IKE SPEARS * NO. 2024-CA-0075
VERSUS * COURT OF APPEAL
WILLIAM W. HALL * FOURTH CIRCUIT
* STATE OF LOUISIANA
*******
APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2010-07257, DIVISION “F-14” Honorable Jennifer M Medley ****** Judge Paula A. Brown ****** (Court composed of Judge Sandra Cabrina Jenkins, Judge Paula A. Brown, Judge Karen K. Herman)
JENKINS, J., CONCURS IN THE RESULT HERMAN, J CONCURS IN THE RESULT
Edwin Mark Shorty, Jr. Hope L. Harper EDWIN M. SHORTY, JR. & ASSOCIATES, APLC 650 Poydras Street, Suite 2515 New Orleans, LA 70130
COUNSEL FOR PLAINTIFF/APPELLEE
Dominick F. Impastato, III FRISCHHERTZ & IMPASTATO, L.L.C. 1140 St. Charles Avenue New Orleans, LA 70130
Dane S. Ciolino Clare S. Roubion LOUISIANA LEGAL ETHICS, LLC 18 Farnham Place Metairie, LA 70005
COUNSEL FOR DEFENDANT/APPELLANT AFFIRMED JANUARY 13, 2025 PAB
This is a dispute over legal fees. Appellant, William W. Hall (“Mr. Hall”),
appeals the district court’s July 19, 2023 judgment, which found that Mr. Hall
breached his joint venture agreement with Appellee, Ike Spears (“Mr. Spears”),
and awarded Mr. Spears damages equal to one half of the contingency fee earned
in the amount of $2,551,079.86, plus judicial interest, attorney’s fees, expenses and
court costs. Mr. Hall also seeks review of the district court’s November 9, 2023
judgment, which denied his motion for new trial, in part.1 For the reasons that
follow, we affirm the district court’s July 19, 2023 judgment.
FACTUAL AND PROCEDURAL HISTORY
In its reasons for judgment, the district court clearly and concisely laid out
the facts at issue. We have adopted and incorporated much of that recitation here.
On August 29, 2005, Hurricane Katrina (“Katrina”) made landfall, which
devastated the City of New Orleans and a large swath of the Gulf Coast Region.
The case sub judice has its origins in the aftermath of Katrina and the damages it
caused to the Port of New Orleans (the “Port”). Both Mr. Spears and Mr. Hall are
attorneys in the New Orleans metropolitan area. In September 2005, Mr. Spears
1 The district court granted Mr. Hall’s motion for new trial, in part, strictly pertaining to the
award of attorney’s fees.
1 initiated contact with Mr. Hall to see if he might be interested in submitting a joint
proposal with him to the Board, with the intention of being considered for legal
work that would involve representing the Port in any Katrina-related litigation
claims and FEMA-related issues.2 Mr. Spears had a well-established relationship
with certain members of the Board of Commissioners for the Port (the “Board”), as
he was already serving as outside counsel for the Port prior to Katrina for other
litigation matters. Mr. Hall had a relationship with a few members of the Board
and a high level Port staff member, but had never done any work for the Port. Mr.
Spears knew Mr. Hall from when Mr. Hall previously represented him in a fee
dispute unrelated to the instant matter, and he approached Mr. Hall because he
knew Mr. Hall also had a relationship with some of the Board members. The
adjusting firm, Adjusters International (“AI”), was another party brought to the
group by Mr. Spears and introduced to Mr. Hall. Mr. Hall agreed to collaborate
with Mr. Spears.
Mr. Spears then scheduled a meeting with Gerald O. Gussoni, Jr. (“Mr.
Gussoni”), Executive General Counsel (“GC”) for the Port, together with Gary
LaGrange (“Mr. LaGrange”), the President and Chief Executive Officer of the Port
(“CEO”), to express their interest in representing the Port. Following, on October
11, 2005, Mr. Hall, Mr. Spears and AI presented Mr. LaGrange with an
Engagement Letter for Assistance with FEMA and Insurance Recovery, which
included a proposed fee for professional services of ten percent (10%) of the total
insurance proceeds recovered. When the Board appeared uninterested in that offer,
the trio subsequently submitted a Contingent Fee Contract for Legal Services to
the Port on October 27, 2005, which outlined the following contingency fee rate:
2 FEMA is the “Federal Emergency Management Agency.”
2 ▪ $0 to 20 million 6% (six); ▪ $20 million to 40 million 7% (seven); ▪ $60 million to (8%); ▪ $80 million to 100 million 9% (nine); and ▪ $100 million and up 20% (twenty)
This proposed contract included the provision that there would be “no fees on
monies received prior to the signing of the agreement.”
On December 1, 2005, William W. Hall & Associates and Spears & Spears,
Attorneys at Law, a Cooperative Endeavor and AI (collectively, “Hall & Spears”),
submitted a proposal in response to the Port’s Request for Qualifications and
Proposals for Insurance and FEMA Claims Management & Legal Services
(“RFP”), wherein Hall & Spears set forth the following proposed fee schedule:
▪ $0 to $20,000,000 at 0%; ▪ $20,000,000 to $40,000,000 at 4%; ▪ $40,000,000 to $60,000,000 at 6%; ▪ $60,000,000 to $80,000,000 at 8%; and ▪ $80,000,000 to final resolution and settlement at 10%
This proposal also provided that “no fee was to be charged on monies received
prior to this engagement.”
A special meeting of the Board was held on December 7, 2005, during
which Commissioner Bernard “Bunny” L. Charbonnet, Jr. (“Mr. Charbonnet”)
reported that the Executive Committee’s recommendation was to “authorize Mr.
LaGrange to award a contract for any legal services associated with Hurricane
Katrina catastrophe losses to the team of Hall & Spears.”3 Acting upon that
recommendation, the Board voted to direct Mr. LaGrange to “take steps necessary
to award these contracts and negotiate appropriate fees commensurate with the
3 The minutes from that meeting indicate that the Executive Committee also recommended that
the CEO “award the insurance claims management services contract to the team of Ernst and Young; and the FEMA claims management services contract to Adjusters International.”
3 Board’s ability to pay.” This resolution did not specify, require, stipulate, or
insinuate whether the contract had to be awarded via contingency fee or hourly rate
fee. On May 31, 2006, a meeting was held between Mr. Gussoni and Mr. Hall,
with the exclusion of Mr. Spears.4
At the special Board meeting, Mr. Gussoni offered to retain Hall & Spears
on an hourly-fee basis. According to testimony elicited at trial, as soon as the
meeting concluded, Mr. Hall called Mr. Spears to relay the Port’s proposal,
whereupon Mr. Spears suggested that Mr. Hall meet him later that evening at the
Windsor Court Polo Lounge to discuss this development. When Mr. Spears
arrived at the Polo Lounge, Mr. Hall was already there with two representatives
from AI—Pat Bickford (“Mr. Bickford”), one of AI’s owners/principals, and Brian
Rivera, AI’s Director of Operations. After Mr. Hall explained that Mr. Gussoni
was in the process of drafting an hourly-fee contract for Hall & Spears, Mr. Spears
informed the group that he was not interested in doing hourly work.5 Soon
afterwards, Mr. Spears left the lounge.
Just a few days later, on June 2, 2006, Mr. Gussoni sent an email to both Mr.
Hall and Mr. Spears. Attached to the email was an engagement letter to Hall &
Spears, proposing to employ both attorneys at a rate of $200.00 per hour, and
bearing signature lines for each of them. After reading the email, Mr. Hall
contacted Mr. Gussoni to inform him that Mr. Spears was not interested in an
hourly-fee contract. In response, Mr. Gussoni emailed a second engagement letter,
4 We note that during this time, the City of New Orleans was not up and operational for residents
and nearly everyone was operating from other states or between states. Because Mr. Spears was traveling back and forth from Massachusetts with his family and Mr. Hall was in Metairie and local, Mr. Spears designated Mr. Hall as the point of contact with the client. 5 At trial, Mr. Hall testified that Mr. Spears informed the group that he was “not interested in
doing any chicken-s*** hourly work.” Mr. Spears called into question whether he used such strong language, but conceded that he had no interest in an hourly-fee contract.
4 also dated June 2, 2006, to Mr. Hall, which was almost identical to the first, but
with two notable differences: (1) it contained an offer only to and a signature line
only for Mr. Hall; and (2) it reduced the amount of required professional liability
insurance from $5,000,000.00 to $1,000,000.00. Although Mr. Hall was unable to
say for certain when he actually received it, he testified that he executed the
engagement letter within a week or two of that date and began to work on the
Port’s claims almost immediately.
At some point in 2007, Mr. Hall indicated that the Port was at loggerheads
with one particular insurer, FM Global, the Port’s risk management property
insurer. In order to get the claims process moving more rapidly, Mr. Hall began
seeking to pursue litigation on the basis of bad faith. Mr. Bickford from AI
suggested a few different attorneys that Mr. Hall might consider bringing in to
assist his firm. Mr. Hall consulted with Mr. Gussoni, who expressed that his first
choice from among those suggestions was Florida attorney William “Chip” Merlin
(“Mr. Merlin”), an attorney who had nearly 15 years of experience in handling
claims such as that facing the Port. Mr. Hall then set up a one-on-one meeting
with Mr. Merlin. Impressed with Mr. Merlin after this initial meeting, Mr. Hall
recommended that Mr. Gussoni meet with Mr. Merlin with an eye to bringing him
on board. After Mr. Merlin met with both Mr. Hall and Mr. Gussoni near the end
of September 2007, the decision was made to attempt to hire Mr. Merlin to assist
with the Port’s claims; however, Mr. Merlin made it clear that he would not work
for an hourly fee—he was only interested in the work if he would be paid a
contingency fee.
In his deposition, Mr. Gussoni testified that, considering the issues with FM
Global and Mr. Merlin’s expertise, both he and the Board decided to acquiesce and
5 offered a contingent fee contract to Mr. Hall and Mr. Merlin (collectively, “Hall &
Merlin”) for their joint representation. Mr. Hall testified that at this time he
mentioned to Mr. Gussoni that Mr. Spears might be interested in participating in
the case now that a contingency fee offer was on the table. According to Mr. Hall,
Mr. Gussoni instructed him not to share this information with Mr. Spears because
the Port was about to file a suit for legal malpractice against Mr. Spears for his
work on an unrelated case.6 Mr. Gussoni, to the contrary, testified that he did not
recall this conversation with Mr. Hall.
The terms of the new Hall & Merlin contract differed from the proposal
made by Hall & Spears in that no fees would be collected by the attorneys for any
sums paid by the insurer totaling less than $75,000,000.00. The fee schedule in
this contract provided the following:
RISING CONTINGENT FEE
0.0% - of gross recovery up to $75,000,000.00
20.0% - of gross recovery from $75,000,000.00 up to $85,000,000.00
25.0% - of gross recovery from $85,000,000.00 up to $95,000,000.00
33.3333% - of gross recovery from $95,000,000.00 or more
The contract further clarified that the fees would only be paid for the additional
amount of monies received in excess of $75,000,000.00. The contract was
executed by Mr. Hall, Mr. Merlin, Mr. Gussoni and Mr. LaGrange on November 1,
2007.7 Following, on November 10, 2007, Mr. Hall and Mr. Merlin executed a
6 The malpractice suit was filed approximately one week before the contingent fee contract was
executed. 7 An associate of Mr. Merlin’s, Deborah Trotter, also executed the contract.
6 separate agreement that they would share any contingency fees equally—i.e., 50%
each.
On November 10, 2008, a settlement agreement was reached by the parties,
in which FM Global agreed to settle the Port’s claim in the amount of
$117,500,000.00. Mr. Hall’s share of the attorney’s fees earned him the gross
amount of $6,002,278.31, from which $900,118.58 was deducted for the hourly
fees already paid to him. Mr. Spears testified at trial that he was unaware of the
contract or the settlement until one of the Board members congratulated him on
being a part of the settlement. At a later meeting in 2009, Mr. Spears told Mr. Hall
that he was entitled to one half of the contingency fee earned by him because the
two had established a joint venture; however, Mr. Hall disagreed.
Mr. Spears filed a petition for damages on July 14, 2010, seeking to recover
one half of the contingency fee earned by Mr. Hall, as well as attorney’s fees and
costs. In the petition, Mr. Spears alleged that Mr. Hall had utilized Mr. Spears’
name and reputation to submit a joint proposal to the Board, and once the Board
awarded Hall & Spears the contract, Mr. Hall discarded him in order to retain all of
the attorneys’ fees for himself. Additionally, Mr. Spears initially asserted a claim
for unjust enrichment in his original petition, but later waived that claim; thus, the
only issues before the district court were whether a joint venture existed with Mr.
Spears at the time Mr. Hall entered into a contingent fee contract with the Port and
Mr. Merlin, and if so, whether Mr. Spears was entitled to one half of the
contingency fee proceeds on that basis, or whether he was entitled to damages
equal to one half of those proceeds.
A two-day bench trial began on March 20, 2023. There, Mr. Spears testified
that the idea for Mr. Hall and him to pitch a contingency contract to the Board for
7 Katrina insurance work was his. Mr. Spears further testified that he and Mr. Hall
had a joint venture agreement, albeit oral, that they would split any attorneys’ fees
50/50. According to Mr. Spears, it was through his relationships that he delivered
this insurance work from the Board to Hall & Spears. In addition, Mr. Spears
related that as soon as the work that he and Hall pursued became available—a
contingency contract—Mr. Hall deliberately failed to inform him. Mr. Spears
attested that his attorney-client relationship in regards to the Katrina insurance
work existed between him and the Port on December 7, 2006, the day the Board
voted to accept the proposal of Hall & Spears and AI.
At the trial’s conclusion, the district court took the matter under advisement
and asked that both parties file post-trial memoranda. On July 19, 2023, the
district court issued its judgment and reasons for judgment, wherein it concluded
that a joint venture did exist at the time of the execution of the contingent fee
contract. The district court further concluded that Mr. Hall breached the agreement
and his fiduciary duty to Mr. Spears by executing a contingency fee agreement
with the Port that excluded Mr. Spears. The district court rendered judgment
against Mr. Hall and in favor of Mr. Spears, awarding Mr. Spears general damages
in the amount of $2,551,079.86, an amount equal to one half of the contingency
fee, plus judicial interest, attorney’s fees, expenses and court costs. On July 26,
2023, Mr. Hall filed a motion for new trial. In his motion, Mr. Hall argued that: no
joint venture existed between the parties; the district court failed to consider
whether public policy prohibited Mr. Spears from sharing a contingency fee under
Rules 7.2(c)(13) and 1.5(e) of the Rules of Professional Conduct; and the district
court’s award of attorney fees was not permitted under the law. The district court
8 granted Mr. Hall’s motion for new trial as to the attorney fees, but in all other
respects the motion was denied. This timely appeal followed.
DISCUSSION
On appeal, Mr. Hall raises two assignments of error, which we summarize as
follows: (1) the district court erred in finding that a joint venture existed between
Mr. Hall and Mr. Spears; and (2) even if a joint venture existed, the district court
erred in awarding Mr. Spears one half of a contingency fee when he performed no
legal work for the client, in violation of the Louisiana Rules of Professional
Conduct. Before addressing the assigned errors, we will first set forth the
applicable standard of review.
Standard of Review
As this Court has previously noted, “while what constitutes a joint venture is
a question of law, the existence or nonexistence of a joint venture is a question of
fact.” Arcement Boat Rentals, Inc. v. Good, 01-1860, p. 6 (La. App. 4 Cir.
5/29/02), 820 So.2d 615, 618 (citing Grand Isle Campsites, Inc. v. Cheek, 262
So.2d 350, 357 (La. 1972)). “Factual determinations are subject to the manifest
error standard of review.” Wootan & Saunders v. Diaz, 17-0820, p. 5 (La. App. 4
Cir. 3/28/18), 317 So.3d 390, 395 (citing Stobart v. State, through DOTD, 617
So.2d 880, 882 (La.1993)). “Similarly, mixed questions of law and fact are
reviewed under the manifestly erroneous standard of review.” Id. (citing
Chimneywood Homeowners Ass’n, Inc. v. Eagan Ins. Agency, Inc., 10-0368, p. 5
(La. App. 4 Cir. 2/2/11), 57 So.3d 1142, 1146). “In order to reverse a fact finder’s
determination of fact, an appellate court must find from the record that a
reasonable factual basis does not exist for the finding and that the record
establishes that the finding is clearly wrong.” Id. (citing Stobart, 617 So.2d at
9 882). However, “[w]here one or more legal errors interdict the [district] court’s
fact-finding process . . . the manifest error standard becomes inapplicable, and the
appellate court must conduct its own de novo review of the record.” Id. (quoting
Hamp’s Constr., L.L.C. v. Hous. Auth. of New Orleans, 10-0816, p. 3 (La. App. 4
Cir. 12/1/10), 52 So.3d 970, 973). “A legal error occurs here when a [district]
court applies incorrect principles of law and such errors are prejudicial.” Id. at p.
6, 317 So.3d at 395. “Legal errors are prejudicial when they materially affect the
outcome and deprive a party of substantial rights.” Id. With these principles in
mind, we now turn to the assigned errors.
Joint Venture
This Court has explained that a “[j]oint venture has been defined as a
‘special combination of two or more persons, where in some specific venture a
profit is jointly sought without any actual partnership or corporate designation.’”
Lemoine Co., L.L.C. v. Ernest N. Morial Exhibition Hall Auth., 22-0217, p. 10 (La.
App. 4 Cir. 4/12/23), 369 So.3d 39, 47, rev’d on other grounds, 23-00775 (La.
10/17/23), 372 So.3d 327 (quoting Arcement, 01-1860, p. 6, 820 So.2d at 618).
“[J]oint adventures [sic] arise only where the parties intended the relationship to
exist. They are ultimately predicated upon contract either express or implied.”
Arcement, 01-1860, p. 6, 820 So.2d at 618 (alteration in original) (quoting
Pillsbury Mills, Inc. v. Chehardy, 90 So.2d 797, 801 (La. 1956)).
“Under Louisiana law, in order to confect a valid contract, four elements are
required: (1) the capacity to contract; (2) mutual consent; (3) a certain object; and
(4) a lawful cause.” Succession of Schimek, 19-1069, p. 14 (La. App. 4 Cir.
6/10/20), 302 So.3d 78, 89 (citations omitted). “The ‘elements of a breach of
contract claim are the existence of a contract, the party’s breach thereof, and
10 resulting damages.’” Payphone Connection Plus, Inc. v. Wagners Chef, LLC, 19-
0181, p. 8 (La. App. 4 Cir. 7/31/19), 276 So.3d 589, 595 (quoting 1100 S. Jefferson
Davis Parkway, LLC v. Williams, 14-1326, p. 5 (La. App. 4 Cir. 5/20/15), 165
So.3d 1211, 1216). “It is well-settled that ‘[t]he party claiming the rights under the
contract bears the burden of proof.’” Id. at pp. 8-9, 276 So.3d at 595 (alteration in
original) (citation omitted). This Court expounded that in order to meet that
burden of proof to demonstrate the existence of a joint venture, three requirements
must be established:
(A) All parties must consent to formation of a partnership;
(B) There must be a sharing of losses of the venture as well as the profits; and
(C) Each party must have some proprietary interest in, and be allowed to exercise some right of control over, the business.
Arcement, 01-1860, p. 6, 820 So.2d at 618 (quoting Marine Servs., Inc. v. A-1
Indus., Inc., 355 So.2d 625, 628 (La. App. 4 Cir. 1978)).
Finding that a joint venture between Mr. Hall and Mr. Spears existed at the
time the contingency fee contract was executed, the district court reasoned that the
previous actions of the two attorneys indicated an intent to enter into a contractual
relationship, albeit without a formal written document. Specifically, the court cited
the meeting between Hall & Spears, and the GC and CEO of the Port; the two
separate joint letters of engagements sent to the Port; and the joint proposal with
Hall & Spears and AI, which followed the Port’s Request for Qualifications and
Proposals for Insurance and FEMA claims Management and Legal Services. As
the district court rightly noted, La. C.C. art. 1927 provides that “[a] contract is
formed by the consent of the parties established through offer and acceptance . . .
[O]ffer and acceptance may be made orally, in writing, or by action or inaction that
11 under the circumstances is clearly indicative of consent.” Further, the court found
that the Board resolution selecting Hall & Spears to be awarded a contract for their
legal services and the subsequently-offered engagement letter that included both of
their names served to corroborate the existence of a joint venture.8 To the district
court, this satisfied the first prong of the joint venture requirements by
demonstrating that Mr. Hall and Mr. Spears consented to forming a partnership.
Next, the district court found that evidence adduced at trial demonstrated that there
was an agreement between the two as to how the contingency fee would be earned,
establishing that there was a sharing of losses and profits of the venture. However,
the court determined that Mr. Spears was prevented from participating in the
sharing of the losses and profits from the contingency fee agreement due to Mr.
Hall’s breach of the joint venture relationship. Lastly, it found that the award of
the legal work that was passed by resolution of the Board gave the team of Hall &
Spears the opportunity to exercise a right of control.
Mr. Hall argues to this Court that, even assuming a joint venture was
established with Mr. Spears for the purpose of obtaining a contingency fee contract
with the Port, the venture failed and ended when the Port offered an hourly fee
contract to Hall & Spears on May 31, 2006. Further, he takes issue with the
district court’s finding that Mr. Spears never rejected the initial proposed hourly
fee agreement, holding that the joint venture was still in existence in 2007 when
Mr. Hall and Mr. Merlin were offered the contingent fee contract. Mr. Hall asserts
that Mr. Spears did, in fact, reject the Port’s hourly fee contract proposal when he 8 We note that “a [district] court’s reasons for judgment are not part of the judgment and that
appellate courts review judgments, not reasons for judgment. But, appellate courts may consider a [district] court’s reasons for judgment to obtain insight into the . . . judgment.” Heard, McElroy & Vestal, L.L.C. v. Schmidt, 22-0221, p. 16 (La. App. 4 Cir. 9/21/22), 349 So.3d 663, 673 (citing Bruno v. CDC Auto Transp., Inc., 19-1065, p. 9 (La. App. 4 Cir. 6/3/20), 302 So.3d 8, 13 n.11) (internal citations omitted).
12 left the meeting at the Windsor Court Polo Lounge after declaring that he was not
going to do hourly work. Regardless, Mr. Hall suggests, the issue is not whether
Mr. Spears rejected the offer; rather, under the codal articles governing offer and
acceptance, the issue is whether Mr. Spears accepted the Port’s offer of an hourly
fee contract. Thus, Mr. Hall contends that whether the hourly fee contract offer
made by the Port is considered to be irrevocable or revocable, Mr. Spears’ failure
to timely accept the offer ultimately extinguished the offer.
Louisiana Civil Code article 1928, regarding irrevocable offers, provides:
An offer that specifies a period of time for acceptance is irrevocable during that time.
When the offeror manifests an intent to give the offeree a delay within which to accept, without specifying a time, the offer is irrevocable for a reasonable time.
Louisiana Civil Code article 1929 then directs that “[a]n irrevocable offer expires
if not accepted within the time prescribed in the preceding Article.” As it pertains
to revocable offers, La. C.C. art. 1930 explains that “[a]n offer not irrevocable
under Civil Code Article 1928 may be revoked before it is accepted.” And,
similarly to La. C.C. art. 1929, La. C.C. art. 1931 instructs that “[a] revocable offer
expires if not accepted within a reasonable time.”
Although Mr. Spears does not directly counter these arguments, it is clear
from his testimony that he considers the original authorization by the Board for
Mr. LaGrange to award the insurance claim management contract to Hall & Spears
to be a contract that was still viable at the time the contingent fee contract was
offered to Mr. Hall and Mr. Merlin. Continuing, Mr. Spears contends that only the
Board was authorized to terminate the contract, not Mr. Gussoni or Mr. LaGrange.
Mr. Spears then asserts that Mr. Gussoni and Mr. LaGrange acted outside of their
13 authority when they removed his name from the Katrina litigation, when the Board
had the sole authority to approve outside counsel contracts. Next, he argues that
because joint ventures are governed by the law of partnership (see, e.g., Transit
Mgmt. of Se. La., Inc. v. Grp. Ins. Admin., Inc., 226 F.3d 376, 383 (5th Cir. 2000),
Mr. Hall could not unilaterally terminate the joint venture9 and had a fiduciary duty
of loyalty to him.10 Finally, he insists that Mr. Hall’s actions showed that he
intentionally failed to inform Mr. Spears that the possibility of a contingency fee
contract had materialized.
Louisiana jurisprudence is clear that “[w]hen findings are based on
determinations regarding the credibility of witnesses, the manifest error-clearly
wrong standard demands great deference to the trier of fact’s findings; for only the
factfinder can be aware of the variations in demeanor and tone of voice that bear so
heavily on the listener’s understanding and belief in what is said.” Braud v.
Bernstein, 23-0332, p. 4 (La. App. 4 Cir. 12/20/23), 381 So.3d 58, 62 (quoting
Rosell v. ESCO, 549 So.2d 840, 844 (La. 1989)). The law is equally clear that
when applying the manifest error standard of review to the district court’s
interpretation of the contract, an appellate court “may not simply substitute its own
view of the evidence for the [district] court’s view, nor may it disturb the [district
court’s finding of fact so long as it is reasonable.” Bartlett Constr. Co., Inc. v. St.
9 See La. C.C. art. 2807, which provides in pertinent part that “[u]nless otherwise agreed, unanimity is required to . . . terminate the partnership.” 10 Mr. Hall counters that our Supreme Court has held that “as a matter of public policy, based on
our authority to regulate the practice of law pursuant to the constitution, no cause of action will exist between co-counsel based on the theory that co-counsel have a fiduciary duty to protect one another’s prospective interests in a fee.” Scheffler v. Adams and Reese, LLP, 06-1774 p. 16 (La. 2/22/07), 950 So.2d 641, 653. However, based upon our discussion, infra, we find the case sub judice hinges upon a breach of contract, not a dispute over prospective interest in a fee. Therefore, we find Scheffler to be inapposite to the facts before us.
14 Bernard Par. Council, 99-1186, pp. 4-5 (La. App. 4 Cir. 5/31/00), 763 So.2d 94,
97 (citing Syrie v. Schilhab, 96-1027, p. 4 (La. 5/20/97), 693 So.2d 1173, 1176).
At the outset, we note the conflicting testimony of Mr. Hall and Mr.
Gussoni. While Mr. Hall testified that Mr. Gussoni instructed him not to contact
Mr. Spears about the upcoming contingency fee contract, Mr. Gussoni did not
recall that conversation. Moreover, we find disturbing the subsequent actions of
Mr. Gussoni and Mr. LaGrange to negotiate a contingency fee agreement on behalf
of the Board with Hall & Merlin when the record evidence reflects that Mr.
LaGrange was only authorized to negotiate a contract with “the team of Hall &
Spears.” In his deposition, Mr. Gussoni explained that, in response to the RFP
from the Board, some 25 or 26 law firms submitted proposals to assist the Port in
settling its Katrina-related claims. After a careful vetting of all of these firms, the
Executive Committee of the Board recommended that the Board choose the team
of Hall & Spears. The Board voted to ratify that recommendation and authorized
Mr. LaGrange to enter into a contract with them. Mr. Charbonnet testified that he
did not recall any conversations by the Board that would have contemplated either
Mr. Hall or Mr. Spears individually doing the legal work for the Port. Mr. Hughes,
Chair of the Property and Insurance Committee, testified at trial that he believed
the team of Hall & Spears, together with AI, were the perfect attorneys to get the
job done. Using an analogous situation, Mr. Hughes further testified that if a team
of two contractors was selected by the Board and the Board later learned that one
of those two contractors would no longer be involved, the Board would either
make another decision about whether it wished to proceed with that single
contractor or select another contractor from its list formulated through the RFP
process. When Mr. LaGrange was questioned as to whether there was any meeting
15 by the Board that approved anyone other than Hall & Spears to handle the Port’s
insurance claims, Mr. LaGrange responded, “I don’t recall, but they would have
had to, to do so legally.” Thus, based upon the testimony elicited at trial, the
Board should have either negotiated the terms of the contingency agreement with
Mr. Spears as a member of the Hall & Spears team that was awarded the contract,
or it should have terminated the award of the contract and reconsidered as a Board
whether they wished to use only the services of Mr. Hall or some other firm that
they had already vetted through the RFP process. Notably, none of the Board
members, Mr. Gussoni or Mr. LaGrange are named defendants in this matter.
Review of the record before us does not contain any other Board meeting
minutes other than those produced from the December 7, 2005 meeting, or any
other communications by the Board pertaining to another offer to contract for legal
services by anyone other than Hall & Spears. The only other pertinent documents
are the letter of engagement to Mr. Hall alone—sent exclusively by Mr. Gussoni,
and the contingency fee agreement with Mr. Hall and Mr. Merlin, executed by Mr.
LaGrange and Mr. Gussoni on behalf of the Board. There is no dispute that the
original engagement letter offered to Hall & Spears by Mr. Gussoni was never
executed by Mr. Spears. Whatever the form of the offer—revocable or
irrevocable—we agree with Mr. Hall that this offer for an hourly fee contract was
not still viable in 2007 because it had not been accepted within a reasonable time.
Nevertheless, we do not find that any of these actions necessarily
extinguished the joint venture. There was testimony from both Mr. Hall and Mr.
Spears that they continued to communicate about the Port’s claims during the
period that Mr. Hall was working under an hourly fee agreement and before the
new contingency fee agreement was offered. Mr. Spears also testified that he
16 continued to press Mr. Hall to seek a contingency fee agreement from the Port on
behalf of Hall & Spears. Accordingly, our review of the record indicates that the
district court reached a reasonable conclusion when it found that the joint venture
agreement was still in effect at the time the contingency fee agreement was offered
and executed. This assignment of error is unpersuasive.
Damages
In this assignment of error, Mr. Hall posits that the district court erred when
it awarded Mr. Spears one half of the contingency fee that he earned because
sharing the fees with Mr. Spears is against public policy on either of two discrete
bases. First, under Rule 7.2(c)(13) of the Louisiana Rules of Professional Conduct
(sometimes hereinafter “LRPC”), attorneys are expressly prohibited from paying
referral fees. The Rule provides, in relevant part, that “[a] lawyer shall not give
anything of value to a person for recommending the lawyer’s services.” Second,
LRPC Rule 1.5(e), which was reenacted on January 20, 2004, and became
effective on March 1, 2004, sets forth that:
A division of fee between lawyers who are not in the same firm may be made only if:
(1) the client agrees in writing to the representation by all of the lawyers involved, and is advised in writing as to the share of the fee that each lawyer will receive;
(2) the total fee is reasonable; and
(3) each lawyer renders meaningful legal services for the client in the matter.
The absence of a written and executed fee agreement between Mr. Spears and the
Port, Mr. Hall argues, means that the first prerequisite under Rule 1.5(e) is not met.
Moreover, alluding to the third requirement under this Rule, Mr. Hall points out
that Mr. Spears unequivocally testified that he did no work on behalf of the Port,
17 but that he delivered the client. Additionally, Mr. Hall advances the position that
the LRPC is to be treated as substantive law. As such, Mr. Hall, citing to La. C.C.
art. 7, asserts that the district court’s ruling that awarded one half of his
contingency fee with Mr. Spears was in error. Louisiana Civil Code article 7
provides:
Persons may not by their juridical acts derogate from laws enacted for the protection of the public interest. Any act in derogation of such laws is an absolute nullity.
That is to say, if the joint venture agreement allowed for an award of fees to Mr.
Spears without a written agreement with the client and without Mr. Spears
performing any meaningful work on behalf of the client, that agreement is against
the public interest and is, therefore, an absolute nullity.
Mr. Spears, in response, first alleges that Mr. Hall has not previously raised
the issue of LRPC Rule 7.2(c), but even so, Mr. Spears avers that he did more than
just recommend a lawyer—he initiated the entire representation.11 Next, Mr.
Spears cites to the pre-2004 version of LRPC Rule 1.5(e), which was more
permissive than the current version and allowed that:
A division of fee between lawyers who are not in the same firm may be made only if:
(1) The division is in proportion to the services performed by each lawyer or, by written agreement with the client, each lawyer assumes joint responsibilities for the representation;
(2) The client is advised of and does not object to the participation of all the lawyers involved; and
(3) The total fee is reasonable.
11 Our review of the record reveals that in his opposition to Mr. Spears’ motion for summary
judgment, Mr. Hall did, in fact, argue to the district court that LRPC Rule 7.2(c)(13) is applicable to the instant case. Therefore, we will consider that Rule in our discussion.
18 In further support, Mr. Spears cites to three cases for the proposition that a fee-
splitting agreement between two attorneys not in the same firm is sufficient to
establish a joint venture; thus, the rules of contract apply to any alleged breach, not
the LRPC.12 We agree; however, our review of these cases finds that they are
distinguishable from the matter at hand.
First, in Raspanti v. Litchfield, 19-0523 (La. App. 4 Cir. 2/12/20), 364 So.3d
131, Raspanti and Litchfield entered into an oral attorney fee agreement to divide
legal fees. In that case, it was acknowledged by both attorneys that each had
provided some measure of work on behalf of the clients. Raspanti sought to have
the contract dissolved based upon an allegation that Litchfield breached the fee
agreement by failing to pay his portion of the defense costs. This Court, using the
pre-2004 version of Rule 1.5(e), concluded that the Rules of Professional Conduct
did not prohibit the enforcement of this agreement and found that when a joint
venture existed with a valid oral fee-splitting agreement, a fee dispute amongst the
attorneys was governed by contract rather than the LRPC.
Next, in Scurto v. Siegrist, 598 So.2d 507 (La. 1992), attorneys Siegrist and
Scurto entered into a valid contingency fee-splitting agreement to represent a
client. The agreement set forth that Scurto was responsible to manage the client
and advance costs, and it delineated the portion of the fees that were to be received
by each. When it was time to split the fees, Siegrist alleged that Scurto had not
performed sufficient work to earn his portion of the fees. The appellate court
found that Scurto was actively involved in the case by frequently communicating
with the client, advancing expenses, attending depositions and performing legal
12 Mr. Spears cites: Raspanti v. Litchfield, 19-0523 (La. App. 4 Cir. 2/12/20), 364 So.3d 131;
Scurto v. Siegrist, 598 So.2d 507 (La. 1992); and Wootan & Saunders, 17-0820, 317 So.3d 390.
19 research. Thus, the court held that the contract was valid, enforceable and did not
violate the Rules of Professional Conduct, and that it would not assume the
position of dictating to attorneys exactly how much work they needed to perform
to entitle them to a certain fee and both attorneys had actually performed work on
behalf of the client.
Finally, in Wootan & Saunders, 17-0820, 317 So.3d 390, Wootan &
Saunders (“WS”), primarily a defense firm, performed some preliminary work on
behalf of the client in a wrongful death suit. After vetting several personal injury
attorneys on behalf of the client, the attorney Diaz was selected, at which time WS
handed over the client files and entered into a contingency fee-splitting agreement
with Diaz. The agreement provided for a division of fees of 75% to be paid to
Diaz for handling the majority of the work and 25% to WS for the work it
previously performed before Diaz’s involvement and its continued assistance in
communicating with the client. When the fees were to be split, Diaz argued that
WS had not done enough work to earn its 25% share. As in Scurto, this Court—in
finding that the fee-splitting agreement complied with the Rules of Professional
Conduct—held that it would not interfere with the contractual relations of two
attorneys who had both performed work in the case.
Thus, although each of the cases cited by Mr. Spears established a joint
venture—whether oral or written—one distinguishing factor is that the attorney
participating in the contingency agreement actually performed some measure of
work on behalf of the client. See Chimneywood, 10-0368, 57 So.3d 1142 (where
this Court held that, in the absence of a fee-splitting or joint representation
agreement, a law firm was not entitled to fully share in a contingency fee when the
attorney who worked the file left the firm and the firm was not actively involved in
20 the case after his departure. Instead, “the remainder of the contingency fee should
be disbursed ‘according to the respective services and contributions of the
attorneys for work performed and other relevant factors.’” Id. at p. 15, 57 So.3d at
1152 (quoting Saucier v. Hayes Dairy Prods, Inc., 373 So.2d 102, 118 (La.1979));
see also Fox v. Heiser, 03-1964 (La. App. 4 Cir. 5/12/04), 874 So.2d 932 (where
this Court found that advancing costs and keeping records constituted sufficient
involvement in the case to share fees under an oral fee agreement); see also Dukes
v. Matheny 02-0652 p. 4, 878 So.2d 517, 520 (citations omitted)) (where the
appellate court noted that “courts have continued to apply the joint venture theory
to uphold an agreement to share fees where two attorneys have executed a single
contingency fee contract with the client. In such cases, the finding of a joint
venture has been based on the fact that neither attorney has been discharged and
both were actively involved in the case and remained responsible to their client.”
As we have just outlined, this long line of cases established the precedent
that fee-splitting agreements between attorneys from different firms did not violate
the pre-2004 version of Rule 1.5(c), which allowed attorneys to decide between
themselves the division of labor and fees without informing or obtaining consent
from the client.13 See, e.g., Fox, 03-1964, p. 9, 874 So.2d at 938 (where the court
explained that a dispute over the validity of an oral fee-splitting agreement was
“neither a suit for recovery of attorney’s fees nor a suit over the terms of the
settlement agreement;” therefore, the agreement was not violative of public policy
or the Rules of Professional Conduct); see also Scurto, 598 So.2d at 509-10 (where
the court commented that “the suit by an attorney to recover pursuant to [a
13 Compare Chimneywood, 10-0368, p. 1, 57 So.3d at 1133-34 (where the court noted that the
attorney obtained the consent of his client in order to collaborate with another attorney and detailed the fee schedule applicable to each attorney).
21 contingency fee-splitting] agreement is a suit to recover for breach of the
agreement to share in the fund resulting from payment of the fee. It is not a suit for
recovery of attorney’s fees.”).
While we agree with Mr. Hall that the Rules of Professional Conduct do
carry the force of substantive law, both his and Mr. Spears’ arguments fail to see
the larger picture. See Kaltenbaugh v Bd. Of Supervisors, S. Univ. & Ag. & Mech.
Coll., 22-0092 pp. 18-19, 346 So.3d 823, 836 (wherein the court explained that
“[T]he [R]ules of Professional Conduct are rules issued and published by the
Supreme Court of Louisiana. As such, these rules are recognized as having the
force and effect of substantive law.”) Under the particularized set of facts
presented to us in the case sub judice, the most discernible difference is that there
is not a single case cited by either party in which an attorney was deprived of the
opportunity to participate in representing the client—the choice was theirs. Having
found that the district court had a reasonable basis to conclude that a joint venture
existed between Mr. Spears and Mr. Hall, we similarly find that the district court
was not in error when it determined that Mr. Hall breached that contractual
relationship. The court weighed the testimony—both from the trial and the
depositions entered into the record—and determined that, based upon the
continued communication between Mr. Spears and Mr. Hall and the fact that
neither of them had taken an affirmative step to end the joint venture relationship,
that agreement was still active at the time Mr. Hall was offered a contingency fee
contract with the Port. When Mr. Hall failed to disclose to Mr. Spears that there
was an opportunity to enter into the contingency fee contract—the object of the
venture—he deprived Mr. Spears of the opportunity to provide representation to
the Port, which breached the oral contract between the two. As we previously
22 noted, Mr. Hall contends that he was instructed by Mr. Gussoni to refrain from
apprising Mr. Spears of the contingency fee offer, while Mr. Gussoni could not
recall any such conversation. Faced with this conflicting testimony, the district
court made a credibility determination. It is well settled, though, that “[i]t is the
role of the factfinder to weigh the respective credibilities of the witnesses, and this
court will not second-guess the credibility determinations of the trier of fact.”
Granger v. Christus Health Cent. La., 12-1892, p. 26 (La. 6/28/13), 144 So.3d 736,
756 (citing State in Interest of D.M., 2011–2588 (La.6/29/12), 91 So.3d 296, 298
(per curiam). Hence, the remaining issue before this Court is whether the damages
award in favor of Mr. Spears was legally correct.
“An obligation is a legal relationship whereby a person, called the obligor, is
bound to render a performance in favor of another, called the obligee.
Performance may consist of giving, doing, or not doing something.” La. C.C. art.
1756. Louisiana Civil Code article 1994 provides, in pertinent part, that “[a]n
obligor is liable for the damages caused by his failure to perform a conventional
obligation.” “Damages are measured by the loss sustained by the obligee and the
profit of which he has been deprived.” La. C.C. art. 1995. It then follows that
“lost business opportunities are cognizable damages[.]” Kocurek v. Frank’s Int’l,
LLC, No. 16-CV-0543, 2017 WL 4582337 at *8, (W.D. La. Oct. 11, 2017) (citing
Buddy’s Tastee No. 1, Inc. v. Tastee Donuts, Inc., 483 So. 2d 1321, 1324 (La. Ct.
App. 1986)). “To prevail on a claim for a lost business opportunity, [a] [p]laintiff[]
must prove that it is ‘more probable than not’ that, had [the obligor] not breached
the contract, they would have availed themselves of the profitable opportunity.”
Id. (quoting Wood v. Axis Energy Corp., 04-1464, pp. 13–14 (La. App. 3 Cir.
4/6/05), 899 So. 2d 138, 148). In this case, the district court made it clear that its
23 decision was premised on a breach of contract claim, not a fee dispute over the
attorney’s fees generated from the FM Global settlement. As such, the court found
the LRPC was inapplicable and nothing more than a “red herring.” Furthermore,
Mr. Spears testified that he was prepared to avail himself of an opportunity to
represent the Port on a contingency fee basis. Therefore, in order to compensate
Mr. Spears for his lost business opportunity that resulted in lost profits, Louisiana
jurisprudence provides a guide. We only recently explained in Huntsman Int’l,
L.L.C. v. Praxair, Inc., that “[c]ompensatory damages are those awarded on the
basis of the loss suffered and are designed to replace the loss caused by the wrong
or injury.” 22-0777, p. 6 (La. App. 4 Cir. 4/19/24), ___ So.3d ____, ____, 2024
WL 1695071 at *3 (quoting FIE, LLC v. New Jax Condo Ass’n, 16-0843, 17-0423,
pp. 13-14 (La. App. 4 Cir. 2/21/18), 241 So.3d 372, 387). “Compensatory
damages are further divided into the broad categories of special damages and
general damages.” Id. “Special damages are those which have a ‘ready market
value,’ such that the amount of the damages theoretically may be determined with
relative certainty.” Id. “Loss of business income or profits is a type of special
damages.” Id. at pp. 6-7, 2024 WL 1695071 at *3 (quoting Cox, Cox, Filo, Camel
& Wilson, LLC v. La. Workers’ Comp. Corp., 21-00566, p. 8 (La. 3/25/22), 338
So.3d 1148, 1155.
Here, relative certainty of the damages award was provided by the
settlement statement, which gave a detailed accounting of the amount of both the
hourly and the contingency fee earned by Mr. Hall. This gave the district court an
easily ascertainable ready market value for the amount of lost business income
suffered by Mr. Spears. Additionally, we agree that LRPC 1.5(e) is not germane
to the set of facts before us. Our review of the history surrounding this rule
24 indicates that its spirit is to protect the public from opaque contracts with attorneys
who, in turn, farm out their representation to an attorney not contracted by the
client. That is not the case before us. As the district court found, although the
Board awarded the opportunity to enter into a contract to Hall & Spears, Mr. Hall
breached his fiduciary duty to Mr. Spears when he prevented him from the
opportunity to enter into a contingency fee contract with the Port. Accordingly, we
find the district court did not err when it awarded damages to Mr. Spears for Mr.
Hall’s breach of contract. Further, based upon the record, we find the district court
had a reasonable basis to award those damages in an amount equal to one half of
the contingency fee.
MOTION FOR NEW TRIAL
Mr. Hall also seeks review of the district court’s November 9, 2023
judgment, which denied his motion for new trial. The issue he raises before this
Court is that the district court failed to address LRPC 1.5(e) in its May 19, 2023
judgment with reasons. Because we consider that rule in this opinion and find it
inapplicable to the facts of this case, we pretermit any further discussion of the
issue.
CONCLUSION
For the foregoing reasons, we affirm the district court’s judgment.
AFFIRMED