Court Opinion

ID: 9931187
Source: CourtListenerOpinion
Date Created: 2024-02-08 17:05:47.611339+00
Date Added: 2024-06-11T12:17:18.537487
License: Public Domain

STATE OF LOUISIANA
                                COURT OF APPEAL
                                   FIRST CIRCUIT

                                DOCKET NUMBER
                                   2023 CA 0694

                               ROBERT C. LEHMAN

                                      VERSUS

                              TOMMY BENASCO AND
                          BENASCO CONSTRUCTION LLC

rim                                         Judgment Rendered.
                                                                   FEB 0 8 2024

                                ON APPEAL FROM THE
           TWENTY-SECOND JUDICIAL DISTRICT COURT, DIVISION C
                 IN AND FOR THE PARISH OF ST. TAMMANY
                                STATE OF LOUISIANA
                             DOCKET NUMBER 2011- 13533

              HONORABLE RICHARD A. SWARTZ, JUDGE PRESIDING

           Robert C. Lehman                 Plaintiff -Appellant
           Mandeville, Louisiana            In Proper Person

           Julie M. Knight                  Attorney for Defendant -Appellee
           Covington, Louisiana             Tommy Benasco

            BEFORE•.       THERIOT, PENZATO, AND GREENE, JJ.

      1?
                      t
GREENE, J.

        In this appeal, an attorney challenges a judgment denying his motion for additional

attorney fees against a former client. After review, we affirm.

                               FACTS AND PROCEDURAL HISTORY

        In 2007, Tommy and Joanne Benasco hired attorney Robert Lehman to represent

them in a suit against their homeowner' s insurer for storm -related damage to their

residence in Slidell, Louisiana.      The Benascos paid Mr. Lehman on an hourly basis for his

services.   After settling the damage claim, the Benascos decided to pursue a bad faith

claim against their insurer for its alleged improper handling of the damage claim.                  In April

2009, they signed a contingency fee contract with Mr. Lehman to represent them in

pursuing the bad faith claim, wherein they agreed to give him a 50%                      interest in their

claim against the insurer.

        The Benascos and their insurer later settled the bad faith claim for approximately

 60, 000. 00. The Benascos received the settlement proceeds in November 2010 but did

not pay Mr. Lehman the agreed- upon 50% contingency fee. Mr. Benasco alone eventually

executed a promissory note payable to Mr. Lehman for the unpaid fee in the amount of

 30,035. 00, plus interest, wherein he agreed to pay Mr. Lehman $ 1, 776. 24 per month

for eighteen months.          The promissory note also required Mr. Benasco to pay reasonable

attorney fees and costs, in the event Mr. Lehman was required to take action to enforce

any requirement of the note.          Mr. Benasco paid the first payment on the note, but his

second payment was returned for insufficient funds, and he made no payments

thereafter.    By letter dated March 25, 2011, Mr. Lehman asked Mr. Benasco to address

the nonpayment, but Mr. Benasco did not respond.

        In June 2011, Mr. Lehman filed the current suit against Mr. Benasco for payment

of the unpaid balance on the promissory note.'                On October 26, 2011, the trial court

signed a judgment finding Mr. Benasco liable to Mr. Lehman for $ 30, 035. 00 ( the amount

of the note), less a payment of $ 1, 776. 24, plus interest, costs, and attorney fees of 25%

1 Mr. Benasco made his single payment on the promissory note with a check drawn on the bank account
of Benasco Construction, LLC. Mr. Lehman named Benasco Construction, LLC as a defendant in the June
2011 suit, but the trial court later granted Benasco Construction, LLC' s exception of no cause of action and
dismissed it from the suit.

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of the amount owed.z In 2012, the Benascos filed for bankruptcy protection and sought

to have the debt owed to Mr. Lehman discharged.                  In June 2013, the bankruptcy court

signed a judgment finding the debt owed to Mr. Lehman was non -dischargeable under

applicable bankruptcy law, because the Benascos defrauded Mr. Lehman and never

intended to pay him his 50% contingency fee for handling their bad faith claim against

their insurer.    In re Benasco, No. 12- 10198 ( Bankr. E. D. La. June 14, 2013), 2013 WL

2949138.

        On October 14, 2015, Mr. Lehman filed a motion in the current suit seeking an

award for attorney fees he incurred in the bankruptcy litigation.                  He attached his own

affidavit attesting that he paid a bankruptcy attorney $ 12, 390. 00 in legal fees to litigate

whether the Benascos' contingency fee debt to him was dischargeable.                    In response, Mr.

Benasco opposed         Mr.   Lehman' s motion and filed exceptions raising objections of

prescription and improper use of summary proceedings. After a hearing, the trial court

rejected Mr. Lehman' s argument that his suit was an action on an open account for which

he could claim statutorily authorized post -judgment attorney fees under La. R. S. 9: 2781.

Rather, the trial court Found Mr. Lehman' s suit was an action on a promissory note for

which no statute allowed post -judgment attorney fees. The trial court signed a judgment

on October 11, 2018, denying Mr. Lehman' s motion for additional attorney fees and ruling

that Mr. Benasco' s exceptions of prescription and improper use of summary proceedings

were moot in light of the denial of the motion.              Mr. Lehman appealed the October 11,

2018 judgment.

        This Court twice remanded the matter to the trial court for a final, appealable

judgment.     Lehman v. Benasco, 2019-0779 ( La. App. 1 Cir. 2/ 26/ 20), 2020 WL 913508,

 2; Robert C. Lehman v. Tommy Benasco and Benasco Construction LLC, 2023- 0694 ( La.

App. 1 Cir. 11/ 16/ 23) ( unpub' d order).         Ultimately, the trial court signed a valid, final

judgment on December 4, 2023, denying Mr. Lehman' s motion for additional attorney

fees, dismissing his claim for such in its entirety, and ruling that Mr. Benasco' s exceptions

z On April 7, 2021, the trial court signed a Judgment of Revival ordering that the October 26, 2011
judgment was revived and ordering that it shall have full force and effect for 10 years from the date signed.

                                                      3
of prescription and improper use of summary proceedings were moot in light of the denial

of Mr. Lehman' s motion.

       Mr. Lehman appeals the adverse judgment.        In a single assignment of error, he

contends the trial court erred in failing to award him additional attorney fees incurred in

the bankruptcy litigation. He contends that the October 26, 2011 judgment awarded him

 30, 035. 00 for unpaid legal services, that La. R. S. 9: 2781 defines an ' open account" as

including a debt owed for legal services, and as such, La. R. S. 9: 2781( F) allows him to

collect the post -judgment attorney fees associated with enforcement of the October 26,

2011 judgment.

                           RECOVERY OF POST -JUDGMENT
                 ATTORNEY FEES IN ACTION ON OPEN ACCOUNT

       Under La. R. S. 9: 2781( A), when a person fails to pay an open account within 30

days after the claimant sends written demand correctly setting forth the amount owed,

that person shall be liable to the claimant for reasonable attorney fees when judgment in

the claimant's favor is rendered. Under La. R. S. 9: 2781( D), an " open account" includes:

       Ajny account for which a part or all of the balance is past due, whether or
       not the account reflects one or more transactions and whether or not at the
       time of contracting the parties expected future transactions. "          Open

       account" shall include debts incurred for professional services, including but
       not limited to legal and medical services.

       Although La. R. S. 9: 2781 allows for the recovery of attorney fees on an open

account,   the statute is penal in nature and must be strictly construed.          Louisiana

Machinery Company, LLC v. Bihm Equipment Co., 2019- 1081 ( La. App. 1 Cir. 8/ 10/ 21),

329 So. 3d 317, 324. While an open account can include debts incurred for legal services,

it does not follow that contracts for legal services are necessarily open accounts.     See

Smith v. Albrecht, 2006- 2072 ( La. App. 1 Cir. 6/ 8/ 07), 965 So. 2d 879, 881.   A contract

does not become an open account simply because there is a balance due under that

agreement.     Louisiana Machinery, 329 So. 3d at 327 ( finding an equipment lease

agreement providing for monthly payments on an undetermined total amount due was

not an open account entitling lessor to attorney fees under La. R.S. 9: 2781).

                                             4
        In this case,     as statutorily allowed by La. R. S. 37: 218,3 Mr. Lehman and the

Benascos executed a written contingency fee contract whereby the Benascos agreed to

give Mr. Lehman a 50%           interest in their bad faith claim against their insurer. The attorney

fee contract itself became the law between the parties provided that its provisions

complied with La. R. S. 37: 218.         Dickerson v. Scholvin, 261 So. 2d 110, 112- 13 ( La. App.

4 Cir. 1972).    When the Benascos failed to pay the contingency fee, Mr. Lehman had a

cause of action for breach of contract against them                See Knapp v. State Farm Mut Auto.

Iris. Co., 2012-0032 ( La. App. 1 Cir. 9/ 21/ 12), 2012 WL 4335401, * 7, writ denied, 2012-

2584 ( La. 1/ 18/ 13),   107 So. 3d 636, and Jumonville v. White, 2007- 2589 ( La. App. 1 Cir.

5/ 8/ 08), 992 So. 2d 1044, 1048 ( both finding that attorney's claim for unpaid contingency

fee was breach of contract claim, not open account claim as contemplated by La. R. S.

9: 2781).   Rather than filing the breach of contract action, Mr. Lehman had Mr. Benasco

execute a promissory note for payment of the contingency fee. And, when Mr. Benasco

did not pay the promissory note in full, Mr. Lehman elected to file this suit against him

on the promissory note. See La. R.S. 10: 3- 310( b)( 3). 5

        A promissory note is a contract between the parties and is to be enforced according

to its terms.   Spillman v. Spillman, 509 So. 2d 442, 443 ( La. App. 1 Cir.), writ denied, 513

So. 2d 1207 ( La. 1987). The promissory note signed by Mr. Benasco specifically included

his agreement to pay reasonable attorney fees in the event Mr. Lehman was required to

take action to enforce any requirement of the note. Mr. Lehman successfully prosecuted

his suit on the promissory note, and the trial court's October 26, 2011 judgment included

3 Louisiana Revised Statutes 37: 218 pertinently provides:

        A. By written contract signed by his client, an attorney at law may acquire as his fee an
        interest in the subject matter of a suit, proposed suit, or claim in the assertion, prosecution,
        or defense of which he is employed, whether the claim or suit be for money or for property.

        B. The term " fee", as used in this Section, means the agreed upon fee, whether fixed or
        contingent, and any and all other amounts advanced by the attorney to or on behalf of the
        client, as permitted by the Rules of Professional Conduct of the Louisiana State Bar
        Association.

4 Mr. Lehman also could have created a privilege for his fee by recording the contingency fee contract in
the pending suit against the Benascos' insurer. See La. R. S. 37: 218(A).

5 Under La. R. S. 10: 3- 310( b)( 3), if a note is dishonored and the obligee of the obligation for which the
instrument was taken is the person entitled to enforce the instrument, the obligee may enforce either the
instrument or the obligation.

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an award of attorney fees, as provided by the terms of the note. The trial court's rendition

of the October 25, 2011 judgment completed the action Mr. Lehman was required to take

to enforce any requirement of [ the]      note."   However, the promissory note did not

specifically bind Mr. Benasco to pay any further attorney fees, such as those Mr. Lehman

incurred in the bankruptcy litigation. Nor did the promissory note become the basis for

an open account simply because Mr. Lehman obtained a judgment for the balance due

under the note.   See Louisiana Machinery, 329 So -3d at 327. To construe " open account"

as used in La. R. S. 9: 2781 to include the failure to pay a promissory note would violate

the principle that statutes providing for attorney fees are penal in nature and must be

strictly construed.   Id.   Thus, we conclude the trial court did not err in denying Mr.

Lehman' s motion for additional attorney fees.

                                      CONCLUSION

       For the foregoing reasons, we affirm the December 4, 2023 judgment, denying

Robert C. Lehman' s motion for an award of additional attorney fees.    We assess costs of

the appeal to Robert C. Lehman.

       AFFIRMED.
                                STATE OF LOUISIANA

                                 COURT OF APPEAL

                                    FIRST CIRCUIT

                                   NO. 2023 CA 0694

                                ROBERT C. LEHMAN

                                        VERSUS

           TOMMY BENASCO AND BENASCO CONSTRUCTION LLC

THERIOT, J., dissenting and assigning reasons.

      The promissory note at issue in this matter provides, in pertinent part:

             In the event the holder must take action to enforce any
       requirement of this note, the maker hereby agrees to pay all costs and
      fees expended by the holder, including reasonable attorney' s fees due
      or $ 1,   000. 00, whichever is greater. ( emphasis added)

Clearly this provision of the note obligated Benasco to pay Lehman' s costs and

reasonable attorney' s fees expended in filing suit on the note and securing a

judgment for the amounts owed. When Benasco failed to pay and attempted to have

the judgment on the note discharged in bankruptcy, Lehman had to take additional

action and incurred additional attorney' s fees and costs to enforce the payment of

the amounts due on the note. I believe that these additional costs and fees are " all

costs and fees expended by the holder" to enforce the note, and as such, Lehman was

entitled to collect those amounts in a suit on the note. For this reason, I respectfully

dissent.