Fadel v. Deseret First Credit Union

• Decision Date: 31 August 2017
• Docket Number: No. 20160070-CA,20160070-CA
• Citation: Fadel v. Deseret First Credit Union, 405 P.3d 807 (Utah App. 2017)
• Parties: George K. FADEL, Appellant, v. DESERET FIRST CREDIT UNION, Appellee.
• Court: Utah Court of Appeals

405 P.3d 807

George K. FADEL, Appellant,

v.DESERET FIRST CREDIT UNION, Appellee.

No. 20160070-CA

Court of Appeals of Utah.

Filed August 31, 2017

George K. Fadel, Appellant Pro Se

Wallace O. Felsted and Gregory S. Moesinger, Salt Lake City, Attorneys for Appellee

Judge Jill M. Pohlman authored this Opinion, in which Judges Gregory K. Orme and Stephen L. Roth concurred.¹

Opinion

POHLMAN, Judge:

¶ 1 George K. Fadel appeals the district court's judgment entered in favor of Deseret First Credit Union (Deseret First). Fadel contends the court erred in dismissing his complaint that sought to foreclose an attorney's lien. We affirm.

BACKGROUND

The Underlying Lawsuit

¶ 2 Jerry W. Parkin as successor trustee for the Wilma G. Parkin Family Protection Trust (the Trust) owned a piece of real property in Bountiful, Utah. Deseret First claimed an interest in the property and brought suit against the Trust to quiet title. The Trust hired Fadel to represent it in the litigation against Deseret First.

¶ 3 In the written attorney–client agreement between Fadel and the Trust, the Trust agreed to pay Fadel "one-half of the amounts recovered by settlement or judgment ... in excess of $10,000." The fee agreement also provided that recovery in the form of property "could result in [Fadel] obtaining a joint interest in the land with [the Trust] after deducting $10,000."

¶ 4 Deseret First and the Trust entered into mediation. Fadel was present for a portion of the mediation but left before its conclusion. After Fadel left, Deseret First and the Trust entered into a settlement agreement pursuant to which the Trust agreed to convey the property to Deseret First by general warranty deed in exchange for a payment of $30,000. On that same day, Deseret First tendered, and the Trust accepted, the $30,000 payment, and Deseret First received the general warranty deed. The next day, October 21, 2011, Deseret First recorded the general warranty deed with the Davis County Recorder's Office.

¶ 5 Three days later, on October 24, 2011, Fadel recorded a notice of attorney's lien against the property with the Davis County Recorder's Office. He also filed the notice of lien with the district court the next day. In the notice, Fadel acknowledged that the Trust conveyed the deed to Deseret First before he recorded the notice of lien.

¶ 6 The Trust retained a new attorney who filed a substitution of counsel on behalf of the Trust, and Deseret First and the Trust filed a stipulated motion to dismiss with prejudice. The district court, over Fadel's objection, entered an order dismissing the quiet title case.

¶ 7 After being replaced as counsel, Fadel nevertheless repeatedly filed motions and documents in the quiet title case purportedly on behalf of the Trust. In response, Deseret First moved to enforce the settlement agreement and for sanctions against Fadel, citing rule 11 of the Utah Rules of Civil Procedure and the court's inherent authority to regulate the conduct of attorneys. Deseret First also petitioned the court to nullify Fadel's attorney's lien and sought damages under the wrongful lien statute. Months later, Fadel filed a motion to intervene, which both Deseret First and the Trust opposed.

¶ 8 Judge David Hamilton, who was presiding over the case, ruled in favor of Deseret First in most respects. First, Judge Hamilton ruled that the Trust and Deseret First had resolved their dispute, that the settlement agreement was valid and enforceable, and that Fadel had no basis to submit pleadings on the Trust's behalf. Second, Judge Hamilton imposed sanctions, including an award of attorney fees, against Fadel. The sanctions were warranted, the judge explained, because Fadel had "repeatedly attempted to represent the Trust in filing motions, and he [had] repeatedly taken positions that [were] frivolous, meritless, and inconsistent" with the district court's rulings. Fadel had also attempted to pursue, on behalf of himself and the Trust, claims against Deseret First "that, if at all, belonged to the Trust but that were resolved and released under the Settlement Agreement." Third, Judge Hamilton ruled that Fadel's notice of attorney's lien was void ab initio. He explained that, although Fadel was entitled to an attorney's lien pursuant to statute, the notice of lien that Fadel recorded with the county on October 24, 2011, was "plagued by errors and failed to comply with statutory requirements." Judge Hamilton ultimately denied Deseret First's request for damages, however, because he determined that Fadel's attorney's lien itself was not wrongful as defined under the wrongful lien statute. Fourth, because Fadel filed his motion to intervene after the quiet title case had been dismissed with prejudice, Judge Hamilton denied the motion as untimely. Fadel appealed, and this court affirmed the district court's decisions.

See Deseret First Fed. Credit Union v. Parkin, 2014 UT App 267, ¶¶ 1, 22, 339 P.3d 471.

The Present Lawsuit

¶ 9 After the quiet title case concluded, Fadel filed the present action against Deseret First. In his complaint, Fadel alleged that Deseret First took title to the property subject to his attorney's lien. He cited his attorney fee agreement with the Trust and relied on Judge Hamilton's statement in the prior case that Fadel was entitled to an attorney's lien.² In terms of relief, Fadel sought to foreclose his attorney's lien and sought an interest in the property as well as a portion of the rents on the property.

¶ 10 Deseret First moved to dismiss, asserting that Fadel's complaint was "attempting to enforce and foreclose a Notice of Attorney's Lien that was previously invalidated, voided, and struck by Judge Hamilton" in the quiet title case. According to Deseret First, when it recorded the general warranty deed, "Fadel had neither asserted nor perfected his attorneys' lien for any unpaid compensation." It asserted that Fadel thus had "no pending lien against Deseret First's real property" and that because the property had "already been conveyed by the former client to Deseret First," Fadel could not "create a new lien" on the property. Deseret First also argued, among other things, that res judicata barred Fadel's claims because they had previously been adjudicated. Deseret First requested sanctions, including an award of attorney fees pursuant to the court's inherent authority and the bad faith attorney fees statute.

¶ 11 In response, Fadel contended that the invalidity of the notice of lien "[did] not affect the validity of the lien" itself and was also insignificant because Deseret First had actual notice of his lien. He further contended that his "attorney's lien itself was not wrongful" under the definition in the wrongful lien statute because it was "expressly authorized" under the attorney's lien statute. Moreover, Fadel contended his suit could proceed because "[t]he issue of [his] entitlement to a lien for services rendered and costs advanced ha[d] not been litigated." According to Fadel, he was filing a separate legal action to foreclose the lien because he had been denied intervention in the quiet title case.

¶ 12 Judge Noel Hyde, presiding over this action, granted Deseret First's motion to dismiss. In so ruling, the district court accepted the complaint's factual allegations as true, reviewed the record in the quiet title case, and considered other undisputed facts outside the complaint. The court first noted that questions relating to the quiet title case, "including as to its propriety, underpinnings of the settlement, and the events relating to the mediation," had already been adjudicated and that Fadel could not collaterally attack the final determination in the quiet title case in the present action. It then declared that Fadel's claim to a portion of the property's rents amounted to an attempt by Fadel to assert a claim on the Trust's behalf, but because the Trust was Fadel's former client, Fadel was "not in the position to assert any claim for the Trust." Moreover, Fadel's inability to assert claims that belonged to the Trust had been decided in the quiet title case and was barred by res judicata.

¶ 13 The court explained that the only issue before it was the attorney's lien asserted by Fadel against Deseret First and the property. Viewing the undisputed facts in the light most favorable to Fadel, the court ruled that, as a matter of law, "Fadel ha[d] no lien on Deseret First's real property on which he could foreclose." The court determined that an attorney's lien may attach only to a client's property and that an attorney's lien on real property has its priority based upon when it is filed or recorded with the county recorder. The court reasoned that Deseret First was never Fadel's client and "Fadel's attorney's lien in this case is not enforceable at law because it did not attach with any priority to the real property before the Trust conveyed the real property to Deseret First." The court thus concluded that Fadel's complaint failed to set forth a valid legal basis upon which a claim could be maintained against Deseret First. Accordingly, it dismissed Fadel's complaint on the merits with prejudice.

¶ 14 In addition, the court determined that Fadel's claims were "without merit" and "were not brought or asserted in good faith." It specifically found that Fadel's assertion of claims belonging to the Trust was not in good faith because his right to do so had already been resolved against him in the quiet title case, something of which Fadel was well aware. As a result, the court awarded $2,000 in attorney fees to Deseret First under the bad faith attorney fees statute. Fadel appeals.

ISSUES AND STANDARDS OF REVIEW

¶ 15 Fadel raises two principal issues on appeal. First, Fadel contends that the district court erred in dismissing his complaint. "The grant of a motion to dismiss pursuant to rule 12(b)(6) is a question of law that we review for correctness, affording the trial court's decision no deference." Williams v. Bench, 2008 UT App...