Belanger v. Spencer H. Calahan, L.L.C.
| Decision Date | 25 October 2018 |
| Docket Number | 2018 CA 0111 |
| Parties | MICHAEL BELANGER v. SPENCER H. CALAHAN, L.L.C., SPENCER CALAHAN, JONATHAN D. MAYEAUX, BRADY PATIN, AND ABC INSURANCE CO. |
| Court | Court of Appeal of Louisiana — District of US |
NOT FOR PUBLICATION
On Appeal from the Nineteenth Judicial District Court In and for the Parish of East Baton Rouge State of Louisiana
The Honorable Janice Clark, Judge Presiding
Travis J. Causey, Jr.
Plaintiff/Appellant, Michael Belanger, appeals the trial court's judgment granting summary judgment in favor of Defendants/Appellees, Spencer H. Calahan, L.L.C., Spencer Calahan, Jonathan D. Mayeaux, Brady Patin, and ABC Insurance Co., and dismissing all his claims against defendants. For the reasons that follow, we reverse the judgment of the trial court.
The matter before us is a legal malpractice action based on underlying litigation that began when Belanger was involved in a motor vehicle accident (MVA) on December 7, 2007, with Natalie N. Stephen, who was insured by GEICO General Insurance Company ("GEICO"). Spencer H. Calahan, L.L.C., Spencer Calahan, Jonathan D. Mayeaux, and Brady Patin, (collectively referred to as "defendants"), the attorneys representing Belanger, filed suit on behalf of Belanger against Stephen and GEICO ("MVA proceeding"), asserting that Belanger requested that GEICO settle the MVA proceeding for its policy limits of $25,000.00, which GEICO rejected. After a trial was held, on April 26, 2011, the jury returned a verdict in favor of Belanger in the amount of $450,000.00, and the trial court signed a judgment in accordance with the jury's verdict. GEICO and Stephen appealed the trial court's judgment to this court, and we affirmed the judgment. The Louisiana Supreme Court denied the writ on April 1, 2013. Belanger v. Stephen, 2012-0278 (La. App. 1 Cir. 11/14/12), 2012 WL 5506648 (unpublished), writ denied, 2012-2679 (La. 4/1/13), 110 So. 3d 581. In May of 2013, GEICO paid its $25,000.00 policy limit to Belanger stemming from the MVA proceeding.
Thereafter, on September 25, 2013, Stephen assigned to Belanger her rights to any bad faith claim against GEICO due to the excess judgment. On October 4, 2013, Belanger, as assignee of Stephen, filed a petition in the 19th Judicial DistrictCourt against GEICO ("GEICO proceeding") alleging that GEICO had entered into a contract with Stephen and had acted in bad faith by violating that contract. Belanger prayed for reasonable damages together with legal interest.1 Defendants also represented Belanger in the GEICO proceeding.
GEICO removed the GEICO proceeding to the United States District Court for the Middle District of Louisiana (Middle District) and filed a Rule 12(b)(6) motion to dismiss for failure to state a claim or an alternative motion for summary judgment. GEICO argued that Spiers v. Liberty Mut. Fire Ins. Co., 2006 WL 4764430, at *3 (E.D. La. Nov. 21, 2006), set forth that "the causes of action and penalties allowed exclusively for breach of fiduciary duty by an insurer are codified" in La. R.S. 22:1973 ().2 GEICO further asserted that a violation of La. R.S. 22:1973 was delictual in nature and therefore, subject to the one-year prescriptive period provided in La. C.C. art. 3492, rather than the ten-year prescriptive period provided in La. C.C. art. 3499. Therefore, GEICO asserted that Belanger's bad faith claim was prescribed. Belanger argued the application of the doctrine of contra non valentem in defense to the Rule 12(b)(6) motion. The Middle District initially determined that prescription began to run from the date of the judgment, April 26, 2011, rather than subsequent to the appeals process and the writ denial by the Louisiana Supreme Court on April 1, 2013. Belanger v. GEICO General Ins. Co., 2014 WL 7338837, at * 5 (M.D. La. Dec. 22, 2014). Therefore, the Middle District held that the bad faith claim against GEICO prescribed on April 26, 2012, thereby making the October 4, 2013 GEICO proceeding untimely. Id. The Middle District noted that the parties did not dispute the application of the one-year prescriptive period. Id., at * 3 n.2.
Belanger appealed to the United States Court of Appeals for the Fifth Circuit (United States Fifth Circuit), which clarified that because the excess judgment was appealed devolutively, rather than suspensively, it was fully enforceable during the appeals process. Consequently, the court held that Stephen was legally obligated to pay the excess judgment in 2011, which is when the bad faith claim against GEICO arose. Belanger v. GEICO General Ins. Co., 623 Fed. Appx. 684, 689 (5th Cir. 2015). The United States Fifth Circuit noted that Belanger, as an assignee of Stephen, stood in her shoes, and that he argued for the first time on appeal that the prescriptive period for a bad faith claim against an insurer by an insured under La. R.S. 22:1973 was subject to the ten-year prescriptive period for contractual actions rather than the one-year prescriptive period for delictual actions. While finding that there was some support for the application of the ten-year prescriptive period, the appellate court held that Belanger had waived his right to advance the argument, and affirmed the decision of the Middle District. Id. The United States Fifth Circuit also recognized that Belanger's counsel made a conscious decision not to raise the ten-year prescriptive period at the Middle District level. Id. at 691.
Belanger then filed the present suit against defendants, claiming legal malpractice by not raising in opposition to GEICO's motion to dismiss in the GEICO proceeding that a ten-year prescriptive period applied to GEICO's breach of a contractual duty to defend Stephen, thereby waiving his right to assert such an argument, and precluding his right to collect the excess judgment.3 Defendants filed a motion for summary judgment, asserting that the bad faith claim againstGEICO prescribed on April 26, 2012, before any alleged malpractice occurred and before Belanger received the assignment of rights against GEICO in the underlying matter. Defendants argued that the bad faith claim pursuant to La. R.S. 22:1973 is a statutory duty, and therefore, the one-year prescriptive period applicable to delictual actions applied. Belanger filed his own motion for partial summary judgment, maintaining that the ten-year prescriptive period was applicable to his claim and defendants deviated below the standard of care by not asserting the ten-year prescriptive period in the GEICO proceeding.
The trial court heard the motions for summary judgment filed by both Belanger and defendants on September 11, 2017, and orally denied Belanger's motion and granted the defendants' motion. On October 4, 2017, the trial court signed a judgment granting the defendants' motion and dismissing Belanger's claims with prejudice.4 It is from this judgment that Belanger appeals.
Summary judgment procedure is favored and "is designed to secure the just, speedy, and inexpensive determination of every action .... and shall be construed to accomplish these ends." La. C.C.P. art. 966(A)(2). In reviewing the trial court's decision on a motion for summary judgment, this court applies a de novo standard of review using the same criteria applied by the trial court to determine whether summary judgment is appropriate. Smith v. Our Lady of the Lake Hospital, Inc., 93-2512 (La. 7/5/94), 639 So. 2d 730, 750-51.
The burden of proof is on the mover. Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court, the mover is not required to negate all essential elements of the adverse party's claim, but only to point out to the court the absence of factual support for one or more of theelements necessary to the adverse party's claim. The burden is on the adverse party to produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. La. C.C.P. art. 966(D)(1).
"After an opportunity for adequate discovery, a motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue as to material fact and that the mover is entitled to judgment as a matter of law." La. C.C.P. art. 966(A)(3). A genuine issue is a triable issue, which means that an issue is genuine if reasonable persons could disagree. If on the state of the evidence, reasonable persons could reach only one conclusion, there is no need for a trial on that issue. A fact is "material" when its existence or nonexistence may be essential to plaintiff's cause of action under the applicable theory of recovery. Kasem v. State Farm Fire & Cas. Co., 2016-0217 (La. App. 1 Cir. 2/10/17), 212 So. 3d 6, 13, citing Smith, 639 So. 2d at 751. Because it is the applicable substantive law that determines materiality, whether or not a particular fact in dispute is material can be seen only in light of the substantive law applicable to the case. Tate v. Outback Steakhouse of Florida, 2016-0093 (La. App. 1 Cir. 9/16/16), 203 So. 3d 1075, 1077.
An attorney is liable to his client for the damages caused by the attorney's negligence in handling the client's business, providing that the client proves by a preponderance of the evidence that such negligence is the proximate cause of the loss...
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