This is a case about judgments and charging liens, and why there was one of the former but none of the latter.

Langerman represented a plaintiff in suing GlenEagles. The jury awarded the plaintiff $100,000 but that was less than the defendant’s Offer of Judgment. The court awarded GlenEagles over $150,000 in Rule 68 sanctions, which was about $30,000 more than the plaintiff’s award plus costs. The trial judge signed a form of judgment in the plaintiff’s favor for the jury award and for costs and in the defendant’s favor for the sanctions.

The plaintiff then filed bankruptcy. She and GlenEagles  worked out a settlement of their respective claims by which GlenEagles would get an unsecured claim for the $30,000.

The bankruptcy judge was about to sign it when Langerman filed this action. The trial court dismissed the case. The Court of Appeals affirmed.

Langerman claimed a charging lien against the awards to the plaintiff. The court held that although there were three awards, there was for lien purposes one judgment, by which the plaintiff ended up owing money to GlenEagles. The common-law charging lien exists, the court pointed out, to ensure that the lawyer will be paid out of the fund generated by his or her efforts. Since Langerman’s efforts resulted in no fund, it had no lien.

We do not know what advice lawyer gave to client about accepting the Offer of Judgment;  it may not have been the lawyer’s fault that the client ended up bankrupt despite winning a six-figure award (though interfering with the client’s bankruptcy settlement for the lawyer’s gain does seem a bit much.) But the court pointed out, by citing a case from Nevada, that there would be no lien even if the lawyer had advised her to accept it. You can’t file a lien on a loss.

A party here pays the price for skirting the rules in what it probably thought was a clever way.

The defendants filed a Notice of Non-Parties at fault that was broad, vague, and that had the effect of hiding their defense rather than disclosing it. The trial court struck the defense and entered summary judgment for the plaintiff.

Cendejas negligently started a fire that burned down the house of Scottsdale’s insured. Scottsdale, after paying the claim, sued Cendejas. Cendejas named, as non-parties at fault, a contractor “to the extent that it performed any work . . . which may have caused or contributed to the fire,” “any subcontractor” on the same basis, and “any building inspector” “to the extent that . . .[inspection’] failed to determine [sic] an inappropriately installed building component to the extent such components are determined to have caused or contributed to the fire.”

After the deadline for non-party-at-fault notices had expired, defendant’s expert (Joe Sesniak – a crackerjack witness, by the way) opined that the fire spread because the attic installation had been installed backwards. Sesniak had done his investigation – and had presumably come to this conclusion – years before. This had not been disclosed, so the court granted Scottsdale’s motion to strike it.

Rule 26(b)(5) requires that the notice “provide the identity, location, and the facts supporting the claimed liability” of the no-party at fault. Although not entirely grammatical, the rule is  pretty clear.

The justifications that the defense tried to offer for its Notice  mirror those that lawyers presumably have in their minds when they file such things. The court pointed out what should go without saying but obviously doesn’t. No, the notice isn’t good enough simply because it does describe, more or less, what turns out later to the be defense. No, it isn’t good enough because the other side could eventually have found the defense by doing discovery into all the people and subcontractors who “may have contributed” to the fire because of a problem with some “building component.” No, the non-party-at-fault statute doesn’t give you the absolute right to point the finger at somebody else whether you obey the procedural rules or not.

The court does indicate, as prior cases have held, that late notice because of justifiable late discovery of the non-party defense may be allowable.

The court decided that the trial judge had calculated pre-judgment interest from the wrong date and remanded for recalculation. The case will still cost the defendant’s carrier nearly $100,000 more than the original claim.

It would be nice to think that this opinion will stop the practice of filing ambiguous, obscure, catch-all non-party notices. But we know too many lawyers who aren’t that nice.

You still can’t fight City Hall – especially when its County and State Hall.

Koepnick leased state trust land between Apache Junction and Florence for agricultural use. Pinal County wanted a right-of-way over the property for a new road. But to get one it would have had to pay Koepnick over $750,000 for improvements he had built that would be disrupted by it. Then the Commissioner of the State Land Department – our friend Mr. Winkleman from a few posts ago – decided to reclassify the land as “commercial” rather than “agricultural.” This had the effect of cancelling the lease and allowing the County to do what the documents arguably showed it wanted to do: get the right-of-way without paying Koepnick anything. Koepnick cried foul but the Arizona Land Board of Appeals and the Superior Court affirmed the decision, hence this appeal.

Koepnick’s principal argument, apparently, was that the Commissioner couldn’t declare the land “commercial” because that was the wrong category. The County envisioned that it would largely be given over to residential use. The statutes have three categories: “commercial,” “agricultural,” and “homesite.” Koepnick argued that “homesite” was therefore the proper category.

The court reasoned that before you can live in a house someone first has to build it, building houses is a commercial enterprise, therefore land to be used for homesites is “commercial,” not “homesite.” That is the Land Department’s interpretation of the statutes; the court adopted it, which it may do if the construction  is “reasonable and consistent with statutory language.” How the Land Department’s view is more reasonable and consistent than Koepnick’s is not crystal clear.

Koepnick argued that the government’s activity was the result of a deal between the County and the State to cheat him. But various government employees who had written notes to that effect testified that they were wrong, or misunderstood, or that they don’t think that they meant that though they can’t really recall. Those of you who do government litigation have heard that sort of thing before. If you don’t, you may wonder how it could ever pass the smell test; the answer is that its easier when there’s no jury to do the sniffing.

Koepnick also argued that the Commissioner violated his constitutional and statutory obligations to ensure that Koepnick be compensated for the improvements; under the circumstances of this reclassification, there is apparently no particular prospect of that happening. The court decided that there was a “conflict” between the Commissioner’s duties to the trust and to the lessee that the Commissioner had in this case “resolved” in a manner within his discretion. How the Commissioner’s voluntary act creates a conflict in his duties that allows him to ignore some of them is a bit murky.

This decision seems to have been pretty much a foregone conclusion after both the Board of Appeals and the Superior Court upheld the Commissioner. The court on appeal had to accept the facts established below. Courts routinely adopt the relevant agency’s interpretations of the statutes it works with. Does that mean that Max Koepnick wasn’t shafted by crafty bureaucrats? Well, appellate decisions don’t answer every question.