Insulation Technologies, Inc. v. Industrial Labor and Equipment Services, Inc.

INSULATION * NO. 2020-CA-0263
TECHNOLOGIES, INC.
*
VERSUS COURT OF APPEAL
*
INDUSTRIAL LABOR AND FOURTH CIRCUIT
EQUIPMENT SERVICES, INC. *
STATE OF LOUISIANA
*******

APPEAL FROM
25TH JDC, PARISH OF PLAQUEMINES
NO. 58-672, DIVISION “A”
Honorable Kevin D. Conner, Judge
******
Judge Joy Cossich Lobrano
******
(Court composed of Judge Roland L. Belsome, Judge Daniel L. Dysart, Judge Joy
Cossich Lobrano)

Daniel A. Ranson
Michael D. Peytavin
John J. Danna, Jr.
GAUDRY, RANSON, HIGGINS & GREMILLION, L.L.C.
401 Whitney Avenue, Suite 500
Gretna, LA 70056

COUNSEL FOR PLAINTIFF/APPELLEE

Yvette A. D’Aunoy
Brett M. Dupuy
Tracy Robinson
MIDDLEBERG RIDDLE GROUP
909 Poydras Street, Suite 1400
New Orleans, LA 70112

COUNSEL FOR DEFENDANTS/APPELLANTS

VACATED AND REMANDED

MARCH 24, 2021

JCL In this contract dispute, defendants/appellants, Industrial Labor and

RLB Equipment Services, Inc., J and D Equipment Leasing L.L.C., Joseph’s Holdings,

DLD L.L.C., and Industrial Labor and Equipment Services of Oklahoma, L.L.C.

(collectively, “Defendants”), appeal the October 8, 2019 judgment of the district

court, which awarded damages, statutory penalties, attorney’s fees, and interest to

plaintiff/appellant, Insulation Technologies, Inc. (“Insultech”). Finding that

Defendants were not provided sufficient notice of trial, for the reasons that follow,

we vacate the judgment and remand for further proceedings.

This litigation arises from a Master Service Agreement between Insultech

and Industrial Labor and Equipment Services, Inc. (“ILES”), whereby Insultech, as

subcontractor, agreed to supply certain labor, materials, and equipment for use by

ILES, as contractor, in performance of ILES’ duties under a contract between ILES

and BP America Production Co., Inc. and BP Exploration and Production, Inc.

regarding the BP Oil Response Project MC252. Insultech alleged that ILES failed

to make payments due under the Master Service Agreement. The underlying

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dispute is discussed in this Court’s prior opinion in Insulation Techs., Inc. v. Indus.

Labor & Equip. Servs., Inc., 13-0194 (La. App. 4 Cir. 8/14/13), 122 So.3d 1146.

Insultech subsequently amended its petition to add claims against the

Defendants and their alleged member/manager, Joseph D. Futch (“Futch”).1 In the

amended petition, Insultech alleged that Defendants operated as a single business

enterprise and were liable in solido to Insultech for the unpaid balance, contractual

interest, penalties, and attorney’s fees. On February 12, 2019, the parties, through

counsel, participated in a status conference with the district court where a trial date

of October 7, 2019 was selected. All participating counsel2 received notice of trial.

Thereafter, on April 4, 2019, counsel of record for Defendants (“Defense

Counsel”) filed an ex parte motion to withdraw from representation.3 Defense

Counsel attached to their motion a certificate, representing that they:

… complied with Local Rule 9.13(a) and Article 16, Rule 1.16 of the
rules of Professional Conduct and have notified defendant Industrial
Labor and Equipment Services, Inc. in writing on March 26, 2019 of
the intent of [Defense Counsel] to withdraw and of the status of the
case on the Court’s docket.

Defense Counsel did not attach any certificate concerning their notification

of the other Defendants or attach as exhibits to their motion any written

communication to their former clients.

1
The amended petition likewise added claims against additional defendants, ASG, L.L.C., Kajun
Construction Services, L.L.C., and JDL Investments, L.L.C., but these entities were not cast in
judgment on October 8, 2019, and these entities have not appealed.
2
A dispute exists as to whether Futch received notice of trial. As he was not served with the
notice of judgment, he has not appealed, and adequacy of Futch’s notice of trial is beyond the
scope of this appeal.
3
In their motion, Defense Counsel also requested to withdraw as counsel for Kajun Construction
Services, L.L.C. (a party not cast in judgment herein) and Futch.

2

The district court granted Defense Counsel’s motion on April 18, 2019. No

contradictory hearing was held on the motion to withdraw, and the district court

did not reissue written notice of trial directly to Defendants.

Trial went forward on October 7, 2019, and Defendants did not appear for

trial. On October 8, 2019, the district court rendered judgment in favor of Insultech

and against Defendants and Futch, in solido, “in the amount of $2,594,568.00,

together with interest at a rate of 1.5% per month from April 13, 2011 until paid

and statutory penalties of $389,185.20, attorney’s fees of $65,000.00, and all

taxable costs of court with legal interest from date of judgment.” This appeal

followed.

The narrow issue we must address is whether Defendants were provided

with adequate notice of trial.4 “[I]t is a basic principle of our legal system that a

final judgment cannot be rendered against a party who has not been provided with

proper notice.” Miller v. Crescent City Health Care Ctr., 11-0403, p. 4 (La. App. 4

Cir. 11/9/11), 78 So.3d 219, 221 (quoting Chaney v. Coastal Cargo, Inc., 98-1902,

4
Defendants set forth six assignments of error as follows:

1. The Trial Court Violated the Appellant Companies’ Due Process Rights When
the Court Proceeded to Trial After Allowing the Attorneys to Withdraw in
Violation of District Court Rule 9.13.
2. The Trial Court Erred by Allowing the Trial To Proceed When An Integral Party
Had Not Been Joined And That Party’s Counsel Of Record Was Not Even
Provided Trial Notice.
3. The Trial Court Erred in Finding Appellants J & D Equipment, Joseph’s
Holdings, and ILES of OK Liable In Solido with ILES
4. The Trial Court Erred by Denying Appellants’ Exception of No Cause of Action.
5. The Trial Court Erred in Awarding Penalties.
6. The Trial Court Erred in its Award of Interest.

As the first assignment is dispositive, we pretermit consideration of Defendants’
remaining arguments.

3

p. 4 (La. App. 4 Cir. 1/20/99), 730 So.2d 971, 973). Moreover, “[p]rocedural due

process requires an opportunity to be heard,” and “adequate notice of the hearing is

fundamental.” Miller, 11-0403, pp. 3-4, 78 So.3d at 221 (citations omitted).

Defendants argue that they were deprived of due process because the district

court: (1) improperly allowed Defense Counsel to withdraw ex parte; and (2) failed

to issue written notice of trial directly to Defendants after Defense Counsel

withdrew from representation. Ordinarily, “[t]he question of withdrawal of counsel

largely rests with the discretion of the trial court, and its ruling will not be

disturbed in the absence of a clear showing of abuse of discretion.” Two Canal St.

Inv’rs, Inc. v. New Orleans Bldg. Corp., 16-1306, p. 4 (La. App. 4 Cir. 2/15/17),

212 So.3d 611, 615. However, when a litigant argues that ex parte withdrawal of

counsel infringed upon his due process rights and resulted in inadequate notice of

trial, this is an assignment of legal error, which is subject to de novo review. Casey

v. Casey, 15-1269, p. 5 (La. App. 4 Cir. 6/29/16), 196 So.3d 748, 752.

In resolving questions of proper notice where counsel withdraws, Louisiana

courts look to Rule 9.13 of the Rules of Louisiana District Courts. See Jackson v.

FedEx Corporated Servs., Inc., 14-1153, pp. 5-6 (La. App. 4 Cir. 4/1/15), 165

So.3d 206, 209; D’Aubin v. Pop’s RV Outlet, Inc., 13-0249, pp. 7-8 (La. App. 1

Cir. 2/7/14), 138 So.3d 655, 659; Metro Gaming & Amusement Co. v. Deckbar &

Grill, L.L.C., 07-0546, p. 7 (La. App. 5 Cir. 12/11/07), 972 So.2d 1264, 1268.

Under Rule 9.13(a), “[t]he withdrawing attorney who does not have written

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consent from the client shall make a good faith attempt to notify the client in

writing of the withdrawal and of the status of the case on the court’s docket.”

Rule 9.13(c) likewise provides, in pertinent part:

(c) Any motion to withdraw shall include the following information:
…
(2) If a scheduling order is in effect, a copy of it shall be attached to
the motion.

(3) The motion shall state whether any conference, hearing, or trial is
scheduled and, if so, its date.

(4) The motion shall include a certificate that the withdrawing
attorney has complied with paragraph (a) and with Rule 1.16 of the
Rules of Professional Conduct, Louisiana State Bar Association,
Articles of Incorporation, Art. 16. A copy of the written
communication required by paragraph (a) shall be attached to the
motion.

Additionally, under Rule 9.13(d), the district court may permit an attorney to

withdraw by ex parte motion only under the following circumstances:

(1) The attorney has been terminated by the client; or

(2) The attorney has secured the written consent of the client and of
all parties or their respective counsel; or

(3) A limited appearance, as authorized by Rule 1.2(c) of the Rules of
Professional Conduct and consented to by the client, has been
completed, or

(4) The case has been concluded.

Pursuant to Rule 9.13(e), the district court “may also allow an attorney to

withdraw by ex parte motion if no hearing or trial is scheduled.” Otherwise, Rule

9.13(f) specifies:

If paragraph (d) does not apply, then an attorney may withdraw as
counsel of record only after a contradictory hearing and for good
cause. All parties and the withdrawing attorney’s client shall be

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served with a copy of the motion and rule to show cause why it should
not be granted.

Here, Defense Counsel filed an ex parte motion to withdraw after the status

conference where the trial date was set. However, the record reflects no exhibits

filed in support of the ex parte motion to withdraw. While Defense Counsel

appended a certificate as contemplated in Rule 9.13(c)(4), representing that they

notified only ILES of the status of the case on the court’s docket, that certificate

does not establish notification to any other Defendants, and no written

communication is attached as an exhibit to the ex parte motion. The record shows

no indication that any elements of paragraph (d) were met: Defendants did not

terminate representation, Defendants’ written consent was not obtained,

representation was not a limited appearance, and the case was not concluded.

Paragraph (e) also does not apply because trial was scheduled. In the absence of

the aforementioned factors, paragraph (f) applies, and counsel of record may only

withdraw “after a contradictory hearing and for good cause.” La. Dist. Ct. Rules,

Rule 9.13(f). We therefore find that the district court erred in failing to set the

motion to withdraw for contradictory hearing.

While Insultech contends that notice of trial through Defense Counsel was

sufficient, the record does not support such an argument. When an attorney moves

to withdraw and the district court does not reissue notice of trial to the

unrepresented litigant directly:

… the court must receive reasonable proof that the withdrawing
attorney has notified the client in writing of the trial date. This can be
accomplished by attaching to the motion to withdraw a certified letter
to the client or other evidence indicating the client has received

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unequivocal written notice of trial. If the record demonstrates that a
litigant did not receive notice of trial, then he was denied procedural
due process and fundamental fairness.

Chef Menteur Land Co. v. Sandrock, 11-0497, p. 9 (La. App. 4 Cir. 10/19/11), 78

So.3d 146, 151 (quoting Davis v. Dunn & Bush Const., 01-2472, pp. 3-4 (La. App.

1 Cir. 4/9/03), 858 So.2d 451, 453 (footnotes omitted)). See also D’Aubin, 13-

0249, p. 8, 138 So.3d at 660; Metro Gaming, 07-0546, p. 7, 972 So.2d at 1268.

Insultech argues that the withdrawing attorney’s Rule 9.13(c)(4)

certification that they notified ILES of the trial date is “other evidence indicating

the client has received unequivocal written notice of trial.” We find no law of this

State accepting such a position. While the record contains a copy of an email from

Defense Counsel to Futch regarding withdrawal of representation and the trial date,

this email was attached only to a motion for judgment debtor rule filed after trial.

Nowhere does the record show that such email was before the district court in

support of Defense Counsel’s motion to withdraw or that Defendants

unequivocally received the email.

“[I]f Rule 9.13 is to have any practical force and effect, justice dictates that

any judgment rendered at a trial held after its violation is subject to review for

possible constitutional invalidity, if actual prejudice results to the client.” Casey,

15-1269, p. 7, 196 So.3d at 752 (quoting Spiers v. Roye, 04-2189, p. 13 (La. App. 1

Cir. 2/10/06), 927 So.2d 1158, 1166, opinion set aside in part on reh’g on other

grounds (5/19/06)); Metro Gaming, 07-0546, p. 7, 972 So.2d at 1268. Considering

that trial went forward, no one appeared at trial on Defendants’ behalf, and

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judgment exceeding $3 million was rendered against them in solido, we find actual

prejudice resulted to Defendants.5

Accordingly, as the record lacks evidence that Defendants received

unequivocal notice of trial, the district court erred in proceeding to trial and casting

Defendants in judgment.

Thus, for these reasons discussed herein, we vacate the judgment of the

district court and remand for further proceedings so that Defendants may receive

proper notice in compliance with their due process rights.

VACATED AND REMANDED

5
Contrast Casey, 15-1269, p. 7, 196 So.3d at 752 (finding husband not prejudiced by district
court’s failure to hold Rule 9.13(f) contradictory hearing where husband contemporaneously
objected to attorney’s withdrawal then appeared at child support hearing representing himself
along with advisory attorney, then stated that he did not want a continuance).

8