3d DCA Watch -- Through A Glass, Obversely Edition

Hi kiddies!

Is it kismet, fate, or simple indigestion that I happened to glance at my DCBA Bulletin and, after reflecting on the full-color beauty that is my friend Timothy Ravitch (what, no color for Gisela Munoz?), noticed that the DCBA plans to honor Judge Schwartz with a Judicial Excellence Award.

Hey, I just report this stuff.

But alas it is hump day, and my job here is not done. Yes, I must read the scribblings! Or magnificent examples of legal scholarship, you decide.

Whatever you call it, the Resplendently Robed Ones have issued Important Utterances, and damn you, WE WILL NOT BE IGNORED.

Ok ok, we're interested, really, even all you Fancy Pants federal court practitioners, because sometimes those judges (at least the Catholic ones) also try to figure out Florida law.

And good luck with that whole thing.

So onward we go, through the coffee-swilled landscape of beautiful South Dade, and on to this week's patently, patiently, I mean patented 3d DCA Watch:

Hall, Lamb v. Sherlon:

Oh this is a fine South Florida story. Poor Andy Hall, nice guy and good lawyer. Has a client, tries to settle case, client fires him and hires a suspended attorney. Andy then files charging lien, the parties settle, and the suspended lawyer steals all the settlement proceeds.

Just another day in paradise, folks.

Trial court refuses to adjudicate lien against settling defendant. Court reverses, finding that there may be joint and several liability against the appellee/defendant:

Here, it is undisputed that upon being terminated, the law firm notified the parties of its interest in recouping the fees earned during the course of representing the former client. 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.” Hutchins v. Hutchins, 522 So. 2d 547, 549 (Fla. 4th DCA 1988) (emphasis added). See also Brown v. Vt. Mut. Ins. Co., 614 So. 2d 574, 580-81 (Fla. 1st DCA 1993) (holding that if a party has notice of an attorney’s charging lien, pays out a settlement to the attorney’s client, and fails to protect the attorney’s interest, the paying party may be held jointly and severally liable for the attorney’s fees along with the attorney’s client to the extent of the settlement proceeds or other funds held). Accordingly, the law firm argues that Sherlon, along with the former client and Blumstein, may be held jointly and severally liable for the fees earned during the law firm’s representation of the former client. We agree.

There is no question that as a party to the settlement, Sherlon 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. Zaldivar v. Okeelanta Corp., 877 So. 2d 927, 930 (Fla. 1st DCA 2004). Similarly, the record now before us indicates that although Sherlon and the former client reached a settlement by the end of September 2006, Sherlon failed to notify the law firm of the settlement in any way until November 2006—when the parties obtained a dismissal of the action with prejudice from the trial court. Furthermore, Sherlon took no other steps to protect the law firm’s interest. Sherlon did not ask the trial court to prevent the direct payment of the law firm’s fee to Blumstein and the former client or to set those funds aside. Instead, Sherlon paid the entire settlement to the former client (through Blumstein) without providing safeguards for the law firm’s lien interest. And regardless of Sherlon’s intent, by doing so, Sherlon may have committed a fraud upon the law firm. Heller v. Held, 817 So. 2d 1023, 1025 (Fla. 4th DCA 2002).

But no, says Judge Schwartz in dissent. In fact, Judge Schwartz grants the appellee a phantom summary judgment, absolving them from all potential liability:

While I agree that Sherlon did not appropriately alert the appellant law firm of the settlement, I dissent from reversal because that failure was not a legal cause of the firm’s failure to recover.

The reason for informing the lawyer of a settlement is to permit him to take steps to protect his charging lien. See Zaldivar v. Okeelanta Corp., 877 So. 2d 927 (Fla. 1st DCA 2004). In this case, however, the Hall firm, by other means, actually learned not only of the settlement but of the location of the proceeds: in “escrow” with the plaintiff’s representative, a person who stated he was an attorney, but was not. Indeed, the firm succeeded in imposing a charging lien on the fund – just as it would have had the defendant given appropriate notice. Hall did not get its fee, however, only because the “escrow agent” eloped with the entire settlement. Putting it in legalese, the theft was the sole proximate cause of Hall’s damages. Obversely, the appellee’s missteps were immaterial to and were thus not a legal cause of the loss.

First of all, that's not the issue on appeal but umm, how do you know this, Judge? The majority opinion specifically states that "Sherlon did not notify the law firm of the settlement or that it had transferred the total amount to Blumstein."

Maybe if Andy was aware of the pending transfer, before it went to Blumstein, he could have moved to have it placed in a different escrow account or maybe the registry of the court?

Or is that question too obverse?