In re Succession of Ewing

• Decision Date: 02 March 2001
• Docket Number: No. 34,413-CA.,34,413-CA.
• Citation: 781 So.2d 885
• Parties: The SUCCESSION OF Mildred Hunt EWING.
• Court: Court of Appeal of Louisiana — District of US

781 So.2d 885

The SUCCESSION OF Mildred Hunt EWING.

No. 34,413-CA.

Court of Appeal of Louisiana, Second Circuit.

March 2, 2001.

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David Dalia & Jack Jernigan, New Orleans, LA, Neal Johnson, Counsel for Plaintiff-In-Reconvention-Appellant.

George M. Snellings, IV, Monroe, LA, Counsel for Defendant-In-Reconvention-Appellee.

Blackwell, Chambliss, Henry, Caldwell & Cagle by Sam O. Henry, III, West Monroe, LA, Counsel for Plaintiff-Appellee.

Before NORRIS, KOSTELKA and DREW, JJ.

NORRIS, Chief Judge

The plaintiff in reconvention, Mrs. Esther Ewing Jensen, appeals a judgment dismissing with prejudice her claims against one of the defendants in reconvention, the Succession of George M. Snellings III (with George M. Snellings III personally, hereinafter collectively referred to as "Snellings"). The District Court sustained exceptions of no right of action, no cause of action, res judicata and prescription filed by Snellings. Snellings has answered, seeking damages for frivolous appeal; Ms. Jensen has also filed a motion to strike passages from Snellings's appellate brief. For the reasons expressed, we affirm the ruling on the exception of no right of action but vacate the remainder of the judgment. We deny Snellings's request for damages for frivolous appeal and grant Ms. Jensen's motion to strike with an admonition to both parties.

Factual and procedural background

The decedent, Mildred Ewing, and her husband Wilson formerly owned two newspapers (The Times and The News Star World) and two TV stations in north Louisiana. According to the pleadings, Mr. Ewing died in 1952; Mrs. Ewing retained usufruct over the estate while the couple's two children, Robert Ewing III ("Robert") and Ms. Jensen acquired the naked ownership. Robert and Mrs. Ewing managed the companies until July 1977, when they sold to Gannett Publishing Company. Monroe attorney George M. Snellings III negotiated this sale. Mrs. Ewing and the two children each received over $4 million in proceeds. Ms. Jensen and her husband retained Snellings to manage their investment program with E.F. Hutton in an effort to enhance gain and minimize taxes.

The management of Ms. Jensen's portfolio has already been the subject of litigation. See, Jensen v. Snellings, 841 F.2d 600 (5 Cir.1988). According to the Fifth Circuit, "Snellings pooled the Jensens' cattle investments with those of the Ewings in a partnership denominated REM Company." Snellings later persuaded the Jensens to transfer part of their assets to oil and gas limited partnerships. Unfortunately, both parts of the Jensens' portfolio performed poorly. In 1981 they sued Snellings and others, alleging SEC, RICO, NYSE and Louisiana Blue Sky Law violations, as well as state law breaches of contract and fiduciary duty. In 1988, the Fifth Circuit held that the Jensens' RICO claims against Snellings were not prescribed. In December 1989, Snellings settled with the Jensens. The compromise agreement recites that Snellings paid $1.375 million in cash to the Jensens and Internal Revenue in exchange for the Jensens' agreement to "release, remit and forever discharge" him from "any and all claims, demands, suits, actions, rights of action, causes of action and liability whatsoever, which the Jensens, or either of them, have had, now have or may in the future have, arising out of, or in any way connected with the claims asserted by the Jensens in the Federal Court suit and the State Court suit."¹

Meanwhile, according to Ms. Jensen's pleadings, her mother began suffering from senile dementia and Alzheimer's Disease; by 1982 or 1983, she was incapable of managing her affairs. Ms. Jensen alleges that her bother, Robert, and Mrs. Ewing's lawyer, Snellings, both obtained powers of attorney from Mrs. Ewing and began managing her sizable estate; in answers to interrogatories, Ms. Jensen said she "believed that the power of attorney persisted from approximately 1975 until at least 1988." Nevertheless, in June 1989 Mrs. Ewing executed a statutory will, making specific bequests to her grandchildren and leaving the residue of the estate to Robert (65%) and Ms. Jensen (35%). The will also named Monroe attorney Paul Fink as executor.

Mrs. Ewing died on September 30, 1996. Within a month Robert filed the instant petition to probate the 1989 will. In early 1997 Mr. Fink qualified as succession representative. By petition to encumber succession property, he alleged that the estate contained no liquid assets but included one significant immovable, Mrs. Ewing's undivided 4/6 interest in her large home and lots on Island Drive in Monroe. Mr. Fink sought approval to mortgage her interest in the house to cover expenses of maintenance, repair and taxes. He then sought approval to sell the interest, showing the house was appraised at $830,000.

Ms. Jensen formally opposed the sale and alleged the will was null. In April 1998 she filed the instant reconventional demand, naming as defendants her brother, Robert; the executor, Mr. Fink; a nephew; and her mother's former attorney, Snellings. She asserted various claims, chiefly that the defendants had dissipated the property subject to her usufruct. Against Snellings she alleged "wasting and dissipation of a multimillion dollar estate." Over the course of subsequent filings, she elaborated that Snellings mismanaged Mrs. Ewing's investments while he held her power of attorney from 1975 to 1988.

Snellings died in October 1998; his estate has been substituted as party defendant. In January 2000 Snellings filed numerous exceptions, including four peremptory exceptions: res judicata, prescription, no cause of action and no right of action. Hearing on the exceptions was fixed for February 3, 2000. Urging that he had a prior obligation in Federal Court in New Orleans, counsel for Ms. Jensen moved for a continuance. This was denied.

After a brief hearing, the District Court sustained all of Snellings's peremptory exceptions, dismissing Ms. Jensen's claims against him with prejudice.² Ms. Jensen has appealed, challenging the denial of the motion for continuance, as well as each of the rulings on the exceptions.

Discussion: No right of action

By her fourth assignment of error Ms. Jensen urges the District Court erred in sustaining the exception of no right of action. She contends it is inconsistent to deny her right of action against Snellings while allowing her to proceed against the other defendants. She further argues that her "cause of action and right to pursue her claim" is obviously established by Anderson v. Collins, 26,142 (La.App. 2 Cir. 1/6/95), 648 So.2d 1371, writs denied 95-0629 (La.4/21/95), 653 So.2d 576, 95-0783 (La.4/21/95), 653 So.2d 576.

The peremptory exception of no right of action tests whether the plaintiff has the capacity or legal interest in judicially enforcing the right asserted. La. C.C.P. art. 927 A(5); Babineaux v. Pernie-Bailey Drilling Co., 261 La. 1080, 262 So.2d 328 (1972). The essential function of this exception is to provide a threshold device which terminates suits brought by one who has no interest in enforcing judicially the right asserted. Id.; Alco Collections Inc. v. Poirier, 95-2582 (La.App. 1 Cir. 9/27/96), 680 So.2d 735, writ denied 96-2628 (La.12/13/96), 692 So.2d 1067. Simply put, this exception tests whether this plaintiff, as a matter of law, has an interest and capacity to enforce the claim sued on. Id.; Greenbriar Nursing Home Inc. v. Pilley, 93-2059 (La.5/23/94), 637 So.2d 429.

The thrust of Ms. Jensen's claim against Snellings is that he wasted, dissipated or mishandled Mrs. Ewing's assets through the use of the latter's power of attorney. Mrs. Ewing's succession was opened shortly after her death. The substantive and procedural law are unanimous in stating that the right to assert Mrs. Ewing's tort claims belongs to her succession. Civil Code art. 938 provides:

Prior to the qualification of a succession representative, a successor may exercise rights of ownership with respect to his interests in the estate. Upon qualification of a succession representative, the exercise of those rights is subject to the administration of the estate.

The succession representative "shall enforce all obligations" in favor of the succession. La. C.C.P. art. 3211. Most importantly, C.C.P. art. 685 provides:

Except as otherwise provided by law, the succession representative appointed by a court of this state is the proper plaintiff to sue to enforce a right of the deceased or of his succession, while the latter is under administration. The heirs or legatees of the deceased, whether present or represented in the state or not, need not be joined as parties, whether the action is personal, real, or mixed.

In Browne v. Witten, 153 So.2d 184 (La. App. 2 Cir.), writ refused 244 La. 1002, 156 So.2d 56 (1963), the residuary legatees and heirs brought an action seeking recovery from the testamentary executor of sums that he and his wife allegedly personally owed the succession. The District Court sustained an exception of no right of action, and the plaintiffs appealed. This court affirmed, explaining:

We feel the lawmakers have made it abundantly clear * * * that while a succession is under administration, the administrator is the sole person authorized to enforce the collection of any debt alleged to be due the succession. This leads to an orderly administration of the estate and prevents a multiplicity of suits which could result if individual heirs were allowed to prosecute claims on behalf of the estate.

We further rejected the argument that denying a right of action of the heirs and legatees "placed a cloak of immunity around the executor." The law does not protect the succession representative from his acts of commission or omission; "there are a number of ways the plaintiffs can force him to properly administer the estate or to recompense them for his failure to do so."

Since this court's opinion in Brown v. Witten, the...