Ie et al v. Ageha Japanese Fusion, Inc. et al
Filing
113
OPINION AND ORDER re: 108 MOTION for Reconsideration re; 107 Memorandum & Opinion, filed by Zhong Hong Bao, Ageha Japanese Fusion, Inc., Chun Yong Chen. Defendants' motion for reconsideration is DENIED. The Clerk of Court is respectfully requested to terminate the motion at ECF No. 108. (Signed by Magistrate Judge Sarah Netburn on 10/11/2018) (ras)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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10/11/2018
FORTUNATA LIANA IE,
Plaintiff,
15-CV-63 (JGK)(SN)
OPINION AND ORDER
-againstAGEHA JAPANESE FUSION, INC., et al.,
Defendants.
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SARAH NETBURN, United States Magistrate Judge:
On April 2, 2018, upon motion from plaintiff counsel, the Court entered judgment to fix
and enforce a charging lien against Plaintiff and Defendants Ageha Japanese Fusion, Inc. and
Chun Yong Chen. ECF No. 107. On April 18, 2018, Defendants moved to reconsider, asserting
that the Court overlooked certain facts and law in arriving at its decision.
BACKGROUND
In 2015, Plaintiff brought this action alleging that Defendants violated the Fair Labor
Standards Act (“FLSA”) and the New York Labor Law. ECF No. 1. On the eve of trial, plaintiff
counsel moved for a continuance principally because he was unable to communicate with his
client. ECF No. 86. In opposition, defense counsel informed the Court that, without notifying
their counsel, “Defendants have settled this lawsuit with the Plaintiff . . . [b]y paying $15,000 in
cash to the Plaintiff.” ECF No. 91. Shortly thereafter, Judge Koeltl ordered a conference to
discuss how to proceed without participation by the plaintiff. ECF No. 105. At the hearing,
Defendants urged the Court to approve the settlement, or in the alternative, dismiss without
prejudice, while plaintiff counsel sought leave to continue discovery. Judge Koeltl noted the
tension between the Court of Appeals’ decision in Cheeks v. Freeport Pancake House, Inc., 796
F.3d 199 (2d Cir. 2015), which requires the district court to review settlements of claims brought
under FLSA, and the reality that the settlement was essentially unreviewable due to the
noncooperation of Plaintiff. In effort to navigate these concerns, he dismissed the action without
prejudice for failure to prosecute. He then referred plaintiff counsel’s motion to enforce a
charging lien to me.
Upon referral, the Court set a briefing schedule for the motion for a charging lien and
advised all parties that the Court may decide the motion on solely on the written submissions.
ECF No. 101. The Court, however, invited the parties to request an evidentiary by identifying the
nature of the evidence and witness testimony that the party sought to put before the Court. The
parties declined that opportunity and made their arguments by submission. ECF Nos. 102-104.
In opposition to the imposition of a charging lien, the defendants argued generally that
(1) plaintiff’s counsel was discharged for cause and therefore not entitled to a charging lien; (2)
no lien could attach to the $15,000 because plaintiff’s claims were not “extinguished” by the
dismissal with prejudice for failure to prosecute; and (3) there was no settlement of the claims
because Judge Koeltl could not approve the FLSA settlement without the plaintiff’s
participation. See generally ECF No. 104. The Court rejected these arguments and entered
judgment enforcing a charging lien in the amount of $15,000 against Plaintiff and Defendants
jointly and severally. Opinion & Order, ECF No. 107. Defendants move for reconsideration of
that decision. ECF No. 108.
LEGAL STANDARD
A motion for reconsideration under Local Civil Rule 6.3 is governed by the same
standard as Federal Rules of Civil Procedure 59(e) and 60(b). In re Facebook, Inc., IPO Sec. &
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Derivative Litig., 43 F. Supp. 3d 369, 373 (S.D.N.Y. 2014), aff’d sub nom. Lowinger v. Morgan
Stanley & Co. LLC, 841 F.3d 122 (2d Cir. 2016). This standard is “strict, and reconsideration
will generally be denied unless the moving party can point to controlling decisions or data that
the court overlooked.” Analytical Surveys, Inc. v. Tonga Partners, L.P., 684 F.3d 36, 52 (2d Cir.
2012), as amended (July 13, 2012) (quoting Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d
Cir. 1995)). Alternatively, the Court will deny a motion for reconsideration unless the moving
party demonstrates an “intervening change in controlling law, the availability of new evidence,
or the need to correct a clear error or prevent manifest injustice.” Facebook, 43 F. Supp. at 373
(quoting Schoolcraft v. City of New York, 298 F.R.D. 134, 136 (S.D.N.Y. 2014)).
The Court should endeavor to construe Local Civil Rule 6.3 narrowly to ensure that the
motion “is not a vehicle for relitigating old issues, presenting the case under new theories,
securing a rehearing on the merits, or otherwise taking a ‘second bite at the apple.’” Sequa Corp.
v. GBJ Corp., 156 F.3d 136, 144 (2d Cir. 1998) (quotations omitted). Further, a “motion for
reconsideration may not be used to advance new facts, issues or arguments not previously
presented to the Court.” Davidson v. Scully, 172 F. Supp. 2d 458, 461 (S.D.N.Y. 2001).
DISCUSSION
Defendants maintain that the Court’s prior opinion erred in two central respects. First,
they contend that the Court misread the body of law governing the enforcement of charging liens
against a third party. Second, they rehash their arguments regarding the absence of a settlement.
As to this second argument, the Court has already addressed these contentions and there is no
basis to reargue. See Opinion & Order at 4-5. With respect to defendants’ first ground for
reconsideration, these procedural arguments were not raised previously, and are further without
merit or otherwise waived.
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For the first time on this motion for reconsideration, defendants argue that, to assert any
lien against the defendants, plaintiff’s counsel was obligated to commence a separate action.
Defendants contend that the summary proceeding authorized by section 475 of the Judiciary Law
is available only to disputes between attorney and client. Plaintiff’s counsel, however, cites case
law that indicates that a court may enforce a lien against a third party so long as the amount due
is undisputed. In their reply, Defendants argue that the amount of the charging lien is disputed.
The Opinion & Order provided an overview of New York law on charging liens. To
recap, “[t]he [charging] lien is predicated on the idea that the attorney has by his skill and effort
obtained the judgment, and hence ‘should have a lien thereon for his compensation, in analogy to
the lien which a mechanic has upon any article which he manufactures.’” Schneider, Kleinick,
Weitz, Damashek & Shoot v. City of New York, 302 A.D.2d 183, 187 (1st Dep’t App. Div.
2002) (quoting Williams v. Ingersoll, 89 N.Y. 508, 517 (1882)) (alterations in original). A
charging lien “applies only to the proceeds obtained from a particular litigation and may be
enforced only to obtain the reasonable value of the attorney’s services and disbursements in
connection with that litigation.” Kaplan v. Reuss, 113 A.D.2d 184, 186 (1985), aff’d, 68 N.Y.2d
693 (1986). Thus, “[i]n the event of settlement, the attorney’s lien attaches to the fund
representing the cause of action extinguished by the settlement.” In re Shirley Duke Assocs., 611
F.2d 15, 18 (2d Cir. 1979). And, “where a defendant settles with a plaintiff without making
provision for the fee of the plaintiff’s attorney, that attorney can in a proper case proceed directly
against the defendant pursuant to section 475.” Chesley v. Union Carbide Corp., 927 F.2d 60, 67
(2d Cir. 1991). Further, “[t]he lien which attaches in the attorney’s favor cannot be impaired by a
collusive settlement.” Haser v. Haser, 271 A.D.2d 253, 255 (1st Dep’t App. Div. 2000).
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New York Judiciary Law § 475 (and its predecessor § 66) codified the charging lien
available to attorneys at common law. Mura v. Mura, 128 A.D.3d 1344, 1345–46 (4th Dep’t
App. Div. 2015). In addition, the statute liberalized the procedure for enforcing the lien by
allowing counsel to petition the Court summarily for the requested relief rather than commencing
a new action. Fischer-Hansen v. Brooklyn Heights R. Co., 173 N.Y. 492, 497, 66 N.E. 395
(1903) (“In 1899 the section was further amended by making it apply to a special proceeding,
extending the lien to a claim as well as a cause of action and a counterclaim and providing a
remedy to determine and enforce the lien upon the petition of either attorney or client . . . .”).
The parties dispute whether this summary procedure applies to the enforcement of
charging liens asserted outside of the attorney-client relationship. Plaintiff counsel points to a
New York Supreme Court case that explained that “where there is no dispute [over facts], ‘it
becomes immaterial whether the proceeding takes the form strictly of an action to enforce a lien
or of the simpler petition described by Judiciary Law, section 475.’” In re Jacobs, 169 Misc. 893,
897 (N.Y. Sup. Ct. 1938) (quoting Freedman v. Kahn, 172 N.Y.S. 98, 98 (1st Dep’t App. Div.
1918)); see also In re Salant, 158 A.D. 697, 699–700 (1st Dep’t App. Div. 1913), aff’d, 210 N.Y.
622 (1914). (“If the attorney seeks to enforce his lien against a third party, except when the
amount due is beyond dispute, he must proceed to foreclose his lien otherwise.”).
Defendants, on the other hand, cite cases that indicate that enforcement actions against
third parties may never be granted summarily. See, e.g., Rochfort v. Metro. St. Ry. Co., 50 A.D.
261, 264–65, 63 N.Y.S. 1036 (1st Dep’t App. Div. 1900) (“[T]he proper practice is that an
attorney’s lien as against a defendant not his client must be enforced by action and not by
motion.”); Rebmann v. Wicks, 259 A.D.2d 972, 973 (4th Dep’t App. Div. 1999) (“[A]n attorney
must commence a separate action to enforce the lien against third parties who are not his or her
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clients.”) Defendants further argue that even if plaintiff counsel’s view of the law is correct, the
fact that there is a factual dispute about the existence of a settlement and the quantum of harm
means that a summary decision was inappropriate.
As a threshold matter, Defendants never cited any relevant case law or otherwise
advanced this argument in their opposition to plaintiff’s motion. Indeed, a large portion of their
argument is made for the first time in their reply brief on their motion for reconsideration. For
that reason alone, the Court would be well within its discretion to deny Defendants’ motion.
Banco de Seguros Del Estado v. Mut. Marine Offices, Inc., 230 F. Supp. 2d 427, 428 (S.D.N.Y.
2002), aff’d sub nom. Banco de Seguros del Estado v. Mut. Marine Office, Inc., 344 F.3d 255
(2d Cir. 2003) (internal formatting and citations omitted) (holding that a motion for
reconsideration is only “appropriate where a court overlooks controlling decisions or factual
matters that were put before it on the underlying motion and which, had they been considered,
might have reasonably altered the result before the court”).
Further, plaintiff counsel has the better reading of the case law. This conclusion is
consistent with the “remedial” character of the statute, which “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.” Fischer-Hansen v. Brooklyn Heights R. Co., 173
N.Y. 492, 499 (1903). Thus, an attorney may enforce a lien against a third party by summary
proceeding where the amount due is beyond dispute.
But the Court already found that no facts were in dispute. Defendants’ argument that
there was no settlement directly contradicts their earlier representation that the parties had
settled. ECF No. 93, Ltr. from Ageha to Court (“Defendant tendered $15,000 cash to Plaintiff as
settlement in full of all claims, costs, and fees.”). The Court will not allow Defendants to take
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contradictory positions on the underlying facts based on how they affect their legal arguments.
Further, Defendants provide no basis for the contention that plaintiff counsel was fired for cause
other than speculation. As mentioned earlier, Defendants were afforded the opportunity for an
evidentiary hearing to ascertain any relevant facts concerning Plaintiff’s attorney-client
relationship but declined to do so. Finally, in their reply brief on their motion for
reconsideration, Defendants dispute for the first time the reasonableness of plaintiff counsel’s
fees. Defendants, however, have been given numerous opportunities to raise such a challenge
and are deemed to have forfeited their opportunity to do so now. The Court invited the parties to
request an evidentiary hearing, but neither did. Thus, the facts offered by plaintiff’s counsel are
conceded. Accordingly, the Court’s prior findings stand. See In re Jacobs, 169 Misc. 893, 9
N.Y.S.2d 206, 210 (N.Y. Sup. Ct. 1938) (enforcing plaintiff’s counsel’s lien against defendant
by summary proceeding and deeming facts “conceded” where defendant raised no objection to
counsel’s affidavits).
CONCLUSION
Defendants’ motion for reconsideration is DENIED. The Clerk of Court is respectfully
requested to terminate the motion at ECF No. 108.
SO ORDERED.
DATED:
October 11, 2018
New York, New York
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