Benchmark Consulting, Inc v. USAA Casualty Insurance Company

CourtDistrict Court, M.D. Florida
DecidedSeptember 24, 2020
Docket8:18-cv-03134
StatusUnknown

This text of Benchmark Consulting, Inc v. USAA Casualty Insurance Company (Benchmark Consulting, Inc v. USAA Casualty Insurance Company) is published on Counsel Stack Legal Research, covering District Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Benchmark Consulting, Inc v. USAA Casualty Insurance Company, (M.D. Fla. 2020).

Opinion

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

BENCHMARK CONSULTING, INC.,

Plaintiff,

v. Case No. 8:18-cv-3134-T-24CPT

USAA CASUALTY INSURANCE COMPANY,

Defendant. __________________________________/

O R D E R Before the Court are the Plaintiff’s Amended Motion to Strike and/or Discharge Kovar Law Group’s [KLG] Charging Lien (Doc. 37); KLG’s Motion to Enforce Charging Lien (Doc. 39); and the responses in opposition to same (Docs. 38, 40, 41).1 For the reasons discussed below, the Plaintiff’s motion is granted in part, and KLG’s motion is denied. I. In November 2018, Plaintiff Benchmark Consulting Inc., doing business as Castle Roofing and Construction (Castle), initiated this action in state court against

1 One of these responses was filed by Defendant USAA Casualty Insurance Company (USAA), which, as noted infra, has since been dismissed from this case. Defendant USAA. (Docs. 1, 1-1). Castle was represented at the time by Sean P. Saval, an attorney at KLG. Approximately one month later, USAA removed the action to this Court, invoking the Court’s diversity jurisdiction. (Doc. 1). As the litigation progressed, the relationship between KLG and Castle deteriorated, ultimately resulting in Saval withdrawing as Castle’s attorney in June 2019. (Docs. 14, 15). With the Court’s permission, attorney Lee Smith of Smith, Kling & Thompson, P.A. (Smith Thompson) assumed representation of Castle. Id.

Roughly one week prior to Saval’s withdrawal, KLG filed a Notice of Attorney’s Charging Lien, claiming that it had not received full payment from Castle for the legal services it had rendered and the costs it had advanced. (Doc. 13). The Notice further stated: By filing and service of this Notice of Attorney’s Charging Lien in this case, [KLG] places CASTLE, its current legal counsel, the Defendant, and its legal counsel on notice of [KLG’s] claim of charging lien, and requests that [KLG] be advised of any settlement, trial, or judgment. Additionally, [KLG] requests that the Court reserve jurisdiction in any final judgment entered to adjudicate the amount of [KLG’s] charging lien. No distribution of any such recovery should be made without satisfying the foregoing lien. . . .

Id. at 3 (emphasis in original). In late September 2019, Castle—through its new counsel, Smith Thompson— filed a notice advising the Court that it had settled its dispute with USAA and requested that the “Court retain original jurisdiction to resolve any issues with respect to the pending charging lien filed by” KLG. (Doc. 23). Based on that notice, the Court entered an Order dismissing the case without prejudice and affording the parties 2 the right either to re-open the action within sixty days upon a showing of good cause, or to submit a stipulated form of final judgment. (Doc. 24). The Court’s Order, however, did not explicitly address or retain jurisdiction as to the matter of KLG’s charging lien. During the ensuing sixty-day period, Castle and USAA worked to finalize and execute their settlement agreement. (Doc. 82 at 3). In early October 2019, while Castle and USAA were preparing the release documents in connection with their

settlement, Saval informed USAA’s counsel in writing that: (1) KLG objected to any settlement that did not include its attorney’s fees and costs being paid in full; (2) KLG’s incurred attorney’s fees and costs were $9,348.50 and $430.55, respectively; and (3) KLG would accept the sum of $9,029.05 as full satisfaction of its charging lien. Id. USAA did not respond to KLG’s correspondence. Id. Two weeks later, Castle and USAA signed their settlement agreement, which provided that USAA would pay Castle $100,000 for a release of any and all claims, including attorney’s fees, costs, and extra-contractual damages. Id. at 4. The agreement required USAA to pay $85,000 of the $100,000 figure to Castle and the

remaining $15,000 to Smith Thompson and KLG to cover all attorney’s fees and costs owed to these two law firms, including those reflected in KLG’s charging lien. Id. The agreement also stated that Castle would indemnify and hold USAA harmless for any and all claims relating to such fees and costs. Id.

3 In late November 2019, Castle moved to re-open the case for purposes of either striking or discharging KLG’s charging lien. (Doc. 27). KLG opposed Castle’s motion as premature (Doc. 28), and, following a hearing on the matter, the Court denied the motion without prejudice and directed the parties to confer in an effort to resolve their fee dispute (Doc. 36). When Castle and KLG were unable to reach such a resolution, the Court scheduled an evidentiary hearing on the matter in late June 2020. Two weeks prior

to that proceeding, the Court conducted a pre-hearing conference, at which the parties agreed to USAA’s dismissal from the case in light of its tender of the above described settlement amounts. (Doc. 76). KLG also agreed at the conference to file amended exhibit and witness lists to ensure that its evidence was not cumulative. In addition, the day before the hearing, the parties filed a joint statement of agreed-upon facts (Doc. 82), as well as a stipulation waiving any attorney-client privilege and confidentiality concerns related to their dispute (Doc. 83). At the hearing, KLG called its owner and principal, Jeremy “Jay” Kovar, who testified to, inter alia, his law firm’s fee agreement with Castle, the type of work KLG

performed for Castle, and the reasons KLG withdrew from representing Castle in this action. (Doc. 87). Upon the completion of Kovar’s testimony, the parties stipulated that KLG’s remaining witness, Austin Fowler (who is an employee at KLG) would corroborate Kovar’s testimony relative to KLG and Castle’s fee arrangement. Id. In addition to this testimony, the parties admitted a total of twenty-one exhibits (Docs.

4 85, 86), including emails sent by KLG to Castle’s owner, James Lathrop, regarding KLG’s termination of its relationship with Castle. The Court has carefully reviewed the evidence tendered at the hearing as well as the parties’ submissions, and the matter is now ripe for resolution. II. A. The Court has supplemental jurisdiction over this charging lien matter pursuant

to 28 U.S.C. § 1367(a). See Shackleford v. Sailor's Wharf, Inc., 770 F. App’x 447, 449, n.1 (11th Cir. 2019) (per curiam) (finding the district court had supplemental jurisdiction over a charging lien following the conclusion of the underlying admiralty action); Moreno Farms, Inc. v. Tomato Thyme Corp., 490 F. App’x 187, 188 (11th Cir. 2012) (per curiam) (noting that the “existence of an attorney’s lien against a party’s recovery in a lawsuit is part of the same case or controversy as the underlying lawsuit”) (citations omitted). In adjudicating attorney charging liens, the federal courts apply the law of their home state. See Buckley Towers Condo., Inc. v. Katzman Garfinkel Rosenbaum, LLP, 519

F. App’x 657, 660 (11th Cir. 2013) (per curiam); In re Washington, 242 F.3d 1320, 1322- 23 (11th Cir. 2001) (per curiam). Under Florida law, the “preferred method” of enforcing an attorney’s charging lien is through a summary proceeding. Daniel Mones, P.A. v. Smith, 486 So. 2d 559, 561 (Fla. 1986); see also New Eng. Mut. Life Ins. Co. v. Podhurst, Orseck, Josefsberg, Eaton, Meadow, Olin & Perwin, P.A., 690 So. 2d 1354, 1356 (Fla. Dist. Ct. App. 1997) (“A summary proceeding represents a speedy and simple 5 method to set the amount of the charging lien.”). A product of Florida common law, summary proceedings are equitable in nature, Nichols v.

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Benchmark Consulting, Inc v. USAA Casualty Insurance Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/benchmark-consulting-inc-v-usaa-casualty-insurance-company-flmd-2020.