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Kisling, Nestico & Redick, L.L.C. v. Progressive Max Insurance Co.

Court of Appeals of Ohio, Eighth District, Cuyahoga

March 29, 2018

KISLING, NESTICO & REDICK, L.L.C. PLAINTIFF-APPELLEE
v.
PROGRESSIVE MAX INSURANCE COMPANY, ET AL. DEFENDANTS-APPELLANTS

          Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-15-853760

         ON RECONSIDERATION[1]

          ATTORNEYS FOR APPELLANT For Progressive Max Insurance Company David G. Utley Collins, Roche, Utley & Garner, L.L.C. Richard M. Garner Collins, Roche, Utley & Garner, L.L.C.

          ATTORNEYS FOR APPELLEE Christopher J. Van Blargan John J. Reagan Kisling, Nestico & Redick, L.L.C.

          For Todd Anthony Thornton Christopher Ankuda Ankuda, Stadler & Moeller, Ltd.

          For Darvale Thomas, Darvale Thomas

          BEFORE: Kilbane, J., E.A. Gallagher, A.J., and Jones, J.

          JOURNAL ENTRY AND OPINION

          MARY EILEEN KILBANE, J.

         {¶1} After reconsideration, the opinion as announced by this court on October 5, 2017, Kisling, Nestico & Redick, L.L.C. v. Progressive Max Ins. Co., 8th Dist. Cuyahoga No. 105287, 2017-Ohio-8064, is hereby vacated and substituted with this opinion.

         {¶2} Defendant-appellant, Progressive Max Insurance Company ("Progressive"), appeals from the trial court's decision granting summary judgment in favor of plaintiff-appellee, Kisling, Nestico & Redick ("KNR"). For the reasons set forth below, we affirm.

         {¶3} In 2014, Todd Anthony Thornton ("Thornton") and Darvale Thomas ("Thomas") were involved in an automobile accident. At the time of the accident, Thornton was insured with Progressive. Thomas retained the law firm of KNR to represent him for all claims arising from the accident. Thomas and KNR entered into a contingent fee agreement, which gave KNR a charging lien on the proceeds of any insurance settlement, judgment, verdict award or property obtained on Thomas's behalf. The contract specifically provides that "[KNR] shall have a charging lien upon the proceeds of any insurance proceeds, settlement, judgment, verdict award or property obtained on [Thomas's] behalf." While negotiating with Progressive on Thomas's behalf, KNR presented a settlement package and demand and obtained a settlement offer of $12, 500.

         {¶4} During the course of its representation of Thomas, however, KNR became aware that Thomas discussed his accident with another law firm. KNR contacted both the other firm and Progressive and notified them of its fee agreement and charging lien with Thomas. Progressive concedes it received "communication" from KNR that KNR was asserting a lien against any settlement proceeds paid to Thomas. Despite its prior knowledge of KNR's charging lien, Progressive eventually settled the claim directly with Thomas.

         {¶5} In November 2015, KNR sought payment of its legal fees and expenses by filing a complaint against Progressive, Thornton, and Thomas. KNR alleged that it met its obligations under the contingent fee agreement with Thomas and obtained a settlement offer from Progressive but did not receive any payment for its services. KNR's claims against Thomas were for breach of contract, breach of fiduciary duty and the implied duty of good faith and fair dealing, and quantum meruit/unjust enrichment. It alleged that Thomas intentionally breached the terms of the contingent fee agreement by settling the claim directly with Progressive after KNR obtained a settlement offer. As a result, Thomas was unjustly enriched by accepting KNR's services and advancement of claim expenses without reimbursing KNR for its services.

         {¶6} KNR's claims against Progressive and Thornton were to enforce the charging lien and for tortious interference. It alleged that Progressive and Thornton (through his agent, Progressive) had actual knowledge of its charging lien prior to settling directly with Thomas and distributing the proceeds to him solely. KNR further alleged that Progressive and Thornton knew of the contingency fee agreement between Thomas and KNR and intentionally procured Thomas's breach of the fee agreement.[2]

         {¶7} KNR voluntarily dismissed Thornton from the action and conceded that it did not have a claim of tortious interference against Progressive. The trial court granted default judgment in KNR's favor against Thomas. As a result, the only remaining issues related to Progressive were whether KNR had a right to "enforce the charging lien" and whether KNR was entitled to damages based on quantum meruit/unjust enrichment. Both Progressive and KNR filed motions for summary judgment as they relate to these issues.

         {¶8} The trial court denied Progressive's motion for summary judgment but granted KNR's motion for summary judgment. It found that Progressive "had a duty to protect [KNR's] interest in the settlement proceeds." The trial court held that Progressive owed KNR the amount of KNR's interest in the settlement proceeds; therefore, Progressive was "liable for the quantum meruit value of [KNR's] legal services which include litigation expense[s]."

         {¶9} Progressive now appeals, raising the following single assignment of error for our review.

         Assignment of Error

         The trial court committed reversible error by entering summary judgment in favor of [KNR] and against [Progressive] with respect to [KNR's] claim for an "equitable lien" for contingent attorney fees.

         {¶10} Progressive argues the trial court erred because it was not in privity of contract with KNR and there is no statute obligating it to assist KNR in the recovery of fees owed to KNR by Thomas. Progressive contends that ...


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