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ACF 2006 Corp. v. Conour

United States District Court, S.D. Indiana, Indianapolis Division

January 24, 2017

ACF 2006 CORP., Plaintiff,
v.
WILLIAM F. CONOUR, CONOUR LAW FIRM, LLC, MARK C. LADENDORF ATTORNEY AT LAW, P.C., and TIMOTHY F. DEVEREUX, Defendants.
v.
DAVID L. BEALS, SR., LORETTA BEALS, KRISTEN BEALS by her Guardians DAVID L. BEALS, SR. and LORETTA BEALS, Intervenors.

          ORDER DENYING DEFENDANTS' MOTION TO ALTER AND/OR AMEND FINAL JUDGMENT

          TANYA WALTON PRATT, JUDGE.

         This matter is before the Court on Defendants Mark C. Ladendorf Attorney at Law, P.C. (“Mr. Ladendorf”) and Timothy F. Devereux's (“Mr. Devereux”) (collectively, “the Lawyers”) Motion to Alter and/or Amend Final Judgment, Pursuant to F.R.C.P. 59. (Filing No. 187). The Lawyers contend that this Court failed to enter judgment in favor of several nonparties to this lawsuit. For the reasons that follow, the Lawyers' motion is DENIED.

         I. BACKGROUND

         Attorney William F. Conour (“Mr. Conour”) was convicted of stealing more than $4.5 million from client trust accounts. The Conour Law Firm, LLC (“the Conour firm”) owes money to several individuals who were victims of Mr. Conour's fraud, including David L. Beals, Sr., Loretta Beals, Kristen Beals by her Guardians, David L. Beals, Sr. and Loretta Beals (“the Intervenors”) and to Plaintiff ACS 2006 (“ACS”), one of the Conour firm's lenders. Shortly before the fraud came to light, Mr. Devereux left the Conour firm, taking twenty-one clients with him to Mr. Ladendorf's law firm (“the Ladendorf firm”).

         Those clients ultimately produced nearly $2 million in attorneys' fees. (Filing No. 151 at 4-10.) In the instant case, the parties first disputed how much of that money should be paid to the Conour firm for work it performed before Mr. Devereux left for the Ladendorf firm. Second, if money is owed to the Conour firm, the parties disputed how that money should be allocated among the Intervenors and ACS, the entities to whom the Conour firm owes money.

         Following a bench trial, this Court concluded that the Conour firm was entitled to approximately $775, 000.00 of the $2 million, and that in recovering any amounts owed, ACS had priority over the Intervenors. (Filing No. 151 at 19.) Both the Intervenors and the Lawyers appealed that judgment, with the Lawyers challenging the amount owed to the Conour firm, and the Intervenors appealing the issue of priority. (Filing No. 153; Filing No. 159.) On appeal, the Seventh Circuit concluded that this Court erred in determining the amount of money owed to the Conour firm, and outlined a quantum merit distribution that amounts to $358, 069.83. (Filing No. 180 at 6-9.) The Seventh Circuit also concluded that the Intervenors have priority over ACS in recovering any amount owed. (Filing No. 180 at 14-15.) Because Mr. Conour owes the Intervenors substantially more than the amount of this judgment, the entire amount will go to them, leaving nothing for ACS. (Filing No. 180 at 10.) The Seventh Circuit's mandate instructed this Court that “[t]he judgment of the district court is REVERSED, and the case is REMANDED for the entry of judgment consistent with this opinion.” (Filing No. 180 at 15.)

         In accordance with this district's Local Rule 16-2, the parties each filed position statements regarding the entry of judgment. (Filing No. 182; Filing No. 183.) As relevant here, in their position statement, the Lawyers requested that the Court determine and award co-counsel fees to the Ken Nunn Law Office (“Ken Nunn”) and the Keller & Keller Law Firm (“Keller & Keller”)- law firms with whom the Ladendorf firm purports to have co-counsel fee agreements. (Filing No. 183.) This Court entered judgment against ACF, and in favor of the Intervenors in the amount of $358, 069.83. (Filing No. 185.) The Court declined the Lawyers' invitation to award judgment to the nonparty law firms. (Filing No. 185 at 1-2.) The Lawyers then filed the instant Motion to Alter and/or Amend Final Judgment, Pursuant to F.R.C.P. 59(e). (Filing No. 187.)

         II. LEGAL STANDARD

         A motion to alter or amend a judgment under Rule 59(e) “must be filed no later than 28 days after the entry of the judgment.” Fed.R.Civ.P. 59(e). The purpose of a motion to alter or amend a judgment is to ask the court to reconsider matters “properly encompassed in a decision on the merits.” Osterneck v. Ernst & Whinney, 489 U.S. 169, 174 (1989). “A Rule 59(e) motion will be successful only where the movant clearly establishes: (1) that the court committed a manifest error of law or fact, or (2) that newly discovered evidence precluded entry of judgment.” Cincinnati Life Ins. Co. v. Beyrer, 722 F.3d 939, 954 (7th Cir. 2013) (citation and quotation marks omitted).

         A manifest error “is not demonstrated by the disappointment of the losing party. It is the wholesale disregard, misapplication, or failure to recognize controlling precedent.” Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000) (citation and quotation marks omitted). Furthermore, “a Rule 59(e) motion is not an opportunity to relitigate motions or present arguments, issues, or facts that could and should have been presented earlier.” Brownstone Publ'g, LLC v. AT&T, Inc., 2009 WL 799546, at *3 (S.D. Ind. 2009). Relief pursuant to a Rule 59(e) motion to alter or amend is an “extraordinary remed[y] reserved for the exceptional case.” Foster v. DeLuca, 545 F.3d 582, 584 (7th Cir. 2008).

         III. ANALYSIS

         The Lawyers take issue with the fact that this Court “did not take into account the co-counsel fee agreements” between the Conour firm, Keller & Keller, and Kenn Nunn when it entered judgment in favor of the Intervenors. (Filing No. 187 at 6.) In short, the Lawyers contend that this Court was required to allocate a portion of the judgment to Ken Nunn and Keller & Keller. The Intervenors respond that, as nonparties, Keller & Keller and Ken Nunn do not have standing to request a judgment in their favor. (Filing No. 189 at 1-3.) Likewise, they argue, the Lawyers have no standing to advocate on behalf of the nonparties. (Filing No. 189 at 1-3.) The Intervenors also argue that the Lawyers failed to raise any issues related to the nonparty law firms on appeal, and have therefore waived their ability to raise the issue in this motion. (Filing No. 189 at 3.)

         A. Judgment in Favor of Nonparties

         The Court again notes the standard under which a Rule 59(e) motion is reviewed. Such a motion will only succeed where the movant clearly establishes that the court committed a manifest error of law or fact, or where newly discovered evidence precluded the entry of judgment. See Beyrer, 722 F.3d at 954. A manifest error “is not demonstrated by the disappointment of the losing party. It is the ...


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