Franciscan Communities, Inc. v. Rice

2025 Ohio 2688

• Court: Ohio Court of Appeals
• Decided: July 31, 2025
• Docket: 114886
• Status: Published

Opinion

[Cite as Franciscan Communities, Inc. v. Rice, 2025-Ohio-2688.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

FRANCISCAN COMMUNITIES, INC., ET AL., :

Plaintiffs-Appellees, : No. 114886 v. :

JASON RICE, ET AL., :

Defendants-Appellants. :

JOURNAL ENTRY AND OPINION

JUDGMENT: VACATED AND REMANDED RELEASED AND JOURNALIZED: July 31, 2025

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-18-897283

Appearances:

Hahn Loeser & Parks LLP, Christina T. Hassel, and Aaron S. Evenchik, for appellees.

Mills, Mills, Fiely & Lucas, LLC, Laura L. Mills, and Pierce C. Walker, for appellants.

EILEEN T. GALLAGHER, P.J.:

This cause came to be heard on the accelerated calendar pursuant to

App.R. 11.1 and Loc.App.R. 11.1. Appellant Mills, Mills, Fiely & Lucas, LLC (“MMFL”) appeals the denial of its motion to enforce a charging lien. It claims the

following error:

The trial court erred in denying appellant’s motion for charging lien.

We find merit to the appeal, vacate the trial court’s judgment, and

remand the case to the trial court to enforce the charging lien.

I. Facts and Procedural History

In May 2018, plaintiffs-appellees, Franciscan Communities, Inc.

(“Franciscan I”) and Franciscan Communities, Inc. II (“Franciscan II”) (collectively

“the Franciscans”) filed a complaint against Armatas Construction Inc. (“Armatas”)

and several other defendants. The complaint, which was amended three times,

alleged claims of fraud, breach of contract, and slander. MMFL represented

Armatas throughout the proceedings and, on behalf of Armatas, MMFL filed an

answer, a cross-claim against codefendant Aventis Development Co. L.L.C.

(“Aventis”), and a counterclaim against the Franciscans for foreclosure of

mechanic’s lien, breach of contract, unjust enrichment, and abuse of process.

The trial court granted a motion to dismiss Armatas’ abuse-of-process

claim, and the case ultimately proceeded to a jury trial. On July 25, 2023, the jury

rendered a verdict in favor of Franciscan I against Aventis and Armatas in the

amount of $966,258.00, and a verdict in favor of Franciscan II against Aventis and

Armatas in the amount of $1,488,007.00. The jury also rendered a verdict in favor

of Armatas in the amount of $165,447.00 on the unjust-enrichment claim in its

counterclaim against the Franciscans. On July 26, 2023, the day after the jury rendered its verdicts, the

Franciscans filed a motion for pre- and post-judgment interest. The trial court

granted the request for prejudgment interest and thereby raised the total award in

favor of the Franciscans to slightly over $3 million.

On July 26, 2023, the Franciscans also filed a motion to set off the

award to Armatas against the separate awards granted to the Franciscans, but the

trial court denied the motion. Pursuant to Civ.R. 62, the Franciscans obtained a

supersedeas bond with Travelers Casualty and Surety Company of America

(“Travelers”) in the amount of $178,684.00, in order to appeal and stay execution of

Armatas’ judgment pending appeal. In October 2024, this court affirmed the trial

court’s judgment denying the motion for setoff and on November 26, 2024, the

cause was dismissed by the Ohio Supreme Court.1 Shortly after the dismissal,

MMFL submitted its claim for a charging lien on the supersedeas bond.

On November 27, 2024, the Franciscans filed a “creditor’s bill”

complaint in a new action seeking an order enjoining Travelers from paying funds

to Armatas in satisfaction of the judgment against them until the Franciscans’

judgments and court costs were paid in full. On December 17, 2024, three weeks

after the Franciscans filed its creditor’s-bill complaint and one week after the

creditor’s-bill complaint was served on Armatas and Travelers, MMFL filed a

1 Franciscan Communities, Inc. v. Rice, 2024-Ohio-4796 (8th Dist.). Franciscan Communities, Inc. v. Rice, 11/26/2024 Case Announcements #2, 2024-Ohio-5568. motion to enforce its charging lien. MMFL attached a copy of its attorney-fee

agreement with Armatas and a copy of the charging lien to the motion.

The Franciscans filed a brief in opposition to the motion for charging

lien, arguing, among other things, that because MMFL’s charging lien motion was

filed after the Franciscans filed their creditor’s-bill complaint, the Franciscans have

priority to the funds held by Travelers on the supersedeas bond. They argued that

MMFL’s charging lien was invalid because it failed to establish the existence of any

unpaid legal fees. They also argued that MMFL failed to establish that it created a

monetary fund to which Armatas or MMFL would have a valid claim because the

judgment in favor of Armatas on its counterclaim against the Franciscans is

substantially less than the judgment the Franciscans obtained against Armatas.

Finally, the Franciscans argued it had priority to the funds held by Travelers because

they filed their creditor’s-bill action before MMFL filed its motion to enforce its

charging lien.

The trial court summarily denied MMFL’s motion to enforce its

charging lien. In a brief judgment entry, the court stated that “the parties’ interests

are secured by creditor’s bill” and that “the motion is not a proper request for

charging order.” This appeal followed.

II. Law and Analysis

In the sole assignment of error, MMFL argues the trial court erred in

denying its motion to enforce its charging lien. A. Standard of Review

“The right of an attorney to payment of fees earned in the prosecution

of litigation to judgment, though usually denominated a lien, rests on the equity of

such attorney to be paid out of the judgment by him obtained, and is upheld on the

theory that his services and skill created the fund.” Cohen v. Goldberger, 109 Ohio

St. 22 (1923), paragraph one of the syllabus. Due to the equitable nature of a

charging lien, we review the trial court’s judgment on a motion to enforce a charging

lien for an abuse of discretion. Cuyahoga Cty. Bd. of Commrs. v. Maloof Properties,

Ltd., 2012-Ohio-470, ¶ 14 (8th Dist.), citing Garrett v. Sandusky, 2004-Ohio-2582

(6th Dist.).

An abuse of discretion occurs when a court exercises its judgment in

an unwarranted way regarding a matter over which it has discretionary authority.

Johnson v. Abdullah, 2021-Ohio-3304, ¶ 35. This court has also held that an abuse

of discretion may be found where a trial court “applies the wrong legal standard,

misapplies the correct legal standard, or relies on clearly erroneous findings of fact.”

Thomas v. Cleveland, 2008-Ohio-1720, ¶ 15 (8th Dist.).

B. Charging Lien

MMFL contends it met all the requirements for its charging lien and

that it was a proper request that should have been granted.

“[A] ‘charging lien’ is a lien upon a judgment or other monies awarded

to a client, or former client, for work previously performed by the attorney.”

Cuyahoga Maloof Properties at ¶ 14, citing Petty v. Kroger Food & Pharmacy, 2005-Ohio-6641 (10th Dist.). It has been described as “a device to protect counsel

against ‘the knavery of his client,’ whereby through his effort, the attorney acquires

an interest in the client’s cause of action.” In re City of New York, 5 N.Y.2d 300,

307 (1959).

“Generally, four elements must be present for a charging lien to be

enforceable: (1) ‘a valid express or implied contract between the attorney and the

client,’ (2) ‘a fund recovered by the attorney,’ (3) ‘notice of intent to assert a lien,’

and (4) ‘a timely assertion of the lien.’” Kisling, Nestico & Redick, L.L.C. v.

Progressive Max Ins. Co., 2020-Ohio-82, ¶ 12, quoting 2 Rossi, Attorneys’ Fees, §

12:13 (3d Ed.2019).

It is undisputed that MMFL had a valid contract with its client,

Armatas, wherein Armatas agreed to pay MMFL certain hourly rates for legal

services performed by attorneys and paralegals. MMFL attached a copy of its

attorney-fee agreement with Armatas to its motion to enforce the charging lien. It

also attached a copy of a document titled “Charging Lien,” wherein Armatas

acknowledged that the jury award of $165,447.00 to Armatas on its counterclaim

against the Franciscans “is a fund recovered by [MMFL]” in the litigation and that

Armatas “hereby grants [MMFL] a charging lien for all outstanding fees owed by

[Armatas]” under the fee agreement. Therefore, the first element of the prima facie

case for enforcing a charging lien was established.

It is also undisputed that the jury awarded Armatas the sum of

$165,447.00 on its counterclaim against the Franciscans. The Franciscans nevertheless contend that MMFL did not create the fund on which it seeks to enforce

its charging lien because “the Armatas Judgment Sum is much less than the closely

related Franciscan Judgment Sum, and [the Franciscans have] long-perfected

judgment against Armatas for the full amount of its over $3 million judgment.”

(Appellees’ brief p. 9.) They contend that MMFL did not win this lawsuit for

Armatas because Armatas still owes them approximately $3 million above and

beyond the Armatas judgment. (Appellees’ brief p. 9-10.)

However, the record shows that MMFL prosecuted Armatas’

counterclaim against the Franciscans and that, as a result of MMFL’s efforts, the

jury rendered a verdict in favor of Armatas and against the Franciscans in the

amount of $165,447.00. Therefore, the award of $165,447.00 was the product of

MMFL’s legal services, and the second element of the charging lien claim was also

established.

Finally, MMFL argues the trial court erred in denying its motion for

charging lien because the motion was timely filed. The Franciscans assert, however,

that MMFL failed to establish the third and fourth elements of its claim for a

charging lien because it failed to provide proper and timely notice of the charging

lien.

MMFL filed the motion to enforce its charging lien more than a year

after the jury rendered the verdict on Armatas’ counterclaim. However, during that

year, the case was on appeal to determine whether the trial court properly denied

the Franciscans’ request to set off Armatas’ verdict. The issue of the setoff was directly related to MMFL’s claim for a charging lien because the Franciscans sought

to set off the amount awarded to Armatas on its counterclaim from the amounts they

were awarded. Although we issued our decision affirming the trial court’s judgment

denying the setoff on October 3, 2024, the trial court issued a judgment entry

notifying the parties that it was without jurisdiction to proceed until after an appeal

to the Ohio Supreme Court had been resolved. MMFL promptly filed its motion to

enforce the charging lien upon remand from the Supreme Court. The Supreme

Court dismissed the appeal for lack of prosecution on November 26, 2024, and

MMFL filed its motion to enforce the charging lien on December 17, 2024.

Therefore, although the motion was filed more than a year after the jury rendered

its verdict, the motion was timely since the case was being reviewed under appellate

jurisdiction, which made it impossible for MMFL to properly file the motion sooner.

The Franciscans further assert that they perfected their judgment lien

before MMFL provided notice of its charging lien and that, therefore, the

Franciscans’ judgment lien has priority over MMFL’s charging lien. They cite

Acacia on the Green Condo. Assn., Inc. v. Jefferson, 2016-Ohio-386 (8th Dist.), and

Olive Branch Holdings L.L.C. v. Smith Technology Dev. L.L.C., 2009-Ohio-1105

(10th Dist.), in support of their argument.

In Acacia, the court held that ordinarily “a lien recorded first has

priority over a lien recorded later in time.” Id. at ¶ 15. In Olive, the court held that

upon commencement of a creditor’s bill, the judgment creditor not only acquires a lien on the debtor’s assets, but also achieves priority over creditors of the judgment

debtor without specific liens upon the debtor’s interest in the property.” Id. at ¶ 33.

However, Acacia involved competing mortgage liens and Olive

involved a creditor’s bill to secure a judgment. Neither Acacia nor Olive involved a

charging lien, and charging liens are superior to the claims of the client’s other

creditors. Maloof Properties, 2023-Ohio-470, at ¶ 18 (Charging liens are generally

superior to the claims of the client’s other creditors.); Cohen, 109 Ohio St. 22, at

paragraph two of the syllabus (A charging lien “has priority over those of general

creditors of the plaintiff[.]”); Fire Protection Resources, Inc. v. Johnson Fire

Protection Co., 72 Ohio App.3d 205, 209-210 (6th Dist. 1991), quoting Diehl v.

Friester, 37 Ohio St. 473, 477 (1882) (“An attorney’s right to fees out of the

judgment, therefore, is no different than if ‘ . . . attorney’s fees were thus included in

the verdict and judgment . . . .’”).

The Franciscans are creditors of Armatas because they obtained

substantial judgments against Armatas. However, under Ohio law, those claims are

inferior to the charging lien asserted by MMFL. It is true, as the Franciscans assert,

that MMFL did not specify how much Armatas owes in attorney fees. However, as

previously stated, MMFL met all the elements necessary to enforce the charging lien,

and proof of the amount of unpaid fees is not required to establish liability on the

charging lien. See Kisling, Nestico & Redick, L.L.C., 2020-Ohio-82143, at ¶ 12,

quoting 2 Rossi, Attorneys’ Fees, § 12:13 (3d Ed.2019). Furthermore, the trial court’s judgment erroneously states that

Armatas’ judgment was secured by a creditor’s bill even though MMFL never

asserted a creditor’s bill, and MMFL is not a party to the separate creditor’s bill

action filed by the Franciscans. The trial court also erroneously concluded that a

motion to enforce the charging lien is not a proper request for a charging order when

it is well-established a motion to declare and enforce a charging lien is a proper

vehicle for enforcing a charging lien. See, e.g., Fire Protection Resources, Inc. v.

Johnson Fire Protection Co., 72 Ohio App.3d 205, 211 (6th Dist. 1991) (holding that

a court must entertain a motion to enforce a charging order where a judgment has

been rendered and an attorney claims to have secured the judgment). Therefore,

the trial court abused its discretion in summarily denying MMFL’s motion to enforce

its charging lien without a hearing to determine the amount of unpaid fees.

Accordingly, the sole assignment of error is sustained.

The trial court’s judgment is vacated, and the case is remanded to the

trial court to determine and award MMFL attorney fees from the amount of money

the jury awarded to Armatas on its counterclaim.

It is ordered that appellants recover from appellees costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate issue out of this court directing the

common pleas court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

EILEEN T. GALLAGHER, PRESIDING JUDGE

MARY J. BOYLE, J., and ANITA LASTER MAYS, J., CONCUR