Karim v. Finch Shipping Co. Ltd.

• Decision Date: 16 June 2004
• Docket Number: No. 03-30069.,03-30069.
• Citation: 374 F.3d 302
• Parties: Noor Begum KARIM, Etc.; et al., Plaintiffs, Fazal Karim, Plaintiff-Appellee, v. FINCH SHIPPING COMPANY LTD.; et al., Defendants, and The Law Office of Paul C. Miniclier, Appellant. In Re: In the Matter of Finch Shipping Company Ltd., Owner and Operator of the M/V LOUSSIO for Exoneration from or Limitation of Liability. Noor Begum Karim, Etc.; et al., Claimants, Fazal Karim, Claimant-Appellee, v. The Law Office of Paul C. Miniclier, Appellant.
• Court: U.S. Court of Appeals — Fifth Circuit

374 F.3d 302

Noor Begum KARIM, Etc.; et al., Plaintiffs, Fazal Karim, Plaintiff-Appellee, v. FINCH SHIPPING COMPANY LTD.; et al., Defendants, and The Law Office of Paul C. Miniclier, Appellant.

In Re: In the Matter of Finch Shipping Company Ltd., Owner and Operator of the M/V LOUSSIO for Exoneration from or Limitation of Liability.

Noor Begum Karim, Etc.; et al., Claimants, Fazal Karim, Claimant-Appellee, v. The Law Office of Paul C. Miniclier, Appellant.

No. 03-30069.

United States Court of Appeals, Fifth Circuit.

June 16, 2004.

COPYRIGHT MATERIAL OMITTED

Jane L. Johnson (argued), Tulane University, School of Law, New Orleans, LA, for Plaintiff-Appellee.

Paul C. Miniclier (argued), David Anthony Binegar, Law Office of Paul C. Miniclier, New Orleans, LA, for Appellant.

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

Before JOLLY, JONES and BARKSDALE, Circuit Judges.

RHESA HAWKINS BARKSDALE, Circuit Judge:

This appeal is by Paul C. Miniclier; under a contingent fee contract, he represented Fazal Karim, a Bangladeshi national, for injuries received while a seaman. Karim was brought to New Orleans upon being injured but was deported to Bangladesh prior to the judgment in his favor being paid into the district court's registry. At issue is whether, after receiving that deposit, the district court erred by: denying a motion by Miniclier to disburse those funds; appointing counsel for Karim and otherwise investigating Miniclier's planned allocation pursuant to the contingent fee contract (Karim would receive nothing); and ordering disbursement in a fashion more favorable to Karim. AFFIRMED.

I.

The underlying litigation involving Karim and Finch Shipping Company is addressed in Karim v. Finch Shipping Co., Ltd., 265 F.3d 258 (5th Cir.2001). For this appeal, only some of the facts in that extensive litigation are relevant. In 1995, while a seaman aboard a vessel owned by Finch, Karim (a Bangladeshi national) was injured on the vessel while it was off the coast of Bermuda. After nine days of "excruciating pain", which presented "a window into Hell", Karim v. Finch Shipping Co., Ltd., 94 F.Supp.2d 727, 732 (E.D.La.2000), he was debarked in New Orleans.

Karim's claims were presented by Miniclier in the limitation of liability proceeding filed by Finch in 1996. Later that year, Karim and Miniclier entered into the contingent fee contract at issue: Miniclier would receive 33-1/3 percent of the recovery if the case settled; 40 percent, "or as allowed by law", if tried.

Miniclier's percentage was to be calculated based on the gross recovery — that is, before expenses were deducted. Karim was to be responsible for court costs and other expenses, but Miniclier was permitted to advance them. As he would later represent to the district court, Miniclier advanced: $91,901.73 for advances and personal expenses ("advances to Mr. Karim for living expenses in the [United States, prior to his being deported in 1997] and his family in Bangladesh, travel, food, telephone, clothes, utilities, and rent in the [United States] and other expenses"); $62,209.79 for medical expenses; $104,252.94 for litigation expenses ("filing fees, depositions, photocopies, witness/expert fees, travel expenses for overseas depositions, service fees, translator fees, trial, transcript costs and other related litigation expenses"); and $34,129.01 for miscellaneous expenses ("primarily ... interest and other banking charges" (emphasis added)).

Applying Bangladeshi law of damages, the district court entered judgment in 2000 in favor of Karim for approximately $407,000, which included damages, prejudgment interest, and $70,000 for litigation costs, including attorney's fees. The damages were: $13,081.28 for past earnings; $26,451.70 for future earnings; $63,668.16 for outstanding medical expenses; $20,000 for future medical expenses; and $160,000 for general damages. Our court affirmed in September 2001. Karim had been deported to Bangladesh in 1997, long before his judgment was affirmed.

After our mandate issued, Karim, through Miniclier, moved for leave to tax costs out of time; the district court denied the motion. In January 2002, in satisfaction of judgment, and pursuant to the district court's instructions, Finch deposited the judgment amount in the district court's registry, rather than pay the judgment to Karim, through his counsel (counsel's trust account).

Upon Karim, through Miniclier, moving to withdraw those funds, the district court denied the motion, citing its duty to ensure that the rights of seamen, as wards of admiralty, are protected, and ordering Miniclier "to submit an accounting ... detailing the expenses, costs, and fees, including attorneys fees, that will be charged against [Karim's] judgment, as well as the net amount that will be conveyed to [Karim] after all costs, expenses, and fees have been deducted". (Emphasis added.)

Miniclier filed the accounting at the end of January 2002, again moving to withdraw the funds. The accounting listed the litigation expenses advanced by Miniclier on Karim's behalf as more than $290,000 (again, including more than $60,000 in medical expenses, more than $34,000 in interest/banking charges, and more than $90,000 in advances/personal expenses for Karim). Were this amount reimbursed to Miniclier (per the contingent fee contract), the amount remaining from the judgment would be less than the 40 percent due Miniclier based upon the gross amount, pursuant to the contingent fee contract; as a result, Miniclier would receive all the funds. In short, Karim would receive nothing.

Based on the accounting, the district court ordered a hearing on the motion to withdraw funds, stating:

According to this accounting, after deducting attorney's fees, advances, medical expenses, litigation expenses, and miscellaneous expenses, the net recovery to Karim is zero. At first blush this result seems harsh. The medical providers, the attorneys, the banks, and others, received some form of recompense. Karim, who fractured his lumbar vertebra and hip, pelvis, leg, ankle, heel and wrist on the left side, sustained several herniated discs in his back and neck, as well as a detached retina in his right eye, who is permanently disabled from returning to maritime work, and who is likely to require future medical care, takes home nothing.

Karim v. Finch Shipping Co., 195 F.Supp.2d 809, 810 (E.D.La.2002). The district court determined that legal and factual issues had to be resolved before the motion to withdraw could be decided.

The first issue was whether Bangladeshi or Louisiana law governed Miniclier's fees. If Bangladeshi law applied, Miniclier would be limited to the $70,000 for costs and fees included in the judgment; if Louisiana law applied, there was a further question of whether the fees were reasonable. In order to assist with the resolution, the district court appointed the Tulane Law School Law Clinic to represent Karim for the district court's examination of the funds' proposed disposition.

Miniclier sought mandamus relief from this court. It was denied. In re Karim, No. 02-30267 (5th Cir.19 Mar. 2002).

After briefing, the district court determined that Louisiana law applied to the contingent fee contract. After further briefing and two hearings, including testimony by two experts, the district court ruled in November 2002 on the fee's reasonableness. Karim v. Finch Shipping Co., 233 F.Supp.2d 807 (E.D.La.2002). The court cited authority that seamen are wards of admiralty courts, and that those courts have the same equitable powers as those not sitting in admiralty; it further cited ample Louisiana and federal precedent that a court's equitable powers include the power to reform contingent fee agreements. The court concluded: "Clearly, under both state and federal law a court has the power as well as the responsibility, particularly where seamen are concerned, to examine and modify contingent fee agreements". Id. at 810 (emphasis added).

The district court found: a 40 percent share of the gross recovery was "not totally out of line with community standards for this type of case"; and Miniclier's "work product was certainly more than adequate". Id. at 811. But, the court concluded it was appropriate to modify the funds' distribution: Miniclier would be reimbursed the litigation expenses (approximately $300,000); the remaining $112,928.51 would be divided equally between Karim and Miniclier ($56,464.25 each).

Several days later, the distribution to Miniclier (expenses-reimbursement and adjusted fee) was ordered (because of accrued interest, he received $57,386.44 for his fee). Karim's share, the amount now at issue, was to remain in the district court registry pending further order.

II.

Miniclier presents two contentions: after Finch satisfied the judgment by paying it into the court registry, the district court was deprived of jurisdiction to do anything other than order the funds' disbursement; and the district court erred in finding the contingent fee agreement unreasonable under Louisiana law. (As discussed infra, the ultimate issue is whether the district court abused its discretion, as an admiralty court, in its treatment of its ward, Karim.)

We have jurisdiction under 28 U.S.C. § 1291 (appeal from final decision), because, as for the order at issue, the requisite "final decision is one that `ends the litigation on the merits and leaves nothing more for the court to do but execute the judgment'". Apache Bohai Corp., LDC v. Texaco China, B.V., 330 F.3d 307, 309 (2003) (quoting Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 86, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000)), cert. denied, 540 U.S. 880, 124 S.Ct. 311, 157 L.Ed.2d 145 (2003). And, it goes without saying that Miniclier has sufficient interest to vest him with standing to take this appeal. See Castillo v. Cameron County, Tex., 238 F.3d 339, 349 (5th Cir.2001).

A.

It also goes without...