Succession of Cloud - 530 So. 2d 1146 (La. 1988)

Rule:

La. Sup. Ct. R. V, § 103(A) provides that a lawyer shall not acquire a proprietary interest in the cause of action or subject matter of litigation he is conducting for a client, except that he may: Acquire a lien granted by law to secure his fee or expenses. Contract with a client for a reasonable contingent fee in a civil case.

Facts:

Four of the five heirs of the decedent filed an action to set aside as a simulation the purported cash sale of immovable property from the decedent to the husband of the fifth child. The action also sought to set aside a subsequent transfer of the property from the husband to his ex-wife as part of the community property settlement, as well as two transfers of mineral interests from the ex-wife to the ex-wife’s attorney. The trial court set aside the sale from the decedent to the husband. The court issued a writ of certiorari to review the portion of the judgment which upheld the attorney's mineral interest in the property.

Issue:

Should the attorney’s mineral interest in the property be upheld? 

Answer:

No.

Conclusion:

The court held that that the heirs could assert a violation of La. Sup. Ct. R. V, § 103(A) as a basis for nullifying the transfers and recovering the mineral interests from the attorney. The court determined that the attorney's totally impermissible conduct in contracting to acquire an interest in the client's genuinely disputed claim was in violation of La. Sup. Ct. R. V, § 103(A). The court noted that the transaction yielded him funds in excess of $ 108,000, and that the contract simply could not be allowed to stand.