In the wake of the Louisiana Supreme Court’s ruling in Lomont v Bennett, 172 So.3d 620 (La. 2015), courts across Louisiana are addressing the intentional tort provision(s) of La. R. S. 9:5605 in legal malpractice actions. Two recent Louisiana Federal Court cases touch on intentional tort/fraud.
Lawyer’s agreement to settle malpractice claim with client found to be fraudulent to prevent discharge in bankruptcy.
Mrs. Bates was injured in an automobile accident and retained Faucheaux to represent her. A timely suit was never filed. Faucheaux advised Bates of the malpractice and she retained Selenberg to file suit in malpractice. Selenberg failed to timely file a malpractice suit. Selenberg advised Bates that he failed to timely file a proper suit but that he had no malpractice insurance. Selenberg offered to Bates an unsecured promissory note in the amount of $275,000.00, which he never paid on prior to filing for bankruptcy protection.
The District Court affirmed the Bankruptcy Court’s order that Selenberg’s obligation to Bates was fraudulent and therefor non-dischargeable citing the failure of Selenberg to provide written notification of the need for independent counsel (Rule 1.8 (h)) and that he made misrepresentations to Bates in an effort to allow the peremptive period of time to file a timely suit against him to lapse.
In re: Carl J. Selenberg, 2016 WL 3034165
Louisiana does not recognize the torts of “aiding and abetting” or “conspiracy” absent an underlying tort.
In Mathews v Stolier, 2016 WL 3034160 (E.D. La. 2016), the Court refused to allow an amendment to the complaint wherein the plaintiff was seeking to include allegations that the attorney “aided and abetted” other parties’ fraud. The Court pointed out that “aiding and abetting” are not in and of themselves torts recognized under Louisiana law. Furthermore, without an underlying tort, “conspiracy” is not a tort recognized under Louisiana law.
The Court in Mathews discussed what is recognized as Louisiana law on “aiding and abetting” and “conspiracy.”
It is anticipated that the plaintiffs’ bar will continue their efforts to avoid the peremptive periods provided by §5605. To the extent their efforts track those done in Mathews, attorney defendants should have continued success in using peremption as a defense. Similarly, other professionals (i.e. insurance agents) which rely on similar statutes to bar untimely suits will be affected.
Allen & Gooch is providing this legal update for informational purposes only. This article should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. You should consult your own attorney concerning your particular situation and any specific legal questions you may have.