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Potier v. JBS Liberty Securities Inc.

United States District Court, W.D. Louisiana, Lafayette Division

December 28, 2017





         Before the Court is a Motion to Reconsider (Record Document 119) filed by Plaintiffs Joseph Clyde Potier and Glenda Potier (collectively “the Potiers”). Pursuant to Federal Rule of Civil Procedure 54(b), the Potiers seek reconsideration of a May 7, 2015 Memorandum Ruling and Order issued by the Honorable Rebecca F. Doherty, [1] wherein the Court dismissed the Potiers' claim of vicarious liability brought against Defendant JBS Liberty Securities, Inc. d/b/a JBS Investment Group, LLC (“JBS”) for the actions of its employee, Roger Dale Lanclos (“Lanclos”). See Record Documents 101 and 103. The Motion to Reconsider is unopposed. See Record Documents 120, 128, and 130. For the reasons set forth below, the Motion to Reconsider is GRANTED.


         On April 16, 2013, the Potiers brought suit against Lanclos, their brokerage agent, and his employer JBS, alleging Lanclos “had been pillaging their retirement accounts to generate excessive commissions. . . .”[2] Record Document 119-1 at 1. According to the Potiers, Lanclos was employed as a broker and agent for JBS from November 2006 through December 2010. Record Document 94-1 at ¶ 2. During that time, Lanclos invested the Potiers' money and managed their financial accounts by purchasing and selling various securities and annuities through JBS. Record Document 14 at ¶¶ 14-15. The Potiers allege while managing their accounts, Lanclos engaged in a continuous process of purchasing and selling the same or similar annuity funds in order to generate “large up-front commissions, bonuses, and fees” for himself and JBS. Id. at ¶ 17. The Potiers contend the annuities purchased by Lanclos on their behalf were not suitable for their financial goals, risk tolerance or investment objectives. Id. at ¶ 16-17. The Potiers further allege Lanclos made material misrepresentations to them regarding the quality of his investments and failed to disclose the financial consequences of his investment decisions. Id. at ¶ 21. The Potiers assert Lanclos engaged in a pattern of conduct intended to defraud them in order to benefit himself and JBS. Id. at ¶¶ 18, 21-22, 24-26. The Potiers' complaint sets forth various claims under federal securities law against Lanclos and JBS. The complaint additionally asserts one state law claim against JBS, alleging JBS is vicariously liable for its failure to properly train or supervise Lanclos and its failure to review the Potiers' statements for evidence of suitability, unauthorized trading, and excessive activity. Id. at ¶¶ 31, 61-63. On November 6, 2014, JBS filed a Motion for Summary Judgment arguing all claims asserted against it were time barred, and therefore all of the Potiers' claims asserted against JBS must be dismissed. Record Document 90. On May 7, 2015, the Court granted the motion with regard to the Potiers' state law claim, and denied the motion with regard to the federal law claims. Record Document 101. As to the state law claim of vicarious liability, the Court found the claim was perempted pursuant to La. R.S. § 9:5606 (Actions for professional insurance agent liability). Id. at 9.

         The Potiers now seek reconsideration of that portion of the ruling dismissing their state law claim against JBS for vicarious liability. The basis for the motion is that subsequent to issuance of this Court's ruling, the Louisiana Supreme Court clarified the law in this area by resolving a circuit split and held that for actions involving legal malpractice, once fraud is established the peremptive periods set forth in La. R.S. 9:5605 do not apply and instead courts must look to the ordinary one-year prescriptive period set forth in La. Civ. Code art. 3492. See Lomont v. Bennet, 2014-2483 (La. 6/30/15), 172 So.3d 620, 637. Although Lomont addressed the fraud exception set forth in La. R.S. 9:5605 (Actions for legal malpractice), the Potiers contend the same reasoning should apply to their claim brought under La. R.S. 9:5606 (Actions for professional insurance agent liability), arguing because the two statutes are virtually identical the same interpretation should govern La. R.S. 9:5606. Record Document 119-1 at 2-3.


         I. Reconsideration

         Reconsideration of interlocutory orders is governed by Fed.R.Civ.P. 54(b). Austin v. Kroger Texas, L.P., 864 F.3d 326, 336 (5th Cir. 2017). Rule 54(b) states in pertinent part, “[A]ny order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties does not end the action as to any of the claims or parties and may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.” Fed.R.Civ.P. 54(b). “Under Rule 54(b), the trial court is free to reconsider and reverse its decision for any reason it deems sufficient, even in the absence of new evidence or an intervening change in or clarification of the substantive law.” Austin, 864 F.3d at 336 (internal quotation marks omitted).[3] “Although the district court's discretion in this regard is broad, it is exercised sparingly in order to forestall the perpetual reexamination of orders and the resulting burdens and delays.” Castrillo v. American Home Mortg. Servicing, Inc., 2010 WL 1424398, *3 (E.D.La.) (citing Calpetco 1981 v. Marshall Exploration, Inc., 989 F.2d 1408, 1414-15 (5th Cir.1993); 18B Charles A. Wright et al., Federal Practice & Procedure § 4478.1 (2d ed. 2002)). “[A] successor judge has the same discretion to reconsider an order as would the first judge, but should not overrule the earlier judge's order or judgment merely because the later judge might have decided matters differently.” U.S. v. O'Keefe, 128 F.3d 885, 891 (5th Cir. 1997).

         II. Summary Judgment

         “A party may move for summary judgment, identifying each claim or defense-or the part of each claim or defense-on which summary judgment is sought.” Fed.R.Civ.P. 56(a). “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Id. “A genuine issue of material fact exists when the evidence is such that a reasonable jury could return a verdict for the non-moving party.” Quality Infusion Care, Inc. v. Health Care Service Corp., 628 F.3d 725, 728 (5th Cir. 2010). As summarized by the Fifth Circuit:

When seeking summary judgment, the movant bears the initial responsibility of demonstrating the absence of an issue of material fact with respect to those issues on which the movant bears the burden of proof at trial. However, where the nonmovant bears the burden of proof at trial, the movant may merely point to an absence of evidence, thus shifting to the non-movant the burden of demonstrating by competent summary judgment proof that there is an issue of material fact warranting trial.

Lindsey v. Sears Roebuck and Co., 16 F.3d 616, 618 (5th Cir.1994) (internal citations omitted).

         When reviewing evidence in connection with a motion for summary judgment, “the court must disregard all evidence favorable to the moving party that the jury is not required to believe, and should give credence to the evidence favoring the nonmoving party as well as that evidence supporting the moving party that is uncontradicted and unimpeached.” Roberts v. Cardinal Servs., 266 F.3d 368, 373 (5th Cir.2001); see also Feist v. Louisiana, Dept. of Justice, Office of the Atty. Gen., 730 F.3d 450, 452 (5th Cir. 2013) (court must view all facts and evidence in the light most favorable to the non-moving party). “Credibility determinations are not part of the summary judgment analysis.” Quorum Health Resources, L.L.C. v. Maverick County Hosp. Dist., 308 F.3d 451, 458 (5thCir. 2002). Rule 56 “mandates the entry of summary judgment . . . against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof.” Patrick v. Ridge, 394 F.3d 311, 315 (5thCir. 2004)(alterations in original)(quoting Celotex v. Catrett, 477 U.S. 317, 322 (1986)).


         The Potiers now seek reconsideration of that portion of this Court's prior ruling dismissing their state law claim against JBS for vicarious liability. Again, the motion is unopposed. Relying upon the Louisiana Supreme Court's decision in Lomont, the Potiers argue this Court should reconsider the prior ruling “and find the Potiers' state law claims against JBS are not time barred under La. Rev. Stat. §9:5606.” Record Document 119-1 at 3 (citing Lomont v. Bennett, 2014-2483 (La. 6/30/15), 172 So.3d 620).

         In Lomont, a client filed a legal malpractice claim against her former attorney, alleging the attorney had failed to record a community property settlement giving the client the family home, and as a result, a third-party creditor was able to file a lien against the property. Lomont, 172 So.3d at 623-24. It was undisputed the act of malpractice was the attorney's failure to record the settlement agreement in the public records prior to February 20, 2009, i.e., the date the third-party recorded its lien. Id. at 626. Because suit was filed more than three years after the act of malpractice, the attorney argued the claim was perempted pursuant to La. R.S. 9:5605. Id. at 623.

         The time limits to file a legal malpractice action are set forth in La. R.S. 9:5605, which provides in pertinent part:

A. No action for damages against any attorney at law duly admitted to practice in this state . . ., whether based upon tort, or breach of contract, or otherwise, arising out of an engagement to provide legal services shall be brought unless filed . . . within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered; however, even as to actions filed within one year from the date of such discovery, in all events such actions shall be filed at the latest within three years from the date of the alleged act, omission, or neglect.
B. . . . The one-year and three-year periods of limitation provided in Subsection A of this Section are peremptive periods within the meaning of Civil Code Article 3458 and, in accordance with Civil Code Article ...

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