Juanita Thibodeaux v. Conoco Phillips Co.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

06-1282
consolidated with 06-1429

JUANITA THIBODEAUX, ET AL.

VERSUS

CONOCO PHILLIPS CO., ET AL.

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APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT,
PARISH OF CALCASIEU, NO. 2003-0481,
HONORABLE WILFORD D. CARTER, DISTRICT JUDGE

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MICHAEL G. SULLIVAN
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Oswald A. Decuir, and
Michael G. Sullivan, Judges.

APPEAL DISMISSED.

Randall A. Smith
Smith & Fawer, L.L.C.
201 St. Charles Avenue, Suite 3702
New Orleans, Louisiana 70170
(504) 525-2200
Counsel for Appellants:
Douglas M. Schmidt
Peter Borstell
Law Offices of Douglas M. Schmidt, APLC
Douglas M. Schmidt, APLC

Allen L. Smith, Jr.
Plauche, Smith & Nieset
Post Office Box 1705
Lake Charles, Louisiana 70602
(337) 436-0522
Counsel for Appellee:
Patrick A. Juneau, Jr., Special Master

Richard F. Zimmerman, Jr.
Jennifer A. Hataway
Kantrow, Spaht, Weaver, & Blitzer
Post Office Box 2997
Baton Rouge, Louisiana 70821-2997
(225) 383-4703
Counsel for Appellees:
Plaintiffs’ Steering Committee
Robert H. Schmolke
Calvin C. Fayard, Jr.
Drew A. Ranier

SULLIVAN, Judge.

This is a dispute over the allocation of attorney fees in a class action.

Appellants appeal the trial court’s refusal to approve the payment of attorney fees and

expenses according to an agreement reached among attorneys representing claimants

in the class and the issuance of a preliminary injunction enjoining Appellants from

proceeding in a suit in another court to enforce the fee agreement. Appellees filed a

motion to dismiss this appeal, arguing Appellants’ waived their right to appeal by

acquiescing in the trial court’s order awarding attorney fees.

Facts

The parties to this appeal are attorneys who represented plaintiffs in a class

action suit which was settled. In conjunction with the settlement, a fund for the

payment of attorney fees and expenses was established. During the course of the

litigation, a Plaintiffs’ Steering Committee (PSC) was appointed by the trial court.

The PSC and some attorneys of members of the class entered into agreements among

themselves for the allocation of attorney fees and expenses. Pursuant to that

agreement, Appellants were to receive $4 million in fees. On September 21, 2005,

the trial court held a hearing on the issue of attorney fees. The trial court refused to

approve the fee agreement, finding that it was unreasonable, against public policy,

and unethical because it violated the Rules of Professional Conduct.1 The trial court

then awarded fees as recommended by the court-appointed Special Master which it

deemed reasonable and equitable. It awarded Appellants $2,490,966.67, not the $4

million provided in the fee agreement.

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Rule 1.5(e) of the Rules of Professional Conduct provides:
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.

Appellant Doug Schmidt attended the hearing. He did not object to the

proceeding and accepted the fees awarded to Appellants by the trial court.

Mr. Schmidt signed a Receipt, Release, and Unconditional Acquiescence in Judgment

(Release), which stated in part:

2. . . . (b) Releasor has read and reviewed the Attorneys’ Fees
Order and Judgment and is thus fully aware of the Court’s award of
attorneys’ fees and/or costs to Releasor and/or the Firm, as contained
therein; (c) Releasor and the Firm are bound by all of the terms,
conditions, and obligations contained in the Attorneys’ Fees Order and
Judgment; and (d) Releasor is satisfied that the Court’s award of
attorneys’ fees and/or costs to Releasor and/or the Firm as
contained in the Attorneys’ Fees Order and Judgment is fair and
adequate.

3. Without limiting the foregoing, in consideration of the Court’s
award of attorneys’ fees and/or costs to Releasor and/or the Firm as
contained in the Attorneys’ Fees Order and Judgment, Releasor and the
Firm hereby voluntarily and unconditionally: (a) acquiesce in the
Attorneys’ Fees Order and Judgment and the Court’s award of attorneys’
fees and/or costs to Releasor and/or the Firm, as contained therein, (b)
waive any right to appeal, petition, bring a writ or law suit or
request court review or extraordinary relief from or with respect to
the Attorneys’ Fees Order and Judgment, (c) release and forever
discharge any and all claims for any amounts whatsoever, including,
but not limited to, claims for attorneys’ fees and costs, whether
common benefit or otherwise, arising out of or related to any of the
Releases, whether part of the Class Action and/or the Pending Actions
or in any way related to the Class Action and /or the Pending Actions,
that Releasor and/or the Firm have, or may have had, against any one or
more of the Released Parties, the PSC, . . .

(Emphasis added.)

On November 28, 2005, Appellants filed a lawsuit in the Civil District Court

of New Orleans, in which they asserted claims of breach of contract and unfair trade

practices against members of the PSC. The PSC sought a preliminary injunction to

enjoin Appellants from proceeding with that litigation. After a hearing, the trial court

granted the injunction based on the Release. On November 30, 2005, Appellants filed

this appeal.

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Motion to Dismiss Appeal

Pursuant to La.Code Civ.P. art. 2085, “[a]n appeal cannot be taken by a party

who confessed judgment in the proceedings in the trial court or who voluntarily and

unconditionally acquiesced in a judgment rendered against him.” This court

addressed the dismissal of an appeal where an appellant acquiesced in a settlement

of his claim, stating: “The acquiescence that prohibits an appeal, or destroys it when

taken, is the acquiescence in a decree commanding something to be done or given.

If the thing commanded to be done or given is done or given, there has been

acquiescence in the judgment.” West v. Bruner Health Group, Inc., 03-152, p. 8

(La.App. 3 Cir. 10/29/03), 866 So.2d 260, 267, writs denied, 04-913, 04-935 (La.

6/18/04), 876 So.2d 805, 806 (quoting Times Picayune Publ’g Corp. v. New Orleans

Aviation Bd., 99-237, p. 5 (La.App. 5 Cir. 8/31/99), 742 So.2d 979, 982, writ denied,

99-2838 (La. 12/10/99), 751 So.2d 257).

Appellants sought attorney fees and were awarded attorney fees by the trial

court which they accepted and in conjunction therewith signed the Release. Their

acquiescence to their fee award prohibits this appeal. However, our discussion

cannot end here because Appellants attack the validity of the trial court’s judgments.

Consent

Appellants claim they acted under duress which vitiates their consent to the

acceptance of the fees and the execution of the Release. Louisiana Civil Code Article

1959 provides:

Consent is vitiated when it has been obtained by duress of such
a nature as to cause a reasonable fear of unjust and considerable injury
to a party’s person, property, or reputation.

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Age, health, disposition, and other personal circumstances of a
party must be taken into account in determining reasonableness of the
fear.

Appellants lived and had their offices in the New Orleans area. They urge that they

were so negatively impacted by Hurricane Katrina they were compelled to accept the

trial court’s fee award and execute the Release. Comment (b) to Article 1959

explains that the article contemplates two kinds of duress. One is physical duress; the

other occurs where “a person makes an improper threat that induces a party who has

no reasonable alternative to manifest his assent.” La.Civ.Code art. 1959, Comment

(b).

Some Louisiana courts have held that economic stress does not constitute legal

duress as contemplated by Article 1959. See Sid-Mar’s Rest. & Lounge, Inc. v.

Gardner, 02-1109 (La.App. 5 Cir. 3/25/03), 844 So.2d 178; Aubert v. Entergy Corp.,

00-30 (La.App. 5 Cir. 5/30/00), 762 So.2d 288; Adams v. Adams, 503 So.2d 1052

(La.App. 2 Cir. 1987). However, the supreme court has held that the fear of

economic deprivation can constitute duress which vitiates consent. Wolf v. La. State

Racing Comm’n, 545 So.2d 976 (La.1989); see also, Martco P’ship v. Frazier, 01-72

(La.App. 3 Cir. 6/6/01), 787 So.2d 1196.

In Wolf, the Fair Grounds Corporation, which operated the New Orleans Fair

Grounds race track, required the jockeys, whom it conceded were independent

contractors, to sign contracts in which they agreed to accept workers’ compensation

benefits as their sole remedy for injuries they suffered due to negligence by the

racetrack or the jockeys. By signing the contract, the jockeys also waived the right

to sue the Fair Grounds Corporation. Only jockeys who signed the contract were

allowed to race at the track. The jockeys sought a declaratory judgment declaring the

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contracts invalid because the Fair Grounds Corporation did not have the authority to

require them to sign the contracts and because the contracts were signed under duress.

The supreme court initially determined that the Fair Grounds Corporation did

not have the legal authority to require the jockeys to sign such waivers. The court

then observed that the threat of doing a lawful right is not duress. See La.Civ.Code

art. 1962. However, because the Fair Grounds Corporation exceeded its authority,

requiring the jockeys to sign the contracts constituted duress. The jockeys signed the

contracts only after a protest clause was included, which the court found evidenced

that they acted under duress. The supreme court also observed that the agreement

effectively denied the jockeys the ability to earn an income.

After viewing the evidence as a whole, we do not find that Appellants’ claim

of fear of economic deprivation meets the level of duress required to vitiate their

consent to the Release. They had the option of not accepting the fee awarded and

appealing and/or filing suit to enforce their fee agreement. The trial court did not

threaten that they would not receive a fee or that their fee would in some way be

jeopardized if they did not accept the award on September 21, 2005. Further,

Appellants never voiced concerns to the trial court that their financial situation was

such that they felt compelled to accept the award, even though they did not believe

it was fair or in their best interests.

Due Process

Appellants also claim that their right to due process was violated. They argue

that the trial court erred in conducting the September 21, 2005 hearing to allocate fees

because notice of the hearing was not provided as required by the Code of Civil

Procedure and because they were displaced by Hurricane Katrina. Mr. Schmidt

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appeared in person and represented Appellants at the hearing. He filed a Motion and

Order to Enforce Fee Allocation Agreement and for Stay of Proceedings with a

supporting memorandum prior to the hearing. The motion sought a stay of the

distribution of attorney fees to allow disputes among the attorneys regarding the

distribution to be resolved. Appellants did not seek a stay or continuance of the

hearing because they were displaced by Hurricane Katrina or because participation

in the hearing would be a hardship on them. If Appellants had raised these objections

in the trial court, the trial court would have had the opportunity to continue the

hearing to a later date. Appellants’ failure to inform the trial court of their situation

and request a continuance constituted a waiver of those objections which will not be

considered on appeal. See Lafayette City-Parish Consol. Gov’t v. Francis, 06-235,

p. 4 (La.App. 3 Cir. 6/28/06), 934 So.2d 258, 261, where this court noted:

“Generally, a party’s failure to object to a procedural irregularity is considered to

constitute a waiver to object to the irregularity on appeal.”

Appellants urge that Executive Order KBB 2005-32 and La.R.S. 9:5821-5825,

which codified Executive Orders KBB 2005-32, 48, and 67, mandated that the

hearing be continued. The intent of these provisions was to protect all persons

affected by Hurricanes Katrina and Rita and to “prevent injustice, inequity, and undue

hardship to persons who were prevented by these hurricanes from timely access to

courts and offices in the exercise of their legal rights, . . . .” La.R.S. 9:5821. If

Appellants had requested a continuance of the September 21, 2005 hearing, they

would have been entitled to it. However, they chose to attend the hearing and accept

the trial court’s award of attorneys fees without objection. Under these

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circumstances, neither the Executive Orders nor the cited provisions excuse their

failure to request a continuance before participating in the hearing.

Injunction

Appellants contend that the trial court improperly enjoined their suit for breach

of contract and unfair trade practices regarding their fee agreement. Appellate review

of the issuance of a preliminary injunction is limited. The issuance of a preliminary

injunction is within the sound discretion of the trial court and can be reversed only

if that discretion has been abused or improvidently exercised. Lafayette City-Parish

Consol. Gov’t v. Lafayette Mun. Fire & Police Civil Serv. Bd., 01-1460 (La.App. 3

Cir. 5/8/02), 816 So.2d 977, writ denied, 02-1565 (La. 9/30/02), 825 So.2d 1194.

Appellants argue they had “no recourse but to file a separate suit” against the

individual members of the PSC to enforce their rights under their fee agreement. This

argument ignores the fact that they could have refused the trial court’s fee award and

appealed the matter to this court. Instead, they chose to accept the fee award and left

the courthouse with a check in hand. By accepting the check and signing the Release,

Appellants waived “any right to appeal, petition, bring a writ or law suit . . . with

respect to the Attorneys’ Fees Order and Judgment.” See Release para. 3.

Appellants contend that the Release does not bar their suit because they waived

the right to sue the PSC, which is identified in the Release, but not the individual

members of the PSC, who were not individually identified in the Release. Louisiana

Civil Code art. 24 defines a juridical person as “an entity to which the law attributes

personality, such as a corporation or a partnership. The personality of a juridical

person is distinct from that of its members.” The PSC is not a juridical entity; it is a

group of individual attorneys appointed by the trial court to efficiently control and

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direct the litigation for the benefit of the class. Therefore, suit against the individual

members of the PSC is suit against the PSC.

Appellants attack the grant of the preliminary injunction on the basis that

Appellees did not prove they would suffer irreparable harm as required by La.Code

Civ.P. art. 3601(A). The trial court cited two reasons for granting the preliminary

injunction: 1) Appellants’ suit violated its Order and the Release and interfered with

its continuing jurisdiction over the class action as provided in La.Code Civ.P. art.

594, and 2) Appellants breached an obligation not to file suit as provided in the

Release.

Article 3601 does require an applicant for a preliminary injunction to prove that

he will suffer irreparable injury if the injunction does not issue and that he is entitled

to the relief sought. However, there are exceptions to this requirement. One

exception is where an injunction is sought to enjoin actions clearly contrary to

expressed law. In such situations, a showing of irreparable injury is not necessary.

Galle v. Coile, 556 So.2d 957 (La.App. 3 Cir. 1990); Bossier v. Lovell, 410 So.2d 821

(La.App. 3 Cir.), writ denied, 414 So.2d 376 (La.1982). In Bossier, this court

affirmed the issuance of an injunction to prevent the general partner of a partnership

from violating provisions of the partnership agreement. Having found that the PSC

is not a separate entity from its individual members, we conclude that Appellants

violated the trial court’s Order and the Release by filing suit to enforce the fee

agreement and that the trial court’s issuance of the preliminary injunction was not an

abuse of its discretion.

In support of their contentions, appellants cite statements made by the trial

court and a member of the PSC regarding the expectation of suits being filed over the

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distribution of attorney fees. These comments were made by the trial court and a

member of the PSC while discussing another attorney’s attempt to enforce the fee

agreement. That attorney did not accept the trial court’s fee award. Additionally, the

referenced comments preceded the trial court’s fee award to Appellants and

Appellants’ execution of the Release and acceptance of those fees. The comments

were not made in response to claims by Mr. Schmidt and should not have been

construed by experienced trial attorneys to mean that the Release did not prohibit

them from filing another suit to enforce the fee agreement.

Disposition

For these reasons, this appeal is dismissed at Appellants’ cost.

APPEAL DISMISSED.

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