August 27, 2008
Is Asset-Transfer to Jenkens & Gilchrist Law Firm a Non-Refundable Retainer?
Posted by Alan Childress
Although the case wound up being more about procedure than the underlying matter of receiving an asset from a client and how that is characterized, this Fifth Circuit decision released yesterday may involve substantive and fiduciary issues of interest to our readers. I quote here a helpful summary from the Fifth Circuit Civil News by its editor Bob McKnight, with my thanks to him for it and for providing the court link:
Jenkens & Gilchrist, A.P.C. v. Groia & Co., No. 07-20296 (5th Cir. Aug. 26, 2008) (Jones, Davis and Garza): Jenkens & Gilchrist, a law firm, filed an interpleader to determine ownership of an asset that a former client transferred to it 10 years before. The client claimed that the asset transfer was only to secure payment of invoices, while J&G claimed that the transfer satisfied a non-refundable retainer. The former client, Felderhof, defaulted on the interpleader complaint and the district court entered judgment declaring J&G the sole owner. The district court denied Felderhof's motions to set aside the default under FRCP 60(b)(1) or 60(b)(4). Holding: Affirmed with respect to the denial of Rule 60(b)(4) relief: Felderhof argued that the judgment was void because she did not receive a summons along with the complaint, but the record evidence supported the opposite conclusion. Vacated with respect to the denial of Rule 60(b)(1) relief: the evidence suggested that Felderhof had a meritorious defense to J&G's claim and the record did not conclusively show that her default was willful. But the district court did not issue any fact-findings in connection with its denial of the Rule 60 motions. "Without guidance from the district court as to the basis for its Rule 60(b)(1) decision, we cannot determine whether the district court abused its discretion; and we are, thus, constrained to vacate this portion of the district court's order." It remanded for the district court to determine whether the record sufficed for denial of Rule 60(b)(1) relief and, if so, to "issue a more detailed ruling sufficient to resolve that which currently hinders our review." (Appeal from S.D. Texas ...)
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Posted by: alan bernson | Nov 23, 2008 5:10:10 AM