Cisney v. Johnson
| Decision Date | 27 August 2021 |
| Docket Number | 2:18-CV-1148-MHH |
| Parties | ERIC CISNEY, et al., Plaintiff, v. ROBERT GREY JOHNSON, JR., Defendant. |
| Court | U.S. District Court — Northern District of Alabama |
This case concerns an attorney's effort to recover a fee from his former clients' settlement funds. After being injured in a car accident in California, Eric Cisney sought damages from the driver at fault. His California attorney, Robert Johnson, also pursued underinsured motorist benefits from Mr Cisney's insurer. Before the UIM claim was resolved, Mr Cisney changed lawyers. When Mr. Cisney and his wife settled their UIM claim, Mr. Johnson asserted an attorney lien on the UIM settlement funds based on his contingency fee agreement with Mr. Cisney. The Cisneys argue that Mr. Johnson is not entitled to fees for his efforts in the UIM case, and they request a declaration that Mr. Johnson cannot recover fees from the disputed settlement funds. The Cisneys have asserted several claims against Mr. Johnson based on his efforts to take a portion of the UIM settlement fund. Mr.
Johnson has filed counterclaims against the Cisneys to try to recover a fee from the UIM settlement fund. This case is before the Court on the parties' cross-motions for summary judgment.
A district court “shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). To demonstrate that there is a genuine dispute as to a material fact that precludes summary judgment, a party opposing a motion for summary judgment must cite “to particular parts of materials in the record, including depositions, documents electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials.” Fed.R.Civ.P. 56(c)(1)(A). “The court need consider only the cited materials, but it may consider other materials in the record.” Fed.R.Civ.P. 56(c)(3). When considering a summary judgment motion, a district court must view the evidence in the record and draw reasonable inferences in the light most favorable to the non-moving party. Asalde v. First Class Parking Sys. LLC, 898 F.3d 1136, 1138 (11th Cir. 2018).
“In practice, cross motions for summary judgment may be probative of the nonexistence of a factual dispute, but this procedural posture does not automatically empower the court to dispense with the determination whether questions of material fact exist.” Georgia State Conference of NAACP v. Fayette Cty. Bd. of Comm'rs, 775 F.3d 1336, 1345 (11th Cir. 2015) (internal quotation marks and brackets omitted) (quoting Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. Voigt, 700 F.2d 341, 349 (7th Cir. 1983)). “‘The standard of review for cross-motions for summary judgment does not differ from the standard applied when only one party files a motion, but simply requires a determination of whether either of the parties deserves judgment as a matter of law on the facts that are not disputed.'” Alabama Mun. Ins. Corp. v. Scottsdale Ins. Co., 297 F.Supp.3d 1248, 1252 (N.D. Ala. 2017) (quoting S. Pilot Ins. Co. v. CECS, Inc., 52 F.Supp.3d 1240, 1242-43 (N.D.Ga. 2014)) (citing in turn Am. Bankers Ins. Group v. United States, 408 F.3d 1328, 1331 (11th Cir. 2005)). A district court will not grant summary judgment when the parties file cross-motions for summary judgment “unless one of the parties is entitled to judgment as a matter of law on facts that are not genuinely disputed.” United States v. Oakley, 744 F.2d 1553, 1555 (11th Cir. 1984) (quoting Bricklayers Int'l Union, Local 15 v. Stuart Plastering Co., 512 F.2d 1017, 1023 (5th Cir. 1975)).
In California, on July 17, 2015, plaintiff Eric Cisney, a firefighter, was severely injured when a firetruck in which he was riding was struck by Nester Jacobo Rosales. (Doc. 110 pp. 16, 27; Doc. 112, pp. 52, 60). Mr. Cisney required medical treatment, and he was unable to work. A portion of Mr. Cisney's medical expenses and a portion of his lost earnings were covered by workers compensation benefits. (Doc. 110, pp. 27, 47). Mr. Cisney hired defendant Robert Johnson, an attorney in California, “to prosecute a claim for an accident which occurred on 7/17/15.” (Doc. 110, pp. 9, 14). Mr. Cisney acknowledges that he hired Mr. Johnson to pursue workers compensation benefits and a third-party tort claim. (Doc. 112, p. 60).
On September 29, 2015, Mr. Cisney signed a contingency fee agreement with Mr. Johnson. (Doc. 110, pp. 9-12). Mr. Cisney signed the fee agreement in Huntsville, Alabama. (Doc. 110, p. 12; Doc. 112, p. 53). Under the agreement, Mr. Johnson was entitled to 33% of monies recovered by settlement, arbitration, or judgment “against the responsible parties, ” and Mr. Johnson could be entitled to up to 40% in certain circumstances. (Doc. 110, p. 9). Mr. Johnson reserved the contractual right to assert a fee lien against a potential recovery. The fee agreement states:
Attorney shall have a lien for his fees against any future recovery by Client in this matter, and said lien shall have priority over all other potential and future liens. Client acknowledges that this contingent fee is not set by law, but has been negotiated between Attorney and Client.
(Doc. 110, p. 9). The agreement permitted Mr. Cisney to substitute another attorney for Mr. Johnson at any time, but Mr. Johnson would retain an attorney's lien, which would be “satisfied upon the resolution of the case by the new attorney . . . from the fees paid to the new attorney on the case.” (Doc. 110, p. 11). The agreement states that if Mr. Cisney were to substitute another attorney for Mr. Johnson, Mr. Cisney would pay Mr. Johnson $350 per hour “for time expended on the case up to the time of any discharge.” (Doc. 110, p. 11). The agreement does not contain a choice of law provision.
The day after Mr. Cisney signed the contingency fee agreement, Mr. Johnson's associate, Robert Rankin, emailed a letter to Metlife Auto & Home concerning Mr. Cisney's accident. (Doc. 110, p. 14). Mr. Rankin notified Metlife that his firm was representing Mr. Cisney “with regard to injuries he sustained in an automobile accident on July 17, 2015.” (Doc. 110, p. 14). The Cisneys had an auto insurance policy with MetLife. (Doc. 111, p. 16).
Two weeks later, Mr. Rankin emailed a letter to Foremost Insurance. (Doc. 110, pp. 16-17). In the letter, he advised Foremost that he represented Mr. Cisney; that Mr. Cisney had been injured in a collision with Nestor Rosales while Mr. Rosales was working for his employer; and that the vehicle that Nestor Rosales was operating at the time of the collision was owned by Jesus Rosales and insured by Foremost. Mr. Rankin asked Foremost to disclose its policy limits for Jesus Rosales's policy. (Doc. 110, p. 16). On January 19, 2016, Mr. Rankin emailed a demand letter to Foremost and offered to settle Mr. Cisney's claim for $50, 000, the limit of Jesus Rosales's policy. (Doc. 110, pp. 19-20).
After sending several additional settlement letters to Foremost, (Doc 110, pp. 22-31), on April 15, 2016, Mr. Rankin notified Mr. Cisney by email that Foremost had agreed to settle the third-party claim for “$50k, the policy limit on the vehicle.” (Doc. 110, p. 33). Mr. Rankin asked Mr. Cisney and Mrs. Cisney to sign the settlement agreement attached to the email message and explained: “now we can make an under-insured claim on your own policy.” (Doc. 110, p. 33). Under the settlement, Mr. Cisney released all claims against Jesus Rosales. (Doc. 110, p. 35). Mr. Cisney and Mrs. Cisney signed the settlement agreement in Huntsville, Alabama on April 15, 2016. (Doc. 110, p. 36).[1]
In May of 2016, Mr. Rankin submitted to Metlife a claim for underinsured motorist benefits under the Cisneys' automobile insurance policy. (Doc. 110, p. 44; Doc. 111, p. 18, ¶ 22). Metlife found “coverage issues” with the claim because, under their policy, the Cisneys had to obtain Metlife's permission before settling with a third-party tortfeasor like Mr. Rosales. (Doc. 110, p. 46; Doc. 111, p. 17, ¶ 21). In a letter to Metlife's Lisa Boyes, Mr. Rankin explained that the Cisneys pursued settlement with Foremost before seeking UIM benefits because “under California law, it is mandated that the plaintiff insured ‘exhaust the entire available insurance proceeds' from the defendant at fault as a prerequisite to even being ‘eligible' for additional UIM compensation.” (Doc. 110, p. 46). Mr. Johnson and
Mr. Rankin negotiated with Foremost and MetLife to redo the third-party settlement and obtain Metlife's permission to settle. (Doc. 111, pp. 2-11). Mr. Rankin requested Metlife's permission to settle on July 7, 2016. (Doc. 111, pp. 8-9).
Meanwhile, on June 14, 2016, Metlife filed a lawsuit against the Cisneys in federal court in Alabama, seeking a declaration that the company had no duty to pay the Cisneys UIM benefits because the Cisneys did not request Metlife's permission to settle with the third-party tortfeasor. (Doc. 111, pp. 13-20); see also Metro. Prop. and Cas. Ins. Co. v. Cisney et al, 5:16-cv-00973-MHH (N.D. Ala. 2016). A few months later, Mr. Johnson filed a lawsuit for the Cisneys in California state court. In their complaint, the Cisneys named Metlife, SCIF, and Jesus Rosales as defendants and asserted contract and tort claims against them. (Doc. 111, pp. 22- 47). The California state court transferred the Cisneys' action to Alabama. (Doc. 112, p. 60).
Eventually the Cisneys agreed to arbitrate the UIM coverage claim with Metlife. (...
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