Archer Western Contractors, LLC v. McDonnel Group, LLC

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ARCHER WESTERN CONTRACTORS, LLC 	CIVIL ACTION
VERSUS 	NO. 22-5323
MCDONNEL GROUP, LLC 	SECTION: D(5)
ORDER AND REASONS
Before the Court is a Report and Recommendation from the United States
Magistrate Judge1 on a Motion for Attorneys’ Fees filed by Defendant The McDonnel
Group (TMG).2 Plaintiff Archer Western Contractors, LLC (AWC) opposes the
Motion.3 TMG timely filed an Objection to the Report and Recommendation,4 and
AWC filed a response5 to which TMG replied.6
After careful consideration and de novo review of the parties’ memoranda, the
record, the Report and Recommendation of the Magistrate Judge, The McDonnel
Group’s Objection to the Report and Recommendation, AWC’s Opposition to the
Objection, TMG’s Reply to AWC’s Opposition, and the applicable law, and having
determined that the Report and Recommendation is not clearly erroneous or contrary
to the law, the Court hereby OVERRULES the objections, approves the Report and
Recommendation and adopts it as its opinion in this matter. TMG’s Motion for
Attorney Fees7 is DENIED.
1 R. Doc. 282.
2 R. Doc. 254.
3 R. Doc. 256.
4 R. Doc. 289.
5 R. Doc. 291.
6 R. Doc. 292.
7 R. Doc. 254.
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I. 	FACTUAL AND PROCEDURAL BACKGROUND8
This case concerns issues that arose from the parties’ joint venture agreement
to obtain and perform a Contract for Orleans Parish.9 In terms of dispositive relief,
this Court: (1) granted TMG’s Motion for Partial Summary Judgment, finding that it
did not owe capital contributions;10 (2) granted AWC’s Motion for Partial Summary
Judgment, finding that TMG had breached the joint venture agreement relating to
$2.7 million in settlement funds;11 (3) and denied subsequent Motions for Summary
Judgment filed by both parties.12 At trial, the jury returned a verdict in favor of TMG
as to all remaining claims not disposed of by summary judgment.13 Following trial,
the Court issued a Final Judgment directing TMG to pay to the joint venture’s
account the $2.7 million in settlement funds plus delay damages.14 It then entered
judgment in favor of TMG as to the remainder of AWC’s breach of contract and breach
of fiduciary duty claims.15
TMG filed the instant Motion for Attorneys’ Fees based on a portion of the joint
venture agreement, which stated
Any Defaulting Party hereunder shall indemnify and hold harmless the Non-
Defaulting Party for any loss, claims or liabilities which the Non-Defaulting
Party may incur arising out of any breach of this Joint Venture Agreement by
the Defaulting Party. The Defaulting Party further agrees to pay all legal
expenses required of or by the Non-Defaulting Party to protect their interests
8 For judicial efficiency, and additionally because there were no objections to that part of the Report
and Recommendation, the Court adopts here the Factual Background as outlined in the Background
section of the Report and Recommendation. See R. Doc. 282.
9 See R. Doc. 42.
10 R. Doc. 146.
11 R. Doc. 158.
12 R. Doc. 215.
13 R. Doc. 243.
14 R. Doc. 252.
15 Id.
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or defend any action arising out of the Defaulting Party’s breach, including
court costs and disbursements and fees on a solicitor and his own client basis.16
The provisions for “default” and who is a “Defaulting Party” are governed by an
earlier portion of Article 15:
If any party hereto (the “Defaulting Party”) shall default in any of its
obligations under this Agreement including . . . then the other party (the “Non-
Defaulting Party”) may give written notice to the Defaulting Party specifying
the event of default.
In the event that the Defaulting Party does not cure its default within seven
(7) days of receipt of such notice then the Non-Defaulting Party may terminate
the Defaulting Party’s interest in the Joint Venture.17
TMG argued that by definition in the Joint Venture Agreement, AWC was the
defaulting party and as a result must pay all legal expenses incurred by TMG, the
non-defaulting party.18 AWC argues that TMG is not entitled to attorneys’ fees
because it was never judicially determined to be in breach of the Joint Venture
Agreement. Absent a breach, it argues, attorneys’ fees cannot be awarded.19
II. 	LEGAL STANDARD
The Federal Rules of Civil Procedure require that the district judge “determine
de novo any part of the magistrate judge's disposition that has been properly objected
to.”20 After reviewing a report and recommendation, “[t]he district judge may accept,
reject, or modify the recommended disposition; receive further evidence; or return the
matter to the magistrate judge with instructions.”21
16 R. Doc. 253-3, The Joint Venture Agreement, at p. 17.
17 Id., at p. 16.
18 R. Doc. 254.
19 R. Doc. 256.
20 Fed. R. Civ. P. 72.
21 Id.
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III. 	ANALYSIS
TMG’s sole objection to the Report and Recommendation of the United States
Magistrate Judge is that it was based on an error of law.22 TMG agrees with the
Report 	and 	Recommendation 	that 	the 	wording 	of 	the 	contractual 	fee-shifting
provision governs whether attorneys’ fees are awarded.23 However, TMG contends
that the fee-shifting provision of the Joint Venture Agreement allows TMG to collect
attorneys’ fees from AWC because AWC is the defaulting party under the terms of
the agreement and because a claim for breach of contract is not necessary for the
awarding of fees.24 AWC responds that the addition of TMG’s claim in the Pretrial
Order does not modify the required contractual interpretation of the Joint Venture
Agreement and the deferral of the issue of attorneys’ fees for post-trial adjudication
does not reflect the viability of TMG’s fees claim.25 TMG replies that AWC’s objection
to the inclusion of TMG’s fees claim in the Pretrial Order is procedurally improper
and lacks substantive merit that lack of prior determination of its entitlement to
attorneys’ fees does not provide the grounds to deny the instant motion.26
The Judgment required that any motion for attorneys’ fees be filed within the
required time period under Federal Rule of Civil Procedure 54(d)(1).27 TMG’s request
for attorney’s fees is procedurally proper; it both requested attorneys’ fees in its
22 R. Doc. 289-1 at p. 3.
23 R. Doc. 282, United States Magistrate Judge’s Report and Recommendation (“…the language of the
Agreement’s fee shifting provision will govern if clear.”); R. Doc. 289-1, Defendant’s Objections to the
Report and Recommendation (“… absent a provision contrary to mandatory law or public policy, the
JV Agreement has the binding effect of law between the parties.”).
24 R. Doc. 289-1 at p. 7.
25 R. Doc. 291 at pp. 2-3
26 R. Doc. 292 at pp. 2-3
27 R. Doc. 252, Judgment, at p. 2.
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Answer28 and filed the instant Motion.29 The analysis, however, does not end at
procedural propriety. The deferral of the issue of attorneys’ fees for post-trial
adjudication does not reflect any endorsement of either party’s claim for attorneys’
fees. Claims for attorneys’ fees are treated as “collateral matters” because “they are
dependent on, and usually await, a determination of the claim on the merits.”30 Each
claim for attorneys’ fees must be analyzed on the substantive merits of the individual
fees claim in the context of and dependent on the outcome of the larger case that has
already been adjudicated.31
Courts may not award attorneys’ fees unless a specific contractual or statutory
fee-shifting provision authorizes their awarding.32 While the specific award of
attorneys’ fees is not barred as a compulsory counterclaim, AWC’s alleged breach of
contract is barred as such.33 Per the plain language of the Joint Venture agreement,
a “breach” is necessary to award attorneys’ fees under the Agreement’s fee-shifting
provision.34 Because there was no judicial determination that AWC breached the
Joint Venture Agreement, the award of attorneys’ fees to TMG is impermissible.
28 R. Doc. 88 at p. 21 (“…there be judgment in its favor dismissing the claims of Plaintiff, Archer
Western Contractors, LLC, with prejudice and at its cost, with attorneys’ fees awarded to The
McDonnel Group, LLC due to Archer Western Contractors, LLC’s defaults under the JV Agreement or
as otherwise may
be available.”).
29 R. Doc. 254.
30 Deus v. Allstate Ins. Co., 15 F.3d 506, 521 (5th Cir. 1994).
31 Id. (“A claim for attorneys' fees or costs generally is not an independent claim for relief essential to
the outcome of the case as a whole.”)
32 See, e.g., Maloney v. Oak Builders, Inc., 235 So. 2d 386, 390 (La. 1970).
33 See Fed. R. Civ. P. 13(a); Baker v. Gold Seal Liquors, Inc., 417 U.S. 467, 469 (1974). Additionally,
while the case cited in TMG’s Reply, United Indus., Inc. v. Simon-Hartley, Ltd., 91 F.3d 762 (5th Cir.
1996), addresses the proper procedure for requesting attorneys’ fees, the underlying substantive law
authorizing attorneys’ fees in that case was English fee-shifting law, not a contract or an American
statutory fee-shifting provision.
34 R. Doc. 253-3, The Joint Venture Agreement, at p. 16.
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The Louisiana Civil Code defines the interpretation of a contract as “the
determination of the common intent of the parties.”35 This common intent should be
“sought by examining the words of the contract itself…”36 When interpreting a
contract, words should be construed based on plain, ordinary and generally prevailing
meaning, unless the words have acquired a technical meaning.”37 “When the words
of a contract are clear and explicit and lead to no absurd consequences, no further
interpretation may be made in search of the parties’ intent.”38
Whether AWC is liable to TMG for attorneys’ fees hinges not on whether the
party was in default but rather whether a “default” in this context is synonymous
with a breach. It is not. Default is not a claim but rather a legal status.39 “Breach,”
however, is not synonymous with “default”; it is a claim that must be brought before
a court, which would then adjudicate the claim of breach.40 Without a judicial
35 La. Civ. C. art. 2045
36 Prejean v. Guillory, 38 So. 3d 274, 279 (La. 2010).
37 Guidry v. Am. Pub. Life Ins. Co., 512 F.3d 177, 181 (5th Cir. 2007) (quoting Cadwallader v. Allstate
Ins. Co., 848 So.2d 577, 580 (La. 6/27/03))
38 La. Civ. C. art. 2046.
39 § 1.2. Meaning, 6 La. Civ. L. Treatise, Law Of Obligations § 1.2 (2d ed.) (“When an obligor fails to
perform at the time he is expected to render performance, thereby giving rise to the warranted
conjecture that if he still intends to perform his performance will be delayed, that necessary transition
is accomplished by the mise en demeure, the act of putting of the obligor in default, which amounts to
a verification that he did not render performance at the time at which his obligation bound him to
render it. Only as of the moment of that act of putting in default, technicality though it may sometimes
be, is the obligor’s failure given the status of an act, negative in content, that is productive of legal
consequences.”). Putting someone in default is required for certain kinds of damages for breach of
contract, see, e.g., La. Civ. C. art. 2010.
40 § 1.15. Delay, default, fault, breach and the meaning of words, 6 La. Civ. L. Treatise, Law Of
Obligations § 1.15 (2d ed.) (“…it can be said that an obligor who delays the rendering of performance
has incurred a breach of contract when he has been put in delay—or default…”). While it “can be said”
that a party breached when put in default, this characterization is not a judicial finding of a breach of
contract. For a court to award attorneys’ fees, more than a party’s unilateral determination that the
opposing party is in breach of the contract that contains the fee-shifting provision is required.
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determination of AWC’s having breached the contract, TMG is not entitled to
attorneys’ fees.41
Contrary to what TMG contends in its Motion, the award of attorneys’ fees is
predicated not on whether a party was put in default of an obligation but rather on a
whether a party breached the Joint Venture Agreement. To be awarded, the non-
defaulting party’s attorneys’ fees must arise “out of the Defaulting Party’s breach,”
not default.42 The choice of the word “breach” instead of “default” for this provision
where “default” is used elsewhere in the Article further demonstrates that the parties
contemplated the differences between the two terms.
Based on its independent and de novo review of the record and applicable law,
the Court finds that TMG has not demonstrated its entitlement to attorneys’ fees
under this language of the Joint Venture Agreement. While TMG argues that there
need not be “a litigated breach of contract claim against a party prior to the motion
for attorneys’ fees,” TMG fails to cite any authority for its assertion.43 This Court
agrees with the Report and Recommendation that allowing a party to collect
attorneys’ fees for a breach of contract without judicial determination of a breach
“would mean either party could unilaterally declare the contract breached” and thus
collect fees based on that unilateral declaration.44 Allowing the award of attorneys’
41 After its independent review of the record and the applicable law, the Court agrees with the Report
and Recommendation and declines to decide whether AWC was properly placed in default in
accordance with the terms of the agreement because the award of fees was predicated on a breach of
the agreement.
42 R. Doc. 253-3, The Joint Venture Agreement, at p. 17 (emphasis added).
43 R. Doc. 289-1, at p. 7. The Court also has not found any authority that permits the award of
attorneys’ fees based on a contractual agreement where the claim allegedly giving rise to the fee-
shifting provision was not litigated before a court.
44 R. Doc. 282, at p. 5.
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fees based on one of the party’s unilateral declaration of a breach would yield an
absurd result.
Because AWC was never found to be in breach of the Joint Venture Agreement
and because a breach is required for the award of attorneys’ fees under that
agreement, TMG is not entitled to attorneys’ fees.
IV. 	CONCLUSION
For the foregoing reasons,
IT IS HEREBY ORDERED that Defendant The McDonnel Group, LLC’s
Objection45 to the Report and Recommendation of the United States Magistrate
Judge is OVERRULED.
IT IS FURTHER ORDERED that the Court APPROVES the Report and
Recommendation46 and ADOPTS it as its opinion in this matter.
IT IS FURTHER ORDERED that Defendant The McDonnel Group, LLC’s
Motion for Attorneys’ Fees47 is DENIED.
New Orleans, Louisiana, November 17, 2025.
_____________________________
WENDY B. VITTER
United States District Judge
45 R. Doc. 289.
46 R. Doc. 282.
47 R. Doc. 254.
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