Court Opinion

ID: 2797948
Source: CourtListenerOpinion
Date Created: 2015-05-01 00:00:52.091297+00
Date Added: 2024-06-11T11:29:25.385372
License: Public Domain

Case: 14-30891      Document: 00513026555         Page: 1    Date Filed: 04/30/2015

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT

                                      No. 14-30891                       United States Court of Appeals
                                                                                  Fifth Circuit

                                                                                FILED
DENNIS LUTHER, JR.,                                                         April 30, 2015
                                                                           Lyle W. Cayce
              Plaintiff–Appellee                                                Clerk

v.

JOHN W. STONE OIL DISTRIBUTOR, L.L.C., in personam,

              Defendant

LARRY CURTIS, APLC; LAWRENCE N. CURTIS, also known as Larry
Curtis,

              Intervenors–Appellants

                   Appeal from the United States District Court
                      for the Eastern District of Louisiana
                             USDC No. 2:11-CV-1184

Before JONES, BARKSDALE, and PRADO, Circuit Judges.
PER CURIAM:*
       Intervenor–Appellant Larry Curtis provided legal services to Plaintiff–
Appellee Dennis Luther, Jr. as Luther pursued a maritime personal-injury
claim against his employer, Defendant John W. Stone Oil Distributor, L.L.C.

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                     No. 14-30891
(“Stone”). Before any formal legal proceedings began, Luther discharged Curtis
as counsel and retained the Cao Law Firm in his stead. The Cao Law Firm
filed suit and prosecuted the case to settlement. Curtis intervened to seek a
share of the contingency fee based on the retainer contract he had signed with
Luther. The district court awarded Curtis his expenses but no part of the
contingency fee, concluding that Curtis’s services did not aid in the resolution
of the suit. We affirm.
            I. FACTUAL AND PROCEDURAL BACKGROUND
      On January 4, 2011, Luther retained Curtis, of the law firm Larry
Curtis, APLC, to sue his employer, Stone, for personal injuries he suffered
while working aboard one of Stone’s vessels. Curtis and Luther entered into a
retainer contract securing Curtis a contingency fee of “33 1/3% of whatever
gross amount is collected by settlement, conference, and/or negotiation before
the suit is filed” or “40% after filing suit, or litigation in any manner
whatsoever, including appeal.”
      Between January and May 2011, Curtis billed approximately 31–32
hours of work on Luther’s case. He met with Luther; advanced living expenses
to Luther; made telephone calls to Luther’s landlord and gym; obtained
Luther’s medical records, employment records, and income-tax returns;
conducted medical research; and contacted a prospective expert witness. 1

      1   Curtis’s correspondence with the expert, Dr. Shira Kramer of Epidemiology
International, reflects that Curtis was attempting to build a case before filing suit:
               The reason I am writing to you . . . is to determine, first, if you will be
       available to participate with us in this case, at the very least, to provide
       litigation support as we begin to work toward developing the pertinent facts,
       and, second, to advise us about what precisely you will require to formulate
       opinion(s) about the relationship . . . between certain CTD disorders . . . [and]
       overhead work with vibrating hand tools . . . .
               We are very early in the case—in fact suit has not yet been filed—
       though, we look forward to hearing from you about the subject matter of this
       letter at the earliest time.
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However, he neither notified Stone of his representation nor filed suit on
Luther’s behalf.
      On May 2, 2011, without prior notice to Curtis, Luther met with Ryan E.
Beasley Sr. of the Cao Law Firm. As a result of this meeting, Luther decided
to terminate Curtis’s representation and retain the Cao Law Firm to prosecute
his claim. The retainer contract between Luther and the Cao Law Firm had a
contingency-fee provision nearly identical to that between Luther and Curtis—
one-third of the recovery in the event of settlement and forty percent if the case
proceeded to trial. The same day, Beasley sent a letter to Curtis, informing him
that Luther had terminated his services and requesting that he forward “all
file materials relating to [Curtis’s] representation” of Luther.
      Although Luther never provided testimony or an affidavit explaining his
reasons for discharging Curtis, Beasley claimed that Luther expressed
“concern[] that his case was not progressing” and “complain[ed] that he was
having difficulty contacting [Curtis].” Curtis contests this characterization,
implying that he was consistently responsive and noting that “Luther never—
ever—voiced any dissatisfaction concerning the manner in which his case was
being handled.” In any event, the Cao Law Firm filed suit and performed all of
the substantive work associated with Luther’s claim, leading to a negotiated
settlement of $280,000. While there is evidence that Curtis remained in
intermittent contact with Luther’s new attorneys as the case progressed, the
record reflects that Curtis did not give his files to the Cao Law Firm. Indeed, the
Cao Law Firm has consistently alleged that Curtis did not respond to its
requests   for     Luther’s   client   file—or,   indeed,    to   any   substantive
correspondence—and Curtis has never affirmatively disputed this charge.
      In January 2012, Curtis filed an unopposed complaint in intervention,
requesting a share of any contingency fee recovered by Luther’s attorneys as
well as reimbursement for the expenses he incurred in representing Luther. In
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March 2014, following settlement, Curtis filed a brief in support of his request
for fees, asserting that he had been discharged without cause and was “entitled
to no less than one-third (1/3) of the contingent professional fee,” plus
$11,894.84 in expenses. The Cao Law Firm challenged Curtis’s request,
averring that “[n]one of the actions undertaken by Mr. Curtis resulted in Mr.
Luther’s recovery” or “benefitted [Luther] in any way.”
      Upon referral from the district court, the assigned magistrate judge
issued proposed findings and recommendations on Curtis’s complaint in
intervention. Applying the Louisiana Supreme Court’s opinions in Saucier v.
Hayes Dairy Products, Inc., 373 So. 2d 102 (La. 1979), and O’Rourke v. Cairns,
683 So. 2d 697 (La. 1996), the magistrate concluded that: (1) Curtis had been
discharged for cause due to nonfeasance; (2) Curtis was not entitled to any
portion of the contingency fee because he “did not perform services . . . which
played a significant, nor minimal part in the settlement of Luther’s case”; and
(3) Curtis could not recover his expenses because he had not adequately
substantiated the charges.
      Curtis objected to the magistrate’s recommendations. He appended his
billing records and his litigation file to the memorandum in support of his
objections. The district court construed Curtis’s objections as a motion for
reconsideration under Federal Rule of Civil Procedure 59(e) and referred the
matter back to the magistrate. The magistrate declined to reconsider its
findings that Curtis had been discharged for cause and that Curtis was entitled
to no portion of the contingency fee, but it elected to reconsider its ruling on
Curtis’s expenses and awarded Curtis $10,664.55. The district court impliedly
adopted the magistrate’s findings by entering judgment for Curtis in the
amount of $10,664.55. Curtis timely appealed.

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           II. JURISDICTION AND STANDARD OF REVIEW
      The district court had jurisdiction over Luther’s suit pursuant to 28
U.S.C. §§ 1331 and 1333 and had jurisdiction over Curtis’s claim in
intervention pursuant to 28 U.S.C. § 1367(a). This court has jurisdiction to
review the district court’s final judgment pursuant to 28 U.S.C. § 1291.
      As it adopted the magistrate’s findings and recommendations in toto, we
review the district court’s findings of fact for clear error and its legal
determinations de novo. See City of Alexandria v. Brown, 740 F.3d 339, 350
(5th Cir. 2014). If, however, the lower court applied the wrong legal standard
when rendering its factual findings, we review these findings de novo. Id. A
factual finding is clearly erroneous if it “is without substantial evidence to
support it, the court misinterpreted the effect of the evidence, or this court is
convinced that the finding[] [is] against the preponderance of credible
[evidence].” Id. at 350–51 (first and second alterations in original) (quoting Bd.
of Trs. New Orleans Emp’rs Int’l Longshoremen’s Ass’n, AFL–CIO Pension
Fund v. Gabriel, Roeder, Smith & Co., 529 F.3d 506, 509 (5th Cir. 2008))
(internal quotation marks omitted). To reverse for clear error, we must be left
with “a definite and firm conviction that a mistake has been committed.” Id. at
351 (quoting Bd. of Trs., 529 F.3d at 509) (internal quotation marks omitted).
      When reviewing questions of state law, we look to the law of that state’s
highest court. Id. In the absence of a final decision by the state supreme court,
we are obligated to make an Erie guess as to how that court would resolve the
case before us. Id. To this end, “we defer to intermediate state appellate court
decisions ‘unless convinced by other persuasive data that the highest court of
the state would decide otherwise.’” Hermann Holdings Ltd. v. Lucent Techs. Inc.,
302 F.3d 552, 558 (5th Cir. 2002). Further, we are bound by our own published,
prior interpretation of state law—our Erie guess—unless a subsequent state-

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court decision or statutory amendment renders our ruling “clearly wrong.”
Bustos v. Martini Club, Inc., 599 F.3d 458, 462–63 (5th Cir. 2010).
                                  III. DISCUSSION
      Curtis raises three claims of error. He contends that, first, the district
court miscalculated the highest ethical contingency fee to which Luther agreed;
second, the district court erroneously found that he had been discharged for
cause; and third, the district court wrongly concluded that he was entitled to
no share of the contingency fee awarded to the Cao Law Firm. We address only
the third point, as its resolution is dispositive of this appeal.
       Under Louisiana law, when two attorneys provide legal services to the
same client on a contingency-fee basis and one attorney is discharged before
the case is resolved, the client is obligated to pay only one contingency fee that
the court allocates between the attorneys. See Saucier, 373 So. 2d at 118. The
amount of the fee is “determined according to the highest ethical contingency
percentage to which the client contractually agreed in any of the contingency
fee contracts which he executed.” Id. And the apportionment of the fee between
the attorneys is based on the factors listed in Rule 1.5 of the Louisiana Rules
of Professional Conduct, which together are directed at assessing the
reasonableness of a fee. See id. at 116, 118. 2 The factors (commonly known as
“the Saucier factors”) include, inter alia, “the time and labor required, the
novelty and difficulty of the questions involved, and the skill requisite to
perform the legal service properly”; “the amount involved and the results
obtained”; and “the nature and length of the professional relationship with the
client.” La. R. Prof’l Conduct 1.5; accord Saucier, 373 So. 2d at 116. The purpose
of applying these factors is to ensure that the fee is divided “according to the

      2 In Saucier, the Louisiana Supreme Court applied Disciplinary Rule 2–106 of the
Code of Professional Responsibility, the precursor to Rule 1.5 of the Rules of Professional
Conduct. 373 So. 2d at 116, 118.
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respective services and contributions of the attorneys for work performed and
other relevant factors.” Saucier, 373 So. 2d at 118.
      If the first attorney was discharged without cause, then the application
of the Saucier factors marks the end of the analysis. Id. at 118. If, however, the
first attorney was discharged for cause, then the court must next “consider the
nature and gravity of the cause which contributed to the dismissal and reduce
by a percentage amount the portion discharged counsel would receive after the
Saucier allocation.” O’Rourke, 683 So. 2d at 704. A finding that the Saucier
factors entitle the first attorney to no part of the contingency fee renders
irrelevant the remainder of the analysis. See id. The apportionment of
contingency fees is a factual determination reviewed for clear error. See
Osborne v. Vulcan Foundry, Inc., 96-1849 (La. App. 4 Cir. 9/3/97), p. 3; 699 So.
2d 492, 494.
      As this court has interpreted Saucier and Osborne, an attorney’s
representation must “advance [the] client’s case” and have some “productive
value to [the] client” in order for the attorney to recover any part of the
applicable contingency fee. See City of Alexandria, 740 F.3d at 351–52. This is
a “threshold issue.” Id. at 352.
      In City of Alexandria, we reviewed a district court’s determination that
a member of a team of attorneys retained by a municipality in litigation against
an energy company was entitled to no fees. Id. at 342, 344, 348. The attorney,
Brown, claimed that she investigated the city’s claims against the company,
“help[ed] to convince the City to file suit,” kept the City Council apprised of the
status of the litigation, discussed the matter with co-counsel and the City
Attorney, and participated in the selection of a consultant and an auditor. Id.
at 344. Brown also reviewed filings in the case but admitted that she made no
written contributions to the team’s submissions. Id. Apparently based on post
hoc calculations, Brown claimed 1,650 billable hours for her work—an average
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of approximately 12–15 hours per week. Id. at 348. Brown was terminated from
the representation for insubordination, using client information to the
disadvantage of the client, and taking actions adverse to the client. Id. at 345,
348. The district court awarded Brown no fees despite her 10% contingency-fee
contract. Id. at 343, 348. The court found that Brown had been discharged for
cause and concluded that “[w]hat ‘work’ she did was essentially nonproductive,
and certainly did not contribute anything of substantial value even while she
was employed.” Id. at 348.
      We affirmed the judgment. Id. at 352, 354. We explained that the district
court’s factual determination that Brown’s work had “no productive value to
her client . . . present[ed] Brown with a threshold issue that she need[ed] to
address before she [could] successfully raise her legal challenges” to the district
court’s analytical framework. Id. at 352. Brown was unable to surmount this
obstacle—we found no clear error in the district court’s finding that Brown’s
services were devoid of value to her client. Id. at 353–54. We emphasized “the
lack of any work product demonstrating Brown’s contribution to the case,” “the
presence of co-counsel who apparently did nearly all, if not all, of the work,”
and the evidence that Brown’s actions were “counterproductive.” Id.
      Similarly here, Curtis claims error in the district court’s factual finding
that he was entitled to no share of the contingency fee. He first asserts that
“the fact that [he] did not file pleadings during his representation of Luther
seems to have completely supplanted the analysis of the Saucier factors.” To
the extent Curtis aims to identify a legal error that would preserve de novo
review of the lower court’s findings of fact, his argument is unpersuasive.
Review of the magistrate’s reports and recommendations confirms that the
magistrate applied the relevant Saucier factors and concluded that Curtis
expended a limited amount of time on the case and “did not advance Luther’s
claims.” Although Curtis is correct that “filing or not filing pleadings is not a
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dispositive factor in whether an attorney is entitled to fees,” his position rests
on the implicit assumption that the discharged attorney has satisfied his
ethical obligation to share his work product with his successor—an assumption
that does not hold here. See La. R. Prof’l Conduct 1.16(d) (“Upon written
request by the client, the lawyer shall promptly release to the client or the
client’s new lawyer the entire file relating to the matter.”).
      As noted above, the Cao Law Firm has consistently maintained that
Curtis failed to comply with its repeated requests that he forward his client’s
litigation file, and Curtis has never controverted this claim—either before the
district court or on appeal. Moreover, Curtis has pointed us to no authority
providing that an attorney who fails to release his client file, and whose work
therefore requires wholesale duplication by replacement counsel, is entitled to
a share of the eventual recovery based exclusively on his pre-discharge activity.
Nor, for that matter, has Curtis distinguished City of Alexandria or identified
any Louisiana law that renders our opinion in that case “clearly wrong,”
Bustos, 599 F.3d at 463. As a result, we conclude that Curtis has shown no
legal error, and our review of the district court’s factual findings is for clear
error. See City of Alexandria, 740 F.3d at 352; cf. Tran v. Williams, 10-1030
(La. App. 3 Cir. 2/9/11), p. 9; 56 So. 3d 1224, 1230 (finding no legal error in the
trial court’s fee-allocation ruling despite the fact that the court “did not
annunciate the Saucier factors it used in reaching its determination” because
“the information for an analysis for each of the factors listed was readily
available to the trial court”).
      Under this heightened standard of review, Curtis bears the burden of
proving that the district court’s finding that his services provided no
compensable value to Luther “is without substantial evidence to support it.”
City of Alexandria, 740 F.3d at 350. This he cannot do. As in City of Alexandria,
Curtis states that he investigated Luther’s claims and essentially helped
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convince Luther to file suit against Stone, but he can point to no work product
that actually contributed to the resolution of Luther’s claims. See id. at 353–
54. While Curtis may have represented Luther competently during the four
months that their retainer agreement was in effect, his apparent refusal to
share his work product with the Cao Law Firm deprived his work of all value
to Luther once Luther retained new counsel.
      Contingency fees, by definition, are dependent on the result of the
representation. See Saucier, 373 So. 2d at 105 (“A contingent fee contract is a
contract for legal services in which the attorney’s fee depends upon success in
the enforcement of the client’s claim.”). Curtis presents no evidence that his
pre-discharge work actually contributed to the outcome of Luther’s suit; to the
contrary, the record suggests that Curtis’s conduct was, at best, akin to an
aborted investigation and, at worst, affirmatively counterproductive, see City
of Alexandria, 740 F.3d at 354. Insofar as Curtis attempts to invoke his
correspondence with the Cao Law Firm as evidence of his continued
collaboration with Luther’s new counsel, his efforts are unavailing: the record
contains no indication of the substance of these conversations, and what does
appear suggests that Curtis was nonresponsive. On this record, we cannot say
that we are left with “a definite and firm conviction that a mistake has been
committed,” id. at 351 (internal quotation marks omitted), and Curtis cannot
overcome the “threshold issue” that his services neither advanced Luther’s
case nor provided any “productive value” to Luther, see id. at 352. Curtis has
recouped his $10,664.55 in documented expenses; he cannot also lay claim to
the contingency fee that the Cao Law Firm alone earned.
                             IV. CONCLUSION
      For the foregoing reasons, we AFFIRM the judgment of the district court.

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