Opinion
Case No. 2D18-2876
02-14-2020
Richard A. SCHURR, Esq., and Christy L. Hertz, Esq., Appellants, v. SILVERIO & HALL, P.A., Appellee.
Richard A. Schurr and Bonnie M. Sack of Richard A. Schurr, P.A., Coral Gables, and Christy L. Hertz and Katie Sager of Christy L. Hertz, P.A., Coral Gables, for Appellants. Brian M. Silverio, Mark V. Silverio and Parker R. Hall of Silverio & Hall, P.A., Naples, for Appellee.
Richard A. Schurr and Bonnie M. Sack of Richard A. Schurr, P.A., Coral Gables, and Christy L. Hertz and Katie Sager of Christy L. Hertz, P.A., Coral Gables, for Appellants.
Brian M. Silverio, Mark V. Silverio and Parker R. Hall of Silverio & Hall, P.A., Naples, for Appellee.
SILBERMAN, Judge. Richard A. Schurr and Christy L. Hertz (Schurr and Hertz) appeal a final order that denies their "Motion for Attorney's Fees, Costs, Damages and Interest Pursuant to § 57.105, Fla. Stat." in which they sought an award against Silverio and Hall, P.A. (Silverio). Schurr and Hertz were the attorneys for Jennifer Wiseberg (the Former Wife) in the underlying dissolution action. Silverio was formerly counsel for Jeffrey Feld (the Former Husband) in the dissolution action. Silverio filed a motion to adjudicate charging lien against Schurr and Hertz, and this motion resulted in Schurr and Hertz seeking attorney's fees pursuant to section 57.105(1), Florida Statutes (2015). Because Silverio's claim was not supported by the material facts necessary to establish its claim and was not supported by the application of the then-existing law to the material facts, we reverse the trial court's order denying Schurr and Hertz's section 57.105 motion and remand for further proceedings.
Silverio began representing the Former Husband in October 2013 and was allowed to withdraw as counsel of record in May 2014. After it withdrew, Silverio filed its motion for charging lien and its notice and claim of attorneys' charging lien. On September 10, 2014, while the dissolution action was still pending, Silverio obtained a "Stipulated Judgment Against Husband Jeffrey Feld for Attorney Fees on Charging Lien of Silverio & Hall, P.A." in the amount of $31,405.41 (the Fee Judgment). The Former Husband was acting pro se at the time that he stipulated to the Fee Judgment. The Fee Judgment provides that Silverio "shall have a judgment lien on all benefits, payments and assets the Husband receives under the Final Judgment of Dissolution of Marriage in this matter, whether by settlement or after trial." It is undisputed that the notice and claim of charging lien did not identify any particular real property and that the Fee Judgment failed to specify a legal description of any real property.
At a mediation of the dissolution action held on January 22, 2015, the Former Husband and the Former Wife entered into a Marital Settlement Agreement (MSA). Silverio was notified of the MSA that same day. The MSA was filed with the court on February 3, 2015. A Final Judgment of Dissolution of Marriage that incorporated the MSA (the Dissolution Judgment) was rendered on March 4, 2015. Silverio filed its first discovery request in aid of execution against the Former Husband on March 5, 2015, and later had writs of garnishment issued. Collection efforts were fruitless.
On February 1, 2016, Silverio filed its motion to adjudicate a charging lien against Schurr and Hertz as well as against the Former Husband's then-current counsel. Silverio alleged that counsel for both parties were on notice of the charging lien and Fee Judgment and "did not notify [Silverio] prior to any settlement and did not protect [Silverio's] lien interest or provide safeguards" in the MSA for Silverio's lien interest. Silverio alleged that "[c]ounsel for the parties had an affirmative duty to notify [Silverio] of the settlement and to protect and cause [Silverio's] lien interest to be paid by [the Former Husband] in any settlement agreement."
Our opinion here is limited to the issues on appeal, and we make no comment on the correctness of the manner or procedure in which the motion to adjudicate charging lien was brought or heard.
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On May 4, 2016, Schurr and Hertz filed a motion for attorney's fees, costs, damages, and interest against Silverio under section 57.105 regarding the motion to adjudicate charging lien against counsel. A ruling on the motion was delayed, and on June 18, 2018, the trial court heard both motions. Mark Silverio of Silverio was the only witness. He acknowledged that the only lien rights he had were as to what assets the Former Husband received in the Dissolution Judgment, whether by settlement or trial. Mr. Silverio did not know what assets of the Former Husband that Schurr or Hertz had in their possession. He "did not discover any assets that the lawyers had at all."
On June 19, 2018, the trial court entered a boilerplate order denying Silverio's motion to adjudicate charging lien against counsel and a boilerplate order denying Schurr and Hertz's motion pursuant to section 57.105.
The appellate court generally reviews an order denying a motion for attorney's fees and costs under section 57.105(1) for an abuse of discretion, but if the trial court's determination is based on a legal conclusion, such as the interpretation of a statute or contractual provision, a de novo standard applies. Country Place Cmty. Ass'n v. J.P. Morgan Mortg. Acquisition Corp., 51 So. 3d 1176, 1179 (Fla. 2d DCA 2010). Section 57.105(1) provides as follows:
(1) Upon the court's initiative or motion of any party, the court shall award a reasonable attorney's fee, including prejudgment interest, to be paid to the prevailing party in equal amounts by the losing party and the losing party's attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party or the losing party's attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:
(a) Was not supported by the material facts necessary to establish the claim or defense; or
(b) Would not be supported by the application of then-existing law to those material facts.
Schurr and Hertz contend that Silverio's motion to adjudicate charging lien against counsel was not supported by the material facts necessary to establish the claim and was not supported by the application of then-existing law to the material facts. "A claim is ‘supported by the material facts’ within the meaning of the statute when ‘the party possesses admissible evidence sufficient to establish the fact if accepted by the finder of fact.’ " MacAlister v. Bevis Const., Inc., 164 So. 3d 773, 776 (Fla. 2d DCA 2015) (quoting Siegel v. Rowe, 71 So. 3d 205, 211 (Fla. 2d DCA 2011) ).
When the requirements of section 57.105 are met and no exception applies, the statute directs that "the court shall award a reasonable attorney's fee.’ " § 57.105(1) (emphasis added). We recognize, however, that "[s]ection 57.105 must be applied with restraint to ensure that it serves its intended purpose of discouraging baseless claims without casting ‘a chilling effect on use of the courts.’ " MacAlister, 164 So. 3d at 776 (quoting Swan Landing Dev., LLC v. First Tenn. Bank Nat'l Ass'n, 97 So. 3d 326, 328 (Fla. 2d DCA 2012) ); see also Minto PBLH, LLC v. 1000 Friends of Fla. Inc., 228 So. 3d 147, 149 (Fla. 4th DCA 2017) (explaining that although the plaintiffs raised "tenuous" claims, when "there is an arguable basis in law and fact for a party's claim, a trial court may not sanction that party under section 57.105").
"A charging lien is an equitable right to have costs and fees due an attorney for services in the suit secured to him in the judgment or recovery in that particular suit." GEICO Gen. Ins. Co. v. Steinger, Iscoe & Greene-II, P.A., 275 So. 3d 775, 777 (Fla. 3d DCA 2019) (quoting Sinclair, Louis, Siegel, Heath, Nussbaum & Zavertnik v. Baucom, 428 So. 2d 1383, 1384 (Fla. 1983) ). Once the lienor provides timely notice of the interest to the parties in the litigation, the charging lien is perfected. Id. "Such a perfected lien is ‘chargeable against any person who, at the time notice of intent to claim a lien is given, holds monies or property which become proceeds of a judgment to be entered in the future.’ " Id. (quoting Hutchins v. Hutchins, 522 So. 2d 547, 549 (Fla. 4th DCA 1988) ). In GEICO, the insurance company had timely notice of a charging lien and "as the paying party ‘had an affirmative duty to notify the law firm of the settlement and to protect the law firm's lien interest in the settlement proceeds.’ " Id. (quoting Hall, Lamb & Hall, P.A. v. Sherlon Invs. Corp., 7 So. 3d 639, 641 (Fla. 3d DCA 2009) ).
In a dissolution action, a charging lien can "attach to the proceeds that are awarded to the client as part of the equitable distribution of property." Szurant v. Aaronson, 277 So. 3d 1093, 1094 (Fla. 2d DCA 2019) (quoting Mitchell v. Coleman, 868 So. 2d 639, 641 (Fla. 2d DCA 2004) ). The property that a spouse retains under an equitable distribution award is subject to a charging lien. Rudd v. Rudd, 960 So. 2d 885, 887 (Fla. 4th DCA 2007).
Based on Mr. Silverio's candid testimony at the hearing, he had no admissible evidence to establish that Schurr and Hertz ever held any assets that were awarded to the Former Husband in the Dissolution Judgment. Schurr and Hertz did not transfer any assets to the Former Husband; rather, the MSA allowed the Former Husband to retain property. Silverio was notified by the Former Husband's counsel the same day that the settlement was reached, and Silverio received a copy of the MSA a few days later, about a month before the Dissolution Judgment was entered.
Silverio argues that Schurr and Hertz had an affirmative duty to notify Silverio of the settlement and to protect Silverio's interests in the assets the Former Husband received in any settlement agreement, citing Zaldivar v. Okeelanta Corp., 877 So. 2d 927 (Fla.1st DCA 2004). Silverio also argues that Schurr and Hertz's failure to protect Silverio's interests required that Schurr and Hertz be held jointly and severally liable for the attorney's fees, citing Hall, 7 So. 3d at 641.
In Zaldivar, in the underlying worker's compensation case the employer and the claimant reached a stipulation that provided for a lump sum settlement. 877 So. 2d at 929. Thus, the claimant would be receiving settlement funds from the employer. The claimant's former attorney sought a charging lien against the employer, but the lien was dismissed. On appeal, the order dismissing the attorney's charging lien against the employer was vacated and the case remanded for a hearing on whether the lienor attorney had notice that a settlement had occurred. Id. at 931.
In Hall, the plaintiff who had paid the settlement was found jointly and severally liable on the charging lien, along with the former client who received the settlement and the former client's new attorney who had held the funds in escrow. 7 So. 3d at 640, 642.
In contrast to a party who pays a settlement or an attorney who holds funds in escrow, Schurr and Hertz never held any "proceeds of the recovery or settlement." Zaldivar, 877 So. 2d at 930 (quoting Brown v. Vt. Mut. Ins. Co., 614 So. 2d 574, 580 (Fla. 1st DCA 1993) ).
Silverio further contends that it had no opportunity to participate in the parties' mediation that resulted in the MSA and that it was without notice that the MSA was going to be entered and thus was unable to protect its lien rights before entry of the Dissolution Judgment. In Sharyn D. Garfield, P.A. v. Green, 687 So. 2d 1388, 1388-89 (Fla. 4th DCA 1997), the appellate court determined that the wife's former attorney could enforce her charging lien against the husband. The final judgment did not provide for the lien and allowed all funds to be distributed directly to the wife. Id. at 1388. The court stated that when the wife's former attorney "had no opportunity to participate in the settlement negotiations and was without notice that the particular negotiated judgment was going to be entered," the wife's former attorney "was unable to protect her lien rights prior to the entry of that judgment." Id. (emphasis added).
Here, although Silverio had no opportunity to participate in the mediation, it had notice of the settlement entered into on the same day and was aware that a judgment would later be entered. Furthermore, in Green, although the opinion did not specify who held the funds, the funds were distributed directly to the wife and the lien was enforced solely against the husband. Id. Here, it is undisputed that Schurr and Hertz never held any assets that were distributed to the Former Husband.
In summary, Schurr and Hertz, the opposing attorneys, had no physical possession of the Former Husband's proceeds of recovery, and Silverio had notice of the settlement a month before the Dissolution Judgment on the settlement was entered. Under these circumstances, we conclude that Silverio's claim was not supported by the material facts necessary to establish its claim and was not supported by the application of the then-existing law to the material facts. Therefore, we reverse the order denying Schurr and Hertz's section 57.105 motion and remand for further proceedings.
Reversed and remanded.
BADALAMENTI and SMITH, JJ., Concur.