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Barrasso Usdin Kupperman Freeman & Darver, L.L.C. v. Burch

Court of Appeal of Louisiana, Fourth Circuit

March 18, 2015

BARRASSO USDIN KUPPERMAN FREEMAN & DARVER, L.L.C.
v.
GEORGE BURCH AND BRYAN BURCH CONSOLIDATED WITH: GEORGE BURCH AND BRYAN BURCH
v.
CAN INSURANCE COMPANIES AND CONTINENTAL CASUALTY COMPANY AND THOMAS A. ROBERTS

Page 202

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH. NO. 2011-07437 C/W 2013-10185, DIVISION " C" . Honorable Sidney H. Cates, Judge.

Henry L. Klein, New Orleans, LA, COUNSEL FOR PLAINTIFFS/APPELLANTS, GEORGE BURCH AND BRYAN BURCH.

William E. Wright, Jr., Charlotte C. Meade, DEUTSCH, KERRIGAN & STILES, L.L.P., New Orleans, LA, COUNSEL FOR DEFENDANT/APPELLEE, THOMAS A. ROBERTS.

David S. Daly, ALLEN & GOOCH, ALC, Metairie, LA, COUNSEL FOR DEFENDANTS/APPELLEES, CONTINENTIAL CASUALTY COMPANY.

(Court composed of Judge Dennis R. Bagneris, Sr., Judge Paul A. Bonin, Judge Rosemary Ledet).

OPINION

Page 203

Dennis R. Bagneris, Sr., Judge.

[2014-1020 La.App. 4 Cir. 1] Plaintiffs/appellants, George Burch and Bryan Burch (the " Burches" ), appeal the trial court's judgment of April 7, 2014 which granted the exceptions of res judicata and peremption filed by defendants/appellees, Thomas A. Roberts- the Burches'

Page 204

former counsel- and Continental Casualty Company and CNA Insurance Company (" Continental" ), the insurer. For the reasons that follow, we affirm.

FACTS/PROCEDURAL HISTORY

The exceptions of res judicata and peremption maintained in the present judgment relate back to a previous judgment rendered on April 29, 2013. In that judgment, the trial court granted the exception of peremption asserted by Roberts' law firm, Barasso Usdin Kupperman & Sarver, L.L.C. (" Barrasso" ). In order to fully address the issues raised in the present appeal, we shall first delve into the facts of the April 29, 2013 judgment.

April 29, 2013 Judgment

This judgment arises from the Burches' retention of Barrasso in November 2007 to represent the Burches in a complaint filed against them by their sister and her son. Roberts served as lead attorney. The sister's suit alleged that the Burches had improperly taken assets from their incapacitated mother. On September 24, [2014-1020 La.App. 4 Cir. 2] 2008, the Burches agreed to settle that suit. In March 2009, the Burches made their final payment under the settlement agreement. This concluded Barrasso's representation.

During the course of their representation, Barrasso submitted monthly billing statements. The statements described the legal services rendered. The Burches paid over $200,000 in fees and costs.

In July 2011, Barrasso filed a Petition on Open Account, contending that the Burches owed Barrasso $50,039.27 in outstanding fees and costs. On October 27, 2011, the Burches countered with a reconventional demand and third party demand against Barrasso and its professional liability carrier. The reconventional demand alleged in part that Barrasso and Roberts had failed to vigorously represent their interests; had engaged in minimal motion practice; recommended an onerous settlement; engaged in excessive billing; committed fraud and deception in overstating the time and effort spent on the case; and had breached their fiduciary duty to the Burches. This breach allegedly resulted in damages of $1,300,000.

In response to the reconventional demand, Barrasso filed an exception of peremption. See La. C.C. art. 3458; see also La. C.C. art. 3461.[1] The exception maintained that the reconventional demand was based in legal malpractice. As the [2014-1020 La.App. 4 Cir. 3] reconventional demand was not brought on a timely basis, Barrasso averred that it was perempted pursuant to La. R.S. 9:5605.[2]

Page 205

As part of their opposition, the Burches filed several other pleadings. These pleadings included: Motion For Partial Summary Judgment Regarding The Doctrine of Obvious, Per Se Negligence (Liability) And (ii) The Applicability Of The Louisiana Unfair Trade Practices And Consumer Protection Act To The Legal Profession (Damages); Motion And Incorporated Memorandum For Leave To File [2014-1020 La.App. 4 Cir. 4] First Amended And Supplemental Reconventional Demand And Third Party Demand; and Motion To Compel Amended Responses To Requests For Admissions Of Facts.[3]

The trial court conducted the hearing on Barrasso's Peremptory Exception of Peremption and the Burches' Motion for Partial Summary Judgment, Motion for Leave to File First Amended and Supplemental Demand and Third Party Demand, and Motion to Compel on April 11, 2013. On April 29, 2013, it granted Barrasso's exception of peremption and dismissed the Burches' Reconventional Demand and their Third Party Demand. It also denied the Burches' Motion for Partial Summary Judgment, Motion for Leave to File First Amended and Supplemental Demand and Third Party Demand, and the Motion to Compel. The trial court's reasons for judgment included the following:

The " acts, omissions, or neglects" complained of in the Burches' Reconventional Demand and Third Party Demand are the firm's failure to vigorously defend the underlying action, for advising them to enter into an inequitable settlement, and for overstating time and effort, which amount to fraud. Those alleged " acts, omissions, or neglects" all occurred prior to or on September 24, 2008, which was the date of the Settlement Agreement. The Reconventional Demand and Third Party Demand was not filed until October 27, 2011, and is on its face perempted.
The Burches defend against peremption by asserting that fraud has been

Page 206

alleged and pursuant to La. [2014-1020 La.App. 4 Cir. 5] R.S. 9:5605(E), the peremptive period is inapplicable. The Burches also assert that the " continuous representation rule" suspends the running of the peremptive period.
First, the law is clear that the " continuous representation rule" does not apply to suspend the peremptive period, as the doctrine is a suspension principle based on contra non valentem, which applies only with respect to prescription, not perempton. Reeder v. North, 701 So.2d 1291 (La. 1997). Additionally, even if it did apply, the Burches still did not file their Reconventional Demand and Third Party Demand within one year of the date that the Barrasso firm's representation of the Burches ended, which the parties concede was in April 2009.
Second, if fraud is proven, the three-year peremptive period is inapplicable. The presence of fraud notwithstanding, however, the one-year peremptive period is always applicable, and the malpractice action based on fraud must still be brought within one year of the alleged fraudulent act, omission, or neglect or within one year from the alleged act is discovered or should have been discovered. Dauterive Contractors, Inc. v. Landry and Watkins, 811 So.2d 1242 (La.App. 3 Cir. 2002). In this matter, the Burches allege that " the Barrasso firm's pattern of billing in a fashion that led them to believe that intense preparation was taking place and in a fashion that overstated the time and effort spent on their case constituted deception and fraud..." . The defense of this action ended with the Settlement Agreement on September 24, 2008. Further, according to the Burches, they received monthly billing statements from the time representation commenced in November 2007 until it ended in April 2009. However, all of the alleged " acts, omissions, and neglects" occurred prior to or at the time of the Settlement Agreement on September 24, 2008, and the Burches had sufficient knowledge at that time to put them on notice of the alleged deception and fraud. The Burches did not file suit until October 27, 2011, over one year later.
Therefore, the Exception of Peremption shall be maintained and the Burches' Reconventional Demand and Third Party Demand shall be dismissed.
Although the Burches' claim for fraud as it relates to overbilling will be dismissed, the Burches continue to have the right to defend the original action for fees due [2014-1020 La.App. 4 Cir. 6] by ...

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