Frank v. AGA Enters.

ELIZABETH FRANK, ROBERT FRANK, and TERRI FRANK, ^[1] Plaintiffs, v. AGA ENTERPRISES, LLC d/b/a COSSIO INSURANCE AGENCY, a Foreign Company, Defendant.

No. 17-CV-61373-SMITH/VALLE

United States District Court, S.D. Florida

May 17, 2021

REPORT AND RECOMMENDATION TO DISTRICT JUDGE

ALICIA O. VALLE, UNITED STATES MAGISTRATE JUDGE

THIS MATTER is before the Court on non-party Celebration Source Inc.'s (“Celebration”) Motion to Enforce Attorney's Fees and Costs Charging Lien and to Abate Disbursement of Funds (the “Motion to Enforce Charging Lien”) (ECF No. 160), ^[2] and the Franks' Motion for Summary Judgment as to the Notice of Charging Lien or in the Alternative Motion to Adjudicate Charging Lien (the “Motion for Summary Judgment or to Adjudicate”) (ECF No. 161) (together, the “Motions”). United States District Judge Rodney Smith has referred the Motions to the undersigned for appropriate disposition. (ECF No 163).

Accordingly having reviewed the Motions, the responses and replies to the Motions (ECF Nos. 162, 164, 171, 172, 176, 177), and being otherwise fully advised in the premises, the undersigned recommends that: (i) the Gonzalez firm's Motion to Enforce Charging Lien be DENIED WITHOUT PREJUDICE; and (ii) the Franks' Motion for Summary Judgment or to Adjudicate be GRANTED.

I. PROCEDURAL HISTORY

A. The State Tort Action

In 2011, Plaintiff Elizabeth Frank, then a minor, was injured on an amusement device operated by Celebration. (ECF No. 1-2 ¶ 10). Subsequently, the Franks filed a tort action in state court against Celebration (the “state tort action”). (ECF Nos. 161 at 2, 171 at 1-2). In December 2019, the state trial court entered final judgment of $6, 525, 000 in favor of the Franks and against Celebration. Id.

Thereafter, on April 2, 2020, the trial court entered an agreed order assigning Celebration's “chose in action” in the instant federal action, see infra I.B., to the Franks.^[3] In relevant part, the order stated:

Pursuant to Fla. Stat. § 56.29 [governing proceedings supplementary] . . . and relevant Florida caselaw . . . [Celebration's] Chose in Action [in the pending federal case] is hereby assigned to the Franks . . . . This order does not preclude any party or counsel from filing a charging lien. Similarly, all objections and defenses to any charging lien are preserved.

(ECF No. 160 at 10). At all times during the state tort action, the Franks were represented by attorneys from the Schlesinger Law Offices, P.A. (ECF No. 161 at 2).

B. The Instant Federal Action

In June 2017, while the state tort action was still pending, Celebration filed the instant action against its insurance agent AGA Enterprises, LLC, d/b/a Cossio Insurance Agency (“Cossio”).^[4] (ECF Nos. 1, 161 at 1-2). In this federal action, Celebration alleged that Cossio had failed to properly advise Celebration about an endorsement in its insurance policy that would have covered Celebration's damages in the state tort action. (ECF No. 171 at 1-2). Celebration was represented by the Gonzalez firm. (ECF Nos. 160 at 3, 161 at 1).

On April 10, 2020, eight days after the state trial court assigned Celebration's federal chose in action to the Franks, the Gonzalez firm filed a Notice of Attorney's Charging Lien (the “Notice of Charging Lien”). (ECF No. 103). In pertinent part, the Notice of Charging Lien stated:

[A]s attorney of record for [then-Plaintiff Celebration], [the Gonzalez firm] claim[s] a charging lien in any settlement or judgment rendered in favor of [Celebration], their successors or assignees. Our lien is for costs and legal services performed by the attorneys in prosecution of the claim that have not been compensated in the above-styled action.

Id.

Subsequently, on May 28, 2020, the District Court granted the Franks' motion to substitute Celebration as Plaintiff in this case, pursuant to Fed.R.Civ.P. 25(c). See (ECF No. 128). In permitting substitution, the District Court stated:

[U]pon reconsideration, the Court finds that substitution is appropriate under the

circumstances. Because [Plaintiff Celebration] no longer owns the action it is prosecuting in this case, [Celebration] has no interest in this case and has no right to settle the matter on behalf of the new owners, the Franks. Thus, substitution of the Franks for [Celebration] is appropriate . . . . The Franks shall be substituted as party Plaintiffs.

Id. at 2.

On September 2, 2020, only a few months after being substituted as Plaintiffs, the Franks and Cossio filed a Notice of Settlement advising the District Court that they had resolved all pending claims. (ECF No. 158). The following day, the Gonzalez firm filed its Motion to Enforce Charging Lien. (ECF No. 160). On September 4, 2020, the Franks filed their Motion for Summary Judgment or to Adjudicate.^[5] (ECF No. 161). In addition, the Franks separately responded in opposition to the Gonzalez firm's Motion to Enforce Charging Lien. (ECF No. 164). The Motions are now ripe for adjudication.

II. LEGAL STANDARDS

A. Summary Judgment

Under Federal Rule of Civil Procedure 56, summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Fed. R. Civ. Pro. 56(a). The parties may support their positions by citation to the record, including, depositions, documents, affidavits, or declarations. See Fed.R.Civ.P. 56(c). An issue is genuine if “a reasonable trier of fact could return judgment for the non-moving party.” Miccosukee Tribe of Indians v. United States, 516 F.3d 1235, 1243 (11th Cir. 2008) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986)); Burgos v. Chertoff, 274 Fed.Appx. 839, 841 (11th Cir. 2008) (citation omitted). A fact is material if it “might affect the outcome of the suit under the governing law.” Miccosukee Tribe of Indians, 516 F.3d at 1243 (quoting Anderson, 477 U.S. at 247-48; Burgos, 274 Fed.Appx. at 841 (citation omitted). The movant shoulders the initial burden of demonstrating the absence of a genuine issue of material fact. See Shiver v. Chertoff, 549 F.3d 1342, 1343 (11th Cir. 2008). A movant must present evidence demonstrating that it can establish the basic elements of its claim. Celotex, 477 U.S. at 322.

Once the moving party has met its burden, the non-movant must “go beyond the pleadings” and show that there is a genuine issue for trial. Id. at 324; see also Fed. R. Civ. Pro. 56(c)(1). The inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. See Adickes v. S. H. Kress & Co., 398 U.S. 144, 158-59 (1970). To avoid summary judgment, the nonmoving party “must do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Further, “a ‘judge's function' at summary judgment is not ‘to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.'” Tolan v. Cotton, 572 U.S. 650, 656 (2014) (per curiam) (quoting Anderson, 477 U.S. at 249); Gross v. S. Ry. Co., 414 F.2d 292, 297 (5th Cir. 1969).^[6] The Court, however, is not required to accept all of the non-movant's factual characterizations and legal arguments. Beal v. Paramount Pictures Corp., 20 F.3d 454, 458-59 (11th Cir. 1994). If a genuine issue of fact exists for trial, summary judgment should not be granted. See Fed. R. Civ. Pro. 56(a).

B. Charging Lien

A charging lien is an equitable remedy recognized as a means of “protecting an attorney from a client who would enjoy the fruits of the attorney's labor but attempt to avoid fair payment for the labor.” In re Summit View, LLC, No. 8:11-CV-724-T-24, 2011 WL 3268367, at *4 (M.D. Fla. Aug. 1, 2011), aff'd, 472 Fed.Appx. 900 (11th Cir. 2012) (citation omitted). Although federal courts do not recognize a common-law lien in favor of attorneys, they nonetheless give effect to the laws of the states in which they are held. Gottlieb v. GC Fin. Corp., 97 F.Supp.2d 1310, 1311 (S.D. Fla. 1999) (citation omitted). In Florida, a charging lien may be enforced if the following conditions exist: (i) an express or implied contract between the attorney and client; (ii) an expressed or implied understanding that payment is either contingent upon recovery or will be paid from the recovery; (iii) an attempt by the client to avoid paying or a dispute as to the amount of the fee; and (iv) a timely notice of a request for a lien. In re Washington, 242 F.3d 1320, 1323 (11th Cir. 2011) (citing Sinclair, Louis, Siegel, Heath, Nussbaum & Zavertnik, P.A. v. Baucom, 428 So.2d 1383, 1385 (Fla. 1983)); Montpellier Farm, Ltd v. Crane Env't, Inc., No. 07-22815-CIV, 2009 WL 722238, at *2 (S.D. Fla. Mar. 18, 2009); Bruton v. Carnival Corp., 916 F.Supp.2d 1262, 1268 (S.D. Fla. 2012).

Nonetheless “[i]t is not enough to support the imposition of a charging lien that an attorney has provided his services; the services must, in addition, produce a positive judgment or settlement for the client, since the lien will attach only to the tangible fruits of the services.” Montpellier Farm, 2009 WL 722238, at *5 (citation omitted); see also In re Hilley, No. 6:17-BK-02389-KSJ, 2019 WL 10734049 at *2 (Bankr. M.D. Fla. Aug. 30, 2019) (“Charging liens . . . only encumber the proceeds from the lawsuit, or the amount the attorney actually recovered for the client.”) (emphasis in original). “All that is required to entitle the attorney to perfect a charging lien is for the attorney to file a notice of charging lien or...