56 So. 3d 1254
La. Ct. App.2011Background
- Chenier Property Partners owned the project and Echelon Construction was the general contractor; a payment bond securing Travelers as surety was filed under the Private Works Act.
- SWC Services subcontracted to perform work on the project and later recorded liens in December 2008 and February 2009 for approximately $122,331.63 unpaid to SWC.
- SWC sued Echelon, Chenier, and Travelers on March 6, 2009 to recover the unpaid balance on SWC's labor and materials furnished.
- Travelers and Echelon denied SWC's allegations, arguing the bond provisions bar SWC's claims; discovery sought by SWC revealed Travelers claimed the bond’s provisions barred the claims and counsel for Travelers withdrew on May 28, 2009.
- SWC moved for partial summary judgment and sanctions on August 18, 2009; the court granted summary judgment and sanctioned Travelers' certifying attorney for $1,500, though notice issues existed for that hearing.
- SWC settled all claims with Travelers on October 5, 2009; SWC’s counsel withdrew, and an intervention sought one-third of the settlement; at the November 3, 2009 hearing, the court reaffirmed sanctions against Travelers but not the moving attorney, and a November 30, 2009 judgment awarded sanctions to the mover's attorney which Travelers appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Article 863 sanctions may be imposed on a party's attorney | SWC argues Article 863 sanctions are proper against the opposing party's attorney to deter improper filings. | Travelers contends Article 863 sanctions target the sanctioned party, not the mover's attorney, and the award was improper. | Sanctions to the mover's attorney were improper and must be vacated. |
| Whether sanctions awarded after settlement were properly awarded under Article 863 | SWC contends the court acted within Article 863 to sanction for improper filings and delay. | Travelers argues once settlement occurred, sanctions to the mover's attorney are inappropriate and fall outside the statute. | Sanctions awarded to the mover's attorney post-settlement were improper and vacated. |
Key Cases Cited
- Sanchez v. Liberty Lloyds, 672 So. 2d 268 (La.App. 1 Cir. 1996) (Rule 11-type sanctions require reasonable inquiry into facts and law)
- Green v. Wal-Mart Store #1163, 684 So. 2d 966 (La.App. 4 Cir. 1996) (sanctions payable to client's attorney improper; payment must be to the other party)
- Langley v. Petro Star Corp. of La., 792 So. 2d 721 (La. 2001) (sanctions are penal and should be construed strictly to deter improper conduct)