IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI CASE NO.: 201S-TS ON APPEAL FROM THE CHANCERY COURT OF JACKSON COUNTY, MISSISSIPPI

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1 E-Filed Document Feb :21: CA Pages: 14 IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI CASE NO.: 201S-TS TS DENHAM LAW FIRM, PLLC APPELLANT VERSUS HEIRS AND WRONGFUL DEATH BENEFICIARIES OF KIMBERLY ANN SIMMONS, DECEASED APPELLEES ON APPEAL FROM THE CHANCERY COURT OF JACKSON COUNTY, MISSISSIPPI BRIEF OF THE APPELLEES, THE HEIRS AND WRONGFUL DEATH BENEFICIARIES OF KIMBERLY ANN SIMMONS, DECEASED ORAL ARGUMENT NOT REQUESTED KRISTOPHER W. CARTER MSBN ALBERT R. JORDAN, IV MSBN CARTER & JORDAN, PLLC 1101 IBERVILLE DRIVE (39564) P.O. BOX 2040 OCEAN SPRINGS, MS TEL FAX: ATTORNEYS FOR APPELLEES

2 IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI CASE NO.: 2015-TS DENHAM LAW FIRM, PLLC APPELLANT VERSUS HEIRS AND WRONGFUL DEATH BENEFICIARIES OF KIMBERLY ANN SIMMONS, DECEASED APPELLEES CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certify that the following listed persons have an interest in the outcome of this case. These representations are made in order that the Justices of the Supreme Court and the Judges of the Court of Appeals may evaluate possible disqualifications or recusal. I. Estate of Kimberly Ann Simmons, Deceased; Appellee 2. David Anthony Nelson, Appellee 3. Savannah Simmons, Appellee 4. Misty Loper, Appellee 5. Shannon Simmons, Appellee 6. Rachel Benefield, Appellee 7. Teressa Nicole Nelson, a Minor, by and through her Guardian, Sheryl Phillips; Appellee 8. Kristopher W. Carter, Attorney for Appellee 9. Albert R. Jordan, Attorney for Appellee 10. Earl L. Denham, Appellant/Attorney for Appellant 11. Denham Law Firm, PLLC, Appellant 12. Alexander 19natiev, Attorney for Appellant 13. Honorable Hollis McGehee, Special Chancellor KRI TO HER1/;':--CARTER, Attorney for Appellees ALBER R. JORDAN, IV, Attorney for Appellees

3 TABLE OF CONTENTS Certificate oflnterested Persons... i Table of Contents...ii Table of Authorities...iii Statement of the Issues...l Statement of the Case... 2 I. Nature of the Case... 2 II. Course of Proceedings and Disposition in Court Below... 2 III. Statement of the Facts... 3 Summary of the Argument Argument....:... 6 I. Standard of Review... 6 II. III. IV. The Special Chancellor Did Not Abuse His Discretion by Enforcing Appellant's Own Contract to Define its Attorney Lien... 6 The Special Chancellor Correctly Denied Appellant's Motion to DisqualifY Counsel The Special Chancellor Correctly Ruled that Appellees had standing to bring the declaratory action... 8 Conclusion... 9 Certificate of Service

4 TABLE OF AUTHORITIES STATE CASES Byrd v. Abney, 99 So. 3d 1180 (Miss. Ct. App. 2012)... 6 Collins v. Schneider, 192 So. 20 (Miss. 1939)... 6 Estate o/stevens v. Wetzel, 762 So. 2d 293 (Miss. 2000)... 6,7,8,9 Glover v. Jackson State University, 968 So. 2d 1267 (Miss. 2007)... 6 McNeil v. Hester, 1057 So. 2d 1063 (Miss. 2000)... 6 Pollard v. Joseph, 50 So. 2d 546 (Miss. 1950)... 8 STATE RULES Mississippi Rule of Professional Conduct OTHER AUTHORITIES Attorney General Ethics Opinion No. 144 (as amended April 2013)... 6,7 ii

5 STATEMENT OF THE ISSUES 1. Whether the Special Chancellor abused his discretion by ruling that Appellant's attorney lien against its fonner clients' wrongful death settlement was defined by the language of its contract. 2. Whether the Special Chancellor abused his discretion in denying Appellant's Motion to Disqualify Counsel. 3. Whether the Special Chancellor erred in ruling that Appellees had standing to bring the action. 1

6 STATEMENT OF THE CASE I. Nature ofthe Case This is a simple declaratory judgment action regarding an attorney lien asserted by a law firm that formerly represented three heirs/wrongful death beneficiaries in a medical malpractice/wrongful death suit. When the former law firm would not give an amount certain as to its lien, Appellees (the heirs/wrongful death beneficiaries) requested that the Chancery Court apply the language of their contract with the former law firm, which included a clause defining its attorney lien in the event of termination. II. Court of Proceedings and Disposition in Court Below Appellees filed their Complaint for Declaratory Judgment on July 23, 2014, in the Chancery Court of Jackson County, Mississippi. [R. 1] The local chancellors recused themselves on July 28,2014. [R. 15] On July 31,2014, Appellant filed a Motion to Dismiss under Mississippi Rule of Civil Procedure 12(b)(6), for Disqualification of Counsel and for Rule 11 Sanctions. [R. 16] Honorable Hollis McGehee was appointed as Special Chancellor to preside over the action on August 8, [R. 19] Appellees filed a Motion for Summary Judgment on September 15, [R. 28] Appellant filed a second Motion to Disqualify Counsel on September 22, Both motions were heard, and the Special Chancellor denied the Motion to DisqualifY Counsel on October 17, 2014, and granted the Motion for Summary Judgment on January 22,2015. [R. 93, 94] Appellant filed a Motion to Reconsider and/or Alter or Amend Judgment Pursuant to Rule 59 of the Mississippi Rules of Civil Procedure on February 2, [R. 96] After a hearing, the Motion to Reconsider was denied and the Court entered its Final Order and Judgment on March 20,2015. [R. 114] Appellant filed its Notice of Appeal on April 17,2015. [R. 116] 2

7 III. Statement of the Facts Kimberly Ann Simmons died from lung cancer on April 21, [R. I] Surviving Ms. Simmons were her six adult children, David Nelson, Savannah Simmons, Misty Loper, Rachel Benefield, Shannon Simmons and Shane Nelson. [R. 6] Shane Nelson later passed away as well, and was survived by his daughter, Teressa Nicole Nelson, a minor. Guardianship of Teressa was assumed by her maternal grandmother, Sheryl Ann Phillips. In early 2012, four of the children (Savannah Simmons, David Nelson, Misty Loper and Shannon Simmons) entered into contracts with DLF to represent them in a medical malpractice/wrongful death action arising from an alleged failure to diagnose cancer leading to their mother's death. [R. 8-12] DLF never entered into contracts with Teressa Nicole Nelson or Rachel Benefield. [R. 35] DLF's contracts with the four heirs it represented included a clause which stated as follows: I do hereby grant to DENHAM LAW FIRM, PLLC an attorney's lien for the value of its services actually performed at its normal hourly rate and for all its costs, advances, and expenses of whatever nature in connection with my claim, including but not limited to fees of associates and paralegals. Any proceeds that I receive from my litigation will be delivered in a check or draft payable to the firm of DENHAM LAW FIRM, PLLC and to me, jointly, to secure payment of the firm's attorney's lien. This paragraph shall survive the termination of this contract for any reason. [R. 8-12] (emphasis added). The three heirs with whom DLF had contracts were represented exclusively by Kristopher W. Carter, a partner at DLF, during their time at that firm. [R. 3, 39; R.E. 83] On September 12, 2013, Kristopher W. Carter and Albert R. Jordan, IV were "dismissed" from D LF by Earl L. Denham because they would not agree to buy his law firm at his terms, and were ejected from the building by Denham on the spot [R. 45, TR. 56] Kristopher W. Carter and Albert R. Jordan, IV, formed the law firm of Carter & Jordan, PLLC, shoitly thereafter. [R. 3] Upon learning of Carter and Jordan's departure, the heirslbeneficiaries 3

8 with whom DLF had contracts terminated DLF's services. [R. 3] DLF immediately filed Notices of Attorney Lien for the work performed at DLF on the case prior to Carter's and Jordan's departure. [R ]. Over the next few months, all of the heirs/wrongful death beneficiaries (Savannah Simmons, David Nelson, Misty Loper, Rachel Benefield, Teressa Nicole Nelson and Shannon Simmons) 1 contracted with Carter & Jordan, PLLC, to represent them in the wrongful death/medical malpractice suit. [R. 3] After extensive litigation in federal court, C&J reached a tentative settlement of the lawsuit on behalf of the Heirs. [R. 3] C&J requested DLF's lien amount to finalize the settlement, but DLF refused to state the amount of its lien (even when requested to do so by the federal magistrate judge). [R. 29; TR ] Accordingly, the Heirs had no choice but to file a Complaint for Declaratory Judgment in the Chancery Court of Jackson County, Mississippi, on July 23, 2014, asking that the court enforce the terms ofdlf's contract defining its attorney lien. [R. I] The Heirs additionally served Requests for Admission on DLF, to which DLF later responded. [R ] Inter alia, DLF explicitly admitted the following: (1) that its contracts with the former clients all contained the referenced termination clause; (2) that the contracts contain a provision defining the amount of its lien in the event of termination of employment of DLF; (3) that DLF was bound by these contracts; and (4) that it refused to agree to a lien calculation in accordance with its own contract. [R ) The Heirs filed a Motion for Summary Judgment regarding the lien calculation and the enforceability of the contract clause, which, after holding a hearing, the Court granted on January 22, [R. 28, 94) Indeed, when Earl L. Denham was directly asked by the chancellor during the hearing, "the real issue is the client contract, is it not?"; he replied "Yes, sir." [TR. 8] The Court explained its rejection of DLF's argument during the hearing, stating, "I know this. I know that these people have a contract with your law firm, and they filed a dee action which is a classic dee action I Hereinafter collectively referred to as "the Heirs." 4

9 litigation to say what are our rights under that contract." [TR. 16] DLF further expressly waived its request for sanctions and any counterclaims, cross-claims and third party claims it might have. [TR. 46] DLF filed motions to dismiss and to disqualify counsel, claiming that the Heirs did not have standing to bring suit, and that Carter and Jordan should be disqualified as counsel because they were "material witnesses," but the Special Chancellor denied those motions. 2 The Special Chancellor ruled, in his Order on the Motion for Summary Judgment, that the Heirs did have standing to bring suit, and that DLF's lien was defined by the terms of its own contract. [R ] After the parties stipulated as to the dollar amount of DLF's time and expenses on the case, the trial court entered its Final Order and Judgment on March 20, 2015, stating the amount certain ofdlf's lien. [R. 114] SUMMARY OF THE ARGUMENT The Special Chancellor correctly ruled that DLF is bound by the terms of its contract with the Heirs. The Special Chancellor did not abuse his discretion in applying the clause from DLF's contract defining DLF's attorney lien upon termination. The Special Chancellor correctly calculated DLF's attorney lien in accordance with its contract, and did not abuse his discretion in his finding as to the attorney lien amount. Appellant's claim that the Heirs did not have standing to bring the declaratory judgment action was correctly determined to be meritless, as this is a classic declaratory action regarding interpretation of a contract between the Heirs and DLF. The Special Chancellor correctly denied the Motion to Disqualify Counsel, as (1) there were no material facts in dispute to which Carter and Jordan would be witnesses, and (2) Mississippi Rule of Professional Conduct 3.7 explicitly states an exception concerning testimony as to the nature 2 The motions and self-serving affidavit of Earl L. Denham attached thereto were filled with defamatory, mudslinging falsehood regarding Carter and Jordan engaging in unethical behavior and stealing files, etc., but as demonstrated by the transcript of the hearing (where additional documents were discussed and viewed but not made exhibits to the record), these were provably false. [TR ] 5

10 and value of legal services rendered. The Special Chancellor's rulings should be affirmed in their entirety. I. Standard of Review ARGUMENT A limited standard of review applies to the appeal of chancery court decisions. McNeil v. Hester, 1057 So. 2d 1063 ('lf21) (Miss. 2000). A chancellor's findings will not be disturbed unless he/she committed and abuse of discretion; i.e., there will be no reversal so long as the chancellor's decision was supported by substantial evidence, was not manifestly wrong, and did not apply an erroneous legal standard. Byrd v. Abney, 99 So. 3d 1180, 1183 ('lfll) (Miss. Ct. App. 2012) (internal citations omitted). Questions of law are reviewed de novo. Id. A chancellor's decision concerning attorney's fees will be upheld so long as it is supported by substantial evidence. Id. at 1185 ('lf28). A grant of summary judgment is proper where there is no genuine issue of material fact regarding the issue as to which the movant seeks summary judgment. Glover v. Jackson State University, 968 So. 2d 1267, 1274 (Miss. 2007). II. The Special Chancellor Did Not Abuse His Discretion by Enforcing Appellant's Own Contract to Define its Attorney Lien This action arose because DLF asserted an attorney lien against its former clients' settlement after being terminated. An attorney lien in this state arises by virtue of a contract between an attorney and client. Collins v. Schneider, 192 So. 20 (Miss. 1939). A substituting attorney has no ethical duty to protect a client's obligation to a former attorney. Attorney General Ethics Opinion No. 144 (as amended April 2013). The legal duty of a substituting attorney to protect a former attorney's lien arises only when the former attorney perfects a common law lien against the client's settlement. Estate of Stevens v. Wetzel, 762 So. 2d 293, 6

11 (Miss. 2000). 3 Absent the substituting attorney converting the funds to his own use, there is no cause of action by a terminated attorney against the substituting attorney. Id. at 294. In the instant case, DLF asserted a lien against the wrongful death settlement of the Heirs. DLF's own contract with its former clients contained a termination clause defining the method of calculating its lien in the event of termination. It provided: I do hereby grant to DENHAM LAW FIRM, PLLC an attorney's lien for the value of its services actually performed at its normal hourly rate and for all its costs, advances, and expenses of whatever nature in connection with my claim, including but not limited to fees of associates and paralegals. Any proceeds that I receive from my litigation will be delivered in a check or draft payable to the firm of DENHAM LAW FIRM, PLLC and to me, jointly, to secure payment of the firm's attorney's lien. This paragraph shall survive the termination of this contract for any reason. The clause is unambiguous and the contract is DLF's own form contract used for time immemorial. DLF admitted in response to the Heirs' Requests for Admission that it was bound by the contract. An attorney may validly include a termination clause defining his or her lien upon termination, and such a clause will be upheld so long as it is not unreasonable to the former client. See Attorney General Ethics Opinion No. 144 (as amended April 2013). If an attorney fails to include such a provision in his/her contract, the safe harbor method of calculation is quantum meruit. Id. Because DLF had the foresight to include such a clause in its contract with the former clients, a court does not even reach evaluation under quantum meruit. There has been no argument by the Heirs that the attorney lien as defined by the contract resulted in an 3 In Wetzel, a former attorney (Stevens) who had a contingent fee contract with a client in a personal injury action was terminated; and the client thereafter hired Wetzel. Id. at 294. The trial court held that Wetzel could not be held liable for the terminated lawyer's attorney lien, but rather Stevens's sole remedy was a direct action against his former client. Id. The Court of Appeals held that Wetzel had no ethical duty to protect the lien, but because Wetzel was aware of the perfected common law lien and kept most of the funds, be was liable for conversion. Id. at 295. The Supreme Court upheld the Court of Appeals' decision regarding Wetzel having no ethical duty to protect the lien, but reversed the Court of Appeals as to the conversion issue as it was never raised prior to appeal. Id. at

12 unreasonable fee to DLF. Accordingly, the trial court did not err in applying DLF's own contractual terms to define its attorney lien entitlement. DLF asserts in its brief that the chancellor "rewrote" the contract. He did not. He applied it explicitly and verbatim, including its actual language in his ruling. DLF asserts that it is entitled to its entire contingent fee of forty percent, but it is black letter law that an attorney is not entitled to a contingency fee which does not occur during his representation of a client. See Pollard v. Joseph, 50 So. 2d 546, 548 (Miss. 1950), DLF was fired nearly a year before the contingency (i.e., the settlement) ever occurred. This assignment of error is grossly meritless. III. The Special Chancellor Correctly Denied Appellant's Motion to Disqualify Counsel Because there was no genuine issue of material fact necessitating the testimony of Carter or Jordan in the action, they were not even arguably material witnesses. Indeed, DLF itself admitted in its responses to Requests for Admission all facts necessary for the chancellor to make his decision. Further, even were they found to have material testimony concerning the attorney lien, Rule 3.7(a)(2) of the Mississippi Rules of Professional Conduct explicitly applies an exception to testimony of counsel regarding the nature and value of legal services. This assignment of error is accordingly without merit. IV. The Special Chancellor Correctly Ruled that Appellees had standing to bring the declaratory action The trial court's ruling that the Heirs had standing to bring a declaratory judgment action against DLF regarding interpretation of their own contract with DLF was unquestionably correct. Indeed, virtually every case in Mississippi's jurisprudence lists as parties the attorney on one hand and his former c1ient(s) on the other. Further, the Wetzel decision involved exactly this 8

13 issue, and the courts made clear that an action regarding an attorney lien is properly between the terminated attorney and his former clients, and not against the substituting attorney. Wetzel, 762 So. 2d This is a classical example, as the chancellor stated, of a declaratory judgment action. This assignment of error is without merit. CONCLUSION The decision of the trial court should be upheld. DLF attempts to muddy the waters with wildly unfounded and patently false allegations against Carter and Jordan, the attorneys for the Heirs, but these are red herring issues with no applicability to the actual dispute: the amount of DLF's attorney lien entitlement. 4 DLF's arguments are quite confusing, as the Statement of Issues in its brief differs wildly from the actual subheadings and arguments made in the meat of the brief. 5 Indeed, Carter and Jordan were not only never brought in as third party defendants, but DLF waived all of its counterclaims and requests for sanctions on the record. The issue is whether a clause in an attorney's contingent fee contract that defines the attorney's lien in the event of termination is enforceable. The answer, clearly, is that it must be. Because that is exactly what the Special Chancellor did, there is no arguable basis for overturning his decision. 4 For instance, Denham claims Carter and Jordan unethically stole files when he was incapacitated by a heart operation. This is an outright fabrication. As discussed at the summary judgment hearing before the chancellor, Carter and Jordan sat down with Denham personally within a week of being dismissed from the firm and went over a list of cases that would be coming with Carter and Jordan and which would stay at DLF. There is even a list with Denham's handwriting reflecting this, and all files that were transferred from DLF to Carter and Jordan were delivered to Carter and Jordan by DLF employees. Denham's heart procedure was weeks later, after all files - including Simmons -- had already been delivered. It is a wonder Denham would make so flagrant a misrepresentation to this Court in light of incontrovertible facts and proof to the contrary. 5 One subheading even states that the chancellor erred by "not finding that Carter and Jordan owed Denham Law a fiduciary duty and that they breached it." This issue was not raised or ruled upon at all by the trial cow1, so its origin and reason for inclusion are a mystery. 9

14 CERTIFICATE I, KRISTOPHER W. CARTER, do hereby certify that I have this day forwarded via the electronic filing system, a true and correct copy of the above and foregoing Appellees' Brief to the following at their usual mailing addresses, and via the MEC filing system which gives electronic notice to all parties of record: Alexander Ignatiev Post Office Box 2076 Hattiesburg, MS IgnatievLaw@GMail.com. Hon. Hollis McGehee Special Chancellor P.O. Box 1587 Pascagoula, Mississippi SO CERTIFIED on this the 23 day of February, Is Kristopher W. Carter KRISTOPHER W. CARTER KRISTOPHER W. CARTER Mississippi Bar Number: ALBERT R. JORDAN, IV Mississippi Bar Number: I CARTER & JORDAN, PLLC 1101 Iberville Drive (39564) Post Office Box 2040 Ocean Springs, MS Telephone Facsimile Kris@CarterJordanLaw.com /s Albert R. Jordan IV ALBERT R. JORDAN, IV 10