Former state Sen. Rob Marionneaux must repay $1 million he improperly took from his ex-law partner Lewis Unglesby based on a state district court judge’s decision.
The finding by 19th Judicial District Court Judge Michael Caldwell came in a civil lawsuit over dissolution of the Baton Rouge law firm of Unglesby & Marionneaux. Marionneaux was the firm’s managing partner from 2003 until 2012 in charge of finances.
“It was a clear misappropriation of funds and he got caught,” said Unglesby’s lawyer, Jerry Dodson, of Baton Rouge.
Marionneaux said he did nothing improper.
“I’m owed over $1 million,” Marionneaux said. “I don’t owe him (Unglesby) anything based on the judge’s finding.”
He also said he plans to appeal Caldwell’s decision.
Dodson said the time has passed for an appeal. He said Marionneaux is due $1 million from the firm, but it is being eaten up by the debt he owes Unglesby.
The dispute involves Marionneaux’s claim that his share of profits and losses of the firm increased from 25 percent to 50 percent in 2009 — when he said he briefly left the firm then was wooed back by Unglesby.
But Unglesby said the agreement that gave him 75 percent and Marionneaux 25 percent was never altered.
Caldwell dismissed Marionneaux’s explanation that the terms of the financial arrangement changed.
Marionneaux’s “testimony concerning this reformation of the contract was not credible,” Caldwell wrote. “There was less than credible evidence. There was no corroborating circumstances to support this reformation.”
At another point, Caldwell wrote, “Mr. Marionneaux is an officer of the court. He is a member of what almost all of us strive to make an honorable profession. There may be some issues about what he did that are better addressed perhaps by some other forum than this. But as I indicated, it was questionable.”
Caldwell directed the certified public accountant liquidating the firm to do an accounting consistent with the 75-25 partnership agreement.
That split results in Marionneaux reimbursing $1 million, Dodson said.
Dodson said the funds have been deducted from legal fees due Marionneaux, including his share of a $5.9 million settlement in a long-running Livingston Parish environmental case. The Livingston case began prior to Marionneaux joining the law firm. Under Caldwell’s decision, Unglesby got 47 percent of the settlement and the other 53 percent was divvied up with Unglesby getting 75 percent and Marionneaux 25 percent.
“Rob has repaid the money already,” he said.
Dodson said there are also court filings outside the liquidation where repayment of other funds also is being sought for things such as personal expenses Marionneaux allegedly charged to a law firm credit card.
“It’s a very regrettable situation,” Dodson said. “It is going to have serious repercussions.”
He mentioned a potential complaint to the Louisiana Attorney Disciplinary Board.
Marionneaux called the situation “disastrous.”
“This will be my last partnership,” Marionneaux said.
He said he is owed based on the 50-50 arrangement involving his cases.
In a motion for partial summary judgment in the liquidation, Dodson writes that Marionneaux “breached his fiduciary duties in numerous ways by wrongfully using his position as managing partner to acquire funds for himself, and that this money be deducted from any funds that Marionneaux claims due from the firm of Unglesby and Marionneaux, LLC.”
A trial was conducted in Caldwell’s court Aug. 21-25 on the liquidation issue, resulting in a Sept. 29 judgment. The liquidation based on Caldwell’s decision was filed with the court Nov. 19.
Marionneaux started taking money in 2008-09, Dodson said. It was discovered in spring 2012, he said.
Dodson said tax returns had to be amended and penalty and interest paid because Marionneaux did not report to the firm’s CPA some $740,000 in income to himself and another $100,000-plus to Unglesby.
Unglesby never looked at the books, trusting Marionneaux, Dodson said. In addition, the financial dealings were kept “off the books from the accountant, Bert Faulk,” he said.