Mohnsam v. Nemes et al

Filing 50

MEMORANDUM OPINION by Senior Judge Charles R. Simpson, III on 4/18/2018 - Acuity's motion for judgment on the pleadings will be granted as to Mohnsam's negligence per se, civil conspiracy, and punitive damages claims, and denied as to Mohnsam's claim for lien for attorney's fees. An order will be entered in accordance with this memorandum.cc:counsel (DAK)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
KURT K. MOHNSAM

PLAINTIFF

CIVIL ACTION NO. 3:17-CV-00427-CRS

v.

JASON M. NEMES, ET AL.

DEFENDANTS

MEMORANDUM OPINION
I.

Introduction

This case is before the court on defendant Acuity, A Mutual Insurance Company’s
(“Acuity”) motion for judgment on the pleadings under Fed. R. Civ. P. 12(c). ECF No. 44.
Plaintiff Kurt K. Mohnsam responded. ECF No. 46. Acuity replied. ECF No. 47. This matter is
now ripe for review. For the reasons set forth below, Acuity’s motion for judgment on the
pleadings will be granted in part and denied in part.
II.

Factual Background

The facts of this case were presented in the memorandum opinion regarding the motion
for judgment on the pleadings filed by Defendants Fultz Maddox Dickens and Jason M. Nemes:
Mohnsam, an attorney admitted to practice in Kentucky, was retained by Morgan
Bryan Perry to represent him in a slip-and-fall case against Martin & Bayley’s
automobile service station (“Martin & Bayley”) in September 2012. Pl.
Complaint, ECF No. 1, ¶ 20. Allegedly, Perry and Mohnsam entered into a
written contract of engagement whereby Mohnsam agreed to represent Perry in
exchange for ten percent of the principal amount recovered from Martin & Bayley
in any litigation or settlement, or alternatively, a reasonable fee for his legal
services. Id. Mohnsam subsequently commenced personal injury actions against
Martin & Bayley on Perry’s behalf in state and federal court. Id. at ¶ 28. ECF No.
42.

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After the lawsuits were filed, Perry separately retained James M. Nemes of the law firm
Fultz Maddox Dickens to serve as Mohnsam’s co-counsel. Pl. Complaint, ECF No. 1, ¶ 28.
Then, on September 19, 2014, Perry entered into a settlement with Martin & Bayley whereby
Martin & Bayley agreed to pay Perry $1,811,000.00 in exchange for termination of the state and
federal cases. Id. at ¶ 42. Perry was solely represented by Nemes and Fultz Maddox Dickens in
this settlement. Id. ¶ 41. Mohnsam was not present. Id.
Acuity, Martin & Bayley’s insurance carrier, issued two payments to Fultz Maddox
Dickens in satisfaction of the settlement with Perry. Id. at ¶¶ 43-44. Nemes and Fultz Maddox
Dickens retained a portion of the payment for their legal fees. Id. at ¶ 46. Nemes then asked
Perry what percentage of the payment should be disbursed to Mohnsam. Id. at ¶ 47. Perry
informed Nemes that he would separately issue a payment to Mohnsam. Id. The remainder of the
funds were then distributed to Perry. Id. Mohnsam has never been paid for his legal services. Id.
at ¶ 48.
On July 17, 2017, Mohnsam filed suit against Perry, Nemes, Fultz Maddox Dickens,
Martin & Bayley, and Acuity in this court. Id. Mohnsam specifically brings claims against
Acuity for lien for attorney’s fees, negligence per se, civil conspiracy, and punitive damages. Id.
Acuity now moves for judgment on the pleadings.
III.

Legal Standard

The Court analyzes a Rule 12(c) motion for judgment on the pleadings under the same
standard as a Rule 12(b)(6) motion to dismiss for failure to state a claim. Fritz v. Charter Twp. of
Comstock, 592 F.3d 718, 722 (6th Cir. 2010). Therefore, to survive a Rule 12(c) motion, a
complaint must contain “enough facts to state a claim to relief that is plausible on its face.” Bell
v. Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “A

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claim has facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v.
Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d. 868 (2009). While “[t]he plausibility
standard is not akin to a ‘probability requirement,’ it demands “more than a sheer possibility that
a defendant has acted unlawfully.” Id. The factual allegations in the complaint must “raise a right
to relief above the speculative level.” Twombley, 550 U.S. at 555.
When considering a motion for judgment on the pleadings, the court may examine the
complaint and its exhibits, public records, items appearing in the record of the case, and
documents incorporated by reference into the complaint and central to the claims. Barany-Snyder
v. Weiner, 539 F.3d 327, 332 (6th Cir. 2008); Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d
426, 430 (6th Cir. 2008). The court must view the complaint in the light most favorable to the
nonmoving party, accepting as true all well-pleaded factual allegations and drawing all
reasonable inferences in the nonmoving party’s favor. Commercial Money Ctr., Inc. v. Ill. Union
Ins. Co., 508 F.3d 327, 336 (6th Cir. 2007). However, the court need not accept as true the
nonmoving party’s legal conclusions or unwarranted factual allegations. Id. The motion may be
granted only if the moving party is nevertheless entitled to judgment as a matter of law. Id.
IV.

Discussion

Acuity asserts that it is entitled to judgment on the pleadings for each of Mohnsam’s
claims against it. Acuity contends that Mohnsam’s claims are time-barred, and that
notwithstanding this fact, Mohnsam fails to allege sufficient facts to support any of his claims.
These arguments will be considered in further detail below.

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A. Lien for Attorney’s Fees
Acuity argues that it is entitled to judgment on the pleadings for Mohnsam’s claim under
the attorney fee lien statute. According to Acuity, this claim is properly characterized as one for
conversion because it is ultimately based on the “wrongful taking or detaining of personal
property, including money.” ECF No. 44, p. 4. Therefore, Acuity contends that this claim is
time-barred under KRS § 413.125.1 Alternatively, Acuity argues that the attorney fee lien statute
does not provide for recovery against a tortfeasor’s insurance company. Mohnsam, by contrast,
argues that a claim under the attorney fee lien statute has a five-year statute of limitations, and
that the statute is broad enough to provide for recovery against an insurance company in this
instance. Taking the facts in the light most favorable to Mohnsam, the court agrees with
Mohnsam.
The court declines to re-characterize Mohnsam’s claim under the attorney fee lien statute
as one for conversion. ECF No. 44, p. 4. Mohnsam’s complaint alleges that Acuity is liable
under the attorney fee lien statute because it disregarded Mohnsam’s lien on Perry’s settlement
proceeds by issuing the entirety of the payment to Fultz Maddox Dickens. Pl. Complaint, ECF
No. 1, ¶¶ 80-84. The court will therefore apply the statute of limitations for the attorney fee lien
statute.
The attorney fee lien statute, codified in KRS § 376.460, does not include an express
statute of limitations. Thus, the court will apply KRS § 413.120(3), which states: “An action for
a penalty or forfeiture when no time is fixed by the statute prescribing it . . . shall be commenced
within five (5) years after the cause of action accrued . . .” See also Vanover v. Cline, 39 S.W.2d

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KRS § 413.125 states: “An action for the taking, detaining or injuring of personal property, including an
action for specific recovery shall be commenced within two (2) years from the time the cause of action
accrued.”

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477, 479 (1931). This cause of action accrued in September 2014, and the lawsuit was filed in
July 2017. ECF No. 1. Therefore, the claim is not time-barred.
Moreover, the court finds that Mohnsam states a plausible claim against Acuity under the
attorney fee lien statute. The Kentucky attorney fee lien statute provides:
Each attorney shall have a lien upon all claims, except those of the state, put into
his hands for suit or collection or upon which suit has been instituted, for the
amount of any fee agreed upon by the parties or, in the absence of such
agreement, for a reasonable fee. If the action is prosecuted to a recovery of money
or property, the attorney shall have a lien upon the judgment recovered, legal
costs excepted, for his fee. If the record shows the name of the attorney, the
defendant shall be deemed to have notice of the lien. KRS § 376.460.
Proctor Coal Company v. Tye & Denham, 96 S.W. 512 (Ky. App. Sept. 27, 1906) is instructive
on the application of this statute. In Proctor Coal Company, the Court of Appeals of Kentucky
held that when a plaintiff and a defendant settle a case without the plaintiff’s attorney’s
knowledge, the plaintiff’s attorney may bring a claim against the defendant under the attorney
fee lien statute. Id. at 514. The plaintiff’s attorney need not first bring suit against his or her own
client. Id. Thus, a “defendant who settles with the plaintiff, without his attorney’s knowledge,
does so at his own risk as to the attorney’s lien.” Jellico Coal Mining Co. v. Pope, 166 S.W.2d
287, 289 (Ky. 1942).
This court previously relied on the facts of Proctor Coal Company in holding that an
attorney might be found liable under the attorney fee lien statute for disregarding his cocounsel’s lien on a settlement payment. ECF No. 42, p. 7 (“Arguably, there is no distinction
between a defendant who disregards an attorney’s lien by settling directly with a plaintiff and
Defendants’ actions in the present case.”). In so holding, the court found that the attorney had
notice of his co-counsel’s lien on the settlement payment, raising legal and factual issues as to
the attorney’s liability under the attorney fee lien statute.

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For the same reasons, the court finds that Acuity could arguably be held liable under the
attorney fee lien statute. Mohnsam was counsel-of-record for Perry in the underlying lawsuit
against Martin & Bayley. Thus, Acuity—as Martin & Bayley’s insurance carrier—had notice of
Mohnsam’s lien on any payments to Perry. This raises legal and factual issues as to whether
Acuity may be held liable under KRS § 376.460. Accordingly, Mohnsam states a plausible claim
against Acuity under the attorney fee lien statute, and Acuity is not entitled to judgment on the
pleadings.
B. Negligence Per Se, Civil Conspiracy, and Punitive Damages
Additionally, Acuity argues that it is entitled to judgment on the pleadings as to
Mohnsam’s negligence per se, civil conspiracy, and punitive damages claims. Mohnsam
concedes in his response motion that these counts should be dismissed. ECF No. 46, p. 21.
Accordingly, Acuity is entitled to judgment on the pleadings for Mohnsam’s negligence per se,
civil conspiracy, and punitive damages claims.
V.

Conclusion

For the foregoing reasons, Acuity’s motion for judgment on the pleadings will be granted
as to Mohnsam’s negligence per se, civil conspiracy, and punitive damages claims, and denied as
to Mohnsam’s claim for lien for attorney’s fees. An order will be entered in accordance with this
memorandum.

April 18, 2018

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