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Loughlin v. United Services Automobile Association

Court of Appeals of Louisiana, Fourth Circuit

December 20, 2017


         APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2012-10478, DIVISION "E" Honorable Clare Jupiter, Judge


          James R. Nieset, Jr. Kristopher M. Gould Jade E. Ennis PORTEOUS, HAINKEL & JOHNSON, LLP FOR DEFENDANT/APPELLEE

          Court composed of Judge Rosemary Ledet, Judge Regina Bartholomew Woods, Judge Paula A. Brown


         Appellants, Kearney Loughlin ("Mr. Loughlin") and Terri Loughlin ("Mrs. Loughlin"), seek review of the district court's April 5, 2016 judgment in favor of Appellee, United Service Automobile Association ("USAA"), dismissing, with prejudice, Appellants' "Petition for Nullity of Judgment."[1]

         For reasons discussed below, we find the Petition is barred by prescription; furthermore, we find no abuse of discretion in the district court's denial of the Petition.


         In 2005, Mr. Loughlin and members of his family filed suit against USAA, arising from property damage caused by Hurricane Katrina to a family home owned by Mr. Loughlin, his mother, and his sister. At the time of Hurricane Katrina, Mr. and Mrs. Loughlin, lived in an apartment in the home. Throughout the lawsuit, Mr. Loughlin was both a plaintiff and counsel of record. Additionally, for a period of time, Mrs. Loughlin was also a plaintiff and counsel of record.

         During the litigation, the Loughlins were found in contempt of court by district court Judge Nadine Ramsey ("Judge Ramsey"). The contempt judgment was based upon alleged misrepresentations regarding the service of certain documents that had been filed by USAA in the underlying lawsuit. The contempt judgment was appealed to this court and affirmed in Talton v. USAA Casualty Ins. Co., 06-1513, 07-1414, (La.App. 4 Cir. 3/19/08), 981 So.2d 696, writ denied, 08-0837 (La. 6/6/08), 983 So.2d 923 ("Talton ").[2] In Talton, the Loughlins argued that the district court erred in finding them in contempt and assessing them a fine of $1, 000.00. Specifically, they argued the proper procedures, as outlined in La. C.C.P. art. 225, were not followed and asserted the district court had previously found them not in contempt of court.[3] This Court affirmed the district court's judgment, in part, and held:

After reviewing the trial court's judgment and the transcript attached thereto, we find that the trial court found the Loughlins in direct contempt for the three misrepresentations. The burden of proof in a civil contempt proceeding is by a preponderance of the evidence and appellate review is the manifestly erroneous standard. Lang v. Asten, Inc., 04-1665, p. 12 (La.App. 4 Cir. 3/30/05), 900 So.2d 1031, 1039. In accordance with La. C.C.P. art. 223, the trial court rendered a judgment that recited the facts constituting the contempt, adjudged the Loughlins guilty, and specified the punishment imposed. The trial court was not manifestly erroneous in its finding. However, in light of the direct contempt, La. R.S. 13:4611 proscribes a penalty less than that which the trial court imposed. Because the trial court assessed the maximum fine for constructive contempt, we will assess the maximum fine permitted for direct contempt: $200.00 each for a total of $400.00.

Talton, 06-1513, 07-1414 at pp. 26-27, 981 So.2d at 713-14 (footnote omitted) (emphasis added).

         In 2008, USAA's trial attorney, Tim Schafer ("Mr. Schafer") filed a disciplinary complaint with the Office of Disciplinary Counsel ("ODC") against the Loughlins. The ODC brought formal charges against the Loughlins in 2011. As part of the proceeding, Judge Ramsey was deposed on November 9, 2011.[4] Ultimately, the ODC charges were dismissed.

         In November 2012, the Loughlins filed a "Petition for Nullity of Judgment".[5] They alleged they recently discovered evidence that the contempt judgment was procured by fraud or ill practices.[6] Judge Ramsey was also deposed on December 17, 2014, in relation to the Petition.[7]

         USAA filed peremptory exceptions of prescription, no cause of action, and no right of action, along with a motion for sanctions in response to the Loughlins' Petition. At the hearing on the exceptions, no evidence was introduced; and no testimony was presented. On May 20, 2013, the district court granted USAA's exceptions, but denied the motion for sanctions. The Loughlins sought review, and this Court in Loughlin v. United Servs. Auto. Ass'n., 13-1285 (La.App. 4 Cir. 6/4/14), 144 So.3d 113, reversed and remanded for further proceedings.

         On remand, a two-day bench trial was held on September 2 and 3, 2015. Mrs. Loughlin, Mr. Loughlin, Judge Ramsey, and Mr. Schafer testified.[8] The following evidence and testimony were adduced at trial:

         Mrs. Loughlin

         Mrs. Loughlin testified that the underlying suit was for damages against USAA for property damages suffered during Hurricane Katrina; she was a plaintiff and counsel of record in the suit. Mrs. Loughlin testified she was dismissed as a plaintiff in May 2006, and she purported she was no longer counsel of record as of June 23, 2006.

         Mrs. Loughlin acknowledged she was served, on June 8, 2006, with two documents: a "Motion for Order (1) Prohibiting Plaintiffs from Contesting the 'Chuck Collins' Appraisal; (2) Finding Plaintiffs in Contempt of Court; and (3) Casting Plaintiffs for Expenses and Fees" and a "Memorandum in Opposition to Plaintiffs' Motion to Dismiss Without Prejudice."[9] She marked, on the documents, the date and time she received them.

         Mrs. Loughlin recalled Mr. Loughlin was in court, on June 23, 2006, on a separate matter. He called and told her that when he had stopped by Judge Ramsey's courtroom to check on the things she was served with, he was told something was set for hearing that morning-June 23rd. Mrs. Loughlin explained to Mr. Loughlin she was never served with anything setting a hearing for that morning, and he responded that he would tell the court.

         The June 23rd hearing was moved to June 29, 2006. Mrs. Loughlin testified that before the June 29th hearing, she reviewed the documents that had been served on her, and she noticed a June 23rd hearing date.

         On June 29th, Mrs. Loughlin appeared at the hearing. The court addressed USAA's motion for contempt for failure of the Loughlins to appear at the June 23rdhearing. In open court, Judge Ramsey ruled in favor of USAA and denied USAA's motion for contempt, sanctions, and fees. The written judgment was signed on July 17, 2006.

         On June 29, 2006, after the hearing, Judge Ramsey requested all the parties to return to her chambers. According to Mrs. Loughlin, Judge Ramsey examined the original documents and concluded that her staff had made a mistake by failing to fill in the correct order for the rule to show cause. Mrs. Loughlin testified Judge Ramsey requested, at the meeting, the Loughlins get someone to represent them on further matters.

         At trial, the parties stipulated that the order setting a hearing date for the rule to show cause on the Motion for Order was blank.[10] Additionally, Mrs. Loughlin testified the Memorandum in Opposition to Plaintiffs' Motion to Dismiss had an order setting a hearing date for June 23, 2006. Mrs. Loughlin explained, however, she did not notice it on June 8, 2006, because it was unusual for a memorandum to be set for a hearing.

         On July 6, 2006, USAA filed a "Motion for Expedited Hearing/Status Conference" requesting the district court to hear several issues, including the contempt issue.[11] The hearing on the motion was set for August 4th, but moved to August 18, 2006. A letter sent by Mr. Schafer to Judge Ramsey's law clerks and copied to Mr. Loughlin, reflected the rescheduling of the August 4th date; it did not reference the contempt issue. Mrs. Loughlin further testified that the contempt motion had been denied by Judge Ramsey on July 17, 2006, and she was unaware a re-urged motion for contempt had been filed by USAA or raised by the court, sua sponte, after that date.

         On August 18, 2006, Attorney Sharonda Williams ("Ms. Williams") appeared at the hearing, but the Louglins were not present. At the hearing, Judge Ramsey ruled on several issues requested in the motion for expedited hearing, including the contempt issue. The transcript of this hearing, which was introduced into evidence, only reflected Judge Ramsey's ruling. The transcript, provided in pertinent part:

Regarding the motion for contempt filed by USAA, the Court finds the plaintiff [sic] in contempt and orders that they pay a fine of $1, 000.00.
I mean, I find it incredulous that two attorneys did not notice. When you look at the pleading - - I mean, there are short pages in between. The last page clearly shows that there were service instructions to them.
. . . Mr. Loughlin first came in and told me that there was no service, and then Mrs. Loughlin came in and told me that there was service but there was a blank page there. And I thought something was very odd about that. I still can't prove that anything was done to change that page. But clearly, she did have notice. She knew enough to mark the date and time that the document was brought to her house. . . .

         Mrs. Loughlin testified she and Mr. Loughlin reviewed the proposed judgment prepared by Mr. Schafer, and they had many objections to it. The first line of the proposed judgment indicated the contempt issue was brought by the district court's own motion. Mrs. Loughlin stated she was unaware Judge Ramsey had motioned for them to be held in contempt. Mrs. Loughlin objected to the reference that they were present at the August 18, 2006 hearing. Additionally, Mrs. Loughlin testified she objected to the inclusion of the language that Judge Ramsey found that they made misrepresentations. She explained the objection in an exchange during cross-examination which provided:

Q: You do say, though, that the bold lines that scratch out the words 'the Court finds that misrepresentations of material fact regarding service of notice of hearing were made by Kearney L. Loughlin and Terri B. Loughlin.'
A: Yes.
Q: Okay, you scratched that out?
A: Uh-huh.
Q: Why did you do that?
A: Because Sharonda said she didn't find that we misrepresented anything.

         Mr. Loughlin set forth their complaints to the proposed judgment in a letter to Mr. Schafer dated August 21, 2006.[12] Mr. Loughlin wrote in pertinent part:

With respect to the contempt judgment, please remove from the first paragraph all reference to a motion for contempt brought either by the Court or by USAA. There was no such motion for contempt and no trial of a rule for contempt as required by La. Code Civ. Pro. art. 225. Nor was a rule to show cause setting a motion for contempt ever served. Moreover, there was never a rule to show cause stating "the facts alleged to constitute the contempt" as required by La. Code Civ. Pro. art. 225 (A).
Please also remove the second paragraph the appearance of Sharonda Williams on behalf of the plaintiffs. Plaintiffs did not engage Ms. Williams nor anyone else to appear on their behalf regarding a trial for contempt for which there was no motion, no rule, and no service.
Please remove the third paragraph of the proposed judgment. Again, there was no motion for contempt nor a rule for contempt. Accordingly, plaintiffs did not present any evidence. . . .
. . . Ms. Williams informs me that the language 'the Court finds misrepresentations of material facts regarding service of notice of hearing were made by Kearney L. Loughlin and Terri B. Loughlin' do not reflect the findings of the Court and should be removed.

         On September 12, 2006, a contempt judgment was signed by Judge Ramsey; and it provided in pertinent part:

This matter was considered by the Court on its own motion and in connection with the motion of defendant, United Services Automobile Association, for an expedited hearing/status conference, which was deferred ...

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