Harry Rein, J.D. M.D. v. Luke Edwards, LLC

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

05-754

HARRY REIN, J.D. M.D.

VERSUS

LUKE EDWARDS, LLC

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF LAFAYETTE, NO. 20036313
HONORABLE PATRICK L. MICHOT, DISTRICT JUDGE

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MARC T. AMY
JUDGE

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Court composed of Marc T. Amy, Michael G. Sullivan, and Billy Howard Ezell,
Judges.

AFFIRMED.

W. Paul Hawley
The Glenn Armentor Law Corporation
300 Stewart Street
Lafayette, LA 70501
(337) 233-1471
COUNSEL FOR PLAINTIFF/APPELLANT:
Harry Rein, J.D. M.D.

Luke Edwards
Post Office Box 3483
Lafayette, LA 70502
(337) 233-9995
COUNSEL FOR DEFENDANT/APPELLEE:
Luke Edwards, LLC

AMY, Judge.

The plaintiff filed suit, seeking legal fees he asserted were due on an open

account. The defendant filed an exception of res judicata and asserted that the fee

dispute had been resolved through a compromise agreement. The trial court granted

the exception. The plaintiff appeals. For the following reasons, we affirm.

Factual and Procedural Background

The plaintiff, Harry Rein, filed suit against the defendant, Luke Edwards, LLC,

alleging that the latter attorney owed him $66,660.00 in attorney’s fees for work

performed on a medical malpractice case prosecuted by Mr. Edwards, Comb v.

American Medical Group. Mr. Rein asserts that $10,000.00 of the fee was paid,

leaving a balance of $56,660.00. The petition asked that the trial court enter

judgment for the unpaid attorney’s fees, legal interest, and attorney’s fees for pursuit

of the matter.

The defendant filed an exception of res judicata, asserting that the plaintiff had

previously worked with him on three cases, including the Comb matter. The

defendant explained that a settlement was reached in Comb, rendering $166,000.00

in attorney’s fees. According to the defendant, “[i]t was disputed that Plaintiff was

entitled to any attorney’s fees considering his participation, or lack thereof, as

expected in the three (3) cases[.]” The defendant stated that he offered to settle the

issue of disputed attorney’s fees for a total of $10,000.00. He asserts that the offer

was accepted. In support of his argument, the defendant entered into evidence a letter

authored by him and addressed to the plaintiff and a copy of a negotiated check

representing the alleged settlement payment. Thus, according to the defendant, any

dispute for attorney’s fees in the Comb matter is res judicata due to this compromise

of the controversy.

The trial court granted the exception and sustained the defendant’s objection

to various exhibits offered by the plaintiff. The plaintiff’s claim was dismissed. He

appeals and assigns the following as error:

(1) The Trial Judge improperly excluded evidence absolutely crucial
to the case of the Plaintiff in connection with the Exception of
Res Judicata of the Defendant. Said ruling effectively precluded
the Plaintiff from making out his case or even having a complete
record to rely on.

(2) The Exception of Res Judicata was improperly granted as the debt
owed the Plaintiff by the Defendant was fixed by written contract
and was earned at the time of the actual settlement of the case of
Comb, et al v. American Medical Group, et al, in which case the
Defendant had associated the Plaintiff, hence the debt was
liquidated prior to the Defendant declaring that there was a
dispute and the assertions of the Defendant that he was forgiving
a debt of the Plaintiff as part of the consideration are not accurate.

Discussion

The plaintiff’s argument is twofold. First, he argues that the trial court erred

in excluding evidence beyond the correspondence and negotiated check that were

offered into evidence in support of the transaction and compromise argument. He

contends that such an exclusion prevented him from fully presenting his defense to

the exception. Next, the plaintiff argues that if this evidence had been admitted, it

would reveal that the defendant’s basis for his refusal to pay the fee claimed was

without merit.

Res Judicata

We first address the merits of the plaintiff’s contention that the res judicata

exception was improperly granted. Louisiana Civil Code Article 3071, in pertinent

part, defines a transaction or compromise as:

[A]n agreement between two or more persons, who, for preventing or
putting an end to a lawsuit, adjust their differences by mutual consent,

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in the manner which they agree on, and which every one of them prefers
to the hope of gaining, balanced by the danger of losing.

This contract must be either reduced into writing or recited in
open court and capable of being transcribed from the record of the
proceeding.

Thus, Article 3071 requires the presence of two elements for a valid compromise:

“(1) mutual intention of preventing or putting an end to the litigation, and (2)

reciprocal concessions of the parties to adjust their differences.” Trahan v. Coca

Cola Bottling Co. United, Inc., 04-0100, p. 10 (La. 3/2/05), 894 So.2d 1096, 1104.1

Reference to the documents constituting the alleged compromise indicates that

the requirements of La.Civ.Code art. 3071 are fulfilled. First, a letter from the

defendant to the plaintiff, dated March 24, 2003, sets forth the defendant’s offer of

compromise and states:

Dear Harry:

As you may or may not know, in Louisiana, regardless of what an
attorney’s contract is, he can receive no fee which does not correlate
with his level of participation, in a particular case. I discharged you in
this case, for what I believe to be cause which would result in your fee
being valued per quantum mer[u]it.

There is no graceful way to say this, but I do not believe that you
earned $67,000.00 in this case. Rather than going into merits [sic] of my
opinion, I will again suggest that you accept a lesser fee. The alternative
is very easy in and that we can have the presiding judge tell us exactly
what is owed each. If you would prefer to do it this way, please simply
let me know and we can go forward. Alternatively, I am enclosing for
you a check in the amount of $10,000.00, which I am offering to resolve
this claim.

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Also relevant to this proceeding is La.Civ.Code art. 3078, which provides that
“[t]ransactions have, between the interested parties, a force equal to the authority of things
adjudged.” Thus, “a valid compromise may form the basis of a plea of res judicata.” Rivett v. State
Farm Fire Cas. Co., 508 So.2d 1356, 1359 (La.1987).

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I wanted to point out to you that from the beginning advised [sic]
me that your customary fee for participating in a case was 40%. I have
been made [sic] you aware of the contracts which belie this assertion.

Further, the total expenses lost in the Wansley trial was
approximately $40,000.00. I sent you a demand for an amount
significantly less than 40% of the loss in that case. You have chosen not
to reimburse me.

Finally, it is and always was my understanding that your
participation in this case was tied to your participation in both the Beller
and Wansely case.

In any event, please either accept this check, as payment in full of
everything that you might be owed by me, and I will also forgive your
percentage of the loss in the Wansley case. Alternatively, please let me
know that this is not acceptable and we will proceed accordingly.

This letter clearly sets forth the offer of compromise and demonstrates that the parties

will be making reciprocal concessions in order to adjust the stated differences. As

will be seen in the discussion below, the accuracy of the statements regarding the

stated difference is irrelevant in consideration of whether a compromise exists.

Also entered into evidence is a check constituting the remaining crucial

element of the compromise, i.e., mutual intention of terminating the dispute. The

negotiated $10,000.00 check, written from a “Luke Edwards, LLC” account bears the

notation “Lilly Comb - full & final payment.” The back of the check bears the

endorsement “Harry Rein JD MD.” This check, which includes both a notation of full

and final payment and the plaintiff’s endorsement, along with payment of the offer

initially set forth in Mr. Edwards’ March 24th letter, demonstrates that the intention

to terminate the difference was mutual. See Felder v. Ga. Pac. Corp., 405 So.2d 521

(La.1981) (wherein the supreme court found that a written and signed draft containing

a notation of full release of all claims constituted a written acceptance of a settlement

offer).

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Our review of the record reveals support for a determination that the

requirements of La.Civ.Code art. 3071 were satisfied. Accordingly, we find no error

in the trial court’s granting of the exception of res judicata. This assignment lacks

merit.

Exclusion of Evidence

The plaintiff also questions the trial court’s exclusion of evidence he contends

was crucial to his case. The plaintiff’s arguments in this regard challenge the veracity

of the assertions made in the March 24th letter. We point out that, in Trahan, 894

So.2d 1096, the Louisiana Supreme Court explained that the parties’ intent in

confecting a compromise is typically determined from the four corners of the

document. Extrinsic evidence may not be admitted to explain or to contradict the

terms of the document. Id. Rather, in the face of a dispute as to the scope of a

compromise, “extrinsic evidence can be considered to determine exactly what

differences the parties intended to settle, but absent some substantiating evidence of

mistaken intent, no reason exists to look beyond the four corners of the instrument to

ascertain the parties’ intent.” Id. at 1107. Having reviewed the plaintiff’s argument

in support of his attempt to introduce the evidence which was ultimately proffered,

we find no error in the trial court’s determination to exclude the exhibits. The

evidence was an attempt to explain or contradict the terms of the March 24th letter

and, according to Trahan, impermissible. Accordingly, the plaintiff’s argument in

this regard lacks merit.

DECREE

For the foregoing reasons, the judgment of the trial court is affirmed. All costs

of this proceeding are assessed to the appellant, Harry Rein, J.D. M.D.

AFFIRMED.

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