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Duhe v. DCR Industrial Services, Inc.

Court of Appeals of Louisiana, First Circuit

December 6, 2018


          On Appeal from the Office of Workers' Compensation Administration, District 6, Louisiana Docket No. 17-02918 Honorable Robert W.Varnado Jr., Judge Presiding





          PETTIGREW, J.

         In this workers' compensation case, a discharged former attorney for the claimant appeals a judgment dismissing his intervention and motions to vacate or annul a settlement and granting his former client's reconventional demand. The former client answers the appeal, seeking attorney fees and costs for work done on appeal. For the reasons set forth herein, we affirm the judgment and deny the answer to the appeal.


         Raydell Duhe, Sr. was injured in the course and scope of his employment as a pipefitter with DCR Industrial Services (''DCR") on August 27, 2013. Duhe hired attorney Robert A. Lenter to represent him in the workers' compensation matter. Duhe and Lenter executed a Contract of Representation on September 10, 2013, which provided for attorney fees of "20% of any instituted' indemnity, MSA, and/or settlement, plus any Court awarded Attorney's fees, plus any additional expenses of pursuing the claim." The contract also contained the following clause regarding withdrawal or dismissal of the attorney:

WITHDRAWAL BY EITHER ATTORNEY OR CLIENT: Either you or said attorneys can withdraw from your case by giving reasonable written notice to the other. Any withdrawal by said attorneys shall be consistent with the Louisiana Rules of Professional Conduct. In the event that you dismiss said attorneys you hereby give said attorneys a lien on your future recovery, if any, to secure payment of our costs and attorney fee shall be the agreed percentage of the last settlement offer obtained by said attorneys prior to dismissal or withdrawal. [Emphasis added].

         Duhe began receiving indemnity benefits at the weekly rate of $605.00, effective August 27, 2013. His indemnity checks were sent directly to Lenter's office, and Lenter deducted his attorney fees before forwarding the remainder to Duhe. At some point, Duhe allegedly fired Lenter, but then rehired him based on an agreement that Lenter would only take ten percent for attorney fees from each indemnity check. On May 17, 2017, Lenter filed a Disputed Claim for Compensation on Duhe's behalf.

         Dissatisfied with Lenter's representation, Duhe discharged Lenter as his attorney by certified mail on June 22, 2017, and then again by follow-up text on June 26, 2017. Around the same time, Duhe filed a complaint against Lenter with the Louisiana Attorney Disciplinary Board. Thereafter, on August 7, 2017, Lenter filed a Motion to Withdraw as Attorney of Record and a Petition of Intervention, seeking to establish a lien for his attorney fees. Lenter alleged in his intervention that since he provided "reasonable and necessary" services to Duhe in accordance with their Contract of Representation and was discharged without cause, he is entitled to statutory attorney fees as reasonable compensation for the legal services rendered. On August 8, 2017, the workers' compensation judge CXWCJ") granted Lenter's motion to withdraw as attorney of record and signed an order decreeing:

Lenter . . . [is] entitled to make claim for statutory attorney fees as reasonable compensation for legal services rendered on behalf of [Duhe], pursuant to the State of Louisiana Worker's [sic] Compensation Act, if and when [Duhe] settles this claim or receives a judgment in this matter. This claim for attorney fees should act as a lien on the underlying claim, causing [Duhe] to resolve the issue of attorney fees owed to [Lenter] prior to collecting on a judgment or entering into a lump sum settlement in this matter.

         Duhe hired new counsel, James F. Scott, III and James "Brad" Dill, of the law offices of Workers' Compensation, L.L.C., who enrolled as counsel of record on August 21, 2017. On December 1, 2017, a joint request was filed by Duhe, DCR, and DCR's insurance carrier, Valley Forge Insurance Company ("Valley Forge"), for approval of a lump sum settlement of the indemnity portion of Duhe's workers' compensation claim for $195, 000.00. The joint request also stated:

Further, as part of this settlement agreement, the claimant, Raydell Duhe, Sr., has agreed to be responsible for any and all attorney fees incurred by any attorneys, including but not limited to any attorney lien which may be asserted by his prior attorney Robert Lenter.
The aforementioned [attorney] fee for which the claimant, Raydell Duhe, Sr., is responsible will be fixed at THIRTY-NINE THOUSAND AND NO/100 DOLLARS ($39, 000.00) to be paid out of the proceeds of this settlement, pursuant to [La. R.S.] 23:1141.[1]

         This settlement agreement was approved by the WCJ on December 1, 2017, including the provision setting the attorney fees at $39, 000.00, and the disputed claim for indemnity benefits was dismissed with prejudice. The WO also signed orders stating that Dill is entitled to a $39, 000.00 attorney fee, to be paid out of the lump sum settlement of the indemnity claim, as well as a $2, 420.00 attorney fee, in accordance with the terms of the contingency fee agreement, for the recovery of $12, 100.00 in workers' compensation benefits for Duhe between July 18, 2017 and December 1, 2017.

         On January 4, 2018, Lenter filed a motion requesting that the WO enforce the August 8, 2017 order acknowledging his lien for attorney fees and obligating Duhe to resolve the issue of Lenter's attorney fees prior to entering into a lump sum settlement. Lenter also asked the WCJ to vacate or recall its December 1, 2017 order approving Dill's attorney fees on the $195, 000.00 settlement. Lenter alleged that the amount of his lien due to his representation of Duhe prior to the settlement was $64, 460.21, representing twenty percent of the $322, 301.05[2] in benefits paid to Duhe, subject to a credit for any attorney fees already paid to Lenter by Duhe. Additionally, Lenter alleged that he was entitled to seventy-five percent ($29, 250.00) of the $39, 000.00 attorney fees awarded on the $195, 000.00 settlement, as Dill did little more than finalize a settlement offer, which was initially made by Lenter.

         On January 19, 2018, Duhe and Workers' Compensation, LLC. filed a joint answer to Lenter's Petition of Intervention, and Duhe filed a reconventional demand against Lenter. In his reconventional demand, Duhe alleged that following Lenter's termination, four indemnity benefit checks were sent to Lenter's office erroneously, and Lenter deposited and retained the entire amounts, totaling $2, 420.00, despite repeated requests for the money to be returned to Duhe. Duhe also claimed that Lenter refused to return his case file, despite numerous requests. Duhe and Workers' Compensation, L.L.C. alleged that the maximum attorney fees payable on the $195, 000.00 indemnity-only settlement was $39, 000.00, and that any attorney fees to which Lenter may be entitled as a result of the settlement must be based on quantum meruit and must be reduced by the $2, 420.00 still owed to Duhe. In his reconventional demand, Duhe alleged that in the event the WO determined that Lenter was not entitled to any attorney fees on the settlement, Lenter owes Duhe $2, 420.00, plus interest, for the above-referenced erroneously withheld indemnity benefits.[3]

         A hearing was held on Lenter's intervention and Duhe's reconventional demand on January 24, 2018. At the hearing, Lenter testified that pursuant to their agreement, he took his attorney fees directly out of Duhe's weekly indemnity benefit checks, and he forwarded the remainder to Duhe. Although he initially deducted his entire twenty percent attorney fees from each check, he testified that Duhe needed more money to live on, so he agreed that he would only deduct ten percent from each weekly check and would collect the remaining ten percent when the case was settled. Lenter's testimony about the amount of his claim for the remaining unpaid fee was unclear. Lenter initially testified that the remaining uncollected attorney fees on the indemnity benefits was $7, 744.00; however, he later testified that the attorney fees due after giving Duhe credit for fees already paid was $56, 560.00; and in an exhibit prepared by Lenter, he calculated his uncollected attorney fees on the indemnity benefits as $15, 972.00. Lenter further testified that he had negotiated a $195, 000.00 settlement offer for Duhe's ...

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