Cambridge Toxicology Group, Inc. v. Exnicios

• Decision Date: 01 August 2007
• Docket Number: No. 06-30397.,No. 05-30437.,05-30437.,06-30397.
• Citation: 495 F.3d 169
• Parties: CAMBRIDGE TOXICOLOGY GROUP, INC., Plaintiff-Appellant-Cross-Appellee, v. Val EXNICIOS, et al., Defendants-Appellees-Cross-Appellants. Cambridge Toxicology Group, Inc., Plaintiff-Appellant-Cross-Appellee, v. Mississippi Litigation Group; et al., Defendants, Mississippi Litigation Group, Defendant-Appellee, Val Exnicios, et al., Defendants-Appellees-Cross-Appellants. Cambridge Toxicology Group, Inc.; The Law Office of Paul C. Miniclier; Paul C. Miniclier, Esq., Plaintiffs-Appellants-Cross-Appellees, v. Val Exnicios, et al., Defendants-Appellees-Cross-Appellants. Cambridge Toxicology Group, Inc.; The Law Office of Paul C. Miniclier; Paul C. Miniclier, Esq., Plaintiffs-Appellants-Cross-Appellees, v. Mississippi Litigation Group, et al., Defendants, Val Exnicios, et al., Defendants-Appellees-Cross-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

495 F.3d 169

CAMBRIDGE TOXICOLOGY GROUP, INC., Plaintiff-Appellant-Cross-Appellee, v. Val EXNICIOS, et al., Defendants-Appellees-Cross-Appellants.

Cambridge Toxicology Group, Inc., Plaintiff-Appellant-Cross-Appellee, v. Mississippi Litigation Group; et al., Defendants, Mississippi Litigation Group, Defendant-Appellee, Val Exnicios, et al., Defendants-Appellees-Cross-Appellants.

Cambridge Toxicology Group, Inc.; The Law Office of Paul C. Miniclier; Paul C. Miniclier, Esq., Plaintiffs-Appellants-Cross-Appellees, v. Val Exnicios, et al., Defendants-Appellees-Cross-Appellants.

Cambridge Toxicology Group, Inc.; The Law Office of Paul C. Miniclier; Paul C. Miniclier, Esq., Plaintiffs-Appellants-Cross-Appellees, v. Mississippi Litigation Group, et al., Defendants, Val Exnicios, et al., Defendants-Appellees-Cross-Appellants.

No. 05-30437.

No. 06-30397.

United States Court of Appeals, Fifth Circuit.

August 1, 2007.

Paul C. Miniclier (argued), David Anthony Binegar, Law Office of Paul C. Miniclier, New Orleans, LA, for Cambridge Toxicology Group, Inc.

James M. Garner (argued), Darnell Bludworth, Sher, Garner, Cahill, Richter, Kelin & Hilbert, New Orleans, LA, for Exnicios; Liska, Exnicios & Nungesser; Finney; Gary, Williams, Parenti, Finney, Lewis, McManus, Watson & Sperando; Jones; Smith, Jones & Fawer, LLP; Reich; Reich & Binstock; Schwartz and Miss. Lit. Group.

Val Patrick Exnicios, New Orleans, LA, for Liska, Exnicios & Nungesser.

Donna Sgarella Cummings, Cummings, Cummings & Dudenhefer, New Orleans, LA, for Dudenhefer.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before JONES, Chief Judge, and BENAVIDES and STEWART, Circuit Judges.

CARL E. STEWART, Circuit Judge:

This appeal involves a contractual dispute between Cambridge Toxicology Group, Inc. ("Cambridge Toxicology") and a group of attorneys. The parties litigated this case before a jury, and now, both Cambridge Toxicology and the defendant attorneys appeal several rulings of the district court on multiple grounds. We affirm the district court's judgments.

I. FACTUAL AND PROCEDURAL BACKGROUND

This lawsuit stems from a chemical release at the Gaylord Chemical Plant in Bogalusa, Louisiana. A team of attorneys, informally known as the Mississippi Litigation Group ("Litigation Group"), represented the victims of the chemical exposure. The Litigation Group retained Cambridge Toxicology to provide expert services in the Mississippi personal injury litigation. In 1998, Cambridge Toxicology and the Litigation Group entered into three contracts: (1) a contract to perform a control study; (2) a contract for Dr. Schrager to testify at a trial in Mississippi; and (3) a contract to evaluate the individual plaintiffs. Eventually, the Litigation Group withheld payment on the control study agreement, and the parties dispute whether Cambridge Toxicology completed the control study.

Cambridge Toxicology filed suit in Massachusetts, but the federal district court dismissed the case for lack of personal jurisdiction. Shortly thereafter, in May 2002, Cambridge Toxicology sued the defense attorneys in the Eastern District of Louisiana, alleging three counts of breach of contract, quantum meruit, promissory estoppel, violation of the Massachusetts unfair business practice statute, and failure to pay a past due account. Cambridge Toxicology's First Amended Complaint added a cause of action under the Louisiana Open Account Statute. In June 2002, Cambridge Toxicology filed a Second Amended Complaint.

The district court set a trial date for October 14, 2003, and a deadline to amend pleadings for October 30, 2002. Cambridge Toxicology moved for leave to file a Third Amended Complaint in August 2003, ten months after the deadline for amendments. The amendment sought to add the Litigation Group as a defendant and to add several causes of action. The magistrate judge denied this motion due to the expired deadline, lack of good cause, the pending trial date, and the fact that Cambridge Toxicology filed pleadings referring to the Litigation Group as early as November 2002. The district court denied Cambridge Toxicology's appeal and continued the trial date to allow settlement discussions.

On October 24, 2003, the district court granted motions for summary judgment filed by the defendants, holding that Louisiana law governed the contracts; dismissing the claim under the Massachusetts unfair trade practices statute; and holding that the control study and trial testimony agreements were not open accounts under the Louisiana Open Account Statute. On November 4, 2003, the district court continued the trial without setting a new date but later ordered that all current deadlines would remain in place. Cambridge Toxicology moved once again for leave to file its Third Amended Complaint. The magistrate judge again denied the motion; and the district court denied Cambridge Toxicology's appeal of the magistrate judge's order. The court reiterated that the trial date continuances were not meant to allow for further discovery or amended pleadings.

Despite these denials and warnings, on July 21, 2004, Cambridge Toxicology filed another lawsuit against the same defendant attorneys, including the Litigation Group as a defendant. The causes of action were the same or substantially similar to those brought in the original action. On October 24, 2004, the court granted the defendants' motion to dismiss Cambridge Toxicology's second action as duplicative of the original action. The court also warned Cambridge Toxicology's counsel that sanctions would be imposed for any additional frivolous or harassing tactics. Following a status conference on November 18, 2004, the court entered an order prohibiting further motions for reconsideration absent clear error or an abuse of discretion and issued a sanctions warning. Undeterred by the district court's order, Cambridge Toxicology filed a Reply to Counterclaim, Counterclaim, and Third-Party Demand on December 9, 2004, reasserting various claims against the defendants and the Litigation Group. The court granted the defendants' motion to strike this pleading as duplicative.

In January 2005, the district court commenced a jury trial on the merits. The jury found that (1) the defendants did not owe Cambridge Toxicology any amounts under the control study agreement; (2) Cambridge Toxicology did not fail to perform its obligation under the control study agreement; (3) the claims for payment under the control study agreement were premature; and (4) the claims for payment under the individual evaluation agreements were not premature. The jury awarded Cambridge Toxicology over $98,000 in damages.

The district court granted defendants' post-trial motions in part, holding that Cambridge Toxicology was not entitled to attorney's fees for the evaluation contract under the Louisiana Open Account Statute because the amounts claimed and the amounts actually awarded by the jury were inconsistent. The court also amended the wording of the judgment but rejected the defendants' arguments that the evidence showed breach of the control study agreement and that the findings of prematurity were inconsistent with the verdicts. Both parties appealed the district court's judgment in case number 05-30437.

Meanwhile, the defendants moved for costs, expenses, and attorney's fees in the district court. The court accepted the magistrate judge's recommendation and awarded the defendants over $27,000 in attorney's fees and costs pursuant to 28 U.S.C. § 1927 against Cambridge's counsel, Paul Miniclier, for filing duplicative harassing pleadings. Both parties, including Cambridge Toxicology's legal representative, Miniclier, now appeal the district court's judgment in case number 06-30397.

II. DISCUSSION

A.

This court reviews de novo the district court's grant of summary judgment. See Gold, Weems, Bruser, Sues & Rundell v. Metal Sales Mfg. Corp., 236 F.3d 214, 217 (5th Cir.2000). The district court held that the Louisiana Open Account Statute, La.Rev.Stat. Ann. § 9:2781, did not apply to the control study and trial testimony agreements. Cambridge Toxicology argues that the district court erred in concluding that its one-time rendition of professional services did not establish an ongoing relationship between the parties. To the contrary, defendants argue that the contracts did not create a line of credit subject to future adjustment because the parties did not share an ongoing debtor-creditor relationship.

An open account "includes any account for which a part or all of the balance is past due, whether or not the account reflects one or more transactions and whether or not at the time of contracting the parties expected future transaction." § 9:2781(D). This includes debts incurred for professional services beyond legal or medical services. Id. Louisiana courts, based on BLACK'S LAW DICTIONARY, define an open account as "[a]n account which has not been finally settled or closed, but is still running or open to future adjustment or liquidation. Open account, in legal as well as in ordinary language, means an indebtedness subject to future adjustment, and which may be reduced or modified by proof." BLACK'S LAW DICTIONARY 18 (6th ed.1990); see, e.g. Dixie Mach. Welding & Metal Works, Inc. v. Gulf States Marine Tech., 692 So.2d 1167, 1169-70 (La.Ct.App.1997). The Louisiana Open Account Statute also provides for reasonable attorney's fees incurred in the prosecution and collection of an open account. See § 9:2781(A). The open account law is penal in nature and must be strictly construed. Frank L. Beier Radio, Inc. v. Black Gold Marine, Inc., 449 So.2d 1014, 1016 (La.1984).

A claim for breach of contract and a claim under the open account statute are considered distinct causes of action. See Operational Tech. Corp. v. Envtl. Contractors, Inc., 665 So.2d 14, 15 (La.Ct.App. 1995). An open account is "similar to a line of credit," Hayes v. Taylor, ...