* Pursuant to 5 T H C IR

. R. 47.5, the Court has determined that

this opinion should not be published and is not precedent except

under the limited circumstances set forth in 5 TH C IR . R. 47.5.4.

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

__________________________

No. 96-30929

__________________________

WILLIAM C. DAVIS,

Plaintiff-Appellee

Cross-Appellant

versus

ERNEST L. PARKER,

Defendant-Appellant

Cross-Appellee

___________________________________________________

Appeal from the United States District Court

For the Western District of Louisiana

(Nos. 91-CV-2493, 93-CV-759)

___________________________________________________

May 12, 1998

Before REYNALDO G. GARZA, SMITH, and WIENER, Circuit Judges.

WIENER, Circuit Judge: *

Defendant-App ellant-Cross-Appellee, Ernest L. Parker, Esq.,

appeals a jury verdict in favor of Plaintiff-Appellee-CrossAppellant, William C. Davis, whose claims had their genesis in a

written asset transfer agreement between the two parties. Davis,2

a long-time Louisiana resident who had moved to Texas, brought suit

in federal district court in Louisiana on diversity jurisdiction

after Parker refused to return to Davis the assets in question ——

c apital stock in a closely-held Louisiana corporation

—— that he

had transferred to Parker in accordance with that agreement. The

case was tried to a jury, which found that —— notwithstanding the

fact that the asset transfer agreeme nt contained no express

stipulation obligating Parker to return Davis’s stock

—— Davis had

retained ownership of his stock vis-à-vis Parker

, as well as the

right to recover it

, by virtue of Parker’s oral promise to hold the

stock other than as owner and return it to Davis on request. The

jury awarded Davis monetary damages consisting of (1) $175,000 for

emotional distress, anguish, or inconvenience that he experienced

as a result of Parker’s refusal to return the stock; (2) attorneys’

fees as provided in Davis’s contingent fee agreement with his

attorneys; and (3) $1,026,951.50 for loss of the benefits that he

would have recei ved had he held the Campbell Wells stock or for

benefits that Parker wrongfully received as a result of his refusal

to return Davis’s stock. In keeping with the jury’s verdict, the

district c ourt rendered judgment for Davis, replicating the

particulars of the verdict and declaring Davis to be the owner of

the stock in question or its value as of the close of business on

the last business day before trial commenced. The district court

al so assessed costs against Parker, purported to include expert3

witness fees.

Parker appeals the district court’s denial of his post-trial

motion for judgment as a matter of law (j.m.l.) or, alternatively,

a new trial. Parker urged his motion on grounds that, i nter alia

,

(1) the evidence conclusively established that Davis entered into

the asset transfer agreement for the illicit purpose of defrauding

his creditors, so that, as a matter of law, Davis cannot recover

from Parker; (2) the jury’s finding that a contract existed between

Davis and Parker, whereby Parker agreed to hold and return Campbell

Wells stock to Davis, is erroneous as a matter of law, as such an

agreement must be in writing to be enforceable; (3) Davis’s claims,

as tried, wer e time-barred under Louisiana’s prescriptive period

for legal malpractice actions; (4) the district court erroneously

permitted Davis to call two of Parker’s former clients to testify

in rebuttal; and (5) the jury’s awards of (a) nonpecuniary damages,

(b) attorneys’ fees, and (c) “excess distributions” w ere without

legal foundation or sufficient evidentiar y basis. Parker also

contends that the trial court erred in its assessment of costs

against him and in its valuation of Davis’s Campbell Wells stock.

Davis cross-appeals the court’s denial of his motion to alter or

amend the judgment.

Finding no reversible error in the denial of Parker’s motions

or in the court’s assessment of Davis’s costs and the valuation of

his stock, we affirm except to the limited extent that we

(1) reverse the award of emotional damages, (2) modify the award of4

attorneys’ fees to reflect the effect of our reversal of the

emotional damages award, and (3) vacate the award of costs to the

extent, if any, that expert witness fees were included and remand

this issue for further consideration by the district court. As for

Davis’s cross-appeal, we make a minor adjustment in the judgment of

the district court but otherwise affirm, thereby denying the crossappeal. In sum, the judgment of the district court is reversed in

part, vacated in part, modified in part, and —— as modified ——

affirmed and remanded for further proceedings consistent with this

opinion and, ultimately, for entry of a revised judgment for Davis

reflecting the dispositions we make today.

I

FACTS AND PROCEEDINGS

Davis and Parker were longtime personal friends and business

associates when Parker offered Davis an interest in Campbell Wells

Corp. (“Campbell Wells”)

—— a company that operated an oil field

waste disposal facility. Parker, who was also Davis’s attorney,

had previ ously invested in several business ventures with Davis.

Campbell Wells had come to Parker’s att ention when he was

approached by Logan Nichols, also an attorney and a law school

classmate of Parker’s. Nichols sought Parker’s aid in finding a

buyer or buyers on behalf of the Campbells, who owned and operated

the facility. The Campbells had offered Nichols a substantial

finder’s fee if he could locate a buyer, which fee Nichols proposed

sharing with Parker as consideration for his assistance.5

Parker in turn enlisted the help of Richard Barnett, a client

of his and a petroleum engineer with connections in the oil patch.

Barnett knew several potential investors but wanted to learn more

about the facility and assess its value befor e making any

recommendations. After visiting the disposal facility, Barnett

became convinced that Campbell Wells represented an a ttractive

investment opportunity and suggested to Parker and Nichols that the

three of them buy the business themselves rather than brokering it.

Presumably with the assent of Nichols and Barnett, Parker invited

Davis to join the threesome as an equal partner in the purchase of

Campbell Wells.

The four men bought all issued and outstanding stock of the

corporation in Septem ber 1985. They also formed a partnership,

CAMPCO—1985, to acquire the immovable property on which the waste

disposal facility was located. Their acquisitions were funded by

a million dollar loan from Guaranty Bank & Trust Co. of Lafayette

(“Guaranty Bank”) and by promissory notes totaling $1,052,000,

payable to the Campbells. An additional $500,000 was borrowed from

the bank to cover start-up costs. As security for its loans,

Guarant y Bank took a collateral first mortgage on the immovable

property and a pledge of the capital stock in Campbell Wells; the

Campbells’ promissory notes were secured by a subordinated

mortgage. In addition, each of the four purchasers signed personal

guaranties to Guaranty Bank and to the Campbells.

Although Campbell Wells continued to prosper, Davis began to6

experience financial difficulties with some of his other business

ventures and by early 1986 was on the brink of bankruptcy. Parker

represented Davis in an attempted work-out with his creditors, and

also advised Davis as his friend and business partner. Parker

warned Davis that his creditors might seize his interest in

Campbell Wells an d suggested that Davis transfer his interest to

Parker. On February 3, 1986, by a written Act of Cash Sale &

Assumption

—— prepared b y Parker —— Davis transferred stock

representing his twenty-five percent ownership interest in Campbell

Wells to Parker. The instrument specified that Parker was assuming

Davis’s debt and paying Davis $1000. Davis testified that he was

neither given a copy of the document by Parker nor advised by him

to consult another attorney before signing it.

This is the point a t which the antagonists’ respective

versions of the saga start to diverge. Davis testified that Parker

agreed to hold the Campbell Wells stock “in trust” until Davis

resolved his financial problems , orally committing to return the

stock to Davis on request. According to Davis, Parker proposed the

arrangement as a means of e nsuring the satisfaction of their

substantial mutual debt: With Davis’s interest in Parker’s hands,

they could avoid outside interference in the Campbell Wells venture

by preventing a “race to the courthouse” by Davis’s creditors.

More importantly, in avoiding seizure by one anxious creditor, cash

flow from the investment could be used to pay off more debt. In1 Coincidentally, the fourth partner, Barnett, had transferred

his interest in Campbell Wells to Parker, also in February 1986.

2 See infra note 106.

7 stark contrast, Parker testified that he acquired full ownership of

Davis’s stock as consideration for assuming the debt that Davis had

incurred in his acquisition of Campbell Wells stock.

Davis was eventually successful in working out of his

financial straits and avoiding bankruptcy. Meanwhile, Campbell

Wells continued to thrive, and in June 1990, the remaining

shareholders of record

—— Parker and Nichols

—— agreed to merge

Campbell Wells with Sanifill, Inc. (“Sanifill”). 1 Pursuant to the

merger agreement, Parker surr e ndered all outstanding stock in

Campbell Wells in exchange for Sanifill stock. 2

D avis testified that he had become concerned about Pa rker’s

control over the transferred shares as early as 1988, well before

the Sanifill merger. Davis mentioned the arrangement to an

attorney representing him on unrelated matters, who advised Davis

to discuss his Campbell Wells interest with Parker. Some time

later, Davis broached the subject with Parker during a meeting in

Lafayette, asking for Parker’s reassurance that their arrangement

would b e honored. According to Davis’s testimony, Parker was

initially very angry at him for having discussed the matter with

another attorney

, but Parker assured Davis the following day that

his stock would eventually be returned.8

D avis testified that he had several subsequent discussions

with Parker concerning the state of Campbell Wells’ affairs, each

discussion characterized by Davis as having included Parke r ’s

reassurance that the business was going well and that Davis could

count on recovering his interest. In September 1990, following the

Sanifill merger, Parker contacted Davis at his home in Austin and

scheduled a visit. Davis assumed that Parker had arranged the

meeting to conclude thei r business under the asset transfer

agreement, but Parker frustrated Davis’s expectations by avoiding

any discussion of Campbell Wells. When Davis eventually broached

the subject, Parker announced that he intended to keep Davis’s

proportionate share of the Sanifill stock acquired in the merger,

and a heated argument ensued.

This lawsuit was filed in November 1991. In it, Davis

asserted claims for breach of contract, resc ission, detrimental

reliance, and nullity, and sought to enforce the written-and-oral

agreement or to rescind it with an accounting. Alternatively,

Davis sought to annul the written agreement under which his

interest in Campbell Wells had been transferred. Parker moved for

summary judgment on the ground that Davis’s claims were time-barred

under Louisiana’s prescriptive period for legal malpractice

actions. The district court granted Parker’s motion and dismissed

Davis’s suit with prejudice. On appeal from that dismissal, we

reversed and remanded ( Parker I ), holding that the pr escriptive

period for legal malpractice actions was not applicable to Davis’s3 Davis v. Parker , 58 F.3d 183, 189-90 (5th Cir. 1995).

4 Davis apparently amended his pleadi ngs on remand, adding a

claim for fraud. The jury did not reach Davis’s detrimental

reliance claim as it found that a valid oral retransfer agreement

existed and was breached.

5 Burroughs v. FPP Operating Partners, L.P. , 28 F.3d 543, 546

(5th Cir. 1994).

9 claims. 3

On remand, the case was tried to a jury. A number of midtrial motions by Parker were denied and, following the close of the

evidence, each party made a motion for j.m.l., both of which the

court denied. The jury returned a verdict in favor of Davis on all

causes of action submitted, 4 and judgment was entered by the

district court on May 31, 1996, in accordance with the verdict.

P arker filed post-trial motions under Federal Rules of Civil

Procedure (F.R.C.P.) 50 and 59, which the trial court denied. Davis

filed a F.R.C.P. Rule 59 motion seeking to amend some aspects of

the judgment, but the court denied this motion as well. Parker

timely appealed, and Davis timely cross-appealed.

II

ANALYSIS

A. S TANDARD OF R EVIEW

We review the denial of a motion for j.m.l. de novo , viewing

all evidence in the light most favorable to the non-moving party. 5

We will conclude that the motion should have been granted only when

“the evidence at trial points so strongly and overwhelmingly in the6 Omnitech Int’l v. Clorox Co.

, 11 F.3d 1316, 1323 (5th Cir.),

cert. denied

, 513 U.S. 815, 115 S. Ct. 71, 130 L. Ed. 2d 26 (1994).

7 Id. (quoting In re Le tterman Bros. Energy Sec. Litig. , 799

F.2d 967 , 972 (5th Cir. 1986), c ert. denied

, 480 U.S. 918, 107

S. Ct. 1373, 94 L. Ed. 2d 689 (1987)).

8 Martinez v. Johnson

, 104 F.3d 7 69, 771 (5th Cir.), c ert.

denied , 118 S. Ct. 195, 139 L. Ed. 2d 133 (1997).

9 Dawson v. Wal-Mart Stores, Inc. 978 F.2d 20 5, 208 (5th Cir.

1992).

10 Marcel v. Placid Oil Co.

, 11 F.3d 563, 566 (5th Cir. 1994).

11 Nickel v. Estate of Estes

, 122 F.3d 294, 301 (5th Cir. 1997).

10 movant’s favor that reasonable jurors could not reach a contrary

conclusion.” 6 The “decision to grant [a j.m.l.] . . . is not a

matter of discretion, but a conclusion of law based upon a finding

that there is insufficient evidence to create a fact question for

the jury.” 7

We review the denial of a Rule 59(e) motion to alter or amend

for abuse of discretion. 8 We also review the denial of a motion

f or new trial for abuse of discretion; new trials should n ot be

granted on evidentiary grounds unless, at a minimum, the verdict is

against the great weight of the evidence. 9 And we review

evidentiary rulings for abuse of discretion, but even then we will

reverse only if the erroneous ruling affects a substantial right of

a party. 10 Finally, we review an award of attorneys’ fees and costs

for abuse of discretion. 11

B. U NLAWFUL

, I LLICIT

, OR I MMORAL P URPOSE

Parker argues that, in light of the jury’s determination that12 S ee Meyer v. Farmer

, 36 La. Ann. 785 (1884); Bernard v.

Auguste

, 1 La. Ann. 69 (1846) (dismissing plaintiff’s rescission

action

—— brought on ground that defendan t’s failure to give

consideration for transfer of plaintiff’s property rendered sale a

simulation

—— based on evidence that plaintiff was only titleholder

of property, true owner having purchased property in plaintiff’s

name to screen it from creditors); P uckett v. Clarke

, 3 Rob. 81

(1842) (holding that plaintiff could not recover property from

defendant when the two had arranged defendant ’s purchase of

property at a sham sheriff’s sale with understanding that defendant

would return property to plaintiff after danger of seizure by

plaintiff’s creditors had subsided); Gravier’s Curator v. Carraby’s

Ex’or

, 17 La. 118, 127 (1841) (refusing to enforce agreement and

denying plaintiff’s recovery of property conveyed to defendant as

security for defendant’s loans where parties held out conveyance as

transfer of title for purpose of concealing property from

plaintiff’s judgment creditors).

11 Davis actually continue d to own the Campbell Wells stock

transferred under the Act of Cash Sale & Assumption by virtue of

P arker’s oral promise to return Davis’s stock on request, the

evidence at trial conclusively established that the agreement was

executed to place Davis’s interest in Campbell Wells be yond the

reach of his creditors. As such, urges Parker, the purported

written-and-oral agreement, found by the jury to exist, cannot be

enforced because it was entered into for the illicit purpose of

defrauding Davi s’s creditors. Thus, concludes Parker, Davis can

recover nothing under the agreement and the jury verdict cannot be

permitted to stand.

In support of his argument, Parker invites our attention to

several Louisiana cases from the nineteenth century that stand for

the proposition that contracts executed for t he purpose of

defrauding creditors are unenforceable. 12 These cases were decided13 Boatner v. Yarborough

, 12 La. Ann. 249, 251 (1857) (“The law,

whose mission is to right the innocent and to enforce the

performance of licit obligations only, leaves parties who traffic

in forbidden things and then break faith with [one another], to

such mutual redress as their own standard of honor may award.”);

Bernard

, 1 La. Ann. at 70 (“[C]ontracts prohibited by law, or

contrary to good morals or public order, can have no effect.”);

Gravier’s Curator

, 17 La. at 127 (“[A]n obligation without a cause

or with a false or unlawful one can have no effect.”).

14 Boat ner , 12 La. Ann. at 251; s ee also Gravier’s Curator

, 1 7 La. at 131 (“[C]ourts of justice are not reduced to the

humiliation of adjusting among dishonest men the results of their

unholy speculations or of protecting one party against another

while engaged in a common purpose, at war with the best interest of

society and subversive of public order.”).

15 L A

. C IV

. C ODE A NN . art. 2033, cmt. (c) (West 1987); s ee also

Gravier’s Curator

, 17 La. at 127 (“[W]here both parties are charged

with the same turpitude[,] the law gives no action [and,]

. . . [i]n such cases[,] the maxim is ‘ Impari causa turpitudinus potior

est causa possidentis .’”).

16 Bernard , 1 La. Ann. at 71.

12 under the rationale that courts of law will not give effect to

contracts having an unlawful or immoral purpose. 13 As courts will

not mediate disputes “between joint venturers in iniquity,” 14 the

parties to such contracts have no recourse at law against one

another. Under the Roman Law maxim, “ I n pari causa turpitudinem

potior est conditio possidentis ” 15

—— in case of equal wrongdoing,

the one in possession is in a better position

—— courts will “leave

[the] property where the dishonest acts of the parties have placed

it.” 16

Parker argued to the district court that this line of cases

bars recovery under the w ell-known “unclean hands” canon which

devolved from English equity: “One who has unclean hands or is17 V idrine v. Michigan Millers Mut. Ins. Co.

, 268 So. 2d 2 33,

239 (La. 1972).

18 See Thomason v. Thomason

, 355 So. 2d 908, 910 (La. 1978)

(noting that the doctrine of recrimination —— barring recovery by

either party to a domestic dispute when both parties are equally at

fault

—— is “based on the equitable idea that he who comes into

court with unclean hands cannot obtain relief”); Rhodes v. Miller

, 179 So. 2d 430, 431 (La. 1938) (“[C]ourts will not relieve a

litigant who appeals for relief with unclean hands.”); C oker v.

Supreme Indus. Life Ins. Co., Inc.

, 43 So. 2d 556, 559 (La. Ct.

App. 1950) (“It is axiomatic in our jurisprudence that equity will

not aid one who comes into court with unclean hands. The line of

decisions confirming this maxim is unbroken and too well known to

need citation here.”).

1 9 See Poole v. Guste

, 262 So. 2d 339, 345 (La. 1972) (notin g

that “limitations to the remedy of equity recognized in common-law

jurisdictions

. . . are not necessarily applicabl e to Louisiana,

with its different civilian procedural background” and rejecting

defendants’ argument that plaintiffs’ unclean hands barred

injunctive relief); Bramblett v. Wilson , 413 So. 2d 600, 602 (La.

Ct. App. 1982) (“It is ques tionable that the so-called ‘clean

h ands’ doctrine, an equitable common law theory, h as any

application in our civilian jurisdiction.”).

13 himself a wrongdoer should not be able to benefit from the

concurrent wrongdoing of another.” 17 Although a rudimentary version

of the Anglo-American concept of unclean hands (which became a

common law doctrine as a result of the merger of law and equity)

appears to have seeped interstitially i nto Louisiana’s Civil Law

system, 18 at leas t nominally so, the extent to which it has been

embraced as a substantive maxim of Civil Law is uncertain at best. 19

And, to the extent that the courts of Louisiana have conflated the

Anglo-American unclean hands canon with the Civil Law notion that

neither party to an unlawfu l or immoral agreement may seek20 See Spearman v. Willson , 99 So. 2d 31, 33 (La. 1958)

(likening the principle of law under which neither party to an

agreement designed to hide property from creditors to prevent its

seizure can seek judicial relief to “leaving the parties in the

same position [the court] found them on the theory that both

plaintiff and defend ants have u nclean hands ”) (emphasis added);

Bernard

, 1 La. Ann. at 71 (“[W]e leave the property where the

dishonest acts of the party have place d it. Whoever claims it

hereafter, must come before us with clean hands .”) (emphasis

added).

2 1 See Poole

, 262 So. 2d at 345 (noting that the def ense of

unclean hands is a “[limitation] to the remedy of equity recognized

in common-law jurisdictions, based on the historical use in them of

injunction s by the chancery court where the damage-remedy in the

regular courts was inadequate”); Terrebonne Parish Police Jury v.

Kelly

, 428 So. 2d 1092, 1093 (La. Ct. App. 1983) (“The doctrine of

‘clean hands’ is an equity principle that requires that ‘he who

comes into a court of equity must come with clean hands.’”)

(qu oting C ity of New Orleans v. Levy

, 98 So. 2d 210, 218

(La. 1957)).

22 L A

. C IV

. C ODE A NN . art. 2033 (West 1987).

14 enforceme nt in a court of law, 2 0 the doctrine occupies a unique

niche in Louisiana as a defense to action s ex contractu : It bars

legal recovery. 21

However this hybrid doctrine is characterized, though, it is

now firmly ensconced in Article 2033 of Louisiana’s Civ il Code,

which provides, in pertinent part:

[A] performance rendered under a contract that

is absolutely null because its object or its

cause is illicit or immoral may not be

recovered by a par ty who knew or should have

known of the defect that makes the contract

null. The performance may be recovered,

however, when that party invokes the nullity

to withdraw from the contract before its

purpose is achieved and also in exceptional

situations when, in the discretion of the

court, that recovery would further the

interest of justice. 2223 See L A

. C IV

. C ODE A NN

. art. 2030 (West 1987) (“A contract is

absolutely null when it violates a rule of pu blic order, as when

the object of a contract is illicit or immoral.”); Succession of

Webre

, 172 So. 2d 285, 288 (La. 196 5) (“Since the property has

never left the patrimony of the ostensible seller, a simulated sale

is an absolute nullity.”); Spearman , 99 So. 2d at 33 (noting that

agreements designed to hide property from creditors to prevent its

seizure are contra bonos mores and unenforceable); Gast v. Gast

, 19

So. 2d 138, 140 (La. 1944) (“[A fra udulent simulation] is not in

reality a contract; it is a mere pretense, a sham, a disguise, the

purpose of which is to defeat the rights of creditors with respect

to the debtor’s property; it is an absolute nullity.”).

24 See L A

. C IV

. C ODE A NN . art. 2033, cmt. (a) (West 1987).

25 See L A

. C IV

. C ODE A NN

. art. 2031 (West 1987) ( “A contract is

relatively null when it violates a rule intended for the

protection of private parties, as when a party lacked capacity or

did not give free consent at the time the contract was made.”).

15 Inasmuch as simulated transfers designed to defraud creditors are

absolute nullities, 23 Article 2033 codifies the line of cases relied

on by Parker for his “unclean hands” defense. 24

Davis attacks the applicability of Article 2033 here on the

ground that simulat ed transfers are not, in fact, absolute

nullities. He argues that Parker may not avail himself of

Louisiana’s extant version of the unclean hands doctrine because

agreements in fraud of creditors produce only relative nullities. 25

Davis maintains that, as a matter of statutory construction,

transactions that prejudice creditors by transferring assets to

third persons cannot be “absolutely null” because the Civil Code

provides defrauded creditors with specific remedies

—— the

revocatory action for cases of actual transfers to third parties;26 See L A

. C IV

. C ODE A NN . arts. 2025, 2036 (West 1987).

27 See L A

. C IV

. C ODE A NN

. art. 2033 (West 1987) (“Absolute nullity

may be invoked by any person. . . .”).

28 The Gast court noted that feigned transfers in fraud of

creditors are absolute nullities, notwithstanding the co-existence

of the declaration of simulation remedy:

[T]here is a vast and clear distinction

between a fraudulent simulation and a real

contract ma d e in fraud of creditors. The

form er is not in reality a contract; it is a

mere pretense, a sham, a disguise, the purpose

of which is to defeat the rights of creditors

with respect to the debtor’s pr operty; it is

an absolute nullity. T he creditor may

disre gard the fraudulent simulation entirely

and seize the affected property under

execution, or he may re sort to the action en

declaration de simulation

. But a real

contract, although fraudulently entered into,

cannot be so disregarded by the creditors. No

matter how fraudulent, it must be set aside by

a judgment; and for this purpose the

revocatory action is provided.

Gast , 19 So. 2d at 140 (emphasis added) (citations omitted).

16 the action to declare a simulation for cases of feigned transfers. 26

The Code’s specific provision of a remedy for feigne d transfers

would be mere surplusage, argues Davis, if fraudulent transactions

p roduced absolute nullities: Any creditor would already h ave

standing

—— by virtue o f such transaction’s absolute nullity 2 7

——

to have the court declare the transaction null.

Davis’s argument would appear unmeri torious in light of the

pronouncements of the Supreme Court of Louisiana in Gast v. Gast

. 28

We need not, however, d ecide whether the interplay among some

modern provisions of the Code affects the enforceability of29 See supra note 22 a nd accompanying text. Contrary to

Parker’s assertions otherwise, Article 2033 does not appear to have

alter ed the Civil Law’s pre-codification treatment of unlawful

contracts; scienter and successful attainment existed as

prerequisites to barring recovery before Article 2033 was enacted.

See L A

. C IV

. C ODE A NN

. art. 2033, cmts. (a), (d) & (e) (West 1987);

Gravier’s Curator , 17 La. at 127 (“By the Roman law right to

recover back what had been paid on an illicit contract depended

upon the question which of the parties was dishonest or whether

both were chargeable with the same turpitude. I f the party who had

received were alone dishonest the sum paid could be recovered back

even though the purpose for which it was given had been

accomplished. ”) (emphasis added); Id. at 127-128 (“These principles

apply in cases where the corrupt or reprobated contract has had its

effect . . . .”) (emphasis added).

17 simulated transfers as between the parties to such agreements, for

we conclude that Parker’s unclean hands defense fails on other

Article 2033 grounds.

By its terms, Article 2033 does not bar recovery unless

—— in

addition to the absolute nullity prerequisite

—— (1) the party

seeking enforceme nt entered into the agreement with knowledge of

its improper nature, and (2) the parties achieved their imp roper

objective. 2 9 In its verdict, the jury found that Davis did not

enter into the asset transfer agreement for an unlawful, immoral or

illicit purpose. We cannot say that, in its denial of Parker’s

alternative motion for j.m.l. or ne w trial, the district court’s

implicit dete rmination that the jury’s conclusion is not against

the great weight of the evidence constitutes an abuse of

discretion, which would require reversal and the grant of a new

trial. Neither can we say that the evidence points so strongly in

favor of a scienter finding against Davis that reason able jurors30 Davis reported substantially diminished or negative taxable

income on these returns, as well as creditor forgiveness of

substantial debt obligations that he was unable to meet. Parker

contends t hat had Davis disclosed his Campbell Wells interest in

the insolvency calculations he used to avoid the payment of taxes

on phantom income from the forgiveness of debt, his tax liability

would have been different.

31 This nondisclosure, urges Parker, gave Davis greater leverage

with which to negotiate favorable settlements and enabled him to

persuade the FDIC to abandon the prosecution of a $3 million

collection suit.

18 would have to conclude that he knew of the illicit purpose of the

transfer, which would require reversal and the grant of a j.m.l.

As evidence that Davis’s m otive for executing the asset

transfer agreement was to hide his Campbell Wells interest from his

creditors, Parker relies on Davis’s intentional failure to (1) list

his Campbell Wells interests on financial statements submitted to

creditors, including the IRS, the FDIC, and Guaranty Bank; (2)

report his beneficial interest in Campbell Wells on his 1986-1994

tax returns; 30 and (3) disclose his Campbell Wells interests during

debt reduction negotiations with a number of his creditors. 31

The district court, however, found sufficient support for the

jury’s verdict in the evidence that Parker initiated the asset

transfer scheme, inducing Davis to divest his interests in Campbell

Wells based on the Parker-generated specter of a potential judgment

creditor’s attempting to seize that interest. According to Davis’s

testimony, Parker, in his capacity as attorney for Davis,

accompanied him to a meeting called by the general partner of

Preferred Properties, a real estate development company in which32 Parker and Davis, as business partners, owed —— in addition

to their Campbell Wells indebtedness

—— some 2.6 million dollars in

joint indebtednesses on various investments.

19 Davis had invested. Preferred Properties had borrowed heavily to

finance one of its projects, but the project failed to produce

enough cash flow to service its debt obligations. At the meeting,

investors were asked to make supplemental contributions sufficient

to service the loan that was secured by a mortgage on the company’s

property. Several partners announced that they were filing for

bankruptcy and thus would not be able to make any contributions

toward the partnership’s obligations. When Davis —— whose own

f inancial situation was deteriorating

—— indicated that he to o

would be unable to contribute, one of the partners became upset and

openly hostile towards the other me mbers of the investment group

and Davis in particular.

Davis testified that after the meeting Parker advised him that

the disgruntled partner could try to seize Da vis’s assets,

depriving him of resources with which to pay his other creditors.

At the time, Davis’s interests in Campbell Wells was the only one

of his business holdings that had a significant value; the company

was netting approximately $100,000 per month. Davis averred that

Parker offered to take title to Davis’s stock and apply Davis’s

share of the company’s revenu es towards their substantial mutual

debt. 32 In this way, rather than losing his sole income-generating

asset to one anxious creditor, Davis would retain the possibility20

of recovering from his financial straits by satisfying most, if not

all, of his c reditors. As such, stated Davis, his purpose in

entering the asset transfer agreement was to pay his creditors, not

to defraud them. The jury obviously believed him; whether we or

the trial judge would have is of no moment.

Parker admitted at trial, via impeachment, that the asset

transfer agreement was discussed in these terms, but denied that

the agreement was ultimately confected for the purpose of

preserving the stock’s income-generating potential for Davis.

Instead, testified Parker, the two settled on an outright exchange

—— Davis transferred his interests to Parker in full ownership, and

Parker assumed Davis’s proportionate share of the debts incurred in

the Campbell Wells ac quisition. Parker would not deny, however,

that he ori ginally approached Davis with the asset transfer

proposal, not vice versa; and conceded that both parties understood

that any proceeds from the transferred assets were to be applied to

their joint debt.

Davis posits that Parker’s version of the nature of their

agreement is implausible because Davis was never concerned that he

might be called on to meet his own obligations as guarantor on the

loans with which the Campbell Wells acquisition had been financed:

The company was making more mo ney than it needed to service its

notes, so Davis had no incentive to trade his interests for the

assumption of his share of the company’s debt by Parker. It

appeared quite likely to all concerned that those debts would be33 Parker contested Davis’s characterization of his Campbell

Wells stock. At trial, Parker referred to the investment as a

“touch and go” concern, the success of which was far from certain.

The jury was presented with ample evidence to the contrary: The

f inancial statements for Campbell Wells indicated that, prior to

its acquisition, the company had approximately $500,000 in accounts

r eceivable and cash, and was netting approximately $90,000 pe r

month in earning s; Parker responded affirmatively when asked

whether the company was well on its way to success whe n the

Campbell Wells deal was closed; six weeks after the purchase, the

financial statements reflected shareholder equity in the amount of

$1,101,554; the pro forma submitted to Guaranty Bank in conjunction

with the loan application projected $2,39 0,000 in profit for the

first full year of operation following the company’s purchase; and

its five-year projection totaled $21,511,000 in profit.

34 Davis had obtained loans from the bank to finance several

ventures that ultimately failed.

21 timely and fully satisfied ou t of the company’s earnings, and

unlikely that, even if there were a default, a foreclosure sale

would not produce sufficient proceeds to cover the debts and thus

make unnecessary the payment of deficiencies by the shareholders

under their personal guaranties. Indeed, Davis saw the venture’s

profitability as a means of satisfying the debts he had incurred on

other ventures as well. 33

In add ition to the evidence of Parker’s inducement, the

district court, in refusing to render a j.m.l., relied on the fact

that Parker had represented Davis in a legal capacity thr oughout

the attempted work-out of Davis’s debts. His ex-wife, Jeanne

Davis, appare ntly handled all the paper work associated with her

husband’s finances. She testified that in connection with the

work-out of Davis’s bank debt, 34 Guaranty Bank had given her a blank

form to use in furnishing informati on on Davis’s financial35 According to Davis’s testimony, Parker took advantage of

their mutual trust in dictating t he nature of and circumstances

22 condition. She further testified that when she asked Parker

whether the C ampbell Wells interest should be included on the

bank’s financial statement form under the heading “assets held in

trust,” Parker instructed her to discard the bank’s form and gave

her an alternative form that did not contain a similar entry space.

She stated that Parker advised her that Davis’s Campbell Wells

interests need not be included on the substituted form as the stock

was not in Davis’s name and there “was nothing in writing.”

Ms. Davis also testified that she considered Parker’s

instruction to be legal advice, and that she felt safe in assuming

that Parker would give her sound advice inasmuch as he was also an

attorne y for Guaranty Bank —— the institution to which the

financial statement was to be submitted. Mr. Davis testified that

he ratified the decision to omit his interests from the statement

for the same reasons.

Based on the testimony adduce d at trial, the jury could

reasonably have concluded that Davis relied on Parker’s counsel

——

legal, business, and personal

—— for the legitimacy of their mutual

actions. In the light most favorable to the verdict, the evidence

supports the conclusion that Parker’s advice was born out of his

own sel f-interest —— keeping outsiders from becoming involved in

the Campbell Wells venture, if nothing else

—— and that he

m anipulated Davis to further that self-interest. 3 5 Insurrounding their transaction:

Q: What confidence did you have in Mr. Parker as your attorney

when you transferred your Campbell Wells interest to him on

February 3rd, 1986?

* * *

A: I had complete confidence in Mr. Parker.

Q: And how was that confidence built over the years?

A: It was built through tru st, through business relationships,

through conversations, through social activities, through things we

did t ogether and through practices that —— things that we

discussed, and I think that Mr. Parker, as far as I was concerned

at the time, was an extremely competent attorney.

* * *

Q: Okay. What discussions did you have with Mr. Parker about

having a writing in the side so that you could show later on that

he was holding the shares for you to be returned?

A: Are you talking about a counter letter?

Q: A counter letter.

A: Well, I asked Mr. Parker about that, and he says, no, there’s

no way that we can do a counter letter.

* * *

Q: The [Act of Cash Sale & Assumption] says that Mr. Parker

assumed your obligations at Guaranty Bank, is that right?

A: Yes, sir.

Q: And you said earlier that there was no discussion about a

release of yourself from the Guaranty Bank obligation pertaining to

Campbell Wells. What discussion was ever had that he was going to

assume your obligations at the bank?

A: No discussion of that at all.

Q: And would you state whether you ever read from the document?

23A: No, sir. I trusted Mr. Parker. I went in, I signed the

document and I left.

Q: And would you state whether Mr. Parker ever sent you a copy of

that document until this lawsuit was filed?

A: No, sir, he did not.

Q: Okay. Would you state why you didn’t read the document?

A: Well, because Mr. Parker, I thought, was looking out for my

best interest. I had a lot of confidence in him, and we had made

this agreement on what we were going to do, and I just didn’t feel

like it was necessary that I had to read it.

Q: Reference is made in that document to a thousand dollar cash

payment. Would you state whether any amount of money was paid to

you?

A: Did he pay me anything?

Q: Yes.

A: No, absolutely not.

Q: What conversations, if any, did Mr. Parker ever make as to

what the contents of that document were?

A: Nothing. We never discussed it.

Q: Okay. What comments did Mr. Parker make to you regarding any

adverse interest or conflict of interest that he would have

preparing this as your attorney and asking you to sign it?

A: He never discussed that with me at all.

Q: What conversation did Mr. Parker have with you about the

disadvantage or an y consequences that might result if you signed

this document without a counter letter?

A: We never discussed that situation at all.

Q: What statements, if any, did he make to you, and I’m speaking

of Mr. Parker, that it might not be in your best interest to sign

this document?

A: He never informed me anything like that.

24Q: What advice did Mr. Parker give you that you should hire

another attorney to review this document before you signed it?

A: Mr. Parker never advised me that I should even think about

getting another attorney or get another attorney, and if he had

been advising me to get another attorney, then I would not probably

have signed this document at all.

In addition, circumstantial evidence of Parker’s true motive

is found in the actions he took following the execution of the Act

of Cash Sale & Assumption. Under the written agreement, Parker

only assum ed Davis’s proportionate share of the Campbell Wells

debt; i.e., Davis remained personally liable to Guaranty Bank and

the Campbells but, by v irtue of the assumption, Parker became

liable to Davis for any creditor judgment against him on the notes.

Shortly after the assumption, however, Parker —— who was also

Guaranty Bank’s attorney

—— acted within the bank to have Davis

released from his liability on the Campbell Wells loan. Davis

testified that Parker never discussed the possibility of obtaining

a release with him, and that he only mentioned it in passing after

the fact.

This move is telling in light of the fact that Guaranty Bank

included a cross-collateralization provision in its loan

instruments. Under that provision, the bank was entitled to

execute on the collateral put up for any loan that the debtor had

with the bank should the debtor default on a given loan. The jury

reasonably could have inferred from Parker’s actions that his true

concern was with preventing creditors from seizing Davis’s Campbell

Wells interest and interfering with the venture inasmu ch as

(a) Davis had multiple loans with Guaranty Bank that were in danger

of going into default, and (b) Parker took no comparable action

with respect to Davis’s liability on the Campbells’ promissory

note.

36 Ms. Davis testified that she and her husband paid creditors

with the equity (approximately $200,000) in their retirement fund

and life insurance policies. Davis also sold his home in Texas to

satisfy a tax lien that the IRS had placed on the house.

25 addition, the jury was presented with evidence that, during the

time that his Campbell Wells stock was held in Parker’s name, Davis

paid off so me of his debts with assets that were exempt from

seizure. 36 From the fact that Davis took measures beyond those

mandated by the law to resolve his indebtednesses, the jury could37 Parker relies on Conkling v. Turner

, 18 F.3d 1285, 1301-03

(5th Cir. 1994)(alleged oral contract for stock redemption failed

for lack of a definite price), in m aking this contention. He

insists that the alleged agreement is vague in that Davis provided

no testimony about the details of this purported agreement and did

not specify whether Parker was en titled to any compensation for

26 reasonably have inferred that he did not enter the asset transfer

agreement with the intent to defraud creditors. It follows that

the district court did not err reversibly in refusing to grant

Parker a j.m.l. on the basis of his unclean hands defense.

C. E NFORCEMENT OF O RAL A GREEMENT

In its answer to the first interrogatory, the jury found that

the Act of Cash Sale & Assumption in and of itself was not a valid

contract expressing the true intent of the parties; rather, it was

a simulation. The jury further determined that Davis was operating

under an error about the nature and terms o f that contract and

would not have entered it had he been aware of his error; and that

Parker induced Davis to enter that contract through fraud. The

jury concluded noneth eless that a contract (written transfer of

title combined with oral obligation t o retransfer) did exist

between the parties

—— a contract whereby Parker agreed to hold and

return Davis’s Campbell Wells stock —— which Parker breached when

he refused to return the stock to Davis.

In addition to his claim of unenforceability grounded in the

unclean hands doctrine, Parker contends that even if such an oral

retransfer agreement existed, it is not enforceable under Louisiana

law because it is vague. 37 Also, Parker insinuates that admittingallegedly “holding” the stock. Parker further comments that there

was no agreement as to the payment of taxes, distribution of

dividends, liability for debts, or the consequences of bankruptcy,

should it occur.

38 See L A

. R EV

. S TAT

. A NN . § 10:8-319 (West 1993)(stating that a

contract for the sale of securities is not enforceable unless there

is some signed writing), repealed by Acts 1995, No. 884, § 1, eff.

Jan. 1, 1996; see also Levinson v. Charbonnet , 977 F.2d 930 (5th

Cir. 1992)(refusing to enforce oral agreement to sell stock);

Morris v. P eople’s Bank & Trust Co. of Natchitoches , 580 So. 2d

1037 (La. Ct. App. 1991)(applying statute of frauds to private

agreement to buy bank stock). As a preliminary matter, we observe

that this court has applied section 8-319 to oral agreements to

sell stock. C harbonnet

, 977 F.2d at 932-33. In that case, we

commented that there appe ared to be some “confusion in the

Louisiana case law concerning whether R.S. 10:8-319 modifies or

restricts the Louisiana Civil Code provisions that provide for the

e nforceability of oral agreements to buy and sell corpore al and

incorporeal moveables, ” as three Louisiana courts of appeal

decisions, relying on the Civil Code, had validated oral agreements

for the sale of securities. As those cases failed to mention

section 8-319, we determined that they did not intend to undermine

its validity. We further noted that another Louisiana court of

appeal affirmed th e validity of section 8-319 and reconciled any

apparent conflicts between the Civil Code and that provision. We

concluded that the Louisiana Supreme Co urt would uphold the

validity of section 8-319, were it presented with the C harbonnet

case. I d. We observe in passing that section 8-319 has been

repealed and a sale or purchase of securities no longer requires a

writing in the traditional sense. Section 8-113 now provides: “A

contract or modification of a contract for the sale or purchase of

a security is enforceable whether or not there is a writing signed

. . . .” L A

. R EV

. S TAT

. A NN . § 10:8-113 (West Supp. 1998).

27 oral testimo ny to prove the retransfer provision violated

Louisiana’s specific statute of frauds for sales of securities as

it stood at all pertinent times. 38

Regarding vagueness, Parker urges that an agr eement under

which he would simply “hold” the stock “in trust” for an

unspecified time and return it to Davis on request is too vague to

be enforceable. Regarding enforcement of an oral agreement to sell39 See L A

. C IV

. C ODE A NN

. arts. 1523, 1536 (West 1987). S ee also

L A

. C IV

. C ODE A NN

. art. 1539 (stating that manual gifts are not

subject to any formalities). Although the authentic act is not

required for gratuitous transfers of corporeal movables, shares of

stock have been held to be incorporeal movables and thus

insusceptible of being donated manually. See, e.g.

, P rimeaux v.

Libersat

, 322 So. 2d 147 (La. 1988) (citing Succession of McGuire

, 151 La. 514, 92 So. 40 (La. 1922), and Succession o f Sinnot v.

Hibernia Nat’l Bank , 105 La. 205, 30 So. 233 (La. 1901)).

40 See L A

. R EV

. S TAT

. A NN . § 9:1752 (West 1991).

28 stock, Parker argues

—— in anticipation of Davis’s contention that

the contract was not a “sale” and therefo re does not fall within

the coverage of the statute of frauds —— that the contract cannot

stand as anything other than a sale. In any event, continues

Parker, i f it was not a sale, it had to be either a gratuitous

donation or a trust. In either case, contends Parker, the district

court erred when it entered judgment on the jury’s verdict, as the

agreement was neither in authentic form as required for a valid

gratuitous donation, 39 nor in a form r equired by the applicable

provisions of the Louisiana Trust Code for the creation of a

trust. 40

As Park er anticipated, Davis countered that the statute of

frauds for securities is inapplicable, as it proscr ibes oral

agreements to sell securities, not oral agreements to hold and

return them. Davis maintains that the jury rejected Parker’s

contention that the transaction was intended to be a sale, finding

instead that a contract existed “whereby Parker agreed to hold and

return Campbell Wells stock to Davis.” Davis insists that, as the29

transaction was not a sale, it was an “innominate contract” in

which, for the consideration of Parker’s attempting to discharge a

joint indebtedness, Davis agreed to place the stock in Parker’s

name for his use in discharging debt, after which Parker would

return the stock to Davis. Moreover, continues Davis, as no price

was contemplated in either of the two steps of the transaction, it

could not be a sale.

Davis continues by arguing that the agreement i s neither a

gratuitous donation nor a trust. He concedes that in his testimony

he used the phrase “in trust” to describe the nature of Parker’s

precarious possession

, but explains that he used those words in the

non-technical sense and that it was never his contention that

either a formal or constructi ve trust relationship had been

created. Davis acknowledges that the stock was placed in Parker’s

name intentionally, but insists that the stock thu s transferred

remained subject to Parker’s obligation to return it to Davis at a

future date. Neither was the agreement a gratuitous donation,

continues Davis, as it transferred the stock to Parker for the

purpose of facilitating his management of Davis’s affairs with his

creditors and to prevent Davis’s stock from finding its way into

the hands of third parties who might interfere with the original

foursome’s unfettered control of Campbell Wells. And, of course,

Davis disputes Parker’s contention that the oral agreement was too

vague to be enforceable.41 In instruct ing the jury on the law applicable to the case,

the court stated that “the plaintiff, William Davis, has asserted

four separate causes of action against the defendant, Ernest

Parker; breach of contract, breach of fiduciary duty, detrimental

reliance and fraud.” In addressing the breach of contract claim,

the court explained that “[c]onsent ma y be invalidated by error,

fraud or duress.” The court continued, “Davis asserts error

existed as to the principal cause of the contract in this case

. .

. .” Later, when addressing the fraud claim, the court noted that

“[c]onsent to a contract can also be destroyed by fraud or

misrepresentation.”

30 F inally, Davis advances that even if the statute of frauds

were applicable to prevent enforcement of the oral retransfer

aspect of the agreement, any error with regard to the jury’s

finding of breach of contract is harmless and does not require that

the judgment in Davis’s favor be reversed. This is so, he posits,

because his case was submitted to the jury on multiple alternative

theories of rec overy —— breach of contract, breach of fiduciary

d uty, detrimental reliance, and fraud 4 1

—— each of which was

addressed in special interrogatories. With the exception of

detrimental reliance, the jury found for Davis on each alternative

theory submitted. (The jury failed to reach detrimental reliance

because its affirmative finding on the existence of a contract

mooted the detrimental reliance issue.)

We conclude that the jury’s determination tha t the written

asset transfer agreement was a simulation —— a contract which, by

mutual agreement, does not express the true intent of the parties

inter se

—— is supported by the evidence apparently credited by the42 See L A

. C IV

. C ODE A NN

. art. 202 5 (West 1987); F ritscher v.

Justice

, 472 So. 2d 105, 107 (La. Ct. App. 1985) (“A simulation is

a feigned or pretended sale clothed with the formalities of a valid

sale.”); see also Thompson v. Woods , 525 So. 2d 174, 178 (La. Ct.

App. 1988) (“In order to determine whether or not a sale is

simulat ed the court must determine whether the parties acted in

good faith, whether there was an actual intention to transfer

property, and whether any consideration was given for the

transfer.”); Peacock v. Peacock

, 674 So. 2d 1030, 1033-34 (La. Ct.

App. 1996) ( “Two legal presumptions, one codal and one

jurisprudential, apply in situations where a party seeks to prove

a simulation

. . . . The jurisprudential presumption of simulation

applies where the evidence establishes the existence of facts and

circumstances which create a highly reasonable doubt as to the

reality of the putative sale

. . . . When either codal or

jurisprudential presumption exist, the burden of pro of shifts to

the other party to the sale who may rebut the presumption by

establishing a g ood faith transaction, resulting in a true

alienation of ownership for consideration.”).

43 Trident Oil & Gas v. John O. Clay Expl. Inc.

, 622 So. 2d

1191, 1193 (La. Ct. App. 1993).

31 jury. 42 This is the legal and factual essence of Davis’s position,

regardless of whether he has advanced it crisply or artfully, when

he continually insists that the agreement he entered into with

Parker was not a sale but rather an arrangement whereby Parker was

to hold and later return the stock to him. Davis maintains, quite

simply, that he r emained the true owner of the stock despite the

transfer of legal title pursuant to the written agreement confected

between the parties to the contrary.

“[A] transaction will not be set aside as a simulation if any

consideration supports the transaction because the reality of the

transference is thus established.” 43 In his appellate brief, Davis

asserts that “no sale was contemplated, but a transfer, the

consideration for which was not a price but the management of the44 Davis also testified that he and Parker had no discussions

regarding Parker’s “assuming” Davis’s obligations at Guaranty Bank,

as provided for in the agreement.

45 Parker does take the position, however, that he had “assumed”

responsibility for the loan, and as such, Davis had rights against

32 asset for the benefit of the joint creditors of the parties.” What

Davis may have thought of subjectively as consideration does not

matter; the issue is whether consideration was present as a matter

of law. We conclude that it was not.

Neither the release of Davis from the Campbell Wells

obligation at the Guaranty Bank nor the stipulation in the asset

transfer agreement providing for a $1000 payment to Davis a lters

our view. Davis testified that he and Parker had no discussions

before or at the time of the transfer regarding any wish by Davis

to be released from the Guaranty Bank note. 4 4 Parker’s testimony

did not refute this; indeed, as he testified, the document itself

does not call for him to obtain Davis’s r elease from either the

Guaranty Bank debt or the Campbell debt, much less expressly bind

Park er to have Davis released. Parker further testified that

(1) he did not think that Davis would have a right to force him to

have Davis released from those debts; (2) he never told Davis that

the document was tantamount to a release on the two debts; and

(3) he had never stated to anyone else that Davis wanted to be

released from the debt at Guaranty Bank. The fact is that Davis

remained liab le on the obligation to the Campbells until the

Sanifill merger and never complained. 45him.

46 A curious explanation for a Louisiana lawyer

—— presumably

referring to anachronistic jurisprudence on “serious consideration”

—— given that the immovable property in question was at all

relevant times owned by either the corporation or the partnership

and was never the object of a direct sale from Davis to Parker; and

movable property is not subject to the laws of registry.

33 A s for the $1000, Davis testified that he was not paid any

money. Parker himself testified that the $1000 was “not what the

deal was about;” rather, “it was put in there

. . . so there’s not

a property title question on the face of the document.” 46 On cross

examination, one of Davis’s trial attorneys inquired “l et’s get

back to the case at hand that we’re in court on

. . . . [A]nd that

is, the thousand dollars was not paid for the --.” Parker

r esponded, “It may not have been. I don’t -- probably not.”

Clearly, between the parties neither release from debt nor payment

of the cash consideration was ever contemplated. This is wholly

consistent with simulation.

In oppo sing enforcement of the agreement to retransfer the

stock, Parker implicitly challenges the propriety of allowing Davis

to introduce parol evidence and thereby vary the terms of the

written Act of Cash Sale & Assumption. Louisiana Civil Code

Article 1848 provides:

Testimonial or other evidence may not be admitt ed to

negate or vary the contents of an authentic act or an act

under private signature. Nevertheless, in the interest

of justice, that evidence may be admitted to prove such

circumstances as a vice of consent, or a simulation, or

to prove that the writte n act was modified by a47 L A

. C IV

. C ODE A NN

. art. 1848 (West 1987).

48 Id. cmt. (c).

49 L A

. C IV

. C ODE A NN

. art. 2026 (West 1987).

50 L A

. C IV

. C ODE A NN

. art. 2027 (West 1987).

51 Id.

52 L A

. C IV

. C ODE A N N

. art. 2026 cmt. b (citing Thomas B. Lemann,

Some Aspects of Simulation in France and Louisiana

, 29 T UL

. L. R EV

. 22, 30-31 (1954)); see also S AÚL L ITVINOFF

, 5 L OUISIANA C IVIL L AW T REATISE

,

T HE L AW OF O BLIGATIONS § 12.97, at 399-400 (West 1992)(“[R]egarding the

use of testimonial proof as evidence of a simulation, the

restricti ons that remain concern only the parties to the

simulation, as third persons may avail themselves of that kind of

evidence to prove a simulation adverse to their interest.”) (citing

Hampton v. Rubicon Chems., Inc.

, 436 So. 2d 1254 (La. Ct. App.

1983)

, rev’d and remanded on other grounds , 458 So. 2d 1260 (La.

1984)) and In re Hacket

, 4 Rob . 290 (La. 1843)). The court in

Ham pton stated that “the parol evidence rule applies only to

34 subsequent and valid oral agreement. 47

The nature of the simulation

—— absolute or relative

—— may

determine whether the parties to the simulated act, or only third

parties, may introduce such evidence. 48 A simulation is a bsolute

when the parties intend for their act to produce no effects

whatsoever between them; 4 9 it is relative when the parties inten d

for their act to produce some effects between them, even though

such effects are not identical to those recited in their act. 50 A

relative simulation produces the effects that the parties intend if

all requirements for those effects have been met. 51 In the case of

an absolute simulation, however, “the apparent transferor may not

succeed in attacking [it] in the absence of a [written]

counterletter.” 52actions between the parties to the contract and their privies, not

to actions between parties and third persons.” Id. at 1260.

53 Davis states in his appellate brief that he never contended

that Parker’s acquisition of the stock was not real or that the

transaction was a mere sham; rather, Davis advances that Parker did

acquire the stock, but subject to the obligation to reconvey it to

Davis in the future. Moreover, Davis testified that “we discussed

that a little bit

. . . that he [Parker] would have the controlling

interest in the company and access to some resources

. . . if this

is a worst comes to worst situation, he could pay him and I’s notes

with.” Davis also testified that Parker said, “Bill, you can have

it [Campbell Wells stock] back any time you want. I’ll give it

back to you.”

54 See L ITVINOFF

, supra

, § 12.97, at 398 (“When the act contained

in a written instrument is a relative simulation, that is, when the

parti es intend that their act shall produce between them effects

different from those recited in the instrument, testimonial proof

is admissible to prove their true intent.”).

35 Clearly, if the written agreement between Davis and Parker was

a simulation it was relative. They intended for their act to

produce some effects between them, and it did: The Campbell Wells

stock theretofore registered to Davis was re-issued to Parker. 5 3

As such, it cannot be said that they in tended that their written

act have “no effect.” But the jury credited Davis’s contention

that the transfer of the stock was only the first of two steps in

this transaction, not the sole step. The second step was to be the

return of the stock to Davis, reversin g the effect of the first

step, yet still not producing a “no effect” agreement. The

district court, then, did not abuse its discretion in allowing

Davis to introduce parol evidence to prove that the asset transfer

agreement was indeed a simulation. 54

But even if this were not the case, the parol evidence at5 5 See L A

. C IV

. C ODE A NN

. art. 1948 (West 1987)(“Consent may be

vitiated by error, fraud, or duress.”).

56 L A

. C IV

. C ODE A NN

. art. 1848 (West 1987); see also Sonnier v.

Boudreaux

, 673 So. 2d 713, 718 (La. Ct. App. 1996)(“Although parol

evidence is generally not admissible to vary or contradict the

clear and unambiguous terms of an authentic act or written

instrument, in the interest of justice, it may be admitted to prove

a vice of consent.”); Smith v. Remodeling Serv., Inc. , 648 So. 2d

995 (La. Ct. App. 1994)(“[A] party to an authentic act who alleges

that the act was executed through fraud, error or mistake may be

permit ted to introduce parol evidence to support such

allegations.”)(citing Mitchell v. Clark

, 448 So. 2d 681 (La. 1984)

and Billingsley v. Bach Energy Co. , 588 So. 2d 786 (La. Ct. App.

1991)).

57 Matter of Oxford Management, Inc.

, 4 F.3d 1329, 1336 (5th

Cir. 1993); Marple v. Kurzweg , 902 F.2d 397, 399 (5th Cir. 1990).

36 issue would be admissible, as Davis also sought rescission of the

agreement based on two vices of consent

—— error and fraud. 55 Civil

Code Article 1848 makes clear that testimonial evidence is properly

admissible on questions of vice of consent. 56

In the instant case, simulation and consent to permanent

ownership by Par ker are opposite sides of the same coin. The

effect that the simulated transfer was to produce is not critical.

Had it been intended to produce a trust, technical problems would

have arisen, as Louisiana does not recognize a constructive trust, 57

and the written agreement clearly did not establish an express

trust. In like manner, the relationship intended by the parties

may have been correctly characterized as mandate

, with Parker

acting as Davis’s agent or mandatary, as the district court appears58 A mandate is “an act by which one perso n gives power to

another to transact for him and in his name

. . . .” L A

. C IV

. C ODE

A NN

. art. 2985 (West 1994), revised by Acts 1997, No. 261, § 1, eff.

Jan. 1, 1998. La. Civ. Code Article 2989 now provides that “[a]

mandate is a contract by which a person, the principal, confers

authority on another person, the mandatary, to transact one or more

affairs for the principal.” L A

. C IV

. C ODE A NN

. art. 2989 (West Supp.

1998). Significantly, a mandate (1) may be established by an oral

or written agreement between the parties; (2) is gratuitous in

nature, unless there is a contrary agreement; (3) may be revoked by

the principal whenever he thinks it proper; and (4) binds the

mandatary “to restore to his principal whatever he has received by

virtue of his procuration.” L A

. C IV

. C O DE A NN

. arts. 2991, 2992,

3005, 3028 (West 1994) (revised 1997). In denying Parker’s motion

to dismiss and/or motion for summary judgment on the breach of

contract claim, the district court addressed the possibility of a

mandate. Record on Appeal , vol. 31, pgs. 12-29.

59 “A deposit

, in general, is an act by which a person receives

the property of another, binding himself to preserve it and return

it in kind.” L A

. C IV

. C ODE A NN

. art. 2926 (West 1994). Deposit is

essentially a gratuitous contract, inv olving the delivery of

movable property, which is created by the parties’ mutual consent,

whether actual or implied. S ee L A

. C IV

. C ODE A NN

. arts. 2928, 2929,

2930, 2932, 2933 (West 1994). Finally, “[t]he deposit must be

r estored to the depositor as soon as he demands it

. . . . ” L A

. C IV

. C ODE A NN

. art. 2955 (West 1994).

37 to have c onstrued it. 5 8 Alternatively, Davis’s delivery of his

stock to Parker might properly be characterized as a deposit. 59 Or

together, the written-and-oral agreement migh t have created an

innominate relationship that provided for Davis to “park” his stock

with Parker for an indefinite

—— but not permanent

—— period and to

reacquire it later.

Our exhaustive (and exhausting) review of the extensive trial

r ecord does not yield a single, precise Civil Law label fo r the

relationship created between Davis and Parker. Plainly, however,

the jury credited Davis’s evidence, which supports the existence of38

a relative simulation consisting of an oral stipulation sufficient

to vary the terms of the written agreement and prohibit full

ownership of the stock from ever passing from Davis to Parker.

Irrespective of the name by which this “rose” is called, though,

the jury was convinced that it included an obligation by Parker to

return the stock to Davis. Moreover, as the jury also found,

Parker’s failure to return the stock constituted a breach of that

obligation. We conclude that the jury’s findings regarding the

existence of an oral covenant to retransfer the stock was neither

unreasonable nor against the great weight of the evidence.

The written agreement could correctly be viewed as a

simulation, w ith the true relationship involving a return of the

stock, as the jury viewed it. Davis thus properly brings this

action for breach of contract, seeking the return of his stock.

This is truly no different in effect than seeking rescission of the

written contract, either because of the simulation or because error

or fraud vitiated D avis’s consent. Stated differently, it is

immaterial whether the relati onship confected was a mandate, a

deposit, or an innominate contract, for the result is the same:

Each of these roads lead to Rome. Accordingly, the arrangement is

not unenforceable so the district court did not commit reversible

error in admitting the parol evidence or in denying Parker’s motion

for j.m.l. or new trial on this issue.

D. P RESCRIPTION60 L A

. R EV

. S TAT

. A NN

. § 9:5605 (West 1990). This is the version

of section 5605 in effect at the time Davis filed his suit against

Parker. The statute has subsequently been amended. S ee

L A

. R EV

. S TAT

. A NN . § 9:5605 (West 1998).

61 Parker I , 58 F.3d at 188-90.

62 Reid v. Rolling Fork Pub. Uti l. Dist. , 979 F.2d 1084, 1086

(5th Cir. 1992) (“The decision of a legal issue by an appellate

court establishes the ‘law of the case’ and must be followed in all

subsequent proceedings in the same case at both the trial and

appellate levels unless the evidence at a subsequent trial was

39 This case came before us in Parker I as an appeal from a grant

of summary judgment in favor of Parker: The district court had

dismissed Davis’s s uit as time-barred under Louisiana’s one-year

prescriptive period for legal malpractice actions. 60 In reversing

and remanding, we held that (1) Davis’s claims for rescission,

breach of contract, and detrimental reliance do not come within the

ambit of section 5605(A)’s provisions because they are not actions

predicated on tra ditional legal malpractice, i.e., they do not

concern the quality of legal representation; and (2) although, in

a sense Davis’s nullity claim does concern the quality of legal

representation, it is not covered by the statute as the language of

section 5605(A) limits the prescriptive p eriod’s application to

“action[s] for damages” and the objective of a nullity action is

ordinarily restoration in kind. 61

Parker entreats us to revisit the prescription issue. He

argues that, as a result of the manner in which Davis tried his

case against Parker on remand, we are not bound by the law of the

case doctrine. 62 Parker notes that Davis escaped dismissal insubstantially different, the controlling authority has since made

a contrary decision of law applicable to such issues, or the

decision was clearly errone ous and would work a manifest

injustice.”) (citing Schexnider v. McDermott Int'l Inc. , 868 F.2d

717, 718-19 (5th Cir.), cert. denied

, 493 U.S. 851, 110 S. Ct. 150,

107 L. Ed. 2d 108 (1989)).

63 As we stated in Parker I :

Although Parker’s legal advice may have

contributed to Davis’ decision to transfer the

stock to Parker, the stock could have been

transferred to a non-lawyer and the same

actions could have been brought against that

40 Parker I by drawing a “fine distinction” between Parker’s status as

a businessman and his status as a lawyer. In other words, Davis

represented that his claims for breach of contract, rescission, and

detrimental reliance turned on Parker’s actions in his capacity as

Davis’s business associ ate, not as his lawyer. This

representation, urges Parker, led us to conclude in Parker I that

Davis’s claims had not prescribed because they are not traditional

legal malpractice claims. But, contends Parker, having fashioned

his case one way to avoid prescription, Davis proceeded on remand

to paint an entirely different picture for the jury

—— in essence,

putting Parker’s status and actions as an attorney on trial. In

support of his argument, Parker cites a number of instances

throughout the trial in which Davis purportedly placed improper

emphasis on Parker’s role as an attorney.

Although he is correct that Parker I hinged on the fact that

Davis’s claims had nothing to do with the quality of legal services

rendered, 63 Parker misconstrues th a t decision insofar as heparty. That an attorney happens to be the

transferee does not grant him the benefit of a

one-year prescriptive period when a non-lawyer

entering into the same agreement would be

subject to a ten-year prescriptive period.

Davis’ fundamental complaint against Parker on

[his breach of contract, rescission, and

detrimental reliance claims] does not concern

the quality of Parker’s legal services;

rather, Davis complains that Parker reneged on

his promise to retransfer the Campbell Wells

stock to Davis.

Parker I , 58 F.3d at 189.

64 Davis argued at trial that the asset transfer agreement was

entered into in violation of former Disciplinary Rule 5—104(A) of

the Louisiana Code of Professional Responsibility, which provides:

“A lawyer shall not enter into a business transaction with a client

if they have differing interests therein and if the client expects

the lawyer to exercise his professional judgment therein for the

protection of the cl ient, unless the client has consented after

full disclosure.” The Code’s provision applied, notwithstanding

its replacement with the Rules of Professional Conduct, because the

con duct at issue occurred before the Rules’ adoption. S ee

Louisiana State Bar Ass’n v. Alker , 530 So. 2d 1138, 1139 n.2

(La. 1988).

41 interprets it as a general gag order with respect to the subject of

Parker’s legal representation or his status as a lawyer in general

a nd Davis’s long-time lawyer in particular. The relevance of

Parker’s status as an attorney has never been questioned. The fact

that Parker was Davis’s attorney, as well as his business associate

and trusted friend, was offered to explain how the asset transfer

agreement came into being, and was essential to Davis’s nullity

action: It established the fiduciary duty on which the claim was

predicated. 6 4 The gravamen of Parker’s contention lies in the

ostensibly improper manner in which Davis r epeatedly presented65 Fruge v. Penrod Drilling Co.

, 918 F.2d 1163, 1168 (5th. Cir.

1990) (noting that “[w]here evidence is admissible for one purpose

but not another, the burden is on the objecting party to request a

proper limiting instruction” and that the issue is waived if no

objection is made) (citing F ED

. R. E VID . 105).

66 Parke r also urges us to reconsider section 5605(A)’s

application to Davis’s nullity claim, arguing that the claim was a

facade, given that rest oration in kind was never a viable

possibility. This argument was disposed of in P arker I

, 58 F.3d at

191 (“Moreover, even if the court ultimately determines that

d amages are the only feasible remedy in this case, we are not

persuaded that the Louisian a courts would adopt one prescriptive

period in a nullity action for which restoration in kind is

feasible and a different prescriptive period for a nullity action

for which the court determines that restoration in kind is

impossible.”).

42 evidence of Parker’s profession, keeping that fact foremost in the

jurors’ minds at all times.

If Parker wished to complain that he was unfairly prejudiced

by the emphasis placed on his status as an attorney, however, it

was incumbent on him to object and request a limiting instruction, 65

which he never did. When viewed in context of the jury trial as a

whole, though, Parker’s lament rings hollow. Even though lawyers

as litigants may labor under the disability imposed by the lawyerbashing vogue of the times, the fact remains th at subjective

qualities of the parties litigant —— age, education,

sophistication, occupation, cultura l background, and the like ——

are frequently relevant to the issues of the case. And that is

certainly true of the instant litigation and the kinds of issues

that it presents. We are bound by the law of the case, and we

remain unconvinced that Davis’s claims sound in malpractice. 6667 Gu ilbeau testified that Parker represented him in the

negotiation of the terms under which replacement tenants were to

assume Guilbeau’s then-current tenants’ obligations under a

commercial lease. In the drafting of the new lease, Parker omitted

certain material terms but nonetheless obtained the parties’

signatures by ass uring everyone that he would complete the

agreement later.

Howard testified that Parker represented her in divorce

proceedings against her then-hu sband. According to Howard, she

retained Parker in April 1983, after Randy Prather and “Red”

Dumesnil recommended him. Prather was a loan officer with Guaranty

Bank and Dumesnil was its president. Prather and Dumesnil

requested a meeting with Howard after discovering that she had

filed for legal separation. Her husband was delinquent on a note

that he had give n the bank in conjunction with a large loan.

Howard testified that Prather and Dumesnil expressed concern over

how her separation would affect the loan, giving her the impression

that she was responsible for half of her husband’s note. They

arranged for her to meet with Parker even though she already had an

attorney. They did not disclose the fact that Parker also did

legal work for Guaranty Bank.

On Parker’s advice, Howard enlisted her daughter to obtain a

power of attorney from her father so that Howard could pay off her

husband’s debts. Even though the husband’s note contained a crosscollateralization provision, the bank could not levy on the other

funds that he had on deposit because they were not in his name ——

they were in a corporate account. After obtaining her father’s

power of attorney, Howard’s daughter, under her mother’s direction,

withdrew the funds from the corporate account

—— over $1,000,000

——

and put them in a CD in her father’s name. The bank then offset

those fu nds against the note, pursuant to its crosscollateralization agreement. Yet Parker never explained to Howard

that she was under no legal obligation to pay off the note, and

that by tra nsferring the funds to a personal CD, she would be

43 E. R EBUTTAL T ESTIMONY

Parker urged his motion for j.m.l. or new trial, on the

additional ground that the district court reversibly erred in

permitting Davis to call two of Parker’s former clients

—— Kathleen

Howard and Kenneth Guilbeau —— as rebuttal witnesses. Howard and

Guilbeau t estified to specific actions taken by Parker in the

course of representing them professionally. 67 Parker insists thatdiminishing the value of the corporation in which she had a

community property interest.

When Parker returned her file, she discovered —— attached to

a letter from her husband complaining to Dumesnil about what had

happened —— a handwritten note from Prather to Parker which read:

“Ernie [Parker], what can I say? Another satisfied customer. Red

w as ticked off because Bobby [Howard’s husband] didn’t spell

‘Dumesnil’ correctly after all these years. s/Randy Prather.”

68 See F ED

. R. E VID

. 404(b)("Evidence of other crimes, wrongs, or

acts is not admissible to prove the character of a person in order

to show that he acted in conformity therewith.”).

69 Prather was a loan officer in G uaranty Bank’s commercial

lending department; he reviewed the loan application for the

Campbell Wells acquisition and is now president of Premier Bank

——

Guaranty Bank’s successor. Parker portrayed himself —— in his own

testimony and through Prather’s testimony —— as having a detached

and strictly professional relations h ip with Guaranty Bank: He

denie d that he was acting in the capacity of the Bank’s attorney

when the Campbell Wells loan application was made, and Prather

testified that, although Parker did some work f or Guaranty Bank,

44 their testimony was offered for th e improper purpose of

demonstrating his bad character via his alleged prior misconduct.

As such, says Parker, their testimony constit utes “other acts”

evidence that is inadmissible under Federal Rule of Evidence

(F.R.E.) 404(b). 68

Davis counters that the testimony of Howard and Guilbeau did

not trigger F.R .E. 404(b), as it was offered for impeachment

purposes pursuant to F.R.E. 608(b) and not as substantive evidence:

Guilbeau contradicted Parker’s testimony that he had never asked a

client to sign an incomplete instrument on the assurance that he

would fill in the details later; and Howard contradicted Parker’s

and Prather’s testimony concerning the nature and extent of their

relationships with one another and with Guaranty Bank. 69Jimmy Bean (Parker’s partner) was the bank’s true attorney; Parker

testified that he was uncertain whether or not, prior to the

Campbell Wells deal (Septe mber 1985), he had any direct business

dealings with Prather; and both Parker and Prather denied that they

were friends, claiming that their relationship was strictly

professional in nature. According to Davis, Parker sought to

mischaracterize Guaranty Bank’s inner workings and Parker’s role

therein in an effort to portray the bank as the hapless victim of

Davis’s unclean hands.

70 “Specific instances of the co nduct of a witness, for the

purpose of attacking or supporting the witness’ credibility, other

than conviction of crime as provided in rule 609, may not be proved

by extrinsic evidence.” F E D

. R. E VID

. 608(b); United States v.

Herzberg

, 558 F.2d 1219, 1223 (5th Cir.), cert. denied

, 434 U.S.

930, 98 S. Ct. 417, 54 L. Ed. 2d 290 (1977).

71 See supra note 69.

45 Parker nevertheless emphasizes that the rebuttal testimony

cannot find shelter under F.R.E. 608(b), as that rule limits

impeachment on collateral matters to cross-examination of the

witness. 70 He contends that the Howard and Guilbeau testimony about

their previous legal representations by Parker concerned collateral

matters; a s a result, he urges, it was inadmissible extrinsic

evidence.

Parker’s argument misses the mark with respect to Howard’s

testimony. That testimony suggests that Parker worked

intimately

—— even collusively

—— with Prather and Guaran ty Bank

long before the Campbell Wells deal. As such, it contradicts

Parker’s portrayal of the relationships among himself, Prather, and

Guaranty Bank, 71 which relationships are not collateral matters in72 See Head v. Halliburton Oilwell Cementing Co.

, 370 F.2d 545,

546 (5th Cir. 1967) (“The test for determining what is a collateral

matter

. . . [has been phrased]: ‘Could the fact as to which error

is predicated have been shown in eviden ce for any purpose

independently of the contradiction?’”) (citations omitted).

73 See United Stated v. Abel

, 469 U.S. 45, 56, 105 S. Ct. 465,

471, 83 L. Ed. 2d 450 (1984); United States v. Martinez , 962 F.2d

1161, 1165 (5th Cir. 1992) (noting that F.R.E. 608(b) does not

prohibit the use of extraneous evidence “if it tends to show bias

in favor or against a party”) Parker further argues that the

probative value of Howard’s testimony in demons trating bias is

substantially outweighed by its prejudicial effect on the jurors.

We cannot s ay, however, that the district court abused its

discretion in admitting the testimony.

74 Davis argues for materiality on the ground that “one of the

issues central to Parker’s defense was his contention that the [Act

of Cash Sale & Assumption] signed by Davis should have been taken

at face value, when the truth is that Parker sometime s told his

clients, such as Guilbeau, that documents as signed do not always

mean what they say.” We find Davis’s argument unconvincing.

75 See Jones v. Southern Pac. R.R.

, 962 F.2d 447, 450 (5th cir.

1992)(noting that “[l]itigants are

. . . entitled to introduce

extri nsic evidence to contradict a witness’ testimony on matters

that are material to the merits of the case” and that “if the

opposing party places a matter in issue on direct examination,

46 this case. 72 Moreover, her testimony casts doubt on Prather’s

objectivity by demonstrating a bias in favor of Parker; and witness

bias is never immaterial. 73

Parker’s F.R. E. 608(b) contention does have arguable merit,

however, with respect to Guilbeau’s tes timony. Parker’s alleged

practice of havin g his clients execute incomplete instruments on

the assurance that he would complete them later is not material to

Davis’s claims. 74 As such, Guilbeau’s testimony contradicting

Parker would be admissible only if Parker had placed the alleged

practice in issue on direct exami nation. 7 5 Parker’s testimony onfairness mandates that the other party can offer contradictory

evidence even if the matter is collateral” but that “a party cannot

delve into collateral matters on its own initiative and then claim

a right to impeach that testimony with contradictory evidence”).

76 See F.D.I.C . v. Mijalis , 15 F.3d 1314, 1318-19 (5th Cir.

1994) (“We will not reverse a district court’s evidentiary rulings

unless they are erroneous and substantial prejudice results. The

bur den of proving substantial prejudice lies with the party

asserting error.”).

47 the matte r was elicited by Davis’s counsel on cross-examination

during Davis’s case in chief, not by Parker’s counsel. Thus,

Guilbeau’s testimony —— extrinsic evidence —— could not have been

properly used to impeach Parker on the question whether it was his

practice to obtain signatures on incomplete instruments

—— at best

a collateral issue. Even so, any error resulting from the

admission of Guilbeau’s testimony was harmless. The plethora of

other probative evidence adduced at trial militates against a

finding of prejudicial effect. 76 We discern no reversible error in

the district court’s admission of this rebuttal testimony.

F. N ONPECUNIARY D AMAGES : E MOTIONAL D ISTRESS

The jury found by a preponderance of the evidence that Davis

“suffered emotional distress, anguish or inconvenience which Parker

intended to occur as a result of his refusal to return Davis’s

Campbell Wells stock.” For this the jury awarded Davis $175,000,

and the district court included this award in its judgment on the

verdict. In his motion for j.m.l. or new trial, Parker challenged

this jury finding as well, contending that there was no evidence to

support nonpecuniary damages for emotional distress. The district77 L A

. C IV

. C ODE A NN . art. 1998 (West 1987).

78 Id.

79 P arker first invokes our decision in Stephenson v. Pai n e

Webber Jackson & Curtis, Inc.

, 839 F.2d 1095 (5th Cir.), cert.

48 court disagreed, stating broadly

—— and, we m ust note,

conclusionally

—— that “there is an adequate amount, and in some

cases overwhelming amount, of evidence to support all of the jury’s

findings . . . .”

Louisiana Civil Code Article 1998 permits recovery of damages

for non-pecuniary loss associated with a breach of contract under

only two, narrowly restrictive circu mstances: (1) “When the

contract

. . . is intended to gratify a non-pecuniary interest and

. . . the obligor knew, or should have known, that his failure to

perform would cause that kind of loss” 7 7 and (2) “[r]egardless of

the nature of the contrac t[,] . . . when the obligor intended,

through his failure, to aggrieve the feelings of t he obligee.” 7 8

Parker offers two reasons why the district court erred in

allowing the jury’s emotional distress award to stand. First,

regarding Civil Code Article 1998(i), he observes that the nature

of the contract at issue was not to gratify a nonpecuniary interest

and that there was no showing that he knew or should have known

that Davis was suscepti ble to such an injury for breach of the

agreement

—— if indeed he was. Parker points to two cases which he

reads as holding that stock transfer agreements lack any intent to

gratify a non-pecuniary interest. 79 Second, Parker urges that theredenied

, 488 U.S. 926, 109 S. Ct. 310, 102 L. Ed. 2d 328 (1988). In

Stephenson

, an investor brought suit against a brokerage house and

its individual broker for trading securities on his behalf without

authorization. The district court “dismissed [investor’s] claim

for emotional distress on the grounds that Louisiana law requires

a nonpecuniary interest as the cause for emotional distress, and no

such interest was prese nt in [that] case.” I d. at 1101. On

appeal, we defer red to the district court’s determination of

Louisiana law, noting th at (1) “a district court is in a better

position than we are to ascertain the law of the state in which it

sits” (but Stephenson was decided before the Supreme Court, in

Salve Regina College v. Russell

, 499 U.S. 225, 231, 111 S. Ct.

1217, 1221, 113 L. Ed. 2d 190 (1991) abolished such deference) and

(2) the investor had not demonstrated that any trades were

“unauthorized” as that term is legally identified. I d. The second

case relied on by Parker, Abu-Kiskh v. Vintage Petroleum, Inc.

, 764

F. Supp. 76 (W.D. La. 1990), does not address stock transfer

agreements. In that case, the parties entered the contract to

(1) compensate plaintiff for the oil company’s previous use of her

property as a disposal site, and (2) lease the property for such

use in the fu ture. Id. at 77. When the company ceased paying

minimum monthly rent, the plaintiff fi led suit for breach of

contract seeking, inter ali a , damages for mental suffering. The

district court rejected this claim, concluding that “[t]he contract

in question has as its primary object the recovery of past

compensation and future income

—— purely pecuniary objects.”). I d.

at 80.

49 is inadequate evidence in the record that Davis in fact experienced

any emotional distress. Parker observes that the only modicum of

evidence supporting mental distress is the bare, conclusio n al

testimony of Davis that “[t]his is very traumatic for me, I promise

you that.” Moreover, there was no confirmation by Davis’s former

wife that he suffered such distress, continues Parker, and no

record of Davis’s having consulted with a mental health

professional about emotional problems.

Davis co unters that, for nonpecuniary damages to be

recoverable, the o bligee’s nonpecuniary interest need only be a80 Stonecipher v. Mitchell

, 655 So. 2d 1381, 1385 (La. Ct. App.

1995)(emphasis added)(“[W]e understand the current law to be that

the obligee’s nonpecuniary interest need only be a ‘significant’

object or cause of the contract in order for nonpecuniary damages

to be recoverable.”)(citing Young v. Ford Motor Co., Inc.

, 595 So.

2d 1123 (La. 1992)).

81 Davis notes tha t he was “reduced to assets consisting of 4

lots in Pi cayune, Mississippi, two payments left from a note

receivable, household furnishings, and about $8,000 in the bank.”

50 significant object or cause of the contract, which is a question of

fact. 80 The jury could reasonably have concluded, continues Davis,

that the contract had as a significant object or cause some

non pecuniary interest —— the trusting bond of friendship and

brotherhood shared by Parker and Davis, for example. Davis insists

that Parker was his “attorney and best friend,” someone whom he

trusted to guide him through the tough times. Furthermore, Davis

urges, the jury could have found that Parke r acted with an overt

intention to cause Davis emotional distress, the second ground for

awarding such damages under Article 1988.

Davis insists that the record demonstrates beyond question

that he indeed suffered emotional distres s, pointing to his

testimony that the experience has been very traumatic. He contends

that his anguish included not only that which he experienced from

learning of the betrayal of trust and from his humiliation at being

“taken,” but also the trauma of having to sell his home to satisfy

creditors and the reduction in his assets. 81 Relying on Quealy v.82 475 So. 2d 756 (La. 1985)(upholding damages for mental

anguish, humiliation and inconvenience in action against broker and

issuer based on unauthorized sale of stock (conversion), when

(1) dividends from c onverted stock constituted plaintiff’s main

source of income (except for a small disability pension);

(2) plaintiff’s living conditions were drastically impaired by the

loss of those dividends; (3) plaintiff was physically unable to

work; and (4) as of the date of trial, plaintiff had been without

the dividend income for six years).

51 Paine Webber, Jacks on & Curtis, Inc.

, 82 Davis argues that such

evidence is more than sufficient to support the jury’s award for

mental anguish.

We agree with Parker on this point. The nature of the

contract at issue was not to gratify any nonpecuniary interest of

Davis’s. Our review of the entire record reveals nothing of this

nature. Moreover, our record review turns up little if any

evidence (beyond Davis’s one bare statement of the affair’s being

traumatic) of emotional distress. We conclude that no reasonable

jury could find that Davis suffered an actionable type of emotional

distress from Parker’s breach of contract. Thus, the award of

damages for emotional distress cannot stand.

G. A TTORNEYS ’ F EES

The district court correctly instructed the jury that a party

against whom rescission is granted on grounds of fraud is entitled

to damages and attorneys’ fees. The court explained that in

determining the amount of attorneys’ fees, the jury must consider

those factors provided in Louisiana’s Rules of Professional

Conduct:83 A rticles of Incorporation of the Louisiana State Bar

Association, L A

. R EV

. S TAT

. A NN

., Title 37, ch. 4 app., art. 16 (West

1988) (Rules of Professional Conduct, Rule 1.5(a)) (articulating

the factors considered in determining t he reasonableness of an

attorney’s fee). Rule 1.5 is the embodiment of former Disciplinary

Rule 2-106 of the Code of Professional Responsibility.

52 [On e,] [t]he time and labor required, the novelty and

difficulty of the questions involved[,] and the skill

requisite to perform the legal service properly; [two,]

[t]he likelihood, if apparent to the client, th at the

acceptance of the particular employment will preclude

othe r employment by the lawyer; [three,] [t]he fee

customarily charged in the locality for similar services;

[four,] [t]he amount involved and the result[s] obtained;

[five,] [t]he time limitations imposed by the client or

by the circumstances; [six,] [t]he nature and length of

the professional relationship with the client; [seven,]

[t]he experience, reputation and ability of the lawyer or

lawyers performing the service[s]; and [eight,] [w]hether

the fee is fixed or contingent. 83

The jury concluded by a preponderance of t he evidence that

Parker induced Davis to enter the written agreement through fraud.

Having thus answered affirmatively regarding fraud in the

ind ucement, the jury dutifully turned to a subsequent

interrogatory, i.e., “[D]o you find that the plaintiff’s attorneys

are allowed to recover their attorney fees as provided in the

conti ngency fee agreement?” The jury again responded in the

affirmative. Had the answer been “no” —— rejecting the contingent

fee arrangement —— the jury would have proceeded to consider next

what amount of attorneys’ fees the plaintiff’s attorneys were

entitled to recover; but that interrogatory was mooted by the

jury’s approbation of the contingent fee arrangement. The district

court entered judgment against Parker in the sum of $3,200,278.60,84 T exas Commerce Bank v. Capital Bancshares, Inc. , 907 F.2d

1571, 1575 (5th Cir. 1990).

53 represent ing attorneys’ fees under the contingent fee contract,

plus legal interest from the date of the jury verdict.

When, in August 1996, it denied Parker’s alternative motion

for j.m.l. or new trial, the court rejected Parker’s claim that

there was insufficient evidence to support the one-third contingent

fee award, noting that “the jury was presented with a copy of the

attorney fee agreement and was instructed by [the] court regarding

the appropriate factors to be considered in assessing the

reasonableness of an award for attorney fees.” The court reasoned

that, “[a]lthough the plaintiff d id not present any evidence

regarding actual time expended upon the trial, the jury was

certainly in a position to determine whether the contingency fee

agreement that was presented was reasonable in light of the amount

of documents presented, complexity of these issues, and any other

factors which the jury could observe through trial.” “Had the jury

found that the contingency fee agreement was not reasonable,”

continued the court, “the plain tiff was willing to accept ‘zero’

attorney fees due to the fact that there was no other evidence of

attorney time submitted.”

In a diversity case, state law governs the award of attorneys’

fees. 84 Under Louisiana Civil Code Article 1958, “[t]he party

against whom rescission is granted because of fraud is liable for85 L A

. C IV

. C ODE A NN . art. 1958 (West 1987).

86 L A

. C IV

. C ODE A NN . art. 1953 (West 1987).

87 Greene v. Gulf Coast Bank , 593 So. 2d 630, 632 (La. 1992).

88 America’s Favorite Chicken Co. v. Cajun Enters., Inc.

, 130

F.3d 180, 186 (5th Cir. 1997)(citing Greene , 593 So. 2d at 633).

89 See, e.g.

, Adams v. Franchise Fin. Corp. of Am.

, 689 So. 2d

572, 577 (La. Ct. App.)(concluding that the award of the contingent

fee was not excessive nor an abuse of discretion), writ denied

, 692

So. 2d 456 (La. 1997); see also Southern Pac. Transp. Co. v.

Chaubert

, 973 F.2d 441, 449 (5th Cir. 1992)(“That a fee is

conti ngent may be considered, but the court is not bound by this

consideration alone.”), cert. denied

, 507 U.S 987, 113 S. Ct. 1585,

123 L. Ed. 2d 152 (1993).

54 damages and attorney fees.” 85 “Fraud is a misrepresentation or a

suppression of the truth made with the intention either to obtain

an unjust advantage for on e party or to cause a loss or

inconvenience to the other. Fraud may also result from silence or

inaction.” 86 “To find fraud from silence or suppression of the

truth, there must exist a duty to speak or to disclose

information.” 87 This duty can arise by statute or by a special

rel ationship between the parties, such as a fiduciary

relationship. 88 Given the jury’s verdict on the merits, an award

of attorneys’ fees to Davis is appropriate.

An attorney’s fee must be reasonable; however, a court is not

bound by the terms of a contingent fee agreement in determining the

reasonableness of a fee award. 89 “[C]ontingency fee contracts, like

all other attorney fee contracts, are subject to review and control90 O’Rourke v. Cairns , 683 So. 2d 697, 701 (La. 1996).

91 Francis v. Travelers Ins. Co.

, 581 So. 2d 1036, 1044-45 (La.

Ct. App.), writ denied , 588 So. 2d 1114 (La.) and 588 So. 2d 1121

(La. 1991).

92 State, Dep’t of Transp. and Dev. v. Wil liamson , 597 So. 2d

439, 441 (La. 1992).

93 Automatic Coin Enters., Inc. v. Vend-Tronics, Inc.

, 433 So.

2d 766, 767-68 (La. Ct. App.), writ denied

, 440 So. 2d 756 (La.

1983).

55 by the courts

—— most notably for reasonableness.” 90 The quantum

of an award of attorneys’ fees is a question of fact and thus

appropriately a jury issue. 91

Parker argues that the record fails to show that Louisiana law

was followed in the award of attorneys’ fees. He advances that

attorneys’ fees may not be recovered except when authorized by

statute or contract, 92 and insists that no statutes authorize

recovery in this case. Specifically, Parker contends that

attorneys’ fees are not available under Article 1997 of the Civil

Code, which governs damages awardable for a bad faith breach of

contract. Furthermore, he maintains that Article 1958, which makes

attorneys’ fees available when rescission is based on fraud, is not

applicable in this case, as Davis’s claim of fraud was legally

insufficient and should not have been considered by the jury; he

asserts that “fraud can not be imputed from alleged

misrepresentation(s) alone but, rather, must be based solely on a

pers on’s intent n ot to perform.” 93 Thus, concludes Parker, the

award of attorneys’ fees on the basis of fraud is inappropriate.94 The court stated, in part, “[c]onsent to a contract can also

be destroyed by fraud or misrepresentation. Fraud is a

misrepresentation or suppression of the truth made with the

intention either to obtain an unjust advantage for one party or to

cause a loss or inconvenience to the other. Fraud may also result

from silence or inaction.” The court also explained that “[w]hen

an attorney enters into a business transaction with a client, the

attorney has a fiduciary obligation to either fully disclose the

relevant information to the client . . . or advise the client to

seek outside counsel before completing the transaction. Failure to

do so may constitute a breach of fiduciary duty by an attorney if

an attorney/client relationship exists, regardless of whether the

attorney entered the particular transaction as a businessman.”

56 Parker argues in the alternative that, even if attorneys’ fees

were properly awarded, the amount of the instant award cannot be

justified. He observes that (1) although the jury instructions

recited the factors that determine the reasonableness of a fee, the

interrogatory on the issue covered only one of these

—— whether the

fee is fixed or contingent

—— when it asks whether Davis’s

attorneys were allowed to recover “attorney fees as provided in the

contingency fee agreement”; and (2) there was no evidence on which

the jury could determine the reasonabl eness of the fee awarded.

Parker insists that Davis should have introduced contemporary time

records or testimony of time spent.

Davis responds first that, in light of the court’s charge to

the jury that fraud can be committed by a failure to disclose that

of which there is a duty to speak, 94 the finding of fraud is legally

sufficient. Davis urges that Parker, as his attorney, had a duty

to disclose all relevant and material information, in cluding his

true motivation f or inducing Davis to enter the contract, his95 Parker testified that he did not tell Davis that (1) he

s hould consult another attorney before entering the transaction,

and (2) he (Parker) was acting as a businessman —— not as Davis’s

attorney

—— in the transaction. Parker complains that Davis’s

argument is inconsistent inasmuch as when Davis needs Parker to be

an attorney (to establish a duty to disclose information so that

fraud can be argued and attorney’s fees awarded), he is

“conveniently” an attorney; however, when Davis needs Parker to be

a businessman (to avoid prescription or preemption), he is just a

businessman.

96 Hebert v. State Farm Ins. Co.

, 588 So. 2d 1150, 1153 (La. Ct.

App. 1991)(“[P]roof of the value of an attorney’s services is not

necessary if the services are evident from the record or were

rendered under the supervision of the court.”).

57 conflict of interest, and his conviction that the stock was worth

more than he was leading Davis to believe. Davis notes that Parker

admitted that he failed to disclose the relevant details of the

transaction. 95 This, combined with the fact that Parker secured the

release of the Guaranty Bank debt within a few days following the

stock transfer but did not even attempt to procure a release of the

debt to the Campbells, maintains Davis, was sufficient to support

the jury’s conclusion that Parker “was planning something from the

very date of the initial transfer.”

Responding next to Parker’s argument that the amount of the

award cannot be justified, Davis insists that the district court’s

rejection of this position in Parker’s post-trial motions was

entirely proper. Davis correctly notes that proof of the value of

an attorney’s services is not necessary if the services are evident

from the record, 9 6 and insists that

—— contrary to Parker’ s

assertions

—— the record does indeed support the jury’s award of97 689 So. 2d 572 (La. Ct. App.), writ denied

, 692 So. 2d 456

(1997).

98 Id. at 577.

99 Id.

58 attorneys’ fees. Davis bases his argument on the opinion of a

Louisiana court of appeal in Adams v. Franchise Finance Corp. of

America

. 97 In A dams

, the trial court awarded a one-third contingent

fee. The court of appeal acknowledged that “[n]o independent

evidence was presented by Adams on this issue, other than what the

trial court could observe from the record and an affidavit by Adams

showing that he had signed a contingency fee contract with his

counsel

. . . ,” 98 but affirmed the award of the contingent fee

nonetheless. The A dams court took into account, inter alia

,

(1) “the considerable actions taken by Adams’ counsel as well as

other members of his firm that have been involved with this

litigation since its inception in 1991”; (2) “[the attorney’s] high

degree of skill and ability as evidenced by the pleading, briefs,

a nd oral arguments”; (3) “[the] considerable amount of money in

dispute and [that] plaintiff made a full recovery in the trial

court which was upheld by this court herein”; and (4) that

“[c]ounsel for the plaintiff pr ovided substantial legal services

which con sisted of numerous filings, considerable discovery, and

the filing and opposing of the motion for summary judgment together

with supporting memoranda and exhibits.” 99

Davis argues that the information before the jury in this100 As to his alleged contentment with the interrogatory, Parker

notes that he objected to the interrogatory, and the objection was

overruled.

59 case, like that in Adams , is sufficient to support the contingent

fee award. The jury was presented with the contingent fee

agreement and asked to determine whether Davis’s counsel were

entitled to recover that amount. In furthe r parallel with the

situation in Adams

, Davis’s counsel did not present ind ependent

evidence on the issue: They presented no records of hours

expended, hourly rates, priority of service, complexity of the

litigation, special expertise, or the like. Nonetheless, Davis

insists, the ju ry was aware of (1) his difficulty in securing an

attorney; (2) how hard and bitterly Parker opposed Davis’s claim;

(3) how long it took to bring the case to trial; (4) the extensive

effort expended, in light of the appeal from the summary judgment

in Parker I on prescription an d the remand for additional

proceedings; (5) the massive expe nditures on voluminous exhibits

and the quantity of testimony; and (6) the time-c onsuming and

lengthy nature of the trial.

Finally, Davis contends that Parker was content to risk allor-nothing when the interrogatories were submitted to the jury. As

such, he should not be heard to complain now that he finds himself

on the losing end of that bet. 100

In the context of attorneys’ fees, Parker’s argument regarding

the absence of fraud is nothin g more than sophistry. Given the101 Parker I

, 58 F.3d at 190 (noting that attorney’s failure

fully to disclose relevant information regarding business

transaction with client or to advise client to seek outside counsel

befor e completing transaction may constitute breach of fiduciary

duty if attorney/client relationship exists, regardless of whether

attorney entered the transaction as businessman).

60 substantive instructions to the jury, its finding of fraud in the

inducement, and our statements in Parker I

, Parker c annot avoid

Davis’s entitlement to attorneys’ fees by denying the presence of

fraud. 101 There was sufficient evidence for the jury to have

concluded that Parker committed fraud, both passively, in failing

to disclose the relevant information and not advising Davis to seek

independent leg al counsel, and actively, in misleading Davis by

orally committing to retransfer the stock while having no intention

of doing so. As for the reasonableness of the fee awarded, when we

consider that, as Parker states, (1) we must follow Louisiana law

in this diversity case, and (2) under Louisiana law this was

appropr iately a question for the jury, we conclude that no

reversible error was committed by the district court in rendering

judgment on the basis of the jury’s award of attorneys’ fees.

Inasmuch as we have reversed the award of $175,000 for emotional

distress, the award of attorneys’ fees must be reduced by an amount

equal to one-third of the disallowed recovery, i.e., by $58,333.

H. C OSTS

The same cannot be said of the court’s assessment of costs,

specifically the quantum of expert witness fees. The state of the

record and the court’s disposition of the matter are such that we102 After discussing our opinion in Cates v. Sears, Roebuck &

Co.

, 928 F.2d 679 (5th Cir. 1991), the district court stated, “I’m

jus t going to continue to deny the fee bills for the expert

witnesses now until you come up with something different.”

61 simply have no basis for an appropriate appellate review.

Regrettably, the record is confused, contradictory, and incomplete

on this issue.

Parker insists that federal law governs, adding that the trial

judge appears to have had no intention of awarding expert witness

fees as costs. 102 In stark contrast, Davis responds that (1) there

is no order in the record taxing costs, and (2) as Parker failed to

o ppose the Bill of Costs submitted by Davis, as required b y the

Uniform Local Rules of the United States District Courts for the

Eastern, Middle, a nd Western Districts of Louisiana, he may not

raise the issue for the first time on appeal. Parker counters that

(1) if the expert witness fees were never taxed, they are not

collectible, and (2) as he was never served with a copy of the Bill

of Costs, he could not be expected to have objected to them.

Try as we may, we cannot sort out, from the record on appeal,

just what was or was not ruled on by the court or what was or was

not preserved for appeal by the parties. As there is thus no way

for us to make an informed and intelligent decision on the issue of

expert witness fees and oth er costs at the trial level, we must

remand this issue for further consideration and determination by

the district court.

I. S TOCK V

ALUATION62

In keeping with the jury’s verdict, the distr ict court

declared Davis to be the owner of 201,775 of the shares of common

stock of Sa nifill that Parker acquired in the merger between

Sanifill and Campbell Wells in June 1990, or its value as of the

close of business on April 19, 1996

—— the last business day before

trial commenced

—— with interest from the date of judgment. The

court ordered Parker to return those shares or their aggregate

dollar equivalent to Davis. Finally, the court entered judgment

against Parker in the amount of $1,201,951.50, plus legal interest

from the date of demand until paid, which included the amount of

damages

—— $1,026,951.50

—— that the jury found “nec essary to

compensate Da vis for the loss of any benefits that he would have

received had he owned the Campbell Wells stock, or for benefits

that Parker wrongfully received as a result of his refusal to

return Davis’s stock.”

Parker contends that the award of the value of the Sanifill

stock as of April 19, 1996 cannot be supported under Louisiana law.

Davis ori ginally demanded the return of the Campbell Wells stock

transferred on February 3, 1986, but Parker insists that he no

longer owns either that stock or the Sanifill stock received in the

merger. When Campbell Wells merged with Sanifill in June 1990,

Parker surrendered all the Campbell Wells stock in his name in

exchange for Sanifill stock. Parker maintains that this prevents

resto ration in-kind from being an available remedy; that Davis’s

remedy must be in money damages only. Parker urges, however, that103 See Parker I

, 58 F.3d at 190 (“Neither party has

demonst rated that Davis could not be awarded restoration in kind

even though the Campbell Wells stock no longer exists. At least

one Louisiana court has suggested in a similar factual setting

(involving a fiduciary relationship between business partners) that

restoration in kind is possible where the shares of the original

partnership had been exchanged for shares in a different

par tnership.”) (citing W .A. McMichael Constr. Co. v. D & W

Properties, Inc.

, 356 So. 2d 1115, 124-25 (La. Ct. App.), writ

denied , 359 So. 2d 198 (La. 1978)).

63 measuring those damages by the value of Sanifill stock almost six

years after the merger is neither fair nor lawful.

To the contrary, maintain s Parker, Davis may recover only a

limited damage award. Parker asserts that if Davis is entitled to

annul the agreement, he is entitled to be restored to his precontract status only; but if the contract is valid and was

breached, Davis is entitled to the value of the Campbell Wells

stock as of the date the breach occurred, not at some later, higher

value. Parker complains that awarding Davis the value of the stock

of a multinational corporation as it stood in 1996 gives Davis a

windfall, as the shares that he now claims to own were exchanged

for that stock in 1990, with no evi dence that he would have

retained the stock throughout that six-year period had he owned it.

Davis responds that he is entitled to receive the value of the

Sanifill stock as of April 19, 1996, and that he can be awarded the

stock in-kind, disagreeing with Parker’s contention t hat damages

are the only remedy. 1 03 Davis correctly points out that the

traditional measure of damages for conversion

—— the return of the

property itself or, if the property cannot be returned, the value104 Trahan v. First Nat’l Bank of Ruston , 690 F.2d 466, 467-68

(5th Cir. 1982); Quealy , 475 So. 2d at 761-62.

105 Quealy , 475 So. 2d at 762.

64 of the property as of the time of conversion

—— will not always

afford an adequate remedy in cases involving equity securities. 104

Davis relies on the Louisiana Supreme Court’s decision in Quealy

,

in which the plaintiff was awarded the market value of his lost

stock as of the day before trial, not t he value of the shares on

the date they were wrongfully converted. In so holding, that court

stated:

In the case of stock, which fluctuates in value, applying

the general rule o f damages will not always accomplish

the goal of makin g the victim whole. Such is the case

here. In order for Paine Webber to fully repair the

damage caused, it must reim burse Quealy in an amount

sufficient to enable him to repurchase exactly what was

lost: 1,500 shares of NEGEA stock. La.Civ.Code arts.

2 315 and 1995. The trial judge thus properly awarded

Quealy an amount commensurate with the value of 1,500

shares of NEGEA stock as of the day before trial. 105

We conclude that the district court did not err in awarding

Davis recovery of either the Sanifill stock in-kind or its value as

of the last business day before trial commenced. Parker exercised

total dominion over Davis’s property either through fraud or as a

bad faith mandatary or depositary (or possibly even a negotiorum

gestor). The proper measure of damages is the value of the

converted stock when Davis obtains a final, executory judgment and

is free to proceed wit h execution. Here, the shares of stock

actually converted no longer exist, having been exchanged for other106 Although neither party bothered to inform the court, we have

determined that Sanifill was acquired by USA Waste Services, Inc.

(“USA Waste”) in September 1996. We note that Sanifill’s merger

partner is publicly traded and the information on the share ratio

is public knowledge. Consequently, conversion of Sanifill shares

to USA Waste shares can be calculated by means of simple

arithmetic. If Parker is to satisfy the judgment with stock, inkind, he must obtain the requisite number of shares —— albeit USA

Waste shares, as a result of the 1996 merger

—— and deliver them to

Davis.

65 stock in a subsequent merger. Accordingly, Davis cannot obtain the

return of his original Campbell Wells shares. Further, it now

appears that the stock of the acquiring company, Sanifill, is no

longer in the hands of Parker and, indeed, has been exchanged in a

second merger. Nevertheless, Davis is entitled to judgment for the

value of t he Campbell Wells shares as converted into Sanifill

shares (or shares resulting from their subsequent merger) if they

are still in the hands of Parker. 106 In essence, even though the

original Campbell Wells stock no longer exists because of the

Sanifill merger, its conversion equivalent in Sanifill st ock was

held and later disposed of by Parker, and Davis is entitled to the

equivalent number of shares or their value. Because Parker

w rongfully kept the stock, depriving its true owner of the

discretion to retain or dispose of it, in whole or in part, at such

times as he (not Parker) might select, it is Parker (not Davis) who

must bear the risks of its management. Additionally, as Parker

unilaterally elected to manage the property of Davis in bad faith

he cannot retain any pr ofit that was made. The district court

correctly determined that P arker owes Davis the value of the107 If Parker still had the Campbell Wells stock, Davis could

receive its return in kind. Were it worth less now than when

converted, Davis would be entitled to its return plus money for its

diminution in value. The victim of fraud must never recover less

than the value of the stock on the date of conversion. S ee Atkins

v. Garrett

, 270 F. 939 (5th Cir. 1921)(in action for conversion of

stock by a seller, brought after his refusal to make delivery on

tender of the agreed price, the measure of recovery is the value of

the stock at the time of conversion, and defendant cannot then

avoid liability by a tender of the stock, w hich had declined in

value).

66 property at the time that the judgment is satisfied, but in no case

less than its value at the time of Parker’s illicit acquisition. 107

J. E XCESS D ISTRIBUTIONS

Parker contends that there is no basis in law or fact for the

j ury’s conclusion that the parties intended for any “excess

distributions” to belong to Davis, and submits that the award is

inconsistent with Davis’s testimony regarding his purpo s e for

entering the transaction

—— to pay off creditors. Moreover, Parker

urges, even if the distributions alleg ed by Davis —— dividends,

salary, travel, and entertainment —— were made, Davis is not the

proper party to assert such claims. Instead, insists Parker, such

claims belong to the corporation

—— not its shareholders

—— and

especially not to a putative shareholder such as Davis.

Davis counters that the award for excess distributi ons was

entirely proper, as it represents payments received by Parker after

he no longer had any lawful right to hold Davis’s shares. This

entitlemen t to the payments derived from ownership of the stock

does not stem from any contractual arrangement between the parties,108 See Wilson v. H.J. Wilson Co., Inc.

, 430 So. 2d 1227, 1234

(La. Ct. App.), writ denied , 437 So. 2d 1166 (1983). In holding

that a mi nority shareholder could maintain a breach of fiduciary

action against a corporation’s majority shareholder based on its

allegedly fraudulent transfer of the minority shareholder’s shares

to the majority shareholder, the court declared:

It is established that where the breach of fiduciary duty

c auses loss to a corporation itself, the suit m ust be

brought as a derivative or secondary action. However,

that is not the case where the breach of a fiduciary duty

causes loss to a shareholder personally. In case of

personal loss, the shareholder may sue indi vidually to

recover his loss.

Id. (citing Junker v. Crory

, 650 F.2d 1349 (5th Cir. 1981)); Noe v.

Roussel , 310 So. 2d 806 (La. 1975); 29 L A

. L. R EV . 691 (1969)).

67 continues Davis; neither is it contrary to his testimony regarding

how cash flow was supposed to be used during the time Parker held

the shares with Davis’s consent. Moreover, insists Davis, he is

the proper party to assert the claim for excess distributions, as

Louisiana courts consistently recognize that shareholders possess

a right of action to recover for injury suffered by them ——

“personal losses”

—— as a consequence of a defendant’s interference

with their ownership of corporate stock. 108

We perceive no reversible error by the district court in

rendering judgment based on the jury’s award of these damages. The

jury found that Davis never stopped being the beneficial owner of

the Campbell Wells stock. Consequently, Parker is not entitled to

retain these sums; rather, such monies should be returned to Davis,

the beneficial owner of the stock, a b initio

. We also reject

Parker’s argument that Davis is not the proper party to bring such109 Whalen v. Carter

, 954 F.2d 1087, 1092 (5th Cir. 1992).

(“Under Louisiana law, damage claims predicated upon the depletion

of corporate assets belong to the entity, not to individual

investors.

. . . Minority shareholders, therefore, do not have a

right of action against the officers and directors of their

corporation for the devaluation of corporate shares.”). In

Palowsky v. Premier Bancorp, Inc.

, 597 So. 2d 543 (La. Ct . App.

1992), th e Louisiana First Circuit Court of Appeal construed the

holding in Wilson to mean that

if a shareholder suffers only an indirect loss in the

form of a decline in the value of his stock resulting

from a loss sustained by the corporation due to

mismanagement and/or breaches of fiduciary duty, that

shareholder may only bring a derivative action on behalf

of the corporation. However, if the breach of fiduciary

duty causes a direct loss to the shareholder, as was the

case in Wilson where the sharehold er, but not the

corporation, suffered a loss, that shareholder may have

a right to sue individually.

Id. at 545 (distinguishing Wilson , 430 So. 2d 1227).

68 a claim, as this is plainly an action for personal loss, and not

one for the devaluation of corporate shares. 109 The claim asserted

by Davis is not that the disbursements were improper or excessive,

only that they rightfully belong to him and not Parker, whether as

preferential dividends or perquisites o f ownership. Finally, we

note that, as Parker’s argument rests solely on the propriety of

the award and never questions its quantum, we need not address

whether the amount is excessive, inadequate, or “just right.” We

treat Parker’s failure to address the quantum of the award, or even

provide record citations to discussions of quantum, as a waiver of

this facet of the issue. Neither do we consider what portion of

these “excess distributions,” if any, Parker might have been

entitled to receive as an owner of Campbell Wells stock in his own69

right, as this argument has not been raised on appeal.

K. C ROSS -A PPEAL

Davis filed a motion to alter or amend judgment, pursuant to

F.R.C.P. Rule 59(e), requesting that the district court modify its

judgment to declare him to be the owner of, and order Parker to

return, 201,775 shares of common stock of Sanifill or, at Davis’s

option , their dollar value calculated at the rate of $41 5/8 per

s hare ($8,398,884), with interest from the date of judgment.

Davis’s motion requested, in the alter native, that the district

court amend its judgment to declare that he was the owner of, and

Parker was required to return, the same number of shares of common

stock of Sanifill or, in the event that the value of the shares on

the date of their return is less than $41 5/8 per s hare, their

tota l dollar value calculated at that amount. Finally, Davis

requested that the district court add to its decree a provision

reserving to him the right to claim damages resulting from any

decline in value of the Sanifill stock from the highest price the

stock might attain between the dates of the entry of judgment and

the stock’s return.

The district court denied Davis’s motion. In its June 21,

1996 minute entry, the court “ordered the parties to prepare an

order to transfer two hundred one thousand, seven hundred seventyfive (201,775) shares of common stock of Sanifill, Inc. to the

United States Marshal to hold as receiver, or, in the alternative,

the cash value of such stock as of Friday, April 19, 1996, to the70

Clerk of Court.” The court further ordered that “[t]he stock shall

be transferred to the Marshal or the cash shall be placed with the

Clerk no later than Friday, June 28, 1996.” Then, in its

memorandum ruling and order of June 26, 1996, filed on June 27th,

the district court stayed its judgment pending disposition of

Parker’s post-trial motions, but conditioned the stay on Parker’s

delivery of the shares to the United States Marshal or his deposit

of $8,398,884.30 in cash with the Clerk of Court by June 28, 1996.

Davis contends that the district court abused its discretion

by not either (1) giving Davis, rather than Parker, the option to

choose between being paid or recovering the stock in -kind, or

(2) a llowing Parker to pay the value of the stock in lieu of

returning it in-kind only in the event that the stock’s value on

the day before trial shall have b een greater than on the date of

return. Davis essentially argues that Parker must not be able to

use this appeal to speculate in the stock and profit from a delay

in his satisfaction of the judgment; rather, Davis advances, “the

risk must borne by the one who has wrongfully held the stock,”

i.e., Parker. Davis further urges that any increase in the market

value of the stock belongs to him, but any decline in market value

during the time the stock was unlawfully held by P arker must be

absorbed by Parker. Finally, Davis asserts that the judgment

should have been amended to reserve his right to bring a separate

action for any damages that he might suffer as a result of Parker’s

delay in satisfaction of the judgment, again insisting that Parker110 Davis responds that, in an action for rescission based on

nullity, “[t]he restoration of the parties to the situation that

existed before the contract that is called for by this Article

[Article 2033] includes restoration of the fruits and revenues, as

any unjust enrichment of the parties must be prevented.” L A

. C IV

. C ODE

. A NN

. art. 2033, cmt. b (West 1987). As such, Davis insists

that his demand that Parker not be permitted to profit by

speculation from this appeal is part and parcel of his rescission

remedy.

71 must bear any risk of loss attendant on such a delay.

Parker responds that Davis’s argument is fl awed in two

respects: First, as Parker no longer owns the stock, he is not in

a position to speculate with it by returning it only if it is in

his financial interest to do so; and second, if the stock cannot be

returned, Davis’s remedy is damages which, Parker maintains, were

fixed by the co urt at the most favorable point Davis could have

imagined. Any effort to receive the value of the stock beyond that

remedy, insists Parker, would be an action for damages, not for

stock return, thereby making this case exactly what Davis contended

it was not on the first a ppeal to escape the legal malpractice

prescription. 110

We conclude that the district court did not abuse its

discretion in giving Parker the option of delivering the stock or

its value. We agree with Davis, however, that Parker should not be

able to profit from any appreciation in the value of the st ock

during the pendency of this appeal. Accordingly, if Parker has

failed timely to (1) file a supersedeas bond, (2) pay the money to

the Clerk of Court, or (3) transfer the stock to the United States111 As noted in note 106 supra

, Sanifill was acquire d by USA

Waste i n September 1996. This fact, however, does not alter our

disposition as to this issue. Assuming that Parker has neither

deposited the money nor an equivalent number of shares in Sanifill,

or its successor USA Waste, the judgment must be amended, but only

to the extent required to allow for fluctuations in the stock price

during the time between the date originally specified for delivery

(June 28, 1996) and the date on which Davis finally recovers the

money, if that is what he recovers in lieu of the equivalent shares

of stock in the appropriate successor entity. In this regard, we

72 Marshal, as ordered, such that the judgment remains unsatisfied,

then reason, equity, and justice require a supplemental provision

to the district court’s judgment. For, if Parker thus elected to

take an appeal but to do nothing about paying the judgment into the

registry of the court, delivering the stock to the Marshal, or

posting a supersedeas bond, he must bear any risk of downward

fluctuation, and Davis must recover the benefit of any upward

fluctuation, in the value of the stock. Therefore, if, in lieu of

delivering the stock, Parker elects to pay the value of the stock,

then any appreciation in its value from June 28, 1996 must be added

to the amount of the judgment, $8,398,884.30; but if the value of

the stock has never been that high since June 28, 1996, Parker may

not thereby benefit by electing to deliver the shares of stock ——

unless he supplements such delive ry with remittance of funds (or

additional shares of stock) so as to bring the value of the

delivery up to full judgment value as of the time of delive ry.

Parker should, of course, receive credit for any funds that Davis

may have acquired or may hereafter acquire in executing on the

judgment. 111reiterate that Davis will be entitled to recover the highest value

of the stock between the day delivery was ordered and the date of

actual recovery.

73 III

CONCLUSION

For the foregoing reasons, the judgment of the district court

in favor of Davis is affirmed, subject to the following:

A. The award to Davis of nonpecuniary damages for

emotional distress is reversed, and the award

to Davis of attor n eys’ fees is reduced by

$58,333 to reflect the effect of disallowing

such nonpecuniary damages.

B. To the extent, if any, that the award of costs

to Davis may include expert witness fees, such

award is vacated and the issue of such fees is

remanded to the district court for further

proceedings consistent with this opinion.

C. The award to Dav is of 201,775 shares of the

common stock of Sanifill, Inc., in-kind, is

modified to permit the substitution of shares

of the comm on stock of USA Waste Services,

Inc., with the number of such shares to be the

same as were received for 201 ,775 shares of

Sanifi ll, Inc. stock in the merger of those

corporations in September 1996, adjusted to74 account for any subsequent stock splits, stock

dividends, and the like.

D. The alternative monetary award to Davis in the

amount of $8,398,884.30, being the value of

201,775 shares of Sanifill, Inc. common stock

on the day before the commencement date of the

trial of this case, is modified by adding the

proviso that, in the event that Parker should

satisfy the judgment of the district court by

p aying money in lieu of delivery of capital

stock in-kind, the sum of money that he must

pay shall be the greater of (1) $8,398,884, or

(2) an amount calculated by multiplying

201,775 by the highest price for a sha re of

Sanifill, Inc. common stock (or, after its

merger with USA Waste Services, Inc., the

number of shares or fractional shares of that

corporation obtained for one (1) share of

Sanifill, Inc. common stock in that merger,

adjusted for stock splits, stock dividends,

and the like) as quoted by any exch ange on

which such stoc k was or is traded, between

June 28, 1996, and the date on which final

payment in full is made in satisfaction of the

judgment in this case.75

We remand this case to the district court to revisit the issue

of expert witness fees and to enter a revised judgment reflecting

the foregoing modifications.

REVERSED in part; VACATED and REMANDED in part; MODIFIED in part;

and, as modified, AFFIRMED in part.