Braud v. New England Ins. Co.

Decision Date11 October 1988
Docket NumberNo. CA-8487,CA-8487
PartiesM.A. BRAUD, Jr. and Geraldine T. Mire, Wife of M.A. Braud, Jr. v. NEW ENGLAND INSURANCE COMPANY, Dependable Insurance Association and Frank Uddo. 534 So.2d 13
CourtCourt of Appeal of Louisiana — District of US

C. James Gelpi, New Orleans, for plaintiffs-appellants.

Paul B. Deal, D. Michael Dendy, New Orleans, for defendants-appellees.

Before GULOTTA, C.J., and KLEES, BYRNES, CIACCIO and LOBRANO, JJ.

BYRNES, Judge.

This is an appeal from the dismissal by summary judgment of a legal malpractice claim against an attorney and his insurers, New England Insurance Company, and Dependable Insurance Association. We reverse.

FACTS

The underlying malpractice action arose out of the attorney's legal representation of Mr. M.A. Braud in a suit to recover damages from Citicorp for breach of contract. In that suit, Braud and other shareholders in the now dissolved company, NAPASCO, alleged that Citicorp caused the financial ruin of NAPASCO by lowering the line of credit it was contractually obligated to provide the company. The suit claimed that Citicorp was liable for twelve million dollars in damages, five million of which were alleged to have been suffered by Braud, a major shareholder of NAPASCO. Suit was filed and served on Citicorp's agent for service of process, (C.T. Corporation) and the delay for answering the suit passed without an answer being filed. The attorney then obtained a preliminary default judgment. Subsequently, the trial court confirmed the default as to Braud's claim for four million dollars upon the submission of evidence consisting of NAPASCO's contract with Citicorp and Braud's testimony concerning his relationship with NAPASCO and the damages he allegedly suffered as a result of Citicorp's actions.

When the attorney attempted to collect on the default judgment, Citicorp filed suit in U.S. District Court to have the judgment nullified. This suit alleged inter alia that Braud's default judgment was defective because it was granted without the requisite proof of a prima facie case. After Citicorp offered its evidence but before Braud and the other defendants put on their case, a settlement was reached. In satisfaction of all their claims against Citicorp, Braud and the other defendants agreed to accept $200,000.00 and divide it among themselves. Braud's portion of this settlement totalled $72,720.00. The attorney did not represent Braud at the nullity proceeding nor did he assist Braud in the settlement negotiations.

Following acceptance of the settlement offer, Braud and his wife sued the attorney for legal malpractice based on his alleged negligence in failing to put on a prima facie case at the default confirmation hearing. Prior to trial, the attorney filed a motion for summary judgment which was granted without assigned reasons. This appeal followed.

ASSIGNMENT OF ERROR

The Brauds assert that the trial court erred in granting summary judgment because there are genuine issues of material fact in dispute which must be resolved by trial on the merits. We agree. C.C.P. Art. 966(B) provides that summary judgment "... shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law". Any doubt as to the entitlement to summary judgment must be resolved against the granting of summary judgment and in favor of trial on the merits to resolve disputed facts. Employers' Surplus Line Insurance Co., v. City of Baton Rouge, 362 So.2d 561 (La.1978); Baker v. Ingram, 447 So.2d 101 (La.App. 4th Cir.1984).

To assert a claim for legal malpractice against their attorney, the Brauds 1 had to allege that there was an attorney-client relationship, that the attorney was negligent in his representation of Braud and that this negligence caused Braud some loss. Evans v. Detweiler, 466 So.2d 800 (La.App. 4th Cir.1985).

In the present case, the Brauds alleged in their petition that their attorney failed to adequately prove liability and damages when he obtained the default judgment against Citicorp. As a result of this alleged negligence, the Brauds claimed they sustained four million dollars in damages for loss of the judgment and one million two hundred thousand dollars in lost interest on the judgment. In his answer, the attorney admitted that the Braud default judgment was "subject to equitable and legal defenses", but argued that Braud's settlement with Citicorp precluded the assertion of a claim against him for legal malpractice since that settlement rather than his conduct caused the purported loss. The attorney moved for summary judgment on this basis. Although a number of affidavits were submitted in...

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