Buckley Towers Condominium, Inc. v. QBE Insurance Corporation

Filing 677

ORDER denying 662 Motion to Compel; denying 664 Motion for Hearing, without prejudice. Signed by Magistrate Judge Edwin G. Torres on 3/31/2014. (EGT)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 07-22988-CIV-GOLDBERG/TORRES
BUCKLEY TOWERS CONDOMINIUM, INC.,
Plaintiff,
v.
QBE INSURANCE CORPORATION,
Defendant.
________________________________/
ORDER ON PENDING MOTIONS
This matter is before the Court on motions pending before the Court, and
referred for disposition, following a mandate entered by the United States Court of
Appeals for the Eleventh Circuit following its decision [D.E. 663] issued July 30,
2013 (the “Opinion”) reversing and remanding in part this Court’s Final Order [D.E.
608]. That Order adjudicated the charging lien disputes of the lawyers and divided
the $4,633,646.86 in attorneys’ fees among three law firms representing the
prevailing Plaintiff in the underlying action.

Only former Plaintiff counsel

Katzman Garfinkel Rosenbaum LLP (“KGR”) and Becker & Poliakoff, P.A.
(“Becker”) filed appeals from that Order. [D.E. 616, 619]. The mandate reversing
the Court’s Order only remanded the quantum meruit award as to KGR. [D.E. 608
at 18].
Yet, immediately upon issuance of the mandate, Plaintiff Buckley Towers
Condominium, Inc. filed a Motion to Compel the Appellee Rosenbaum Mollengarden

Janssen & Siracusa PLLC (“RMJS”) to return previously disbursed attorneys’ fees
to the Court registry. [D.E. 662].

That motion is fully briefed and ripe for

adjudication. Also pending is a Motion for Hearing filed by the only prevailing
party to the appeal, KGR, which seeks to adjudicate the limited issue remanded by
the Eleventh Circuit mandate. [D.E. 664]. RMJS opposes only the motion to compel
filed by Plaintiff. KGR opposes in part Plaintiff’s motion to compel because, to the
extent any monies are to be returned to the Court registry from RMJS, it should be
only to benefit KGR’s post-mandate entitlement to a greater quantum meruit
award.
I. BACKGROUND
The only party appellant who prevailed in part on appeal of this Court’s Final
Order is KGR. That Order awarded RMJS the bulk of the $4,633.646.86 contingent
fee earned by the multiple sets of lawyers who worked on the case on Plaintiff’s
behalf. KGR was only awarded $894,897.00 of the total fee award. KGR argued on
appeal that it was entitled to a greater award. KGR maintained that Florida law
requires that the fee be apportioned among the lawyers according to their respective
effort and the benefit to the client conferred by each of them, rather than merely
giving the discharged law firm its “hours times rates” and the subsequent law firm
the overwhelming balance of the contingency fee. Second, it argued that KGR’s
time and effort in securing the favorable judgment was undervalued. And, as a
result, KGR was entitled to the entirety of the contingency fee minus a quantum
meruit award for RMJS. [Appellant KGR Br. at 13, No. 12-12039 (11th Cir.)].

The only other party who appealed the Final Order, Becker, had been
awarded $681,063 for its equitable charging lien. Becker’s appeal of that award
was then settled for a total of $1,200,000 with RMJS during the course of the
appeal. [D.E. 641, 643]. As a result, with all parties’ approval the Court authorized
the disbursement of additional funds from the Court registry.1 Specifically, Becker
and RMJS’s settlement agreement was comprised of the $681,063 awarded in the
Final Order plus an additional $618,937 of the fees awarded to RMJS. [D.E. 646,
654].

The Eleventh Circuit acknowledged that settlement and disbursal in its

opinion and rendered its judgment with that in mind. [D.E. 663 at 5 n.4].
Although Plaintiff never appealed the Final Order, it argued as an appellee
that the Final Order was wrong for different reasons. Plaintiff argued that the

Specifically, this was accomplished through adjudication of three motions: (1)
Becker’s Emergency Motion to Stay Execution on Judgment and to Use Funds in
Court Registry in Lieu of Supersedeas Bond [D.E. 611], in which KGR joined [D.E.
612], (2) Plaintiff’s Second Motion to Order Release of Funds Held in the Court
Registry [D.E. 613], and (3) B&P’s and RMJS’s Notice of Settlement and Joint
Motion for Disbursement of Funds. [D.E. 641]. During an August 15, 2012 hearing,
KGR, Becker, and RMJS entered into an agreement that resolved most of the three
motions, culminating in entry on August 20, 2012 of the Amended Order to
Partially Release Funds Held in the Court Registry and Stay Further Execution of
Judgment (the “Amended Order”). [D.E. 654]. Paragraph eight of the Amended
Order provides that “[t]he parties’ agreement is limited to the matters set forth in
this Order and is without prejudice to the rights of any party in any other respect.”
Pursuant to the Amended Order, the $4,633,646.86 of fees was then disbursed in its
entirety, portions going to the three law firms: RMJS received $1,538,750.86,
Becker received $1,200,000.00, and KGR received $894,897.00. These three figures
total $3,633,646.86. Consistent with the conditional resolution of the motions, and
to moot the need for any supersedeas bond for appeal, the parties stipulated to
maintaining $1,000,000.00 of the $4,633,646.86 fee in the court registry (mainly
funded from RMJS’s awarded fee) to be “maintained in place, as per Rule 62, until
further Order of the Court pending KGR’s appeal.” [D.E. 654]. That Amended
Order was never appealed by any party in the case and is now final.
1

entire contingency fee agreement was void based on Frates v. Nichols, 167 So. 2d 77
(Fla. 3d DCA 1964), as well as Florida’s lawyer disciplinary rules. Plaintiff claimed
that its three sets of lawyers had nothing but a quantum meruit claim because the
original fee agreement had been voided and otherwise terminated. Consequently,
Plaintiff asked that the Court disburse the remaining funds in the court registry to
Buckley Towers. [Appellee Buckley Brief at 5, 13]. Moreover, Plaintiff asked the
Eleventh Circuit to order that all funds previously awarded to RMJS and Becker be
returned to the court registry. [Id. at 13 n.7].
The Court of Appeals issued its mandate on July 30, 2013 [D.E. 663] that
reversed the Court’s Final Order but only as to KGR. The parties in the present
dispute have picked and chosen discrete language from the Opinion to further their
positions. We, however, must focus on what the Eleventh Circuit held to identify
the specific mandate that we are duty bound to carry out.
Specifically, the Court’s holding is plainly and unequivocally set forth at page
18 of the Opinion, the only point where the Court’s remand is mandated:
While we appreciate the magistrate’s focus on judicial
efficiency and ruling in equity, it was improper to value
KGR’s charging lien without considering the significant
work KGR did on the appeal. Thus, we must remand the
matter back to the district court to properly consider the
Rosenberg and Poletz factors, including the benefit
conferred on Buckley by KGR’s representation throughout
the trial and the preliminary appellate work. . . . In the
end, while the magistrate applied an incorrect legal
standard and did not fashion an award that fairly
compensated KGR, there is only one issue to be decided
on remand—KGR’s proper quantum meruit award.

The Court of Appeals then specifically directed the District Court to “exercise
its sound discretion to determine a proper value for KGR’s charging lien,” [Id. at 19,
n.12] under “the totality of the circumstances surrounding the professional
relationship, including time spent on the matter, the recovery sought, the skill
demanded, the results obtained and the attorney-client contract,” and particularly
considering the “benefit actually conferred on the client.” [Id. at 16.]
That is the entirety of the “mandate” language in the discussion. The Court’s
remand Order was pursuant to its earlier discussion that, first, expressly rejected
RMJS’s argument (supporting this Court’s Final Order) that it was entitled to the
bulk of the contingent fee based upon Frates and that case’s application to the
situation where a partner exits an initial firm retained under a contingent fee
agreement. The Court held that RMJS was not entitled to the contingent fee and,
instead, the original firm hired by Plaintiff – Becker – retained entitlement to the
contingent fee.2
The Court, second, did not hold that either Frates or any Florida bar
disciplinary rule voided the original contingent fee agreement. To the contrary, the
Court relied on both sources of authority for delineating Florida common law on
distribution of a total contingent fee award.

[Id. at 13-14].

The Court thus

concluded that Becker was entitled to the entire contingent fee, less the former

“However, when a partner exits the initial firm and the client follows, the
initial firm is entitled to the entire contingency fee, less the former partner’s
partnership share. Frates, 167 So. 2d at 82 (holding fees were assets of the initial
firm and the former partner is only “entitled to receive his partnership share . . . of
the net fee in each such case.”).” [Id. at 6-7].
2

departing partner’s partnership share, and less the quantum meruit amounts owed
by any law firm subsequently associated with that departing partner. [Id. at 7, 15].
By not voiding the entire contingent fee agreement, the Court impliedly rejected
Plaintiffs’ argument as appellee on appeal that the entire contingent fee should
have been voided, that all three firms involved were only due their quantum meruit
fees, and significantly that the monies previously distributed should have been
returned to the Court registry and, ultimately, returned to Plaintiff.

This also

impliedly rejected KGR’s argument on appeal that it was entitled to the contingent
fee, not just a quantum meruit award.
The thrust of Plaintiff’s motion ignores all of this and focuses instead on
footnote 12 of the Opinion:
We note that because B&P settled its claim for $1.3
million, it is entitled to no greater award than that
amount to which it agreed. See Rosenberg, 409 So. 2d at
1022 (limiting an attorney’s fee recovery to the contract
fee agreed to by the attorney). Consequently, any award
that B&P would be entitled to above the $1.3 million
agreed-upon amount should be returned to Buckley. For
example, if the magistrate determines KGR’s quantum
meruit award to equal the $894,897 awarded plus the
$75,232.50 sought in appellate fees, for a total of
$970,129.50, then (a) RMJS would be entitled to
$85,696.31 (approximately 2.34% of the remaining
$3,663,517.36); (b) B&P would be entitled to its $1.3
million; and (c) the remaining $2,277,821.05 set aside in
the court registry for the charging liens would be returned
to Buckley.
This example is used entirely for
demonstrative purposes and is not intended to dissuade
the district court from using its sound discretion to
determine a proper value for KGR’s charging lien.

A plain reading of that language at the end of the Opinion, which admits to
having been included only for “demonstrative purposes,” suggests that RMJS
cannot retain any of the monies previously distributed beyond that limited amount.
Thus, Plaintiff’s motion seeks to compel RMJS (or rather its successor) to return
anything beyond what footnote 12 contemplates because RMJS was never entitled
to anything more than that plus an additional quantum meruit amount. Applied
literally, that would require the Court to vacate its final amended distribution
Order, which was approved by all parties on the record and never appealed. That
could also require the Court to potentially reopen, on proper motion, the original
distribution to Becker that has now been closed.
But that plain reading and the confusion that would ensue then runs into
this conflicting language in an earlier footnote in the opinion:
We do not intend to significantly burden the district court
with this decision, and think it within the district court’s
discretion to simply reconsider the amount of KGR’s
quantum meruit award based on the arguments and
evidence previously submitted to the court, or, if the
district court deems it more appropriate, to allow the
parties to re-argue the issue.
[D.E. 663 at 18 n.11].
The Court has wrestled with this conflicting language and the parties’
current positions post-mandate to arrive at a sound conclusion. The answer, it
seems to us, is to follow what the Eleventh Circuit directs us to follow under wellestablished law of the case principles designed to achieve finality, a goal that has
been quite elusive in this case.

II. ANALYSIS
A.

Motion to Compel RMJS to Return Fees

Following the reversal of the Court’s Final Order, our task now is simply to
carry out the Court’s mandate. See Litman v. Massachusetts Mut. Life Ins. Co., 825
F.2d 1506, 1511-12 (11th Cir. 1987). “A different result would encourage and invite
district courts to engage in ad hoc analysis of the propriety of appellate court
rulings. Post mandate maneuvering in the district courts would undermine the
authority of appellate courts and create a great deal of uncertainty in the judicial
process. It would also eliminate any hope of finality.” Id.
Under this principle, the mandate rule, courts are bound by the appellate
court’s mandate and “cannot vary it, or examine it for any other purpose other than
execution; or give any other or further relief; or review it, even for apparent error,
upon a matter decided on appeal; or intermeddle with it, further than to settle so
much as has been remanded.” Id. at 1511 (quoting In re Sanford fork & Tool Co.,
160 U.S. 247, 255 (1895)). The purpose for this rule is creating efficiency, finality
and obedience within the judicial system. Id. (citing Wheeler v. City of Pleasant
Grove, 746 F.2d 1437, 1440 (11th Cir. 1984)).
To further these goals, it is also well established that the mandate rule
requires application of the appellate court’s holdings, not dicta. “The district court
‘is bound to follow the appellate court’s holdings, both expressed and implied.’”
National Fire Ins. Co. of Hartford v. Fortune Constr. Co., 233 F. App’x 890, 894
(11th Cir. Apr. 9, 2007) (quoting Piambino v. Bailey, 757 F.2d 1112, 1120 (11th Cir.

1985)). Dicta – references in an opinion that are not “necessary to deciding the case
then before us” – carries no such weight because the mandate rule “only applies if
our prior opinion determined [the issue], explicitly or by necessary implication.”
Transamerica Leasing, Inc. v. Inst. of London Underwriters, 430 F.3d 1326, 1331
(11th Cir. 2005) (quoting Piambino, 757 F.2d at 1119).
The perils of dicta in judicial opinions have been well chronicled.

Judge

Carnes, for instance, persuasively explained in Edwards v. Prime, Inc., what dicta
was and how it should be regarded:
We have pointed out many times that regardless of what a court says
in its opinion, the decision can hold nothing beyond the facts of that
case. E.g., Watts v. BellSouth Telecomms., Inc., 316 F.3d 1203, 1207
(11th Cir. 2003) (“Whatever their opinions say, judicial decisions
cannot make law beyond the facts of the cases in which those decisions
are announced.”); United States v. Aguillard, 217 F.3d 1319, 1321
(11th Cir. 2000) (“The holdings of a prior decision can reach only as far
as the facts and circumstances presented to the Court in the case
which produced that decision.” (quotation marks omitted)). All
statements that go beyond the facts of the case – and  sometimes, but
not always, they begin with the word “if” – are dicta. See, e.g., United
States v. Eggersdorf, 126 F.3d 1318, 1322 n. 4 (11th Cir. 1997)
(“[L]anguage in ... [an opinion] not necessary to deciding the case then
before us” is dicta); Moon v. Head, 285 F.3d 1301, 1318 (11th Cir. 2002)
(Carnes, J., concurring) (“Those statements are dicta. They are dicta
because they go beyond the facts of the [earlier] case itself”).
602 F.3d 1276, 1298 (11th Cir. 2010).
Judge Carnes succinctly synthesized the value of dicta as being a nullity:
“[D]icta is not binding on anyone for any purpose. See, e.g., McNely v. Ocala Star–
Banner Corp., 99 F.3d 1068, 1077 (11th Cir. 1996) (“[W]e are not required to follow
dicta contained in our own precedents”); Great Lakes Dredge & Dock Co. v. Tanker
Robert Watt Miller, 957 F.2d 1575, 1578 (11th Cir. 1992) (because what is said in a

prior opinion about a question not presented there is dicta, and dicta is not binding
precedent, a later panel is “free to give that question fresh consideration”).”
Edwards, 602 F.3d at 1298.
The problem with dicta is readily apparent when a district court is duty
bound to follow the mandate rule. What happens when the holding of the case is
inconsistent with language found elsewhere in an opinion that supports a party’s
contrary position? That was the issue the Eleventh Circuit dealt with in National
Fire where one party focused on language from an earlier decision that purportedly
had not been followed on remand, while the other party argued that this language
was not what the court actually held. 233 F. App’x at 893-95.

The Court

acknowledged that the language at issue in that case could have been
misinterpreted and not reflected what the Court actually meant. But the Court
then agreed that, at best, it was dicta because it was not necessary in deciding the
case then before them. “The district court was free to conclude, as it did, that
Fortune had never asserted an affirmative claim against National Fire” even
though the earlier opinion referenced a counterclaim that included an affirmative
claim. Id. at 894. This case illustrates that under the mandate rule a district court
must follow an opinion’s holdings, either express or implied, and nothing more.
Our dilemma here further illustrates the point. The language of footnote 12
by its own terms identifies itself as demonstrative to illustrate what the court could
do on remand.

But it certainly does not represent the holding of the opinion

because it relates to a circumstance that has not yet arisen. The holding is plainly

stated in the body of the opinion – that only KGR’s quantum meruit award must be
reassessed.
When compared to the bulk of the language in the remaining parts of the
Opinion, the demonstrative language in footnote 12, as interpreted by Plaintiff now,
is wildly inconsistent. Footnote 11 had just finished stating that the remand would
not require much difficulty. Yet, reopening the Court’s distribution Orders that
were not on appeal and which were acknowledged as having been executed in the
Opinion itself would entail much difficulty indeed.
Apart from that, the language of footnote 12, again as construed by Plaintiff,
seems plainly incorrect because the Court’s opinion had just reaffirmed Becker’s
contingent fee. Becker was indeed entitled to the full amount of the contingent fee,
based on the Court’s application of Frates, yet the dicta in the footnote suggests that
Becker’s settlement with a third party – RMJS – somehow magically transforms
itself into an agreement with the original Plaintiff to limit its fee. The authority
cited in footnote 12 has no relationship whatsoever to that situation.
But, when one reads footnote 12 as applied to what was before the Court
after the final (i.e. unappealed) distribution Order of August 20, 2012, the
demonstrative language of the Court’s footnote makes perfect sense.

Given the

Court’s holding, on remand if the Court found that the corrected/revised quantum
meruit award to KGR did not exceed the amount in the court registry, any
remaining monies in the court registry had to be returned to Plaintiff less the
partnership share due to Rosenbaum. That is the position taken by KGR now post-

mandate, which argues that after KGR’s fee is increased, if there is any remainder
of the fees, that remainder shall be divided 97.66% to Buckley and 2.34% to RMJS.
Upon a fresh review of the record as a whole and a careful analysis of the
Court’s opinion to identify the mandate that we are to follow, we agree with that
interpretation of the Court’s Opinion. We also agree that, if the amount in the court
registry is not sufficient, we would have to then consider – then and only then –
whether the distribution Order must be revisited to comply with the Court’s
mandate.

If that occurs, equitable principles would seem to dictate that any

difference would have to come from Rosenbaum and RMJS, given the Court’s
finding in the Final Order that the maximum owed by the client in this case is the
full amount of the contingent fee and nothing more. That finding, which RMJS did
not appeal and which was untouched by the Court’s Opinion and remand, would
have to be applied in that circumstance.
Rosenbaum and RMJS take issue with that possibility based upon all parties’
concurrence with the amended distribution Order and the contractual effect that
such concurrence has on his fee.

We need not resolve that now because it,

ironically, would be dicta (and hence improper). We, similarly, need not address
now KGR’s position that it should on remand end up receiving the entire contingent
fee distributed to RMJS (which is the position it took on appeal yet was impliedly
rejected by the Court’s Opinion that fixed KGR’s fee as being a purely quantum
meruit amount). But the quantum meruit determination that the Court mandated
has not yet been made, so we will leave this issue open as well.

Finally, our resolution of this pending motion is not entirely final even as it
relates to Plaintiff’s original position. The only holding we reach here is that to
comply with the strict requirements of the Court’s mandate, it is not absolutely
certain whether or not any monies will have to be reimbursed. Plaintiff will have a
further opportunity to reargue its position later after KGR’s quantum meruit award
is finally fixed – as required by the Court’s mandate. For now, we only find that
there has been no compelling showing why we should require any reimbursement at
this point in time into the court registry pending resolution of “the only issue” on
remand – KGR’s quantum meruit award.
B.

KGR’s Motion for Hearing

The other post-mandate motion is KGR’s motion for a hearing on the issue of
the appropriate award of attorneys’ fees to KGR. It goes without saying at this
point that KGR, post-mandate, is entitled to such a hearing.

We quarrel only,

however, with the mechanism by which KGR seeks to adjudicate the issue. The
Court’s Opinion remanded this one issue – KGR’s quantum meruit award – and
criticized the Court’s treatment of that award using only the prevailing party fee
application submitted back in March 2009. Though it agreed that the quantum
meruit award that KGR was due could be based in part on that fee application, the
Court of Appeals held that it was error for this Court to rely entirely on that
application without considering other factors that KGR could show as to the benefit
actually conferred to the client by its work on the case while it worked on post-trial
matters and during the first appeal. [D.E. 633 at 17-18].

Now, however, the pending motion suggests that we could simply have a onehour hearing, presumably working off that same application and other parts of the
existing record, to comply with the Court’s mandate.

And, KGR adds, that

summary consideration could then result in the Court awarding a quantum meruit
award that eats up the entire contingent fee that Becker was due.
To be fair, we should have Ordered the following relief sooner, but we were
trying to first adjudicate the motion to compel and understand what the Court’s
mandate required.

Now that that issue has been tabled for now, as explained

above, we will deny the motion for hearing without prejudice.

A hearing will

ultimately be scheduled, but only after KGR files a proper fee application that
strictly follows the Court’s mandate. The Court rejected KGR’s argument for a
direct contingent fee award, holding that it was entitled only to a quantum meruit
award. The Court directed this Court to review that request with a fresh eye under
all the Poletz factors identified in the Opinion. We cannot do so on this record
because KGR must first submit that revised and updated application, which takes
into account what the Eleventh Circuit held and what it required this Court to do
on remand. Our review of the existing record reveals that we have nothing on
paper to truly that guide our decision and comply with the mandate.
Therefore, KGR shall file a revised and updated fee application that is in
accord with the mandate.

KGR must comply within twenty-one days with the

requirements of Local Rule 7.3 and file the final application within forty-five days.
All interested parties must be given an opportunity to review and object to the

application, as set forth in the Local Rule. Again, any objections to the application,
and any responses filed in opposition to the filed application, must take into strict
account the requirements of the mandate. A hearing will be scheduled thereafter.
III. CONCLUSION
For the foregoing reasons, it is ORDERED AND ADJUDGED:
1.

Plaintiff’s Motion to Compel RMJS to Return Previously Disbursed

Attorneys’ Fees [D.E. 662] is DENIED without prejudice and with leave to renew in
accordance with this Order.
2.

KGR’s Motion for Hearing [D.E. 664] is DENIED without prejudice

pending compliance with the requirements of this Order.
DONE AND ORDERED at Miami, Florida, this 31st day of March,
2014.
/s/ Edwin G. Torres     

EDWIN G. TORRES
United States Magistrate Judge