McDonald & Cody v. State of Georgia ( 2022 )

FOURTH DIVISION
DILLARD, P. J.,
MARKLE, J., and SENIOR APPELLATE JUDGE PHIPPS
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
https://www.gaappeals.us/rules
June 23, 2022
In the Court of Appeals of Georgia
A22A0531. McDONALD & CODY v. STATE OF GEORGIA.
PHIPPS, Senior Appellate Judge.
In this forfeiture case, law firm McDonald & Cody appeals from a trial court
order finding that the firm and attorneys Sam Sliger and Steve Maples did not have
a valid and enforceable attorneys’ lien as a matter of law under OCGA § 15-19-14
(c).1 On appeal, McDonald & Cody contends that the trial court erred by (a) setting
aside a prior order dismissing the underlying forfeiture complaint entered on June 24,
2019, and (b) finding that McDonald & Cody, Sliger, and Maples had no valid and
enforceable attorneys’ lien as to the property that was the subject of the forfeiture
action. For the following reasons, we reverse.
1
Although McDonald & Cody, Sliger, and Maples filed a “notice of attorneys’
lien” together, only McDonald & Cody appeals from the trial court’s order.
In November 2018, the State filed a complaint for forfeiture based on alleged
violations of the Georgia Controlled Substances Act by Jigneshkumar Patel and his
wife Toral Patel (the “Patels”). The complaint for forfeiture listed a number of bank
accounts belonging to the Patels that the State had seized in September and October
2018. The Patels hired McDonald & Cody to resolve all claims relating to the seized
accounts and signed contingency fee agreements in February 2019. Sliger, who
worked at McDonald & Cody, represented the Patels in both the civil forfeiture case
and the underlying criminal case. Maples also represented Jigneshkumar Patel in the
civil forfeiture case. In addition, attorney Steven Sadow represented Jigneshkumar
Patel in both the civil case and the underlying criminal case.
McDonald & Cody filed answers on behalf of the Patels in the forfeiture action,
seeking, inter alia, the return of the seized property. Then, McDonald & Cody moved
to dismiss the forfeiture complaint based on the State’s failure to schedule and begin
a bench trial within 60 days after the last claimant was served with the complaint as
required by OCGA § 9-16-12 (f).2 Maples filed a brief in support of the motion to
2
OCGA § 9-16-12 (f) provides, in pertinent part: “If an answer is filed, a bench
trial shall be held within 60 days after the last claimant was served with the
complaint; provided, however, that such trial may be continued by the court for good
cause shown.”
2
dismiss. After a hearing, the trial court dismissed the State’s complaint. At the same
hearing, after the trial court announced its decision to dismiss the complaint, Sliger
asked whether the State was required to return the property or post a supersedeas
bond. The trial court’s June 24, 2019 written order dismissing the complaint
concluded as follows:
It is therefore the order of the court that the claimants’ motion to dismiss
the complaint for forfeiture be granted. It is further the order of the court
that the assets held by the State be paid into the registry of the court
until such time as the deadline for appeal has expired or this judgment
has been affirmed. Upon satisfaction of the aforementioned conditions
precedent, all of the property described and listed in the complaint for
forfeiture shall be returned to the claimants.
(Capitalization omitted.)
After obtaining a certificate of immediate review, the State filed an application
for interlocutory appeal, which we granted on the basis that “the trial court’s June 24
order is a final order that dismissed the complaint and announced the return of all of
the property identified in the complaint to [the Patels], pending any appeal.” Case No.
3
A19I0284.3 The State’s ensuing appeal was docketed in this Court as Case No.
A20A0351.
While the State’s appeal of the June 24, 2019 order was pending, Jigneshkumar
Patel entered into a plea agreement, which was negotiated with the State by Sadow,
to resolve his criminal case. Under the terms of the plea agreement, Jigneshkumar
Patel entered an Alford4 plea to a single count of violating the Georgia Racketeer
Influenced and Corrupt Organizations Act (“Georgia RICO Act”) and was given an
eight-year probated sentence. As part of the plea agreement, the Patels agreed to
forfeit the assets in the forfeiture complaint, and the State agreed to unfreeze certain
bank accounts and to dismiss all charges against Toral Patel. Thereafter, on May 21,
2020, the Patels withdrew their answers in the forfeiture case and consented to
forfeiture of all of the assets in the forfeiture complaint. The next day, the State filed
a motion in this Court to withdraw its appeal in Case No. A20A0351, which we
granted on May 29, 2020.
3
The State also filed an application for discretionary appeal, which we
dismissed as superfluous. Case No. A20D0012.
4
North Carolina v. Alford, 400 U. S. 25 (91 SCt 160, 27 LE2d 162) (1970).
4
On May 26, 2020, McDonald & Cody, Sliger, and Maples filed a “notice of
attorneys’ lien” and a “motion to vacate the withdrawal of claimants’ answers and
consents to forfeiture for the purpose of prosecuting the attorneys’ contingency fee
contract” in the civil forfeiture case. Thereafter, the State filed a motion to set aside
the judgment dismissing the forfeiture complaint entered on June 24, 2019.
McDonald & Cody, Sliger, and Maples opposed the State’s motion to set aside. On
December 8, 2020, the trial court entered two orders — one granting the State’s
motion to set aside the June 24, 2019 judgment, and the other denying the “motion
to vacate the withdrawal of claimants’ answers and consents to forfeiture for the
purpose of prosecuting the attorneys’ contingency fee contract.” In the order granting
the State’s motion to set aside the judgment entered on June 24, 2019, the trial court
directed the parties to brief the court “on whether the attorney[s’] lien filed under
OCGA § 15-19-14 is valid and enforceable.” Following briefing, the trial court
entered an order on September 1, 2021, finding that there was no valid and
enforceable attorneys’ lien. This appeal followed.
1. McDonald & Cody contends that the trial court erred in setting aside the
final judgment entered on June 24, 2019. We agree.
5
“A trial court’s decision regarding a motion to set aside a judgment will not be
reversed absent a showing of manifest abuse of discretion.” Williams v.
Contemporary Svcs. Corp., 325 Ga. App. 299, 300 (750 SE2d 460) (2013).
Here, the State moved to set aside the June 24, 2019 judgment under OCGA
§ 9-11-60 (d) (2), which provides: “A motion to set aside may be brought to set aside
a judgment based upon . . . [f]raud, accident, or mistake or the acts of the adverse
party unmixed with the negligence or fault of the movant.” The State argued that the
Patels’ acts of withdrawing their answers and consenting to the forfeiture of the
property on May 21, 2020, fell “squarely within the acts contemplated by OCGA §
9-11-60 (d) (2), as acts of the adverse party unmixed with any negligence or fault of
the movant.” (Emphasis in original.) The trial court granted the State’s motion,
explaining that the Patels, “the adverse parties, wish to withdraw their answer and
forego any claim to the forfeited funds as part of their negotiated plea agreement in
the companion criminal case” and that “[t]he State, the moving party, has not been
negligent [ ]or . . . shown any fault[,]” which “provides the necessary basis for the
[court] to set aside” the June 24, 2019 judgment. The trial court reasoned that
“[s]etting aside the previous order would allow the parties to enforce a compromise
6
that they each negotiated at arm’s length, and would promote the administration of
justice, not obscure it.”
To decide whether a trial court properly set aside a judgment under OCGA §
9-11-60 (d) (2), we must first determine whether that judgment was based upon fraud,
accident, mistake, or the acts of the adverse party. Principal Lien Svcs., LLC v. NAH
Corp., 346 Ga. App. 277, 282-283 (3) (814 SE2d 4) (2018); Cheuvront v. Carter, 263
Ga. App. 837, 838 (589 SE2d 609) (2003). If so, we must also consider whether the
fraud, accident, mistake, or act of the adverse party was unmixed with any negligence
on the part of the State. Principal Lien Svcs., LLC, 346 Ga. App. at 283 (3);
Cheuvront, 263 Ga. App. at 838.
Applying these standards, we first consider whether the June 24, 2019
judgment, which dismissed the forfeiture complaint on the basis that the trial required
under OCGA § 9-16-12 (f) was not held or continued within 60 days after the last
claimant was served, was based upon fraud, accident, mistake, or the acts of the
Patels. See Principal Lien Svcs., LLC, 346 Ga. App. at 282-283 (3); Cheuvront, 263
Ga. App. at 838. The State argues that the withdrawals of answers and consents to
forfeiture entered by the Patels in May 2020 were grounds for setting aside the June
24, 2019 judgment under OCGA § 9-11-60 (d) (2) as acts of the adverse party.
7
However, the State does not contend that the June 24, 2019 judgment was based upon
fraud, accident, mistake, or the acts of the Patels, and we have found no evidence in
the record that would support such a conclusion. On the facts of this case, the June
24, 2019 judgment could not have been based upon the acts by the Patels of
withdrawing their answers and consenting to forfeiture in May 2020, because those
acts had not yet occurred when the June 24, 2019 judgment was entered.5 Given these
circumstances, the Patels’ acts in May 2020 are not grounds for setting aside the June
24, 2019 judgment under OCGA § 9-11-60 (d) (2). See Principal Lien Svcs., LLC,
346 Ga. App. at 282-283 (3); Cheuvront, 263 Ga. App. at 838. Consequently, the trial
court abused its discretion when it granted the State’s motion to set aside the
judgment on this basis. See Williams, 325 Ga. App. at 300.
2. McDonald & Cody contends that the trial court erred in holding that
McDonald & Cody, Sliger, and Maples had no valid and enforceable attorneys’ lien
under OCGA § 15-19-14 (c) as a matter of law because there was no property
recovered by the Patels. According to McDonald & Cody, the lien was perfected
5
Because we conclude that the June 24, 2019 judgment was not based upon
fraud, accident, mistake, or the acts of the adverse party, we do not reach the question
of whether any fraud, accident, mistake, or act of the adverse party was unmixed with
any negligence on the part of the State. See Principal Lien Svcs., LLC, 346 Ga. App.
at 283 (3); Cheuvront, 263 Ga. App. at 838.
8
when the attorneys obtained a final judgment for the return of the property to the
Patels. We agree.
OCGA § 15-19-14 (c) provides:
Upon all actions for the recovery of real or personal property and upon
all judgments or decrees for the recovery of the same, attorneys at law
shall have a lien for their fees on the property recovered superior to all
liens except liens for taxes, which may be enforced by mortgage and
foreclosure by the attorneys at law or their lawful representatives as
liens on personal property and real estate are enforced. The property
recovered shall remain subject to the liens unless transferred to bona
fide purchasers without notice.
“The validity and enforceability of an attorney’s lien, and the amount of fees
to award the attorney enforcing the lien, are matters for the trial court to decide.”
Tolson v. Sistrunk, 332 Ga. App. 324, 325 (772 SE2d 416) (2015). “Where the trial
court is the factfinder, we construe the evidence in the light most favorable to support
the court’s judgment and will uphold the court’s factual findings on appeal if there
is any evidence to support them.” Id. “With respect to questions of law, however, we
employ a de novo standard of review.” McWay v. McKenney’s, Inc., 359 Ga. App.
547, 548 (859 SE2d 523) (2021).
9
“It is well established that the attorney’s lien created under OCGA § 15-19-14
(c) attaches to the fruits of the labor and skill of the attorney, whether realized by
judgment or decree, or by virtue of an award, or in any other way, as long as they are
the result of his exertions.” Smith, Bassett, Purcell & Koenig v. Word of God
Ministries, Inc., 234 Ga. App. 263, 264 (506 SE2d 427) (1998) (citation, punctuation,
and emphasis omitted). “An attorney[‘s] lien arises upon the attorney’s employment
and is perfected at the time of the ultimate recovery of the judgment by the client.”
Jones v. Wellon, 237 Ga. App. 62, 64 (514 SE2d 880) (1999) (citation and
punctuation omitted). “The moment a judgment of recovery is rendered the lien
becomes perfect as against the client[.]” Hodnett v. Bonner, 107 Ga. 452, 455 (33 SE
416) (1899). “A party to litigation is charged with notice of the lien which the
attorney for the opposite party will have on the property recovered for his client for
professional services rendered him in such litigation[.]” Hodnett v. Stewart, 131 Ga.
67, 68 (a) (61 SE 1124) (1908).
In its September 1, 2021 order, the trial court found that OCGA § 15-19-14 (c)
applies because the case is a forfeiture action and involves the recovery of personal
10
property.6 However, citing Molloy v. Hubbard, 48 Ga. App. 820, 821 (173 SE 877)
(1934), as support for the proposition that “[a]n attorney’s lien under OCGA § 15-19-
14 (c) arises upon the attorney’s employment and is perfected by the ultimate
recovery in favor of his client[,]” (punctuation and emphasis omitted) the trial court
concluded that there was no “ultimate recovery” for the Patels under the meaning of
OCGA § 15-19-14 (c) because “[t]o have recovered under the meaning of the statute,
the [Patels] would have had to receive some or all of the property claimed in the
forfeiture suit.” The trial court cited no authority for this conclusion, and we have
found none. On the contrary, in Molloy, we held that an attorney had a lien for his fee
on property he recovered for his client even though the client did not receive any of
the property. See 48 Ga. App. at 821.
In Molloy, a common law fi. fa. was levied upon certain mules, and they were
sold by the sheriff in a quick-order sale. 48 Ga. App. at 820. An attorney representing
a client who had a chattel mortgage on the mules foreclosed the mortgage and
6
We note that OCGA § 15-19-14 (e) provides that “The same liens and modes
of enforcement thereof which are allowed to attorneys at law who are employed to
bring an action for any property, upon the property recovered, shall be equally
allowed to attorneys at law employed and serving in defense against such actions in
case the defense is successful.” Neither party argues on appeal that subsection (e)
applies to this case.
11
initiated a proceeding against the sheriff to have the funds from the sale of the mules
turned over to his client. Id. While this proceeding was pending, a creditor of the
client instituted garnishment proceedings. Id. We held that the attorney was entitled
to have his lien for services performed in the foreclosure of the mortgage satisfied
from the proceeds of the sheriff’s sale of the mules before the remaining proceeds
were turned over to the garnishing creditor. Id. at 821. Although none of the proceeds
of the sale were paid to the client, we affirmed the award of the attorney’s fee out of
the proceeds of the sheriff’s sale. Id. Thus, Molloy does not support the trial court’s
conclusion that to recover within the meaning of OCGA § 15-19-14 (c), the Patels
had to receive some or all of the property claimed in the forfeiture suit.
The State relies on Outlaw v. Rye, 312 Ga. App. 579, 582 (2) (718 SE2d 905)
(2011), to argue that McDonald & Cody, Sliger, and Maples did not recover property
on behalf of their clients. The State’s reliance on Outlaw is misplaced. In Outlaw, an
attorney attempted to put an attorney’s lien under OCGA § 15-19-14 (c) on certain
real property owned by her former client. Id. at 579-580. The attorney had represented
the former client in a custody dispute, and the real property was not recovered in the
custody proceedings. Id. at 580. We explained that
12
Our Supreme Court has long held that, because the statute concerning
attorney’s liens is in derogation of the common law, it must be strictly
construed. For this reason, Georgia courts have steadfastly refused to
apply the statute to any factual situation not strictly within its wording.
By its clear and unambiguous terms, the statute permits a lawyer to
assert a statutory lien only against property recovered by the lawyer for
her client. Put another way, the lien that is authorized by the statute
attaches to the fruits of the labor and skill of the attorney, and it properly
can be directed only to properties that are among those fruits.
Id. at 581 (1) (citations and punctuation omitted). Consequently, we held that because
the property at issue in Outlaw was not “among the fruits of the labor and skill” of the
attorney, the lien was not authorized by OCGA § 15-19-14 (c) and was, therefore,
invalid. Id. at 581-582 (1). Here, by contrast, McDonald & Cody properly seeks to
enforce a statutory lien pursuant to OCGA § 15-19-14 (c) on property that was at
issue in the forfeiture case.
The State also asserts that it was not aware of the contingency fee agreement
“until well after the criminal plea had been entered,” but does not explain how its lack
of knowledge would affect the validity of the attorneys’ lien. Even if the State was
not aware of the contingency agreement, it is “charged with notice of the lien which
13
the attorney for the opposite party will have on the property recovered for his client
for professional services rendered him in such litigation[.]” Stewart, 131 Ga. at 68 (a).
Finally, the State argues that “the property at issue in the civil forfeiture action
. . . is in fact property and proceeds derived from violations of the Georgia [RICO]
Act.” However, the State cites no authority, and we have found none, to support the
State’s implicit argument that OCGA § 15-19-14 (c) does not apply to property
recovered in a civil forfeiture action.
In short, McDonald & Cody, Sliger, and Maples sought the return of the Patels’
property seized by the State and dismissal of the State’s forfeiture complaint, and the
trial court’s June 24, 2019 order dismissing the State’s complaint is a final order
announcing the return of all of the Patels’ property identified in the complaint,
pending any appeal. Thus, the June 24, 2019 order is a “judgment of recovery,” see
Bonner, 107 Ga. at 455, and the property identified in the complaint constituted the
“fruits of the labor and skill of the attorney, . . . realized by judgment[.]” See Smith,
Bassett, Purcell & Koenig, 234 Ga. App. at 264. As a matter of law, at the moment
the June 24, 2019 order was entered, the attorneys’ lien was perfected. See Bonner,
107 Ga. at 455. Consequently, under the circumstances of this case, the trial court
14
erred in concluding that there was no valid and enforceable lien under OCGA § 15-
19-14 (c) on the ground that there was no “ultimate recovery” for the Patels.
Judgment reversed. Dillard, P. J., and Markle, J., concur.
15