City of Alexandria v. Cleco Corporation
740 F.3d 339
5th Cir.2014Background
- City hired EMS to audit energy contracts; EMS to receive 50% of any recovery.
- City then hired Sharp, Davidson, Brown, and later Hunter to pursue the Cleco suit; Brown had limited utilities experience.
- Contingency contracts: Brown at 10%; Sharp and Davidson jointly at 20%; contract wording treated them as lead counsel.
- Disputes arose over Brown’s dismissal for cause and the proper basis for attorney-fee recovery (quantum meruit vs contingency).
- Settlement negotiations ultimately yielded a final settlement of $50.7 million for the City, with fee disputes continuing post-settlement.
- District court awarded Brown zero, Sharp $700k, Davidson $1.3m; Brown appeals, Davidson and City cross-appeal partially seek equal treatment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Brown was terminated for cause and could recover fees | Brown: firing was wrongful; contract intact; entitled to full value | City: termination for cause; Brown contributed no value | Brown fired for cause; no fee due for zero-value work |
| Whether district court used the proper framework to determine Brown’s fee | Saucier/quantum meruit both applicable; value analysis should be same | Quantum meruit appropriate when contract unenforceable; Saucier not required | District court could apply quantum meruit (or Saucier factors) to assess value; error not reversible on this point |
| Whether Sharp/Davidson contract constituted a joint, indivisible obligation | Contract created a single joint obligation to provide lead counsel | Contract not joint/indivisible; separate roles; performance divisible | Contract created a joint, indivisible obligation; unenforceable; quantum meruit awarded |
| Whether Davidson’s quantum meruit award was proper and reasonable | Award should reflect contingency value and work performed | Award excessive; should follow lodestar | Quantum meruit award of $1.3 million affirmed as proper and reasonable |
Key Cases Cited
- Nabors v. Producers’ Oil Co., 74 So. 527 (La. 1917) (text unambiguously sets out joint obligation; indivisible contract)
- Stockstill v. Byrd, 132 La. 404 (La. 1913) (performance required; no payment without performance)
- Berlier v. A.P. Green Indus., Inc., 815 So.2d 39 (La. 2002) (determines whether joint obligation is divisible or indivisible)
- Williamson v. State Dep’t of Transp. & Dev., 597 So.2d 439 (La. 1992) (quantum meruit factors from Rule 1.5(a))
- Shell Petroleum Corp. v. Calcasieu Real Estate & Oil Co., 170 So. 785 (La. 1936) (contract interpretation principles for clear terms)
- In re Calm C’s Inc., 179 F. App’x 911 (5th Cir. 2006) (harmless error when mischaracterized as quantum meruit)