Lyons v. Knight

• Decision Date: 11 May 2011
• Docket Number: No. 10–1470.,10–1470.
• Citation: 65 So.3d 257
• Parties: Judy LYONSv.Ann KNIGHT, Mark Knight, Kelly Knight, and Knight Oil Tools, Inc.
• Court: Court of Appeal of Louisiana — District of US

65 So.3d 257

Judy LYONS

v.Ann KNIGHT, Mark Knight, Kelly Knight, and Knight Oil Tools, Inc.

No. 10–1470.

Court of Appeal of Louisiana, Third Circuit.

May 11, 2011.

Alan K. Breaud, Timothy W. Basden, Breaud & Meyers, Lafayette, LA, for Plaintiff–Appellant, Judy Lyons.Cliffe E. Laborde III, Cliff A. Lacour, Lafayette, LA, for Defendants–Appellees, Ann Knight, Mark Knight, Kelly Knight Sobiesk, Knight Oil Tools.Court composed of ELIZABETH A. PICKETT, BILLY HOWARD EZELL, and J. DAVID PAINTER, Judges.PICKETT, Judge.

[3 Cir. 1] The appellant, Judy Lyons, appeals the judgment of the trial court dismissing her claims against the defendants Ann Knight, Mark Knight, Kelly Knight Sobiesk, and Knight Oil Tools, as prescribed and as an exercise of the defendants' rights pursuant to La.Code Civ.P. art. 971, and awarding attorney's fees to the defendants.

STATEMENT OF THE CASE

Judy Lyons was contracted by Ann Knight and Kelly Knight Sobiesk to do interior design work in their primary homes and other residences. This work involved making home improvements and purchasing furnishings and accessories for their homes. Rather than pay Ms. Lyons directly, they instructed her to submit invoices to Knight Oil Tools, Inc., a family corporation that had previously been run by Mrs. Knight's late husband but was now managed by her son, Mark Knight. In order to keep Mark Knight from knowing that personal work for Mrs. Knight and Mrs. Sobiesk was being paid for by the Knight Oil Tools, Mrs. Knight instructed Ms. Lyons to alter invoices so that they looked like business expenses. Ms. Lyons would turn in invoices to the company's accounts receivable department, and they would give her an unsigned check for Mrs. Knight to sign. At some point, Ms. Lyons, with or without the permission of Mrs. Knight, began signing Mrs. Knight's name on the checks. While there is no dispute that Ms. Lyons signed some of the checks, there is no claim that Ms. Lyons did not do the work for which the checks were issued, though there is some dispute about the amounts she charged. Between 2002 and 2005, Ms. Lyons submitted invoices totaling over $600,000.00 for goods and services.

[3 Cir. 2] In 2005, Mark Knight discovered the payments made to Ms. Lyons. He initiated a criminal complaint with the Lafayette Police Department, alleging that Ms. Lyons had forged signatures on thirty-five checks issued by Knight Oil Tools. In addition to the complaint from Mark Knight, Mrs. Sobiesk swore out an affidavit stating that she had personally paid for furniture invoiced by Ms. Lyons to Knight Oil tools. She also stated that Ms. Lyons had received payments for goods that she never delivered. In addition, Mrs. Knight signed an affidavit stating that Ms. Lyons had forged her signature on thirty-six checks issued by Knight Oil Tools. Based on these allegations, the Lafayette City Police arrested Ms. Lyons on September 13, 2005, and charged her with thirty-two counts of forgery and thirty-two counts of theft by fraud.

The criminal prosecution of Ms. Lyons went to trial on August 25, 2009. At the close of the prosecution's case, the trial court entered a directed verdict of acquittal. It relied on the fact that Mrs. Knight, in her trial testimony, could not identify any checks that she did not sign. Also, the trial court found that there was no intent to defraud as required for a criminal conviction for forgery.

On February 2, 2010, Ms. Lyons filed a Petition for Damages against Mrs. Knight, Mark Knight, Mrs. Sobiesk, and Knight Oil Tools, Inc., alleging malicious prosecution and defamation. In response, the defendants filed an Exception of Prescription and Special Motion to Strike. A hearing on the exception and the motion to strike were held on April 26, 2010. At the hearing, the trial court indicated that it would grant the exception of prescription as it related to the claims of defamation. The court found that the statements Ms. Lyons claimed were defamatory were made in 2005, and the one-year prescriptive period had clearly run. The trial court took the issue of the special motion to strike under La.Code Civ.P. art. 971 under advisement. [3 Cir. 3] On May 11, 2010, the court issued written reasons granting the motion to strike. In a judgment rendered on August 23, 2010, the trial court signed a judgment dismissing Ms. Lyons' claims of defamation on the basis of prescription; striking the claims for malicious prosecution pursuant to La.Code Civ.P. art. 971; and awarding attorneys' fees pursuant to La.Code Civ.P. art. 971(B) in the amount of $10,000.00.

Ms. Lyons appeals this judgment.

ASSIGNMENT OF ERROR

Ms. Lyons asserts two assignments of error:

1. The trial court erred in granting the Special Motion to Strike, dismissing the claim for malicious prosecution, and awarding attorneys' fees and costs to the defendants.

2. The trial court erred in granting the Exception of Prescription and dismissing the defamation claims.

DISCUSSION

Are the Defamation Claims Prescribed?

In her second assignment of error, Ms. Lyons argues that the trial court erred in granting the peremptory exception of prescription. An exception of prescription is a peremptory exception. La.Code Civ.P. art. 927. Defamation is a delictual action subject to a one-year liberative prescription. La.Civ.Code art. 3492. Here, the claims for defamation were based on the information provided by Mark Knight to the Lafayette Police Department in August and September 2005, an affidavit executed by Mrs. Sobiesk on September 7, 2005, and an affidavit executed by Mrs. Knight on September 8, 2005. Mrs. Lyons filed her petition for damages on February 2, 2010. Thus, on the face of the pleadings, the claims for defamation have prescribed. The supreme court discussed the burden of proof for prescription claims in Carter v. Haygood, 04–646, pp. 8–9 (La.1/19/05), 892 So.2d 1261, 1267:

[3 Cir. 4] Ordinarily, the exceptor bears the burden of proof at the trial of the peremptory exception. Campo v. Correa, 01–2707, p. 7 (La.6/21/02), 828 So.2d 502, 508. However, if prescription is evident on the face of the pleadings, the burden shifts to the plaintiff to show the action has not prescribed. Campo, 01–2702 at p. 7, 828 So.2d at 508; Williams v. Sewerage & Water Bd. of New Orleans, 611 So.2d 1383, 1386 (La.1993). If evidence is introduced at the hearing on the peremptory exception of prescription, the district court's findings of fact are reviewed under the manifest error-clearly wrong standard of review. Stobart v. State, Through DOTD, 617 So.2d 880, 882 (La.1993). If the findings are reasonable in light of the record reviewed in its entirety, an appellate court may not reverse even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Id. at 882–83.

As Ms. Lyons' claim for defamation was prescribed on the face of her petition, the burden shifted to her to show that her defamation claims did not prescribe. To satisfy this burden, Ms. Lyons argued in the trial court that the prescriptive period was suspended during the pendency of the criminal action initiated by the defamatory statements made by the defendants. The trial court found that the criminal action against Ms. Lyons did not suspend prescription, and dismissed her defamation claims.

Louisiana courts have consistently held that an action for defamation arising out of allegations made in judicial proceedings and against a party to those proceedings cannot be brought until those proceedings are terminated. Loew's, Inc. v. Don George, Inc., 237 La. 132, 110 So.2d 553, 561 (1959); Nolan v. Jefferson Parish Hosp. Serv. Dist. No 2, 01–0175, p. 8 (La.App. 5 Cir. 6/27/01), 790 So.2d 725, 730; Ballex v. Naccari, 95–0057, p. 2 (La.App. 4 Cir. 6/7/95), 657 So.2d 511, 512; Grant v. Politz, 575 So.2d 915, 917 (La.App. 2 Cir.1991); Thomas v. Mobley, 118 So.2d 476, 483 (La.App. 1 Cir.1960). See also Justice Watson's concurrence in Union Serv. & Maint. Co., Inc. v. Powell, 393 So.2d 94, 99 (La.1980). This rule allows the underlying litigation to proceed in an orderly manner, without the issue of defamation present. Ortiz v. Barriffe, 523 So.2d 896, 898 (La.App. 4 Cir.), writ denied, 531 So.2d 273 (La.1988); Calvert v. Simon, 311 So.2d 13, 17 (La.App. 4 Cir.1975).Simpson v. Perry, 03–116, p. 3 (La.App. 1 Cir. 7/14/04), 887 So.2d 14, 16 (footnote omitted).

[3 Cir. 5] In this case, the statements which Ms. Lyons claims are defamatory were made by the defendants to law enforcement officers for the purpose of initiating a criminal prosecution. These statements became the basis of a criminal prosecution filed by the state against Ms. Lyons. While acknowledging that prescription would be suspended if the statements were made during a civil case, the defendants argue that the statements were not made in connection with a judicial proceeding, or that the defendants were not a party to the criminal prosecution, and thus prescription was not suspended or interrupted. In support of their position, they cite Doughty v. Cummings, 44,812, (La.App. 2 Cir. 12/30/09), 28 So.3d 580, writ denied, 10–251 (La.4/9/10), 31 So.3d 394.

In Doughty, the plaintiff, a former bank employee, sued his former employer bank and its president for defamation and malicious prosecution. The president of the bank had reported to an insurance adjuster and later federal authorities that the plaintiff had colluded in a fraud scheme with a bank client's employee in 2003. The plaintiff was indicted in 2006, but the charges were dismissed on April 1, 2008. The plaintiff filed his suit on June 13, 2008. The second circuit held that the claim for defamation had prescribed, stating:

The defamation claim is prescribed on the face of the petition. The statement to the insurance agent was made in 2003, and although the petition does not announce precisely when applicants made federal authorities and bank regulators aware of their accusations of fraud and...