Green Tree Servicing LLC v. Elkhorn Community Association et al

Filing 90

ORDER granting 86 Motion for District Judge to Reconsider Order; Attorney Aaron Ray Dean terminated for Xin Zhang and Jiangtao Li. FURTHER ORDERED that The Dean Legal Group, Ltd has perfected a charging lien in the amount of $17,114.61. Signed by Judge Andrew P. Gordon on 4/5/2017. (Copies have been distributed pursuant to the NEF, Updated Address per Order - JM)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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GREEN TREE SERVICING LLC,

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Plaintiff,
v.
ELKHORN COMMUNITY ASSOCIATION,
et al.,

Case No. 2:15-cv-00477-APG-CWH
ORDER GRANTING MOTION FOR
RECONSIDERATION
(ECF No. 86)

Defendants.

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Attorney Aaron Dean of The Dean Legal Group, Ltd is counsel of record for Steve Ayres,

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Trustee of the 8117 Guava Nectar Trust. In August 2016, Dean moved to substitute Xin Zhang

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and Jiangtao Li as parties because Ayres sold the disputed property to Zhang and Li. ECF No. 73.

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Dean also moved to withdraw as counsel of record for Zhang and Li. Id. According to Dean,

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Zhang and Li had notice of the action, were directing counsel’s actions in the case, but were

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refusing to pay money owed to counsel. Id. Finally, Dean moved to adjudicate a charging lien for

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the unpaid fees. Id.
Magistrate Judge Ferenbach set the matter for hearing. ECF No. 79. Judge Ferenbach

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denied the motion. ECF No. 82. Zhang and Li (through Dean) thereafter filed an answer. ECF

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No. 84.

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Dean moves for reconsideration of Magistrate Judge Ferenbach’s ruling. Dean states that

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he agreed to represent Zhang and Li but they have refused to pay outstanding legal bills. ECF No.

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86. Dean also asserts there has been a breakdown in communications between himself, Zhang,

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and Li. He therefore requests he be allowed to withdraw. He also requests adjudication of a lien

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for attorney’s fees.1

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Dean does not seek reconsideration of the substitution question because Zhang and Li were
added as parties in the second amended complaint and served. ECF Nos. 44, 57, 58.

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I review the magistrate judge’s decision under a clearly erroneous or contrary to law

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standard. 28 U.S.C. § 636(b)(1)(A). I may “accept, reject, or modify, in whole or in part, the

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findings or recommendations made by the magistrate judge.” Id. § 636(b)(1). I “may also receive

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further evidence or recommit the matter to the magistrate judge with instructions.” Id.

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No one has opposed the motion for reconsideration. I therefore grant it as unopposed. See

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LR 7-2(d). Moreover, in light of the fact that Dean has since filed an answer on Zhang and Li’s

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behalf, there has been a breakdown in communications, and Zhang and Li have not paid their

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attorney, I grant the motion to withdraw. Finally, I grant the motion for charging lien because the

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lien has been properly perfected.

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A. Motion to Withdraw

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Under Local Rule IA 11-6, an attorney may not withdraw after appearing in a case

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“except by leave of the court after notice has been served on the affected client and opposing

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counsel.” Counsel’s original motion to withdraw and notice of the hearing on that motion were

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served on opposing counsel, as well as on Zhang and Li via MRT Assets, LLC, which has power

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of attorney for Zhang and Li in relation to this action. ECF Nos. 77, 81, 83. Zhang and Li thus

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had notice of the motion. They did not oppose it or appear at the hearing. ECF No. 82. There are

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no pending motions in this action, the case is stayed, and Magistrate Judge Ferenbach’s concern

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about the lack of an answer for Zhang and Li has been rectified. Dean’s withdrawal therefore

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will not result in delay of discovery, the trial, or any hearing in the case. LR IA 11-6(e).

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Nevada Rule of Professional Conduct 1.16(b)(5) provides that a lawyer may withdraw if

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the “client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services

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and has been given reasonable warning that the lawyer will withdraw unless the obligation is

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fulfilled.” Dean represents that there has been a breakdown in communication and that Zhang

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and Li have not paid amounts owed. Zhang and Li do not deny Dean’s assertions and do not

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oppose the withdrawal. Consequently, I grant Dean’s motion for reconsideration and permit him

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to withdraw as counsel for defendants Zhang and Li only. Dean remains counsel of record for

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defendant Ayres.

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Page 2 of 6

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B. Attorney’s Lien

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Under Nevada Revised Statutes § 18.015(1), an attorney can obtain two types of lien: (1) a

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charging lien and (2) a retaining lien. A charging lien is “for the amount of any fee which has

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been agreed upon by the attorney and client.” Nev. Rev. Stat. § 18.015(2). A retaining lien may

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arise in a civil action and applies to “any file or other property properly left in the possession of

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the attorney by a client.” Id. § 18.015(1)(b).

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To perfect these liens, the attorney must serve “notice in writing, in person or by certified

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mail, return receipt requested, upon his or her client and, if applicable, upon the party against

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whom the client has a cause of action, claiming the lien and stating the amount of the lien.” Id.

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§ 18.015(3). If the attorney properly perfects the liens, then the charging lien “attaches to any

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verdict, judgment or decree entered and to any money or property which is recovered on account

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of the suit or other action.’” Id. § 18.015(4)(a). When perfected, the retaining lien “attaches to

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any file or other property properly left in the possession of the attorney by his or her client . . .

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and authorizes the attorney to retain any such file or property until such time as an adjudication is

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made pursuant to subsection 6.” Id. § 18.015(4)(b). If the attorney files a motion under § 18.015,

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the court “shall, after 5 days’ notice to all interested parties, adjudicate the rights of the attorney,

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client or other parties and enforce the lien.” Id. § 18.015(6).

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For a court to adjudicate and enforce a charging lien, the “four requirements of NRS

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18.015 must be met . . . .” Leventhal v. Black & LoBello, 305 P.3d 907, 909-10 (Nev. 2013).

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“First, there must be a ‘claim, demand or cause of action, . . . which has been placed in the

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attorney’s hands by a client for suit or collection, or upon which a suit or other action has been

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instituted.” Id. (quoting Nev. Rev. Stat § 18.015(1)). “Second, the attorney must perfect the lien

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by serving ‘notice in writing, in person or by certified mail, return receipt requested, upon his or

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her client and upon the party against whom the client has a cause of action, claiming the lien and

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stating the interest which the attorney has in any cause of action.’” Id. (quoting Nev. Rev. Stat.

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§ 18.015(2)). “Third, the statute sets a timing requirement: Once perfected, the ‘lien attaches to

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any verdict, judgment or decree entered and to any money or property which is recovered on

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account of the suit or other action, from the time of service of the notices required by this

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section.’” Id. (quoting Nev. Rev. Stat § 18.015(3)). Finally, “the attorney must timely file and

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properly serve a motion to adjudicate the lien.” Id. (citing Nev. Rev. Stat. § 18.015(4)).

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Here, Zhang and Li filed an answer with no counterclaim affirmatively pleaded.

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However, at the end of the answer, Zhang and Li request a declaration that they are the rightful

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owners of the subject property. ECF No. 84 at 18. Consequently, they have placed a demand or

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claim to the property in Dean’s hands for suit, and the first requirement is satisfied. Leventhal,

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305 P.3d at 910 (“Fundamentally, NRS 18.015(3) requires a client to assert an affirmative claim

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to relief, from which some affirmative recovery can result.”).

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Dean perfected the liens by sending a notice of attorney’s lien by certified mail to

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opposing counsel and to MRT Assets, LLC, which has power of attorney for Zhang and Li

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regarding this action. ECF Nos. 73-4, 83. Dean identified the amount of the charging lien as

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$15,419.92, along with “court costs and out-of-pocket costs advanced by attorney in an amount to

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be determined.” ECF No. 73-4 at 2. In his motion for reconsideration, Dean increased the

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requested amount to $17,114.61 to account for fees incurred in preparing Zhang and Li’s answer

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and in preparing the lien. ECF No. 86 at 3. Because Dean identified the amount both in terms of

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dollar amount and that it could include court costs and other out-of-pocket costs to be determined,

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Dean adequately identified the amount of the lien in his notice. Cf. Golightly & Vannah, PLLC v.

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TJ Allen, LLC, 373 P.3d 103, 106 (Nev. 2016) (attorney working on contingency basis properly

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complies with the requirement to state the amount of the lien by “disclos[ing] an attorney’s

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agreed upon contingency percentage and claim[ing] court costs and out-of-pocket costs advanced

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by the attorney in an amount to be determined”). The notice also advised that Dean was claiming

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a retaining lien. Id.

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Dean’s charging lien in the amount of $17,114.61 attaches to any verdict, judgment, or

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decree entered, and to any money or property which is recovered, in this lawsuit in favor of

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Zhang and Li from this date forward. I will defer ruling on whether there is any basis to adjust

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the lien until property or money (if any) is awarded to Zhang and Li in this action. See Argentena

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Consol. Min. Co. v. Jolley Urga Wirth Woodbury & Standish, 216 P.3d 779, 781, 787 (Nev.

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2009) (en banc) (stating that summary adjudication of a fee dispute is improper where the client

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objects and asserts in defense attorney malpractice or misconduct); Michel v. Eighth Judicial Dist.

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Court ex rel. Cty. of Clark, 17 P.3d 1003, 1008 (Nev. 2001) (discussing factors that may impact

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charging lien).

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The retaining lien attaches from this point forward to any file or other property properly

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left in Dean’s possession by Zhang and Li. Dean is authorized to retain any such file or property

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until such time as an adjudication is made pursuant to § 18.015(6) or some other mechanism

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resolves the fee dispute.

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C. Conclusion

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IT IS THEREFORE ORDERED that The Dean Legal Group, Ltd’s motion for

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reconsideration (ECF No. 86) is GRANTED.

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IT IS FURTHER ORDERED that Aaron Dean of The Dean Legal Group, Ltd is

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withdrawn as counsel for defendants Xin Zhang and Jiangtao Li. However, Aaron Dean of The

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Dean Legal Group, Ltd remains as counsel of record for defendant Steven Ayres, Trustee of the

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8117 Guava Nectar Trust.

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IT IS FURTHER ORDERED that the clerk of court shall update the address for

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defendants Xin Zhang and Jiangtao Li as: c/o MRT Assets, LLC, 6085 W. Twain Ave, Suite 203,

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Las Vegas, Nevada 89103.

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IT IS FURTHER ORDERED that the clerk of court shall send a copy of this order to
defendants Xin Zhang and Jiangtao Li at the above address.
IT IS FURTHER ORDERED that The Dean Legal Group, Ltd has perfected a charging

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lien in the amount of $17,114.61 that attaches from this date forward to any verdict, judgment, or

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decree entered, and to any money or property which is recovered, in this lawsuit in favor of

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defendants Xin Zhang and Jiangtao Li.

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IT IS FURTHER ORDERED that The Dean Legal Group, Ltd has perfected a retaining

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lien that attaches from this point forward to any file or other property properly left in The Dean

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Legal Group, Ltd’s possession by defendants Xin Zhang and Jiangtao Li. Dean is authorized to

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retain any such file or property until such time as an adjudication is made pursuant to § 18.015(6)

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or some other mechanism resolves the fee dispute.

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DATED this 5th day of April, 2017.

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ANDREW P. GORDON
UNITED STATES DISTRICT JUDGE

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