Khairy Barash v. Huda Yaldo
332705
| Mich. Ct. App. | Dec 12, 2017Background
- Plaintiffs were injured in a 2011 car crash and submitted their dispute to arbitration; arbitrator awarded $103,000 and the trial court retained jurisdiction to enforce the award.
- Rasor Law Firm (appellant) was the plaintiffs’ counsel; Jonathan Marko (appellee) was an attorney employed by Rasor who claimed a fee-splitting agreement entitling him to 25% of fees on matters he worked.
- Marko left Rasor after the arbitration award but asserted a charging lien for 25% of the funds Rasor would receive from the arbitration proceeds.
- Rasor moved to terminate the charging lien, arguing Marko never contracted directly with the clients and therefore lacked an attorney-client relationship required for a charging lien.
- The trial court held Marko had no attorney charging lien but granted him an equitable lien on the arbitration proceeds, finding his employment agreement created an identifiable fund and that he lacked an adequate remedy at law due to Rasor’s alleged financial problems.
- The Court of Appeals reversed the equitable-lien portion of the order, holding Marko had an adequate remedy at law (breach of contract) and the trial court erred in imposing an equitable lien based solely on Rasor’s purported financial condition.
Issues
| Issue | Plaintiff's Argument (Marko) | Defendant's Argument (Rasor) | Held |
|---|---|---|---|
| Whether Marko can assert an attorney's charging lien | Marko argued his fee‑split arrangement made him a special partner/entitled to a charging lien | Rasor argued Marko never had a contract with clients or an attorney‑client relationship | Court: Marko not entitled to a charging lien (issue not contested on appeal) |
| Whether Marko is entitled to an equitable lien on arbitration proceeds | Fee‑splitting employment agreement created an identifiable fund and equitable lien; Rasor may be insolvent so legal remedy inadequate | No separate contract with clients; any entitlement can be enforced by breach‑of‑contract action against Rasor | Court: Reversed — equitable lien improper because Marko has an adequate remedy at law |
| Whether alleged financial instability of Rasor justifies equitable relief | Marko: Rasor’s purported precarious finances make a money judgment inadequate | Rasor disputed insolvency and provided no basis for denying legal remedy sufficiency | Court: Financial speculation alone insufficient; solvency not shown, so legal remedy adequate |
| Proper reliance on precedent (Berke/Barnes/Warren Tool) | Marko relied on equitable lien principles from those cases | Rasor argued those cases do not authorize an equitable lien here | Court: Trial court misapplied Berke (it was a contract case); Barnes/Warren Tool not controlling on adequacy of legal remedy |
Key Cases Cited
- Barnes v. Alexander, 232 U.S. 117 (federal case discussing equitable liens on identifiable funds)
- Warren Tool Co. v. Stephenson, 11 Mich. App. 274 (Mich. Ct. App. decision referencing Barnes on attorneys' equitable claims)
- Berke v. Murphy, 280 Mich. 633 (Mich. Supreme Court contract case about payment to a referring/participating attorney)
- Yedinak v. Yedinak, 383 Mich. 409 (Mich. Supreme Court: equitable lien cannot be imposed if adequate remedy at law exists)
- Maclean v. Fitzsimons, 80 Mich. 336 (Mich. Supreme Court: solvency of obligor affects adequacy of legal remedy)