Morice Law Firm, LLC v. Akehurst

Filing 25

ORDER denying 17 Motion to Dismiss, or alter, stay case pursuant to Colorado River abstention. Signed by Judge Lance M Africk. (car, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

MORICE LAW FIRM, LLC

CIVIL ACTION

VERSUS

No. 10-2942

RITA K. AKEHURST

SECTION: I
MAGISTRATE: 3

ORDER AND REASONS
Before the Court is defendant’s motion to dismiss or, alternatively, to stay this matter
pursuant to the Colorado River abstention. Plaintiff, Morice Law Firm, LLC (“Morice”), has
filed a response. For the following reasons, defendant’s motion is DENIED.
BACKGROUND
Plaintiff alleges that defendant, Rita K. Akehurst (“Akehurst”), rented office space from
Morice and worked as a contract lawyer for Morice beginning in October 2001.1 She was the
lead lawyer for Morice in numerous client matters and obtained new clients who signed
engagement agreements with Morice using Morice’s form contracts.2 Plaintiff alleges that
Akehurst breached her contract with Morice when she advanced funds belonging to Morice to
clients who were not paying their bills and when she took money in excess of her agreed
monthly draw.3 Plaintiff claims that Akehurst was evicted and fired on June 8, 2005.4
Defendant has intervened in Mark Jones, et al. v. Bello’s Furniture & Appliance, Inc., et
al., a state case currently pending in the 18th Judicial District Court for the Parish of West Baton

1

R. Doc. No. 1, ¶ 5.
Id. at ¶ 8.
3
Id. at ¶¶ 15-19.
4
Id. at ¶ 19.
2

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Rouge.5 In such case, Morice and Akehurst are litigating an attorneys’ fees dispute. As a former
attorney for plaintiffs in the state court matter, defendant asserts an interest in any attorneys’ fees
earned by plaintiffs in the Jones case.6 The funds in dispute are currently deposited with the
state court.7
After Akehurst intervened in the state case, plaintiff filed this lawsuit seeking a
declaratory judgment that: (1) Akehurst was never a partner in, member of, or joint venturer with
Morice (2) Akehurst is not entitled to any fees or other remuneration from Morice’s clients who
had contact with Akehurst (3) all attorneys’ fee divisions will be made under a quantum meruit
determination and (4) Akehurst has no lien or privilege on any attorneys’ fees absent a written
contract with plaintiff and compliance with La. Rev. Stat. Ann. § 37:218.8 Plaintiff further seeks
restitution, damages, and repayment of: (1) all costs, fees and expenses Akehurst expended on
cases not authorized by Morice (2) all accounts receivable that Akehurst allegedly took after she
was fired (3) all accounts receivable that Akehurst allegedly claimed as her own (4) all amounts
collected by Akehurst after June 8, 2005 from former Morice clients who had outstanding
balances with Morice and (5) the excess draw money allegedly taken by Akehurst.9
Defendant argues that this Court should abstain from adjudicating this matter because it
involves issues and funds that are involved in a pending state court matter. Plaintiff responds
that abstention is not appropriate because this case is not parallel to the state court case and it does
not present exceptional circumstances which would require abstention.10
LAW AND ANALYSIS

5

R. Doc. No. 17-1.
Id.
7
Id.
8
R. Doc. No. 1, ¶¶ 61-64.
9
Id. at ¶¶ 65-69.
10
R. Doc. No. 20.
6

2

Abstention is the relinquishment of a federal court's jurisdiction “when necessary to
avoid needless conflict with a state's administration of its own affairs.” Black’s Law Dictionary
(8th ed. 2004). “Abstention from the exercise of federal jurisdiction is the exception, not the
rule.” Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 814 (1976).
“‘The doctrine of abstention ... is an extraordinary and narrow exception to the duty of a District
Court to adjudicate a controversy properly before it.’” Id. (quoting County of Allegheny v. Frank
Mashuda Co., 360 U.S. 185, 188-89 (1959)). “‘Abdication of the obligation to decide cases can
be justified under [the abstention doctrine] only in the exceptional circumstances where the order
to the parties to repair to the state court would clearly serve an important countervailing
interest.’” Id. (quoting Allegheny, 360 U.S. at 188-89).
In Colorado River, the U.S. Supreme Court noted that, generally, “‘the pendency of an
action in the state court is no bar to proceedings concerning the same matter in the Federal court
having jurisdiction....’” Id. at 817 (quoting McClellan v. Carland, 217 U.S. 268, 282 (1910)).
This is because of the “virtually unflagging obligation of the federal courts to exercise the
jurisdiction given them.” Id. at 817-18 (citing England v. Louisiana State Bd. of Medical
Examiners, 375 U.S. 411, 415 (1964)). Accordingly, a court may abstain from a case because of
parallel litigation in state court only under “exceptional” circumstances. Id. at 818.
In order to determine if the Colorado River abstention doctrine applies, the Court must
first inquire into whether the federal and the state actions are parallel. Diamond Offshore Co. v.
A & B Builders, 302 F.3d 531, 540 (5th Cir. 2002), overruled on other grounds by Grand Isle
Shipyard Inc. v. Seacor Marine, LLC, 589 F.3d 778, 788. “A suit is ‘parallel’ when substantially
the same parties are contemporaneously litigating substantially the same issues in another forum,
thus making it likely that judgment in one suit will have a res judicata effect in the other suit.”

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Calvert Fire Ins. Co. v. Am. Mut. Reinsurance Co., 600 F.2d 1228, 1229 n.1 (7th Cir. 1979).
Furthermore, a federal case is parallel when “there is ‘a substantial likelihood that the state
litigation will dispose of all claims presented in the federal case.’” Kenner Acquisitions, LLC v.
BellSouth Telecommunications, Inc., 2007 WL 625833, at * 2 (E.D. La. Feb. 26, 2007) (quoting
Lumen Constr., Inc. v. Brant Constr. Co., 780 F.2d 691, 694 (7th Cir. 1979)).
Second, to determine whether “exceptional” circumstances exist in a given case, courts
have identified six factors that may be considered related to “proper constitutional adjudication
and regard for federal-state relations.” These six factors are: (1) the assumption by either court
of jurisdiction over a res (2) the relative inconvenience of the forums (3) the avoidance of
piecemeal litigation (4) the order in which jurisdiction was obtained by the concurrent forums (5)
to what extent federal law provides the rules of decision on the merits and (6) the adequacy of
the state proceedings in protecting the rights of the party invoking federal jurisdiction. Colorado
River, 424 U.S. at 818-19; Moses H. Cone Mem. Hosp. v. Mercury Const. Corp., 460 U.S. 1, 1826 (1983). No one factor is determinative and all applicable factors must be carefully balanced
in a given case, “with the balance heavily weighted in favor of exercise of jurisdiction.” Moses
H. Cone, 460 U.S. at 16.
DISCUSSION
Assuming, without deciding, that the two cases are parallel, this matter does not present
exceptional circumstances which would warrant Colorado River abstention. The balance of the
six factors used to determine if exceptional circumstances exist weighs heavily against
abstention.

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With respect to the first factor, the Court notes that the state court has jurisdiction over
the disputed funds in Jones.11 However, even though the first factor may indicate that the earlier
court’s jurisdiction over the res favors abstention, “there is no bar to jurisdiction in federal court
in a case ‘based upon diversity of citizenship, wherein the plaintiff seeks merely an adjudication
of his right or his interest as a basis of a claim against a fund in the possession of a state court.’”
Gross v. Weingarten, 217 F.3d 208, 221 (4th Cir. 2000) (quoting Princess Lida of Thurn & Taxis
v. Thompson, 305 U.S. 456, 466 (1939)). Plaintiff seeks a declaratory judgment that Akehurst
“is not entitled to any fees or other remuneration from . . . clients who signed contracts with
[Morice] and who have never had a contract with [Akehurst]” and that Akehurst “has no lien nor
privilege on any attorneys’ fees absent a written contract with the plaintiff and compliance with
La. R.S. 37:218.”12 Accordingly, the first factor does not weigh in favor of abstention.
The second factor also does not weigh in favor of abstention. When determining the
relative inconvenience of the forums, the question is whether the “inconvenience of the federal
forum is so great” that abstention is warranted. Evanston Ins. Co. v. Jimco, Inc., 844 F.2d 1185,
1192 (5th Cir. 1988). As the United States Court of Appeals for the Fifth Circuit has determined,
the central concern of “the inconvenience factor primarily involves the physical proximity of the
federal forum to the evidence and witnesses.” Id. at 1191. The distance between the state court in
Baton Rouge and the federal court in New Orleans is approximately eighty-three miles. The
defendant does not allege that this Court is so far from evidence or witnesses that she is unable to
defend her case. Indeed, the Morice law firm is located in Jefferson Parish.
The third Colorado River factor addresses the problem of piecemeal litigation. Colorado
River, 424 U.S. at 818. As the United States Court of Appeals for the Third Circuit has

11
12

R. Doc. Nos. 17-1, 4.
R. Doc. No. 1, ¶¶ 62, 64.
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determined, “the ‘avoidance of piecemeal litigation’ factor is met . . . only when there is
evidence of a strong federal policy that all claims should be tried in state courts.” Ryan v.
Johnson, 115 F.3d 193 (3rd Cir. 1997). Defendant has failed to identify any such federal policy
in this matter. Accordingly, this factor does not weigh in favor of abstention.
The fourth Colorado River factor, which speaks to the order in which jurisdiction was
obtained, “should not be measured exclusively by which complaint was filed first, but rather in
terms of how much progress has been made in the two actions.” Moses H. Cone, 460 U.S. at 21.
Akehurst intervened in state court action in March 2007.13 Plaintiff filed the present matter in
this Court in September 2010.14 However, as plaintiff concedes, the only progress made in the
state case is the deposit of the disputed attorneys’ fees in the state court’s registry and the setting
of a June status conference.15 Accordingly, the fact that the state court lawsuit was filed before
this lawsuit does not weigh in favor of abstention.
The fifth factor, whether state or federal law will be applied, is generally either a neutral
factor or one that weighs against granting abstention. St. Paul Ins. Co. v. Trejo, 39 F.3d 585, 589,
n. 4 (5th Cir.1994) (citing Moses H. Cone, 460 U.S. at 25). For instance, in Evanston, the U.S.
Fifth Circuit found that, while Louisiana law was controlling in the interpretation of insurance
policies, the district court erred in viewing the absence of a federal law issue as weighing in
favor of dismissal. Evanston, 844 F.2d at 1193. The court reasoned that although the presence of
federal law weighed against abstention, the presence of state law issues “weighs in favor of
surrender [of federal jurisdiction] only in rare circumstances.” Id. As a result, the court found
that the presence of state law issues did not weigh in favor of abstention. Id. This case involves
claims governed by state law.
13

R. Doc. No. 17-2.
R. Doc. No. 1.
15
R. Doc. 17-1.
14

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However, Akehurst does not assert that a “rare circumstance” exists in this case that
would counsel in favor of abstention due to the presence of state law issues. Accordingly, this
factor does not weigh in favor of abstention.
Finally, the sixth Colorado River factor concerns whether the rights of the parties are
adequately protected in state court. Moses H. Cone, 460 U.S. at 26. As with the fifth factor, this
factor is either neutral or weighs in favor of retaining jurisdiction. St. Paul, 39 F.3d at 589, n. 4.
State and federal courts may have parallel jurisdiction and “[a] party who could find adequate
representation in state court is not thereby deprived of its right to the federal forum....” Evanston,
844 F.3d at 1193. In other words, “the fact that both forums are adequate to protect the parties’
rights merely renders this factor neutral on the question of whether the federal action should be
dismissed.” Abell Corp. v. Indus. Risk Ins., 896 F. Supp. 598, 601 (E.D. La. 1995) (quoting
Noonan South, Inc. v. County of Volusia, 841 F.2d 380, 382 (11th Cir. 1988)) (internal quotation
marks omitted). Both the state court and this Court will provide adequate forums to protect the
parties’ rights. Accordingly, this factor is neutral.
CONCLUSION
Accordingly, IT IS ORDERED that Akehurst’s motion to dismiss or, alternatively, to
stay proceedings is DENIED.
New Orleans, Louisiana, June __________ 2011
8th

LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE

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