Rodriguez v. Brass Mill Center, LLC
| Decision Date | 01 December 2016 |
| Docket Number | HHDCV166064935S |
| Court | Connecticut Superior Court |
| Parties | Luis Rodriguez et al. v. Brass Mill Center, LLC et al |
UNPUBLISHED OPINION
The court received evidence on July 20, 2017, in the trial of this action in the nature of an interpleader. Post-trial briefs were received on or before August 4, 2016 pursuant to a briefing schedule. After considering the evidence and the arguments of the parties, the court issues this memorandum of decision.
On December 10, 2015, the plaintiffs, Luis Rodriguez (" Rodriguez") and Phonecrafters, LLC (" Phonecrafters")[1] filed a one-count interpleader action against the defendants, Brass Mill Center, LLC, Karl D Shehu, Esq. (" Shehu"), and his law firm, Shehu LLC.[2] In their interpleader complaint the plaintiff's alleged that there is a dispute as to settlement proceeds resulting from an action brought by the plaintiffs against the defendant Brass Mill Center, LLC (" Brass Mill"). The following facts were admitted by the pleadings. The plaintiffs retained Shehu and Shehu LLC to represent them in certain legal matters involving the Brass Mill and related parties. Specifically, the defendants represented them in connection with an action by the Brass Mill Center, LLC to collect unpaid lease/license obligations at property owned by Brass Mill (docket no UWY-CV-13-5016512-S) (" collection action") and an action by the plaintiffs against Brass Mill Center, LLC (docket no. UVW-CV 13-6019628-S) claiming generally unfair trade practices on the part of Brass Mill in relation to the lease/license it granted to Phonecrafters to conduct a business on its property (" UTPA action"). The undisputed evidence admitted at trial was that the defendants also represented the plaintiffs in an eviction action brought by Brass Mill against the plaintiff Phone Crafters, LLC (docket No. WASP-049780) (" Eviction action"). The admitted allegations of the complaint also include that the defendants filed motions to withdraw in each case on July 20, 2015 and thereafter the plaintiffs retained the current counsel to represent them in connection with these matters. On November 10, 2015, the plaintiffs settled their legal claims with the Brass Mill parties via a settlement agreement of all three actions (the " Fund") involving a payment in the amount of $30, 000.00 which proceeds were being held by counsel for Brass Mill. The plaintiffs and defendants are at issue as to a division of, and entitlement to, the monies in the Fund. The parties admitted at trial that the plaintiffs had an interest in the stake subject to a charging lien for attorneys fees possessed by the defendants.
The court granted an interlocutory judgment of interpleader on February 22, 2016 and, pursuant to the parties' desire that the settlement proceeds be escrowed other than with the clerk of the court, the court ordered them to be escrowed by counsel for the Brass Mill Center, LLC. On March 7, 2016, the plaintiffs filed a claim as to the interpleader funds in which they allege that the plaintiffs entered into a contingency fee agreement with the defendants which was unsigned and therefore, unenforceable. By agreement the parties agreed that the plaintiffs have an interest in the fund by virtue of the settlement of their claim against Brass Mill. On March 14, 2016, the defendants filed their statement of claim in which they allege that the plaintiffs signed a letter explaining the scope and cost of representation by the defendants of the plaintiffs which referenced an " Attorney-Client Contingency Fee Agreement" (" Fee Agreement"). The defendants further allege in their statement of claims that ultimately the plaintiffs terminated the attorney client relationship and that pursuant to the terms of the Fee Agreement such a termination by the plaintiffs entitled the defendants to an hourly fee for work performed as well as reimbursement of litigation costs. In the absence of an award of an hourly fee, the defendants seek compensation on the basis of quantum meruit. The statement of claim further alleges that the Brass Mill Center obtained a prejudgment attachment in the collection action against the plaintiffs for $101, 920.00 and that as a result of the " superb legal services provided by the [defendants]" the Brass Mill Center, LLC released those claims and paid a cash settlement of $30, 000.00 to the plaintiffs.
The defendants further allege in their statement of claim that due to Shehu's " exceptional lawyering" the plaintiffs obtained a benefit valued at $131, 920.00 representing the cash settlement and the waiver of any claims involved in the collection action presumably valued at the amount of the prejudgment remedy order. The defendant's post-trial brief statement claims that if the court enforces a contingency fee arrangement between Shehu, LLC and the plaintiffs the former is entitled to " $36, 925.45 (after correcting for amounts previously paid by the [plaintiffs], " or alternatively $102, 188.17 on a quantum meruit or hourly basis which represents a sum including deductions for moneys already paid by the plaintiffs. The latter is predicated on a fee calculated on an hourly rate of $300.00 per hour multiplied by the amount of hours spent on all three actions.[3] As to the former, it was the position of the defendants that they are entitled to a percentage recovery of the amount that Brass Mill did not recover in relation to its PJR in the amount of $101, 920.00 in addition to the monetary payment by Brass Mill. The defendants seek an order that they are entitled to the entirety of the fund because regardless of whether the court enforces the contingency fee agreement or applies a quantum meruit analysis they would be entitled to an amount exceeding that which has been interpleaded, the Fund of $30, 000.00.
On February 22, 2016, Brass Mill waived any claim to the money in the fund but asserted a claim for a reasonable sum for counsel fees and disbursement in accordance with General Statutes § 52-584.
" The purpose of an interpleader action is to bring all adverse claimants together in a single action for an adjudication of all matters in controversy related to a particular fund to which the adverse claimants seek an entitlement." Millman v. Paige, 55 Conn.App. 238, 241, 738 A.2d 737 (1999). An interpleader is brought in order to shield the stakeholder from conflicting claims to funds controlled by the stakeholder and to prevent a multiplicity of suits. Vincent Metro, LLC. v. Yah Realty, LLC, 297 Conn 489, 496, 1 A.3d 1026 (2010). A distinction is made between a pure bill in equity seeking interpleader and an action in the nature of interpleader brought pursuant to Conn. Gen. Stat. § 52-484.[4] " The classic interpleader action existing in equity, prior to the enactment of the statute, was brought by a disinterested stake holder to establish the undivided ownership of money or property claimed by two or more entities or individuals . . . after the passage of the forerunner to § 52-484 . . . the rule that an interpleader action be maintained only by a stake holder with no interest in the disposition of the fund was relaxed." Trikona Advisers Ltd v. Haida Investments, Ltd., 318 Conn. 476, 483, 122 A.2d 242 (2015).
Connecticut Practice Book § 10-3 requires that " [w]hen any claim made in a complaint . . . is grounded on a statute, the statute shall be specifically identified by its number." The plaintiffs' complaint does not reference § 52-484. Here, the plaintiffs are clearly not disinterested stake holders of the funds, but claimants to the Fund. Therefore, General Statutes § 52-484 should have been pled. However, this rule has been held to be directory rather than mandatory and as long as the defendant is sufficiently apprised of the nature of the action the failure to comply with the directive of Practice Book § 10-3(a) will not bar the action. Spears v. Garcia, 66 Conn.App. 669, 676, 785 A.2d 1181 (2001), aff'd, 263 Conn. 22, 818 A.2d 37 (2003). Both the partial waiver of claim filed by Brass Mill dated February 22, 2016 and the plaintiffs' Claim of Interpleader Funds dated March 7, 2016 reference the statute. The defendants did not move to strike the complaint nor have they objected to proceeding under that statute. The court finds that the defendants were sufficiently apprised of the nature of the action and treats the action as if it is one in the nature of an interpleader brought pursuant to General Statutes § 52-484.
The issue before the court is the equitable apportionment of the $30, 000.00 fund between the plaintiffs and the defendants. Trikona Advisers Ltd. v. Haida Investments, Ltd. supra, 318 Conn. 483. Here, the parties agreed that the basis for the defendants' interest is an attorney's charging lien. Connecticut recognizes an attorney's common-law charging lien. D'Urso v. Lyons, 97 Conn.App. 253, 256, 903 A.2d 697 (2006). It is applicable whether there is a contingency fee or an hourly fee agreement. Id., 257-58. Such a lien would be a valid unliquidated claim if proven. Disciplinary Counsel v. Smigelski, 124 Conn.App. 81, 95, 4 A.3d 336 (2010). The lien arises with respect to attorneys whose services created the fund at issue. In re Knight, 538 B.R. 191, 211, footnote 25 (D.Conn. 2015). McNamara & Goodwin v. Pink, Superior Court, judicial district of New Haven, docket no. 930346405 (Hodgson, J., Jan. 16, 1997), 44 Conn.Supp. 592, 696 A.2d 1328 (1997) (18 Conn.L.Rptr. 660) . It is recognized as an equitable means to enforce a client's agreement to pay fees from the judgment or settlement achieved by the efforts of counsel. Id. 602. An attorney's charging lien is " a lien placed upon any money...
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