Barrasso Usdin Kupperman Freeman & Darver, L.L.C. v. Burch

Decision Date18 March 2015
Docket Number2014–CA–1021.,Nos. 2014–CA–1020,s. 2014–CA–1020
Citation163 So.3d 201
PartiesBARRASSO USDIN KUPPERMAN FREEMAN & DARVER, L.L.C. v. George BURCH and Bryan Burch. George Burch and Bryan Burch v. Can Insurance Companies and Continental Casualty Company and Thomas A. Roberts.
CourtCourt of Appeal of Louisiana — District of US

Henry L. Klein, New Orleans, LA, for Plaintiffs/Appellants, George Burch and Bryan Burch.

William E. Wright, Jr., Charlotte C. Meade, Deutsch, Kerrigan & Stiles, L.L.P., New Orleans, LA, for Defendant/Appellee, Thomas A. Roberts.

David S. Daly, Allen & Gooch, ALC, Metairie, LA, for Defendants/Appellees, Continental Casualty Company.

(Court composed of Judge DENNIS R. BAGNERIS, SR., Judge PAUL A. BONIN, Judge ROSEMARY LEDET ).

Opinion

DENNIS R. BAGNERIS, SR., Judge.

Plaintiffs/appellants, George Burch and Bryan Burch (the “Burches”), appeal the trial court's judgment of April 7, 2014 which granted the exceptions of res judicata and peremption filed by defendants/appellees, Thomas A. Roberts—the Burches' former counsel—and Continental Casualty Company and CNA Insurance Company (“Continental”), the insurer. For the reasons that follow, we affirm.

FACTS/PROCEDURAL HISTORY

The exceptions of res judicata and peremption maintained in the present judgment relate back to a previous judgment rendered on April 29, 2013. In that judgment, the trial court granted the exception of peremption asserted by Roberts' law firm, Barrasso Usdin Kupperman & Sarver, L.L.C. (“Barrasso”). In order to fully address the issues raised in the present appeal, we shall first delve into the facts of the April 29, 2013 judgment.

April 29, 2013 Judgment

This judgment arises from the Burches' retention of Barrasso in November 2007 to represent the Burches in a complaint filed against them by their sister and her son. Roberts served as lead attorney. The sister's suit alleged that the Burches had improperly taken assets from their incapacitated mother. On September 24, 2008, the Burches agreed to settle that suit. In March 2009, the Burches made their final payment under the settlement agreement. This concluded Barrasso's representation.

During the course of their representation, Barrasso submitted monthly billing statements. The statements described the legal services rendered. The Burches paid over $200,000 in fees and costs.

In July 2011, Barrasso filed a Petition on Open Account, contending that the Burches owed Barrasso $50,039.27 in outstanding fees and costs. On October 27, 2011, the Burches countered with a reconventional demand and third party demand against Barrasso and its professional liability carrier. The reconventional demand alleged in part that Barrasso and Roberts had failed to vigorously represent their interests; had engaged in minimal motion practice; recommended an onerous settlement; engaged in excessive billing; committed fraud and deception in overstating the time and effort spent on the case; and had breached their fiduciary duty to the Burches. This breach allegedly resulted in damages of $1,300,000.

In response to the reconventional demand, Barrasso filed an exception of peremption. See La. C.C. art. 3458 ; see also La. C.C. art. 3461.1 The exception maintained that the reconventional demand was based in legal malpractice. As the reconventional demand was not brought on a timely basis, Barrasso averred that it was perempted pursuant to La. R.S. 9:5605.2

As part of their opposition, the Burches filed several other pleadings. These pleadings included: Motion For Partial Summary Judgment Regarding The Doctrine of Obvious, Per Se Negligence (Liability) And (ii) The Applicability Of The Louisiana Unfair Trade Practices And Consumer Protection Act To The Legal Profession (Damages); Motion And Incorporated Memorandum For Leave To File First Amended And Supplemental Reconventional Demand And Third Party Demand; and Motion To Compel Amended Responses To Requests For Admissions Of Facts.3

The trial court conducted the hearing on Barrasso's Peremptory Exception of Peremption and the Burches' Motion for Partial Summary Judgment, Motion for Leave to File First Amended and Supplemental Demand and Third Party Demand, and Motion to Compel on April 11, 2013. On April 29, 2013, it granted Barrasso's exception of peremption and dismissed the Burches' Reconventional Demand and their Third Party Demand. It also denied the Burches' Motion for Partial Summary Judgment, Motion for Leave to File First Amended and Supplemental Demand and Third Party Demand, and the Motion to Compel. The trial court's reasons for judgment included the following:

The “acts, omissions, or neglects” complained of in the Burches' Reconventional Demand and Third Party Demand are the firm's failure to vigorously defend the underlying action, for advising them to enter into an inequitable settlement, and for overstating time and effort, which amount to fraud. Those alleged “acts, omissions, or neglects” all occurred prior to or on September 24, 2008, which was the date of the Settlement Agreement. The Reconventional Demand and Third Party Demand was not filed until October 27, 2011, and is on its face perempted.
The Burches defend against peremption by asserting that fraud has been alleged and pursuant to La. R.S. 9:5605(E), the peremptive period is inapplicable. The Burches also assert that the “continuous representation rule” suspends the running of the peremptive period.
First, the law is clear that the “continuous representation rule” does not apply to suspend the peremptive period, as the doctrine is a suspension principle based on contra non valentem, which applies only with respect to prescription, not peremption. Reeder v. North, 701 So.2d 1291 (La.1997). Additionally, even if it did apply, the Burches still did not file their Reconventional Demand and Third Party Demand within one year of the date that the Barrasso firm's representation of the Burches ended, which the parties concede was in April 2009.
Second, if fraud is proven, the three-year peremptive period is inapplicable. The presence of fraud notwithstanding, however, the one-year peremptive period is always applicable, and the malpractice action based on fraud must still be brought within one year of the alleged fraudulent act, omission, or neglect or within one year from the alleged act is discovered or should have been discovered. Dauterive Contractors, Inc. v. Landry and Watkins, 811 So.2d 1242 (La.App. 3 Cir.2002). In this matter, the Burches allege that “the Barrasso firm's pattern of billing in a fashion that led them to believe that intense preparation was taking place and in a fashion that overstated the time and effort spent on their case constituted deception and fraud ...”. The defense of this action ended with the Settlement Agreement on September 24, 2008. Further, according to the Burches, they received monthly billing statements from the time representation commenced in November 2007 until it ended in April 2009. However, all of the alleged “acts, omissions, and neglects” occurred prior to or at the time of the Settlement Agreement on September 24, 2008, and the Burches had sufficient knowledge at that time to put them on notice of the alleged deception and fraud. The Burches did not file suit until October 27, 2011, over one year later.
Therefore, the Exception of Peremption shall be maintained and the Burches' Reconventional Demand and Third Party Demand shall be dismissed.
Although the Burches' claim for fraud as it relates to overbilling will be dismissed, the Burches continue to have the right to defend the original action for fees due by challenging the amount and/or reasonableness of the fees.
The Burches' Motion For Partial Summary Judgment on the applicability of the La. Unfair Trade Practices and Consumer Protect Act and on the issue of liability under the doctrine of “obvious negligence”, shall be denied. The claims alleging “obvious negligence” are perempted. However, even if they were not perempted, the Court finds that the doctrine of “obvious negligence” would not apply in this matter. Further, at the time the Motion for Summary Judgment was filed by the Burches, they had not made any claims under the La. Unfair Trade Practices and Consumer Protection Act (LUTPA).
The Burches also sought leave to amend their Reconventional Demand and Third Party Demand to assert claims under the LUTPA, La. R.S. 51:1401, et seq. However, after hearing argument on the issue, but prior to the Court's ruling, counsel for Bryan and George Burch informally advised the Court that they would be filing pleadings to withdraw their Motion for Leave. Based on the representations of counsel for the Burches, the Motion for Leave to Amend will be denied as moot.
Finally, the Court finds no merit to the Burches' Motion to Compel Amended Responses to Requests for Admissions and that Motion shall be denied.

On September 9, 2013, the trial court denied the Burches' Motion for Entry of Partial Final Judgment. Thereafter, it denied their Notice of Intent to seek Writs from the April 29, 2013 judgment as untimely. The Burches never lodged an appeal from this judgment.

We now turn to the facts behind the April 7, 2014 judgment that is presently on appeal.

April 7, 2014 Judgment

The Burches filed a separate action against Roberts and Continental, in its capacity as the insurer of Barrasso and Roberts, on October 29, 2013.4 In this complaint, the Burches asserted that they had a cause of action and right of action under the Louisiana Unfair Trade Practices And Consumer Protection Action (“LUTPA”).5 The complaint argued that Roberts and Barrasso had engaged in a practice of fraudulent overbilling; misrepresented the amount of effort the firm put into the Burches' defense; breached their fiduciary duty to the Burches, resulting in damages in excess of $1,300,000; and caused mental anguish and humiliation. Noting that their complaint arose from the same nucleus of facts addressed in Barrasso's suit on the open account, the Burches requested that...

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