Opinion ID: 3023740
Heading Depth: 3
Heading Rank: 2

Heading: Appeal from the March 2002 Order

Text: This leaves Friedman’s counterclaim, filed on June 26, 2000, that he has a lien on the settlement proceeds he holds and the files he turned over to the Trustee. This was ruled on both by Judge Stripp in 2001 and by Judge Ferguson in March 2002. It is here that the Trustee interposes another procedural bar to Friedman’s appeal—that he waived before Judge Ferguson the making of any substantive argument in favor of his assertion of any attorney’s lien. The context is this. After the first District Court decision that vacated Judge Stripp’s decision granting summary judgment in favor of Friedman as to attorney’s liens because Judge Stripp entered his decision sua sponte (thus improperly), the case was remanded to the Bankruptcy Court. The parties appeared—this time before Judge Ferguson—and the only argument Friedman made to the Trustee’s motion for summary judgment was that Judge Stripp’s decision was the law of the case. As an exception to the law-of-the-case doctrine is whether the decision purported to be law of the case is clearly wrong and would be manifestly unjust, see Schultz v. Onan Corp., 737 F.2d 339, 345 (3d Cir. 1984) (citing Arizona v. California, 460 U.S. 605, 619 n.8 (1983)), Judge Ferguson 10 decided that Judge Stripp had indeed erred and entered summary judgment on the merits of the attorney’s lien claims in favor of the Trustee. Prudence would have counseled Friedman to argue the merits before Judge Ferguson as a back-up to his procedural, law-of-the-case argument. Moreover, as the District Court had remanded Judge Stripp’s ruling “because of the failure to give [the Trustee] notice and the opportunity to respond before the grant of summary judgment to [Friedman],”9 there can be little (if any) doubt that the “slate was wiped clean” as to any pronouncement by Judge Stripp on the merits. The parties were starting over at the summary judgment stage on attorney’s lien issues. The Court—this time with Judge Ferguson back presiding—was free to reverse itself now that it had the benefit of the Trustee’s response. The law-of-the-case doctrine was not in play, and Friedman’s decision to rest solely on that argument waived whatever substantive contentions he could have made. Thus we need not decide whether he had a valid lien—statutory or common law—on Smith’s personal injury cause of action.10 9 The order mistakenly said “appellant” (the Trustee) when it meant “appellee” (Friedman). 10 Even were Friedman to have either or both a statutory or common law attorney’s lien, we reiterate that the District Court “decline[d] to conclude that an attorney who performs the settlement of his . . . client’s case post-petition without the knowledge of the Trustee . . . retains a lien in the future proceeds of the claim.” While we do not decide this issue, we note that the fact mentioned—combined with the initial failure to disclose the settlement, the failure to seek and obtain Bankruptcy Court approval of the settlement, and the attempt to dismiss the bankruptcy when inquiry was made about the status of Smith’s possible claims against others—make this an inviting case for a court to exercise its equitable authority to preclude any attorney’s lien from being enforced (or at least 11