102 So. 3d 133
La. Ct. App.2012Background
- Breeden sued his former clients Crumes and insurers GICA and CUNA for unpaid legal fees and an accounting related to settlement funds from federal litigation settlement that produced a check never negotiated.
- The Crumeses’ federal case settled with an $11,950 settlement check issued August 30, 2007 payable to Crumeses, Breeden, and CUNA/GICA, which was not cashed or endorsed by anyone.
- Breeden alleges a second undisclosed settlement check was issued to Crumeses with funds shared with a NOME attorney, excluding Breeden.
- GICA and CUNA answered with exceptions of no cause/no right of action, arguing no duties or recordation under La. R.S. 37:218 and lack of a recorded fee contract against third parties.
- The trial court granted GICA’s no cause of action and CUNA’s no right/no cause of action, dismissing Breeden’s petition; Breeden appeals.
- The appellate court affirms, holding no duty or recorded contract against third parties, and notes the issue of party naming was not preserved for review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether GICA and CUNA owed Breeden a duty to pay or account | Breeden states GICA/CUNA violated settlement norms and owed fees. | GICA/CUNA had no recorded fee contract or duty to Breeden as third parties. | No duty; petition fails to state a cause of action. |
| Whether a recorded attorney fee contract is required to bind third parties | Recording not required to enforce contract; custom favored Breeden. | Recordation required for third-party enforcement. | Recordation required for third-party enforceability; none filed. |
| Whether the trial court correctly named the wrong defendants on the judgment | Safeco/Lloyds and CUNA Group were the proper parties. | Names on petition were incorrect; no preservation of this issue. | Issue not reviewable; argument waived. |
| Whether Breeden should be allowed to amend the petition | Amendment could remove grounds of objection. | Could not amend to cure due to lack of 37:218 compliance. | Amendment not permitted; grounds cannot be removed. |
Key Cases Cited
- Hall v. St. Paul Fire & Marine Insurance Co., 868 So.2d 910 (La. App. 5 Cir. 2004) (recordation required to bind third parties; fee contract must be recorded)
- Scott v. Kemper Ins. Co., 377 So.2d 66 (La. 1979) (settlement-related third-party rights; recording of fee agreement)
- Becnel v. Grodner, 982 So.2d 891 (La. App. 4 Cir. 2008) (no affirmative duty on defense attorneys to include payee on check; no fiduciary duty absent special relationship)
- Wingfield v. State, Department of Transportation and Development, 716 So.2d 164 (La. App. 1 Cir. 1998) (no right of action analysis; policy and statutory framework for actions)
- Spellman v. Desselles, 596 So.2d 843 (La. App. 4 Cir. 1992) (no cause of action standards; petition viewed on face of pleadings)