Rex Townsley v. Quality Marine Services, Inc.

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

07-283

REX TOWNSLEY AND J. MAC MORGAN

VERSUS

QUALITY MARINE SERVICES, INC. AND INDEMNITY
INSURANCE COMPANY OF NORTH AMERICA

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APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT
PARISH OF CALCASIEU, DOCKET NO. 2005-3843
HONORABLE RICK BRYANT, DISTRICT JUDGE

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SYLVIA R. COOKS
JUDGE
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Court composed of Sylvia R. Cooks, Glenn B. Gremillion, and James T. Genovese,
Judges.

AFFIRMED.

Rex D. Townsley
The Townsley Law Firm
3102 Enterprise Boulevard
Lake Charles, Louisiana 70601
(337) 478-1400
COUNSEL FOR APPELLANTS:
Rex D. Townsley and J. Mac Morgan

J. Mac Morgan
Law Office of Mac Morgan
4650 Nelson Road, Suite 415
Lake Charles, LA 70605
(337) 474-7143
COUNSEL FOR APPELLANTS:
Rex D. Townsley and J. Mac Morgan

Carl T. Conrad
Henderson, Reilly & Boudreaux
300 Lafayette Street
Houma, LA 70360-4368
(985) 868-2081
COUNSEL FOR APPELLEES:
Quality Marine Services, Inc. and Indemnity Insurance Co.

COOKS, Judge.

This litigation began with Gerard Bollich filing a maritime personal injury suit

against Quality Marine Services, Inc. and its insurer, Indemnity Insurance Company

of North America. Bollich was represented by appellants, Rex Townsley and J. Mac

Morgan. A settlement was reached in mediation, which was reduced to writing at the

completion of the mediation by counsel for Bollich. A Receipt, Release, and

Indemnity Agreement, which incorporated the provisions of the agreed upon

settlement, was then prepared and signed by the parties. The litigation in federal

court was then dismissed.

At issue in this matter was the settlement’s provision that $100,000 be set aside

in an escrow account “to fund medical expenses related to GERARD BOLLICH’s

lumbar spine surgery that has been recommended by Dr. Clarke Gunderson.”1 The

“Receipt, Release, and Indemnity Agreement” further provided that “[t]he funds

deposited in the escrow account must be utilized by GERARD BOLLICH within

eighteen months from the date of June 3, 2005, or by December 3, 2006, or the funds

will revert to Quality Marine Services, Inc., and its underwriters and insurers.”

On July 7, 2005, in accordance with the terms of the release agreement, Quality

Marine deposited $100,000 into an escrow account. On July 8, 2005, Mr. Bollich’s

attorneys, Townsley and Morgan, made demand on Quality Marine for their 40%

contingency fee on the $100,000 portion of the settlement in the escrow account.

Quality Marine refused to pay.

Townsley and Morgan then filed a “Petition for Enforcement of Attorney’s Fee

Lien” seeking said payment. In response to the petition, Quality Marine filed a

1
The settlement also provided that Mr. Bollich receive an immediate payment of
$600,000.00.

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motion for summary judgment asking that the claims of Townsley and Morgan be

dismissed. Both Townsley and Morgan filed their own motions for summary

judgment declaring “they were entitled to their 40% contingency fee on the $100,000

of the settlement between defendants and Gerard Bollich.” Two hearings were held

on the motions. After the first hearing, held on December 1, 2005, the trial court

ruled that the $100,000 would remain in escrow to be drawn upon by Mr. Bollich as

his future medical care would necessitate without any deduction of attorney fees. The

funds were never used by Mr. Bollich. On December 4, 2006, the trial court held the

second hearing, at which the following discussion took place:

THE COURT
. . . There was a Motion for Summary Judgment in this matter
filed by plaintiffs’ counsel in this matter, seeking 40 percent of a
contingency fee contract of a hundred thousand dollars in a settlement.
That hundred thousand dollars was set aside for future medical
expenses. The argument being that the future medical expenses, that
hundred thousand dollars would either go, (A) to the victim in this case,
whom the plaintiffs’ attorneys represent, or (B) if it’s not used, then it
would revert back to the insurance company. Under either theory, I find
that the Court cannot award 40 percent of that sum, since under neither
scenario was it listed in the contract that that particular sum should go
back to the - - or the 40 percent may come out of the total amount. But
this specific amount, it can’t come out of the specific one hundred
thousand dollars since it’s already been detailed as to where that money
would go, and the plaintiffs would certainly have to seek any type of
reimbursement from their client, but it wouldn’t - - it could not come out
of this particular fund. So the Court is going to deny the plaintiff
attorneys’ Motion for Summary Judgment at this point.

MR. BOUDREAUX:
Your Honor, may it please the Court, I - -

THE COURT:
You need to get by a microphone if you want to do it in court.

MR. BOUDREAUX:
Your Honor, I am Barry Boudreaux here, and I’m representing
Quality Marine and its insurance carrier. I believe if I am correct, there
was a cross motion for summary judgment. I could be mistaken, but I
think there were two motions perhaps before the Court. It’s been - - I
think we waited the 18th-month [sic] period, under the contract, for the
plaintiff to have whatever medical treatment he was going to have, but

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I just wanted the Court to, if you could, check the record and see if I am
correct on that. I understand your ruling.

THE COURT:
Well, if that 18th-month [sic] period of time has elapsed, if you
will present a judgment to me - - in the motion - - in the judgment itself,
point out that the 18th-month [sic] period of time has - - I’m not going to
check it myself, - -

MR. BOUDREAUX:
I understand.

THE COURT:
- - but you can certainly file it, and then the Court will sign it and
grant it, based on that factor. I think I left it open for 18 months to see
if the money was being used for future medical. If not, it would, in fact,
revert back. And the Court would order, and the motion by Defense,
that if the money has not been used, as was set out in the contract, in that
18th-month [sic] period of time, that it would be returned to the insurance
company. And I will sign a judgment when presented to me.

On January 9, 2007, the trial court signed a judgment dismissing the motion for

summary judgment filed by Townsley and Morgan. On January 29, 2007, the trial

court signed a judgment granting Quality Marine’s motion for summary judgment.

Townsley and Morgan have appealed.

ANALYSIS

In Hines v. Riceland Drilling Co., 04-503, pp. 3-4 (La.App. 3 Cir. 9/29/04),

882 So.2d 1287, 1289-90, writ denied, 04-2705 (La. 1/07/05), 891 So.2d 681, this

court set forth the law applicable to the appellate review of summary judgments,

stating as follows:

In Independent Fire Insurance Co. v. Sunbeam Corp., 99-2181,
99-2257, p. 7 (La. 2/29/00), 755 So.2d 226, 230-31, the Louisiana
Supreme Court discussed the standard of review of a summary judgment
as follows:

Our review of a grant or denial of a motion for
summary judgment is de novo. Schroeder v. Board of
Sup’rs of Louisiana State University, 591 So.2d 342
(La.1991). A motion for summary judgment will be
granted “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the

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affidavits, if any, show that there is no genuine issue as to
material fact, and that the mover is entitled to judgment as
a matter of law.” La. C.C.P. art. 966(B). This article was
amended in 1996 to provide that “summary judgment
procedure is designed to secure the just, speedy, and
inexpensive determination of every action. . . . The
procedure is favored and shall be construed to accomplish
these ends.” La. C.C.P. art. 966(A)(2). In 1997, the article
was further amended to specifically alter the burden of
proof in summary judgment proceedings as follows:

The burden of proof remains with the movant. Thereafter,
if the adverse party fails to produce factual support
sufficient to establish that he will be able to satisfy his
evidentiary burden of proof at trial, there is no genuine
issue of material fact. La. C.C .P. art. 966(C)(2).

Hines, 882 So.2d at 1289-90. Thus, we must undertake a de novo
review of the summary judgment.

The facts in this case are not in dispute. The “Receipt, Release, and Indemnity

Agreement” signed by both sides clearly reflects the intent of the parties to return the

funds in escrow to Quality Marine if not utilized for future medical expenses by

December 3, 2006. The relevant provision provides:

a) Quality Marine Services, Inc., and its underwriters agree to deposit
$100,000 in an escrow account to fund medical expenses related to
GERARD BOLLICH’s lumbar spine surgery that has been
recommended by Dr. Clarke Gunderson, for injuries sustained on June
29, 2003. The funds deposited in the escrow account must be utilized
by GERARD BOLLICH within eighteen months from the date of June
3, 2005, or by December 3, 2006, or the funds will revert to Quality
Marine Services, Inc., and its underwriters and insurers.

This provision clearly does not provide for payment of a 40% contingency fee to Mr.

Bollich’s attorneys. The provision also clearly established a suspensive condition

which Mr. Bollich was required to meet before utilizing the funds. The potential

payment of the $100,000 placed in the escrow account was conditioned upon Mr.

Bollich submitting to a specific medical procedure. Absent such, the agreement

unambiguously provides that the funds “will revert” to Quality Marine and its

underwriters and insurers. The placement of $100,000 in the medical expenses

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escrow account did not create an unconditional payment to Mr. Bollich for which his

attorneys were entitled to receive 40% of in fees. The escrow account created a

conditional obligation, which could only be triggered by Mr. Bollich undergoing

spinal surgery, which he chose not to do. “A conditional obligation is one dependent

on an uncertain event.” La.Civ.Code art. 1767. “If the obligation may not be

enforced until the uncertain event occurs, the condition is suspensive.” Id. “If the

condition is that an event shall occur within a fixed time and that time elapses without

the occurrence of the event, the condition is considered to have failed.” La.Civ.Code

art. 1773. Since Mr. Bollich’s right to the escrow account never materialized, his

attorneys cannot claim any right to fees on that amount. The trial court’s grant of

Quality Marine’s motion for summary judgment and its denial of Townsley’s and

Morgan’s motion for summary judgment were correct.

DECREE

For the above reasons, the judgments appealed from are affirmed. All costs of

this appeal are assessed to appellants, Rex Townsley and J. Mac Morgan.

AFFIRMED.

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