Greenspoon Marder, P.A. et al v. Andry Law Firm, L.L.C. et al
Filing
26
ORDER & REASONS denying 20 Motion to Dismiss. Signed by Judge Martin L.C. Feldman on 11/13/2013. (caa, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
GREENSPOON MARDER, P.A., ET AL.
CIVIL ACTION
VERSUS
NO. 13-5509
ANDRY LAW FIRM, LLC, ET AL.
SECTION: “F”
ORDER & REASONS
Before the Court is the defendants' motion to dismiss under
Rule 12(b)(6) for failure to state a claim upon which relief can
be granted.
For the reasons that follow, the motion is DENIED.
Background
This
case
involves
the
alleged
breach
of
a
fee-sharing
agreement between two attorneys in different firms. The plaintiffs
allege the following facts in their complaint:
On August 16, 2009, Nell L. Fink sustained catastrophic
injuries when she tripped and hit her head on the jetway while
attempting to board a Southwest Airlines flight from New Orleans to
Los Angeles.
After the accident, Fink retained Jeffrey C. Fox, an
attorney who practices in Florida with the law firm of Greenspoon
Marder, P.A., to represent her.
Because he is not licensed to
practice law in Louisiana, Fox sought local counsel in New Orleans,
and eventually contacted Gibby Andry with The Andry Law Firm, LLC.
Andry agreed to act as cocounsel in Fink's case.
On August 2, 2010, Fink's daughter, Diane Schnauder, acting on
behalf
of
Fink
through
a
power
-1-
of
attorney,
executed
an
"Attorney/Client
Contract,"
in
representation by Fox and Andry.
contract.
two
she
agreed
to
joint
Fox and Andry also signed the
The contract provided for one 40% contingency fee, plus
costs and expenses.
the
which
attorneys
plaintiffs
allege
The contract did not, however, indicate how
would
that
split
Fox
that
and
fee.
Andry
Nonetheless,
agreed
to
split
the
the
contingency fee 50/50, with each entitled to reimbursement of his
own costs and expenses.
On August 3, 2010, Fox sent a letter to
Fink, the client, in which he described the fee-sharing agreement,
advising that "only one attorney's fee will be charged," which
"will be divided equally."
On August 6, 2010, Andry filed a complaint for Fink in Civil
District Court for the Parish of Orleans, against the City of New
Orleans d/b/a Louis Armstrong New Orleans International Airport and
Southwest Airlines Company.
record on the case.
Fox did not enroll as counsel of
The plaintiffs allege that Andry agreed to
copy Fox on all pleadings and correspondence so that Fox would not
need to seek admission pro hac vice.
However, the plaintiffs then allege that Andry failed to keep
Fox informed regarding the progress of the litigation.
The
plaintiffs further allege that when the case settled, Andry not
only failed to inform Fox, but also withheld Fox's share of the
attorney's fee plus his costs and expenses.
Fox only learned of
the settlement by discovering that on March 1, 2012, Andry had
-2-
joined
in
a
motion
and
order
dismissing
Fink's
claims
with
prejudice, "on the grounds that the parties have amicably resolved
their
differences."
The
plaintiffs
specifically
allege
that
Andry's actions breached the terms of both the Attorney/Client
Contract and the apparently oral fee-sharing agreement.
On
August
20,
2013,
Fox
and
Greenspoon
Marder
filed
a
Complaint for Breach of Contract against Andry and The Andry Law
Firm in this Court based on diversity jurisdiction.
In their
complaint, the plaintiffs state the allegations described above,
and also specifically allege that "Greenspoon Marder, P.A., acting
through Jeffrey C. Fox and others, diligently investigated Ms. Nell
L. Fink's August 16, 2009 accident and resulting injuries and
diligently pursued her claims against the City of New Orleans d/b/a
Louis Armstrong New Orleans International Airport and Southwest
Airlines Company."
The original complaint includes claims of
breach of contract, or alternatively, of a joint venture or quantum
meruit.
Attached to the original complaint are two exhibits:
Exhibit A, a copy of the Attorney/Client Contract; and Exhibit B,
a copy of the Joint Motion and Order of Dismissal in the Fink case.
On September 3, 2013, the plaintiffs filed an amended complaint,
naming "Gibby Andry, the Andry Law Firm, LLC" as an additional
defendant, and adding claims of negligence, intentional torts, and
open account.
The defendants now move to dismiss the plaintiffs'
claims under Rule 12(b)(6).
-3-
I.
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows
a party to move for dismissal of a complaint for failure to state
a claim upon which relief can be granted.
Such a motion is rarely
granted because it is viewed with disfavor.
See Lowrey v. Tex. A
& M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997) (quoting Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982)).
In considering a Rule 12(b)(6)
motion, the Court “accepts ‘all well-pleaded facts as true, viewing
them in the light most favorable to the plaintiff.’” See Martin K.
Eby Constr. Co. v. Dall. Area Rapid Transit, 369 F.3d 464 (5th Cir.
2004) (quoting Jones v. Greninger, 188 F.3d 322, 324 (5th Cir.
1999)). But, in deciding whether dismissal is warranted, the Court
will not accept conclusory allegations in the complaint as true.
Kaiser, 677 F.2d at 1050.
Indeed, the Court must first identify
allegations that are conclusory and, thus, not entitled to the
assumption of truth.
(2009).
Ashcroft v. Iqbal, 556 U.S. 662, 678-79
A corollary: legal conclusions “must be supported by
factual allegations.” Id. at 678.
Assuming the veracity of the
well-pleaded factual allegations, the Court must then determine
“whether they plausibly give rise to an entitlement to relief.” Id.
at 679.
“‘To survive a motion to dismiss, a complaint must contain
sufficient factual matter, accepted as true, to state a claim to
-4-
relief that is plausible on its face.’” Gonzalez v. Kay, 577 F.3d
600, 603 (5th Cir. 2009)(quoting Iqbal, 556 U.S. at 678)(internal
quotation marks omitted).
“Factual allegations must be enough to
raise a right to relief above the speculative level, on the
assumption that all the allegations in the complaint are true (even
if doubtful in fact).”
Bell Atl. Corp. v. Twombly, 550 U.S. 544,
555 (2007) (citations and footnote omitted). “A claim has facial
plausibility when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.”
Iqbal, 556 U.S. at 678 (“The
plausibility standard is not akin to a ‘probability requirement,’
but it asks for more than a sheer possibility that a defendant has
acted
unlawfully.”).
This
is
a
“context-specific
task
that
requires the reviewing court to draw on its judicial experience and
common sense.” Id. at 679.
“Where a complaint pleads facts that
are merely consistent with a defendant’s liability, it stops short
of the line between possibility and plausibility of entitlement to
relief.” Id. at 678 (internal quotations omitted) (citing Twombly,
550 U.S. at 557).
“[A] plaintiff’s obligation to provide the
‘grounds’ of his ‘entitle[ment] to relief’”, thus, “requires more
than labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do.”
Twombly, 550 U.S. at
555 (alteration in original) (citation omitted).
In deciding a motion to dismiss, the Court may consider
-5-
documents that are essentially “part of the pleadings.”
That is,
any documents attached to or incorporated in the plaintiff’s
complaint that are central to the plaintiff’s claim for relief.
Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 288 (5th
Cir. 2004) (citing Collins v. Morgan Stanley Dean Witter, 224 F.3d
496, 498-99 (5th Cir. 2000)).
Also, the Court is permitted to
consider matters of public record and other matters subject to
judicial notice without converting a motion to dismiss into one for
summary judgment.
See United States ex rel. Willard v. Humana
Health Plan of Tex. Inc.,
336 F.3d 375, 379 (5th Cir. 2003).
II.
A.
Discussion
Breach of Contract Claims
The defendants first contend the plaintiffs fail to state a
claim for breach of contract.
The defendants argue that the
Attorney/Client Contract contains no provision regarding feesplitting, and that any such arrangement would be impermissible
under Rule 1.5 of the Louisiana Rules of Professional Conduct. The
Court disagrees.
In their complaint, the plaintiffs properly allege that the
parties agreed to jointly represent Fink, and to split the 40%
contingency fee equally plus reimbursement for each attorney's own
costs and expenses.
The plaintiffs properly allege the defendants
breached these agreements by failing to turn over Fox's portion of
the fee plus his costs and expenses after the Fink case settled.
-6-
Importantly,
the
plaintiffs
claim
breaches
of
both
the
Attorney/Client Contract, and a separate fee-splitting agreement.
Accordingly, the defendants' contention that the Attorney/Client
Contract contains no fee-splitting provision fails.
Moreover, the
Attorney/Client Contract explicitly provides that Fox and Andry
would jointly represent Fink, but would charge her only one 40%
contingency fee.
Additionally,
despite
the
defendants'
contention
to
the
contrary, the plaintiffs have not alleged conduct violating Rule
1.5.
Rule 1.5(e)(1) provides:
"A division of fee between lawyers
who are not in the same firm may be made only if 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."
The plaintiffs allege full compliance with
this Rule. The complaint explicitly states that Fink agreed to the
joint representation in the Attorney/Client Contract, and that Fox
then advised Fink that the attorney's fee would be "divided
equally" in a letter.
The plaintiffs clearly allege sufficient
factual matter to state plausible claims for breach of contract.
The defendants are therefore not entitled to dismissal of those
claims.
B.
Joint Venture/Quantum Meruit Claims
The defendants next contend the plaintiffs fail to state
claims under the joint venture and quantum meruit theories.
-7-
The
defendants
contend
there
was
no
joint
venture
because
the
plaintiffs do not claim they were actively involved in the Fink
case and remained responsible to the client, and that there is no
basis for recovery under quantum meruit because the plaintiffs do
not allege they performed any substantive work on the case.
The
Court rejects these contentions.
The Louisiana courts have used both the theories of a joint
venture and quantum meruit to resolve fee-sharing disputes between
two attorneys.
See, e.g., Dukes v. Matheny, 878 So. 2d 517, 520
(La. App. 1 Cir. 2004).
Where the attorneys were jointly involved
in the representation of a client, the courts will divide the fee
equally.
Id.
The finding of a joint involvement requires "that
neither attorney has been discharged and that both were actively
involved in the case and remained responsible to their client."
Id. In the absence of a joint venture, the courts have apportioned
the fee based on quantum meruit.
Id.
Here, the plaintiffs allege on the face of their complaint
that "Greenspoon Marder, P.A., acting through Jeffrey C. Fox, and
others, diligently investigated Ms. Nell L. Fink's August 16, 2009
accident and resulting injuries and diligently pursued her claims
against the City of New Orleans d/b/a Louis Armstrong New Orleans
International
Airport
and
Southwest
Airlines
Company."
The
plaintiffs clearly allege active involvement in the case, and there
is
no
indication
that
they
were
-8-
ever
discharged
by
Fink
or
otherwise relinquished responsibility to her prior to settlement.
The plaintiffs allege sufficient factual matter to state plausible
claims of a joint venture or quantum meruit.
Accordingly, the
defendants are not entitled to dismissal of those claims.
C.
Tort Claims
The defendants next contend the plaintiffs fail to state a
claim in tort. The defendants maintain that the plaintiffs fail to
allege both duty and cause in fact.
Once again, the Court
disagrees.
Under Louisiana law, legal responsibility in tort claims is
determined under a duty/risk analysis, which requires the plaintiff
to prove: (1) duty, (2) breach, (3) cause in fact, and (4) actual
damages.
2008).
Becnel v. Grodner, 982 SO. 2d 891, 894 (La. App. 4 Cir.
Contrary to the defendants' contentions, the plaintiffs
specifically allege both duty and cause in fact.
The original
complaint states that: "The Andry Law Firm, LLC, and Gilbert V.
Andry, IV owed and continues to owe Greenspoon Marder, P.A. and
Jeffrey C. Cox a fiduciary duty and the duty of good faith and fair
dealing, all of which the Andry Law Firm and Gilbert V. Andry, IV
breached and violated to the detriment of Greenspoon Marder P.A.,
and Jeffrey C. Fox."
Additionally, the amended complaint states
that "the Andry Defendants breached duties, standards of care, and
obligations they owed to Fox/Greenspoon Marder, P.A. by engaging in
a negligent pattern of acts and omissions," and then continues to
-9-
outline those acts and omissions, and specifies that "[a]s a result
of
these
negligent
acts
and
omissions,
no
portion
of
the
contingency fee earned from the settlement of the Action was paid
or tendered to Fox/Greenspoon Marder, P.A., nor was Fox/Greenspoon
Marder,
P.A.
expenses."
reimbursed
for
their
out-of-pocket
costs
and
The amended complaint then states a similar claim
regarding intentional acts and omissions. Moreover, the defendants
concede that, under Louisiana law, a duty arises through a joint
venture, which this Court has already decided the plaintiffs
properly allege.
1943).
See McCann v. Todd, 14 So. 2d 469, 471 (La.
The plaintiffs plainly allege sufficient factual matter to
support their tort claims.
Accordingly, those claims cannot be
dismissed under Rule 12(b)(6).
D.
Open Account Claim
The defendants also contend the plaintiffs fail to state a
claim on open account. The defendants maintain that the attorney's
fee is clearly in dispute, is not due and payable, and that it
arises out of a contractual obligation and not an open account.
The defendants contend the plaintiffs claims cannot be based on an
open account because the plaintiffs "do not allege that there was
any line of credit" or that "any agreement between Plaintiffs and
Defendants was open to future modification" or that "services were
recurrently granted over a period of time."
The defendants also
contend the plaintiffs' claims are for a contingency fee, which is
-10-
not an open account under Louisiana law.
See Jumonville v. White,
992 So. 2d 1044, 1048 (La. App. 1 Cir. 2008).
The Court again
disagrees.
La. R.S. 9:2781(D) provides that an "'open account' includes
any 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."
La. R.S. 9:2791(D).
The statute further
provides that an "'[o]pen account' shall include debts incurred for
professional services, including but not limited to legal and
medical services."
Id.
In their complaint, the plaintiffs allege
a past-due debt for legal services. Although the plaintiffs do not
allege a line of credit, expected future dealings, or multiple
transactions, they are not required to do so under Louisiana law.
Moreover, the plaintiffs' claims do not concern the contingency fee
provision but, rather, the fee-sharing agreement. Accordingly, the
defendants are not entitled to dismissal of this claim.
E.
Prescription
Finally, the defendants contend the plaintiffs' claims have
prescribed.
According to the defendants, this action is governed
by Louisiana Civil Code article 3494, which provides a three-year
prescriptive period for actions for the recovery of professional
services rendered.
Under article 3495, this period commences to
run on the date payment became exigible, which, according to the
-11-
defendants, was the last date the plaintiffs allege they performed
any services in the Fink case.
See Breeden v. Winfrey, 16 So. 3d
1176, 1178 (La. App. 4 Cir. 2009).
The defendants maintain that
date is August 17, 2010, the date the plaintiffs allege that Fox
received an email from The Andry Law Firm saying that it was not
necessary for him to enroll as counsel of record and that the firm
would copy him on all correspondence and pleadings.
The Court
rejects this contention.
Payment in this case could not have become exigible until the
Fink case settled.
Sanders v. Ryland, 651 So. 2d 863, 864 (La.
App. 3 Cir.), rev'd on other grounds by 656 So. 2d 983, 984 (La.
1995).
to
Before that date, neither party in this case was entitled
fees.
The
counterintuitive.
defendants'
contention
to
the
contrary
is
Moreover, the defendants' contention that the
three-year prescriptive period applies flies in the face of their
earlier assertion that the plaintiffs do not allege that payment is
past-due.
See La. Civ. Code art. 3494.
According to that earlier
assertion, the ten-year prescriptive period for contracts should
apply.
See La. Civ. Code art. 3499 ("a personal action is subject
to a liberative prescription of ten years"); Broussard, Bolton,
Halcomb & Vizzier v. Williams, 796 So. 2d 791, 795 (La. App. 3 Cir.
2001) (fee dispute between two attorneys is governed by the tenyear prescriptive period for contracts). Under either prescriptive
period, however, this action is timely.
-12-
The defendants therefore
are
not
entitled
to
dismissal
based
on
prescription.
See
Washington v. Allstate Ins. Co., 901 F.2d 1281, 1283 (5th Cir.
1990)(Rule 12(b)(6) encompasses dismissal based on prescription).
Although the plaintiffs are prepared to again amend their
complaint to include over six pages of additional specific factual
allegations, the Court finds further amendment is unnecessary. The
plaintiffs already pleaded sufficient factual content to support
all of their claims.1
Iqbal, 556 U.S. at 678.
Accordingly, the
defendants' motion to dismiss under Rule 12(b)(6) is DENIED.
New Orleans, Louisiana, November 13, 2013
______________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE
1
Quite obviously, plaintiffs have competently pleaded
sufficiently to pass this first procedural hurdle. Proof of the
merits of their claims presents an entirely different issue.
-13-
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?