Twin Pines Coal Co. v. Twin Pines, LLC

• Decision Date: 19 February 2013
• Docket Number: CASE NO. 2:09-cv-1403-SLB
• Court: U.S. District Court — Northern District of Alabama
• Parties: TWIN PINES COAL COMPANY, INC., RGGS LAND & MINERALS, LTD., L.P., Plaintiffs, v. TWIN PINES, LLC, TWIN PINES II, LLC, Intervenors, v. COLONIAL PIPELINE COMPANY, Defendant.

TWIN PINES COAL COMPANY, INC., RGGS LAND & MINERALS, LTD., L.P., Plaintiffs,

v.TWIN PINES, LLC, TWIN PINES II, LLC, Intervenors,

v.COLONIAL PIPELINE COMPANY, Defendant.

CASE NO. 2:09-cv-1403-SLB

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ALABAMA SOUTHERN DIVISION

Dated: February 19, 2013

MEMORANDUM OPINION

This case is currently before the court on Intervenors' Motion for Partial Summary Judgment. (Doc. 248.)¹ Intervenors in this case, Twin Pines, LLC and Twin Pines II, LLC (collectively referred to as "intervenors"), contest plaintiffs' counsel's, the law firms of Jackson, Fikes, Hood & Brakefield ("the Jackson firm") and Friedman, Dazzio, Zulanas & Bowling, P.C. ("the Friedman firm"),² Claim for Attorneys' Fees and Statutory Lien, (doc. 222), and Motion for Court Ordered Award of Attorneys' Fees, (doc. 226), which were filedafter a settlement in the underlying litigation,³ (see id. ¶ 1). The court has scheduled a hearing on these issues for April 22, 2013. (See doc. 256 ¶ 5.) In the meantime, intervenors have filed a Motion for Partial Summary Judgment against the claim filed by the Friedman firm, alleging that it is not a proper party to bring a claim under Alabama Code § 34-3-61 (1975), the statute which governs attorney liens on client funds. (See doc. 248 at 1.) Upon consideration of the record, the submissions of the parties, the arguments of counsel, and the relevant law, the court is of the opinion that Intervenors' Motion for Partial Summary Judgment, (doc. 248), is due to be granted.

I. SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate "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). The moving party bears the initial burden of showing no genuine issue of material fact and that it is entitled to judgment as a matter of law. See Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991); see also Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). Once the moving party has met its burden, the non-moving party must go beyond the pleadings and show that there is a genuine issue of fact for trial. See Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). A dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

In deciding a motion for summary judgment, the court's function is not to "weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." Anderson, 477 U.S. at 249. Therefore, "courts are required to view the facts and draw reasonable inferences 'in the light most favorable to the party opposing the [summary judgment] motion.'" Scott v. Harris, 550 U.S. 372, 378 (2007) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655 (1962) (per curiam)). Nevertheless, the non-moving party "need not be given the benefit of every inference but only of every reasonable inference." Graham v. State Farm Mut. Ins. Co., 193 F.3d 1274, 1282 (11th Cir. 1999) (citing Brown v. City of Clewiston, 848 F.2d 1534, 1540 n.12 (11th Cir. 1988)). Therefore, "[i]f the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted).

II. STATEMENT OF FACTS AND PROCEDURAL BACKGROUND⁴

General Background

The current dispute arose out of a breach of contract action filed by Twin Pines Coal Company, Inc. ("Twin Pines Coal") and RGGS Land and Minerals, Ltd., L.P. ("RGGS") against Colonial Pipeline Company ("Colonial") on July 14, 2009. (See doc. 1.) The two plaintiffs alleged that Colonial had failed to pay an invoice issued by Twin Pines Coal for the value of coal that it could not mine because of limits established by Colonial in order toprotect its pipeline. (See id. ¶¶ 7-22.)⁵ After the filing of the action against Colonial, on December 22, 2012, Twin Pines Coal executed an agreement with Twin Pines, LLC ("Asset Purchase Agreement"), (see doc. 237-13; doc. 225 ¶ 1), where Twin Pines, LLC purchased substantially all of the assets⁶ of Twin Pines Coal and gained a one-half interest in the recovery from the underlying litigation, (see doc. 222 ¶¶ 3-4; doc. 225 ¶ 1). However, under the Agreement, Twin Pines Coal still retained a one-half interest in any recovery from the underlying litigation.⁷ (Doc. 225 ¶ 1.) On May 12, 2012, all parties to the contract dispute signed a settlement agreement and general release, which resolved the lawsuit (including all potential future claims) and created a settlement fund. (See doc. 237-8; doc. 225 ¶ 2).

Involvement of the Attorneys

Before the underlying litigation began, Twin Pines Coal had been consulting the Jackson firm regarding issues with Colonial. (Doc. 270-4 at 15-18.) At some point, Eddie Jackson ("Jackson") contacted Jeff Friedman ("Friedman") at the Friedman firm on behalfof Twin Pines Coal. (Doc. 259-1 at 21; doc. 270-4 at 24-25.) Friedman testified that though he was first contacted by Twin Pines Coal, it was eventually decided that he would "best serve the interest of all the plaintiffs by being lead litigation counsel for RGGS." (Doc. 259-1 at 22.) Accordingly, the attorneys and their respective clients ultimately decided to split up the formal representation of RGGS and Twin Pines Coal, (see doc. 260 at 14, ¶ 6; doc. 262-2 ¶ 4), and Friedman was engaged as RGGS's attorney before the July 15, 2009 filing of the lawsuit, (doc. 259-1 at 20). Among other reasons, the split in representation was a strategic decision to allow the plaintiffs in the underlying lawsuit (Twin Pines Coal and RGGS) to have two opening statements and two chances to cross-examine every witness. (Doc. 248 at 4, ¶ 7; doc. 260 at 14-15, ¶ 7.) Friedman testified that there was a "community of interest" between Twin Pines Coal and RGGS,⁸ (doc. 259-1 at 22), but that his client was RGGS, (id. at 32). He further explained that he defined his "client" as the party who he appeared for in the lawsuit. (Id. at 23.)

It is undisputed that attorneys from the Friedman firm—including Friedman himself—entered an appearance only on behalf of RGGS in the underlying litigation.⁹ (Seedoc. 260 at 7, ¶ 2; id. at 8-9, ¶ 3.) However, though Friedman technically represented RGGS, Twin Pines Coal paid both the Jackson firm's and the Friedman firm's hourly bills.¹⁰ (Doc. 259-1 at 23; see also doc. 270-4 at 27.) George Barber ("Barber"), the President of Twin Pines Coal, stated in his Affidavit filed in support of the attorneys' Opposition, (doc. 260), that he hired both firms and "intended to pay both firms pursuant to [the agreement with the attorneys] for their work even if it meant paying RGGS'[s] fees without contribution." (Doc. 262-2 ¶ 4.) Later, after Twin Pines Coal had executed the Asset Purchase Agreement with Twin Pines, LLC, the attorneys' hourly bills were paid by intervenors. (Doc. 259-1 at 47-48; doc. 270-4 at 242.)

Once the settlement agreement was executed, the attorneys filed their Claim for Attorneys' Fees and Statutory Lien, (doc. 222), against the portion of the settlement monies recovered by Twin Pines Coal and intervenors, (id. ¶ 2-3).¹¹ They allege that their claim foran attorney's lien under Alabama Code § 34-3-61 is supported by both contract and quantum meruit. (Id. ¶ 5.) Subsequently, the attorneys also filed a Motion for Court Ordered Award of Attorneys' Fees, (doc. 226), and Brief in Support, (doc. 237-2), where they request that the court declare the amount of attorneys' fees that they are entitled to and order that the funds be disbursed pursuant to Alabama Code § 34-3-62 (1975),¹² (doc. 226 at 1). Intervenors have filed a Motion for Partial Summary Judgment on the § 34-3-61 claim filed by the Friedman firm, alleging that it is not a proper party to bring a claim for a lien on the settlement fund under Alabama Code § 34-3-61 because (1) Twin Pines Coal and intervenors were never its "client" as required by the statute and (2) Friedman was the attorney of record only for RGGS. (See doc. 248 at 5-6.)

III. DISCUSSION

At the outset the court notes that it is appropriate for federal courts to entertain claims under state statutes permitting attorneys' liens. See Panola Land Buying Ass'n v. Clark, 844 F.2d 1506, 1514 (11th Cir. 1988) ("Federal courts sitting in a state enforce that state's statute creating attorneys' liens."). Consequently, the court will next consider whether the Friedman firm's claim under § 34-3-61 is proper.

A. Alabama Code § 34-3-61

This Motion for Partial Summary Judgment presents a very narrow issue. That is, can the Friedman firm bring a claim for a charging lien¹³ under Alabama Code § 34-3-61? The answer is no. Though the parties—particularly the attorneys—have addressed issues far beyond the scope of this question, the court will adhere to the core issue and address the additional questions regarding the enforceability of the attorneys' alleged contract with intervenors during the April 22 hearing.

In their Motion for Partial Summary Judgment, (doc. 248), intervenors argue primarily that the Friedman firm was representing only RGGS, and that neither Twin Pines Coal norintervenors were ever "clients" of Friedman. (See doc. 248 at 2, 6.)¹⁴ However, intervenors only briefly make the winning argument (though they more thoroughly address the issue in their Reply)—that is, that "the right of an attorney to intervene or assert a lien after settlement is available only to the attorney of record . . . ." (Id. at 6 (quoting Eaton v. Keller Plumbing Co., 587 So. 2d 338, 339 (Ala. Civ. App. 1991)).) The attorneys respond to these arguments with evidence to show that they had a contingency fee contract with Twin Pines Coal. (See doc. 260.) They argue this proves that Twin Pines Coal, and thus, intervenors, were "clients" of the Friedman firm; therefore, they claim that Friedman has properly brought a...