Wiener, Weiss & Madison v. Fox

971 F.3d 511 (5th Cir. 2020)

Free access to 20,000 Casebriefs

Nature Of The Case

This section contains the nature of the case and procedural background.

Facts

Four years after D filed for divorce from her husband, Rosbottom, Jr., the divorce court appointed a receiver to assume control of the couple's community estate, which consisted primarily of 'state-licensed gaming enterprises' that operated in Louisiana (the Community Entities). 'Less than one hour later,' Rosbottom filed for Chapter 11 bankruptcy, transferring the contested property division from Texas family court to federal bankruptcy court. D hired Ps. Ps originally agreed to represent D 'in connection with the [] bankruptcy cases and any and all matters related to those bankruptcy cases' at an hourly rate. Because her assets were tied up in the bankruptcy proceedings, Ps agreed to seek their fees directly from the court, payable from the community estate. On March 1, 2010, the Firms filed a 'Substantial Contributions Application,' seeking more than $1.2 million in fees. The bankruptcy court approved the application, and Ps were paid their $1.2 million, plus interest. Ps proposed a contingency fee agreement for the work left to be done. The agreement assigned Ps up to a 35% interest in the gross proceeds (whether cash or property) that P received for her claims against the bankruptcy estate and as an equity owner of the bankruptcy estate of her husband. P signed the agreement. By 2013, the Community Entities, whose assets had been depleted by Rosbottom's mismanagement, were enjoying a positive cash flow and had satisfied much of their debt. On May 1, 2013, the bankruptcy court approved a proposed Plan of Reorganization for the Community Entities. The Plan granted Fox a 100% interest in ABC Holding, LLC-later renamed Louisiana Truck Stop and Gaming (LTSG)-a holding company comprised of the Community Entities. P could not receive her entire interest until all creditors were paid, Louisiana gaming authorities approved the transfer, and P obtained a final, unappealable divorce decree and community partition. Ps informed Fox that their work was complete and that she had 'to increase the contingency percentage' if she wanted them to stay on. Ps provided her with a revised contingency agreement, which increased Ps' contingency fee to 40% of the gross proceeds, including her proceeds as the full equity owner of LTSG, from the bankruptcy proceedings. P signed the agreement. Ps worked to expedite the Plan's consummation, including by searching for a lender to loan LTSG funds to pay the Community Entities' remaining creditors. Business First Bank ultimately provided two loans to LTSG, which P, exclusively, guaranteed. In early 2016, Ps asked her to execute a new agreement. Ps sought to amend the agreement so that Ps receive 40% of any distributions of property or cash that P receives rather than any outright ownership. Though they had not done so with the previous agreements, Ps recommended that D seek independent legal advice about whether to execute this new, eleven-page contingency agreement. D did just that, and her independent counsel advised against executing the revised agreement. D followed the counsel's advice. Ps filed suit against D for breach of contract and to enforce by specific performance agreement. Ps also raised a quantum meruit claim. D claimed the agreements are 'barred because their fee agreements violate the Louisiana Rules of Professional Conduct' and 'are void due to vagueness and ambiguity.' The district court granted partial summary judgment for Ps, concluding that Rule 1.8(a), which concerns entering into business transactions with clients, did not apply to the agreement. Eventually, the court granted Ps summary judgment and ordered D 'to specifically perform her obligations.' D appealed.

Issues

The legal issues presented in this case will be displayed here.

Holding & Decision

The court's holding and decision will be displayed here.

Legal Analysis

Legal analysis from Dean's Law Dictionary will be displayed here.

© 2007-2025 ABN Study Partner

© 2025 Casebriefsco.com. All Rights Reserved.