REPLY IN SUPPORT OF BRIEF OF APPELLEE/CROSS APPELLANT H&E EQUIPMENT SERVICES, INC. ORAL ARGUMENT NOT REQUESTED

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1 E-Filed Document Aug :50: CA COA Pages: 10 IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI CASE NO CA IS-CA BAR-TIL, BAR-TTL, INC., Appellant/Cross-Appellee V. SUPERIOR ASPHALT, INC. PULL-A-PART OF JACKSON, LLC, MMC MATERIALS, INC., AND H&E EQUIPMENT SERVICES, INC. Appellees/Cross-Appellants On Appeal from the Chancery Court of Hinds County, Mississippi First Judicial District Original Cause No. G T/1 Til REPLY IN SUPPORT OF BRIEF OF APPELLEE/CROSS APPELLANT H&E EQUIPMENT SERVICES, INC. ORAL ARGUMENT NOT REQUESTED Donald Alan Windham, Jr. (MS ) BALCH & BINGHAM LLP 401 East Capitol Street, Suite 200 Jackson, MS Telephone: (601) Facsimile: (601)

2 TABLE OF CONTENTS TABLE OF AUTHORITIES ii SUMMARY OF REPLY REPLY ARGUMENT I. Appellant's counsel lacks standing to claim the interplead funds at issue II. Additionally, Bar-Til's counsel lacks possession over the interpleaded funds, and has no basis to asse1i its lien CONCLUSION CERTIFICATE OF SERVICE

3 TABLE OF AUTHORITIES CASES Brent v. Mathis, 154 So. 3d 842 (Miss. 2014) City of Madison v. Bryan, 763 So. 2d 162, 166 (Miss. 2000)... 3 Ellis v. Anderson Tully Co., 727 So. 2d 716 (Miss. 1998)... 3, 4 Hall v. City of Ridgeland, 3 7 So. 3d 25 (Miss. 2010)... 3 Indiana Tractor Co. v. Takesly, 337 So. 2d 705 (Miss. 1976)... 2 OTHER AUTHORITIES Rule 22 of the Mississippi Rules of Civil Procedure... 2 Rule 24 of the Mississippi Rules of Civil Procedure

4 SUMMARY OF REPLY It is undisputed that neither Chuck McRae nor his law firm, McRae Law Firm, PLLC (collectively referred to as "Appellant's counsel"), have intervened (or attempted to intervene) in the Interpleader Action, and are not parties to this cause. Appellant's counsel lacks standing to bring a claim for the interplead funds, and has no basis for asserting its "charging lien" for its fees because it failed to properly asse1t its claims to the interplead funds. In addition, Mississippi comts have made clear that a client must recover under its awarded judgment before his attorney may assert a lien against its client's recovery to the exclusion of judgment creditors of the attorney's client. In analyzing the order of priority of the actual pa1ties before this Court, it is undisputed that H&E Equipment Services, Inc. ("H&E") served a writ of garnishment on Superior Asphalt ("Superior") before any other creditor. H&E's writ was served on September 19, 2012, in the amount of One Hundred One Thousand One Hundred Sixty-Eight Dollars and 58/100 ($101,168.58). As such, the trial court erred in not awarding H&E the full amount of its writ of garnishment, as it has first priority over all other creditors, including Appellant's counsel. In addition, Appellant's counsel lacks standing to claim even a cent of the interplead funds at issue, because Appellant's counsel was never a party to the interpleader action and lacks standing to assert a claim to the funds interpleaded into the comt. For the reasons stated herein and in H&E's Appellant Brief, H&E should be awarded the entire amount of its writ, including interest, in accordance with its judgment against Bar-Til.

5 REPLY ARGUMENT I. Appellant's counsel lacks standing to claim the interplead funds at issue.! Appellant's counsel does not have, and has never had, a right to the interplead funds at issue in this cause. Appellant's counsel was never a party, nor intervened as a party, to the Interpleader Action.2 Because Appellant's counsel is not a party to the current action, nor did it intervene in the Interpleader Action to make a claim to its attorney's fees and expenses, Appellant's counsel lacks standing to assert a claim to the interplead funds. Under Rule 22 of the Mississippi Rules of Civil Procedure: [a]ny party seeking interpleader... may deposit with the court the amount claimed, or deliver to the court or as otherwise directed by the court, the property claimed, and the court may thereupon order such party discharged from liability as to such claims and the action shall continue as between the claimants of such money or property. Miss. R. Civ. P. 22 (b) (emphasis added). Appellant's counsel is neither a party nor a rightful claimant to the interplead funds. Under Rule 24 of the Mississippi Rules of Civil Procedure, anyone may intervene in an action permissively or as of right, but only upon serving "a motion to intervene upon the paities." Miss. R. Civ. P. 24(a)-(c); see also Indiana Tractor Co. v. Takesly, 337 So. 2d 705 (Miss. 1976). Despite its obvious knowledge of the cause of action, Appellant's counsel never filed any motion to intervene in this cause, and never took any steps to assert itself as an individual party in this cause. Throughout the pleadings, Bar-Til, Inc. ("Bar-Til") is listed as the Appellant, and Chuck McRae is listed as Appellant's counsel. Fmther, Bar-Til states in its own Appellant Brief that "Appellant's Counsel is not a ' claimant' to the interpleaded funds as the Appellees may attempt to argue." See Brief of Appellant, pg. 29. It is undisputed that 1 In the interest of brevity, H&E adopts and incorporates by reference the Brief of Appellee/Cross Appellant, MMC Materials, Inc., pp , and the Briefof Appellee, Superior Asphalt, Inc., pp The parties to the Interpleader Action were Bar-Til, H&E, MMC, and Tom De Weese. See [R. at 46; 125; ; ; ]; see also [R. Supp. at 5-6]. 2

6 Appellant's counsel's role in this suit was to serve as counsel for Bar-Til, and that Appellant's counsel was not a claimant to the interplead funds. Therefore, the lower court erred in awarding Appellant's counsel a po1tion of the funds at issue. Moreover, standing is a "jurisdictional issue which may be raised by any party or the Comt at any time." City of Madison v. B1yan, 763 So. 2d 162, 166 (Miss. 2000). "Pa1ties have standing to sue 'when they assert a colorable interest in the subject matter of the litigation or experience an adverse effect from the conduct of the defendant..." Brent v. Mathis, 154 So. 3d 842, 845 (Miss. 2014) (quoting Hall v. City of Ridgeland, 37 So. 3d 25, 33 (Miss. 2010)). Because Appellant's counsel has failed to properly intervene in this case, he lacks standing to bring forth its claims. Stated differently, neither Chuck McRae nor McRae Law Firm, PLLC have standing to assert a claim to the interplead funds because they did not intervene in the lower court's proceedings, and have never been a party to this case. Appellant's counsel was not made a pa1ty or an intervener to this case, and is therefore not a proper party on appeal. Appellant's counsel has no basis for asse1ting its "charging lien" for its fees and expenses, because it failed to properly asse1t its claims to the interplead funds. Appellant's counsel has no colorable interest in this matter, and the lower court erred in granting it an interest in the interplead funds. II. Additionally, Bar-Til's counsel lacks possession over the interpleaded funds, and has no basis to assert its lien. As H&E has previously stated, when an attorney in Mississippi works under a contingency fee agreement, the attorney is not entitled to asse1t an attorney's lien against interpleaded funds unless and until those funds have been recovered by his or her client. See Ellis v. Anderson Tully Co., 727 So. 2d 716, 719 (Miss. 1998). In Ellis, the Mississippi Supreme Comt confirmed the trial comt's finding that Ellis' attorneys were not entitled to an attorney's lien on the interplead funds because the recovery, which was the basis of the contingency 3

7 contract between Ellis and his attorneys, had not occurred and therefore, Ellis' attorney's rights had not vested. See id. at 719. Bar-Til attempts to distinguish Ellis from the facts at hand, arguing that the decision in Ellis "should not be extended to the instant situation" because the comi in Ellis "denied those attorneys their fees on the basis of those attorneys inability to gain recovery on behalf of their client..." See Brief of Appellant, pp On the contrary, just as in Ellis, Appellant's counsel has failed "to gain recovery on behalf of their client" for the very same reason, the funds were paid into comi and subject to a superior claim. The facts of this matter and those in Ellis are extremely similar. Just as the attorneys in Ellis, Appellant's counsel entered into a contingency contract with Bar-Til for its services. See Ellis, 727 So.2d at 719. Just as the funds were interplead into the registry of the court in Ellis, the funds at issue in this matter have also been interplead into the court's registry. As in Ellis, because Appellant's counsel entered into a contingency agreement with Bar-Til, and the funds were interplead into the registry of the comi by Superior, Appellant's counsel's rights have not vested in the current suit. Moreover, there has been no final judgment entered in this case, as it is now on appeal. Stated differently, because no recovery to Bar-Ti! has occurred, and this matter is not finally concluded, Appellant's counsel has no rights to claim any portion of the interplead funds. As this Comi held in Ellis, where the funds are interplead before recovery, "the contingency on which the contract was based, recovery, had not occuned..." Id. For these reasons, Appellant's counsel is not entitled to a lien on the funds unless there is some amount left over to be recovered by its client. Even if Appellant's counsel had recovered for his client and his rights under the contingency fee agreement had vested, his claim nevertheless fails. The funds at issue have never been in the actual - or constructive - possession of Appellant's counsel. It is undisputed 4

8 that the funds were interplead into the Clerk of Court by Superior; thus, they are not possessed in any manner by Bar-Til's counsel. There is no clear authority among courts in Mississippi as to whether an attorney must have actual possession over his client's funds in order to asse1i an attorney's lien, and this case is a matter of first impression for this Honorable Comt. Appellant's counsel's attempt to rely on out-of-state and non-controlling case law to support its contention that no other parties have priority over Appellant's counsel' s lien or claim to the funds at issue is irrelevant and inapplicable to this suit. See Brief of Appellant, pp. 9; 15. Instead, it is undisputed that H&E's writ of garnislunent was served on Superior before any other creditor, and, therefore, H&E is entitled to first priority over the interplead funds at issue. CONCLUSION Appellant's counsel is neither a patty nor an intervener in this case, and therefore has no basis for asse1ting its "charging lien" for its fees. First, Appellant's counsel lacks standing to asse1t its lien, because it failed to properly assert its claims to the interplead funds through intervention in the trial court proceedings. Because Appellant's counsel lacks standing to bring forward its claims to the funds at issue, this Honorable Court should not entertain the arguments of Appellant's counsel regarding its alleged attorney's lien. Notwithstanding, H&E is entitled to first priority over the interplead funds, because it's writ of garnishment was served on Superior before any other creditor; therefore, Appellant's counsel may not assert its lien, as its rights have not vested and it lacks possession of the interplead funds. For the reasons stated herein and in H&E's Brief, H&E Equipment Services, Inc. respectfully requests this Honorable Court find that H&E has priority over all other creditors in this cause, including Bar-Til's counsel, Chuck McRae and the McRae Law Firm, PLLC, and that H&E, therefore, is entitled to receive the full amount, including interest, of the judgment owed to 5

9 it by Bar-Til, Inc., in accordance with H&E's priority lien. H&E also requests that this Honorable Court find that Bar-Til's counsel's claim of f0l1y percent (40%) of the judgment, plus unproven costs and expenses, is unreasonable. In addition, H&E respectfully requests that this Honorable Court deny Bar-Til's request that its counsel be permitted to remove the judgment funds from the registry of the lower cout1. Respectfully submitted, this the J2}Jay of August, H&E EQUIPMENT SERVICES, INC. BY: BALCH & BINGHAM LLP BY:~~1d ~t- Donald Alan Windham, Jr. (MS Bar ) BALCH & BINGHAM LLP 401 East Capitol Street, Suite 200 Jackson, MS Telephone: (60 I) Facsimile: (601) awindham@balch.com 6

10 CERTIFICATE OF SERVICE I, Donald Alan Windham, Jr., do hereby certify that I have caused to be filed the above and foregoing Brief via the Supreme Court's MEC system which will send electronic notification to the following: Chuck R. McRae chuck@mcraelaw.net Christopher A. Bambach christopher@mcraelaw.net Seth C. Little seth@mcraelaw.net Crane D. Kipp cdk@wisecarter.com Cory L. Radicioni clr@wisecarter.com P. Vance Daly vdaly@thedalyfirm.com Further, I hereby certify that I have sent via United States Mail, postage prepaid, a true and correct copy of the above and foregoing Briefto the following non-mec participants: Honorable J. Dewayne Thomas Hinds County Chancellor Hinds County Chancery Court Building 316 S. President St. Jackson, MS iyjfk This the J_J day of August,