24-50807
Bankr. W.D. La.May 21, 2025Background
- In December 2022 and January 2023, Quality Wholesale & Supply, Inc. sold equipment to Superior Contract Cleaning, Inc., later invoicing over $1 million, of which only $225,000 was promptly paid.
- Quality obtained a state court judgment against Superior for $384,945.88, plus judicial interest and unspecified attorneys’ fees/costs, after the debtor failed to oppose summary judgment.
- Superior made post-judgment payments totaling $20,000, reducing the balance, then filed for bankruptcy after unsuccessful efforts to halt enforcement of the judgment.
- Quality filed a bankruptcy proof of claim for $610,580.31, including interest and attorneys’ fees; Superior objected, arguing the claim should be disallowed or subordinated due to lack of specificity in the award of attorneys' fees.
- The Bankruptcy Court allowed Quality’s claim for the reduced principal plus judicial interest but disallowed attorney’s fees and subordination; Superior appealed and sought a stay pending appeal.
- The court denied the stay, finding Superior failed to meet any of the applicable legal standards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of claim based on judgment lacking sum certain for attorneys’ fees | Judgment is legally deficient, so no claim should be allowed | Judgment valid for principal/interest, only fees portion invalid | Claim allowed to extent of principal and interest; fees not allowed |
| Entitlement to stay pending appeal | Stay needed because appeal likely to succeed and injury will result | Stay not justified, no likelihood of success or irreparable injury | Stay denied; none of four factors for stay are satisfied |
| Effect of failure to specify fees in state judgment | Entire judgment is void without specific attorney fee award | Only award of fees is void; rest of judgment stands | Only unspecified fee portion is invalid, not the whole judgment |
| Subordination of Quality’s claim | Claim should be subordinated to other creditors | No grounds for subordination; claim is valid | Subordination denied |
Key Cases Cited
- Monster Rentals, LLC v. Coonass Const. of Acadiana, LLC, 162 So. 3d 1264 (La. Ct. App. 2015) (judgment not void for failing to specify attorney's fee amount, only fee portion invalid)
- Opelousas Auth. v. Toldo, 773 So. 2d 294 (La. Ct. App. 2000) (amending a final judgment to add sum certain for attorney's fees is an invalid substantive amendment)
- Villaume v. Villaume, 363 So. 2d 448 (La. 1978) (judgment may not be substantively amended except by new trial or appeal)