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Franklin v. Fountain Group Adjusters, L.L.C.

Court of Appeals of Louisiana, Third Circuit

June 6, 2018

CLIFTON FRANKLIN
v.
FOUNTAIN GROUP ADJUSTERS, L.L.C.

          APPEAL FROM THE PINEVILLE CITY COURT PARISH OF RAPIDES, NO. 2016CV00229 HONORABLE GARY K. HAYS, CITY COURT JUDGE

          David F. Rutledge 330 Settlers Trace, Suite A Lafayette, LA COUNSEL FOR PLAINTIFF/APPLICANT: Clifton Franklin

          Stacy C. Auzenne Auzenne Law Firm, L.L.C. COUNSEL FOR DEFENDANT/RESPONDENT: Fountain Group Adjusters, LLC

          Court composed of Sylvia R. Cooks, John E. Conery, and Van H. Kyzar, Judges.

          VAN H. KYZAR, JUDGE

         The Plaintiff/Relator, Clifton Franklin, seeks supervisory writs from the judgment of the Pineville City Court, Parish of Rapides, which denied his motion for summary judgment filed against the Defendant/Respondent, Fountain Group Adjusters, LLC. For the reasons set forth below, we grant the writ, reverse the judgment in part, render in part, and remand for further proceedings consistent herewith.

         FACTS AND PROCEDURAL HISTORY

         Mr. Franklin entered into a contract with Fountain Group Adjusters, LLC, (Fountain) to provide insurance adjusting services associated with damages claims arising from Superstorm Sandy. The amount of compensation to be received for his work was set forth in the contract executed between Mr. Franklin and Fountain; Mr. Franklin being identified in the contract as the independent contractor, referred to as "IC, " and Fountain being identified in the contract as "FG, " in the following provision:

         COMPENSATION

5. IC shall be entitled to compensation for performing those tasks and duties related to the adjustment of insurance claims equal to 65% of FG's compensation based on the current applicable Fee Schedule, copies of which will be provided by FG to IC from time to time.
Note: FG has the right to apply compliance penalties. You will be notified of the penalty and the reason for such penalty.
6. Such compensation shall be paid to IC on a weekly basis after FG has received compensation from the client for service fee.

         Mr. Franklin avers that he was asked to sign a second contract, identical to the first, because Fountain could not locate its original copy of the contract. The pertinent provisions are the same in both contracts, with the exception that the second contract calls for compensation for claims adjusting services at 75%, rather than 65%. Mr. Franklin, however, is only asserting a claim for 65% commission. The two contracts, attached to Mr. Franklin's motion for summary judgment, are dated August 28, 2012 and December 4, 2012.

         During this time, Mr. Franklin was employed by Claims One.[1] Fountain also entered into a contract with Claims One. Below is a portion of that contract, with Claims One identified as an independent contractor, referred to as "IC, " and Fountain being identified in the contract as "FG, " also setting forth compensation for services, in the following provision:

         COMPENSATION

5. IC shall be entitled to compensation for performing those tasks and duties related to the adjustment of insurance claims equal to 10% of FG's compensation based on the current applicable Fee Schedule, copies of which will be provided by FG to IC from time to time.
Note: FG has the right to apply compliance penalties. You will be notified of the penalty and the reason for such penalty.
6. Such compensation shall be paid to IC on a weekly basis after FG has received compensation from the client for service fee.

         It is undisputed that Mr. Franklin performed adjusting services pursuant to the contract from 2012 through some point in 2014. It is also undisputed that through third parties, Fountain received $327, 644.00 for adjusting services performed by Mr. Franklin, through his employment with Claims One. Fountain paid Claims One seventy-five percent (75%) of that total, equaling $245, 737.00, which is the total amount of adjuster commission earned by work performed by Mr. Franklin through Claims One, representing the 65% owed to Mr. Franklin and the 10% due Claims One. It is further undisputed that Mr. Franklin did, in fact, receive a significant amount of the money he was owed through his contract with Fountain directly from Claims One, which was paid by Fountain to Claims One on Mr. Franklin's behalf.

         Then, on May 2, 2016, Mr. Franklin filed suit against Fountain, claiming that, although he had received much of what he had earned under the contract, he had not been fully compensated. Subsequently, Mr. Franklin filed a motion for summary judgment, arguing that the contract clearly provided that Fountain was to pay him a certain amount, and pursuant to his affidavit, he was not paid the full amount. He asked that the trial court enter judgment in his favor against Fountain, as follows: "summary judgment should be granted against Fountain Group Adjusters, LLC for breach of contract and damages in the amount of $28, 395.74 plus legal interests [sic] from date of original demand and court costs." Alternatively, Mr. Franklin requested that summary judgment be granted against Fountain as to the issue of liability concerning the breach of contract claim.

         Fountain filed an opposition to the motion for summary judgment contending that it was not liable to Mr. Franklin. Fountain stated that it had entered into a separate contract with Mr. Franklin's employer, Claims One, whereby Claims One would receive 10% of the amount of payment Fountain received for the adjusted claims, similar to the 65% provided for in Mr. Franklin's contract. Fountain asserted that it paid Mr. Franklin's employer, Claims One, the full amount due to Mr. Franklin, minus a 10% "hold back" until all audits were completed; all of which, Fountain claimed, was standard practice in the industry. Fountain expounded on the purported industry standard, claiming that the contractor, Fountain herein, would pay the employer, i.e., Claims One, and the adjuster, i.e., Mr. Franklin, the amount due to both of them and that Claims One would then pay the employee, Mr. Franklin, the portion of that total amount that is his due.

         In this case, however, Claims One did not pay Mr. Franklin the full amount due him, even though Fountain had allegedly sent the earned commissions to Claims One for it to pay Mr. Franklin. Based upon this fact, Fountain asserted that the true party liable to Mr. Franklin was Claims One, not Fountain.[2] In addition to attaching an affidavit of Keith Fountain, the sole owner of ...


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