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Franklin v. Regions Bank

United States District Court, W.D. Louisiana, Shreveport Division

May 31, 2018

ELIZABETH FRY FRANKLIN, ET AL.
v.
REGIONS BANK

          KAREN L. HAYES MAG. JUDGE.

          RULING

          TERRY A. DOUGHTY UNITED STATES DISTRICT JUDGE.

         Pending before the Court is the Objection to Magistrate's Memorandum Order on Defendant's Motion to Disqualify Counsel (“Appeal”) [Doc. No. 37] filed by Plaintiffs Elizabeth Fry Franklin, Small Fry, L.L.C., Cynthia Fry Peironnet, and Cynthia F. Peironnet Family, L.L.C.

         For the following reasons, Plaintiffs' Appeal is DENIED, and Magistrate Judge Karen L. Hayes' April 18, 2018 Memorandum Order [Doc. No. 33] is AFFIRMED.

         I. FACTS AND PROCEDURAL HISTORY

         On August 5, 2016, Plaintiffs filed suit against their former agent, Defendant Regions Bank (“Regions”). Plaintiff Eleanor Baugnies de St. Marceaux (“Marceaux”) filed a nearly identical suit against the same Defendant approximately one year later. The suits were consolidated by a January 12, 2018 order of the Court.

         Regions served as Plaintiffs' agent with regard to mineral leases of their 5/6 ownership of 1, 805.34 acres in Caddo Parish, Louisiana (“the Property”). In that capacity, Regions executed an extension of a 2004 mineral lease in favor of a third party, Matador Resources Company (“Matador”). It was Plaintiffs' intent for the extension to apply to certain undeveloped acreage and only to the depth of the Cotton Valley formation. However, the lease that Regions signed as Plaintiffs' agent included developed acreage and extended to greater depths.[1]

         In late April or early May 2008, Regions, acting through its Senior Vice President, Joseph Hand (“Hand”), contacted the Davidson, Jones & Summer law firm (“DJS”) and set up a meeting to discuss whether Regions could lease Plaintiffs' mineral interests to other oil companies. On May 6, 2018, Randy Davidson, a partner at DJS, sent a conflict waiver letter to Hand, explaining that the firm had been engaged to render services to clients, Cynthia Fry Peironnet (“Peironnet”) and Elizabeth Fry Franklin (“Franklin”), in connection with a lawsuit against Matador, that Regions would serve as the clients' agent, but that DJS's “representation in the Lawsuit will be limited to representation of the Clients' interests.” [Doc. No. 33, p. 13]. The conflict waiver letter was sent to Hand, who executed the letter that same day. [Doc. No. 34-2].[2]

         DJS then forwarded its Contract for Services and Letter of Representation to Hand on May 9, 2008, which also identified Peironnet and Franklin as DJS' clients “in connection with a dispute over the validity of a certain Amendment of Oil & Gas Lease by and between . . . Peironnet, et al. and Matador.” [Doc. No. 26-3]. Hand signed the contract.

         Thereafter, on May 15, 2008, Randy Davidson and Grant Summers of DJS filed suit on behalf of Peironnet and Franklin (and were later joined by Marceaux) against Matador in state court to rescind or reform the lease extension.

         In her Memorandum Order, Magistrate Judge Hayes correctly states the applicable law and rules. Despite the express conflict waiver and contract provisions, Magistrate Judge Hayes noted that there were ambiguous references in the contract references to “you” or “your, ” which could also refer to Regions. Further, in Magistrate Judge Hayes' detailed Memorandum Order, she set forth extensive facts and details supporting the finding that Regions reasonably believed that DJS represented it as well as Peironnet and Franklin. During the pendency of the lawsuit, Hand specifically met with Allison Jones, another partner at DJS, had telephone calls with her, and attended meetings in the conference room at DJS.

         After the jury returned a verdict against Peironnet and Franklin in September 2010, Jones advised them privately that they had a claim against Regions. Jones left her partnership at DJS in 2016 and became a partner at Downer, Jones, Marino & Wilhite (“Downer”). She and her new partners now seek to represent Plaintiffs in this matter.

         II. LAW AND ANALYSIS

         A. ...


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