At Most An Incidental Beneficiary
The Mississippi Supreme Court affirmed the denial of relief in a law firm’s suit for a fee
In 2008, the former Attorney General of Mississippi desired to sue the national utility company Entergy Corporation and its subsidiaries/affiliated entities (Entergy) based on the electricity rates it charged in the State. To help prosecute the claims, the attorney general entered into a retention agreement with the Kilborn Firm. The Kilborn Firm subsequently entered into an agreement with Roedel Parsons Blache Fontana Piontek & Pisano (Roedel Parsons), a Louisiana law firm, agreeing to split any compensation and reimbursement earned by the Kilborn Firm under its agreement with the State. The Kilborn Firm is not a party in this case.
Following years of litigation, the trial judge granted Entergy’s motion for summary judgment and dismissed the case against it with prejudice. The State chose not to appeal. Yet Roedel Parsons determined that it was entitled to a payment of $34,625,000 from the State. Roedel Parsons sued the State through the office of the attorney general, alleging breach of contract and seeking a declaratory judgment that it was a third party beneficiary under the State’s retention agreement with the Kilborn Firm or, in the alternative, for unjust enrichment and quantum meruit recovery. The trial judge granted the State’s Mississippi Rule of Civil Procedure 12(b)(6) motion to dismiss for failure to state a claim upon which relief could be granted. Roedel Parsons appealed the trial judge’s decision. Finding no legal error, we affirm.
The court
In the case sub judice, the trial court found that “the contract forecloses any claim that the Plaintiff might have had against the State as a third-party beneficiary because the Retention Agreement specifically provides that the Kilborn Firm may associate other counsel at the expense of the Kilborn Firm and at no cost to the State.” We agree. Roedel Parsons failed to plead sufficient allegations showing that it possessed any rights springing from the terms of the agreement between the former attorney general and the Kilborn Firm. ¶20. The unambiguous terms of the retention agreement fail to reveal any intent of the former attorney general that Roedel Parsons would benefit under the State’s agreement with the Kilborn Firm. The Court has held that “[i]f a written contract is unambiguous, ‘the intention of the contracting parties should be gleaned solely from the wording of the contract and parole evidence should not be considered.’” Rosenfelt v. Miss. Dev. Auth., 262 So. 3d 511, 518 (Miss. 2018) (quoting Epperson v. SOUTHBank, 93 So. 3d 10, 16 (Miss. 2012)). Rather than vesting Roedel Parsons with a direct interest under the terms of the agreement, the unambiguous language expressly excluded Roedel Parsons from recovering any amount from the State, explicitly directing that “the undersigned attorneys may associate other attorneys . . . at their own expense and at no cost to the State of Mississippi.” (Emphasis added.)
Accordingly, Roedel Parsons is at most merely an incidental beneficiary to the retention agreement. The Court has held that “[a] mere incidental, collateral, or consequential benefit which may accrue to a third person by reason of the performance of the contract, or the mere fact that he has been injured by the breach thereof, is not sufficient to enable him to maintain an action on the contract.” Burns, 171 So. 2d at 324-25. “Where the contract is primarily for the benefit of the parties thereto, the mere fact that a third person would be incidentally benefitted does not give him a right to sue for its breach.” Id. (emphasis added) (quoting 17 Am. Jur. 2d Contracts § 307, at 732-33 (1964)).
To be frank, Roedel Parsons is barking up the wrong tree. Accepting its factual allegations as true—that Roedel Parsons qualified as “other attorneys” as specified in the retention agreement, that Roedel Parsons had a 50/50 side-agreement with the Kilborn Firm, that Roedel Parsons exerted a vast amount of labor and expenses by prosecuting the Entergy litigation, and even accepting as true that a “substantial recovery” was indeed had in the Entergy litigation—the only recourse for Roedel Parsons to recoup the fees to which it claims entitlement is against the Kilborn Firm.
Because Roedel Parsons failed to plead sufficient allegations showing third-party beneficiary status under the retention agreement between the former attorney general and the Kilborn Firm, it has no standing to sue the State for an alleged breach of the agreement. The issue of whether the State breached its agreement with the Kilborn Firm, therefore, is moot.
Quantum Meruit
Under the unambiguous terms of the agreement between the State and the undersigned attorneys, “[i]n the event that no recovery is realized, the undersigned attorneys shall receive no compensation or reimbursement.” Had recovery been realized, whether Roedel Parsons would be entitled to compensation for its legal services by the State or the Kilborn Firm is unquestionably clear, as the Kilborn firm expressly could “associate with other attorneys . . . at their own expense and at no cost to the State of Mississippi.” (Emphasis added.) As such, the State had no notice of a reasonable expectation by Roedel Parsons that it would be compensated by the State for the legal services it provided during the Entergy litigation. See Tupelo Redev. Agency v. Gray Corp. Inc., 972 So. 2d 495, 514515 (Miss. 2007). Accordingly, Roedel Parsons failed to state a claim upon which relief could be granted for quantum meruit recovery and unjust enrichment.
(Mike Frisch)