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CEH Energy, LLC, v. Kean Miller LLP

United States District Court, E.D. Louisiana

February 7, 2018

CEH ENERGY, LLC ET AL.
v.
KEAN MILLER LLP ET AL.

          SECTION "L" (2)

          ORDER & REASONS

         Before the Court is Plaintiffs' Motion for Reconsideration. R. Doc. 47. Defendants oppose the motion. R. Doc. 53. Having considered the parties' submissions and the applicable law, the Court now issues this Order & Reasons.

         I. BACKGROUND

         This lawsuit arises from the representation by Defendants of Plaintiffs who are investors in Louisiana oil prospects. Plaintiff CEH Energy, LLC (“CEH Energy”) is a Delaware corporation, wholly owned and created by Plaintiff Shenzhen Careall Investment Holdings Group Co., Ltd. (“Careall”), for the purpose of investing in Louisiana oil prospects. R. Doc. 1 at 1-2. Plaintiffs invested a total of $2.1 million in two oil prospects. R. Doc. 1 at 5. The oil prospects were owned by Intrepid Drilling, LLC (“Intrepid”), which is owned by Bill Simmons. R. Doc. 1 at 2. Plaintiffs allege that the investments were fraudulent. R. Doc. 1 at 25-26. Plaintiffs filed a lawsuit in federal court in Mississippi against Intrepid and Bill Simmons claiming that these defendants failed to disclose material omissions, including a $205 million outstanding RICO judgment, and defrauded Plaintiffs. R. Doc. 1 at 5, 10-11.

         Defendants in the present lawsuit are Kean Miller LLP (“Kean Miller”) and Stephen Hanemann. R. Doc. 1. Stephen Hanemann is a partner at Kean Miller. R. Doc. 1 at 3. Stephen Hanemann was engaged by Plaintiffs, at the suggestion of Bill Simmons, to represent them regarding their investments in Louisiana oil prospects. R. Doc. 1 at 2-3. Plaintiffs allege that Kean Miller and Stephen Hanemann already were, and had been, representing Intrepid and Bill Simmons. R. Doc. 1 at 4. Plaintiffs allege that Kean Miller and Stephen Hanemann had a conflict of interest, failed to disclose material omissions regarding the investment, and breached their fiduciary duties. R. Doc. 1 at 5-6, 30.

         Plaintiffs claim that had they known about the conflict of interest they would have hired different counsel. R. Doc. 1 at 7. Plaintiffs further allege that competent counsel would have discovered and/or disclosed the judgments against Intrepid and Bill Simmons, and Plaintiffs, had they been so informed, would not have made the oil prospect investments. R. Doc. 1 at 7. Plaintiffs bring the following claims against Kean Miller and Stephen Hanemann: breach of fiduciary duty, conspiracy, conversion, negligent misrepresentation, unjust enrichment, violation of Louisiana Unfair Trade Practices Act (“LUTPA”), detrimental reliance, and fraud. R. Doc. 1 at 39-48. Plaintiffs request damages in the amount of their investment as well as attorney fees. R. Doc. 1 at 39-48.

         On November 20, 2017, the Court granted Defendants' motions to dismiss Plaintiffs' claims with prejudice. R. Doc. 45. The Court held that all of Plaintiffs' claims were perempted under La. R.S. 9:5605 or if they fell under the statute's fraud exception were prescribed under Article 3492. R. Doc. 45. Judgment was entered for Defendants on November 21, 2017. R. Doc. 46. Plaintiff now moves the Court to reconsider its Order and Judgment. R. Doc. 47.

         II. PENDING MOTION

         Plaintiffs move the Court to reconsider under Rule 59(e). R. Doc. 47-1 at 1. First, Plaintiffs argue that this Court's decision is at odds with Judge Morgan's ruling in In re: Queyrouze, et al., 2017 WL 5185426 (E.D. La. Nov. 8, 2017). R. Doc. 47-1 at 2. Second, Plaintiffs argue that the Court relied on bad law. R. Doc. 47-1 at 1. Third, Plaintiffs argue that the Fifth Circuit's ruling in Gerdes v. Estate of Cush, 953 F.2d 201 (5th Cir. 1992), dictates reconsideration in this case. R. Doc. 47-1 at 6. Finally, Plaintiffs argue that public policy favors finding a ten-year prescriptive period for breach of fiduciary duty claims against attorneys. R. Doc. 47-1 at 10. Defendants oppose Plaintiffs' motion. R. Doc. 53.

         III. LAW & ANALYSIS

         a. Standard of Review

         Motions asking a court to reconsider an order are generally analyzed under the standards for a motion to alter or amend a judgment pursuant to Rule 59(e) or a motion for relief from a judgment or order pursuant to Rule 60(b). See Hamilton Plaintiffs v. Williams Plaintiffs, 147 F.3d 367, 371 n. 10 (5th Cir. 1998). Rule 59(e) governs when the motion is filed within 28 days of the challenged order. Fed.R.Civ.P. 59(e). Because Plaintiffs' motion was filed within 28 days of entry of the Order & Reasons it challenges, the Court treats the motion as one pursuant to Rule 59(e).

         A Rule 59(e) motion “is not the proper vehicle for rehashing evidence, legal theories, or arguments that could have been offered or raised before the entry of judgment.” Templet v. HydroChem Inc., 367 F.3d 473, 479 (5th Cir. 2004) (citing Simon v. United States, 891 F.2d 1154, 1159 (5th Cir. 1990)). Rather, Rule 59(e) serves the narrow purpose of correcting manifest errors or law or fact, or presenting newly discovered evidence. Lavespere v. Niagra Mach. & Tool Works, Inc., 910 F.2d 1667, 174 (5th Cir. 1990); Templet, 367 F.3d at 479. “‘Manifest error' is one that ‘is plain and indisputable, and that amounts to a complete disregard of the controlling law.'” Guy v. Crown Equip. Corp., 394 F.3d 320, 325 (5th Cir. 2004) (quoting Venegas-Hernandez v. Sonolux Records, 370 F.3d 183, 195 (1st Cir. 2004)). In the Fifth Circuit, altering, amending, or reconsidering a judgment under Rule 59(e) “is an extraordinary remedy that should be used sparingly.” Templet, 367 F.3d at 479. “A Rule 59(e) motion should not be used to re-litigate prior matters that . . . simply have been resolved to the movant's dissatisfaction.” Voisin v. Tetra Technologies, Inc., 2010 WL 3943522, at *2 (E.D. La. Oct. 6, 2010). District courts have “considerable discretion in deciding whether to grant or deny a motion to alter a judgment.” Hale v. Townley, 45 F.3d 914, 921 (5th Cir. 1995). Yet at the same time, the Rule 59(e) standard “favors denial of motions to alter or amend.” S. Constructors Group, Inc. v. Dynalectric Co., 2 F.3d 606, 611 (5th Cir. 1993).

         b. ...


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