Josh Norris v. Garry Causey

Case: 16-30339 Document: 00514126837 Page: 1 Date Filed: 08/22/2017

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 16-30339

United States Court of Appeals

Fifth Circuit

FILED

JOSH NORRIS; JILL NORRIS, August 22, 2017

Lyle W. Cayce

Plaintiffs - Appellees Cross-Appellants Clerk

v.

KARRY CAUSEY,

Defendant - Appellant Cross-Appellee

GARRY CAUSEY,

Defendant - Cross-Appellee

------------------------------------------------------------------------

consolidated with 16-30942

JOSH NORRIS; JILL NORRIS,

Plaintiffs - Appellants

v.

GARRY CAUSEY; KARRY CAUSEY,

Defendants - Appellees

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consolidated with 16-31068

JOSH NORRIS; JILL NORRIS,

Plaintiffs - Appellees

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v.

GARRY CAUSEY,

Defendant - Appellant

------------------------------------------------------------------------

consolidated with 16-31069

JOSH NORRIS; JILL NORRIS,

Plaintiffs - Appellants

v.

GARRY CAUSEY; KARRY CAUSEY,

Defendants - Appellees

Appeals from the United States District Court

for the Eastern District of Louisiana

Before REAVLEY, HAYNES, and COSTA, Circuit Judges.

GREGG COSTA, Circuit Judge:

This is yet another case that has its roots in the devastation Hurricane

Katrina wreaked on New Orleans. Resilient as the city is, it swiftly began to

rebuild. That effort presented attractive opportunities for investors and

developers looking to turn a profit. This case involves one such opportunity

that went sour.

This lawsuit that followed resulted in a bench trial. One of the

defendants appeared at trial to fight the allegations; the other did not and

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whether he was properly served is an issue on appeal. The district court found

that both defendants breached their agreement with plaintiffs to purchase,

renovate, and sell Katrina-damaged properties. It held Karry Causey, the

defendant who put up a defense, liable for $16,780. It found the defaulting

defendant, Garry Causey, further liable for breach of fiduciary duty and

responsible for $94,000. After that judgment issued, Garry finally appeared

and sought to vacate the award alleging improper service. Both defendants

sought to vacate the judgment on the additional ground that they believe the

plaintiffs failed to adequately disclose the claim during their bankruptcy. The

district court denied those postjudgment motions and also awarded attorneys’

fees and costs against the Causeys.

All these rulings are challenged as both sides appeal. Plaintiffs contend

the district court should have required both defendants to pay the full $94,000

in damages. Defendants argue that the jurisdictional defects warrant vacating

the judgment, that in any event Karry did not breach the contract, and that

the fee award is excessive. We affirm the judgment in all respects as to Karry,

but remand for additional factfinding about the attempts to serve Garry.

I.

Joshua Norris, a plumber from Michigan, traveled to New Orleans in

early 2007 in search of work. There he met twin brothers Karry and Garry

Causey. The Causeys proposed to Joshua and his wife, Jill, the following

investment opportunity: the Norrises would supply funds to purchase

hurricane-damaged properties and the Causeys would renovate those

properties and sell them at a profit. That profit would be evenly divided among

them.

Garry reduced this plan to writing. He and the Norrises signed the joint

venture agreement. Karry did not.

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The agreement divides responsibilities among the parties along the lines

of the original understanding. The Norrises are to finance the project. Garry

is responsible for, among other things, maintaining accounting records,

identifying and facilitating the purchase of properties, and negotiating with

contractors to obtain the best possible prices. Karry is the project manager.

To fulfill their end of the bargain, the Norrises obtained a home equity

loan. From those funds, they wrote Garry one check for $48,000 and another

for $45,000. This money was supposed to be used for construction on two

separate properties. Garry wired Karry $15,780 of those funds. The Norrises

gave Karry an additional $1,000 for architectural plans he said were needed.

Despite receiving these funds, the Causeys failed to move forward with

the renovations. They instead spent the money on personal items. After a few

months, they also stopped paying the Norrises the interest accumulating on

their home equity loan.

Inability to repay that loan led the Norrises to file for Chapter 7

bankruptcy in 2009. The Norrises did not list their potential claim against the

Causeys in their bankruptcy schedules. Before the issuance of the trustee’s

final report, however, the claim began to appear in interim reports by the

trustee as “a potential lawsuit regarding LA property” with an estimated value

of $1,000. The bankruptcy trustee’s final report expressly abandons this claim

to the Norrises. See 11 U.S.C. § 554(c). That abandonment became final in

2012 when the bankruptcy court approved the final report and closed the case.

The Norrises subsequently filed this lawsuit against the Causeys. Garry

failed to appear despite various efforts, described in more detail below, to serve

him. The district court thus found Garry in default. Karry, on the other hand,

appeared and actively defended against the Norrises allegations in a one-day

bench trial.

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That trial resulted in the district court’s entering default judgment

against Garry on breach of contract and fiduciary duty claims and ordering

him to pay $94,000 in damages. The district court also found Karry tacitly

accepted the contract and likewise breached. But it held him liable for only

$15,780—the amount Garry wired him that Karry used for his own benefit.

The Norrises subsequently filed a motion for attorneys’ fees and a motion

to amend the final judgment. The district court awarded $58,736 in attorneys’

fees and costs, holding Garry and Karry solidarily liable for the full amount.

And despite disagreeing with the Norrises’ arguments for holding Karry

solidarily liable for the full damages award, it added $1,000 in damages to

account for the check Karry received for architectural plans. Karry filed a

notice of appeal. The Norrises filed a cross appeal.

Following the commencement of these appeals, the bankruptcy court in

the Eastern District of Michigan reopened the Norrises’ case, stating “it

appear[s] that Debtors may have intentionally [misled] the Court as to their

assets and said asset appears to be an asset of the Debtor's Estate.” 1

After that bankruptcy court activity, and approximately four months

after the New Orleans district court issued its final judgment, the Causeys

filed separate motions under Rule 60(b)(4) seeking to set aside the judgment

as void. This was the first time Garry appeared in the case.

Both Causeys argued that the Norrises did not have standing as failure

to disclose the claim in bankruptcy meant abandonment of the claim was

1 The parties report no further action in the bankruptcy court. The docket sheet shows

the trustee has since filed one interim report, one semiannual report, and one annual report.

In re Norris, 2:09-bk-68137 (Bankr. E.D. Mich.). All list this lawsuit as an asset. Id. The

last report estimates the lawsuit’s value at $170,000. Id.

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improper and the trustee should be considered the real party in interest.

Garry separately argued that he was not properly served.

The district court agreed with the Causeys that the Norrises were not

the proper plaintiffs. But because real-party-in-interest is not a jurisdictional

requirement, it denied relief, ordering instead that the trustee could substitute

as the plaintiff. The district court further found that Garry was properly

served.

II.

We start our review at the end of the district court litigation, with the

denial of the Rule 60(b)(4) motions. We do so because if those motions should

have been granted, then the judgment would be void and there would be no

need to review the merits.

We first consider the Rule 60(b) ground that would vacate the judgment

as to both defendants: the argument that the Norrises lack standing because

they did not disclose this claim during their bankruptcy. The district court’s

ruling on this issue is subject to cross appeals. This is because, although the

district court did not void the judgment, it held that the Norrises are not the

real parties in interest and the bankruptcy trustee could substitute in. The

Causeys argue that the district court did not go far enough; it recognized the

real-party-in-interest problem but did not see that through to voiding the

judgment. The Norrises contend the district court went too far; whether they

or the trustee was the proper party is not a question the court should consider

at all in a motion for postjudgment relief. They also argue that the Rule 60

motions were untimely. 2

2 The Norrises similarly argue the appeals were untimely. But that is not so. Though

the timelines are somewhat convoluted given the multiple posttrial motions, the Causeys

complied with the deadlines. FED. R. CIV. P. 59(b) (28 days after entry of judgment); Id.

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A.

For starters, there is no timeliness problem with the motions seeking

relief from the judgment. Because a “void judgment cannot acquire validity”

through the passage of time, Rule 60(b)(4) motions have no time limit. 11

Charles Alan Wright, Arthur R. Miller, & Mary Kay Kane, FEDERAL PRACTICE

& PROCEDURE, § 2862 (3d ed.); Jackson v. FIE Corp., 302 F.3d 515, 523 (5th

Cir. 2002).

Nor is it a problem that Karry’s motion was brought after his having

appealed the final judgment. A party may seek Rule 60(b) relief after filing a

notice of appeal. Lopez Dominguez v. Gulf Coast Marine & Assoc., Inc., 607

F.3d 1066, 1073–74 (5th Cir. 2010). The complication is that a district court

may not grant the motion and vacate the judgment while an appeal is pending.

Id. If the district court is inclined to do so, it may notify the litigant who can

then ask the court of appeals for a remand. In contrast, the pendency of an

appeal does not deprive the district court of the authority it exercised here to

deny a Rule 60 motion. Id. (citing Winchester v. U.S. Attorney for Southern

Dist. of Texas, 68 F.3d 947, 949 (5th Cir. 1995)).

B.

As the Rule 60(b)(4) motions were timely, we consider whether they

established one of the rare defects that renders a judgment void. United

Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 270 (2010). The

“exceedingly short” list of such “infirmities” includes only subject matter

60(c)(1) (within a reasonable time after the entry of judgment); FED. R. APP. P. 4(a)(1)(A) (30

days after entry of the judgment). Karry timely filed his appeal of the judgment and both

Causeys timely appealed the denials of their Rule 60(b) motions. Those separate appeals are

consolidated. We do not understand the Norrises’ complaint that the appeals of the Rule

60(b) denials somehow improperly extended Karry’s appeal of the underlying judgment. The

separate appeals focus on distinct issues: (1) Karry’s appeal on his liability and (2) the Rule

60(b) appeals on “standing” and personal jurisdiction.

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jurisdiction, personal jurisdiction, “or [ ] a violation of due process that deprives

a party of notice or the opportunity to be heard.” Id. The Causeys try to fit

their alleged error into the jurisdictional bucket, characterizing the question

whether the Norrises or bankruptcy estate possess the claims against them as

one of “standing.”

Standing of the constitutional variety—the well-known injury,

causation, and redressability trifecta—is a question of subject matter

jurisdiction. Sprint Commc’ns. Co. v. APCC Servs. Inc., 554 U.S. 269, 273

(2008) (“Th[e] case-or-controversy requirement is satisfied only where a

plaintiff has standing.”). But a lack of Article III standing is neither the

challenge the Causeys bring nor one they would prevail on. The Norrises’

injury is clear: they lost thousands of dollars. They argue that Causeys’

diversion of funds caused that injury. And this litigation can redress the loss

through damages, as the judgment demonstrates.

The “standing” label is also sometimes placed on the real-party-in-

interest challenge the Causeys do assert. See Wieburg v. GTE Southwest Inc.,

272 F.3d 302, 306 (5th Cir. 2001) (“Because the claims are property of the

bankruptcy estate, the Trustee is the real party in interest with exclusive

standing to assert them.”); Rideau v. Keller Indep. Sch. Dist., 819 F.3d 155, 163

n.7 (5th Cir. 2016) (noting that “the intermingling of standing and capacity

issues is not uncommon”) (citing William V. Dorsaneo III, The Enigma of

Standing Doctrine in Texas Courts, 28 REV. LITIG. 35, 65 (2008)); In re Unger

& Assocs. Inc., 292 B.R. 545, 550 (Bankr. E.D. Tex. 2003) (“Frequently,

attorneys and courts confuse the concepts of standing with that of capacity to

sue and with the real party in interest principle.”). Despite this cross labeling,

there is a key jurisdictional distinction between a challenge that a plaintiff

lacks Article III standing and one that she is not the real party in interest. The

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latter presents a merits question: “who, according to the governing substantive

law, is entitled to enforce the right?” 6A Wright & Miller, supra, § 1543. It is

thus like contractual or statutory standing and does not go to a court’s subject

matter jurisdiction. See id. § 1542 (stating that real-party-in-interest

“typically is deemed a prudential, rather than a constitutional [issue]”); Dunn

v. Advanced Med. Specialties, Inc., 556 F. App’x 785, 789–90 (11th Cir. 2014)

(noting that “the principle of real party in interest . . . does not impact the

court’s subject matter jurisdiction”).

The nonjurisdictional nature of real-party-in-interest challenges is

evident from the procedure for raising such an objection. An argument that

the plaintiff is not the real party in interest is an affirmative defense that must

be asserted with reasonable promptness. In re Signal Int’l, LLC, 579 F.3d 478,

487–88 (5th Cir. 2009). This typically requires that it be raised ahead of trial.

6A Wright & Miller, supra, § 1554. In contrast, a problem with subject matter

jurisdiction cannot be waived—that is why it can serve as a ground to void a

judgment via Rule 60(b)(4) long after the case ends. In another feature not

typical of defects in subject matter jurisdiction, Rule 17(a)(3) states that a case

may not be dismissed for a “failure to prosecute in the name of the real party

interest until, after an objection, a reasonable time has been allowed” for the

proper party to “substitute[ ] into the action.” FED. R. CIV. P. 17(a)(3).

Courts have recognized this distinction between Article III standing and

real-party-in-interest/capacity issues in holding that an assignment does not

erase constitutional injury, see Cranpark Inc. v. Rogers Group Inc., 821 F.3d

723, 730 (6th Cir. 2016) (concluding that “one who sells his interest in a cause

of action is not deprived of Article III standing” but “is susceptible to a real-

party-in-interest challenge”), and that parents can suffer a financial injury

from their child’s hardship even when they are not the proper party to sue in

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his name, see Rideau, 819 F.3d at 163 (recognizing that parents who had

Article III standing to sue nonetheless lacked capacity to sue on their child’s

behalf because a different guardian had been appointed). More generally, that

the Norrises may not ultimately be entitled to the damages awarded does not

change that the relief sought redresses an injury they suffered. See Sprint,

554 U.S. at 287 (holding that it is irrelevant that the plaintiff would give all

winnings to another party because the sole question is “whether the injury that

a plaintiff alleges is likely to be redressed through the litigation”). This means

that even if the Causeys are correct that the trustee should have brought this

suit, 3 that would not entitle them relief under Rule 60(b)(4). See Dunn, 556 F.

App’x at 789–90 (rejecting a Rule 60(b)(4) motion challenging real-party-in-

interest status for the same reason).

The district court recognized as much in holding that this argument did

not raise the jurisdictional defects that support vacating a judgment. Yet it

also ruled that the trustee could replace the Norrises as plaintiffs at this late

juncture. But the inapplicability of Rule 60(b)(4) means the Causeys have

invoked no postjudgment vehicle that allows replacing the Norrises with the

trustee. And as we have already explained, challenges to real-party-in-

interest status can be forfeited even when raised prior to entry of judgment,

such as when a defendant waits to raise the issue until the eve of trial. See In

re Signal, 579 F.3d at 487–88; see also 6A Wright & Miller, supra, § 1554. So

3 Because of the improper procedural posture in which this real-party-in-interest

question was raised, we have no occasion to address whether the Norrises’ bankruptcy court

disclosure was sufficient or, if it was not, whether the bankruptcy court’s abandonment can

be undone in this separate litigation. Judicial estoppel is also sometimes argued when a

party pursues a claim that it did not disclose in bankruptcy, see, e.g., Love v. Tyson Foods,

Inc., 677 F.3d 258, 261–62 (5th Cir. 2012), but that equitable doctrine does not raise a

jurisdictional question. So the Causeys failure to timely raise estoppel again means we

cannot address it.

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the Causeys’ raising this challenge only after the court entered judgment was

too late. 4 The district court should have stopped with its correct observation

that an alleged real-party-in-interest problem is not a jurisdictional defect that

can overcome the strong interest in finality of judgments. If the rest of this

opinion affirms the judgment, then it remains with the Norrises who acquired

this action through the bankruptcy court’s express abandonment of it to them.

C.

In contrast, Garry does raise an issue that goes to the power of the

district court to enter a judgment against him: whether he was properly served.

Thompson v. Deutsche Bank Nat’l Trust Co., 775 F.3d 298, 306 (5th Cir. 2014).

The Norrises contend this argument also falls outside Rule 60(b)(4) because

technically deficient service may not rise to the level of a due process violation.

But this argument need not fit in Rule 60(b)(4)’s “due process” category.

Deficient service means a court lacked personal jurisdiction over a defendant,

and lack of personal jurisdiction is an independent basis for voiding a

judgment. Harper Macleod Solicitors v. Keaty & Keaty, 260 F.3d 389, 393 (5th

Cir. 2001) (“[A] district court must set aside a default judgment as void if it

determines that it lacked personal jurisdiction over the defendant because of

defective service of process.”).

We thus must decide whether Garry was served in accordance with

Federal Rule of Civil Procedure 4. Rule 4 allows serving an individual by

following either: (1) the law of the state where the suit is brought (Louisiana);

(2) the law of the state where service is made (New Mexico); or (3) the methods

listed in Rule 4 itself. FED. R. CIV. P. 4(e)(1). All three allow substituted

4 Karry suggested a real-party-in-interest problem ahead of trial but decided not to

pursue it then.

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service. Such service entails leaving a copy of the summons and complaint at

the individual’s usual place of abode with someone of suitable age and

discretion. Id.; LA. CODE CIV. PROC. ANN. art. 1234; NMRA, Rule 1-004(F)(2).

1.

Garry first contends that service was improper because the address in

New Mexico where the Norrises tried to serve him was not his place of abode

at the time. The district court’s factual finding to the contrary is reviewed for

clear error. Goetz v. Synthesys Tech., Inc., 415 F.3d 481, 483 n.3 (5th Cir. 2005).

There is ample support for the district court’s determination. The New

Mexico address appears as Garry’s residence in litigation documents, pay

stubs, property tax forms, and affidavits. On top of all this, Karry testified

that the New Mexico home is where Garry’s wife lives, where Garry raised his

kids, and Garry’s address as far as he knows.

Garry responds by pointing to his and his wife’s affidavits saying he has

been living in Denver since 2010—five years prior to service being first

attempted in New Mexico. He notes that a sign outside the home said Garry’s

mail should be forwarded. And he offers three bills from 2016 listing a Denver

address.

But this effort fails for two reasons. First, the standard of review means

that even if Garry has shown that the location of his place of abode was

debatable, we defer to the district court’s conclusion. Anderson v. City of

Bessemer City, N.C., 470 U.S. 564, 573 (1985). Garry’s argument also assumes

he can only have one usual place of abode. But a person can have two or more

such places, provided each contains sufficient indicia of permanence. Nat’l

Dev. Co. v. Triad Holding Corp., 930 F.2d 253, 257 (2d Cir. 1991); see also

Wright & Miller, supra, § 1096. This is true of the New Mexico residence. See

Periodical Publishers' Serv. Bureau, Inc. v. Keys, 1992 WL 298003, at *7 (E.D.

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La. Oct. 7, 1992) (concluding a second residence had sufficient indicia of

permanence as defendant’s “wife resides there, he does not state that he is

legally separated or divorced from her, [and] he did actually reside there within

three days of service”). The district court did not err in finding that the New

Mexico home was a place where Garry could be served. 5

2.

Even if the New Mexico residence is Garry’s usual place of abode,

another question remains: Was posting the complaint and summons on the

door of that residence proper service under Rule 4? The district court held that

it was. As support, it cited Vann Tool Co. v. Grace, 566 P.2d 93 (N.M. 1977).

Van Tool says that posting a summons and complaint on a defendant’s door is

proper if no person is found willing to accept service. Id. at 94. That

observation, however, relies on an outdated version of the New Mexico rules

that allowed service in that manner. Id. That rule was revised in 2004 to

eliminate “post and mail” service in favor of service at the place of

employment. 6 See UMG Recordings, Inc. v. Montoya, 2009 WL 1300361, at *2

n.1 (D.N.M. Jan. 30, 2009) (noting the change to Rule 1-004(F)).

5 Garry also argues that the district court erroneously relied on the “outward

appearances” doctrine in finding he could be served at the Albuquerque address. See NLRB

v. Clark, 468 F.2d 459, 464 (5th Cir. 1972) (holding that when a defendant “has in fact

changed his residence but to all appearances is still occupying a former dwelling, substituted

service at the former dwelling is proper”) (emphasis added). But this misconstrues the

district court’s reliance on Clark. The district court cites it for the proposition that a plaintiff

may rely on a defendant’s outward representations in concluding a residence is his usual

place of abode. Consideration of such representations is not improper. Indeed, we have said

that “no hard and fast rule can be fashioned to determine what is or is not a party’s ‘dwelling

house or usual place of abode’ within the rule’s meaning; rather the practicalities of the

particular fact situation determine whether service meets the requirements of [Rule 4].”

Nowell v. Nowell, 384 F.2d 951, 953 (5th Cir. 1967). The district court’s reliance on Garry’s

outward representations regarding the New Mexico residence was just that: assessing the

practicalities of the particular fact situation to determine whether service was proper.

6 “Rule 1-004(F)(1) formerly provided that if no qualified person was at the usual place

of abode to accept service of process, service could be made by posting process at the abode

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The Norrises’ failure to comply with New Mexico’s requirements for

service does not end our inquiry. Given the multiples sources that Rule 4

considers in determining if service is proper, we look to whether federal or

Louisiana law allows service by posting on the door. The answer turns on what

happened the day the complaint was posted on the New Mexico house.

The process server’s affidavit says she attempted to serve Garry at his

New Mexico residence numerous times. But, she says, neither Garry nor his

wife voluntarily opened the door to accept service at any point. She then notes

that “[o]n another occasion, Garry Causey’s wife yelled through the door that

she would not accept service . . . .” The affidavit then says that “[s]ervice was

subsequently made on February 2, 2015 by posting the [documents] to the front

door.”

The district court’s reliance on New Mexico’s since-repealed service

rule—the one allowing posting and mailing even without anyone being present

or avoiding service—meant it did not believe it mattered whether Garry’s wife

yelling through the door and the posting of the documents happened on the

same day. So the district court did not make a clear finding as to this timing

question. The district court says, for example, that the “process server left a

copy of the summons and complaint outside the Albuquerque residence after

Garry Causey’s wife refused to accept service” without detailing how soon

after. It likewise later says that “Garry Causey’s wife refused service, so the

process server posted the summons and complaint on the front door”—again

without clearly stating whether both events took place the same day.

and then mailing a copy of the process to the last known mailing address. This alternative

method of service has been omitted in the 2004 amendment.” NMRA, Rule 1-004(F)

(committee commentary). The 2004 Amendment further establishes a “hierarchy of methods

of service” which did not before exist, id., meaning that previously a plaintiff did not have to

make prior attempts at service before resorting to the “post and mail” method.

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It turns out that whether the yelling and posting happened the same day

matters a great deal. Leaving a summons and complaint at a residence door,

unaccompanied by a refusal to accept service, is not effective service under

Rule 4. See German Am. Fin. Advisors & Trust Co. v. Rigsby, 623 F. App’x 806,

808 (7th Cir. 2015) (“[L]eaving the papers on the defendant’s door is not enough

to constitute valid service . . . .”); Coffin v. Ingersoll, 1993 WL 208806, at *2

(E.D. Pa. June 11, 1993) (same). Louisiana law likewise does not allow service

in that manner. LA. CODE CIV. PROC. ANN. art. 1231. This means that if

Garry’s wife was not present, let alone refusing service, on the day the process

server posted the documents on the door, Garry’s service was likely defective.

On the other hand, a defendant’s refusal to accept service is not rewarded

when the process server announces the nature of the documents and leaves

them in close proximity to the defiant defendant. 4A Wright & Miller, supra,

§ 1095 (citing Rule 4(e)(2)(A) and collecting cases). And, contrary to Garry’s

contention, that doctrine has been extended to cases involving substituted

service on a family member. See Fed. Fin. Co. v. Longiotti, 164 F.R.D. 419,

421–22 (E.D.N.C. 1996) (concluding service was proper when server left legal

documents at doorstep after defendant’s wife refused to accept them);

Periodical Publishers’ Service Bureau, 1992 WL 298003, at *6–7 (same);

Conwill v. Greenberg Traurig, LLP, 2010 WL 2773239, *5 (E.D. La. Jul. 13,

2010) (same). So if Garry’s wife was present and refusing service the day of

the posting, leaving the summons on the door may have qualified as the

permissible “substituted service” of leaving the documents with someone of

suitable age and discretion.

Garry urges us to find that his wife’s avoidance of service and the posting

of the documents on the door were two separate incidents, rule service was

improper, and void the judgment. His view of the timing may be the most

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natural reading of the process server’s affidavit. But because both the affidavit

and the district court’s findings are susceptible to different interpretations and

more evidence may be warranted on this question, the wiser route is to remand

to allow the district court to make this finding in the first instance.

If the district court concludes the documents were not posted on the door

the same day Garry’s wife was home and refused service, it may also engage

in additional factfinding about its alternative ruling that service was proper

under a “good faith” theory. We cannot review that holding now for two

reasons. For one thing, the finding that the plaintiffs engaged in good faith

efforts to serve Garry may be influenced by the clarification we seek on remand

about the extent of the process server’s efforts. For another, the district court

seemed to believe a finding of good faith does not require actual notice. It said

only that “the record reveals that Garry likely had actual notice of the lawsuit.”

We have never considered the “good faith” rule that some district courts have

adopted and do not do so here given the need for a remand on factual issues.

See, e.g., Conwill, 2010 WL 2773239, *3–5 (“Where the defendant receives

actual notice and the plaintiff makes a good faith effort to serve the defendant

pursuant to the federal rule, service of process has been effective.”). But at a

minimum the cases adopting that theory seem to permit it only when a

defendant had actual notice of the suit. 7 See, e.g., Ali v. Mid-Atlantic

Settlement Servs., Inc., 233 F.R.D. 32, 36 (D.D.C. 2006) (prefacing the rule as

with when “[a] defendant receives actual notice”).

We therefore remand the service issue for additional factfinding.

7 Although the court did not make a finding that Garry had actual notice, there is

evidence to that effect. Most notably, Garry’s brother and business partner (Karry) said there

is “[n]o question [Garry] is aware of [this lawsuit]”.

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III.

Because we do not find any Rule 60(b) basis to void the judgment entered

against Karry, we consider the merits of the district court’s rulings as to him.

Karry asserts he could not have breached the joint venture agreement because

he never accepted it. 8 The Norrises contend they should have received more

damages: lost profits as well as Karry being held liable for the full amount of

their funds that were not invested or returned.

A.

The district court found that Karry tacitly accepted the joint venture

agreement. Karry fails to show this finding is clearly erroneous. The trial

testimony reveals Karry approached the Norrises about a possible joint

venture; had discussions with them about the venture before the agreement

was written; agreed to act as the project manager and share in any profits;

knew Garry sent the written agreement to the Norrises to sign; and accepted

and spent money given to him by Garry that he knew came from the Norrises.

This is more than enough to support a conclusion that Karry tacitly consented.

LA. CIV. CODE ANN. art. 1843 (“Tacit ratification results when a person, with

knowledge of an obligation incurred on his behalf by another, accepts the

benefit of that obligation.”); see also Zeller v. Webre, 17 So. 3d 55, 58 (La. App.

5 Cir. 2009).

B.

Although it held that Karry was liable for breaching the joint venture

agreement, the district court declined to award lost profits as damages for that

breach. Lost profits must be proved with reasonable certainty, meaning they

8 Karry also alleges the bankruptcy court’s discharge of the Norrises extinguished

their cause of action under the agreement. His failure to raise this issue below waives it.

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may not rest on speculation. Al Smith's Plumbing & Heating Serv., Inc. v.

River Crest, Inc., 365 So. 2d 1122, 1126 (La. App. 4 Cir. 1978). The district

court is given considerable discretion in assessing the amount, if any, of

uncertain lost profits. LA. CIV. CODE ANN. art. 1999.

Although the Norrises hoped the joint venture would result in profits,

they did not adequately quantify those losses at trial. White Haute, LLC v.

Mayo, 38 So. 3d 944, 953 (La. App. 5 Cir. 2010) (noting that an expectation that

a venture would be profitable alone does not suffice to warrant a lost profits

award). As the joint venture was a new enterprise, the Norrises point to

Karry’s testimony showing he earned profits from redeveloping other

properties, and the later redevelopment of one of the properties that is the

subject of this litigation. But that evidence, without more, fails to bridge the

gap. That is because profiting from a redevelopment depends on many

contingencies such as costs, timely construction, and market conditions. See

Al Smith’s, 365 So. 2d at 1125–26 (vacating an award of lost profits because

the amount of losses attributable to a plumbing company that delayed a project

were indeterminable given that other contingencies may have added to the

delay). And the Norrises did not detail the similarity of those undertakings to

the one envisaged by the joint venture agreement, let alone the finances of

these purportedly comparable projects. As such, the district court did not

abuse its discretion in refusing to award lost profits.

C.

The last of the contested breach of contract rulings is the district court’s

determination that Karry is liable for only $16,780 of the $94,000 it awarded

in damages to the Norrises.

The Norrises cite two reasons Karry should be liable for the full damages

award: (1) although Karry’s and Garry’s obligations under the agreement are

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separate, their respective breaches combined to cause the same loss: the failure

of the joint venture; and (2) Karry conspired with Garry to breach the contract

and conspirators are liable for all injuries resulting from the conspiracy.

Neither argument supports reversal.

The Norrises correctly recite the Louisiana rule holding several obligors

solidarily liable—meaning each is responsible for the entire loss—when their

breaches combine to cause an item of damages for which each obligor would be

entirely liable if she had acted alone. Stonecipher v. Mitchell, 655 So. 2d 1381,

1386 (La. App. 2 Cir. 1995). This rule is driven not by the source of the

obligations or the nature of the ensuing harm but by the coextensiveness of

liability—that is, it applies when each obligor would be independently liable

for the entirety of the damages. See id. at 1386 (“It is the coextensiveness of

the obligations for the same debt, and not the source of liability, which

determines the solidarity of the obligation.”) (internal citations omitted);

Rivnor Properties v. Herbert O'Donnell, Inc., 633 So. 2d 735, 748 (La. App. 5

Cir. 1994) (same). The quintessential case involves subcontractors whose

individual shortcomings lead to an entire project being scrapped. An example

is two roofers who caused separate defects—one a leaky roof; the other a

wrinkly roof—each of which on its own would have required a new roof.

Standard Roofing Co. of New Orleans v. Elliot Constr. Co., 535 So. 2d 870, 882

(La. App. 1 Cir. 1988).

This is not true of the liability here. Karry’s misconduct—using the

$15,780 and $1,000 checks for his own benefit—did not cause all the funds to

be misappropriated. Stonecipher, 655 So. 2d at 1386 (explaining that the focal

point of the solidary liability inquiry is whether the parties’ conduct “combined

and contributed to cause the same item of damages”); see also Rivnor, 633 So.

2d at 748 (same); Sanders v. Zeagler, 670 So. 2d 748, 760 (La. App. 3 Cir. 1996)

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(same), rev'd in part, 686 So. 2d 819 (La. 1997). Put another way, if Garry had

followed through on his obligations under the contract, the Norrises’ only loss

would have been the funds Karry used for personal expenses. In contrast, had

lost profits been proved, the entirety of those damages may have been

attributable solely to Karry’s misconduct as diverting even a portion of the

funds may have prevented a successful renovation. But the district court did

not award lost profits. So it did not err in holding Karry solidarily liable only

for the portion of the damages attributable to his wrongdoing.

The Norrises are also right that Louisiana makes one “who conspires

with another to commit an intentional or willful act [ ] answerable, in solido,

with that person, for the damages caused by such act.” LA. CIV. CODE ANN. art.

2324(A). The problem for the Norrises is that they did not ask the trial court

to make a finding of conspiracy. We do not make that type of determination in

the first instance, especially one that turns on intent for which credibility plays

a big role. Homoki v. Conversion Servs, Inc., 717 F.3d 388 (5th Cir. 2013), does

not say otherwise. It notes that a failure to obtain a jury finding on damages

caused by a conspiracy, which the jury found existed, does not bar imposing

solidary liability on the conspirators if the evidence conclusively establishes

the damages are the same for the conspiracy and the underlying offense. Id.

at 405. That is quite different than making a conspiracy finding in the first

instance on appeal. Karry thus cannot be held solidarily liable for the $94,000

on account of his purportedly conspiring with his brother.

IV.

We lastly address the challenge to the award of attorneys’ fees and costs.

We review such an award for abuse of discretion, evaluating underlying legal

determinations de novo and factual determinations for clear error. HDRE Bus.

Partners Ltd. Grp. v. RARE Hosp. Int’l, 834 F.3d 537, 539–40 (5th Cir. 2016).

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And this being a diversity case involving Louisiana law, we are governed by

that state’s law on attorneys’ fees. Id. at 539.

The joint venture agreement provides that “the prevailing party” in any

action arising out of the agreement “shall be awarded . . . costs . . . [and]

reasonable attorneys’ fees.” See Cajun Concrete Servs, Inc. v. J. Caldarera &

Co., 759 So. 2d 237, 240 (La. App. 5 Cir. 2000) (allowing recovery of attorneys’

fees when they are authorized by contract). As the parties who obtained

affirmative relief—at least as to Karry whose liability we have affirmed 9—the

Norrises are the prevailing party. Farrar v. Hobby, 506 U.S. 103, 111–12

(1992).

Karry argues that even if this is the case, the district court erred in

making him liable for the full amount of fees and costs incurred. His

arguments on this point are largely conclusory and difficult to decipher. He

essentially contends the award is either excessive or unreasonable as to him. 10

Karry says that holding him liable for the full $58,736.53 in attorneys’

fees and costs is excessive because that amount is three-and-a-half times the

amount of damages he was ordered to pay. But Louisiana courts frequently

9 Garry’s only claim to attorneys’ fees and costs depends on him winning his Rule 60(b)

motion on remand. In the event that happens, the court can at that time consider his

entitlement to fees. And Karry’s request for fees was contingent on him prevailing on his

arguments we have already rejected.

10 Karry styles the header in his brief challenging the attorneys’ fees award as, “The

district court erred by ruling that [he] is solidarily liable for all of the Norrises’ costs and

attorney fees.” But the arguments he advances and the cases he cites all speak to the award

being either excessive or unreasonable. Because he neither advances an argument

challenging the district court’s imposition of solidary liability on fees nor offers case law in

support of it, we hold that he forfetied any such claim. Weaver v. Puckett, 896 F.2d 126, 128

(5th Cir. 1990) (noting that a failure to adequately brief an issue constitutes abandonment);

FED. R. APP. P. 28(a)(8)(A) (requiring appellant’s argument to contain “appellant's

contentions and the reasons for them, with citations to the authorities and parts of the record

on which appellant relies”).

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uphold awards exceeding the amount recovered. Garden Lakes Condo.

Homeowners Ass’n v. Perrier, 66 So.3d 1147, 1148–49 (La. App. 5 Cir. 2011);

South Texas Pioneer Millwork v. Favalora Constructors, Inc., 90 So.3d 1092,

1097 (La. App. 5 Cir. 2012); Health Educ. & Welfare Fed. Credit Union v.

Peoples State Bank, 83 So.3d 1055, 1065 (La. App. 3 Cir. 2011). These awards

are upheld when the “amount of time and effort to collect the amount due from

defendant warranted the [awards].” Perrier, 66 So. 3d at 1149. That is also

the case here. The overall amount, well below $100,000, is not on its face

excessive for a federal lawsuit that results in a trial (albeit a brief bench trial)

and involves some of the challenging legal questions with which this opinion

grapples. And the result obtained is only one of ten factors Louisiana courts

consider in assessing the reasonableness of a fee award. State, Dept. of Transp.

and Dev. v. Williamson, 597 So. 2d 439, 442 (1992). Other factors include the

amount of money at stake (much more than the amount Karry was ordered to

pay given the colorable arguments for lost profits and holding Karry

responsible for the full amount misappropriated), the extent and character of

the work done, and the number of appearances. Id. Just about all of the work

the Norrises’ attorneys undertook was devoted to the case against Karry as

Garry did not appear to defend at trial. 11 All things considered, the district

court did not abuse its discretion in awarding the fees and costs.

11 The posttrial work responding to Garry’s Rule 60(b) motion was not included in the

fee award. As for the amounts spent attempting to serve Garry ahead of trial, Karry’s appeal

does not challenge any failure to segregate fees. Rather, it focuses on the fee amount being

disproportionate to the damages recovered. That implicates only the question whether the

district court abused its discretion in concluding the amount was reasonable. HDRE Bus.

Partners Ltd. Group, LLC v. RARE Hosp. Int’l, Inc., 834 F.3d 537, 539–40 (5th Cir. 2016).

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***

As to Karry Causey, we AFFIRM the judgment and posttrial order

awarding attorneys’ fees and costs. As to Garry Causey, we REMAND for the

district court to engage in additional findings concerning the propriety of

service. We leave it to the sound judgment of the district court to decide

whether to allow additional evidence on that issue. Because this is a limited

remand, we retain jurisdiction of this appeal and will conduct any additional

appellate review that is needed. See United States v. Cessa, 861 F.3d 121, 143

(5th Cir. 2017).

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