La. State Bar Ass'n v. CARR AND ASSOCIATES

15 So. 3d 158, 2008 La.App. 1 Cir. 2114, 2009 La. App. LEXIS 727, 2009 WL 1270230
CourtLouisiana Court of Appeal
DecidedMay 8, 2009
Docket2008 CA 2114
StatusPublished
Cited by35 cases

This text of 15 So. 3d 158 (La. State Bar Ass'n v. CARR AND ASSOCIATES) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
La. State Bar Ass'n v. CARR AND ASSOCIATES, 15 So. 3d 158, 2008 La.App. 1 Cir. 2114, 2009 La. App. LEXIS 727, 2009 WL 1270230 (La. Ct. App. 2009).

Opinion

CARTER, C.J.

1 .This case involves the trial court’s grant of permanent injunctive relief in favor of the Louisiana State Bar Association (the LSBA) and against a public insurance adjuster, Earl T. Carr, Jr., and his public adjusting business, Carr and Associates, Inc. (hereafter collectively referred to as “Carr”). The injunctive relief is based on the trial court’s finding that Carr was engaged in the unauthorized practice of law, which is strictly prohibited by Louisiana law. For the following reasons, we affirm the trial court’s judgment.

FACTS AND PROCEDURAL BACKGROUND

The LSBA initiated this lawsuit on September 5, 2006, after receiving several complaints regarding Carr’s public insurance adjusting activities. Carr’s business involves contracting with individuals in a representative capacity in order to negotiate a settlement of the individual’s first-party property insurance claims with insurance companies. No employee of Carr is a licensed attorney in Louisiana or elsewhere. Carr’s fee for its public adjusting service is contingent upon and calculated by a percentage of the amount recovered for each claim. Based upon the complaints, the LSBA became convinced that Carr was engaged in the unauthorized practice of law because Carr: (1) advised and counseled its clients regarding the terms of their insurance policy coverage and their respective rights; (2) had direct contact and negotiated with its clients’ insurers regarding aspects of the clients’ insurance coverage, the monetary value of its clients’ claims, and settlement of its clients’ claims; (3) improperly used a contingency fee/percentage-based contract for its public adjusting services; and (4) instructed its clients’ insurers to send checks directly to Carr and made payable to Carr along with Carr’s clients. The LSBA believed that all of these activities were in direct violation of prohibitory language in the Louisiana Public Adjuster Act (the I,.LPAA), 1 LSA-R.S. 22:1691, et seq. (formerly cited as LSA-R.S. 22:1210.91, et seq.), and constituted the unauthorized practice of law in violation of LSA-R.S. *163 37:212-213. Therefore, the LSBA sought a preliminary and permanent injunction restraining, enjoining, and prohibiting Carr from the outlined activities, as well as a declaratory judgment outlining what activities were prohibited by law.

In response to the LSBA’s petition, Carr filed an answer and peremptory exceptions raising the objections of no right of action and no cause of action. Carr argued that the LSBA lacked standing to regulate the activities of a non-lawyer and could not bring a civil suit to enforce a criminal statute. The trial court heal’d argument on the exceptions at the same time that it received evidence on the preliminary injunction. The evidence submitted to the trial court at a three-day hearing included: (1) copies of Carr’s various contingency fee and percentage-based compensation contracts that required payment from insurance companies to Carr and the insured client whom Carr represented; (2) copies of an advertising brochure, notice of representation, and power of attorney, all indicating that Carr advised and assisted in the conclusion of insurance losses/claims and represented the interests of insured clients in mediation and negotiation in order to settle insurance claims; (3) testimony from Carr and several of Carr’s clients regarding the fee arrangement and the advice given by Carr; (4) testimony regarding complaints filed with the LSBA; (5) a surveillance tape of a private investigator and a representative of Carr where Carr is presented as an advocate in the insured |4client’s negotiating process with its insurers; and (6) expert testimony from a professor of law regarding the practice of law and the unauthorized practice of law.

On October 23, 2006, the trial court rejected Carr’s peremptory exceptions raising the objections of no right of action and no cause of action, finding that the LSBA had standing to bring the action for injunc-tive relief. The trial court also granted a preliminary injunction against Carr, finding that the LSBA had established by a “preponderance of the evidence” that Carr had engaged in the unauthorized practice of law and enjoining Carr from specific prohibited activities. No appeal was taken from the preliminary injunction. 2 A few days later on October 31, 2006, the LSBA moved for a permanent injunction prohibiting Carr from engaging in the unauthorized practice of law and from utilizing unauthorized contingent/percentage-based fee contracts. The LSBA relied on all of the testimony and exhibits that had been introduced into the record at the preliminary injunction hearing. Carr responded by re-urging the peremptory exceptions raising the objections of no right of action and no cause of action, again challenging the LSBA’s standing to bring the action for injunctive relief. The trial court denied Carr’s peremptory exceptions for the same reasons it overruled them before the preliminary injunction proceeding.

Trial on the merits of the permanent injunction was held on February 21, 2008. At the trial, the parties filed stipulations and submitted the entire record to date, including all of the evidence previously adduced at the hearing on the preliminary injunction. The trial court took the matter under advisement, and on March 25, 2008, rendered judgment in favor of the LSBA, issuing a permanent injunction without bond against Carr. The permanent injunction prohibited Carr |5from: (1) entering *164 into fee agreements with clients that provide for payments to Carr that are contingent upon and calculated as a percentage of the amount paid on the clients’ insurance claims; (2) advising or counseling clients in a manner that constitutes the unauthorized practice of law, including giving advice on the terms of insurance policies, rights, limitations, coverage, liabilities, establishing and/or enforcing legal remedies, or law; (3) having any direct contact with its clients’ insurers to settle its clients’ claims against the insurers by negotiating with the insurers regarding legal aspects of its clients’ insurance policies and claims, acting on behalf of its clients to prevent a wrong or establish a right, and negotiating with its clients’ insurers over the monetary value of its clients’ claims; and (4) instructing insurance companies to send checks directly to Carr and made payable to Carr along with Carr’s clients. 3

Carr moved for a new trial, but that motion was denied. Carr then appealed to this court from the trial court’s final judgment issuing the permanent injunction. 4 Carr raises the following assignments of error (some of which have been combined):

1. The trial court committed legal error in denying Carr’s peremptory exceptions raising the objections of no right of action and no cause of action.
2. The trial court was manifestly erroneous in ruling against Mr. Carr individually as there was a lack of evidence in the record supporting any personal liability against Mr. Carr.
3.The trial court was manifestly erroneous and committed legal error in allowing expert testimony on matters related to “the field of law.”
|„4.

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Bluebook (online)
15 So. 3d 158, 2008 La.App. 1 Cir. 2114, 2009 La. App. LEXIS 727, 2009 WL 1270230, Counsel Stack Legal Research, https://law.counselstack.com/opinion/la-state-bar-assn-v-carr-and-associates-lactapp-2009.