Title: William A. Manci v. Ball, Koons & Watson, a partnership
Citation: N/A
Docket Number: 1061370
State: Alabama
Issuer: Alabama Supreme Court
Date: May 23, 2008

REL: 5/23/08
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
OCTOBER TERM, 2007-2008
____________________
1061370
____________________
William A. Manci
v.
Ball, Koons & Watson, a partnership
Appeal from Baldwin Circuit Court 
(CV-04-606)
SEE, Justice.
William A. Manci appeals from the entry of a default
judgment in favor of Ball, Koons & Watson, a partnership
formed for the practice of law ("BK&W"), on its claims against
1061370
2
Manci and from the dismissal of Manci's counterclaims against
BK&W.  We affirm.
Facts and Procedural History
In 1998, Manci retained Ball & Koons, Attorneys at Law
(now BK&W), to represent him in litigation regarding the
estate of Arthur Manci ("the estate").  When BK&W's legal fees
exhausted Manci's original retainer, Manci and BK&W entered
into a contingent-fee agreement providing 
that 
Manci 
would 
pay
BK&W a fee of 1/3 of the value of any assets or sums Manci
recovered or was awarded as a result of the litigation.
Following the litigation, Manci refused to make any payment
under the contingent-fee agreement.  In May 2004, BK&W sued
Manci, the estate, and other persons and entities associated
with the estate seeking the payment of fees for legal services
BK&W had provided to Manci.  Manci brought a counterclaim
against BK&W and its individual attorneys, alleging legal
malpractice and requesting a judgment declaring that BK&W was
not entitled to the payment of any legal fees.
In February 2005, BK&W submitted its first discovery
requests to Manci.  Manci did not respond.  In June 2005, BK&W
moved the trial court to compel Manci to respond to the
1061370
3
discovery requests.  In March 2006, the trial court ordered
that all pending discovery be completed within 30 days.  In
April 2006, BK&W noticed the deposition of Manci, but he
failed to respond to the notice or to appear for the
deposition.  Manci then amended his answer and counterclaim
and responded to BK&W's first set of interrogatories with a
series of objections and vague responses.
In July 2006, BK&W filed a motion to show cause why Manci
should not be held in contempt for his nonresponsive replies
to BK&W's discovery requests.  The trial court granted the
show-cause motion in September 2006.  Manci moved the trial
court to vacate its order and to enter a protective order.  On
January 2, 2007, the trial court held a hearing on the
outstanding motions of all the parties, subsequent to which it
ordered Manci to complete his responses to discovery by
January 19, 2007, and set February 2, 2007, as the date for
Manci's 
deposition. 
 Manci 
responded 
by 
petitioning 
this 
Court
for the writ of mandamus declaring that the trial court had
exceeded its discretion by ordering Manci to complete his
responses to BK&W's discovery requests.  We denied that
1061370
4
petition without an opinion on February 27, 2007 (case no.
1060633). 
On January 31, 2007, BK&W moved for sanctions against
Manci for his failure to comply with the trial court's
discovery orders.  On February 2, 2007, the trial court
entered an order finding that "[a]s of the date of this Court
Order, [Manci] still refuses to provide any answers to
discovery as ordered by this Court in it[]s order of January
8, 2007."  Based on this finding, the trial court entered a
default judgment against Manci on BK&W's claims, dismissed
Manci's 
counterclaims 
with 
prejudice, 
and 
awarded 
BK&W 
damages
in the amount of $1,212,045.78 based on the contingent-fee
agreement.  Manci moved to set aside the trial court's default
judgment.  The trial court denied that motion, and Manci now
appeals.
Issues
Manci presents five issues on appeal.  First, Manci
argues that the trial court exceeded its discretion by
entering a default judgment on BK&W's claims and by dismissing
Manci's counterclaims as a sanction for Manci's failure to
comply with the trial court's discovery orders.  Second, Manci
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5
argues that his failure to submit discovery was harmless
because, he says, BK&W never properly replied to Manci's
amended counterclaim and, thus, admitted the averments of the
counterclaim.  Third, Manci argues that the trial court erred
in granting BK&W's motion to tax Manci with fees for an expert
witness incurred during BK&W's representation of Manci.
Fourth, Manci argues that BK&W presented no admissible
evidence to support the award of damages against him.  Fifth,
Manci argues that the record does not support the trial
court's finding that Manci's responses to discovery were not
made in good faith.
Standard of Review
In reviewing a trial court's denial of a motion to set
aside a default judgment, this Court has stated:
"A trial court has broad discretion in deciding
whether to grant or deny a motion to set aside a
default judgment. Kirtland v. Fort Morgan Auth.
Sewer Serv., Inc., 524 So. 2d 600 (Ala. 1988).  In
reviewing an appeal from a trial court's order
refusing to set aside a default judgment, this Court
must determine whether in refusing to set aside the
default judgment the trial court exceeded its
discretion. 524 So. 2d at 604.  That discretion,
although broad, requires the trial court to balance
two competing policy interests associated with
default judgments: the need to promote judicial
economy and a litigant's right to defend an action
on the merits. 524 So. 2d at 604.  These interests
1061370
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must be balanced under the two-step process
established in Kirtland.
"We begin the balancing process with the
presumption that cases should be decided on the
merits whenever it is practicable to do so. 524 So.
2d at 604. The trial court must then apply a three-
factor analysis first established in Ex parte
Illinois Central Gulf R.R., 514 So. 2d 1283 (Ala.
1987), in deciding whether to deny a motion to set
aside a default judgment. Kirtland, 524 So. 2d at
605.  The broad discretionary authority given to the
trial court in making that decision should not be
exercised without 
considering 
the following factors:
'1) whether the defendant has a meritorious defense;
2) whether the plaintiff will be unfairly prejudiced
if the default judgment is set aside; and 3) whether
the default judgment was a result of the defendant's
own culpable conduct.' 524 So. 2d at 605."
Zeller v. Bailey, 950 So. 2d 1149, 1152-53 (Ala. 2006).
Analysis
I.
First, we address Manci's argument that the trial court
exceeded its discretion in entering a default judgment on
BK&W's claims and in dismissing Manci's counterclaims as a
sanction for Manci's failure to comply with the trial court's
discovery orders. 
A. Meritorious Defense
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In clarifying the meritorious-defense requirement for
reviewing a trial court's refusal to set aside a default
judgment, this Court has stated:
"To be more precise, a defaulting party has
satisfactorily made a showing of a meritorious
defense when allegations in an answer or in a motion
to set aside the default judgment and its supporting
affidavits, if proven at trial, would constitute a
complete defense to the action, or when sufficient
evidence has been adduced either by way of affidavit
or by some other means to warrant submission of the
case to the jury.
"The allegations set forth in the answer and in
the motion must be more than mere bare legal
conclusions without factual support; they must
counter the cause of action averred in the complaint
with specificity -- namely, by setting forth
relevant legal grounds substantiated by a credible
factual basis."
Kirtland, 524 So. 2d at 606 (citations omitted).  In the trial
court's order denying Manci's motion to set aside the default
judgment 
and 
the dismissal of Manci's counterclaims, the trial
court found that Manci had "failed to set forth with
sufficient particularity a plausible legal defense based upon
(1) a viable legal theory, and (2) a strong factual basis to
counter [BK&W]'s Cause of Action.  [Manci]'s mere allegation
that he has a meritorious defense is insufficient."
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The record supports the trial court's order.  Manci's
motion to set aside the judgment makes only one allegation:
"The contents of the combined motions creates a genuine issue
as to whether Manci or his counsel has engaged in culpable
conduct."  Because Manci's motion presents "mere bare legal
conclusions without factual support," Kirtland, 524 So. 2d at
606, we turn to Manci's amended answer and counterclaim to
determine whether they show a meritorious defense.
Manci's amended answer and counterclaim aver three
affirmative defenses.  First, Manci offers a bare allegation
that BK&W fails to state a claim upon which relief can be
granted.  This allegation is insufficient as a basis on which
to set aside the default judgment.  Second, Manci asserts that
BK&W's claims are barred because the complaint "fails to
allege that BK&W performed all of BK&W's obligations and
conditions precedent to BK&W's right to recover under the
[contingent-fee agreement]."  This second assertion, however,
is factually incorrect.  BK&W's complaint states that BK&W
"substantially performed all of the terms required of it under
the terms of said [contingent-fee agreement] and a dispute has
arisen concerning the amount [Manci] owes [BK&W] for legal
1061370
9
services rendered."  Manci's third defense is that BK&W
forfeited the right to compensation by engaging in abusive and
overreaching misconduct in its attempt to collect the disputed
legal fees.  However, Manci offers no legal basis for this
contention.  Therefore, this claim too is insufficient to
demonstrate that Manci has a meritorious defense.
Manci asserted two claims in his counterclaim.  Manci
alleges 
a 
legal-services-liability 
claim 
against 
BK&W,
alleging numerous breaches of the standard of care applicable
to BK&W.  However, this Court has consistently held that "'"in
a legal malpractice case, the plaintiff must show that but for
the defendant's negligence he would have recovered on the
underlying cause of action ...."'" Dennis v. Northcutt, 923
So. 2d 275, 279 (Ala. 2005) (quoting Independent Stave Co. v.
Bell, Richardson & Sparkman, P.A. 678 So. 2d 770, 772 (Ala.
1996), quoting in turn McDuffie v. Brinkley, Ford, Chestnut &
Aldridge, 576 So. 2d 198, 199 (Ala. 1991)).  Not only does
Manci not allege that he failed to recover on the underlying
matter 
as 
the 
result 
of 
BK&W's 
negligence, 
but 
his
counterclaim also repeatedly refers to BK&W's "successful"
handling of his case.
1061370
10
Manci also seeks in his counterclaim a judgment declaring
that BK&W is not entitled to attorney fees under the terms of
the contingent-fee agreement he entered into with BK&W.
However, BK&W's complaint seeks to recover all expenses and
legal fees arising from its representation of Manci, not just
those due under the contingent-fee agreement.  In fact,
Manci's counterclaim admits that "BK&W is entitled to be
compensated for those legal representations of him on the
basis of quantum meruit instead of a contingent fee."  By
Manci's own admission, his defenses and counterclaims are not
a complete defense to BK&W's action; therefore, Manci fails to
meet the meritorious-defense requirement of a challenge to the
default judgment. 
B. Prejudice to the Nondefaulting Party
This Court has stated:
"'The setting aside of a default judgment delays a
final termination of the litigation. This delay
frustrates or impedes a plaintiff's efforts to
recover on his claim and causes him to incur
additional 
costs. 
 
Moreover, 
the 
delay 
may
facilitate fraud and collusion, result in loss of
evidence, and hinder discovery.'"
Zeller v. Bailey, 950 So. 2d 1149, 1153 (Ala. 2006) (emphasis
omitted) (quoting Kirtland, 524 So. 2d at 606-07).  On this
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11
factor, the trial court found that BK&W would be prejudiced if
the default judgment were to be set aside because "[t]he Court
is convinced that [Manci] will never comply with the Rules of
Civil Procedure or the Orders of this Court if the Default
Judgment is set aside."  Moreover, the record indicates that
the trial court held a hearing on March 6, 2007, to determine
the amount of damages arising from the default judgment and,
after the hearing, entered an order setting damages in the
amount of $1,212,045.78.  On March 26, 2007, Manci filed an
untimely "Notice of Disclaimer" with the circuit court,
attempting to disclaim his interest in the estate, which was
deposited with the clerk of the circuit court pending the
resolution of this case.  Although the trial court rejected
this disclaimer as "ineffective and for naught," it
demonstrates that Manci has attempted to divest himself of
assets from which the judgment in favor of BK&W might be paid.
Because further delay in bringing this case to resolution
could result in further attempts by Manci to "facilitate
fraud," setting aside the default judgment would unfairly
prejudice BK&W.
C. Culpability of the Defaulting Party's Conduct
1061370
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This Court has stated in regard to the culpability
factor:
"To warrant a refusal to set aside a default
judgment, the defaulting party's actions that
resulted in the entry of the default judgment must
constitute willful conduct or conduct committed in
bad faith.  Negligence alone is not sufficient. Bad
faith or willfulness is identified by 'incessant and
flagrant disrespect for court rules, deliberate and
knowing 
disregard 
for 
judicial 
authority, 
or
intentional nonresponsiveness.' Kirkland [v. Fort
Morgan Auth. Sewer Serv., Inc.], 524 So. 2d [600] at
608 [(Ala. 1988)] (citing Agio Indus., Inc. v. Delta
Oil Co., 485 So. 2d 340, 342 (Ala. Civ. App. 1986)).
A trial court's finding with respect to the
culpability of the defaulting party is subject to
great deference. Jones v. Hydro-Wave of Alabama,
Inc., 524 So. 2d 610, 616 (Ala. 1988)."
Zeller, 950 So. 2d at 1154.  The trial court stated that
"[Manci] has failed to offer any reasonable explanation why
the discovery responses have not been forthcoming.  This Court
has 
never 
witnessed 
such 
incessant 
and 
flagrant 
disrespect 
for
Court rules or deliberate and knowing disregard for judicial
authority, or more intentional non-responsiveness than of
[Manci] in this case."  On appeal, Manci appears to argue that
the trial court erred by granting BK&W's motion for a default
judgment without ever having ordered him to respond to the
discovery requests pursuant to Rule 37(a), Ala. R. Civ. P.,
which provides the circumstances under which a party may move
1061370
13
the court to compel discovery.  Manci's allegation that he was
not ordered to respond to discovery is, however, incorrect.
The record indicates that BK&W first moved the trial court to
compel discovery on June 17, 2005.  The trial court entered an
order on September 15, 2006, under which Manci was ordered "to
fully and completely answer the interrogatories as propounded
on or before October 15, 2006."  The trial court entered a
second order compelling discovery on January 8, 2007.  BK&W
then moved for sanctions against Manci on January 31, 2007.
The trial court granted that motion on February 2, 2007.
Manci has offered no reasonable explanation for his failure to
comply with the trial court's discovery orders.  After
reviewing the arguments of the parties and the record in this
case, we hold that the trial court did not exceed its
discretion in finding that Manci's conduct was willful and
committed in bad faith and warranted the sanctions of the
entry of a default and the dismissal of his counterclaim.
II.
Second, Manci argues that his failure to submit proper
discovery responses was harmless because, he says, BK&W never
properly replied to his amended counterclaim, and, thus, it
1061370
14
admitted the averments of the counterclaim.  Manci bases this
argument on Rule 8(d), Ala. R. Civ. P., which provides, in
relevant part, that "[a]verments in a pleading to which a
responsive pleading is required, other than those as to the
amount of damage, are admitted when not denied in the
responsive pleading."  In Hawk v. Bavarian Motor Works, 342
So. 2d 355 (Ala. 1977), this Court dealt with the issue
whether "the failure to file a written denial of a pleading to
which a response is required, under Rule 8(d), [Ala. R. Civ.
P.], admits the allegations of that pleading where the issues
tried are embraced in prior pleadings that were responded to
in writing." 342 So. 2d at 356.  In that case, the plaintiff's
original complaint contained six counts related to an
allegedly defective motorcycle.  The defendant responded to
the complaint, denying any negligence.  The plaintiff later
added a seventh count, alleging that the defendant had notice
of the defect.  The defendant did not file an answer to this
amended complaint.  When the case went to trial, the plaintiff
moved for a directed verdict (now a judgment as a matter of
law, see Rule 50, Ala. R. Civ. P.) on count seven, alleging
that the defendant had admitted that count by not responding
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as required by Rule 8(b), Ala. R. Civ. P.  The trial court
denied that motion, and an appeal followed.  This Court
affirmed the trial court's order denying the motion, stating
that "mere failure to file an additional answer to a recast
theory of one issue already stated in a previously filed
pleading could not reasonably and fairly require strict
application of Rule 8(d) to thwart the just determination of
this action." 342 So. 2d at 357.  The Court reasoned that the
amended complaint "states nothing so materially different from
what is stated in the original complaint so that an answer to
the original would not sufficiently answer the amendment." 342
So. 2d at 357.  We find Hawk to be apposite.  Manci's amended
counterclaim does not add a new basis of recovery; rather, it
appears to amplify the grounds on which Manci based his
request for a declaratory judgment on the contingent-fee
agreement and his legal-malpractice claim.  BK&W's response to
Manci's original complaint was adequate; therefore, it did not
admit the allegations of the amended counterclaim simply
because it failed to reply to Manci's recasting of his
theories.
III.
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Third, Manci argues that the trial court erred in
granting BK&W's motion to tax as costs expert-witness fees
incurred during BK&W's representation of Manci as taxable
costs against him.  The sole authority Manci cites for this
allegation of error is Bundrick v. McAllister, 882 So. 2d 864
(Ala. Civ. App. 2003).  Manci's argument is misplaced.  In
Bundrick, the Court of Civil Appeals held that the successful
plaintiff could not tax the defendant with the costs the
plaintiff incurred hiring an expert witness necessary to
prosecute her claim against the defendant.  However, in this
case, the expert-witness fees in question were incurred by
BK&W on behalf of Manci while he was BK&W's client, not in the
prosecution of BK&W's claims against Manci.  Bundrick is
clearly distinguishable, and we affirm the trial court's
judgment on this ground as well.
IV.
Fourth, Manci argues that BK&W presented no admissible
evidence to support the award of damages against him.
However, Manci cites no authority and makes no argument as to
the admissibility of any evidence offered at the hearing.
Rather, it appears that Manci's argument is that the
1061370
Section 34-3-61(c), Ala. Code 1975, provides:
1
"Upon all actions for the recovery of real or
personal property, and upon all judgments for the
recovery of the same, attorneys-at-law shall have a
lien on the property recovered, for their fees,
superior to all liens but liens for taxes, which may
be enforced by said attorneys-at-law, or their
lawful representatives, as liens on personal and
17
contingent-fee agreement he entered into with BK&W should not
apply to the 60-acre plot of land that was part of the dispute
in 
which 
BK&W represented 
Manci 
against Arthur 
Manci's estate.
The contingent-fee agreement states, in pertinent part: 
"The undersigned, William A. Manci, employs the law
firm of [BK&W] to recover by suit or settlement any
assets from [the estate].  The undersigned agrees to
pay said firm for legal representation, a sum equal
to 33 1/3% of the value of all said assets or sums
awarded or recovered on his behalf in said
litigation or any related litigation, plus expenses,
for professional services rendered up to and
including the conclusion of (1) trial."
Manci argues that because he was ultimately adjudged to be the
rightful owner of those 60 acres, his title to those 60 acres
was not an asset the firm recovered on his behalf in the
estate litigation; therefore, he argues, BK&W "had no right to
claim an attorney's lien against Manci's 60 acres of land."
Manci's brief at 59.  Manci bases this argument on § 34-3-
61(c), Ala. Code 1975,  and three cases from this Court.
1
1061370
real estate, and the property recovered shall remain
subject to said liens, unless transferred to bona
fide purchasers without notice."
18
Manci quotes the following from Warren v. Hill, Hill, Stovall
& Carter, 252 Ala. 638, 639, 42 So. 2d 264, 265 (1949): "The
right of attorneys under [Title 46, Ala. Code 1940] section
64, subd. 3, supra [now codified at § 34-3-61(c)], to enforce
a lien on the land recovered by plaintiff is dependent upon
the proposition that the suit was for the land and resulted in
its recovery."  He also cites, without quoting, Ex parte
Clanahan, 261 Ala. 87, 72 So. 2d 833 (1954), and King v.
Acuff, 218 Ala. 619, 119 So. 833 (1929), for the proposition
that "[a]n action filed by an attorney to quiet the title to
real property is not an action to recover the property for the
client and judgment quieting the title is not a judgment for
the recovery of the property." Manci's brief at 58.  However,
Manci's reliance on these authorities is misplaced.  In
Warren, the Court reached the conclusion that even though the
underlying action was to enforce a personal statutory right of
redemption, "neither the plaintiff nor defendant is in a
position to question the fact of a recovery of the land by
plaintiff." 252 Ala. at 640, 42 So. 2d at 265.  Manci appears
1061370
19
to cite Clanahan for its citations to King, in which this
Court was asked to uphold a statutory attorney's lien against
his client's land to secure the payment of the attorney's fee
for successfully bringing a quiet title action on behalf of
the client.  This Court held that "[t]here was no recovery of
property; there was only an authoritative and conclusive
declaration by the court that defendants there had no interest
in the property the subject of litigation.  We are unable to
find in the statute any purpose to create a lien in such
case." 218 Ala. at 620, 119 So. at 833.  However, the statute
and all the cases cited by Manci deal with an attorney's
attempt to enforce a statutory lien on real property.  None
address the case presented here –- where an attorney has not
filed a statutory attorney's lien but has an interest in the
value of the subject property in reference to a contingent-fee
agreement.  We note that the contingent-fee agreement between
Manci and BK&W entitles BK&W to a fee equal to the value of 33
1/3% of the assets or sums recovered by or awarded to Manci in
the litigation, not 33 1/3% of the assets themselves.  We
further note that the trial court awarded BK&W a monetary sum,
not an interest or attorney's lien in any particular asset of
1061370
20
Manci's.  "'"The determination of whether an attorney fee is
reasonable is within the sound discretion of the trial court
and will not be disturbed on appeal absent an abuse of that
discretion."'" Rabb v. Estate of Harris, 953 So. 2d 401, 405
(Ala. 2006) (quoting City of Birmingham v. Horn, 810 So. 2d
667, 681-82 (Ala. 2001), quoting in turn Ex parte Edwards, 601
So. 2d 82, 85 (Ala. 1992)).  Manci's argument fails to
demonstrate that the trial court exceeded its discretion in
determining the amount of the attorney-fee award, and we
affirm the trial court's judgment on this ground.
V.
Fifth, Manci argues that the record does not support the
trial court's finding that Manci's responses of BK&W's
discovery requests were not made in good faith.  However,
Manci fails to provide any citation to authority or argument
in support of this allegation.  "'"Where an appellant fails to
cite to any authority for an argument, this Court may affirm
the judgment as to those issues, for it is neither this
Court's duty nor its function to perform all the legal
research for an appellant."'"  Ex parte Barnett, [Ms. 1060174,
August 3, 2007] ___ So. 2d ___, ___ (Ala. 2007) (quoting
1061370
21
Birmingham News Co. v. Horn, 901 So. 2d 27, 28 (Ala. 2004),
quoting in turn Sea Calm Shipping Co. v. Cooks, 565 So. 2d
212, 216 (Ala. 1990)).  Because Manci has not cited any
authority in support of his allegation, we affirm the judgment
of the trial court on this ground.
Conclusion
Because Manci has not shown that the trial court exceeded
its discretion in denying his motion to set aside the default
judgment and the dismissal of counterclaims, we affirm the
trial court's judgment.
AFFIRMED.
Cobb, C.J., and Woodall, Smith, and Parker, JJ., concur.