{ "id": 8527163, "name": "NANCY S. MACK v. DONALD T. MOORE, M.D., DONALD T. MOORE, M.D., P.A., ARTHUR VERNON STRINGER, M.D.", "name_abbreviation": "Mack v. Moore", "decision_date": "1992-07-21", "docket_number": "No. 9114SC715", "first_page": "87", "last_page": "94", "citations": [ { "type": "official", "cite": "107 N.C. App. 87" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "414 S.E.2d 568", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1992, "pin_cites": [ { "page": "576-77" }, { "parenthetical": "strong inference of improper purpose required to support imposition of sanctions on this basis" } ], "opinion_index": 0 }, { "cite": "105 N.C. App. 620", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524731 ], "year": 1992, "pin_cites": [ { "page": "632" } ], "opinion_index": 0, "case_paths": [ "/nc-app/105/0620-01" ] }, { "cite": "381 S.E.2d 706", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1989, "pin_cites": [ { "page": "714", "parenthetical": "trial court's decision to impose or not to impose sanctions reviewable de novo as a legal issue" }, { "page": "717" } ], "opinion_index": 0 }, { "cite": "325 N.C. 152", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2491380 ], "weight": 2, "year": 1989, "pin_cites": [ { "page": "165", "parenthetical": "trial court's decision to impose or not to impose sanctions reviewable de novo as a legal issue" }, { "page": "171" } ], "opinion_index": 0, "case_paths": [ "/nc/325/0152-01" ] }, { "cite": "251 S.E.2d 468", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "opinion_index": 0 }, { "cite": "296 N.C. 410", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8566628, 8566481, 8566586, 8566555, 8566526 ], "year": 1979, "opinion_index": 0, "case_paths": [ "/nc/296/0410-05", "/nc/296/0410-01", "/nc/296/0410-04", "/nc/296/0410-03", "/nc/296/0410-02" ] }, { "cite": "247 S.E.2d 305", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1978, "pin_cites": [ { "page": "309" }, { "page": "309" }, { "page": "308-09", "parenthetical": "discharged attorney can recover only the reasonable value of his services as of that date" } ], "opinion_index": 0 }, { "cite": "38 N.C. App. 61", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8551878 ], "weight": 3, "year": 1978, "pin_cites": [ { "page": "67" }, { "page": "67" }, { "page": "64" } ], "opinion_index": 0, "case_paths": [ "/nc-app/38/0061-01" ] }, { "cite": "258 S.E.2d 829", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "pin_cites": [ { "page": "830" } ], "opinion_index": 0 }, { "cite": "43 N.C. App. 395", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8552240 ], "year": 1979, "pin_cites": [ { "page": "396" } ], "opinion_index": 0, "case_paths": [ "/nc-app/43/0395-01" ] }, { "cite": "364 S.E.2d 918", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "opinion_index": 0 }, { "cite": "321 N.C. 471", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2568512, 2572119, 2572624, 2569747, 2566199 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/nc/321/0471-05", "/nc/321/0471-02", "/nc/321/0471-01", "/nc/321/0471-04", "/nc/321/0471-03" ] }, { "cite": "361 S.E.2d 115", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "page": "118" } ], "opinion_index": 0 }, { "cite": "87 N.C. App. 386", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358435 ], "year": 1987, "pin_cites": [ { "page": "391" } ], "opinion_index": 0, "case_paths": [ "/nc-app/87/0386-01" ] }, { "cite": "365 S.E.2d 181", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1988, "pin_cites": [ { "page": "183" }, { "page": "183" } ], "opinion_index": 0 }, { "cite": "89 N.C. App. 115", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8520677 ], "weight": 2, "year": 1988, "pin_cites": [ { "page": "118" }, { "page": "118" } ], "opinion_index": 0, "case_paths": [ "/nc-app/89/0115-01" ] }, { "cite": "401 S.E.2d 827", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "830" } ], "opinion_index": 0 }, { "cite": "102 N.C. App. 240", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523166 ], "year": 1991, "pin_cites": [ { "page": "246" } ], "opinion_index": 0, "case_paths": [ "/nc-app/102/0240-01" ] }, { "cite": "412 S.E.2d 327", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 6, "year": 1992, "pin_cites": [ { "page": "336" }, { "page": "336" }, { "page": "333" } ], "opinion_index": 0 }, { "cite": "330 N.C. 644", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2508834 ], "weight": 3, "year": 1992, "pin_cites": [ { "page": "661" }, { "page": "656" } ], "opinion_index": 0, "case_paths": [ "/nc/330/0644-01" ] }, { "cite": "862 F.2d 427", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1825428 ], "year": 1988, "pin_cites": [ { "page": "429" } ], "opinion_index": 0, "case_paths": [ "/f2d/862/0427-01" ] } ], "analysis": { "cardinality": 676, "char_count": 15895, "ocr_confidence": 0.776, "pagerank": { "raw": 5.23977154149282e-07, "percentile": 0.941163751245729 }, "sha256": "7790a9e07ea5c457c0898eb1e34c848cf04c0e51c2629b66d1f3050157a3e33e", "simhash": "1:4ea84761463608ca", "word_count": 2672 }, "last_updated": "2023-07-14T14:52:31.872261+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges PARKER and Cozort concur." ], "parties": [ "NANCY S. MACK v. DONALD T. MOORE, M.D., DONALD T. MOORE, M.D., P.A., ARTHUR VERNON STRINGER, M.D." ], "opinions": [ { "text": "GREENE, Judge.\nAppellant appeals from an order filed 24 April 1991 striking appellant\u2019s notice of lien and sanctioning appellant pursuant to N.C.G.S. \u00a7 1A-1, Rule 11.\nAppellant R. Marie Sides (Sides) is the former attorney of appellee Nancy Mack (Mack), the plaintiff in the underlying action. Sides entered into a contingent fee contract with Mack in January, 1987, pursuant to which Sides agreed to represent Mack in a medical malpractice action against the defendants named herein. In October, 1990, approximately four months prior to the trial date of the medical malpractice action, the attorney-client relationship between Sides and Mack began to deteriorate. According to Mack, Sides disagreed with Mack\u2019s decision to reject a $25,000 settlement offer from one of the defendants. Thereafter, Mack filed a grievance against Sides with the North Carolina State Bar alleging misconduct on the part of Sides. On 14 January 1991, the trial court granted Sides\u2019 motion to withdraw as Mack\u2019s counsel and continued the trial until July, 1991, in order to enable Mack to procure replacement counsel.\nMack hired replacement counsel to represent her in the medical malpractice action. Subsequently, Mack\u2019s new attorneys received a notice of lien from Sides in which Sides claimed a lien in the amount of \u201c$75,550 as Quantum Meruit (hourly fee), plus a portion of the ultimate settlement or judgment to compensate her for taking the case on contingency . . . plus $143.74 as costs advanced in this case.\" On 7 March 1991, Mack filed a motion to strike the notice of lien and for sanctions pursuant to N.C.G.S. \u00a7 1A-1, Rule 11, alleging that the notice of lien filed by Sides had no legal foundation and was interposed to \u201charass the movant and prevent her from obtaining and retaining counsel to represent her in this action.\u201d\nThe trial court heard the motion on 18 April 1991. In addition to hearing oral argument from both Sides and Mack\u2019s attorneys, the trial court considered a memorandum of law presented by Mack\u2019s attorneys in support of Mack\u2019s motion for sanctions. The record indicates that Sides did not present any documents to the trial court in opposition to the motion for sanctions, and, indeed, at oral argument before this Court it was apparent that Sides\u2019 sole argument before the trial court was that, contrary to Mack\u2019s contentions, existing law in North Carolina permitted Sides to properly file the notice of lien.\nOn 24 April 1991, the trial court filed an order striking Sides\u2019 notice of lien and sanctioning Sides in the amount of $2,125.00 (the amount expended by Mack\u2019s attorneys in opposing the notice of lien). In its order, the trial court found that no settlement or judgment had been entered into in the underlying action at the time that Sides filed her notice of lien, and that the excessive amount stated in Sides\u2019 notice of lien served to harass Mack and her attorneys and served to deter them from prosecuting Mack\u2019s claims. The court concluded that Sides\u2019 notice of lien violated both the legal sufficiency and improper purpose prongs of Rule 11. Sides appeals.\nThe issues presented are whether I) after making a reasonable inquiry into the existing law, an attorney\u2019s belief that she is entitled to assert an attorney\u2019s charging lien against a settlement or judgment in favor of a former client, despite the attorney\u2019s withdrawal from the case prior to settlement or entry of judgment, is reasonable; and II) a former attorney\u2019s filing of a notice of lien seeking recovery on the basis of both quantum meruit and a percentage of the judgment creates an inference of improper purpose under Rule 11.\nWe note at the outset that Sides herself may properly appeal the trial court\u2019s imposition of Rule 11- sanctions since \u201cwhere an award of sanctions runs only against the attorney, the attorney is the party in interest and must appeal in his or her name.\u201d DeLuca v. Long Island Lighting Co., 862 F.2d 427, 429 (2d Cir. 1988). Furthermore, \u201can order imposing sanctions on counsel, or any other non-party to the underlying action, may immediately be appealed as a final order.\u201d Gregory P. Joseph, Sanctions: The Federal Law of Litigation Abuse \u00a7 17(F)(2) (1989 & Supp. 1992) (hereinafter Joseph).\nI\nLegal Sufficiency\nSides argues that the trial court erroneously concluded in its Rule 11 order that Sides is not permitted under the existing law of North Carolina to recover fees through the use of an attorney\u2019s charging lien, and that therefore the court\u2019s order imposing sanctions against Sides based on her alleged violation of the legal sufficiency prong of the rule must be reversed. We disagree.\nUnder Rule 11, in addition to certifying that the pleading or paper is well grounded in fact and \u201cnot interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation,\u201d the signer also certifies that the pleading or paper is \u201cwarranted by existing law or a good faith argument for the extension, modification, or reversal of existing law.\u201d N.C.G.S. \u00a7 1A-1, Rule 11(a) (1990). In determining whether sanctions are warranted under the legal sufficiency prong of the rule, the court must first determine the facial plausibility of the paper. Bryson v. Sullivan, 330 N.C. 644, 661, 412 S.E.2d 327, 336 (1992). If the paper is facially plausible, then the inquiry is complete, and sanctions are not proper. If the paper is not facially plausible, then the second issue is (1) whether the alleged offender undertook a reasonable inquiry into the law, and (2) whether, based upon the results of the inquiry, formed a reasonable belief that the paper was warranted by existing law, judged as of the time the paper was signed. If the court answers either prong of this second issue negatively, then Rule 11 sanctions are appropriate. Id. at 661-62, 412 S.E.2d at 336; dePasquale v. O\u2019Rahilly, 102 N.C. App. 240, 246, 401 S.E.2d 827, 830 (1991), overruled on other grounds, Bryson v. Sullivan, 330 N.C. 644, 412 S.E.2d 327 (1992).\nThe well established law in North Carolina is that no right to an attorney\u2019s charging lien exists when an attorney working pursuant to a contingent fee agreement withdraws prior to settlement or judgment being entered in the case. See Howell v. Howell, 89 N.C. App. 115, 118, 365 S.E.2d 181, 183 (1988); Clerk of Superior Court v. Guilford Builders Supply Co., 87 N.C. App. 386, 391, 361 S.E.2d 115, 118 (1987), disc. rev. denied, 321 N.C. 471, 364 S.E.2d 918 (1988); Dillon v. Consolidated Delivery, Inc., 43 N.C. App. 395, 396, 258 S.E.2d 829, 830 (1979); Covington v. Rhodes, 38 N.C. App. 61, 67, 247 S.E.2d 305, 309 (1978), disc. rev. denied, 296 N.C. 410, 251 S.E.2d 468 (1979). This is so because\n[t]he charging lien is an equitable lien which gives an attorney the right to recover his fees \u2018from a fund recovered by his aid.\u2019 The charging lien attaches not to the cause of action, but to the judgment at the time it is rendered. At the time when [a former attorney\u2019s] purported charging lien . . . would . . . attach[ ], the time of judgment in favor of [the attorney\u2019s former client]..., the judgment [would not be] a fund recovered by the [attorney\u2019s] aid, as he [has withdrawn. The former attorney is] entitled to no interest in the fund. [Citations omitted.]\nHowell, 89 N.C. App. at 118, 365 S.E.2d at 183 (quoting Covington, 38 N.C. App. at 67, 247 S.E.2d at 309). Under existing law, the former attorney\u2019s sole remedy is to institute an action for quantum meruit recovery of fees against the former client. See Covington, 38 N.C. App. at 64, 247 S.E.2d at 308-09 (discharged attorney can recover only the reasonable value of his services as of that date).\nWe must first resolve whether Sides\u2019 notice of lien is facially plausible. The record establishes and the trial court found that at the time Sides filed the notice, she had withdrawn from Mack\u2019s case and that such withdrawal was prior to settlement or entry of judgment in the case. In other words, the notice of lien was filed by an attorney who had no right under existing law to such a lien and therefore the paper lacks facial plausibility.\nMack does not argue nor did the trial court find that Sides failed to conduct a reasonable inquiry into the law on attorney\u2019s charging liens in North Carolina. The record is silent on the matter. Thus, assuming a reasonable inquiry, the pivotal question is whether a reasonable person in Sides\u2019 position (i.e.-, an attorney), after having read and studied the applicable law as previously set forth in this opinion, would have concluded that she had the right to assert an attorney\u2019s charging lien under the circumstances of this case. The answer is no. Accordingly, the trial court\u2019s order imposing sanctions upon Sides for violation of the legal sufficiency prong of Rule 11 must be upheld. See Turner v. Duke Univ., 325 N.C. 152, 165, 381 S.E.2d 706, 714 (1989) (trial court\u2019s decision to impose or not to impose sanctions reviewable de novo as a legal issue).\nAt the Rule 11 hearing, Sides made no argument that her notice of lien was warranted by a good faith extension of existing North Carolina law. As previously noted, Sides\u2019 sole argument below was that existing North Carolina law supported her filing of the notice of lien, despite the fact that she had withdrawn from representation of Mack. Therefore, as the issue was not raised, we do not address whether Sides is insulated from the imposition of Rule 11 sanctions because her notice of lien may have been warranted by a good faith extension of existing law.\nII\nImproper Purpose\nSides argues that the record does not support the trial court\u2019s conclusion that she violated the improper purpose prong of Rule 11 by filing her notice of lien. We disagree.\nUnder Rule 11, an objective standard is used to determine whether a paper has been interposed for an improper purpose, with the burden on the movant to prove such improper purpose. Bryson, 330 N.C. at 656, 412 S.E.2d at 333. In this regard, the relevant inquiry is whether the existence of an improper purpose may be inferred from the alleged offender\u2019s objective behavior. Joseph at \u00a7 13(A). An improper purpose is \u201cany purpose other than one to vindicate rights ... or to put claims of right to a proper test.\u201d Id. at \u00a7 13(C) (Supp. 1992). For example, an improper purpose may be inferred from \u201cthe service or filing of excessive, successive, or repetitive [papers] . . . from \u201cfiling successive lawsuits despite the res judicata bar of earlier judgments,\u201d from \u201cfailing to serve the adversary with contested motions,\u201d from filing numerous dispositive motions when trial is imminent, from \u201cthe filing of meritless papers by counsel who have extensive experience in the pertinent area of law,\u201d from \u201cfiling suit with no factual basis for the purpose of \u2018fishing\u2019 for some evidence of liability,\u201d from \u201ccontinuing to press an obviously meritless claim after being specifically advised of its meritlessness by a judge or magistrate,\u201d or from \u201cfiling papers containing \u2018scandalous, libellous, and impertinent matters\u2019 for the purpose of harassing a party or counsel.\u201d Id. In addition, improper purposes may be inferred from the noticing of witness depositions six days before trial, the attendance of which would require extensive travel and interfere with opposing counsel\u2019s final trial preparations. Turner, 325 N.C. at 171, 381 S.E.2d at 717.\nHowever, just as the Rule 11 movant\u2019s subjective belief that a paper has been filed for an improper purpose is immaterial in determining whether an alleged offender\u2019s conduct is sanctionable, Taylor v. Taylor Products, Inc., 105 N.C. App. 620, 632, 414 S.E.2d 568, 576-77 (1992), whether the conduct does in fact harass is also not relevant to the issue. Joseph at \u00a7 13(A). Rather, the dispositive question in the instant case is whether the filing of the notice of lien supports a strong inference of improper purpose on the part of Sides. See id. (strong inference of improper purpose required to support imposition of sanctions on this basis). While Sides\u2019 filing of the notice of lien after having withdrawn from Mack\u2019s case violated the legal sufficiency prong of the rule, in this case that itself does not support a strong inference of improper purpose. However, the totality of the circumstances does.\nSides\u2019 notice of lien asserted a right to recovery on the basis of quantum meruit plus a percentage of the judgment. Not even a validly asserted attorney\u2019s charging lien entitles the claimant to double recovery of his or her fees. In addition, the evidence before the trial court reveals that Sides withdrew from her representation of Mack out of anger at Mack for Mack\u2019s refusal to accept a settlement offer. In light of the obviously strained relationship between Sides and Mack, and because it is utterly unreasonable for an attorney, particularly one who has withdrawn from the case, to file an attorney\u2019s charging lien seeking recovery of fees based on both quantum meruit and a percentage of the judgment, there exists a strong inference of improper purpose by Sides, i.e., harassment of Mack and her attorneys, in filing the notice of lien. Accordingly, the trial court\u2019s imposition of Rule 11 sanctions based on Sides\u2019 alleged improper purpose in filing her notice of lien must be upheld.\nFor the foregoing reasons, the order of the trial court is\nAffirmed.\nJudges PARKER and Cozort concur.", "type": "majority", "author": "GREENE, Judge." } ], "attorneys": [ "Robert R. Seidel and R. Marie Sides for R. Marie Sides, appellant.", "Glenn E. Gray for plaintiff-appellee." ], "corrections": "", "head_matter": "NANCY S. MACK v. DONALD T. MOORE, M.D., DONALD T. MOORE, M.D., P.A., ARTHUR VERNON STRINGER, M.D.\nNo. 9114SC715\n(Filed 21 July 1992)\n1. Appeal and Error \u00a7 130 (NCI4th)\u2014 sanctioning of attorney \u2014 immediate appeal by attorney\nAn attorney may properly appeal the trial court\u2019s imposition of Rule 11 sanctions where the sanctions run only against the attorney. Furthermore, an order imposing sanctions on counsel is immediately appealable.\nAm Jur 2d, Trial \u00a7\u00a7 118, 192 et seq.\n2. Attorneys at Law \u00a7 63 (NCI4th)\u2014 charging lien \u2014withdrawal prior to settlement or judgment\nNo right to an attorney\u2019s charging lien exists when an attorney working pursuant to a contingent fee agreement withdraws prior to settlement or judgment being entered in the case.\nAm Jur 2d, Attorneys at Law \u00a7\u00a7 324 et seq.\n3. Rules of Civil Procedure \u00a7 11 (NCI3d)\u2014 improper notice of charging lien \u2014sanctions against attorney \u2014legal sufficiency prong of Rule 11\nThe trial court properly imposed sanctions upon an attorney for a violation of the legal sufficiency prong of Rule 11 by filing notice of a charging lien after she had withdrawn from her former client\u2019s case and before a settlement or judgment was entered since no reasonable person in the attorney\u2019s position, after reading and studying the North Carolina law on the issue, would have believed that she had the right to file such a lien, and the attorney made no argument that her notice of lien was warranted by a good faith extension of existing North Carolina law.\nAm Jur 2d, Attorneys at Law \u00a7\u00a7 324 et seq.; Trial \u00a7 118.\n4. Rules of Civil Procedure \u00a7 11 (NCI3d)\u2014 notice of charging lien \u2014improper purpose \u2014sanctions against attorney\nA. strong inference of improper purpose, i.e., harassment of a former client and her present attorneys, was created by a former attorney\u2019s filing of a notice of a charging lien seeking recovery on the basis of quantum meruit plus a percentage of the judgment after she had withdrawn from the case out of anger because the client refused to accept a settlement offer. Therefore, the trial court properly imposed sanctions against the attorney for a violation of the improper purpose prong of Rule 11.\nAm Jur 2d, Attorneys at Law \u00a7\u00a7 324 et seq.; Trial \u00a7 118.\nAPPEAL by R. Marie Sides from order filed 24 April 1991 in DURHAM County Superior Court by Judge Henry V. Barnette, Jr. Heard in the Court of Appeals 13 May 1992.\nRobert R. Seidel and R. Marie Sides for R. Marie Sides, appellant.\nGlenn E. Gray for plaintiff-appellee." }, "file_name": "0087-01", "first_page_order": 115, "last_page_order": 122 }