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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
JAMES EDDIE WILSON, JR., Plaintiff, v. BARBARA WATERS WILSON,
Filed: 15 May 2007
1. Pleadings--Rule 11 sanctions_-attorney's improper filing of charging lien
The trial court did not err by imposing sanctions on appellant attorney, who previously
represented plaintiff appellee in an equitable distribution case, under the legal sufficiency
requirement of N.C.G.S. § 1A-1, Rule 11 based on her filing of a charging lien, because: (1)
contrary to appellant's argument, she had notice that appellee sought the imposition of Rule 11
sanctions against her based on her improper filing of a notice of charging lien; (2) appellant was
given an opportunity to be heard; (3) common law generally limits the use of a charging lien to
representation taken on a contingency basis, and the charging lien made a claim for far more than
the amount owed for the work done on a contingent basis; (3) regarding the rule that a charging
lien must be filed by the attorney of record at the time judgment is entered, the charging lien in
the instant case was filed after appellee had dismissed appellant as his attorney, but before she
had received permission from the trial court to formally withdraw from the case; and (4) even
assuming arguendo that appellant could act as appellee's attorney after he informed her that he no
longer wanted her services, she was nonetheless not authorized to file a charging lien before the
final judgment was entered.
2. Pleadings--denial of motion to impose Rule 11 sanctions--appropriate motion but
wrong statute or rule
The trial court did not err by denying appellant attorney's motion to impose Rule 11
sanctions on plaintiff appellee based on his motion to strike her charging lien, because: (1)
appellant has not cited any cases, and none were found, holding that a party is required to
abandon a motion based simply on a party opponent's disagreement with its interpretation of the
law; (2) plaintiff did not cite any case law requiring a party to amend its motion every time a new
or more persuasive legal basis is found; (3) appellee's motion to strike sought relief to which he
was entitled when the notice of charging lien violated the legal sufficiency prong of Rule 11 and
the charging lien was improperly filed; and (4) appellant cites no cases holding that Rule 11
sanctions are mandatory against a party who files an appropriate motion but cites the wrong
statute or rule therein.
Appeal by appellant-attorney, who is not one of the captioned
parties, from judgment entered 17 March 2006 by Judge Becky Thorne
Tin in Mecklenburg County District Court. Heard in the Court of
Appeals 22 March 2007.
Aylward at Fenton Place, by Ilonka Aylward for appellant.
Whitesides & Walker, L.L.P., by Annette R. Heim and James E.
Wilson, for appellee
Appellant, attorney Ilonka Aylward, appeals an order imposing
sanctions pursuant to N.C. Gen. Stat. § 1A-1, Rule 11, and denying
her motion to impose Rule 11 sanctions on appellee. We affirm.
Appellant previously represented James Wilson (Wilson) in the
above captioned case that included, inter alia
distribution of the parties' marital assets. On 9 December 2005
the trial court faxed the parties' counsel a letter setting out the
court's intended distribution. The judge's letter indicated that
the court would address mathematical errors but would not consider
further argument on the substantive findings. A final order for
equitable distribution was entered on 21 February 2006.
On 12 January 2006, after the court had written to the parties
about its proposed order for equitable distribution, but before the
order had been entered, Wilson informed appellant that he no longer
wished her to represent him by letter stating that he was
terminating [her] representation of [him] effective immediately.
Appellant formally withdrew as counsel on 6 February 2006. On 13
January 2006, appellant filed a Notice of Charging Lien for
Attorney's Fees. The notice asserted an attorney's fee charging
lien [of approximately $81,200] against the Judgment of Equitable
Distribution signed 9 December 2005 which appellant claimed was
owed for her services rendered in the representation of the
Plaintiff by [appellant].
On 31 January 2006 Wilson filed a motion asking the court to
strike the charging lien, impose sanctions against appellant underN.C. Gen. Stat. § 1A-1, Rule 11, and award attorney's fees. In his
verified motion, which he asked the trial court to treat as an
affidavit, Wilson said that he ended appellant's employment as his
counsel on 12 January 2006 and had hired substitute counsel, and
that proceedings with the North Carolina State Bar had been
initiated to resolve the substantive dispute between Wilson and
appellant regarding attorney's fees. In addition, the motion
stated in pertinent part that:
4. The Notice of Charging Lien . . . is
deficient in that it fails to have any
. . . .
6. . . . [T]he Notice of Charging Lien . . .
does not provide the sufficient notice
required by North Carolina General Statutes
7. The Notice of Charging Lien . . . is not
well-grounded or warranted in law or equity[.]
. . . [Appellant] is subject to sanctions
pursuant to N.C.G.S. Rule 11 sanctions.
On 8 February 2006 appellant filed an affidavit opposing Wilson's
motion to strike, and moved for Rule 11 sanctions against Wilson.
Appellant asserted that (1) a charging lien was not a pleading, and
therefore did not have to comply with N.C. Gen. Stat. § 1A-1, Rule
8, and (2) a charging lien was not legally required to be filed
with an attached affidavit. Appellant agreed that Mr. Wilson fired
her on 12 January 2006, and that their dispute was set for
(See footnote 1)
Appellant sought Rule 11 sanctions, on the groundsthat Wilson's motion to strike was not grounded in fact, not
warranted by existing law or a good faith argument for a change in
the law, and was interposed for the improper purpose of delaying
the date when he would have to pay attorney's fees.
A hearing was conducted on the parties' motions on 27 February
2006. Following the hearing the trial court, in an order entered
17 March 2006, ordered the notice of charging lien stricken by the
court's own motion and imposed $1,868.10 in Rule 11 sanctions
against appellant, this being the amount Wilson had spent in
attorney's fees to defend against the charging lien. The order
also denied appellant's motion for Rule 11 sanctions and attorney's
fees. From this order appellant has appealed.
Standard of Review
N.C. Gen. Stat. § 1A-1, Rule 11(a) (2005) states in relevant
. . . Every pleading . . . shall be signed by
at least one attorney of record . . . [which]
constitutes a certificate by him that he has
read the pleading, . . . [and] that to the
best of his knowledge, information, and belief
formed after reasonable inquiry it is well
grounded in fact and is warranted by existing
law . . . and that it is not interposed for
any improper purpose[.] . . . If a pleading .
. . is signed in violation of this rule, the
court . . . shall impose upon the person who
signed it . . . an appropriate sanction. . . .
The trial court's decision to impose or not to impose mandatory
sanctions under N.C.G.S. § 1A-1, Rule 11(a) is reviewable de novo
as a legal issue. In the de novo review, the appellate court will
determine (1) whether the trial court's conclusions of law support
its judgment or determination, (2) whether the trial court'sconclusions of law are supported by its findings of fact, and (3)
whether the findings of fact are supported by a sufficiency of the
evidence. If the appellate court makes these three determinations
in the affirmative, it must uphold the trial court's decision to
impose or deny the imposition of mandatory sanctions under N.C.G.S.
§ 1A-1, Rule 11(a). Turner v. Duke University, 325 N.C. 152, 165,
381 S.E.2d 706, 714 (1989).
 We first address appellant's argument that the court erred
by imposing Rule 11 sanctions for her filing a charging lien.
Appellant asserts that sanctions were improperly imposed, on the
grounds that: (1) she was given no notice that Rule 11 sanctions
might be imposed on the basis of an alleged improper purpose for
filing the charging lien; (2) the trial court did not allow her to
be heard on the issue of sanctions; and (3) the order for sanctions
was based in part on findings of fact for which there is no
competent evidence. We disagree.
Appellant argues that she did not have notice that sanctions
might be imposed. 'Notice and an opportunity to be heard prior to
depriving a person of his property are essential elements of due
process of law which is guaranteed by the Fourteenth Amendment of
the United States Constitution.' Griffin v. Griffin, 348 N.C.
278, 280, 500 S.E.2d 437, 438 (1998) (insufficient notice where
appellant was notified that sanctions were proposed for filing the
adoption proceeding, but sanctions were imposed for [filing]
something else) (quoting McDonald's Corp. v. Dwyer, 338 N.C. 445,
448, 450 S.E.2d 888, 891 (1994)). In the instant case, appellant clearly had notice that Wilson
sought the imposition of sanctions against her. She had notice
that sanctions were sought under Rule 11, and that the basis for
seeking sanctions was her improper filing of a notice of charging
lien. Appellant, however, asserts that this notice was
insufficient in that it did not inform her of, e.g., which prong
of Rule 11 might be the basis for sanctions, which rule or statute
might be cited by opposing counsel, or which cases might be cited
at the hearing. Appellant has not cited any cases requiring this
level of detail, and we conclude that appellant had sufficient
notice that Rule 11 sanctions might be ordered against her, and
that the basis was her filing of the notice of charging lien. See
Dunn v. Canoy, 180 N.C. App. 30, 40, 636 S.E.2d 243, 250 (2006)
(where trial court specifically informed appellant he was
considering imposing Rule 11 sanctions; accepted an affidavit
from appellant; and questioned him and the other lawyers involved,
this Court holds appellant was thus given notice of the 'charges'
against him in advance and was given an opportunity to be heard
[and his] . . . due process rights were fully protected).
Appellant also asserts that she was not given the opportunity
to be heard at the hearing on this matter. The transcript of the
hearing consists of eighteen (18) pages. Appellant and opposing
counsel each made arguments resulting in approximately six
transcript pages each. It is true that at the end of the hearing,
the trial court directed appellant to be quiet and allow her torule on the matter. However, we conclude that appellant was given
an opportunity to be heard. This assignment of error is overruled.
We next consider whether Rule 11 sanctions were properly
imposed for appellant's filing of a notice of charging lien. The
charging lien is an equitable lien which gives an attorney the
right to recover his fees from a fund recovered by his aid. The
charging lien attaches not to the cause of action, but to the
judgment at the time it is rendered. Covington v. Rhodes, 38 N.C.
App. 61, 67, 247 S.E.2d 305, 309 (1978) (internal quotation marks
omitted) (citations omitted). However:
The well established law in North Carolina is
that no right to an attorney's charging lien
exists when an attorney working pursuant to a
contingent fee agreement withdraws prior to
settlement or judgment being entered in the
case . . . Under existing law, the former
attorney's sole remedy is to institute an
action for quantum meruit recovery of fees
against the former client.
Mack v. Moore, 107 N.C. App. 87, 91-92, 418 S.E.2d 685, 688 (1992)
(citation omitted). In Mack v. Moore, an attorney filed a charging
lien after withdrawing from representation and before judgment was
entered. This Court upheld the imposition of Rule 11 sanctions in
part for legal insufficiency:
Thus, assuming a reasonable inquiry, the
pivotal question is whether a reasonable
person in [appellant's] position (i.e., an
attorney), after having read and studied the
applicable law as previously set forth in this
opinion, would have concluded that she had the
right to assert an attorney's charging lien
under the circumstances of this case. The
answer is no. Accordingly, the trial court's
order imposing sanctions . . . for violation
of the legal sufficiency prong of Rule 11 must
Id. at 107 N.C. App. at 92, 418 S.E.2d at 688-89.
In the instant case, we conclude that appellant was not
entitled to file a charging lien.
First, our common law has generally limited the use of a
charging lien to representation taken on a contingency basis.
Appellant asserts that she and Wilson agreed to carve out a small
part of work to be contingent on the correction of a perceived
error by the trial court judge. However, that was, as appellant
concedes, a small part of her work, and did not transform the
parties' contract for legal representation at an hourly rate of
$225/hour into a bona fide contingency contract. Further, the
charging lien makes a claim for far more than the amount owed for
the work done on a contingent basis. Appellant does not address
Regarding the rule that a charging lien must be filed by the
attorney of record at the time judgment is entered, it is
uncontradicted that the charging lien was filed after Wilson had
dismissed appellant as his attorney, but before she had received
permission from the trial court to formally withdraw from the case.
Appellant argues that until she withdrew she remained Wilson's
counsel of record, and thus was entitled to file a charging lien.
We do not reach this issue because it is clear that appellant did
not meet the other requirement for filing a charging lien.
Appellant filed the charging lien after the trial court had
faxed counsel its proposed distribution, which appellant described
in her response to the motion to strike by saying that the trialcourt entered her decision by letter ruling signed on 9 December
2006 (the Letter Ruling). However, a judgment is entered when
it is reduced to writing, signed by the judge, and filed with the
clerk of court. N.C. Gen. Stat. § 1A-1, Rule 58 (2005). Thus,
the purported letter ruling by fax did not constitute a final
judgment. Accordingly, we conclude that appellant was not entitled
to file the notice of charging lien because, even assuming arguendo
that she could act as Wilson's attorney after he informed her that
he no longer wanted her services, she was nonetheless not
authorized to file a charging lien before the final judgment was
There are three parts to a Rule 11 analysis: (1) factual
sufficiency, (2) legal sufficiency, and (3) improper purpose. A
violation of any one of these requirements mandates the imposition
of sanctions under Rule 11. Because we find plaintiff violated the
legal sufficiency requirement, we find it unnecessary to address
the others. Dodd v. Steele, 114 N.C. App. 632, 635, 442 S.E.2d
363, 365 (1994) (citing Bryson v. Sullivan, 330 N.C. 644, 655, 412
S.E.2d 327, 332 (1992), and N.C. Gen. Stat. § 1A-1, Rule 11
[(2005)]). We conclude that Rule 11 sanctions were properly
imposed for failing to meet the legal sufficiency requirement of
the rule. This assignment of error is overruled.
 Appellant also argues that the trial court committed
reversible error by denying her motion for Rule 11 sanctions
against Wilson. Appellant's arguments rest on the premise that herresponse to the motion to strike conclusively demonstrated that the
motion to strike was baseless and invalid, thus requiring Wilson to
withdraw the motion or face Rule 11 sanctions. We disagree.
Appellant's response disputed Wilson's stated grounds for the
motion to strike, the failure to attach an affidavit or comply with
N.C. Gen. Stat. § 1A-1, Rule 8 (2005). However, appellant's
position was not supported by any case law, but only by her own
interpretation of the language of Rule 8. Appellant has not cited
any cases, and we find none, holding that a party is required
abandon a motion based simply on a party opponent's disagreement
with its interpretation of the law. Nor does she cite any case law
requiring a party to amend its motion every time a new or more
persuasive legal basis is found.
Moreover, as discussed above, the notice of charging lien
violated the legal sufficiency prong of the Rule 11 analysis; the
charging lien was improperly filed, if only on the basis that no
final judgment had been entered. Wilson's motion to strike
therefore sought relief to which he was entitled, even if not on
the basis of the rules cited in his motion. Appellant cites no
cases holding that Rule 11 sanctions are mandatory against a party
who files an appropriate motion, but cites the wrong statute or
rule therein. This assignment of error is overruled.
For the reasons discussed above, we hold that the trial
court's order imposing Rule 11 sanctions must be
Judges BRYANT and STEELMAN concur.
The trial court entered an order on 6 February 2006,
allowing appellant to withdraw as counsel.
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