APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH. NO. 2013-06785, DIVISION " G-11" . Honorable Robin M. Giarrusso, Judge.
Cesar R. Burgos, Robert B. Evans, III, Gabriel O. Mondino, Robert J. Daigre, BURGOS & EVANS, LLC, New Orleans, LA, COUNSEL FOR PLAINTIFF/APPELLANT.
E. Phelps Gay, Mary B. Meyer, CHRISTOVICH & KEARNEY, L.L.P., New Orleans, LA, COUNSEL FOR DEFENDANT/APPELLEE.
(Court composed of Judge Daniel L. Dysart, Judge Madeleine M. Landrieu, Judge Rosemary Ledet).
[2014-0888 La.App. 4 Cir. 1]
Rosemary Ledet, Judge.
In this legal malpractice action, the plaintiff,
Marco Tulio Miralda, appeals the trial court's judgment granting the peremptory exception of peremption filed by the defendants, Romauldo Gonzalez, Sr., and the Law Offices of Romauldo Gonzalez, L.L.C. d/b/a Braden Gonzalez and Associates (collectively " Mr. Gonzalez" ). Because we find the trial court properly applied the one-year peremptive period set forth in La. R.S. 9:5605 (A) and because we find the fraud exception set forth in La. R.S. 9:5605 (E) is inapplicable, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On July 19, 2013, Mr. Miralda filed this legal malpractice suit against Mr. Gonzalez. In his petition, he alleged that he first retained Mr. Gonzalez in January 2008 for assistance in renegotiating a mortgage note held by Wells Fargo (the " Mortgage Note" ) on his home located on Frenchman Street in New Orleans, Louisiana (the " Property" ). At that time, he was significantly in arrears on the Mortgage Note. Although Wells Fargo (through its attorney, the law firm of Dean [2014-0888 La.App. 4 Cir. 2] Morris, L.L.P.
(" Dean Morris" )) already had filed a foreclosure proceeding, Mr. Miralda alleged that Wells Fargo had agreed to negotiate regarding reinstatement of the loan. Mr. Miralda further alleged that he was advised by José Chacon--a non-attorney employee of Mr. Gonzalez's firm--to deposit over $30,000 into Mr. Gonzalez's trust account to be utilized as a down-payment toward renegotiation of the Mortgage Note. Mr. Miralda thus deposited $33,864.75 into the trust account (the " Deposit" ). According to Mr. Miralda, the Deposit effectively equaled his savings. Mr. Miralda alleged that he requested Mr. Gonzalez to " do everything possible to protect the [P]roperty."
Thereafter, Mr. Miralda met with Mr. Chacon a number of times to issue payments to Wells Fargo and to sign paperwork, which Mr. Miralda understood was being submitted to Wells Fargo. Mr. Miralda alleged that, for reasons not explained to him, Mr. Gonzalez's office was " never available to finalize the negotiation with Wells Fargo." Mr. Miralda further alleged that on September 9, 2009, Dean Morris sent correspondence to Mr. Chacon, in response to a previous offer by Mr. Gonzalez's firm, proposing a lump-sum payment of $20,000 to cease the foreclosure process. Mr. Miralda alleged that " [t]his letter advised [MR.] CHACON that such an offer would need to be forwarded to Wells Fargo directly stating that if DEFENDANTS, on [MR.] MIRALDA's behalf had $20,000 available to put toward the arrearage to contact Loss Mitigation to finalize the [2014-0888 La.App. 4 Cir. 3] arrangement." Mr. Miralda alleged that despite the fact he had over $20,000 remaining of the Deposit, no offer was ever sent to Wells Fargo.
Beginning in March 2009, Mr. Miralda acknowledged that he made several withdrawals from the Deposit. Mr. Miralda, however, alleged that he was neither advised against making the withdrawals nor informed that doing so would have a detrimental effect on Mr. Gonzalez's negotiations on his behalf. Instead, he alleged that these withdrawals always were allowed and unquestioned.
In late September or October 2010, Mr. Miralda alleged that he learned that he was evicted from his home. Following his eviction, Mr. Miralda visited Mr. Gonzalez's office eleven times; however, he " was never informed that the case had been finalized," that he had no further recourse, or that there were " any steps he may take in order to challenge the eviction."
On June 30, 2011, Mr. Miralda alleged that he was informed that Mr. Gonzalez's firm was no longer representing him in this matter and that Mr. Gonzalez was charging him over $6,800 for " legal fees." Mr. Miralda alleged that he never met with Mr. Gonzalez or any other attorney in Mr. Gonzalez's firm. He further alleged that he was never given an accounting of the time spent by Mr. Gonzalez's firm on the matter or advised of the amount of attorney's fees charged on the matter. He still further alleged that no contract was ever executed between him and Mr. Gonzalez's firm related to this matter.
Finally, Mr. Miralda alleged that he was unaware of the nature or extent of Mr. Gonzalez's malpractice until " visiting separate counsel" and " reviewing [2014-0888 La.App. 4 Cir. 4] correspondence from DEFENDANTS concerning the representation of [MR.] MIRALDA." He contends he was " only finally able to meet with his attorneys to
discuss this matter on or about November 16, 2012, at which time he first became aware that he had no recourse related to the [P]roperty, as well as the facts . . . concerning DEFENDANTS failure to negotiate on his behalf, lack of attorney representation and unauthorized billing."
Based on the above facts, Mr. Miralda asserted in his petition roughly six malpractice claims. He also asserted an " intentional fraud" claim. In response, Mr. Gonzalez filed a peremptory exception of peremption. He contended that all the alleged acts of malpractice occurred over one year before the suit was filed on July 19, 2013, and that Mr. Miralda's claims were thus barred by peremption under La. R.S. 9:5605 (A). He further contended that the fraud exception under La. R.S. 9:5605 (E) was inapplicable.
In April 2014, a two-day evidentiary hearing was held on the peremptory exception. At the hearing, four witnesses testified--Mr. Miralda, Mr. Gonzalez, Mr. Chacon, and Lourdes Letona--and documentary evidence was introduced. Briefly, the four witnesses provided the following background information.
[2014-0888 La.App. 4 Cir. 5] Mr. Gonzalez testified that he had been practicing law for over forty years. He identified the two members of his firm who were involved in handling Mr. Miralda's case as follows: (i) his legal assistant, Mr. Chacon; and (ii) his office manager, Ms. Letona.
Mr. Chacon testified that he was a former banker and a licensed mortgage broker and that he had extensive experience handling difficult credit-related matters. In general, he assisted in handling the firm's foreclosure and bankruptcy matters. In this case, he assisted in preparing the loan workout with Wells Fargo, communicated with potential new lenders, and assisted Mr. Miralda in preparing the loan packages.
Ms. Letona, albeit not an accountant, testified that she handled the firm's banking and bookkeeping. She communicated with Mr. Miralda regarding his repeated requests to withdraw funds from the Deposit, and she prepared a ledger of those withdrawals.
Mr. Miralda testified that he had lived in the United States for the last forty years. He attended six years of school and two years of college in his country, Hondurus. Mr. Miralda testified that between January 2008 and June 2011 he was not steadily employed; instead, he was collecting unemployment.
Based on the testimony and documentary evidence presented at the hearing, the following time line of events was established.
On October 29, 1999, Mr. Miralda and his unmarried sister, Maria Miralda, purchased the Property. They financed the purchase by executing the Mortgage Note--a promissory note for $77,362.00 that was secured by a mortgage encumbering the Property. On September 1, 2001, Maria Miralda died. In 2004, her
succession was opened; and a judgment of possession was obtained. Because [2014-0888 La.App. 4 Cir. 6] she was not married and never had any children, each of her five surviving siblings--Mr. Miralda and his four other sisters--inherited a one-fifth interest in her one-half interest in the Property. Until March 2005, Mr. Miralda paid the Mortgage Note and resided in the house located on the Property. Beginning in March 2005, he discontinued paying the Mortgage Note. Meanwhile, in August 2005, the house on the Property sustained severe damage as a result of Hurricane Katrina.
On March 19, 2007, the holder of the Mortgage Note, Wells Fargo, commenced a foreclosure proceeding by filing a " Petition to Enforce Security Interest by Executory Process." In its petition, Wells Fargo named the following defendants: (i) Mr. Miralda, as the maker of the Mortgage Note; and (ii) Mr. Miralda's four siblings (sisters), as co-owners of the Property. Wells Fargo alleged that Mr. Miralda defaulted on the Mortgage Note by failing to pay the April 1, 2005 monthly installment and all successive monthly installments.
On September 1, 2007, Mr. Miralda first presented to Mr. Gonzalez; and a new client case file was opened for him. At the initial visit, Mr. Miralda informed Mr. Gonzalez that he wanted to take his two sisters who lived in Honduras off the title to the Property. Simply stated, he wanted to be the sole owner of the Property. Based on what Mr. Miralda represented, Mr. Gonzalez's plan was to open a [2014-0888 La.App. 4 Cir. 7] succession and to have Mr. Miralda's two sisters renounce their interest in the succession. To prepare the necessary paperwork to complete the succession, Mr. Gonzalez needed a copy of the legal description of the Property. When Mr. Gonzalez sent Mr. Chacon to City Hall to obtain one, he discovered that in 2004 Maria Miralda's succession had been completed and that a judgment of possession had been rendered. He also discovered that Mr. Miralda had failed to inform him that he had two other--a total of four--surviving sisters, each of whom had an interest in the Property.
On January 9, 2008, Mr. Miralda called Mr. Gonzalez's office and reported that he had an emergency. His emergency was that he had been served with a bunch of papers regarding the foreclosure of the Property. At that point, Mr. Gonzalez first learned of the pending executory proceeding and that a judicial sale of the Property was scheduled. Given the nature
of Mr. Miralda's problem, Mr. Gonzalez brought in Mr. Chacon to meet with Mr. Miralda and to work on his case.
Although filing for bankruptcy was an option considered for Mr. Miralda, the firm ruled this option out for multiple reasons, including Mr. Miralda's lack of steady employment. Instead, the firm's plan was to postpone the judicial sale and [2014-0888 La.App. 4 Cir. 8] to negotiate with Wells Fargo to have Mr. Miralda's mortgage loan reinstated. To facilitate the plan, Mr. Chacon instructed Mr. Miralda to bring any paperwork that he received to the firm. He also instructed Mr. Miralda to deposit about $34,000 in a trust account with the firm--$30,000 was earmarked for negotiating with Wells Fargo to reinstate or modify the loan, and $4,000 was earmarked as a retainer for the firm's legal services.
On January 9, 2008, the Gonzalez firm faxed correspondence to Wells Fargo's attorney, Dean Morris, informing that the firm was representing Mr. Miralda with regard to renegotiating the loan. On January 17, and January 25, 2008, Mr. Miralda executed powers of attorney authorizing Mr. Gonzalez and Mr. Chacon, respectively, to act on his behalf in connection with the Wells Fargo loan.
On January 16, 2008, Wells Fargo sent Mr. Miralda a payoff statement (good through January 31, 2008), demanding payment of $102,764.34 in certified funds payable to Dean Morris, to stop the foreclosure.
On February 24, 2008, the Gonzalez firm made an offer to Wells Fargo, on Mr. Miralda's behalf, to buy the Property under a " short sale" for $75,000. Wells Fargo rejected the offer.
On April 24, 2008, Mr. Miralda presented a cashier's check in the amount of $33,864.75, made payable to Braden Gonzalez and Associates--the Deposit. Mr. Gonzalez's office manager, Ms. Letona, acknowledged that she deposited Mr. [2014-0888 La.App. 4 Cir. 9] Miralda's check into the firm's operating--not its trust--account. She explained that she did so because she understood the transaction would be a flow through; shortly after the Deposit was received, she understood that she would be requested to obtain a cashier's check for a similar amount.
On July 16, 2008, Mr. Chacon wrote to Dean Morris and offered $30,000 plus monthly payments due for May, June, July, and August 2008 to stop any further legal proceedings. On August 4, 2008, Dean Morris confirmed receipt of the offer. On August 19, 2008, Dean Morris followed-up and instructed Mr. Chacon to deal directly with Wells Fargo's Loss Mitigation Department (" Loss Mitigation" ) to discuss alternative resolutions.
On March 10, 2009, Mr. Chacon forwarded to Wells Fargo a Loan Modification Application, which included Mr. Miralda's financial, employment, and income information.
On May 19, 2009, Mr. Chacon sent a letter to Wells Fargo, which was accompanied
by Mr. Miralda's Letter of Hardship, Proof of Income, Personal Financial Statement, and a check for $25,000 (a lump sum offer). On May 22, 2009, Wells Fargo replied, returning the check and stating that it could not apply the funds as requested.
On July 30, 2009, Mr. Chacon wrote Dean Morris complaining that they were " getting the run around" on Mr. Miralda's case. He explained that Mr. Miralda had received a payment coupon calling for two payments, including one for $1,114.82, and that those payments had been made but returned to him. In this [2014-0888 La.App. 4 Cir. 10] letter, Mr. Chacon stated that " at this time [Mr. Miralda] is prepared to offer a $20,000 lump sum payment to resolve the foreclosure process." On August 24, 2009, Dean Morris wrote Mr. Chacon advising that it had forwarded his correspondence regarding this matter to Wells Fargo for review and that the foreclosure had been placed on hold so that it could respond to the dispute.
On September 5, 2009, Dean Morris wrote Mr. Chacon and apologized for the present situation; nonetheless, Dean Morris informed him that it lacked the authority to do any type of workout plan. Dean Morris instructed Mr. Chacon to contact the Loss Mitigation Department directly regarding a workout plan. Dean Morris also pointed out that Mr. Miralda was $30,000 to $40,000 in arrears and had a negative escrow balance. Dean Morris noted in its letter that " [i]f you have $20,000 available to put towards the arrearage (certified funds only) contact Loss Mitigation and advise them of this and I feel they will be more inclined to work out a deal with you." Dean Morris also warned that it had been instructed by its client, Wells Fargo, to continue proceeding with the foreclosure. According to Mr. Chacon, the firm did not offer $20,000 to Wells Fargo at that juncture because the firm had already offered Wells Fargo a much higher amount. Mr. Chacon also testified that the September 9, 2009 letter said " if you offer they might consider or something along those lines."
On October 9, 2009, Mr. Chacon, on Mr. Miralda's behalf, submitted another loan modification proposal to Wells Fargo. This proposal included a Letter [2014-0888 La.App. 4 Cir. 11] of Hardship, Proof of Income, and a tender of partial payment of arrearages in the amount of $15,000. According to Mr. Chacon, the amount tendered was ...