Law Offices of John L. Juliano, P.C. v. Jensen
673 F. App'x 291
| 4th Cir. | 2016Background
- Juliano, a New York law firm, originally represented Hazlett in a New York personal-injury suit, then referred the matter in 2008 to Jensen McGrath Podgorny (JMP) under a contingency agreement that included a fee-division schedule paying Juliano one-third of JMP’s fee.
- JMP filed a North Carolina suit that was dismissed; later Jensen left JMP and formed Jensen Law; Hazlett remained with JMP initially but ultimately retained Jensen Law in 2012 under a new contingency agreement that revoked prior fee contracts and did not allocate any fee share to Juliano.
- Jensen Law tried the second North Carolina action, obtained a jury verdict and fee of roughly $2.3 million; Juliano learned of the verdict about a year later and demanded one-third of the fee under the 2008 fee-division schedule; Jensen refused.
- Juliano sued in federal court (diversity) asserting unjust enrichment and seeking imposition of a constructive trust or equitable lien to recover one-third of Jensen’s fees; he did not allege he performed work on the North Carolina case or that he assisted Jensen in the trial.
- The district court dismissed under Rule 12(b)(6), concluding Juliano failed to plead unjust enrichment (no benefit conferred/accepted) and had not pleaded quantum meruit; the Fourth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether unjust enrichment / constructive trust claim is pleaded | Juliano: equitable transfer of JMP’s fee-sharing obligation to Jensen because Jensen knew of the 2008 agreement and Juliano brought Hazlett to JMP | Jensen: no benefit was conferred on Jensen for his representation; no inequitable conduct or relationship to support fee sharing | Court: Dismissed — Juliano failed to allege conferment and acceptance of a benefit or unconscionable conduct to justify constructive trust |
| Whether complaint adequately pleads quantum meruit | Juliano: (argued at oral argument) entitling him to fees for services that led to recovery | Jensen: complaint did not plead quantum meruit or identify services for which reimbursement is sought | Court: Dismissed — complaint gave no fair notice of a quantum meruit claim and did not allege services supporting recovery |
| Whether Juliano’s prior agreement with JMP binds Jensen after Jensen left JMP | Juliano: fee obligation should follow because Juliano procured the case for the firm when Jensen was a partner | Jensen: left firm two years before representation; Hazlett executed a new fee agreement revoking prior contracts | Court: Found relationship too attenuated; new agreement and intervening events undercut equitable claim |
| Sufficiency of pleading under Rule 12(b)(6) and applicable NC law standards | Juliano: equitable relief appropriate despite not pleading classic unjust enrichment elements | Jensen: North Carolina law requires measurable benefit conferred and conscious acceptance; pleadings must provide fair notice | Court: Applied NC unjust enrichment elements and federal notice pleading standards; upheld dismissal |
Key Cases Cited
- Belmora LLC v. Bayer Consumer Care AG, 819 F.3d 697 (4th Cir. 2016) (Rule 12(b)(6) review standard and accepting well-pleaded allegations)
- JPMorgan Chase Bank, N.A. v. Browning, 750 S.E.2d 555 (N.C. Ct. App. 2013) (elements of unjust enrichment under North Carolina law)
- Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC, 723 S.E.2d 744 (N.C. 2012) (constructive trust described as equitable remedy to prevent unjust enrichment)
- Butler v. Butler, 768 S.E.2d 332 (N.C. Ct. App. 2015) (mere enrichment at another’s expense insufficient for unjust enrichment)
- Watson Elec. Constr. Co. v. Summit Cos., LLC, 587 S.E.2d 87 (N.C. Ct. App. 2003) (unjust enrichment requires more than expense to one party)
- Houston v. Tillman, 760 S.E.2d 18 (N.C. Ct. App. 2014) (constructive trust requires inequity or unconscientious acquisition)
- Stevenson v. City of Seat Pleasant, 743 F.3d 411 (4th Cir. 2014) (federal notice-pleading requires fair notice of claims)
- McCleary-Evans v. Md. Dep’t of Transp., 780 F.3d 582 (4th Cir. 2015) (pleading standards and Twombly/Iqbal pleading principles)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for pleadings)
- Greenhouse v. MCG Capital Corp., 392 F.3d 650 (4th Cir. 2004) (appellate affirmance may rest on any basis supported by the record)