BOARD OF SUPERVISORS OF LOUISIANA STATE UNIVERSITY v. SOUTHERN ELECTRONICS INC (2018)

ON APPLICATION FOR REHEARING

On June 6, 2018, this Court issued the opinion in the above captioned case along with the Notice of Judgment. The opinion and notice was transmitted by e-mail on June 7, 2018. Southern Electronics, Inc. (hereinafter “Southern Electronics”) filed an application for rehearing on June 21, 2018. Pursuant to Rule 2-18.2, Uniform Rules, Courts of Appeal, applications for rehearing must be filed with the clerk on or before fourteen (14) days after transmission of the Notice of Judgment. Computing the delay from June 7, 2018, we find Southern Electronics' application for rehearing timely. According, we hereby grant the application for rehearing solely for clarification of the $578,384.98 credit issued in our June 6, 2018 opinion.

Southern Electronics' application asserts the Court committed legal error by amending the trial court's judgment to reflect a credit of $578,384.98 to the Board of Supervisors of Louisiana State University and Agricultural and Mechanical College (hereinafter the “Board”). We disagree. Courts have the inherent authority to regulate the practice of law, and thus may inquire as to the reasonableness of attorney's fees as part of that authority. Rivet v. State, Dep't of Transp. & Dev., 2001-0961, p.6 (La. 11/28/01), 800 So.2d 777, 782. (citation omitted). “Attorney's fees have traditionally been regarded as being distinct from the compensation due to the landowner.” Id. The trial court awarded $2,177,500.00 to Southern Electronics for attorneys' fees. In finding the trial court's award reasonable, we reviewed the entire fee structure rather than considering the attorneys' fee award in a vacuum. Initially, Southern Electronics and Sher Garner entered into an hourly billing agreement. Southern Electronics made payments to Sher Garner which totaled $578, 384.98. As of June 15, 2015, when Southern Electronics and Sher Garner entered into the “contingency fee contract,” Southern Electronics had a remaining balance of $1,757,606.25. Under the “contingency fee contract,” Southern Electronics could not be reimbursed any fees previously paid to Sher Garner. Thus, the trial court's judgment of $2,177,500.00 plus the $578,384.98 would result in an award of $2,755,884.98 which excludes any outstanding amount still due under the contract. As the Board asserted in its original brief to this Court, this calculation would result in Sher Garner being awarded fees on fees. Such an award is against public policy. This Court's original opinion applied legal principles regarding the reasonableness and fairness of the attorneys' fee award in this expropriation case. We conducted a thorough review of the fees on the “contingency fee contract,” the fees previously paid by Southern Electronics, and the fees awarded by the trial court, and concluded that the amount would have been an unreasonable and excessive award of attorneys' fees.

Accordingly, we grant the Application for Limited Rehearing filed by Southern Electronics, solely for clarification of the $578,384.98 credit issued in our original opinion. We deny the Motion to Strike portions of Southern Electronics' response to the Court's show cause order; and deny the Motion for Leave to file a reply to Board's opposition to the Application for Limited rehearing.

APPLICATION FOR REHEARING GRANTED; MOTION TO STRIKE DENIED; MOTION FOR LEAVE DENIED; ORIGINAL OPINION AFFIRMED AS CLARIFIED

I concur in the majority's finding that the $2,177,500.00 in attorney's fees awarded by the trial court was excessive. However, I dissent from the majority's calculation of the appropriate award of attorney's fees. There is no legal precedent that directs the Court to arbitrarily deduct an amount of attorney's fees based on the fees previously being paid by the client. As discussed in the original dissent of this matter, that is a violation of the principles of just compensation and the award of attorney's fees in expropriation cases.¹ In accordance with the record, I would award the $1,757,606.25 in attorney's fees that were billed and earned.

FOOTNOTES

1.   Board of Supervisors of Louisiana State University and Agricultural and Mechanical College v. Southern Electronics, Inc., 2017-0722 (La.App. 4 Cir. 6/6/18), 317 So.3d 865 (Belsome, J., dissenting).

Judge Tiffany G. Chase

BELSOME, J., CONCURS IN PART AND DISSENTS IN PART