Ike Spears v. William W. Hall

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.

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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

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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,

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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.

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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.

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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

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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).

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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

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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

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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

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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

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