Luca v. Giaccone et al

Filing 22

MEMORANDUM AND ORDER. For the reasons stated in the attached Memorandum and Order, the Court declares that Fairfields Attorneys have a charging lien over the funds deposited in the Escrow Settlement Fund and that Fairfields Attorneys charging lien ha s priority over any charging or judgment lien possessed by Luca or LL&A. Further, the Court finds that LL&A does not possess a retaining lien over the funds deposited in the Escrow Settlement Fund, and, even if LL&A did possess a retaining lien, it would be subordinate to Fairfields Attorneys charging lien. Accordingly, Lucas motion 10 is denied and Fairfields motion 12 is granted.The parties shall submit a status report by August 31, 2017, confirming that the Escrow Settlement Fund was turned over to Fairfield's Attorneys in accordance with the parties' Stipulations 9 and 14 and this Order. Ordered by Judge Pamela K. Chen on 8/24/2017. (Fletcher, Camille)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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JAMES R. LUCA,
Plaintiff,
MEMORANDUM & ORDER
16-CV-04975 (PKC) (ARL)

- against CANDICE GIACCONE, CARLO
DELLAPINA, FAIRFIELD FINANCIAL
MORTGAGE GROUP, INC., MICHAEL A.
HASKEL, ESQ., SCOTT A. STEINBERG,
ESQ.,
Defendants.
-------------------------------------------------------x
PAMELA K. CHEN, United States District Judge:

Presently before the Court are Plaintiff James R. Luca’s (“Luca”) and Defendant Fairfield
Financial Mortgage Group, Inc.’s (“Fairfield”) competing motions for an order declaring the
priority of certain liens attached to funds paid by other defendants in a settlement of related actions
brought by Fairfield and deposited into an escrow account (“Escrow Settlement Fund”) held by
Luca’s counsel, La Reddola, Lester & Associates, LLP (“LL&A”). For the reasons stated herein,
Luca’s motion is denied and Fairfield’s motion is granted. Accordingly, the Court declares that
Fairfield’s attorneys (“Fairfield’s Attorneys”) have a charging lien on the Escrow Settlement Fund
and that Fairfield’s Attorneys’ charging lien has priority over any charging, retaining or judgment
lien Luca or his attorneys, LL&A, may have on the Escrow Settlement Fund.
BACKGROUND
Fairfield-Luca Cases
In 2006, Fairfield commenced an action styled as Fairfield Financial Mortgage Group,
Inc. v. James R. Luca, Case No. 06-CV-5962 (JMA) (SIL), (E.D.N.Y.) (hereinafter the “Disloyalty
Case”). In the Disloyalty Case, Fairfield alleged that certain defendants breached their fiduciary

duty owed to Fairfield as its employees, by, inter alia, diverting brokerage business from Fairfield
to Defendant Shaw Mortgage Group, Inc. (“Shaw”), a competing broker. (See Zlotnick Decl., Ex.
A, Second Amended Complaint in Disloyalty Case, Dkt. No. 16-1, ¶¶ 16-44.)
In 2011, Fairfield commenced a second action, styled as Fairfield Financial Mortgage
Group, Inc. v. James R. Luca, Case No. 11-CV-3802 (PKC) (ARL) (E.D.N.Y.) (hereinafter the
“RICO Case”), against many of the same defendants who were sued in the Disloyalty Case, the
facts of which provided a significant part of the background for the RICO Case (Collectively, the
Disloyalty Case and the RICO Case will be referred to as the “Fairfield-Luca Cases”). The RICO
Case arose from damages suffered by Shaw, a defendant in the Disloyalty Case, because of
misappropriation of brokerage fees to which Shaw was entitled, but which were concealed from
Shaw and ultimately paid to some of the defendants in the RICO Case. (See Zlotnick Decl. Ex. B,
RICO Case Compl., Dkt. No. 16-2.) Shaw had assigned to Fairfield the claims asserted in the
RICO Case. (See Zlotnick Decl. Ex. C, Agreement and Assignment of Claims, Dkt. No. 16-3, ¶
3.)
On or about July 25, 2016, Fairfield and certain defendants in the Fairfield-Luca Cases
resolved both actions pursuant to a single settlement agreement (“Settlement Agreement”), which
provided for a discontinuance with prejudice against all signatories upon the happening of certain
events, including the payment of monies to Fairfield (i.e., the monies constituting the Escrow
Settlement Fund) by certain defendants in the Fairfield-Luca Cases. (See Pl.’s Mem. of Law in
Supp. of Order to Show Cause for Turnover Order, Dkt. No. 11 at ECF 1 6; Def.’s Mem. of Law in
Opp’n to Mot. by Luca, Dkt. No. 17 at ECF 7-8.)

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Citations to “ECF” refer to the pagination generated by the Court’s electronic docketing
system and not the document’s internal pagination.
2

The Towne Case
On or about August 2, 2016, Luca was assigned a judgment that had been entered against
Fairfield and Fairfield’s principal, Charles Levesque (“Levesque”), in an unrelated action brought
by Towne Mortgage Company (“Towne”), styled as Towne Mortgage Company v. Fairfield
Financial Mortgage Group, Inc., Case No. 2:14-cv-14015 (E.D. Mich.) (hereinafter the “Towne
Case”). (See Zlotnick Decl., Ex. D, Assignment of Judgment, Dkt. No. 16-4; Zlotnick Decl., Ex.
E, Judgment against Fairfield in the Towne Case (“Luca Assigned Judgment”), Dkt. No. 16-5; see
generally Zlotnick Decl., Ex. F, Towne Case Complaint (“Towne Case Compl.”), Dkt. No. 16-6.)
The Towne Case Complaint alleged, inter alia, that on February 26, 2008, Fairfield as a lender,
had extended a loan to Abibi Ocampo-Guevara (“Guevara Loan” and “Guevara”) through Linden
Residential Credit Corporation (“Linden”), its broker; that Towne had purchased the Guevara
Loan; that Guevara had defaulted on the Guevara Loan; that Towne subsequently sold the Guevara
Loan to another entity; and that Towne had been injured because of Fairfield and Levesque’s
alleged breach of contract, breach of fiduciary duty, fraudulent misrepresentations, and fraudulent
inducement, largely in connection with the Guevara Loan. (See Zlotnick Decl., Ex. F, Towne Case
Compl., Dkt. No. 16-6, passim.)
On March 21, 2016, judgment was entered in the Towne Case, in favor of Towne and
against Fairfield only, in the amount of $400,000. (Zlotnick Decl., Ex. E., Luca Assigned
Judgment, Dkt. No. 16-5.) The judgment in Towne Case was assigned to Luca from Towne on
August 2, 2016. (Zlotnick Decl., Ex. D, Assignment of Judgment, Dkt. No. 16-4.)
The Turnover Case
On September 7, 2016, Plaintiff Luca filed the Complaint in the instant action (hereinafter
the “Turnover Case”). (Complaint (“Compl.”) Dkt. No. 1.) Luca initiated this action in an effort
to collect on the Luca Assigned Judgment. Specifically, Luca seeks the following relief: (1)
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judgment requiring Disloyalty and Rico Case Defendants Candice Giaccone (“Giaccone”) and
Carlo Dellapina (“Dellapina”) turn over to Luca the amount Giaccone and Dellapina owe to
Fairfield under the Settlement Agreement; 2 (2) a declaratory judgment declaring that upon
Giaccone and Dellapina’s turnover of the Settlement Amount to Luca, the Settlement Amount
under the Settlement Agreement has been paid in full by the Settling Parties in the Fairfield-Luca
Actions, and directing Fairfield to file stipulations of dismissal with prejudice in the Fairfield-Luca
Actions with respect to the Settling Parties; and (3) a temporary restraining order and preliminary
injunction staying, during the pendency of this action, the entry of judgment by Fairfield against
the Settling Parties in the Fairfield-Luca Actions based upon any alleged violations of the terms of
the Settlement Agreement by the Settling Parties. (Compl. at ECF 7-8.)
On September 8, 2016, the Court held a hearing where it ordered, in relevant part, (1) “the
full amount due from all Defendants other than Tarasco and the Moberg Defendants shall be
transferred timely, by 9/10/16, to Mr. Lester’s [Luca’s counsel in the Turnover Case] attorney
escrow account, with Mr. Lester sending Plaintiff confirmation thereof;” (2) Jonathan Bruno,
counsel for the Moberg Defendants in the Disloyalty Case, to “obtain the full agreed-upon
settlement amounts due from the Moberg Defendants . . . and from Tarasco, and [to] transfer said
settlement amounts to Mr. Lester, sending Plaintiff confirmation that he has done so;” and (3)
“[u]pon receipt of these additional amounts, Mr. Lester shall inform Plaintiff that he holds the full
agreed-upon settlement amounts from both [the RICO Case] and [the Disloyalty Case]. (Minute
Entry dated September 8, 2016, in RICO Case, No. 11-cv-3802.) “Mr. Lester shall hold these

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Giaccone and Dellapina have paid these funds, as ordered by this Court at the September
8, 2016 hearing, to Steven M. Lester, Luca’s counsel in the instant action, who is holding them in
escrow in the Escrow Settlement Fund. (See Minute Entry dated September 8, 2016, in RICO
Case, No. 11-cv-3802.)
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settlement amounts in escrow, pending the Court’s resolution of the priority of various liens
asserted on those settlements amounts.” (Id.) Giaccone deposited by wire transfer to LL&A’s
attorney IOLA 3 account the entirety of the amount she and the other settling defendants owed to
Fairfield under the Settlement Agreement in the Fairfield-Luca cases. (See Def.’s Mem. of Law
in Opp’n to Mot. by Luca, Dkt. No. 17 at ECF 10.)
By stipulation dated September 29, 2016, Luca, Fairfield, and Fairfield’s counsel have
agreed that if the Court determines that Fairfield’s Attorneys have priority over Luca and LL&A
with respect to the Escrow Settlement Fund, the Turnover Case Complaint will be dismissed with
prejudice as against Fairfield and Fairfield’s counsel, and any restraining notices affecting any
funds deposited by Giaccone and Dellapina into LL&A’s attorney IOLA account shall be
withdrawn with prejudice with respect to the funds at issue in the Turnover Case, so that the
Escrow Settlement Fund may be delivered to Fairfield and/or Fairfield’s counsel. (Dkt. No. 9 ¶
6.) On the other hand, if Luca or his attorneys prevail as to the priority issue, the funds deposited
by Giaccone and Dellapina into LL&A’s attorney IOLA account shall be used to satisfy the
proceeds of the Luca Assigned Judgment, and upon the payment of such funds to Luca or LL&A,
the Turnover Case shall be dismissed with prejudice. (Id.) The Court so ordered the September
29, 2016 Stipulation on August 2, 2017. (See Order dated August 2, 2017.)
On September 29, 2016, Luca’s and Fairfield’s motions asserting the priority of their
attorneys’ liens were fully briefed. (See Dkt. Nos. 10-13.) After the motions were filed, Disloyalty
Case Defendant Eric Forte offered to settle the Disloyalty Case as to himself. (See Stipulation

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“An ‘interest on lawyer account’ or ‘IOLA’ is an unsegregated interest-bearing deposit
account with a banking institution for the deposit by an attorney of qualified funds.” New York
State Interest on Lawyer Account Fund, http://iola.org/laws/judiciarylaw.pdf (last visited Aug. 20,
2017).
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dated October 18, 2016, Dkt. No. 14 at ECF 1.) In response to Forte’s offer, Luca, Fairfield, and
Fairfield’s counsel entered into a stipulation where Fairfield agreed to transfer the settlement
amount received from Forte (the “Forte Proposed Settlement”) to the Escrow Settlement Fund.
(See id. at ECF 2 ¶¶ 1-2). The parties further agreed that if the Court determined that Luca and/or
LL&A have priority as to the Escrow Settlement Fund, so much of the Escrow Settlement Fund
(including the Forte Proposed Settlement) will be transferred to Luca and/or LL&A to satisfy any
judgment lien Luca may have resulting from the Luca Assigned Judgment (“Judgment Lien”) and
any charging lien that LL&A may have, including interest up to the date of such payment. (See
id. at ECF 2-3 ¶ 7.) The parties also agreed that if the Court determined that Fairfield’s Attorneys’
charging lien has priority over the Judgment Lien and LL&A’s attorney’s charging lien, the
entirety of the Escrow Settlement Fund will be transferred to Fairfield’s counsel, Law Offices of
Michael A. Haskel, as attorney’s fees. (See id.) The Court so ordered the October 18, 2016
Stipulation on October 19, 2016. (See Order dated October 19, 2016.)
DISCUSSION
Fairfield’s Attorneys Have a Charging Lien as to the Escrow Settlement Fund
The charging lien 4 is a common law device “invented by the courts for the protection of
attorneys against the knavery of their clients, by disabling clients from receiving the fruits of
recoveries without paying for the valuable services by which the recoveries were obtained.”
Goodrich v. McDonald, 19 N.E. 649, 651 (N.Y. 1889); accord LMWT Realty Corp. v. Davis
Agency Inc., 649 N.E.2d 1183, 1187 (N.Y. 1995); In re Heinsheimer, 108 N.E. 636, 637 (N.Y.

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Disputes relating to charging liens are cognizable in federal court. See Itar–Tass Russian
News Agency v. Russian Kurier, Inc., 140 F.3d 442, 448–49 (2d Cir. 1998); accord Tancredi v.
Metro. Life Ins. Co., 378 F.3d 220, 225 (2d Cir. 2004) (“[W]henever a district court has federal
jurisdiction over a case, it retains ancillary jurisdiction after dismissal to adjudicate collateral
matters such as attorney’s fees.”) (citations and internal quotation marks omitted).
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1915). An attorney’s charging lien “gives the attorney an equitable ownership interest in the
client’s cause of action,” LMWT Realty, 649 N.E.2d at 1186, and ensures that the attorney can
collect his fee from the funds that were obtained on behalf of his client as a result of the attorney’s
labors. Rosenman & Colin v. Richard, 850 F.2d 57, 61 (2d Cir. 1988); see Gordon v. Shirley Duke
Assocs. (In re Shirley Duke Assocs.), 611 F.2d 15, 18 (2d Cir. 1979).
The charging lien is codified in Section 475 of New York’s Judiciary Law, which provides,
in relevant part:
From the commencement of an action, special or other proceeding
in any court . . . the attorney who appears for a party has a lien upon
his or her client’s cause of action, claim or counterclaim, which
attaches to a verdict, report, determination, decision, award,
settlement, judgment or final order in his or her client’s favor, and
the proceeds thereof in whatever hands they may come . . . .
N.Y. Jud. Law § 475. “The statute enlarges the common law charging lien to the extent that it
now attaches to the cause of action even before judgment, but otherwise remains what it was at
common law.” In re Schick, 215 B.R. 13, 15 (Bankr. S.D.N.Y. 1997) (citing In re Heinsheimer,
108 N.E. at 637 and LMWT Realty, 649 N.E.2d at 1186). “The statute is remedial in character,
and hence should be construed liberally in aid of the object sought by the legislature, which was
to furnish security to attorneys by giving them a lien upon the subject of the action.” Itar–Tass
Russian News Agency v. Russian Kurier, Inc., 140 F.3d 442, 450 (2d Cir. 1998) (quoting Fischer–
Hansen v. Brooklyn Heights R. Co., 66 N.E. 397 (N.Y. 1903)) (internal quotation marks omitted).
“The prerequisites to the creation of a charging lien are well-settled; as a result of the
attorney’s efforts, (1) the client must assert a claim, (2) which can result in proceeds (3) payable
to or for the benefit of the client.” In re Ramirez, 528 B.R. 580, 596 (Bankr. S.D.N.Y. 2015)
(quoting In re Schick, 215 B.R. at 15) (internal quotations marks omitted). Defense counsel,
therefore, cannot obtain a charging lien unless their client asserts a counterclaim. Id. (citing
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United States v. J.H.W. & Gitlitz Deli & Bar, Inc., 499 F. Supp. 1010, 1014 (S.D.N.Y. 1980)
(Weinfeld, J.); United States v. Clinton, 260 F. Supp. 84, 90 (S.D.N.Y. 1966); Ekelman v. Marano,
167 N.E. 211, 212 (N.Y. 1929); Nat’l Exhibition Co. v. Crane, 60 N.E. 768, 769 (N.Y. 1901);
United Orient Bank v. 450 W. 31st St. Owners Corp., 589 N.Y.S.2d 390, 390–91 (Sup. Ct. 1992).
In addition to the funds being obtained as a result of the attorney’s efforts, Section 475 requires
that the attorney also obtain a “final order in his client’s favor.” Thus, the attorney “must recover
the fund for the benefit of his client,” and the attorney “gets no lien in proceeds recovered by
another party even if they were created through his efforts.”

In re Schick, 215 B.R. at 15–16

(citations omitted).
Here, Fairfield’s Attorneys have established that they have a charging lien over the Escrow
Settlement Fund. Fairfield asserted a claim in the Fairfield-Luca Cases, which resulted in the
settlement funds that are now being held in the Escrow Settlement Fund. The settlement funds
were obtained through Fairfield’s Attorneys’ efforts for Fairfield’s benefit. See Butler, Fitzgerald
& Potter v. Sequa Corp. 250 F.3d 171, 177 (2d Cir. 2001) (citing N.Y. Judiciary Law § 475 (“From
the commencement of an action . . . the attorney who appears for a party has a lien upon his client’s
cause of action . . . which attaches to a verdict, report, determination, decision, judgment or final
order in his client’s favor.”) and In re Shirley Duke Assocs., 611 F.2d at 18 (“The rationale of
section 475 is that an attorney should have a lien for his litigation efforts that bring a fund into
existence; it is upon the fund thus created, either by judgment or settlement, that the lien is
imposed.”)). Thus, Fairfield’s Attorneys have established that they have a charging lien for the
proceeds of the Fairfield-Luca Cases, which are now being held in the Escrow Settlement Fund.
Fairfield’s Attorneys’ Charging Lien Has Priority
Fairfield’s Attorneys’ charging lien has priority over any charging lien or judgment lien
held by Luca or LL&A. First, the general New York rule in determining the priority of liens is
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“first in time, first in right.” Granite Commercial Indus. LLC v. Landmark Am. Ins. Co., 909 F.
Supp. 2d 191, 194 (E.D.N.Y. 2012). Here, Fairfield’s Attorneys’ charging lien attached in 2006
with respect to the Disloyalty Case and in 2011 with respect to the Rico Case. See LMWT Realty,
649 N.E.2d at 1186 (“The [attorneys’ charging] lien comes into existence, without notice or filing,
upon commencement of the action or proceeding.”). The instant action, the only action initiated
by Luca and LL&A, was commenced in September 2016, approximately five years after the Rico
Case. (See Zlotnick Decl., Ex. B, Rico Case Compl., Dkt. No. 16-2; Compl., Dkt. No. 1). Thus,
Fairfield’s Attorneys’ charging lien has priority over any charging lien that Luca or LL&A may
possess with respect to the instant action because Fairfield’s Attorneys’ charging lien attached
first. See Granite, 909 F. Supp. 2d at 194.
Further, even assuming that the Luca Assigned Judgment gave rise to a judgment lien
possessed by Luca or LL&A, Fairfield’s Attorneys’ charging lien would also have priority over
such a lien. The Luca Assigned Judgment was not entered until March 21, 2016, and the judgment
was not assigned to Luca until August 2, 2016, both dates being approximately five years after
Fairfield’s Attorneys’ charging lien attached in the Rico Case. (Zlotnick Decl., Ex. D, Assignment
of Judgment, Dkt. No. 16-4; Zlotnick Decl., Ex. E., Luca Assigned Judgment, Dkt. No. 16-5.)
Thus, based on timing, Fairfield’s Attorneys’ charging lien has priority over any judgment lien
that Luca or LL&A may possess with respect to the Luca Assigned Judgment. See Granite, 909
F. Supp. 2d at 194.
Moreover, charging liens generally have “priority over other claims against the funds,
including the claims of judgment creditors.” Beadwear, Inc. v. Media Brands, LLC, No. 00 CIV
5483 AGS, 2001 WL 1622207, at *1 (S.D.N.Y. Dec. 18, 2001). The New York Court of Appeals
in Banque Indosuez v. Sopwith Holdings Corp., 772 N.E.2d 1112, 1117 (N.Y. 2002) specifically

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held “that an attorney’s charging lien maintains superiority over a right of setoff where the setoff
is unrelated to the judgment or settlement to which the attorney’s lien attached.” Here, the Towne
Case from which the Luca Assigned Judgment arose is completely unrelated to the Fairfield-Luca
Cases giving rise to the settlement funds being held in the Escrow Settlement Fund. Thus,
Fairfield’s Attorneys’ charging lien from the Fairfield-Luca Cases has priority over any judgment
lien held by Luca and LL&A from the Luca Assigned Judgment, a judgment secured in an
unrelated action. See id.; Rebmann v. Wicks, 688 N.Y.S.2d 293, 294 (App. Div. 4th Dep’t 1999)
(“Supreme Court properly determined that attorney’s charging lien is superior to defendant’s right
of setoff pursuant to the judgment obtained by defendant in a subsequent action”); Weiser v. City
of New York, 226 N.Y.S.2d 929, 930 (App. Div. 2d Dep’t 1962) (“an attorney’s lien on the funds
he created should be granted priority over setoff judgments”); Drake v. Pierce Butler Radiator
Corp., 116 N.Y.S.2d 712, 716 (Sup. Ct. 1952) (“A judgment recovered in a separate action and
assigned to a defendant cannot destroy the lien of the attorney for the plaintiff whose services have
produced a judgment in his client’s favor.”); see also Beecher v. Peter A. Vogt Mfg. Co., 125 N.E.
831, 833 (N.Y. 1920) (“Attorneys have by their labor produced a judgment. They have done so in
reliance upon the assurance of the statute that the judgment, and the cause of action back of it,
shall secure their pay. The debtors seek by the belated purchase of another judgment to frustrate
the hope and belie the promise. Nothing that will move discretion to a departure from the rules of
set-off as they prevail in courts of law, will be found in that endeavor.”) (Cardozo, J.).
LL&A Does Not Have a Retaining Lien on the Escrow Settlement Fund
Luca and LL&A also argue that LL&A have a retaining lien on the Escrow Settlement
Fund because the Escrow Settlement Fund is in LL&A’s possession and that their retaining lien
should take priority over Fairfield’s Attorneys’ charging lien. Luca and LL&A are mistaken,
however, because a retaining lien never attached to the Escrow Settlement Fund.
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A retaining lien “is founded upon physical possession, and an attorney may forfeit its
retaining lien by voluntarily giving away any of the items to which it may have attached.”
Schneider, Kleinick, Weitz, Damashek & Shoot v. City of New York, 754 N.Y.S.2d 220, 223 (App.
Div. 1st Dep’t 2002). A retaining lien “gives an attorney the right to keep, with certain exceptions,
all of the papers, documents and other personal property of the client which have come into the
lawyer’s possession in his or her professional capacity as long as those items are related to the
subject representation.” Universal Acupuncture Pain Servs., P.C. v. Quadrino & Schwartz, P.C.,
370 F.3d 259, 262 n.3 (2d Cir. 2004) (quoting Schneider, 754 N.Y.S.2d at 223). Funds held by an
attorney in escrow is one exception where a retaining lien does not attach. See Schelter v. Schelter,
614 N.Y.S.2d 853, 854 (App. Div. 4th Dep’t 1994) (“Funds held in escrow or in a custodial
capacity are not subject to an attorney’s retaining lien.”); Marsano v. State Bank of Albany, 279
N.Y.S.2d 817, 820 (App. Div. 3d Dep’t 1967) (holding that an attorney who received funds in
escrow from a settlement he had negotiated on behalf of his client “was merely a custodian of the
funds in a sense not contemplated by the term ‘possessor’ as employed in retaining lien cases; and
as such trustee or escrowee, he [was] not entitled to a retaining lien”); J.H.W. & Gitlitz, 499 F.
Supp. at 1015 (holding that an attorney who received funds in escrow for his client was not entitled
to a retaining lien because he “did not receive the funds in his capacity as an attorney”).
Here, the funds from the Disloyalty and RICO Case settlements were deposited with LL&A
in the Escrow Settlement Fund, as directed by the Court, to ensure that they were not dissipated
by the other defendants in the Fairfield-Luca Cases during the pendency of this litigation, the
purpose of which is to determine which party is entitled to the funds. The funds were not delivered
to LL&A in their role as attorneys on behalf of their client, Luca, but rather, in LL&A’s role as
escrow agent for safekeeping. Accordingly, no retaining lien in favor of LL&A attached to the

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Escrow Settlement Fund by virtue of LL&A’s physical possession of those funds. See e.g., Mayeri
Corp. v. Shea & Gould, 447 N.Y.S.2d 413, 415 (Sup. Ct. 1982). Just as in Mayeri:
Here, the person . . . who will be entitled to the fund awaits the determination of
pending litigation. Thus, although the creation of the escrow was obviously closely
related to the professional work being done by [LL&A], the funds were not
delivered to them as attorney for their clients, but rather as coescrowee. In such
capacity there is nothing in the papers to indicate that they should be entitled to a
possessory retaining lien with respect thereto.
Furthermore, even if a retaining lien had attached to the Escrow Settlement Fund, it would
also be subordinate to Fairfield’s Attorneys’ charging lien because the retaining lien would have
attached in 2016 when the funds were deposited by the other settling defendants, approximately
five years after Fairfield’s Attorneys’ charging lien in the RICO Case attached.
CONCLUSION
For the reasons discussed above, the Court declares that Fairfield’s Attorneys have a
charging lien over the funds deposited in the Escrow Settlement Fund and that Fairfield’s
Attorneys’ charging lien has priority over any charging or judgment lien possessed by Luca or
LL&A. Further, the Court finds that LL&A does not possess a retaining lien over the funds
deposited in the Escrow Settlement Fund, and, even if LL&A did possess a retaining lien, it would
be subordinate to Fairfield’s Attorneys’ charging lien. Accordingly, Luca’s motion is denied and
Fairfield’s motion is granted.

SO ORDERED.
/s/ Pamela K. Chen
Pamela K. Chen
United States District Judge
Dated: August 24, 2017
Brooklyn, New York

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