Cummings v. Keefer (In re Cummings Manookian, PLLC)

Summarized by David Treacy , U.S. Bankruptcy Court, Eastern District of Kentucky
7 months 2 days ago

Case Type:

Business

Case Status:

Affirmed

Citation:

No. 24-5606 (6th Circuit, Jul 16,2025) Not Published

Tag(s):

Ruling:

The U.S. Court of Appeals for the Sixth Circuit concluded the Appellants "waived their appeal" by failing to address the bankruptcy court's two reasons for denying their motion to compel arbitration of an attorney fee dispute: (a) Appellants failed to admit an arbitration agreement into evidence, and (b) any arbitration agreement, if one existed, would not be enforced as it "would interfere with the purposes of the Bankruptcy Code." Stated differently, the arguments Appellants offered the circuit were not "responsive to the bankruptcy court’s reasons for rejecting Appellants’ claims."

Procedural context:

Both the Sixth Circuit and the district court, reviewing the bankruptcy court's denial of Appellants' motion to dismiss, construed the motion "as a request to compel arbitration." Both also found they could immediately review the bankruptcy court’s decision under 9 U.S.C. § 16(a)(1) and reached the merits.

Facts:

The fact pattern of this case is a spiderweb. Defendant/Appellant Bretton Keefer engaged a law firm, Cummings Manookian, PLLC ("CM"), to represent him in a medical negligence/wrongful death lawsuit. Three CM attorneys worked on the case: Plaintiff/Appellee Brian Cummings, Defendant/Appellant Afsoon Hagh, and non-party Brian Manookian. Keefer and CM signed a retainer agreement "that covered all disputes 'within the Attorney-Client relationship'" and stated, “neither the client nor the attorneys in this Attorney-Client relationship can file litigation over or about any alleged or real dispute within the Attorney-Client relationship, and the forum for any such dispute must first be a good-faith mediation and then binding arbitration.'” Cummings left CM before Keefer's lawsuit was filed. Keefer then signed a retainer agreement with "Manookian PLLC;" its terms were nearly identical to those in his agreement with CM, including "the same mediation and arbitration language[.]" Separately, Cummings "emailed Keefer asking him to confirm that Cummings was still authorized to work on" the tort case and stating "the email was meant only to supplement the updated retainer agreement that Keefer had signed with Manookian." Keefer confirmed his intent to retain Cummings, who performed legal work in Keefer's lawsuit. After the lawsuit progressed through discovery, Cummings sent Keefer an engagement letter that "was identical to the prior agreements (including the mediation and arbitration clause) and merely added a requirement that, if Keefer chose to leave Cummings an online review, he would leave only a five-star positive review." But Keefer declined to sign this agreement, leading Cummings to withdraw as his counsel. Meanwhile, after Cummings' departure from CM, (1) Manookian was suspended from practicing law, (2) Hagh opened her own firm and, along with new co-counsel, continued to represent Keefer in the negligence case, which settled on the eve of trial, and (3) CM filed for bankruptcy protection in the U.S. Bankruptcy Court for the Middle District of Tennessee. After the tort suit settled, Cummings asked Hagh to arbitrate the division of earned legal fees. Hagh declined, contending Cummings was not owed any fees. Cummings thus sued Keefer, Hagh, and the appointed bankruptcy trustee for CM, Jeanne Burton, in state court. Trustee removed this suit to federal bankruptcy court. Hagh and Keefer moved to dismiss Cummings' complaint, or to stay the case pending mediation and arbitration, contending "the arbitration provision in the retainer agreement with Keefer covered the present dispute over fees between Hagh and Cummings." The bankruptcy court entered a scheduling order for an evidentiary hearing on the motion to dismiss and required the parties to file witness and exhibit lists. Hagh and Keefer did not comply. At the hearing, Hagh and Keefer referenced the retainer agreement (it was attached to their motion to dismiss) and their counsel said "he 'didn’t understand that we were required to reupload exhibits that were filed in support of the motion[.]'” The bankruptcy court refused Hagh and Keefer's request to take judicial notice of the retainer agreement. It ultimately denied the motion to dismiss "because, based on the evidence before it, (1) there was no arbitration agreement between Cummings and Hagh and (2) compelling arbitration would frustrate the purposes of the Bankruptcy Code." Keefer and Hagh appealed to the U.S. District Court for the Middle District of Tennessee, which affirmed the bankruptcy court's decision, They then appealed further to the Sixth Circuit,

Judge(s):

BATCHELDER, LARSEN, and RITZ

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