Law Offices of John J. Juliano v. John W. Jensen

Filing

UNPUBLISHED AUTHORED OPINION filed. Originating case number: 1:15-cv-00288-CCE-JEP Copies to all parties and the district court/agency. [999987611].. [15-2028]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 15-2028

LAW OFFICES OF JOHN L. JULIANO, P.C.,
Plaintiff - Appellant,
v.
JOHN W. JENSEN; JENSEN LAW, P.A., d/b/a Jensen Law Group,
Defendants - Appellees.

Appeal from the United States District Court for the Middle
District of North Carolina, at Greensboro. Catherine C. Eagles,
District Judge. (1:15-cv-00288-CCE-JEP)

Argued:

October 25, 2016

Decided:

December 15, 2016

Before TRAXLER, KEENAN, and WYNN, Circuit Judges.

Affirmed by unpublished opinion.
Judge Keenan wrote
opinion, in which Judge Traxler and Judge Wynn joined.

the

ARGUED: Steven B. Epstein, POYNER SPRUILL LLP, Raleigh, North
Carolina, for Appellant.
Jonathan Arthur Berkelhammer, ELLIS &
WINTERS LLP, Greensboro, North Carolina; Robert Ellis Zaytoun,
ZAYTOUN LAW FIRM, PLLC, Raleigh, North Carolina, for Appellees.
ON BRIEF: Andrew H. Erteschik, POYNER SPRUILL LLP, Raleigh,
North Carolina, for Appellant.
Matthew D. Ballew, ZAYTOUN LAW
FIRM, PLLC, Raleigh, North Carolina, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

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BARBARA MILANO KEENAN, Circuit Judge:
The Law Offices of John L. Juliano, P.C. (Juliano), 1 a New
York law firm, filed this diversity action seeking payment of
one

third

of

attorneys’

fees

recovered

in

a

North

Carolina

personal injury lawsuit conducted by the defendants, attorney
John

W.

Jensen

(Jensen Law).

(Jensen)

and

his

law

firm,

Jensen

Law

Group

Although Juliano was not directly involved in the

North Carolina litigation, he asserts that he is entitled on
equitable grounds to a portion of Jensen’s fees, based on a feesharing agreement he reached with Jensen’s former law firm.
The district court concluded that Juliano had failed to
state a claim for unjust enrichment, and had not attempted to
plead a separate quantum meruit claim.

Accordingly, the court

dismissed the complaint under Federal Rule of Civil Procedure
12(b)(6).

Upon

our

review,

we

affirm

the

district

court’s

judgment.

I.
In 2007, Howard Hazlett, who is not a party to this case,
retained

Juliano

to

represent

1

him

after

Hazlett

Although the only plaintiff in this case is
entity Law Offices of John L. Juliano, P.C.,
reference we refer to both the law firm and
attorney, John Juliano, as “Juliano” throughout the

2

suffered

the corporate
for ease of
its founding
opinion.

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injuries

in

Carolina. 2
state

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a

watercraft

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accident

that

occurred

in

North

Juliano filed a personal injury action in New York

court

on

Hazlett’s

behalf,

which

later

was

dismissed

without prejudice (the New York case).
In October 2008, after the New York case was dismissed,
Juliano referred Hazlett’s case to the North Carolina law firm
of Jensen McGrath Podgorny (JMP), of which defendant Jensen was
a partner.

Hazlett and JMP entered into a written contingency

fee agreement (the 2008 agreement) under which JMP would receive
a certain portion of any total amount that Hazlett recovered.
The

2008

agreement

also

included

a

“fee

division

schedule,”

which provided that one third of the fee collected by JMP would
be paid to Juliano.

Although JMP filed a personal injury action

on Hazlett’s behalf in North Carolina state court (the first
North Carolina case), that case was dismissed without prejudice
in April 2010.
In September 2010, Jensen resigned from JMP and formed a
new law firm, Jensen Law.

At that time, Hazlett elected to have

2

Because the district court dismissed the complaint under
Rule 12(b)(6), we recount the facts as alleged in the complaint.
See Harbourt v. PPE Casino Resorts Md., LLC, 820 F.3d 655, 658
(4th Cir. 2016).
We also may consider documents attached to a
motion to dismiss that were “integral to and explicitly relied
on in the complaint.”
Am. Chiropractic Ass’n v. Trigon
Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004) (citation
omitted).

3

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his case remain with Jensen’s former law firm, now named McGrath
Podgorny, P.A.
In March 2011, McGrath Podgorny filed a second personal
injury action on Hazlett’s behalf in North Carolina state court
(the second North Carolina case).

While this case was pending,

attorney McGrath resigned from McGrath Podgorny.
Podgorny,
counsel

the

from

withdrawal,

only
the

remaining

second

however,

partner,

North

Podgorny

Carolina
contacted

In July 2012,

withdrew

as

case.

Hazlett’s

Prior

Jensen,

who

to

his

indicated

that he and Jensen Law would be willing to assume representation
of Hazlett in the pending case.
Hazlett, after having proceeded pro se in the second North
Carolina
written
2012.

case

for

contingency

about
fee

three

weeks,

agreement

with

ultimately
Jensen

executed

Law

in

a

August

In that agreement, Hazlett expressly stated that he was

revoking all prior contracts governing attorney representation
and fees.

In contrast to the 2008 agreement between Hazlett and

JMP, the new agreement between Hazlett and Jensen Law did not
include

a

fee

division

schedule

allocating

to

Juliano

any

portion of the attorneys’ fees recovered from the lawsuit.
During

the

course

of

Jensen’s

work

on

Hazlett’s

case,

Juliano’s only contact with Jensen consisted of two letters, in
which Juliano advised Jensen that Hazlett owed Juliano $2,000

4

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for certain expenses incurred in the New York case.

Jensen

eventually paid Juliano this amount.
Hazlett’s claim in the second North Carolina case proceeded
to a jury trial, which lasted about one month.

In August 2013,

the state court entered judgment on the jury’s verdict in favor
of Hazlett for about $5.7 million.
collected
million.

a

forty

percent

As a result, Jensen Law

contingency

fee

of

almost

$2.3

Juliano learned of the judgment in July 2014, nearly

one year after the verdict was entered, and contacted Jensen
requesting

payment

of

one

recovered.

Juliano asserted that he was entitled to this sum

based on the 2008 agreement.

third

of

the

attorneys’

fees

Jensen refused Juliano’s request.

Juliano later filed the present action in federal district
court, alleging a single claim entitled “unjust enrichment and
imposition of constructive trust or equitable lien.”

In his

claim, Juliano sought one third of the attorneys’ fees recovered
by Jensen and Jensen Law in the second North Carolina case.

The

district court held that Juliano had failed to state a claim of
unjust enrichment because he had not conferred, and Jensen had
not accepted, any benefit regarding Jensen’s representation of
Hazlett in the second North Carolina case. 3

3

The district court

The district court held in the alternative that the
complaint could be dismissed on the ground that Juliano had
failed to comply with Rule 1.5(e) of the North Carolina Rules of
(Continued)
5

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also rejected Juliano’s assertion that his complaint included a
claim for recovery in quantum meruit.
dismissed

the

complaint

in

its

The court accordingly

entirety,

and

this

appeal

followed.

II.
Juliano argues that the district court erred in dismissing
his

complaint

under

Rule

12(b)(6).

Although

Juliano

acknowledges that he has not alleged a “garden-variety unjust
enrichment claim,” he nonetheless seeks to “invoke the equitable
powers of the court to impose a constructive trust” on a portion
of

Jensen’s

transfer

of

fees.
the

Juliano

fee-sharing

effectively
obligations

seeks
of

JMP

an

equitable

onto

Jensen,

arguing that: (1) Jensen was aware of the 2008 agreement between
Hazlett and JMP; and (2) Hazlett would not have retained Jensen
in the second North Carolina case if Juliano had not initially
referred Hazlett’s case to JMP in 2008.

Accordingly, Juliano

contends that his complaint states a claim of unjust enrichment
based

on

Jensen’s

retention

of

the

entire

$2.3

million

fee

Professional Conduct, which governs fee-sharing arrangements
between attorneys.
Because we agree with the court’s primary
conclusion that Juliano has failed to state a claim, we do not
address this additional rationale.

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collected in the second North Carolina case.

We disagree with

Juliano’s arguments. 4
We review de novo the district court’s dismissal of the
complaint under Rule 12(b)(6), accepting Juliano’s well-pleaded
allegations as true and drawing all reasonable inferences in his
favor.

See Belmora LLC v. Bayer Consumer Care AG, 819 F.3d 697,

705 (4th Cir. 2016).

To state a claim for unjust enrichment

under North Carolina law, a plaintiff must allege that: (1) one
party conferred a benefit upon the other party; (2) the benefit
was not “conferred officiously, that is it must not be conferred
by an interference in the affairs of the other party in a manner
that is not justified in the circumstances”; (3) the benefit was
not gratuitous; (4) the benefit was measureable; and (5) the
defendant

consciously

accepted

the

benefit.

JPMorgan

Chase

Bank, N.A. v. Browning, 750 S.E.2d 555, 559 (N.C. Ct. App. 2013)
(emphasis and citation omitted).

Thus, the mere fact that one

party was enriched at the expense of another, without more, does
not amount to a claim of unjust enrichment.
4

Butler v. Butler,

We observe that despite language in the complaint clearly
asserting a claim for unjust enrichment, counsel for Juliano
appeared at oral argument to abandon this claim, and instead
argued exclusively that the court should impose a constructive
trust on one third of Jensen’s fees.
As we discuss further
below, both theories fail for the same reason, namely, that
Juliano has not alleged facts showing that it would be
inequitable for Jensen to retain the entirety of the fees
recovered.

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768 S.E.2d 332, 336 (N.C. Ct. App. 2015) (citing Watson Elec.
Constr. Co. v. Summit Cos., LLC, 587 S.E.2d 87, 92 (N.C. Ct.
App. 2003)).

Instead, a benefit must have been conferred on the

defendant “under circumstances which give rise to a legal or
equitable obligation on the part of the defendant to account for
the benefit[] received.”

Id. at 336-37 (citation omitted).

The Supreme Court of North Carolina also has explained that
a constructive trust
is a duty, or relationship, imposed by courts of
equity to prevent the unjust enrichment of the holder
of title to, or of an interest in, property which such
holder acquired through fraud, breach of duty or some
other circumstance making it inequitable for him to
retain it against the claim of the beneficiary of the
constructive trust.
Variety
LLC,

Wholesalers,

723

Although

S.E.2d
“actual

Inc.

744,

v.

751

Salem
(N.C.

wrongdoing,

Logistics
2012)

such

as

Traffic

(citation
fraud

or

Servs.,

omitted).
breach

of

fiduciary duty” is not required to impose a constructive trust,
a

plaintiff

nevertheless

must

allege

that

it

would

be

inequitable for the defendant to retain the funds in question,
or that the defendant “acquired the funds in an unconscientious
manner.”

Houston v. Tillman, 760 S.E.2d 18, 21-22 (N.C. Ct.

App. 2014) (citing Variety Wholesalers, 723 S.E.2d at 751-52).
Here, however, Juliano has not alleged that Jensen engaged
in any “unconscientious” conduct or other questionable activity
in his representation of Hazlett.
8

The facts alleged in his

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complaint also do not identify any inequity that would result
from Jensen’s retention of the entire attorneys’ fee award, but
merely point to the circumstance that Juliano “brought” the case
to JMP in 2008 when Jensen was a partner in that firm.

And,

notably, Juliano has not alleged any facts suggesting that he
assisted

Jensen

in

representing

Hazlett

or

otherwise

court’s

conclusion

participated in the trial of the case.
We

therefore

agree

with

the

district

that the facts alleged by Juliano do not support a claim for
unjust enrichment, and do not identify an inequitable result
justifying imposition of a constructive trust.

Juliano has not

alleged any relationship with Jensen or Jensen Law that would
support

imposition

of

a

fee-sharing

obligation.

Any

relationship between Juliano and Jensen based on Jensen’s prior
membership

in

JMP

is

too

attenuated

to

support

basis for recovery of the fees at issue.
nearly

two

years

before

Hazlett

an

equitable

Jensen had left JMP

eventually

retained

representation in the second North Carolina case.

him

for

During that

interim period, Hazlett had been represented by McGrath Podgorny
until

briefly

Moreover,

proceeding

Juliano

did

not

pro

se

enter

before
an

retaining

appearance

on

Jensen.
Hazlett’s

behalf in either of the North Carolina cases, nor did Juliano
refer Hazlett’s case to Jensen or Jensen Law while Hazlett was
acting pro se in the second North Carolina case.
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Significantly, as noted above, Juliano did not provide any
assistance

during

Carolina case.

Jensen’s

litigation

of

the

second

North

In fact, Juliano was unaware that the case had

resulted in a jury verdict in Hazlett’s favor until nearly a
year after the trial had concluded.

And, as we have observed,

Juliano’s only communication with Jensen during the period of
Jensen’s representation related to Juliano’s request for payment
of expenses incurred in the former New York case.

Given these

facts and circumstances, Juliano has failed to provide a factual
basis to support his allegation that it would be inequitable for
Jensen to retain the attorneys’ fees he earned exclusively by
virtue of his work under his fee agreement with Hazlett. 5
Finally,
substance
meruit,

of

we

disagree

his

apart

obliged

to

use

complaint

from

constructive trust.

with

his

Juliano’s

also
claim

stated
for

contention
a

claim

unjust

for

that

the

quantum

enrichment

and

Although Juliano is correct that he was not

“magic

words”

in

his

complaint

identifying

a

specific legal theory of recovery, he nevertheless was required
in his pleading to give the defendants “fair notice” of the
nature of his claims.

See Stevenson v. City of Seat Pleasant,

5

Although the district court dismissed the unjust
enrichment claim on the ground that Juliano did not confer a
benefit on Jensen, we may affirm the court’s Rule 12(b)(6)
dismissal on any basis supported by the record. See Greenhouse
v. MCG Capital Corp., 392 F.3d 650, 660 (4th Cir. 2004).

10

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F.3d

411,

Filed: 12/15/2016

418,

420

(4th

Pg: 11 of 11

Cir.

2014)

(citations

omitted);

McCleary-Evans v. Md. Dep’t of Transp., 780 F.3d 582, 585 (4th
Cir. 2015) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007)); see also Hartmann v. Cal. Dep’t of Corrs. & Rehab., 707
F.3d 1114, 1122 (9th Cir. 2013).

Juliano’s complaint, however,

fails to contain any language placing Jensen on “fair notice”
that Juliano was seeking reimbursement in quantum meruit for
services rendered in the New York case, and does not identify
any work Juliano had performed that would entitle him to recover
the attorneys’ fees requested in his complaint.

Accordingly, we

hold that the district court properly rejected Juliano’s attempt
to argue a claim of quantum meruit that was not pleaded in his
complaint.

III.
For these reasons, we affirm the district court’s judgment.

AFFIRMED

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