United States District Court, S.D. Ohio, Eastern Division
OPINION & ORDER
L. GRAHAM, UNITED STATES DISTRICT JUDGE.
matter is before the Court on Appellant Joseph S. Tann,
Jr.'s appeal from a bankruptcy court order. The United
States Bankruptcy Court for this district denied Tann's
request to lift the automatic stay imposed by federal
bankruptcy law. For the reasons more fully described herein,
that denial is AFFIRMED.
the essential background facts in this appeal relate to
background bankruptcy law. For example, “[w]hen a
bankruptcy petition is filed, § 362(a) of the Bankruptcy
Code provides an automatic stay of, among other things,
actions taken to realize the value of collateral given by the
debtor.” United Sav. Ass'n of Tex. v. Timbers
of Inwood Forest Assocs., Ltd., 484 U.S. 365, 369
(1988). Tann wants the bankruptcy court to lift the automatic
stay to permit him to pursue a lien for attorneys' fees.
The bankruptcy court issued an opinion and order denying
Tann's motion to lift the automatic stay. (Bankr. Ct. Op.
& Order, Doc. 1-1). The bankruptcy court's decision
sits at the confluence of two sets of litigation: (1) the
bankruptcy of Karen Elaine Boddie, and (2) a civil claim
brought by Boddie against PNC Bank in which she was
represented by Joseph Tann (hereinafter the “PNC
Claim”). (Bankr. Ct. Op. & Order at 2). The Court
reviews the progress of each to describe the nature of
Boddie filed a voluntary petition under Chapter 13 of the
Bankruptcy Code on March 12, 2007. After filing the petition,
Boddie acquired additional assets, including the PNC Claim,
which she, at least initially, did not properly disclose to
the bankruptcy court. Boddie hired Tann to prosecute the PNC
Claim, but the bankruptcy court never appointed Tann to
perform legal services on behalf of the bankruptcy estate.
a more detailed timeline of these events. In January 2013,
after making payments pursuant to her confirmed Chapter 13
bankruptcy plan, Boddie filed a motion for determination,
which asked the bankruptcy court to determine, among other
things, whether the PNC Claim was property of the bankruptcy
estate. The bankruptcy court found that it was and ordered
that Bod-die had no authority to prosecute the PNC Claim on
behalf of the estate. (Doc. 4-3 at 2-3). The court further
ordered that Boddie could file a motion to employ counsel to
prosecute the PNC Claim on behalf of the estate.
(Id. at 3). In September 2013, Boddie moved to
employ Tann as special counsel to prosecute the PNC Claim,
but the bankruptcy court denied the motion. (Order Sustaining
Objs., Doc. 4-22). In March 2015, Boddie again moved to
employ Tann as an attorney. (Mot. of Karen Elaine Boddie,
Doc. 4-41). Again, the Court denied the motion. (Or. Den.
Mot., Doc. 4-47).
between the first and second motions to employ Tann as the
PNC Claim attorney, the bankruptcy trustee apparently reached
a settlement of the PNC Claim. Boddie then threw a wrench in
the spokes of the settlement. In between the first and the
second orders denying Bod-die's motions to retain Tann as
counsel for the PNC Claim, Boddie filed, pro se, a
“reply” to the bankruptcy trustee's motion to
approve a settlement between the trustee and PNC Bank. The
bankruptcy court then denied the trustee's motion to
approve the settlement. (Or. Den. Trustee's Mot. Approve
Settlement at 2, Doc. 4-43).
then began filing his own motions with the bankruptcy court.
Tann filed an application with the bankruptcy court to permit
him to be compensated for his work on the PNC Claim. (Mem.
Op. & Order on App. of Tann for Allowance of Compensation
for the Period July 19, 2011 Through August 14, 2014, Doc.
4-52). Tann argued that two separate legal principles
entitled him to attorney's fees. First, Tann requested
compensation under bankruptcy law, specifically 11 U.S.C.
§ 330(a)(4)(B) and Local Bankruptcy Rule 2016-1. Second,
Tann argued that he possessed an attorney-charging lien as
authorized by Ohio law. The Bankruptcy court denied
Tann's request for compensation, rejecting both arguments
that Tann presented. (Mem. Op. & Order at 17, Doc. 4-52).
The district court affirmed the order. (Op. & Order of
District Ct., Doc. 4-61).
Tann filed the motion that is the subject of this appeal: a
motion to lift the automatic stay so that he can obtain an
attorney's lien on any proceeds from the PNC Claim. Tann
argued that principles of equity and quantum meruit
(“the reasonable value of services, ”
Garner's Modern Legal Usage at 741, (3d. 2011)),
dictated that the stay be lifted for him to pursue a lien for
attorney's fees. The Chapter 13 Trustee, on the other
hand, argued that since the court never authorized Tann to
represent the estate in the PNC Claim, he isn't entitled
to any attorneys' fees, and permitting him to attach an
attorney's lien on the PNC Claim proceeds would
essentially nullify the bankruptcy court's earlier
bankruptcy court rejected Tann's argument and sided with
the trustee. (Bankr. Ct. Mem. Op. & Order at 17, Doc.
1-1). The court held that while the Bankruptcy Code permits a
court to grant relief from the automatic stay in certain
circumstances, those circumstances weren't present in
Tann's case. Specifically, the bankruptcy court held that
Tann was-if any-thing-an unsecured creditor because he did
not (and does not now) possess an attorney's lien. Under
Ohio law, an attorney's lien only attaches to a judgment
or funds collected for a client, and since Tann had no
judgment or funds collected for a client, he had no
attorney's lien. In the catch-all provision in the
bankruptcy code's automatic-stay rule, the statute
permits courts to grant relief from the automatic stay
“for cause.” 11 U.S.C. § 362(d). The
bankruptcy court denied Tann relief even under this catch-all
provision because Tann sought essentially the reversal of the
court's earlier order refusing to appoint Tann as counsel
for the PNC Claim. Further still, the bankruptcy court
recognized the “nonsensical” nature of permitting
“a person to impress a lien on property based on an
agreement entered into with someone other than the owner of
that property.” (Bankr. Ct. Op. & Order at 16, Doc.
1-1). Finally, § 362(d) permits the court to lift the
stay if “the debtor does not have any equity in
[estate] property.” Id. Tann argued that
Boddie had no equity in the PNC Claim because the PNC Claim
was encumbered with his attorney's lien. But Tann had no
attorney's lien; therefore, the court denied Tann's
request to lift the automatic stay.
a summary of what led to Tann's appeal. After filing the
bankruptcy petition, Boddie hired Tann to prosecute the PNC
Claim on her behalf. Later realizing that she could not do
so, Boddie moved to employ Tann as special counsel to the
estate to prosecute the PNC Claim. The bankruptcy court
refused to appoint Tann to prosecute the PNC Claim, and it
found that Boddie had no authority as the debtor in
bankruptcy to appoint Tann herself. When Tann tried to assert
his right to payment for his work on the PNC Claim, the
bankruptcy court denied his claim. Then, Tann tried to move
to lift the automatic bankruptcy stay on debt collection so
he could assert an attorney's lien on the PNC Claim, but
the bankruptcy court denied this too. This appeal followed.
Jurisdiction and Standard of Review
bankruptcy court's order denying a motion for relief from
the automatic stay is a final, appealable order. In re
Miller, 459 B.R. 657, 661 (B.A.P. 6th Cir. 2011). Final,
appealable orders can be appealed to the district court. 28
U.S.C. § 158. “Orders denying motions for relief
from stay are reviewed for an abuse of discretion.”
In re Rice, 462 B.R. 651, 653 (B.A.P. 6th Cir. 2011)
(citing Spierer v. Federated Dep't Stores, Inc. (In
re Federated Dep't Stores, Inc.), 328 F.3d 829, 836
(6th Cir. 2003)). “‘An abuse of discretion occurs
only when the [trial] court relies upon clearly erroneous
findings of fact or when it improperly applies the law or
uses an erroneous legal standard.'” Id.
(alteration in original) (quoting Kaye v. Agripool, SRL
(In re Murray, Inc.), 392 B.R. 288 (B.A.P. 6th Cir.