          United States Court of Appeals
                     For the First Circuit

No. 13-1476

                      SANTANDER BANK, N.A.,

                      Plaintiff, Appellee,

                               v.

                      CAMILLA J. WARRENDER,

                      Defendant, Appellee,


                      VALERIANO DIVIACCHI,

                  Interested Party, Appellant.


          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

          [Hon. Denise J. Casper, U.S. District Judge]



                             Before

                    Selya, Stahl and Lipez,
                         Circuit Judges.


     Valeriano Diviacchi, appearing pro se.
     Howard M. Brown, with whom Richard E. Gentilli, Sarah A.
Smegal, and Bartlett Hackett Feinberg P.C. were on brief, for
appellee Santander Bank, N.A.
     Nancy Sue Keller, with whom Harold Jacobi, III and Jacobi and
Chamberlain LLP were on brief, for appellee Camilla J. Warrender.



                          July 29, 2014
             LIPEZ, Circuit Judge.        This is an appeal from the

district court's denial of a motion to enforce an attorney's lien

in an underlying mortgage dispute.           Attorney Valeriano Diviacchi

was one of several lawyers representing defendant Camilla Warrender

in an action brought against her by her mortgagee, Sovereign Bank.1

Shortly after Diviacchi entered his appearance, Warrender, without

Diviacchi's assistance, was able to find a third-party purchaser

for   her   property   and   negotiate   with   Sovereign    Bank    for   the

dismissal of its claims against her.          Prior to the completion of

the   settlement,   Diviacchi    filed   a   notice   of   attorney's      lien

pursuant to Massachusetts General Laws chapter 221, section 50

("section 50").        The sale of the property went smoothly and

Sovereign Bank dismissed its claims against Warrender.              Diviacchi

nonetheless moved for enforcement of his lien against funds derived

from the sale of the property.           The district court denied his

motion.     We affirm that decision.

                                    I.

             In June 2011, Sovereign Bank commenced this action in the

District of Massachusetts against Warrender to collect on a $2.5

million loan that was secured by property on Nantucket.2            On May 1,


      1
       The appellee, Santander Bank, N.A., operated under the name
"Sovereign Bank, N.A." during the events at issue here and so we
refer to it throughout by that former name. The bank's name was
changed in 2013 and, pursuant to our order of November 13, 2013,
the caption of the case was amended to reflect that change in name.
      2
       Federal jurisdiction is based on diversity of citizenship
pursuant to 28 U.S.C. § 1332. At the time of filing, plaintiff

                                   -2-
2012,    Warrender   hired   Diviacchi    to    represent    her.     The   fee

arrangement provided for Diviacchi to receive either a contingent

fee (calculated as a percentage of the gross amount collected from

her counterclaim, if any) or a flat, nonrefundable fee of $25,000

($15,000 of which was paid upfront).              One week after he was

retained, Diviacchi entered his appearance and filed an amended

counterclaim against Sovereign Bank. Sovereign Bank filed a motion

to dismiss the counterclaim on May 17.

            Shortly after entering his appearance, Diviacchi briefly

left the state to attend his daughter's college graduation.                  He

requested, and was partially granted, a stay of proceedings for

thirty days.     That stay applied to any scheduling and response

deadlines, but the court held that the non-judicial foreclosure of

Warrender's    property,     scheduled    for    May   24,    could     proceed

regardless of Diviacchi's availability.3           As a result, Warrender

hired attorneys from the law firm of Jacobi & Chamberlain LLP, who

entered a limited appearance for the purpose of "filing Defendant's

Emergency Motion For A Temporary Restraining Order And Motion For

Preliminary    Injunction     in   the    above-captioned      action     while


Sovereign Bank, N.A. was a federal savings bank with its
headquarters and principal place of business in Pennsylvania;
defendant Warrender was a citizen of Massachusetts.
     3
       Under Massachusetts law, a court action is generally not
necessary to effectuate a foreclosure.       When the loan is in
default, provided the mortgage documents include the usual power of
sale provision, the law permits the mortgagee to conduct a
foreclosure by sale. See Mass. Gen. Laws ch. 244, § 14. The law
does require notice before such a foreclosure sale. Id.

                                    -3-
defendant and plaintiff-in-counter-claim awaits the return of her

new counsel from vacation."          After oral argument on May 22, the

court       denied   the   motion,   thereby   declining   to   enjoin   the

foreclosure sale of Warrender's property. Jacobi & Chamberlain LLP

represented Warrender in an interlocutory appeal of that decision.

We ordered the parties to participate in mediation.4

              On June 6, Warrender notified Diviacchi by email that she

had received an offer for the property from a third party and

Sovereign Bank was offering to settle the case pursuant to the

short sale5 and forgive the loan.           Diviacchi responded, telling

Warrender that if she were to settle, she would still owe him the

$10,000 balance on the flat fee.        Meanwhile, on June 14, Diviacchi

filed an opposition to Sovereign Bank's motion to dismiss the

counterclaim.

              In July, due to Warrender's alleged refusal to pay the

remaining portion of the flat fee in accordance with the fee

agreement, Diviacchi filed a notice of attorney's lien in the

action in accordance with section 50.           Three days after the lien

was filed, as a result of the court-ordered mediation, Warrender



        4
       The appeal was not decided before the settlement described
herein was reached and was therefore voluntarily dismissed pursuant
to Federal Rule of Appellate Procedure 42(b).
        5
       A short sale is a sale of real property for less than the
total amount owed on a loan secured by that real property that
nonetheless, by agreement, generally releases the property from the
encumbrance. See Daniel F. Hinkel, Practical Real Estate Law 167
(7th ed. 2014).

                                      -4-
and Sovereign Bank agreed to a settlement pursuant to a stipulation

(allegedly unbeknownst to Diviacchi) that Warrender's property be

sold for $2.24 million to a third party.          Sovereign Bank agreed to

forgive the loan and waive its right to a deficiency judgment in

exchange for $1.9 million of the proceeds from the short sale. The

remaining proceeds were left to Warrender ($340,000 in total).              Of

the $340,000, after other debts were paid in order to transfer

clear title (including the debts accrued by the hiring of Jacobi &

Chamberlain LLP), Warrender had over $175,000 remaining.            Only the

attorneys of Jacobi & Chamberlain LLP signed the stipulation on

behalf of Warrender.      On September 6, 2012, one day after the sale

of the property, a stipulation of dismissal was submitted to the

court (also allegedly unbeknownst to Diviacchi).6

              Diviacchi then filed a Motion to Enforce Attorney's Lien

Against All Parties, seeking almost $100,000 in accordance with the

contingency fee provision (i.e., one-third of the $340,000 minus

the $15,000 paid on the flat fee).           In April 2013, the district

court denied the motion to enforce the lien, holding that it failed

to   comply    with   section   50.    In   May   2013,   the   court   denied

Diviacchi's motion for reconsideration. This appeal from Diviacchi

followed.      We review de novo the district court's determination

that the attorney's lien was not enforceable under section 50. See



      6
       Diviacchi claims that he did not learn of the events that
occurred between the time he filed his lien and the filing of the
stipulation of dismissal until September 21.

                                      -5-
Gargano v. Liberty Int'l Underwriters, 572 F.3d 45, 49 (1st Cir.

2009) ("[W]e review de novo the district court's interpretation of

state law.").

                                   II.

            Section 50 provides, in pertinent part:

            From the authorized commencement of an action,
            counterclaim or other proceeding in any court,
            or appearance in any proceeding before any
            state   or   federal  department,   board   or
            commission, the attorney who appears for a
            client in such proceeding shall have a lien
            for his reasonable fees and expenses upon his
            client's cause of action, counterclaim or
            claim, upon the judgment, decree or other
            order in his client's favor entered or made in
            such proceeding, and upon the proceeds derived
            therefrom.

            The district court concluded that Diviacchi was not

entitled to enforcement of his lien pursuant to that statute.

Initially, the court concluded that there was no judgment in favor

of Warrender.     In the alternative, the court held that Diviacchi

"failed to make a showing that he incurred reasonable fees and

expenses here."     After reconsideration, the court added, without

reversing its prior decision, that even if the stipulation of

dismissal constituted a judgment, it did not result in "proceeds"

being paid on Warrender's counterclaim.

            Thus, the district court's holding had three components.

First, the court concluded that the settlement reached in this case

did   not   constitute   a   "judgment,   decree   or   other   order   in

[Warrender's] favor" within the meaning of section 50. Second, the


                                   -6-
court concluded that Warrender received no "proceeds" upon which a

lien could attach.   Id.    Third, the court concluded that the fees

requested were not shown to be reasonable.       We address each of

these conclusions in turn.

          Massachusetts courts have consistently held that "for

purposes of [Mass. Gen. Laws ch. 221, § 50], a 'judgment' includes

a stipulation of dismissal."        Ne. Avionics, Inc. v. City of

Westfield, 827 N.E.2d 721, 725 (Mass. App. Ct. 2005); see also

Craft v. Kane, 747 N.E.2d 748, 752 (Mass. App. Ct. 2001) ("[T]he

stipulation of dismissal constituted a judgment within the meaning

of the attorney's lien statute."). Here, it is undisputed that the

parties agreed to a settlement whereby Sovereign Bank would forgive

Warrender's debt and waive its right to a deficiency judgment

against her in exchange for a cash payment derived from the short

sale of the property.      Because the result of that settlement was

the dismissal of claims against Warrender, the stipulation of

dismissal could fairly be interpreted as a judgment in her favor.

See, e.g., Ne. Avionics, 827 N.E.2d at 725-26.          Accordingly,

Diviacchi is correct in his assertion that the stipulation of

dismissal here could have provided the basis for an attorney's

lien.

          The problem, however, is that an attorney's lien must

attach to something.       In other words, there must be "'proceeds

derived' from a 'cause of action' as a result of a settlement."

Ropes & Gray LLP v. Jalbert, 910 N.E.2d 339 n.12 (Mass. 2009); see

                                  -7-
also Curly Customs, Inc. v. Pioneer Fin., 814 N.E.2d 1176, 1179

(Mass. App. Ct. 2004) ("[I]f there are no such proceeds, there is

no lien." (citing Torphy v. Reder, 257 N.E.2d 435, 437-38 (Mass.

1970)).   Here, the sale of Warrender's property, which was a

condition of the settlement, did generate money that she then used

to pay her indebtedness to Sovereign Bank and other creditors.

Importantly,   these   funds   did   not   come   from     the   counterclaim

defendant -- Sovereign Bank -- but rather from a third party in a

transaction    that   was   effectuated    outside   the    context   of   the

litigation.    Furthermore, the relevant cause of action from which

proceeds had to derive was her counterclaim, which was simply

dismissed as part of the settlement.

          The district court found that the settlement itself

generated no "proceeds" for Warrender; neither the dismissal of her

counterclaim nor the dismissal of the bank's claims against her

required any payment to her, and any money she may have acquired

came from the sale of her property to a third party.             Accord In re

Leading Edge Prods., Inc., Civ. A. No. 90-13112-Z, 1991 WL 97459,

at *1 (D. Mass. May 28, 1991) ("[The attorney's client] received no

cash or cash equivalent as the result of the settlement.              Rather,

the benefit derived from the elimination of [creditor's] claim was

merely the elimination of [the client's] debt to this creditor

. . . .   No case in Massachusetts recognizes such a benefit as

attachable proceeds under the charging lien statute . . . .").             As

in Leading Edge, the benefit Warrender derived from the stipulation

                                     -8-
of dismissal was the ability to sell her own property and eliminate

her indebtedness to Sovereign Bank (i.e., the bank's claim against

her).       Thus, any funds that went to satisfy Warrender's debt were

not "proceeds" of her counterclaim.

               Diviacchi argues that because the sale price of the

property exceeded the amount Warrender paid to Sovereign Bank, she

experienced a windfall.7         In an attempt to characterize that

windfall as "proceeds" of her counterclaim, he then likens the sale

of Warrender's home to the sale of patents and patent applications,

which the Supreme Judicial Court of Massachusetts found to generate

attachable "proceeds" in Ropes & Gray.       910 N.E.2d at 338 ("[T]he

attorney's lien also attaches to the proceeds from the sale of

[patents and patent applications].").       There, however, the court

focused on the peculiarities of patent litigation and an attorney's

role in securing the monetary benefits of a valid patent.          The

court noted that "[a] patent attorney who successfully secures a

patent for his client in proceedings before the USPTO is entitled

to the same protection under [section 50] as an attorney who

obtains a favorable judgment for his client in court."      Id. at 339

(emphasis added).      The court also remarked that "the clear intent



        7
       But cf. Goldstein, Goldman, Kessler & Underberg v. 4000 E.
River Rd. Assocs., 64 A.D.2d 484, 488 (N.Y. App. Div. 1978)(per
curiam) (holding that although the attorney successfully argued for
a reduction in the tax assessment of his client's property,
producing "a measurable saving of taxes for three tax years," the
savings were not proceeds subject to a lien within the meaning of
New York's attorney's lien statute).

                                    -9-
of   the   Legislature   in   enacting    [section   50]   was   to   provide

protection to the unpaid attorney, and in the context of patent

prosecution work, this intent would be wholly frustrated if the

lien did not attach to the proceeds derived from the sale of the

patent or patent application."      Id. at 338.

            This logic does not apply to the funds generated by the

sale of Warrender's property.        Diviacchi did not "successfully

secure[]" the value that Warrender realized by selling her home.

Id. at 339.    Unlike a patent, whose monetary value is linked to the

efforts of the attorney in securing appropriate recognition of its

validity, real property has value independent of the efforts of any

attorney.     In other words, one situation involves created value,

the other intrinsic value.         Warrender's home was worth $2.24

million regardless of whether Diviacchi did any work. Moreover, by

his own admission, Diviacchi had virtually no involvement in the

short sale or settlement process.            Hence, we agree with the

district court that Diviacchi is not entitled to enforcement of his

attorney's lien against the proceeds of the sale of Warrender's

property. Accord Johnston v. First Fed. Sav. Bank, 822 N.E.2d 614,

616 (Ind. Ct. App. 2005) (remarking that under Indiana law "an

attorney would be entitled to a lien only upon property recovered

for a client"); Snitow v. Jackson, 158 N.Y.S.2d 304, 306 (N.Y. Sup.

Ct. 1956) ("The real property against which the petitioners seek a

lien was not itself recovered or awarded to the respondent by the

order dismissing the proceeding to validate the mortgage against

                                   -10-
such property, and the petitioners may not be given a lien against

the same.").

            As noted, the district court also held that the equities

would not have entitled Diviacchi to enforcement of the lien even

if he legally met the requirements of section 50.         Specifically,

the court held that Diviacchi "failed to make a showing that he

incurred reasonable fees and expenses here. . . .            [H]is sole

contributions were the filing of an amended counterclaim and

opposition to the Bank's motion to dismiss that amended pleading.

The scope and brevity of his representation here do not lend

particular credence to his unsubstantiated claim that he expended

'at least 60 hours on this Action.'"            Because we find that

Diviacchi's lien is not legally enforceable against the sale

proceeds,    we   need   not   reach   the   equitable   issue   of   the

reasonableness of his requested fees.8

Affirmed.




     8
       We note that nothing in our decision precludes Diviacchi
from commencing independent litigation seeking payment for his
services pursuant to his contract with Warrender. Accord Bistany
v. PNC Bank, NA, 585 F. Supp. 2d 179, 185 (D. Mass. 2008) ("[The
unpaid attorney's] remedy cannot, therefore, lie in the enforcement
of a lien for attorneys' fees. Rather, he may sue [the clients] to
recover any fees they rightfully owe him." (citing Torphy, 257
N.E.2d at 436, 438)); Zabin v. Picciotto, 896 N.E.2d 937, 949 n.17
(Mass. App. Ct. 2008) ("[T]he lien furnishes merely a basis to
secure a claim, rather than the basis for the claim itself. With
or without a lien, the attorneys [may be] entitled to claim and
recover the amounts due to them for their respective services.").



                                  -11-
