Court Opinion

ID: 4306018
Source: CourtListenerOpinion
Date Created: 2018-08-22 09:07:43.861098+00
Date Added: 2024-06-11T14:38:10.097132
License: Public Domain

STATE OF MICHIGAN

                           COURT OF APPEALS

LESLEY POUNDERS, Guardian for AARON                         UNPUBLISHED
CHRISTOPHER POUNDERS,                                       August 21, 2018

             Plaintiff-Appellant,

v                                                           No. 338348
                                                            Wayne Circuit Court
ALI FAWAZ,                                                  LC No. 14-004770-NO

             Defendant/Cross-Plaintiff,

and

ALFA ENTERPRISES, INC.,

             Third-Party Plaintiff,

and

BARRICK ENTERPRISES, INC., VEGAS
MARKET, and CHASE CASH & CARRY, INC.,

             Defendants,

and

ABBAS DAHBER and H&A MART, INC.,

             Defendants/Cross-
             Defendants/Third-Party Defendants,

and

JONATHAN R. MARKO,

             Appellee.

Before: SWARTZLE, P.J., and CAVANAGH and M. J. KELLY, JJ.

                                           -1-
PER CURIAM.

       Plaintiff Lesley Pounders, guardian for Aaron Christopher Pounders, appeals as of right
an order denying her motion to terminate the equitable lien asserted by nonparty Jonathan R.
Marko against the proceeds of her settlement with defendants. Because Marko is not entitled to
an equitable lien, we reverse.

                                       I. BACKGROUND

        Plaintiff retained Rasor Law Firm PLLC (Rasor Law) to represent her in a personal-
injury lawsuit against defendants brought on behalf of her minor son. Marko was employed by
Rasor Law under an employment agreement, the terms of which are now disputed, and provided
some work on plaintiff’s case. Marko left Rasor Law prior to any resolution in the case. After
Marko’s departure, Rasor Law aided plaintiff to a settlement with defendants, the terms of which
are not at issue in this appeal.

        Rather, this appeal concerns an equitable lien Marko placed on the proceeds of plaintiff’s
settlement. When Rasor Law challenged the lien, Marko argued that his pre-resignation work on
the case entitled him to a share of the fees Rasor Law earned from plaintiff’s settlement and that
Rasor Law unlawfully withheld plaintiff’s share. Over Rasor Law’s objection, the trial court
ruled that Marko held a 25% lien on the net attorney fees to be paid to Rasor Law. The trial
court reasoned that an equitable lien can be imposed on an identifiable piece of property that the
parties intended to be security for a debt and concluded that Marko and Rasor Law had such an
agreement and that the agreement gave rise to a lien on the settlement funds in favor of Marko.
Rasor Law, in a motion filed in plaintiff’s name, moved for reconsideration of the trial court’s
ruling, but the motion was denied.

       This appeal followed.

                                          II. ANALYSIS

        “Whether a lien is authorized in a particular case is a question of law” that we review de
novo. Ypsilanti Charter Twp v Kircher, 281 Mich App 251, 281; 761 NW2d 761 (2008).
“Generally, an equitable lien arises from an agreement that both identifies property and shows an
intention that the property will be security for an obligation.” In re Estate of Moukalled, 269
Mich App 708, 719; 714 NW2d 400, 407 (2006). “In the absence of a written contract, an
equitable lien will be established only where, through the relations of the parties, there is a clear
intent to use an identifiable piece of property as security for a debt.” Id. (internal citation and
quotation marks omitted). “An equitable lien cannot be imposed, however, if the proponent has
an adequate remedy at law.” Id.

        The crux of the instant dispute is Marko’s claim that Rasor Law has not paid him the fees
he was entitled to under his employment agreement with the firm. Marko, in other words,
alleges that Rasor Law breached its contract with Marko. Yet, instead of seeking the fees in a
breach-of-contract suit against Rasor Law, Marko attempted to recover the fees through an
equitable lien in the underlying personal-injury suit, a case to which neither he nor Rasor Law is
a party. Because Marko could sue Rasor Law for breach of contract and, if he prevailed, obtain
the same relief he seeks here—an order requiring Rasor Law to pay him a percentage of the
                                                -2-
attorney fees it collected in this case—Marko has an adequate legal remedy which precludes him
from obtaining an equitable lien.

        Marko insists that his legal remedy is not adequate because litigation would be difficult,
long, and expensive. Yet, the underlying contract dispute requires resolution whether it is
addressed in the context of a breach-of-contract suit or an action for an equitable lien. And the
difficulty of the issue favors resolution in a separate suit as opposed to grafting the costs and
delays onto plaintiff’s case. Marko also argues that Rasor Law’s “solvency issues” preclude
Marko from obtaining an adequate legal remedy. See In re Estate of Moukalled, 269 Mich App
at 719. Yet, while Marko presented evidence of Rasor Law being unable or unwilling to pay
certain bills, Marko presented no evidence that Rasor Law is insolvent. Rather, Rasor Law’s
participation in this and other cases indicates that it is a functioning enterprise. Accordingly,
Marko has not shown that his remedy at law is inadequate. Therefore, we reverse the trial
court’s approval of an equitable lien on plaintiff’s settlement. Given our conclusion that Marko
is not entitled to an equitable lien, we need not address Marko’s other argument that the trial
court improperly interpreted the terms of Marko’s employment agreement with Rasor Law.

        On a final note, this case is just one of several similar attorney-fee disputes between
Marko and Rasor Law that have been litigated in this Court. See, e.g., Hedrick v Dep’t of
Corrections, unpublished per curiam opinion of the Court of Appeals, issued December 12, 2017
(Docket No. 335489); Barash v Yaldo, unpublished per curiam opinion of the Court of Appeals,
issued December 12, 2017 (Docket No. 332705); Ford v Woodward Tap, Inc, unpublished per
curiam opinion of the Court of Appeals, issued December 7, 2017 (Docket No. 332473); Joe v
Kearn, unpublished per curiam opinion of the Court of Appeals, issued December 12, 2017
(Docket No. 333643). Indeed, this is not the only attorney-fee dispute before the immediate
panel. In Docket No. 338474, we conclude that Rasor Law is entitled to a charging lien against
the proceeds of a settlement by one of Rasor Law’s former clients that took his case to Marko’s
new law firm, Ernst & Marko, after Marko’s resignation from Rasor Law. While this result may
seem inequitable in light of our conclusion in this case that Marko is not entitled to an equitable
lien against the proceeds of a settlement by one of Rasor Law’s clients, the analysis supporting
these different conclusions is rather straightforward and has been consistently applied by this
Court in each dispute Marko and Rasor Law have brought before it.

        In the context of these disputes, Rasor Law’s entitlement to attorney fees results from its
previous contractual relationship with a client. In each of these cases, the client had an initial
retainer agreement with Rasor Law. When the client discharged Rasor Law, Rasor Law obtained
a right to recovery from the client, making a charging lien on the client’s settlement the
appropriate remedy. Marko’s purported entitlement to attorney fees, however, results from his
previous employment relationship with Rasor Law. Because no contractual relationship existed
between Marko and the clients that remained with Rasor Law, Marko has no right of recovery
against those clients. Rather, Marko’s right of recovery is against Rasor Law for allegedly
breaching its employment agreement with Marko. Because this right may be vindicated in a
breach-of-contract suit against Rasor Law, Marko has an appropriate legal remedy that renders
inappropriate an equitable lien on the client’s settlement.

                                                -3-
        Reversed and remanded for entry of an order terminating Marko’s lien. We do not retain
jurisdiction.

                                                         /s/ Brock A. Swartzle
                                                         /s/ Mark J. Cavanagh
                                                         /s/ Michael J. Kelly

                                             -4-