NEW ORLEANS – A federal judge has denied a law firm’s request to have a fee dispute with another firm transferred back to state court or dismissed.
Barbier
Senior U.S. District Judge Carl J. Barbier of the Eastern District of Louisiana filed his order September 12 denying the motion by the Sangisetty Law Firm in its case against Jason Joy & Associates, Colin Wood, Phil Debaillon and Kathleen O’Connor.
The litigation arises out of a joint venture agreement signed by the Sangisetty and Joy firms. Wood was a partner at Joy when the events leading to the litigation occurred.
In the agreement, the firms agreed to assume the representation of clients who formerly had been represented by McClenny Moseley and Associates in litigating insurance claims related to the hurricanes that struck Louisiana in 2020 and 2021. The agreement was meant to “facilitate the transfer” of client files and “to work collaboratively to effectuate an expedited and efficient transfer of the clients from the previous firm.”
The Sangisetty firm claims the defendants breached the agreement and are not entitled to legal fees under the agreement. The Sangisetty firm filed its complaint February 28 in the 32nd District Court in Terrebonne Parish. On July 30, the defendants removed the case to federal court, and the Sangisetty firm filed the motion to transfer or dismiss August 5, saying the agreement was governed by a forum-selection clause and that the case should be sent back to the 32nd District Court.
The defendants claim the forum-selection clause does not apply to the agreement because it does not include such a clause. Instead, the defendants say the hurricane contingency fee agreement executed with clients by both parties jointly is what has the forum-selection clause.
Barbier sides with the plaintiff firm.
“The primary issue in this case is whether the forum-selection clause is valid as to the contractual relationship between plaintiff and defendants,” Barbier wrote. “Here, the forum-selection clause is not included in the joint venture agreement executed by plaintiff and defendants. Instead, this forum-selection clause appears in the contingency fee agreement that was executed jointly by plaintiff and defendants with the clients they agreed to represent.”
Barbier says the contingency fee agreement bears the logos of both law firms, and both firms are referred to throughout as the “firms” or “attorneys.”
The Sangisetty firm says the parties did not specify a global fee-splitting arrangement, but it “was to be determined at a later date and based on the actual work done on each of the client files.” A later October 2, 2023, email shows the firms agreed to a 50/50 arrangement.
But Barbier says the contract to govern the relationship between the firms was the joint venture agreement, which does not include the forum-selection clause. It does have an arbitration agreement that says the parties agree to a “binding, non-appealable arbitration.”
“Because plaintiff has not presented any evidence to support its argument that plaintiff and defendants agreed to the forum in which they would litigate disputes arising out of their contractual relationship, the motion to transfer/dismiss lacks both factual and legal support,” Barbier wrote.
U.S. District Court for the Eastern District of Louisiana case number 2:25-cv-1561
