EDWIN A. LOMBARD, Judge.
Plaintiff, John D. Sileo, Jr., appeals a judgment of the district court granting a Motion to Enforce Settlement in favor of defendant, Allan Berger & Associates, ordering plaintiff to release a full sum payment of $81,777.69 to attorney Susan Earnest as part of a settlement agreement recited in court related to payment of attorney's fees owed to Ms. Earnest for a previously-settled civil case. For the reasons provided below, we affirm.
This is an appeal from a lawsuit concerning claims for attorney's fees between a law firm and a former attorney employed by the law firm. John D. Sileo, Jr., an attorney licensed to practice law in Louisiana, was hired by Allan Berger & Associates, a professional law corporation, in January 1996. Allan Berger & Associates (AB & A) is owned by Allan Berger, also
On May 26, 2009, the parties' counsel, as well as Mr. Sileo and Mr. Berger personally, appeared before the district court to announce that they had "reached a settlement and compromise" as to all claims between the parties, which included any claims and reconventional demands for wages, reimbursements of fees and costs, damages, and breach of contract. The parties informed the Court of a percentage-based division of fees depending on certain time periods of when a particular case was settled or tried.
The parties further informed the Court that they "have agreed to enter into cross indemnity agreements to protect one another from claims by third-party attorneys who may be entitled to a referral fee ... to our knowledge there are but two of those cases." Mr. Berger and Mr. Sileo personally informed the Court of the two known cases, which were: 1) a matter called Ryan Babineaux; and 2) Brenda L. Argiz-Pipkin, et al v. Auto Auction of New Orleans, L.L.C., filed in Division "F" of the Civil District Court for the Parish of Orleans under Docket No. 01-02557 (the "Pipkin case").
The parties' counsel then began discussing the indemnity agreements on possible unknown third-party attorney fees or referral fees owed. Mr. Herman, counsel for Allan Berger & Associates, stated to the Court:
Mr. Schonekas, counsel for Mr. Sileo, agreed with that sentiment, and the Court acknowledged it as well:
Mr. Sileo then stated that he did not know what Mr. Berger's fee agreement with Ms. Earnest was on the Pipkin case, and sought further clarification, to which Mr. Berger and the Court replied:
Mr. Berger admitted that, at that moment, he did not know what percentage arrangement he had with Ms. Earnest for the Pipkin case. He then suggested that the parties look at their books and get together again to discuss cases in which fees are potentially due to third-party attorneys. Mr. Sileo then stated:
The parties' counsel then reiterated that they would meet later in the week to discuss the indemnification arguments further, but that as to the two known matters, Babineaux and Pipkin, there is no confusion. Mr. Sileo then said:
The district court understood that the by the end of the week, "you all will talk and have an agreement reached as it relates to this indemnity provision by Friday, and then I expect counsel to come and let me know what the agreement is."
The parties did not return to the district court, however, as they instead reached a written settlement agreement resolving all other claims and issues between the parties. The written and signed agreement of August 28, 2009 acknowledged that the parties reached a full and complete compromise resolving all claims against each other, and that the terms of the compromise were placed on record in the May 26, 2009 hearing. It was discovered that AB & A had an agreement with Susan Earnest in which she would receive 33.33% of all total fees earned in the Pipkin case.
Paragraph 5 of the August 28, 2009 written agreement states that "[t]he parties further agree that fees due other attorneys in the cases identified on Exhibit B will be paid prior to the division of the fees due to Berger and Sileo." One of the listed cases in Exhibit B to the written agreement is the Pipkin case, with a case note stating that "Susan Earnest is owed 33.33% of the fee recovered by Allan Berger & Associates."
On March 15, 2010, AB & A filed a Motion to Enforce Settlement "compelling
In response to AB & A's Motion to Enforce Settlement, Mr. Sileo filed Exceptions of Prematurity, No Right of Action, No Cause of Action, and filed a cross Motion to Enforce Settlement Agreement. Mr. Sileo argued that under the settlement agreement of August 28, 2009, the Pipkin settlement is part of a percentage fee division in which he receives 45% of the entire fee, and that Ms. Earnest is only entitled to one-third of the remaining 55% awarded to AB & A. Mr. Sileo also sought to enforce an arbitration provision of the August 28, 2009 agreement.
The matter came for hearing before the district court on October 19, 2010. The trial court denied Mr. Sileo's exceptions for being "no more, no less than a delay tactic," and granted AB & A's Motion to Enforce Settlement. The Court expressed a strong recollection of the May 26, 2009 hearing:
The trial court granted AB & A's Motion to Enforce Settlement, and ordered Mr. Sileo to release onto Susan Earnest $81,777.69, representing 32.5375% of the total fee earned in the Pipkin matter. Mr. Sileo appeals this judgment.
Mr. Sileo, appellant, first argues that the trial court wrongly substituted its own interpretation for that of the August 28, 2009 written agreement regarding the fee owed to attorney Susan Earnest for the Pipkin case. Mr. Sileo further argues that the disagreement should be handled in arbitration according to the August 28, 2009 written agreement.
This Court's recent jurisprudence reveals that we apply the manifest error appellate standard of review to a judgment granting a motion to enforce settlement. Howard v. Louisiana Citizens Property Ins. Corp., 2010-1302, pp. 2-3 (La.App. 4 Cir. 4/27/11), 65 So.3d 697. "The district court made a factual determination that a contract existed between the parties when the court ruled on the motion to enforce settlement agreement. Thus, we apply the manifest error or clearly wrong standard." Id., p. 3, 65 So.3d 697, quoting Rogers v. Mumford, 2008-1144, p. 5 (La.App. 3 Cir. 2/4/09), 6 So.3d 848, 851.
Appellate courts review findings of fact by the trial court judge using the manifestly erroneous or clearly wrong standard of review. Rosell v. ESCO, 549 So.2d 840, 844 (La.1989). "Where there is conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review, even though the appellate court may feel that its own evaluations and inferences are as reasonable." Id.
A compromise is valid if there is a meeting of the minds of the parties as to exactly what they intended when the compromise was reached. Elder v. Elder &
In 2007, the Legislature amended and reenacted the Louisiana Civil Code articles relative to compromise to be comprised of La. Civ.Code arts. 3071-3078. See Acts 2007, No. 138, § 1. Although the articles are new, they were not intended to change the law, but to merely reproduce the substance of the former articles and to clarify and reflect principles contained in the former articles and jurisprudence. See 2007 Official Revision Comments, arts. 3071-3078; City of Baton Rouge v. Douglas, 2007-1153, pp. 4-5 (La.App. 1 Cir. 2/8/08), 984 So.2d 746, 748-49. The Civil Code articles pertinent to the present matter are provided as follows:
Not only does the party seeking to nullify a settlement agreement bear the burden of proof but the law strongly favors compromise agreements between parties. Courts will not invalidate such settlements absent a strong showing that they violate good morals or the public interest because of error, bad faith, or fraud. City of Baton Rouge v. Douglas, p. 5, 984 So.2d at 749. A compromise agreement recited in open court and capable of transcription from the record will be treated as though it were a written contract, and each party acquires the right of judicially enforcing the performance of the agreement even though its substance may later be written in a more convenient form. Trahan v. Coca-Cola Bottling Company United, Inc., 2004-0100, p. 10 (La.3/2/05), 894 So.2d 1096, 1104.
In the matter sub judice, we find that the district court did not commit manifest error in finding that the parties reached a compromise settlement agreement in open court as pertains to the payment of fees to Susan Earnest in the Pipkin matter. Therefore, we affirm the judgment of the district court granting the Motion to Enforce Settlement.
Contracts are formed by the consent of the parties established through offer and acceptance. La. Civ.Code art. 1927. Thus, "before a district court can find the existence of a valid written compromise agreement, it must find an offer and acceptance." Howard v. Louisiana Citizens Property Ins. Corp., p. 9, 65 So.3d 697.
A reading of the transcript of the hearing of May 26, 2009 reveals that the parties had clearly reached an agreement that as to the Pipkin and Babineaux cases, the amount owed to third party-attorneys would be taken "off the top," and that the remaining legal fees would be divided into a percentage arrangement between Mr. Sileo and Allan Berger & Associates. The only uncertainty that was expressed at during the May 26, 2009 hearing pertained to possible cross-indemnity agreements between
As for the Pipkin fee, Mr. Berger did not know the precise percentage arrangement owed to Ms. Earnest on that day standing in court, but it was clear that all persons involved, including the district court, were in agreement that her fee would "come off the top" before the remaining funds would be divided between Mr. Sileo and the Berger firm. This was, as the district court stated, "an agreement, not a suggestion." When seeking clarification, the district court assured appellant numerous times that the "off the top" agreement applied solely and specifically to the Babineaux and Pipkin cases.
At the October 19, 2010 hearing, the district court asked the parties how the fee in the Babineaux matter was dispersed, and the Court was told that the fee owed to the third-party attorney in Babineaux was taken "off the top," and then the remaining percentage was divided between the parties, i.e., "[t]he same way it was articulated in the transcript."
Appellant argues on appeal that the language of the written agreement of August 28, 2009, particularly Exhibit B, shows that the parties agreed that Ms. Earnest would receive one-third of the percentage fee to the Berger firm after the division between himself and AB & A. We disagree. We see no contradiction between the written agreement and the May 26, 2009 agreement. But the evidence on record fully supports an "off the top" agreement as it pertains to the Pipkin matter solely by reviewing the transcript of May 26, 2009. La. Civ.Code art. 3072; Menard v. Sagrera, 2002-0924, p. 4 (La.App. 3 Cir. 2/5/03), 838 So.2d 934, 936.
In support of his exceptions filed in response to the Motion to Enforce Settlement, Mr. Sileo attached a letter dated September 6, 2000 in which Susan Earnest wrote to the Berger firm that "Pursuant to my conversation with Allan, it is my understanding that I will receive a referral fee of 33 and 1/3%... on the above case. That is 33 and 1/3% Allan Berger and Associates total legal fee." At the time of this letter, Ms. Earnest and Mr. Sileo were both employed by AB & A. When Ms. Earnest and Mr. Berger made this agreement, they clearly did not anticipate that ten years later, Mr. Sileo and the firm would become involved in a contentious dispute for legal fees that would reduce the one-third arrangement owed to Ms. Earnest through no fault of her own. The only fair and reasonable course of action, and to meet the true intent of the fee arrangement made between Ms. Earnest and Mr. Berger, is to provide Ms. Earnest her just due legal fee "off the top" exactly in the way the parties agreed to in the hearing of May 26, 2009. The Berger firm and Mr. Sileo, who both also performed legal work on the Pipkin matter, will split the remainder of the fee in accordance with their compromise settlement.
This Court finds that the agreement recited in court on May 26, 2009 constitutes a complete compromise settlement as to the distribution of legal fees owed to Susan Earnest in the Brenda L. Argiz-Pipkin matter. La. Civ.Code 3072. The parties, who were also present at the hearing and attorneys themselves, are considered by this Court to be sophisticated negotiators who clearly and amicably approved the "off the top" fee arrangement. Reynolds v. Paulson, 2003-1884, p. 8 (La.App. 4 Cir. 3/31/04), 871 So.2d 1215, 1220.
The record fully supports the compromise made between the parties, and the compromise does not frustrate the fee arrangement made between Ms. Earnest and the Berger firm on this case. The agreement
The district court judgment granting the Motion to Enforce Settlement, thus requiring plaintiff, John D. Sileo, Jr., to release unto Susan Earnest the full sum of $81,777.69, plus legal interest, is affirmed.
