Hodges v. Reasonover

In 2007, Jacqueline and Stephen Hodges (plaintiffs) entered a retainer agreement with Reasonover & Olinde, LLC and attorney Kirk Reasonover (defendants). The agreement included a blended hourly rate and contingency fee and required disputes to be resolved by the American Arbitration Association (AAA). Jacqueline, owner and chief executive officer of Med-Data Management, Inc. (Med-Data), sold software rights to MedAssets, Inc. in exchange for payment. When payment was not made, Reasonover brought suit on behalf of the Hodgeses. In 2009, the Hodgeses requested that the retainer be revised to a pure contingency fee. The revised agreement had the same arbitration clause and a disclaimer that, due to a conflict of interest with the firm relating to a newly added claim, the Hodgeses should review the agreement with independent counsel. The Hodges signed without the assistance of counsel. The Hodgeses’ claims brought on behalf of Med-Data were dismissed on summary judgment, and the Hodgeses filed a legal-malpractice suit against Reasonover. Reasonover sought dismissal, citing the arbitration clause and asserting that the clause did not limit his liability in violation of any ethical rules. The Hodgeses argued that the clause limited Reasonover’s liability because the AAA filing fee created a barrier to arbitrate. The district court found the clause invalid because it limited Reasonover’s liability, violating rules of professional conduct because the Hodgeses did not have independent counsel when they entered the agreement. The court of appeal denied Reasonover’s writ for review. Reasonover filed a writ with the Louisiana Supreme Court, which was granted.