MARK W NIEMANN V JOHN L NIEMANN
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STATE OF MICHIGAN
COURT OF APPEALS
MARK W. NIEMANN,
UNPUBLISHED
September 2, 2010
Plaintiff-Appellee,
v
No. 288262
Wayne Circuit Court
LC No. 05-511163-CB
JOHN L. NIEMANN, MARY NIEMANN and
NIEMANN BROTHERS GREENHOUSE,
INCORPORATED,
Defendants-Appellees,
and
STEVEN E. SMITH, Court Appointed Receiver,
Appellee,
and
CALLIGARO & MEYERING, P.C.,
Appellant.
Before: SHAPIRO, P.J., and SAAD and SERVITTO, JJ.
PER CURIAM.
Appellant, Calligaro & Meyering, P.C., appeals the trial court’s order regarding the
distribution of receivership funds. Appellant challenges the portion of the order that bars it from
asserting a claim for attorney fees against its former client, plaintiff, Mark W. Niemann. For the
reasons set forth below, we affirm.
Appellant argues that the trial court erred in barring it from asserting a claim for attorney
fees against plaintiff and in setting aside the attorney charging lien. We review for clear error the
trial court’s factual determination that there exists a conflict of interest. Rymal v Baergen, 262
Mich App 274, 316; 686 NW2d 241 (2004). Appellant’s arguments that the trial court lacked
jurisdiction over it and the trial court deprived it of due process are unpreserved and, thus,
reviewed for plain error affecting substantial rights. Kern v Blethen-Coluni, 240 Mich App 333,
336; 612 NW2d 838 (2000).
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Plaintiff and defendant, John L. Niemann, are brothers. Defendant, Mary Niemann, is
John’s wife. This case arises out of a dispute between the brothers concerning a commercial
greenhouse, Niemann Brothers Greenhouse, that had been in the Niemann family for
generations. In 1994, the parents hired attorney Clinton Meyering of the appellant law firm to
transfer their interest in the greenhouse to plaintiff and John. The sons were to redeem their
parents’ shares in the partnership, and the partnership would then enter into a land contract to
purchase from the parents the land upon which the greenhouse sat. Plaintiff and John each
secured 50 percent ownership in the partnership. In addition, the brothers formed a new
corporation, defendant Niemann Brothers Greenhouse, Inc., which assumed ownership of the
greenhouse’s business assets, but not the land. The brothers were each 50 percent shareholders
of the corporation. For Meyering’s part, he structured the redemption of the parents’ partnership
shares, prepared the land contract, and incorporated the new corporation.
In 2005, plaintiff hired Eric Grimm of appellant law firm to sue defendants. Plaintiff
alleged that, in 1996, John signed papers purporting to give a 1/3 interest in the corporation to
defendant Mary, and reducing plaintiff’s interest in the corporation from 1/2 to 1/3. John also
allegedly signed papers purporting to transfer the land upon which the greenhouse sat from the
partnership into the corporation. Plaintiff alleges that John signed the papers as part of a secret
plan to deprive plaintiff of his interest in the greenhouse and the land. Plaintiff did not become
aware of the transfers until late 2004.
The parties ultimately reached a settlement in November 2006. The trial court appointed
a receiver and ordered that the assets of the corporation be sold and the proceeds split equally
between plaintiff and John. Grimm worked on this case for approximately three months before
he was disqualified on conflict of interest grounds. Grimm asserted an attorney charging lien1 on
plaintiff’s recovery in the amount of approximately $25,000 for legal services rendered.
Appellant challenges the portion of the trial court’s September 19, 2008, order which
provides: “the charging lien asserted by Calligaro & Meyering, P.C., is denied and that firm is
barred from asserting a claim for attorney fees for the reasons stated on the record.” The trial
court barred appellant from recovering attorney fees on the ground that Grimm had been
disqualified from representing plaintiff because of an alleged conflict of interest. Although the
trial court did not articulate why it believed that a conflict of interest existed, presumably it
accepted defendants’ argument that MRPC 1.9 and MRPC 1.10 justified disqualification.
MRPC 1.9(a) provides as follows:
A lawyer who has formerly represented a client in a matter shall not thereafter
represent another person in the same or a substantially related matter in which that
1
The existence of an attorney’s charging lien is recognized in Michigan common law. George v
Sandor M Gelman, PC, 201 Mich App 474, 477; 506 NW2d 583 (1993). The attorney’s
charging lien creates a lien on a judgment, settlement, or other money recovered as a result of the
attorney’s services. Id.
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person’s interests are materially adverse to the interests of the former client unless
the former client consents after consultation.
Furthermore, MRPC 1.10(a) provides, in pertinent part:
While lawyers are associated in a firm, none of them shall knowingly represent a
client when any one of them practicing alone would be prohibited from doing so
by Rules 1.7, 1.8(c), 1.9(a), or 2.2.
Pursuant to MRPC 1.10(a), if Meyering would be disqualified from representing plaintiff on the
basis of MRPC 1.9(a), Grimm, too, by virtue of his being part of the same firm, would also be
disqualified.
At issue is whether the 1994 matter was “substantially related” to the instant matter for
purposes of MRPC 1.9(a). In the 1994 matter, Meyering performed the following work for the
relevant parties: he effectuated the transfer of the parents’ interest in the partnership to plaintiff
and John; he effectuated the partnership’s purchase of the land upon which the greenhouse sat;
and, he drafted the necessary paperwork to form plaintiff and John’s corporation. Here, the crux
of plaintiff’s complaint alleges that John acted fraudulently and improperly by transferring the
land on which the greenhouse sits from the partnership to the corporation, transferring a portion
of his (plaintiff’s) interest in the corporation to defendant Mary, and terminating plaintiff’s
employment with the corporation. Although the latter two claims do not relate to the 1994
matter, the first claim does because it implicates the intent behind, and purpose of, the documents
prepared by Meyering. Indeed, appellant acknowledges that Meyering may have been called as a
witness at trial to testify that the intention of the parties during the 1994 transactions was to
ensure that the land was property of the partnership, not of the corporation.2 Given these
circumstances, this case is “substantially related” to the 1994 matter wherein Meyering
represented the interests of plaintiff, John, and defendant corporation. Also, plaintiff’s interests
in this case are materially adverse to the interests of Meyering’s former client, John.3
Particularly where the deferential “clearly erroneous” standard applies, we are not persuaded that
the trial court erred in finding that MRPC 1.9 and 1.10 barred Grimm from acting as plaintiff’s
counsel.
As a matter of public policy, an attorney who is disqualified on conflict-of-interest
grounds is generally barred from receiving any fee from either of the opposed interests. Evans &
Luptak, PLC v Lizza, 251 Mich App 187, 196-197; 650 NW2d 364 (2002). Accordingly, the
2
Grimm could not be disqualified on the basis of this alone, as MRPC 3.7 provides that “[a]
lawyer may act as advocate in a trial in which another lawyer in the lawyer’s firm is likely to be
called as a witness unless precluded from doing so by Rule 1.7 or Rule 1.9.”
3
Appellant’s argument, that Meyering never represented John, is unpersuasive. Meyering
represented John as well as Mark in their efforts to form a corporation. And, in his capacity as
counsel in 1994, he was in a position to learn information that could be used adversely against
John here.
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trial court did not err in holding that appellant is barred from recovering attorney fees from
plaintiff.
Appellant asserts that the trial court lacked jurisdiction to enter a ruling barring it from
collecting attorney fees from plaintiff. In light of our holding, appellant’s jurisdiction argument
does not warrant relief. Appellant’s filing of an attorney charging lien might be construed as
appellant itself placing the attorney fee issue before the court and voluntarily submitting to the
court’s jurisdiction. Appellant presents no authority for the proposition that a trial court lacks
jurisdiction to make rulings regarding whether a party in a case before the court (here, plaintiff),
and over whom the court has jurisdiction, is obligated to pay an attorney charging lien lodged
against it. Even assuming that the trial court lacked jurisdiction to make the challenged ruling,
appellant cannot demonstrate plain error. We have fully considered and rejected appellant’s
arguments on the merits of the trial court’s ruling and conclude, as a matter of law, that appellant
was disqualified from representing Mark Niemann. As noted, an attorney who is disqualified on
conflict of interest grounds is not permitted to collect an attorney fee. Therefore, had appellant
pursued attorney fees in a court with undisputed jurisdiction, there does not exist a reasonable
probability that it could prevail in its pursuit. Indeed, this may be why counsel for appellant
failed to appear at the hearing, despite his knowledge of the scheduled hearing.
Similarly, appellant’s due process argument fails because appellant cannot establish plain
error. Though appellant asserts that he received inadequate notice of the hearing on the
receiver’s motion to distribute receivership funds and that this gave him inadequate time to
respond or appear, counsel conceded at oral argument that, despite the late notice, he could have
attended the hearing to assert his claims or to seek further time to do so. He failed to do so. In
any case, there is no reasonable probability that a different result on the attorney fee issue would
have been reached. Again, an attorney who is disqualified on conflict of interest grounds is not
permitted to collect an attorney fee.
Affirmed.
/s/ Douglas B. Shapiro
/s/ Henry William Saad
/s/ Deborah A. Servitto
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