Title: Capstack Nashville 3, LLC v. Cohen
Citation: N/A
Docket Number: 50, 2022
State: Delaware
Issuer: Delaware Supreme Court
Date: October 24, 2022

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
CAPSTACK NASHVILLE 3, LLC, 
CSP N3 PARTNER LLC, 
CAPSTACK PARTNERS LLC, and 
DAVID BLATT, 
 
Plaintiffs Below 
Appellants, 
 
v. 
 
NED H. COHEN, 
NHCOHEN PARTNERS LLC, and 
NHCOHEN CAPITAL LLC, 
 
Defendants Below, 
Appellees, 
 
WILKS LAW LLC, 
 
Interested Party Below, 
Appellee. 
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No. 50, 2022 
 
Court Below—Court of Chancery  
of the State of Delaware 
 
C.A. No. 2020-0519 
      
Submitted:  August 10, 2022 
Decided:  October 24, 2022 
 
Before VAUGHN, TRAYNOR, and MONTGOMERY-REEVES Justices.  
O R D E R 
 
On this 24th day of October 2022, it appears to the Court that: 
(1)  In this appeal we consider whether a law firm may assert an attorney’s 
charging lien for services rendered against a settlement fund that the client recovers 
through litigation, but which was not incorporated into a judgment, judicial decree, 
or court-ordered award.  The client is the Plaintiff-Appellant Capstack Nashville  3 
2 
 
LLC, et al. (“Capstack”).  Capstack contends that an attorney’s charging lien can 
“attach” only to a judgment, judicial decree, or court-ordered award.1  It cannot, 
Capstack contends, be asserted against a settlement fund where the settlement 
agreement which creates the fund has not been incorporated into a judgment, judicial 
decree, or court-ordered award.2  The law firm asserting the charging lien is Wilks 
Law LLC (“Wilks Law”).  It contends that a judgment, judicial decree, or court-
ordered award is not required and that Capstack’s settlement fund itself can be the 
subject of a charging lien.3  The Vice-Chancellor agreed with Wilks Law, awarded 
a charging lien in its favor against Capstack’s settlement fund in the amount of 
$125,229.35, and ordered Capstack to pay to Wilks Law “any and all funds plaintiffs 
have received or will receive in settlement of this action in satisfaction of the 
charging lien.”4  For the reasons that follow, we affirm. 
 
(2)  Capstack was an investor in certain multifamily apartment complexes in 
Nashville, Tennessee.  Disputes arose and Capstack retained Wilks Law to represent 
it in dealing with those disputes.  Capstack agreed to pay Wilks Law attorney’s fees 
at hourly rates and to reimburse Wilks Law for expenses paid on Capstack’s behalf.  
On July 3, 2019, Wilks Law initiated an arbitration on behalf of Capstack against 
 
1 Opening Br. at 8. 
2 Id. at 10. 
3 Answering Br. at 13, 18. 
4 Chancery Order at add. to Opening Br. at 37. 
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Ned H. Cohen, a real estate broker, and entities affiliated with him.5  On May 11, 
2020, an arbitrator entered an award in Capstack’s favor in the amount of 
$220,220.70.  Shortly after the arbitrator entered the award, the Wilks Law attorney 
assigned to represent Capstack left the firm.  Capstack decided to retain a different 
law firm, one that had, it appears, not been previously involved in Capstack’s matter, 
to represent it in any further proceedings.  At that time, Capstack owed Wilks Law 
$125,229.35 in unpaid attorneys’ fees and unreimbursed expenses from the Cohen 
arbitration. 
 
(3)  On June 26, 2020, Capstack’s new counsel filed an action in the Court of 
Chancery to have the arbitration award confirmed.  On September 14, 2020, counsel 
for Capstack wrote to Chancellor Bouchard indicating that the case had been settled.  
Counsel’s letter stated that the settlement included “an agreement to file a notice of 
voluntary dismissal with prejudice upon completion of terms of settlement or a 
stipulation of judgment in the event of default on the terms of settlement[.]”6 On 
October 15, 2020, Wilks Law filed a notice in the action that it was asserting a 
charging lien “on any and all sums to be paid to Plaintiffs in satisfaction of the 
[Arbitrator’s] Award by judgment, settlement or otherwise.”7  This notice was 
followed later by a Motion to Enforce an Attorney’s Charging Lien.   
 
5 This was one of two arbitrations initiated by Wilks Law on Capstack’s behalf.  The other 
arbitration is not relevant to this appeal. 
6 App. to Opening Br. at A29. 
7 Id. at A32. 
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(4)  At a hearing on the Motion to Enforce an Attorney’s Charging Lien, the 
Vice-Chancellor determined that the settlement referred to in the letter to Chancellor 
Bouchard involved an agreement that Capstack would be paid money from the sale 
or refinancing of one or more of the Nashville properties.  She further determined 
that such sale or refinancing had not yet occurred when Wilks Law put Capstack on 
notice of its assertion of a charging line.  Her ruling in Wilks Law’s favor followed 
from these findings. 
(5)  Capstack’s contention on appeal is succinctly set forth in its Summary of 
the Argument in its opening brief as follows: 
The Court of Chancery entered an attorney’s charging lien 
below, but there was no judgment, award, or judicial 
decree entered against which the charging lien can attach.  
As a result, there is nothing upon which the charging lien 
can be executed or satisfied and the charging lien is a legal 
nullity.  There is no legal basis to support what the Court 
of Chancery did and this Court should reverse.8 
 
 
(6)  Capstack relies upon this Court’s opinion in Katten Muchin Rosenman 
LLP v. Sutherland as support for its position.9  In that case this Court: 
embrace[d] the definition that a charging lien is “an 
equitable right to have costs advanced and attorney’s fees 
secured by the judgment entered in the suit wherein the 
costs were advanced and the fee earned,” which had been 
previously adopted by the Court of Chancery in its earlier 
decision in Zutrau v. Jansing.10 
 
8 Opening Br. at 2. 
9 See id. at 8-9. 
10 153 A.3d 722, 723 (quoting 7A Kristina E. Music Biro, J.D., et.al., Corpus Juris Secundum 
Attorney & Client § 523 (2016)) (en banc). 
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Capstack also relies on definitions of an attorney’s charging lien from legal 
dictionaries and on comparisons of an attorney’s charging lien with other types of 
liens, such as mechanic’s liens or mortgages which attach to a legally tangible thing 
or res.11 
 
(7)  The issue Capstack raises here was not raised in Katten.  In that case the 
Court of Chancery awarded the plaintiff legal fees and expenses in a derivative 
action.12  Katten asserted a charging lien against that award, and the Court of 
Chancery limited the attorney’s charging lien to amounts which were “directly 
relate[d] to [the] client’s recovery.”13  It excluded from the charging lien work which 
had “no connection to the recovery, other than having occurred in the same 
litigation.”14  This Court stated that “the sole issue on appeal is whether the Court of 
Chancery’s requirement that a charging lien can only be obtained for unpaid services 
that directly relate to a client’s recovery was a proper prerequisite to impose on 
Katten’s equitable right to a charging lien.”15  This Court reversed the Court of 
Chancery’s judgment as too narrow and one that “undermines the utility of a 
 
11 See Opening Br. at 9-11. 
12 153 A.3d at 724-25. 
13 Id. at 725-26. 
14 Id. at 725 (citation omitted) (emphasis omitted). 
15 Id. at 726. 
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charging lien in encouraging counsel to provide legal services to clients by ensuring 
them that their contractual right to a fee will be upheld by the judiciary.”16 
 
(8)  A treatise cited by the Court in Katten does not limit the application of 
charging liens to “judgments.”17  We think that Capstack places undue emphasis on 
the Court’s use of the word “judgment” in Katten and that this Court’s opinion in 
Doroshow, Pasquale, Krawitz & Bhaya v. Nanticoke Mem’l Hosp. is of greater 
precedential value in this appeal.  In that case, the Doroshow law firm filed a 
personal injury action against a tortfeasor on behalf of an injured party.18  
Doroshow’s fee agreement with its client provided that the law firm would receive 
a contingent fee of 40% plus costs from any recovery.19  The case was settled for 
$19,671.49, which was paid in full in two payments.20  The settlement checks were 
made payable to both the Doroshow law firm and the plaintiff.21  The law firm 
deducted its fee and deposited the balance in its escrow account.22  Nanticoke 
asserted a hospital lien for the plaintiff’s medical expenses against the entire 
$19,671.49.23  Doroshow filed an interpleader action against Nanticoke and the 
 
16 Id. at 723. 
   17 See id. at 623, 28; 7A Kristina E. Music Biro, J.D., et.al., Corpus Juris Secundum Attorney & 
Client § 523 (2022) (“A charging lien is the equitable right of an attorney to have fees and costs 
due the attorney for services rendered in a particular suit secured by the judgment or the recovery 
in that suit.” (emphasis omitted)). 
18 36 A.3d 336, 339 (Del. 2012) (en banc). 
19 Id. 
20 Id. 
21 Id. 
22 Id. 
23 Id. at 338-339. 
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plaintiff seeking to release the amount remaining after deduction of its fee, the sum 
of $11,619.47, to the Superior Court for distribution.24  The Superior Court ruled 
that Nanticoke’s hospital lien took priority over Doroshow’s attorney’s lien and 
ordered that the full $19,671.49 be paid to Nanticoke.25 
 
(9)  On appeal, this Court found “that the right of an attorney to a charging 
lien is well established at common law.”26  The Court quoted with approval the 
definition of an attorney’s charging lien appearing in A Treatise on Attorneys at Law 
by Mark Thornton as “the right of an attorney at law to recover compensation for his 
services from a fund recovered by his aid, and also the right to be protected by the 
court to the end that such recovery might be effected.”27  This Court ultimately 
reversed the judgment of the Superior Court, finding that the Doroshow law firm 
had an attorney’s charging lien which had priority over Nanticoke’s hospital lien.28 
 
(10)  In Doroshow, no mention is made of a judgment in the personal injury 
case and a fair reading of the opinion creates a clear inference that the settlement 
creating the settlement fund was an “out-of-court” settlement.29  Capstack seeks to 
distinguish Doroshow on the ground that the facts are different in that the settlement 
proceeds there were paid directly to the law firm and the issue in the case “was 
 
24 Doroshow, 36 A.3d at 339. 
25 Id. at 339-40. 
26 Id. at 340. 
27 Id. (quoting 2 Edward Mark Thornton, A Treatise on Attorneys at Law § 578 (1914)). 
28 Id. at 339. 
29 Id. 
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simply . . . whether the law firm or the [hospital] had priority in terms of which lien 
should be discharged first.”30  However, the Court first discussed attorney’s charging 
liens in some detail as a threshold matter and arrived at the conclusion that Doroshow 
had a valid attorney’s charging lien on the settlement proceeds.31 
 
(11)  Although the precise issue involved in this appeal was not expressly 
raised in Doroshow, we are persuaded that Doroshow supports the view that an 
attorney’s charging lien can be asserted against a settlement fund such as the one 
recovered by Capstack in this case, and that charging liens are not restricted to 
judgments, judicial decrees, or court-ordered awards.  We are also persuaded that 
the use of the word “judgment” in Katten was not intended to exclude settlement 
recoveries which are not reduced to judgment from attorney’s charging liens.  After 
having thoroughly reviewed the authorities cited by both parties, we conclude that a 
Wilks Law attorney’s charging lien could be awarded against Capstack’s settlement 
recovery as ordered by the Court of Chancery. 
 
NOW, THEREFORE, IT IS THE ORDER of the Court that the judgment of 
the Court of Chancery is AFFIRMED.  
BY THE COURT: 
 
 
 
 
 
 
 
 
/s/  James T. Vaughn, Jr. 
 
 
 
 
 
Justice 
 
30 Opening Br. at 13. 
31 Doroshow, 36 A.3d at 240-42.