONS FOR ENFORCEMENT
The November 2003 Motion for Enforcement was actually the third in a series that Tarlton had filed against Powell arising out of Powell's divorce.
As part of the Powells' marriage settlement, the parties agreed to set up a trust that would govern four parcels of land for the benefit of the Powells' two minor children. Tarlton didn't represent either party in the divorce but says the trustee hired him to draft the trust agreement: the Powell Children's Trust.
Under the terms of the trust, Powell would make all mortgage and ad valorem tax payments, says Tarlton, in exchange for Powell's exclusive right to use and possess the four tracts. Powell was also obliged to pay Tarlton for drafting the trust instrument, but he didn't receive payment, says Tarlton, at least not until Powell filed his first Motion for Enforcement, asking that Powell be held in contempt for nonpayment. "He [Powell] was relatively vocal during the hearing, and it was obvious he wasn't pleased with me," Tarlton recalls.
In 2003, the trustee again hired Tarlton, this time to enforce the rights of the trust after Powell allegedly breached its terms by, among other things, defaulting on the mortgage payments and failing to pay the taxes. "One of the parcels had been foreclosed and a second was about to be," Tarlton says. "In the hearing, Powell claimed that he couldn't afford to pay the indebtedness, but the judge didn't buy it."
On Oct. 6, 2003, Judge Ray entered a second enforcement order, which dispossessed Powell of two of the remaining tracts of land, and granted the trust their "exclusive use, control and possession." The judge ordered Powell to execute promissory notes payable to the Powell Children's Trust for the value of the remaining tract of land "plus $30,000.00 under terms established by the Court." Powell was further obligated to pay attorney fees to Tarlton in the amount of $1,000 for his legal efforts on behalf of the trust.
"It was clear he didn't like me hauling him into court again," Tarlton says. "But I was just trying to get him to do what was right."
Powell's notion of what was right came in the form of 100,000 pennies that were unceremoniously deposited on Tarlton's law office floor on Oct. 30, 2003. "As a practical matter you don't do it this way, but legally there is nothing wrong or illegal or against the court's ruling," Peak argues.
Tarlton found the penny payment so "contemptible," he says, of the court and him, that he filed his third Motion for Enforcement five days later.
THE HEARING
On Nov. 25, 2003, Ray held a hearing on the motion, during which Tarlton and Powell were the only witnesses. According to transcripts of the proceeding, the facts regarding the penny drop were virtually undisputed: Powell's hired "agents" delivered $1,000 of unrolled pennies to Tarlton's law office in payment of court-ordered attorney fees. Tarlton testified that after he tracked down the "originating bank ... that gave or sold Mr. Powell the pennies," the bank agreed to redeem the pounds of pennies for a price. Tarlton was seeking reimbursement for the $100 bank redemption fee and an additional "$412.44" -- the "2.7496" hours he spent redeeming the pennies at his "non-court rate of $150 an hour."
Next up was Powell, who represented himself pro se. "I have law here that says that coins are legal tender currency," Powell testified. And just because Tarlton chose to "take time out of his day and want $1 bills or $100 bills -- that's irrelevant."
After neither side had any questions for the other, Ray entertained argument. Tarlton maintained that Powell's conduct was "contemptible" because he "openly defied the court's order by skirting -- by walking the line as tight as possible." He argued that things of substance are not paid in pennies, just like they are not paid for in gold bars. If they were, he said, there would be no reason why pennies couldn't be used to pay for say, district clerk filing fees.
Powell stayed on message -- at least at first. "I owed a debt. I paid the debt with legal tender currency," he argued. "As far as [Tarlton] having extra fees attached to this, I have spent hours of research on legal tender status. Therefore, I recommend that I be awarded what Mr. Tarlton claims he needs to be awarded for my time and effort and my day here."
"Well, you are not an attorney, are you?" asked the judge.
"No sir."
"Let me ask this, Mr. Powell, exactly why did you choose to engage in this method of payment?"
Powell answered that he wanted "to make a hardship upon [Tarlton]," for whom he had no respect "in any shape, form or fashion."
The judge, however, didn't seem to think much of Powell's answer. "I find your choice of conduct to be frivolous and ridiculous," he said. "But I guess you complied by taking legal tender there of $1,000 by the deadline and therefore, I am not going to hold you in contempt."
Nevertheless, the court ordered Powell to pay $533 -- $350 of which was attorney fees. The judge said he had learned his lesson though, and required that Powell pay these expenses "by cashier's check or money order, or, if you choose to do so, five $100 bills, a $20 bill, a $10 bill and three $1 bills -- all in folding money."
Powell protested, claiming that the original $1,000 had put "an extreme financial hardship on me ... so now we've created another situation within 30 days that I've got to come up with another 500-plus dollars."
"Right," said the judge. "Tough, isn't it?"
Despite Powell's plea of poverty, he gave notice of appeal by the end of December 2003 and retained Peak to represent him.
"It absolutely shocked me," Tarlton says. "I thought Powell was lucky that the judge was so lenient."
In his brief to the 11th Court, Peak raised many of the same arguments that his client previously had: that U.S. coins and currency are legal tender for all debts; that the court never specified that the debt had to be paid in a certain manner; that Powell's intent to "inconvenience" Tarlton was "irrelevant" and not contumacious; and that absent contempt, the court had abused its discretion.
The 11th Court, however, didn't call it that way. In its June 23 opinion, Justice Jim R. Wright, writing for the three-justice panel that included W.G. Arnot and Terry McCall, concluded that "the trial court has vast discretion to maintain control of the proceedings before it, to expedite the proceedings, and to prevent what it considers to be the unnecessary use of its time or resources." Looking at the entire record, the appellate court held that Judge Ray had not abused that discretion and affirmed the award against Powell for $533.
"I think the Court of Appeals decision is just wrong," Peak contends. "And I'm sure trying to convince my client to invest the money to appeal it. For him it's a matter of principal. He has got the money for the appeal."
"Oh great, that's just what I need," Tarlton responds. "A chance to go to the Texas Supreme Court over $500."
And change.
Mark Donald
Texas Lawyer
July 5, 2005
His secretary quickly entered his office, seeming alarmed by the goings-on in the reception area. "We have a problem," she told Ken Tarlton, a Mineral Wells, Texas, solo.
Two unknown women were in the process of hauling into his law office 20 sacks of unrolled pennies totaling $1,000 in loose change. "They were under instructions to dump the pennies out of the canvas bags and return the bags to the bank," Tarlton recalls. "I asked them who gave them the instructions. They said Michael Powell."
Tarlton just shook his head; he had filed a Motion for Enforcement of a court order against Powell, a real estate agent, for his alleged failure to abide by the terms of Powell's 2001 divorce decree. Judge Jerry D. Ray, who presided over the 29th District Court of Palo Pinto County, Texas, had ordered that Powell pay Tarlton $1,000 in attorney fees by Nov. 1, 2003. Although the penny drop seemed a purposefully impractical method of payment, it was timely, occurring two days before the deadline. Powell would later contend that he was just complying with the court's order -- in his own small way.
Tarlton would have none of it: He says he told the women to remove the pennies, but after phoning Powell, they refused. Rather than pour 100,000 pennies on the floor of his reception room, they agreed to leave the money inside the bank bags. Days later, Tarlton took the bags to a bank, which converted the coins into a check but charged him a redemption fee of $100 to do so.
Tarlton says he was not going to let Powell get away with flaunting the court's order or the trouble it had caused him. On Nov. 4, 2003, he filed another Motion for Enforcement against Powell, this time asking the court to hold Powell in contempt or require him to pay the $100 redemption fee, plus additional attorney fees and court costs.
At the hearing on the motion, Powell maintained that the $1,000 in unrolled pennies was legal tender timely delivered and sufficient to satisfy the court's order.
Although Ray refused to hold Powell in contempt, he ordered Powell to pay for Tarlton's time, court costs and redemption fee.
"One of the consequences of your chicanery is to incur the expenses associated with it," said the judge. "This time it's $533." To exclude the possibility that Powell might again ante up in pennies, the judge specifically directed that Powell pay by cashier's check, money order or "folding money."
But the ruling didn't end the litigation. Powell appealed the order to Eastland, Texas' 11th Court of Appeals, contending that the trial court had no legal basis to order him to pay $533. On June 23, the 11th Court released its opinion in In Re: Marriage of Powell.
"Did he [Powell] fail to follow the court's ruling in some way?" asks Eastland solo Gary D. Peak, who represents Powell on appeal. "Just because the court doesn't like the way you follow its order, doesn't mean you did something wrong. Powell followed the court's ruling down to the letter."
Tarlton sees the appeal as nothing short of payback, which he says is obvious from Powell's comments about him during the hearing. Peak claims that animus is coming from both parties. "There is simply bad blood between these two folks -- and there has been for a long time."
MOTIONS FOR ENFORCEMENT
The November 2003 Motion for Enforcement was actually the third in a series that Tarlton had filed against Powell arising out of Powell's divorce.
As part of the Powells' marriage settlement, the parties agreed to set up a trust that would govern four parcels of land for the benefit of the Powells' two minor children. Tarlton didn't represent either party in the divorce but says the trustee hired him to draft the trust agreement: the Powell Children's Trust.
Under the terms of the trust, Powell would make all mortgage and ad valorem tax payments, says Tarlton, in exchange for Powell's exclusive right to use and possess the four tracts. Powell was also obliged to pay Tarlton for drafting the trust instrument, but he didn't receive payment, says Tarlton, at least not until Powell filed his first Motion for Enforcement, asking that Powell be held in contempt for nonpayment. "He [Powell] was relatively vocal during the hearing, and it was obvious he wasn't pleased with me," Tarlton recalls.
In 2003, the trustee again hired Tarlton, this time to enforce the rights of the trust after Powell allegedly breached its terms by, among other things, defaulting on the mortgage payments and failing to pay the taxes. "One of the parcels had been foreclosed and a second was about to be," Tarlton says. "In the hearing, Powell claimed that he couldn't afford to pay the indebtedness, but the judge didn't buy it."
On Oct. 6, 2003, Judge Ray entered a second enforcement order, which dispossessed Powell of two of the remaining tracts of land, and granted the trust their "exclusive use, control and possession." The judge ordered Powell to execute promissory notes payable to the Powell Children's Trust for the value of the remaining tract of land "plus $30,000.00 under terms established by the Court." Powell was further obligated to pay attorney fees to Tarlton in the amount of $1,000 for his legal efforts on behalf of the trust.
"It was clear he didn't like me hauling him into court again," Tarlton says. "But I was just trying to get him to do what was right."
Powell's notion of what was right came in the form of 100,000 pennies that were unceremoniously deposited on Tarlton's law office floor on Oct. 30, 2003. "As a practical matter you don't do it this way, but legally there is nothing wrong or illegal or against the court's ruling," Peak argues.
Tarlton found the penny payment so "contemptible," he says, of the court and him, that he filed his third Motion for Enforcement five days later.
THE HEARING
On Nov. 25, 2003, Ray held a hearing on the motion, during which Tarlton and Powell were the only witnesses. According to transcripts of the proceeding, the facts regarding the penny drop were virtually undisputed: Powell's hired "agents" delivered $1,000 of unrolled pennies to Tarlton's law office in payment of court-ordered attorney fees. Tarlton testified that after he tracked down the "originating bank ... that gave or sold Mr. Powell the pennies," the bank agreed to redeem the pounds of pennies for a price. Tarlton was seeking reimbursement for the $100 bank redemption fee and an additional "$412.44" -- the "2.7496" hours he spent redeeming the pennies at his "non-court rate of $150 an hour."
Next up was Powell, who represented himself pro se. "I have law here that says that coins are legal tender currency," Powell testified. And just because Tarlton chose to "take time out of his day and want $1 bills or $100 bills -- that's irrelevant."
After neither side had any questions for the other, Ray entertained argument. Tarlton maintained that Powell's conduct was "contemptible" because he "openly defied the court's order by skirting -- by walking the line as tight as possible." He argued that things of substance are not paid in pennies, just like they are not paid for in gold bars. If they were, he said, there would be no reason why pennies couldn't be used to pay for say, district clerk filing fees.
Powell stayed on message -- at least at first. "I owed a debt. I paid the debt with legal tender currency," he argued. "As far as [Tarlton] having extra fees attached to this, I have spent hours of research on legal tender status. Therefore, I recommend that I be awarded what Mr. Tarlton claims he needs to be awarded for my time and effort and my day here."
"Well, you are not an attorney, are you?" asked the judge.
"No sir."
"Let me ask this, Mr. Powell, exactly why did you choose to engage in this method of payment?"
Powell answered that he wanted "to make a hardship upon [Tarlton]," for whom he had no respect "in any shape, form or fashion."
The judge, however, didn't seem to think much of Powell's answer. "I find your choice of conduct to be frivolous and ridiculous," he said. "But I guess you complied by taking legal tender there of $1,000 by the deadline and therefore, I am not going to hold you in contempt."
Nevertheless, the court ordered Powell to pay $533 -- $350 of which was attorney fees. The judge said he had learned his lesson though, and required that Powell pay these expenses "by cashier's check or money order, or, if you choose to do so, five $100 bills, a $20 bill, a $10 bill and three $1 bills -- all in folding money."
Powell protested, claiming that the original $1,000 had put "an extreme financial hardship on me ... so now we've created another situation within 30 days that I've got to come up with another 500-plus dollars."
"Right," said the judge. "Tough, isn't it?"
Despite Powell's plea of poverty, he gave notice of appeal by the end of December 2003 and retained Peak to represent him.
"It absolutely shocked me," Tarlton says. "I thought Powell was lucky that the judge was so lenient."
In his brief to the 11th Court, Peak raised many of the same arguments that his client previously had: that U.S. coins and currency are legal tender for all debts; that the court never specified that the debt had to be paid in a certain manner; that Powell's intent to "inconvenience" Tarlton was "irrelevant" and not contumacious; and that absent contempt, the court had abused its discretion.
The 11th Court, however, didn't call it that way. In its June 23 opinion, Justice Jim R. Wright, writing for the three-justice panel that included W.G. Arnot and Terry McCall, concluded that "the trial court has vast discretion to maintain control of the proceedings before it, to expedite the proceedings, and to prevent what it considers to be the unnecessary use of its time or resources." Looking at the entire record, the appellate court held that Judge Ray had not abused that discretion and affirmed the award against Powell for $533.
"I think the Court of Appeals decision is just wrong," Peak contends. "And I'm sure trying to convince my client to invest the money to appeal it. For him it's a matter of principal. He has got the money for the appeal."
"Oh great, that's just what I need," Tarlton responds. "A chance to go to the Texas Supreme Court over $500."
And change.
