IN RE: Hollander et al, No. 2:2017cv08157 - Document 14 (E.D. La. 2018)

Court Description: ORDER AND REASONS - IT IS ORDERED that the Bankruptcy Court's August 4, 2017 order denying the Sigillitos' motion for additional attorney's fees be and hereby is REVERSED. IT IS FURTHER ORDERED that the Bankruptcy Court's order r eleasing and cancelling the supersedeas bond be and hereby is VACATED. IT IS FURTHER ORDERED that the Hollanders' 9 motion to strike the Sigillitos' reply brief is hereby DENIED WITHOUT PREJUDICE AS MOOT. IT IS FURTHER ORDERED that the Sigillitos' 12 motion to supplement the record is hereby DENIED WITHOUT PREJUDICE AS MOOT. IT IS FURTHER ORDERED that the case be REMANDED to the Bankruptcy Court for proceedings not inconsistent with this order, including a determination of the amount of attorneys' fees to which the Sigillitos are entitled. Signed by Judge Susie Morgan. (NEF: USBC)(bwn)

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IN RE: Hollander et al Doc. 14 U N ITED S TATES D ISTRICT COU RT EASTERN D ISTRICT OF LOU ISIAN A IN RE: JERRY MICH AEL H OLLAN D ER, JR. AN D SH EILA STORY H OLLAN D ER CIVIL ACTION N O. 17-8 15 7 SECTION : “E” ( 5) ORD ER AN D REAS ON S 1 This m atter is before the Court on review from the U.S. Bankruptcy Court. 2 Rhonda and Robert Sigillito appeal: (1) the Bankruptcy Court’s August 4, 20 17 order denying the Sigillitos’ m otion for additional attorneys’ fees, 3 and (2) the Bankruptcy Court’s August 4, 20 17 order granting J erry Michael Hollander and Sheila Story Hollanders’ request for an order releasing their surety bond. 4 The Hollanders have filed an opposition. 5 For the reasons that follow, the Court REVERSES the Bankruptcy Court’s order denying the Sigillitos’ m otion for additional attorneys’ fees, 6 VACATES the Bankruptcy Court’s order that the Hollander’s surety be released, 7 and REMAN D S the case to the Bankruptcy Court for the purpose of determ ining the am ount of additional attorneys’ fees owed. 1 Unless otherwise specified, citations to the record herein refer to docket No. 17-8157. Ban kr. No. 0 4-1193. On March 29, 20 17, this case was transferred from the U.S. Bankruptcy Court for the Eastern District of Louisian a, J udge Elizabeth W. Magner presiding, to the U.S. Bankruptcy Court for the Middle District of Louisiana, J udge Douglas D. Dodd presiding. No. 0 4-1193, R. Doc. 261. The case rem ain ed on the sam e docket, Ban kr. No. 0 4-1193. 3 R. Doc. 1-2; Ban kr. No. 0 4-1193, R. Doc. 274. 4 R. Doc. 1-3, Ban kr. No. 0 4-1193, R. Doc. 275. The Sigillitos’ brief on appeal is docketed as R. Doc. 5. 5 R. Doc. 6. 6 R. Doc. 1-2; Ban kr. No. 0 4-1193, R. Doc. 274. 7 R. Doc. 1-3; No. 0 4-1193, R. Doc. 275. 2 1 Dockets.Justia.com BACKGROU N D This adversary proceeding has been pending for over a decade. Multiple appeals and rem ands have taxed the resources of the judiciary, counsel for the parties, an d the parties them selves. This dispute’s long and tortured history has been sum m arized aptly in previous opinions. 8 For purposes of this appeal, only a brief sum m ary of the underlying dispute is necessary. On Septem ber 8 , 20 0 4, the Sigillitos filed an adversary proceeding in the Bankruptcy Court against the Hollanders, alleging that the Hollanders concealed redhibitory defects when they sold the Sigillitos a house in Mandeville, Louisiana. 9 The Sigillitos sought rescission, dam ages, attorneys’ fees and costs, and m oved to have their claim for dam ages m ade nondischargeable under 11 U.S.C. § 523(a)(2)(A), claim ing that they bought the house from the Hollanders under false pretenses, false representations, and/ or as the result of actual fraud. 10 In 20 0 4, the Bankruptcy Court held a trial on the m erits, entering a nondischargeable m oney judgm ent in redhibition against the Hollanders and in favor of the Sigillitos. 11 The Bankruptcy Court did not address the Sigillitos’ fraud claim or their request for attorneys’ fees. Several rounds of appeals followed, one of which directed the Bankruptcy Court to rule on the fraud claim . 12 The Bankruptcy Court eventually entered judgm ent, holding that the Sigillitos failed to prove contractual fraud by a preponderan ce of the evidence. 13 On appeal, this Court reversed the Bankruptcy Court’s judgm ent, 8 See Ban kr. No. 0 4-110 3, R. Docs. 10 3, 129, 132, 145 148, 150 , 166, 169. Bankr. No. 0 4-110 3, R. Doc. 1; Ban kr. No. 0 4-110 3, R. Doc. 166 at 1. 10 Bankr. No. 0 4-110 3, R. Doc. 1; Ban kr. No. 0 4-110 3, R. Doc. 166 at 1. 11 See Ban kr. No. 0 4-1193, R. Docs. 10 4, 114. 12 See Ban kr. No. 0 4-1193, R. Doc. 129. 13 Bankr. No. 0 4-1193, R. Doc. 170 ; see La. C.C. art. 1957. 9 2 rendered judgm ent in favor of the Sigillitos, and rem anded the case to the Bankruptcy Court “solely for the purpose of determ ining attorneys’ fees.”14 On J uly 20 , 20 15, the Bankruptcy Court entered its judgm en t, finding the Hollanders liable to the Sigillitos for attorneys’ fees in the am ount of $ 163,151.30 and for costs in the am ount of $ 16,498.92. 15 On Septem ber 16, 20 15, the Hollanders filed a Motion for Entry of Final J udgm ent before this Court, seeking affirm ance of the Bankruptcy Court’s judgm ent on attorneys’ fees and costs. 16 The Hollanders “d[id] not challenge the am ount of fees and costs awarded by the Bankruptcy Court and d[id] not ask this Court to exercise its appellate review of the bankruptcy court’s judgm ent.”17 On Septem ber 17, 20 15, the Sigillitos filed a response in support of the Hollander’s m otion for a final judgm ent, but noted that the Bankruptcy Court’s J uly 20 , 20 15 judgm ent did not account for fees incurred after J anuary 31, 20 15, and “request[ed] that the J udgm ent reflect that the Sigillitos reserve the right to seek additional attorneys’ fees and costs that were not before the Bankruptcy Court’s consideration on their Fee Application.”18 On Septem ber 18, 20 15, this Court entered its final judgm ent affirm ing the Bankruptcy Court’s determ ination of fees and costs, stating “the Sigillitos’ right to seek additional attorneys’ fees and costs that were not before the Bankruptcy Court is hereby reserved.”19 On August 21, 20 15, the Hollanders posted a supersedeas bond listing J erry Michael Hollander, J r. and Sheila Story Hollander, as principals, and LEXON Insuran ce Com pany, as surety, in favor of Robert and Rhon da Sigillito, in the am ount of 14 No. 13-6665, R. Doc. 8 at 8 . Bankr. No. 0 4-1193, R. Doc. 239. 16 No. 13-6665, R. Doc. 21. 17 Id. 18 No. 13-6665, R. Doc. 22. 19 No. 13-6665, R. Doc. 23. 15 3 $ 215,58 0 .37, twenty percent m ore than the am ount of costs and fees ordered by the Court, 20 to “satisfy whatever J udgm ent m ay be rendered against them .”21 The sam e day, on August 21, 20 15, the Bankruptcy Court approved the Hollanders’ supersedeas bond and stayed the execution of the final judgm ent awarding fees an d costs “during penden cy of Defendants’ appeal to the United States Fifth Circuit of the District Court’s Order and Reasons.”22 The Hollanders filed their initial notice of appeal on October 27, 20 14, 23 which the Fifth Circuit deem ed prem ature. 24 After this Court issued a final order with respect to costs and fees on Septem ber 18, 20 15, 25 the Hollanders filed an am ended notice of appeal on October 5, 20 15. 26 On May 3, 20 16, three days after hearing oral argum ent on the appeal of this Court’s finding of fraud, the Fifth Circuit affirm ed this Court’s order in full, with the m andate issuing on May 25, 20 16. 27 On J une 20 , 20 16, the parties filed a joint m otion in the Bankruptcy Court for the partial release and paym ent in satisfaction of judgm ent. 28 In the joint m otion, the Sigillitos preserved “their rights to seek additional attorney’s fees pursuant to the District Court’s Final J udgm ent for Fees an d Costs.”29 On J une 22, 20 16, the Bankruptcy Court granted the parties’ joint m otion, 30 signing their jointly proposed order, which specifically provided that “[the Sigillitos’] rights to seek 20 No. 13-6665, R. Doc. 23. The Court found the Hollanders liable to the Sigillitos for attorneys’ fees in the am ount of $ 163,151.30 and for costs in the am ount of $ 16,498 .92, totalin g $ 179,650 .22. 21 Bankr. No. 0 4-1193, Doc. 244-1, 245– 46, 248 . 22 Bankr. No. 0 4-1193, Doc. 247. 23 No. 13-6665, R. Doc. 9. 24 No. 13-6665, R. Doc. 15. The Fifth Circuit stayed the appeal “until the question of attorney’s fees ha[d] been resolved by the bankruptcy court and the district court, and the district court ha[d] entered an order or final judgm ent regarding attorney’s fees.” Id. at 2. 25 No. 13-6665, R. Doc. 23. 26 No. 13-6665, R. Docs. 24– 26. 27 No. 13-6665, R. Doc. 30 . 28 Bankr. No. 0 4-1193, R. Doc. 251. 29 Id. at ¶ 5. 30 Com pare Ban kr. No. 0 4-1193, R. Doc. 251-1 w ith Ban kr. No. 0 4-1193, R. Doc. 252. 4 further attorney’s fees pursuant to the judgm ent rendered in the United States District Court on Septem ber 18, 20 15, [R. Doc. NO. 23], are hereby reserved.”31 On J uly 13, 20 16, the Sigillitos filed a m otion in this Court seeking to am end the Court’s Septem ber 18, 20 15 order awarding them costs and fees, seeking “to include the additional attorneys’ fees and costs that were expressly reserved by this Court’s Final J udgm ent.”32 The Hollanders opposed the m otion: (1) arguing the m otion “should be denied outright,” as the Sigillitos are not entitled to the fees they seek; (2) m oving this Court to rem and the Sigillitos’ m otion to the Bankruptcy Court for initial consideration; and (3) conten ding the Sigillitos’ fee request “is unreasonable on its face.”33 Significantly, the Hollanders did not argue the m otion was untim ely. On J uly 29, 20 16, the Hollanders filed a form al m otion m oving for rem and to the Bankruptcy Court, 34 which this Court granted on August 1, 20 16. 35 On J anuary 18, 20 17, while the Sigillitos’ J uly 13, 20 16 m otion for additional attorneys’ fees was still pending, 36 the Hollanders filed a “Motion for Order of Satisfaction of J udgm ent and Release of Supersedeas Bond” in the Bankruptcy Court. 37 In this m otion, which was filed over seven m onths after the Fifth Circuit’s m andate issued, the Hollanders argued for the first tim e that the Sigillitos’ m otion seeking additional attorney’s fees and costs was filed untim ely. 38 The Sigillitos opposed the m otion on February 14, 20 17, arguing that their m otion to am end the Court’s judgm ent was tim ely, as they “are not 31 Bankr. No. 0 4-1193, R. Doc. 252 at 2. No. 13-6665, R. Doc. 32-1 at 1. 33 No. 13-6665, R. Doc. 33 at 1– 3. 34 No. 13-6665, R. Doc. 38 . The Sigillitos opposed the m otion. No. 13-6665, R. Doc. 41. 35 No. 13-6665, R. Doc. 44. 36 No. 13-6665, R. Doc. 32-1. 37 Bankr. No. 0 4-1193, R. Doc. 256. 38 Bankr. No. 0 4-1193, R. Doc. 256-1 at ¶ 7– 8 . 32 5 seeking an attorney fee award in the first instance,” and clarifying that “they are m erely seeking to am en d the J udgm ent rendered in their favor finding that the Sigillitos should be com pensated for all the fees and costs associated with the several appeals in this case, as reflected in the District Court’s J udgm ent reserving the right to am en d the J udgm ent.”39 On August 8, 20 17, the Bankruptcy Court entered a m em orandum opinion fin ding “[t]he Sigillitos failed to m ove for additional attorney fees and costs within the tim e the Federal and Bankruptcy Rules prescribe or to allege facts supporting a finding that their failure to act tim ely stem m ed from excusable neglect.”40 The Bankruptcy Court’s evaluation of the tim eliness of the Sigillitos’ m otion is based on the fourteen-day tim e lim it in Federal Rule of Civil Procedure 54, as applied to the Fifth Circuit’s May 25, 20 16 m andate issue date. The Bankruptcy Court found in the alternative that the fees and costs the Sigillitos requested were excessive and also not recoverable for that reason. 41 The Bankruptcy Court reasoned: The bankruptcy court awarded the Sigillitos dam ages of $ 28,424.43; no reviewing court m odified that sum . The judgm ent creditors also have recovered $ 179,650 .22 in fees and costs through J anuary 31, 20 15, for litigating appeals and trying their attorney fees claim , an am ount m ore than six tim es the dam age award. Though no bright line exists in Louisiana law for reasonableness of attorney fee awards, surely that sum is reasonable and adequate in light of the dam ages they proved. The Sigillitos now ask the court for additional fees and costs that, in com bination with their prior awards, totals m any tim es m ore than dam ages awarded on their fraud claim . They have been com pensated am ply in light of their origin al dam age award, the work perform ed, and the skill required, and the court declines to award further com pensation. 42 39 Bankr. No. 0 4-1193, R. Doc. 256-1 at 2. Bankr. No. 0 4-1193, R. Doc. 274. 41 Id. 42 Id. at 9– 10 . 40 6 On August 6, 20 17, the Bankruptcy Court entered an Order deem in g this Court’s Septem ber 18, 20 15 judgm ent satisfied and releasing and cancelling the supersedeas bond. 43 The Sigillitos filed their notice of appeal to this Court on August 24, 20 17. 44 STAN D ARD OF REVIEW A party aggrieved by a bankruptcy court’s ruling m ay appeal to the district court. 45 The district court reviews the bankruptcy court’s findings of fact for clear error and its conclusions of law de novo. 46 A factual finding is clearly erroneous when the district court is left with the “definite and firm conviction, in light of the entire record, that a m istake has been m ade.”47 The district court m ay correct a factual finding predicated on an erroneous interpretation of law. 48 D ISCU SSION In the Bankruptcy Court and before this Court, the Hollanders argue the Sigillitos’ m otion to am end the Court’s prior judgm ent awarding them costs and attorney’s fees was filed untim ely. According to the Hollanders, for the Sigillitos’ request for attorneys’ fees to have been tim ely, Federal Rule of Civil Procedure 54 required the Sigillitos to file a second m otion for attorney’s fees within fourteen days of the m andate issue date of the Fifth Circuit’s judgm ent affirm ing this Court’s order—in other words, no later than J une 8 , 20 16. 49 In opposition, the Sigillitos point out that their m otion seeking additional attorney’s fees was a m otion to am end this Court’s prior judgm ent dated Septem ber 18, 43 Bankr. No. 0 4-1193, R. Doc. 276. R. Doc. 1. 45 See 28 U.S.C. § 158(a). 46 In re Green Hills Dev . Co., 741 F.3d 651, 654 (5th Cir. 20 14); see also F ED . R. BANKR . P. 80 13. 47 In re MBS Mgm t. Servs., Inc., 690 F.3d 352, 354 (5th Cir. 20 12). 48 See In re Coston, 991 F.2d 257, 261 (5th Cir. 1993). 49 R. Doc. 6. 44 7 20 15, and that, in an y event, prior orders of this Court and the Bankruptcy Court extended the tim e the Sigillitos had to file their m otion for attorney’s fees incurred after J anuary 31, 20 15. 50 Federal Rule of Civil Procedure 1 provides that the Federal Rules “govern the procedure in all civil actions and proceedin gs in the United States district courts.”51 Federal Rule of Civil Procedure 54(d)(2) lays out the procedural fram ework for requesting attorneys’ fees in the district court. Subsection A requires that a “claim for attorney’s fees and related nontaxable expenses . . . be m ade by m otion.”52 Subsection B governs the contents of that m otion and provides that such a m otion m ust be filed no later than fourteen days after the district court enters its judgm ent: Unless a statute or a court order provides otherwise, the m otion m ust: (i) be filed no later than 14 day s after the entry of judgm ent; (ii) specify the judgm ent and the statute, rule, or other grounds entitling the m ovant to the award; (iii) state the am ount sought or provide a fair estim ate of it; and (iv) disclose, if the court so orders, the term s of any agreem ent about fees for the services for which the claim is m ade. 53 Because the Federal Rules of Civil Procedure govern proceedings in the district courts, the fourteen day period within which a m otion for attorneys’ fees m ust be filed begins to run from the date of the final judgm ent issued in the district court, not the court of appeals. Quigley v. Rosenthal, decided by the Tenth Circuit, illustrates this concept. 54 The Tenth Circuit reversed in part an order of the district court, rem anding it with 50 R. Doc. 5. F ED. R. CIV. P. 1 (em phasis added). Rule 1 goes on to state “except as stated in Rule 81.” Rule 81 does not apply in this case. 52 F ED . R. CIV. P. 54(d)(2)(A). 53 F ED . R. CIV. P. 54(d)(2)(B) (em phasis added). 54 427 F.3d 1232, 1236– 37 (10 th Cir. 20 0 5). 51 8 instructions. 55 Following reversal and rem and, the district court revised its ruling, “to com ply ‘with the m andate of the United States Court of Appeals for the Tenth Circuit filed with th[e district] court on Septem ber 22, 20 0 3’” and entered an am ended final judgm ent on J une 14, 20 0 4. 56 On J uly 29, 20 0 4, the plaintiffs filed a m otion requesting the district court to schedule a hearing on their original m otion, which they had filed on May 12, 20 0 0 , for attorneys’ fees and costs, an d “purported to update and am end that original m otion to include requests for fees and costs incurred since the filing of the original m otion.”57 The district court denied plaintiff’s m otion as untim ely, as it was filed m ore than fourteen days from the entry of the district court’s am ended final judgm ent on J une 14, 20 0 4. On appeal, the Tenth Circuit affirm ed the district court’s judgm ent. 58 The circuit court explained that, it is beyond dispute that appeals can be taken from am ended final judgm ents, in cluding those entered following an appellate reversal or rem and. Thus, although there was nothing in the am en ded final judgm ent entered in this case that either party would have challenged, the am ended final judgm ent nevertheless constituted a “judgm ent” for purposes of Rule 54. 59 Notably, the Tenth Circuit did not find the fourteen day filing period began to run following its m andate, but rather concluded that the period began anew following the am ended judgm ent entered by the district court after reversal and rem and. 60 In this case, the Sigillitos sought attorneys’ fees in their com plaint, alleging the Hollanders sold the Sigillitos the property “under false preten ses, false representations 55 Id. at 1233– 34. Id. at 1234. 57 Id. 58 Id. at 1232– 33. 59 Id. 1236– 37. 60 Id. 56 9 and/ or actual fraud.”61 At every stage of this litigation, the Sigillitos have m oved for the attorneys’ fees to which they are entitled under Louisiana Civil Code article 1958 based on the Hollanders’ fraud in connection with the sale of their hom e. 62 The parties have been litigating the Sigillitos’ right to attorneys’ fees since at least 20 0 9, 63 with the issue being presented to m ultiple courts, including two Bankruptcy Court judges, two district court judges, and two panels of the Fifth Circuit. Throughout the course of this litigation, this Court and the Bankruptcy Court have ordered repeatedly that the Sigillitos’ right to additional attorneys’ fees be reserved. 64 As a result, the Sigillitos m oved for attorneys’ additional fees tim ely. The Bankruptcy Court’s judgm ent to the contrary is an error of law. 65 Alternatively, even if the Fifth Circuit’s m andate issue date triggered a new filing deadline for attorneys’ fees or the m otion was otherwise untim ely, the Court finds the doctrine of excusable neglect applies in this case. In Pioneer Investm ent Services Co. v. Brunsw ick Associates L.P., 66 the U.S. Suprem e Court addressed the concept of excusable neglect. The Court adopted a flexible approach, holding that excusable neglect could be found in situations in which delays were caused by “intervening circum stances beyond the party's control” as well as in situations involving “late filings caused by inadvertence, 61 Bankr. No. 0 4-1193, R. Doc. 1 at ¶ 7, p. 4. No. 10 -392, R. Doc. 3 at 8 (“This Court should apply the findings of fact that the Bankruptcy Court necessarily found, determ in e that the Sigillitos have proven their case for fraud against the Hollanders, and award the Sigillitos the dam ages and attorneys' fees that are due under Civil Code article 1958.”); No. 12318, R. Doc. 5 at 25 (“A finding of fraud requires that this Court award the Sigillitos all dam ages and attorneys’ fees under Louisiana Civil Code article 1958.”); No. 13-6665, R. Doc. 3 (“If the Hollanders are liable for fraud under Louisiana Civil Code article 1953, the Sigillitos are entitled to dam ages and attorneys’ fees under Civil Code article 1958 .”). 63 No. 0 9-3355, R. Doc. 18. 64 No. 13-6665, R. Doc. 23; Bankr. No. 0 4-1193, R. Doc. 252. To the extent it was n ecessary, these orders provided the Sigillitos with additional tim e in which to file their m otion for additional attorneys’ fees. 65 See In re Green Hills Dev. Co., 741 F.3d at 654. 66 50 7 U.S. 380 (1993). 62 10 m istake, or carelessness.”67 “Although inadvertence, ignorance of the rules, or m istakes construing the rules do not usually constitute ‘excusable’ neglect, it is a som ewhat ‘elastic concept’ and is not lim ited strictly to om issions caused by circum stances beyond the control of the m ovant.”68 The determ in ation of whether neglect is excusable “is at bottom an equitable on e, taking account of all relevant circum stances surrounding the party's om ission.”69 To determ ine what sorts of neglect is “excusable, the Court set out a balancing test to be applied when a negligent party or its attorney has failed to m eet a deadline.”70 “A court is to consider the danger of prejudice to the adversary party, the length of the delay and its potential im pact on judicial proceedings, the reason for the delay, including whether it was within the reasonable control of the m ovant, and whether the m ovant acted in good faith.”71 In this case, the delay in filing was m odest, the Sigillitos acted in good faith by repeatedly reserving their right to seek additional fees, and the Hollanders, having been put on notice of the Sigillitos’ intent to m ove the Court for additional fees, were not prejudiced by the delay. The parties filed a joint m otion on J une 20 , 20 16, twenty-six days after the Fifth Circuit’s m andate issued on May 25, 20 16, reserving the Sigillitos’ right to seek additional fees. 72 On J uly 13, 20 16, the Sigillitos filed a m otion to am end this Court’s Septem ber 18, 20 15 order awarding them costs an d fees, seeking “to include the additional attorneys’ fees and costs that were expressly reserved by this Court’s Final 67 Id. at 388 . Id. at 392. 69 Id. at 395. 70 Ardisam , Inc. v. Am eristep, Inc., 343 F. Supp. 2d 726, 729– 30 (W.D. Wis. 20 0 4) (citing Pioneer Inv . Servs. Co., 50 7 U.S. at 395). 71 Id. at 730 (citing Pioneer Inv. Servs. Co., 50 7 U.S. at 395). 72 Bankr. No. 0 4-1193, R. Doc. 251. 68 11 J udgm ent.”73 In their opposition to the m otion, the Hollanders did not argue the m otion was filed untim ely. 74 The Hollanders argued the m otion was untim ely for the first tim e on J anuary 18, 20 17, 238 days after the m andate issue date. 75 The Hollanders were not prejudiced by the Sigillitos’ delayed filing. In Rom aguera v. Gegenheim er, for exam ple, the Fifth Circuit clarified that in certain situations the rigid strictures of Rule 54(d)(2) m ay not apply. 76 Explaining that “one of the key functions of Rule 54(d)(2) is to ensure that parties properly notify their counterparts of their requests for attorneys’ fees” and that the rule “sets out the m inim um requirem ents needed to effectuate a valid notice of the request,” the Fifth Circuit stated that “[t]he failure to file the request would ordinarily result in a request being denied.”77 “However, a court m ay deem a notification sufficient if it satisfies the intended purposes of Rule 54(d)(2).”78 Given that this Court and the Bankruptcy Court both ordered that the Sigillitos’ right to seek additional fees be reserved, and, after the fourteen-day period had passed, the parties filed a joint m otion seeking partial paym ent of attorney’s fees, again explicitly reserving the Sigillitos’ right to seek additional fees, the Hollanders were sufficiently on notice that the Sigillitos would be seeking additional fees. The intended purposes of Rule 54(d)(2) have been satisfied. The Court also finds the Bankruptcy Court’s alternative holding—that, because it considered the Sigillitos’ fees excessive, the Sigillitos were not entitled to any additional fees—was legal error. 79 The underlying dispute in this case is a Louisiana law based action 73 No. 13-6665, R. Doc. 32-1 at 1. No. 13-6665, R. Doc. 33 at 1– 3. 75 Bankr. No. 0 4-1193, R. Doc. 256. 76 162 F.3d 893 (5th Cir.1998 ), decision clarified on denial of rehearing, 169 F.2d 223 (5th Cir. 1999). 77 Id. at 895. 78 Id. 79 R. Doc. 1-2 at 8 – 10 . 74 12 in redhibition. 80 Because the underlying suit is based on Louisiana law, the Court m ust apply Louisiana law in determ in ing the quantum . 81 In Louisiana, attorneys’ fees are not allowed except when they are authorized by statute or contract. 82 Having granted rescission again st the Hollanders and specifically finding the Sigillitos were entitled to rescission as a result of the Hollanders’ fraud, 83 the Hollanders are liable to the Sigillitos for attorneys’ fees pursuant to Louisiana Civil Code article 1958. 84 When determ in ing a quantum m eruit award, courts m ust consider the following factors, derived from Rule 1.5(a) of the Louisiana Rules of Professional Conduct: (1) the ultim ate result obtained; (2) the responsibility incurred; (3) the im portance of the litigation; (4) am ount of money involved; (5) extent and character of the work perform ed; (6) legal knowledge, attainm ent, an d skill of the attorneys; (7) num ber of appearances m ade; (8) intricacies of the facts involved; (9) diligence and skill of counsel; and (10 ) the court's own knowledge. 85 “Courts m ay inquire as to the reasonablen ess of attorney fees as part of their prevailing, inherent authority to regulate the practice of law.”86 In this case, the Sigillitos seek attorneys’ fees and costs incurred after J anuary 31, 20 15. 87 These fees include fees incurred litigating the am ount of attorneys’ fees owed, as well as opposing the Hollanders’ appeal of this Court’s finding of fraud. In its order denying the fee request, the Bankruptcy Court did not differentiate between the am ount 80 Bankr. No. 0 4-1193, R. Doc. 1. v. Sears, Roebuck & Co., 928 F.2d 679, 689-90 (5th Cir. 1991). 82 Huddleston v. Bossier Ban k and Trust Co., 475 So. 2d 10 82 (La. 1985). 83 No. 13-6665, R. Doc. 8 at 8 . 84 LA. C.C. art. 1958 (“The party against whom rescission is granted because of fraud is liable for dam ages and attorney fees.”). 85 State ex rel. Dep’t of Tran sp. & Dev elop. v. W illiam son, 597 So. 2d 439, 441 (La. 1992) (citin g State ex rel. Dep’t of Transp. & Dev elop. v. Jacob, 491 So. 2d 138 (La. App. 3 Cir. 1986); State v. Ransom e, 392 So. 2d 490 (La. App 1 Cir. 1980 )). 86 Id. at 441– 42 (citing City of Baton Rouge v . Stauffer Chem ical Co., 50 0 So. 2d 397 (La. 1987); Leen erts Farm s, Inc. v. Rogers, 421 So. 2d 216 (La. 198 2)). 87 R. Doc. 1-2. 81 Cates 13 of the fees incurred opposing the Hollanders’ appeal to the Fifth Circuit and those incurred in preparing the fee application itself. Instead, the Bankruptcy Court, with alm ost no analysis, concluded that the requested fees as a whole were excessive because they total “m any tim es m ore than dam ages awarded on their fraud claim ,” and stating “surely that sum [already awarded] is reason able and adequate in light of the dam ages they proved.”88 The cases to which the Bankruptcy Court cited do not stand for the proposition that, if the court finds a fee request excessive, it should deny the fees entirely. 89 Instead, under Louisiana law, when the attorneys’ fees requested are excessive, the court m ay reduce the award accordingly. 90 The Bankruptcy Court also found the Sigillitos were not entitled to fees on fees, relying on Baker Botts L.L.P. v. ASARCO LLC. 91 J udge Magner correctly distinguished Baker Botts from the case at bar in her J uly 20 , 20 15 opinion granting the Sigllitos’ original fee request, including their request for fees on fees. As she noted, the U.S. Suprem e Court’s decision in Baker Botts “was based on a request [for attorneys’ fees] under 11 U.S.C. Section 330 .”92 In this case, the fee request is m ade pursuant to Louisiana Civil Code article 1958. 93 J udge Magner found no Louisiana law or opinion providing that fees on fee are not recoverable under article 1958. 94 This Court agrees with J udge Magner’s assessm ent. 95 As a result, the Court finds the Bankruptcy Court’s alternative 88 R. Doc. 1-2 at 10 . See City of Alexandria v. Brow n, 740 F.3d 339, 352 (5th Cir. 20 14); Sicard v. Sicard, 8 2 So.3d 565, 569 (La. App. 5 Cir. 20 11). 90 In re Succession of Horn, 0 4-168 (La. App. 5 Cir. 6/ 29/ 0 4), 877 So. 2d 1111, 1113– 14. 91 135 S. Ct. 2158 (20 15). 92 Bankr. No. 0 4-1193, R. Doc. 238 at 29, n .124. 93 LA. C.C. art. 1958 (“The party against whom rescission is granted because of fraud is liable for dam ages and attorney fees.”). 94 Bankr. No. 0 4-1193, R. Doc. 238 at 29, n .124. 95 Silver Dream , LLC v. 3MC, Inc., No. 10 – 3658 , 20 11 WL 5878142, at *7 (E.D. La. Oct. 31, 20 11), adopted by , 20 11 WL 5878140 (E.D. La. Nov. 23, 20 11) (citing Riley v. City of Jackson, 99 F.3d 757, 760 (5th Cir. 1996); Cruz v. Hauck, 762 F.2d 1230 , 1233– 35 (5th Cir. 1985); Lew allen v. City of Beaum ont, No. 0 5-733, 89 14 holding that the Sigillitos are not entitled to recover attorneys’ fees incurred after J anuary 31, 20 15 because they are, in part, fees on fees is legally erroneous. The Bankruptcy Court’s judgm ent is reversed. 96 The Sigillitos are entitled to recover reasonable attorneys’ fees for the work perform ed after J anuary 31, 20 15 through this date. If the Hollanders appeal this ruling and the decision is affirm ed, the Sigillitos’ right to additional fees is hereby reserved. Accordingly; CON CLU SION IT IS ORD ERED that the Bankruptcy Court’s August 4, 20 17 order denying the Sigillitos’ m otion for additional attorney’s fees be and hereby is REVERSED . 97 IT IS FU RTH ER ORD ERED that the Bankruptcy Court’s order releasing and cancelling the supersedeas bond be and hereby is VACATED . 98 IT IS FU RTH ER ORD ERED that the Hollanders’ m otion to strike the Sigillitos’ reply brief is hereby D EN IED W ITH OU T PREJU D ICE AS MOOT. 99 IT IS FU RTH ER ORD ERED that the Sigillitos’ m otion to supplem ent the record is hereby D EN IED W ITH OU T PREJU D ICE AS MOOT. 10 0 20 0 9 WL 2175637, at *8 (E.D. Tex. J uly 20 , 20 0 9), aff'd,394 F. App'x 38 (5th Cir. 20 10 ); Chaparral Tex., L.P. v. W . Dale Morris, In c., No. 0 6-2468, 20 0 9 WL 45528 2, at *12 n .5 (S.D. Tex. Feb. 23, 20 0 9) (“A prevailin g party is entitled to an award of reasonable attorneys’ fees in conn ection with the tim e spent to prepare the fee application .”)). 96 R. Doc. 1-2; Ban kr. No. 0 4-1193, R. Doc. 274. 97 R. Doc. 1-3; Bankr. No. 0 4-1193, R. Doc. 274. 98 Bankr. No. 0 4-1193, R. Doc. 276. 99 R. Doc. 9. Because the Court did not consider the em ail chain to which the H ollanders object in their m otion to strike, but nevertheless finds in favor of the Sigillitos, the Court dism isses the m otion to strike the Sigillitos’ reply brief without prejudice as m oot. 10 0 R. Doc. 12. 15 IT IS FU RTH ER ORD ERED that the case be REMAN D ED to the Bankruptcy Court for proceedings not inconsistent with this order, including a determ ination of the am ount of attorneys’ fees to which the Sigillitos are entitled. N e w Orle a n s , Lo u is ian a, th is 2 4 th d ay o f Ju ly, 2 0 18 . ________________________________ SU SIE MORGAN U N ITED S TATES D ISTRICT J U D GE 16

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