Pivot Holdings, LLC v. Daniel & Henry Co.
| Decision Date | 20 April 2021 |
| Docket Number | No. ED 108856,ED 108856 |
| Citation | 626 S.W.3d 772 |
| Court | Missouri Court of Appeals |
| Parties | PIVOT HOLDINGS, LLC and DH Advisors, Appellants, v. The DANIEL AND HENRY COMPANY, Defendant, and Devereux Murphy, LLC, Respondent. |
Jack B. Spooner, 34 N. Brentwood Blvd. Ste. 210, St. Louis, MO 63105, For Appellants.
Michael A. Gross, 6350 Clayton Rd. No. 306, St Louis, MO 63117, John F. Garvey, Jr., 8235 Forsyth Blvd. Ste. 1100, St. Louis, MO 63105, For Respondent.
Irwin O. Switzer III, 10 S. Broadway Ste. 2000, St. Louis, MO 63102, For Defendant.
DH Advisors, LLC ("DHA") appeals the judgment granting the motion of Devereux Murphy, LLC ("DM") to enforce its attorney's lien. In its seven points on appeal, DHA challenges both the right of DM to recover fees from DHA and the manner in which the trial court ordered payment of those fees. We conclude that none of these points have merit. The judgment was supported by substantial evidence, is not against the weight of the evidence, and does not misapply the law. We affirm.
DHA is an insurance brokerage firm formerly affiliated with The Daniel & Henry Company ("D&H"), a collective of insurance brokerage firms and brokers. In November of 2011, DHA left D&H and attempted to move its business to Pivot Holdings, LLC f/k/a AHM Financial Group, LLC ("Pivot").1 Pivot and DHA entered into a Contribution Agreement setting out the terms of DHA contributing and Pivot acquiring DHA's business. D&H tried to prevent this move, which ultimately led to DHA and Pivot engaging the DM law firm, who had represented Pivot years before in an unrelated matter. In February of 2012, DHA, Pivot and DM entered a Joint Defense, Common Interest and Confidentiality Agreement ("Joint Defense Agreement"), which provided that DHA and Pivot had a "mutuality of interest in a common and joint defense" and wanted to pursue a lawsuit against D&H with a single counsel. DHA and Pivot therefore "waived any conflict of interest that may result or exist as a consequence" of representation by one counsel, but retained their right to raise "any conflict of interest which may arise in the future;" there is also a clause relating to the specific conflict of interest that may arise if one client becomes a testifying witness. The Joint Defense Agreement also addressed confidentiality during this pursuit of DHA and Pivot's "separate but common interest" and the sharing of otherwise privileged materials between the clients to best serve their "mutual interests." The petition DM filed on behalf of Pivot and DHA in 2012 asserted counts on behalf of Pivot against D&H for money had and received and for tortious interference with a contract and counts on behalf of DHA against D&H for breach of contract and for tortious interference with a contract.
It is undisputed that the Joint Defense Agreement and the Contribution Agreement are silent on the matter of DM's attorney's fees. It is also undisputed that DM provided its legal services at an hourly rate and that the bills would be sent to Pivot. For years, DM sent Pivot the bills, Pivot paid the bills and there were no disputes. By late 2014, however, Pivot had stopped paying bills. In a December 20, 2014, internal email, Pivot discussed the fact that it was "out of money" and proposed they tell DM that Pivot could pay them the following November or "they can go contingent on DHA and we will offer them their current amount due plus 20%" unless DHA wants to "man up." Pivot forwarded that email to DM on December 22nd, explaining that it is "short on cash," and asked DM to consider deferred payment or the "contingent arrangement." DM responded the next day by email and copied DHA into this email chain. DM rejected Pivot's proposal and stated that "all parties need to make immediate arrangements to work through this." DM noted that trial was set in 19 days and it was unfair to ask DM to continue working on the case "if Pivot has no intention of paying." Later that day, Pivot replied that it did intend to pay and was going to ask DHA for "some help on this" to try to scrape together some money. DM wrote back again expressing confusion that Pivot and "the other partners of the Pivot ownership group" did not have sufficient resources to pay the outstanding fees.
On December 30, 2014, Pivot forwarded another internal email to DM about D&H's interest in talking about settlement, noting that Pivot had suggested $1.8 million but D&H was in the $700,000-800,000 range. Pivot told DM that it was "inclined to reach agreement with D&H."
On January 5, 2015, DM emailed Pivot, copying DHA, saying "we have an irreconcilable conflict that must be addressed at once." DM explained that Pivot "has indicated it is going to settle this case" and instructed DM to cease preparing for the January 12th trial setting. On the other hand, DHA "has indicated that it would like to proceed to trial in this matter in the event the Plaintiffs and Defendant are unable to settle the matter on satisfactory terms."
Time is running very short because the necessary preparations must be undertaken immediately to properly prepare for trial. Therefore, unless I hear from both parties by 10:00am tomorrow--January 6th that both parties have resolved their differences, [DM] will have no alternative but to file a motion to withdraw on the grounds that co-plaintiffs have irreconcilable differences that necessarily require each party to have separate counsel.
DM expressed regret, but "the respective positions of the parties have left us no other alternative."
The next morning, January 6, 2015, shortly after 10:00 a.m., DHA emailed DM, copying Pivot, saying DHA was "caught completely off guard" that Pivot had fired DM and wanted to clarify a few items: (1) DHA asked for at least a month to seek new counsel; (2) in the meantime, it told DM it expected it "to continue to protect DHA's interests, particularly as it relates to [Pivot's] attempt to settle out from under us and secure any offsets or credits against any future awards;" (3) DHA asserted it would not be responsible for any outstanding bills Pivot "has refused to pay," claiming Pivot hired DM and agreed "with both of us that they would pay you" and that Pivot had broken its "agreement with us and failed to uphold their responsibility to pay your fees;" and (4) DHA asked for DM to gather its files as soon as possible in anticipation of inspection by new counsel.
DM wrote back within an hour to "clear up some items in your email." First, despite being instructed to discontinue work on the case by Pivot, DM said DHA "was never unrepresented by [DM] and nothing has transpired that has adversely affected DHA in any way." But, as to "continuing to represent DHA's interests," DM explained that once the trial court grants the motion to withdraw, DM can take no action on either party's behalf. And, in response to DHA's concern about Pivot settling, DM said it would "be surprised" if the case could settle without DHA and explained that any settlement will "necessarily require" DHA's signature. As to attorney's fees, DM stated it will be asserting an attorney's lien pursuant to statute, which "essentially provides that [DM] would receive its fees from any settlement proceeds." DM said it would gather the files and assured DHA of its cooperation.
A few minutes later, DM emailed everyone again: "It is my understanding that the parties have been unable to resolve their irreconcilable differences." DM explained that it had informed the trial court of this development and the necessity of DM having to withdraw so that each party can retain separate counsel, and the trial court told DM to file a motion to continue, which it would do later that day. DM stated it planned to file a formal motion to withdraw the following week. DM again expressed regret, but "it is impossible for us to have to answer to 2 masters that have conflicting intended courses of action."
A few days later, on January 9, 2015, DHA emailed DM again for "more clarity." DHA asserted that "notwithstanding the joint representation agreement," when DM "undertook our representation it was with the understanding and condition that [Pivot] is solely responsible for all legal fees and costs." "With this in mind, please confirm that whatever lien you are claiming for attorneys fees/costs is against [Pivot] only and that you are waiving any claim for attorneys fees and costs from all other plaintiff parties." And, again, DHA insisted that until it hired new counsel, DM had an obligation to protect it from any adverse interests if Pivot accepts settlement and DHA goes to trial and asked it to confirm that DM would take whatever action needed to do so.
The next written communication with DHA was not until February 11, 2015. Meanwhile, in a February 3rd email from DM to Pivot, DM points out that it had agreed to represent both Pivot and DHA "due to their mutuality of interest" acknowledged in the Joint Defense Agreement. DM reiterated how the irreconcilable conflict arose--Pivot deciding to settle and DHA not wanting to settle--explained that DM informed both parties and was "hopeful that our clients could get on the same page so that we could get this matter resolved to everyone's satisfaction." Having concluded the parties "could not resolve this, the rules of professional responsibility dictated that [DM] could not any longer serve 2 differing goals and objectives." DM told Pivot that DHA had retained new counsel and DM would file its motion to withdraw the next day. DM also asked Pivot to contact DM to address the outstanding fees.
DM's motion to withdraw was filed on February 5, 2015, asserting the "irreconcilable conflict" between DHA and Pivot. DM also filed a notice of attorney's lien under § 484.130 in the amount of $149,618.20 attaching to "any verdict, report, settlement, decision or judgment in Plai...
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