                         United States Court of Appeals
                                 FOR THE EIGHTH CIRCUIT
                                       _____________

                                        No. 97-1904
                                       _____________

Hillside Enterprises, Inc., a Missouri      *
general business corporation, doing         *
business as Hillside Vineyards,             *
                                            *
               Plaintiff,                   *
                                            *
       v.                                   *
                                            *   Appeals from the United States
Continental Carlisle, Incorporated,         *   District Court for the
                                            *   Eastern District of Missouri.
               Defendant - Appellee,        *
                                            *
------------------------------              *
                                            *
John A. Walsh,                              *
                                            *
               Movant - Appellant.          *

                                       _____________

                                        No. 97-1907
                                        No. 97-1908
                                       _____________

Hillside Enterprises, doing business        *
as Hillside Vineyards, Inc., a Missouri     *
general business corporation,               *
                                            *
               Plaintiff - Appellee,        *
                                            *
       v.                                   *
*




-2-
Continental Carlisle, Incorporated,       *
                                          *
                Defendant - Appellant.    *
                                          *
-------------------------------           *
                                          *
John A. Walsh,                            *
                                          *
                Movant - Appellee.        *
                                    _____________

                                  Submitted: April 16, 1998
                                      Filed: June 23, 1998
                                   _____________

Before McMILLIAN, BOWMAN,1 and MURPHY, Circuit Judges.
                        _____________

BOWMAN, Circuit Judge.

       Hillside Enterprises and Continental Carlisle entered into a purchase agreement
whereby Continental was to develop and manufacture, and Hillside was to purchase,
a semi-disposable wine glass product. Hillside later sued Continental alleging a breach
of the purchase agreement and misrepresentation. Continental counterclaimed, seeking
to recover for shipments of the product already delivered to Hillside. On March 28,
1994, after a jury trial, the District Court entered a judgment for Hillside in the amount
of $465,000.00 on its claims and a judgment for Continental in the amount of
$164,948.17 on its counterclaim. We affirmed the judgments and ruled that
Continental was entitled to prejudgment interest on its counterclaim. See Hillside
Enter. v. Carlisle Corp., 69 F.3d 1410, 1416 (8th Cir. 1995).



      1
       The Honorable Pasco M. Bowman became Chief Judge of the United States
Court of Appeals for the Eighth Circuit on April 18, 1998.

                                           -3-
       On April 5, 1994, seven days after the District Court entered the original
judgments, Hillside and its counsel, John Walsh, executed an amendment to their
original retainer agreement.2 The amendment changed Walsh's compensation from one-
third, which was purportedly the amount provided for in the original agreement, to one-
half of all sums recovered. On February 23, 1996, nearly two years after the trial,
Walsh informed Continental for the first time that he was asserting an attorney's lien
against Hillside's judgment pursuant to Missouri law. See Mo. Rev. Stat. § 484.140
(1987). On March 8, 1996, Walsh moved to impress his lien upon Hillside's judgment
and claimed that his lien had priority over Continental's right to offset its judgment
against Hillside's judgment. The District Court held that Walsh's attorney's lien had
priority, but that the lien was limited to one-third pursuant to the purported original
retainer agreement. The court further held that Continental was entitled to prejudgment
interest only from the date on which Continental filed its counterclaim. Walsh then
moved for reconsideration, requesting a ruling that his attorney's lien also included
expenses he had incurred. The court denied Walsh's motion and held that the lien did
not include such expenses.

        In this appeal, Walsh argues that he is entitled to a contingent fee of one-half and
that his expenses should be included in the lien. Continental cross-appeals, claiming
that it is entitled to prejudgment interest beginning thirty days after the date of each
unpaid invoice, that Walsh has no valid attorney's lien, and that, if the lien is valid,
Continental's right to set-off has priority.

                                            II.

      We must first determine the date from which Continental is entitled to
prejudgment interest. In our earlier opinion, we applied Oklahoma law and determined
that Continental was entitled to prejudgment interest at the one and one-half percent

       2
        Walsh has never produced a copy of the original written retainer agreement.
                                            -4-
rate set forth in the purchase agreement. See Hillside, 69 F.3d at 1416. On remand,
the District Court awarded prejudgment interest starting from the date on which
Continental filed its counterclaim. We review this award for abuse of discretion. See
United States v. Feterl, 849 F.2d 354, 358 (8th Cir. 1988).

       Under Oklahoma law, "'it is a rule of general recognition by the courts and
obtains in [that] jurisdiction that where there is a contract to pay money on a day
certain, . . . interest will be allowed from such date.'" Loffland Bros. Co. v. C.A.
Overstreet, 758 P.2d 813, 822 (Okla. 1988) (quoting Fidelity-Phenix Fire Ins. Co. of
New York v. Board of Educ. of Rosedale, 204 P.2d 982, 987 (Okla. 1949)). In this
case, the purchase agreement stated, "Terms of sale shall be Net 30 Days from date of
invoice. Past due invoices may be subject to a one and one half (1 ½%) percent service
charge per month." Appellee's Supplemental App. at 82.

       Walsh argues that the one and one-half percent was a service charge and
therefore not interest. We rejected this argument the first time this case was before our
Court. See Hillside, 69 F.3d at 1416 ("Although the contract uses the term 'service
charge,' a sensible reading of the provision indicates it is an interest rate.") Walsh
further argues that, because the language in the purchase agreement states that invoices
"may be" subject to a service charge, Continental merely had the option of imposing
such a charge and never exercised that option before filing its counterclaim. Walsh
thus contends that the District Court was correct in awarding prejudgment interest from
the filing of the counterclaim. We disagree. We read the purchase agreement as a
contract to pay money on a day certain--thirty days from the date of the invoice. Under
Oklahoma law, Continental is entitled to interest from that date. The District Court
abused its discretion in finding otherwise. This result further accords with the policy
under Oklahoma law behind awarding prejudgment interest from the time an obligation
becomes due and payable: "to compensate another for the use of his money."
Rendezvous Trails of Am. v. R.T. Ayers, 612 P.2d 1384, 1385 (Okla. Ct. App. 1980)
(footnote omitted). Finally, awarding prejudgment interest from the time at which the

                                          -5-
payments became overdue is consistent with the result in our previous decision in this
case. It would be anomalous to hold that Continental is entitled to prejudgment interest
according to the contract rate, see Hillside, 69 F.3d at 1416, and then disregard for no
apparent reason the terms of the contract that state the time at which the interest is to
accrue. We therefore hold that Continental is entitled to prejudgment interest from the
time each invoice became overdue, which amounts to $248,541.943 for a total judgment
of $413,489.51 plus postjudgment interest at the rate of 4.22 percent per year from
March 28, 1994.

       We next address whether the District Court erred in holding that Walsh's
attorney's lien has priority over Continental's right to offset its judgment against
Hillside's judgment. As the District Court determined, we apply Missouri law to this
issue because Missouri law governs Walsh's relationship with his client and, indeed,
Walsh asserts his lien pursuant to Missouri law. See Mo. Rev. Stat. §§ 484.130 and
484.140 (1987).

       The District Court ordered that Walsh's lien should take priority over any set-off
of Continental's judgment against Hillside. We conclude that this result is contrary to
Missouri law. In Benton v. Alcazar Hotel Co., 194 S.W.2d 20, 25 (Mo. 1946), the
Missouri Supreme Court held that an attorney's lien is "subsequent and subservient" to
the right of an opponent to set off its award where the claims "arose in the course of
[the] very action and inhered in and arose out of the same transaction." Benton in turn
relied upon State ex rel. Hinde v. United States Fidelity & Guar. Co., 115 S.W. 1081,
1083 (Mo. Ct. App. 1909), wherein the court held that a defendant's right to set-off is
superior to an attorney's lien.4 "[W]here the cause and the set-off are related to the

      3
       Hillside and Continental stipulated to this figure.
      4
         The District Court concluded that, by relying upon Hinde, "the Missouri
Supreme Court [in Benton] may have made an error in judgment" in its holding because
at the time Hinde was decided, the statute in effect made set-off mandatory. Hillside

                                          -6-
same matter, the lien attaches only to the surplus that may be adjudged the plaintiff after
a balance is struck." Id. Further, this Court has applied Benton, holding that "[the
plaintiff's] counsel's attorney lien against [the plaintiff's] $450,000 judgment is inferior
to [the defendant's] right to obtain a final judgment for the net amount." James E. Brady
& Co. v. Eno, 992 F.2d 864, 870 (8th Cir. 1993). We are, of course, bound by this
decision. See United States v. Mason, 74 F.3d 890, 891 (8th Cir.) (per curiam), cert.
denied, 517 U.S. 1239 (1996).

        In this case, the judgments Hillside and Continental obtained against each other
arose out of same transaction pursuant to the same purchase agreement. We therefore
hold that under Missouri law Walsh's attorney's lien is inferior to Continental's right to
set off its judgment. This result also comports with Missouri's policy "that an attorney
is entitled to a percentage of the amount of the verdict after it is reduced by any
counterclaim or offset."5 Kramer v. Fallert, 628 S.W.2d 671, 674 (Mo. Ct. App. 1981).




Enter., Inc. v. Carisle Corp., 944 F. Supp. 793, 801 (E.D. Mo. 1996). It is not the
place of the federal courts, however, to reexamine state court determinations of state
law questions. "We are . . . bound to accept the interpretation of [state] law by the
highest court of the State." Hortonville Joint Sch. Dist. No. 1 v. Hortonville Educ.
Ass'n, 426 U.S. 482, 488 (1976). To do otherwise "exceed[s] the bounds of federal
court authority." Reeves v. Hopkins, 76 F.3d 1424, 1427 (8th Cir.), cert. denied, 117
S. Ct. 307 (1996). Moreover, notwithstanding that Hinde was decided at a time when
set-off was mandatory, we believe that the rationale upon which Hinde relied equally
applies in the present case.
       5
        The amended retainer agreement states that Walsh's compensation "shall be one-
half of all gross sums recovered, before counterclaims, set-offs and expenses are
deducted therefrom." Appellant's Addendum at 18. While it is the prerogative of
Walsh and Hillside to establish the figure from which Walsh's fee should be computed,
here the total amount before counterclaims and set-offs, we decline to give effect to the
agreement insofar as it would unfairly prejudice Continental.

                                            -7-
       In further keeping with Missouri law, one final judgment representing the net
difference in awards should be entered. See Buss v. Horine, 819 S.W.2d 762, 770 (Mo.
Ct. App. 1991). Accordingly, Continental should first offset its judgment of
$413,489.51 plus postjudgment interest from Hillside's judgment of $465,000.00 plus
postjudgment interest. A final judgment should be entered in favor of Hillside for the
difference. Only then may Walsh assert his attorney's lien over the net sum due to
Hillside.

        Because we conclude today that Walsh's attorney's lien does not take priority
over Continental's judgment, we need not decide the percentage of Hillside's recovery
Walsh is entitled to have under his contingent fee arrangement with Hillside, whether
Walsh's expenses should be included, and whether the attorney's lien is even valid. It
is for Walsh and Hillside to determine the portion of Hillside's recovery to which Walsh
is entitled; the amount of his attorney fee is now irrelevant to this proceeding.

                                          III.

       We hold that Continental is entitled to prejudgment interest beginning thirty days
after the date of each invoice and that Continental's right to set-off has priority over
Walsh's attorney's lien. We therefore remand to the District Court to enter one final
judgment in favor of Hillside for the net difference between $465,000.00 plus
postjudgment interest and $413,489.51 plus postjudgment interest.



      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.


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