DAUTERIVE CONTRACTORS, INC.,
v.
LANDRY AND WATKINS, A Law Partnership.
Court of Appeal of Louisiana, Third Circuit.
*1245 James H. Gibson, Allen & Gooch, Lafayette, LA, for Defendant/Appellee: Landry & Watkins, A Law Partnership.
Kai David Midboe, Midboe, Guirard, Davis, and Brinsko, LLP, Baton Rouge, LA, for Plaintiff/Appellant: Dauterive Contractors, Inc.
Court composed of ULYSSES GENE THIBODEAUX, MARC T. AMY and ELIZABETH A. PICKETT, Judges.
THIBODEAUX, Judge.
This is a legal malpractice action instituted under La.R.S. 9:5605 by plaintiff-client, Dauterive Contractors, Inc., against defendant-law firm, Landry & Watkins, A Law Partnership, for failure to timely file proof of claim in bankruptcy court proceedings. In response, Landry & Watkins filed an exception of prescription/peremption, alleging that the legal malpractice action was untimely, having been filed more than one year from the date Dauterive Contractors gained knowledge of the facts sufficient to place them on notice of their potential claim against Landry & Watkins. The trial judge granted the exception and Dauterive Contractors appealed. For the reasons set forth below, we affirm.
I.
ISSUES
We shall consider whether:
(1) Mr. William Repaske, a partner at Landry & Watkins, terminated his attorney-client relationship with Mr. Dauterive on January 18, 1999.
(2) Mr. Edward Landry, a partner at Landry & Watkins, represented Mr. Dauterive in bankruptcy and/or malpractice proceedings after January 18, 1999.
(3) Landry & Watkins engaged in a continuing tort or separate torts that rendered Mr. Dauterive's suit timely in February 2000.
(4) Landry & Watkins engaged in misleading conduct in representing Mr. Dauterive in the bankruptcy and/or malpractice proceedings which amounted to fraud.
(5) the one-year period of limitation contained in La.R.S. 9:5605(A) is so unreasonably short as to be arbitrary and in violation of Amendments IV and V of the United States Constitution and Article 1, Sections 2 and 22 of the Louisiana Constitution of 1974.
II.
FACTS AND PROCEDURAL HISTORY
Mr. Aubrey Dauterive is the President of Dauterive Contractors, Inc. (hereinafter "Dauterive Contractors"), a business located in New Iberia, Louisiana that leases *1246 boats to the oilfield industry. Among Dauterive Contractors' clientele was Grant Geophysical, Inc. (hereinafter "Grant"). In the fall of 1996, Grant became delinquent in account payments to Dauterive Contractors, prompting the plaintiff company to retain Landry & Watkins, A Law Partnership (hereinafter "Landry & Watkins") with a view toward the collection of unpaid invoices in an amount exceeding $300,000. There was no written contract reflecting this retention.
The particular matter for which Dauterive sought legal aid was handled by Mr. William Repaske, a partner at Landry & Watkins. Initially, Mr. Repaske composed collection letters to Grant. These attempts proved unsuccessful. On December 6, 1996, Grant filed for bankruptcy and Landry & Watkins continued to represent Dauterive Contractors through the course of the bankruptcy proceedings.
In order to preserve their claim against Grant in the proceedings, Dauterive Contractors was required to file a proof of claim in the bankruptcy court by May 7, 1997. This filing was Mr. Repaske's responsibility. According to his testimony, he drafted a proof of claim by hand, which his secretary was to type and then arrange for Mr. Dauterive to sign. Mr. Dauterive remembers having signed something, which may or may not have been the original proof of claim. In any event, Mr. Repaske asserts that the proof of claim was completed and mailed. However, the documentation has allegedly been lost. The firm asserts that it never received responsive correspondence from the bankruptcy court.
The deadline, i.e., "bar date," for filing the proof of claim in the bankruptcy proceeding was set for May 7, 1997 by the "Notice of Last Date for Creditors to File Proofs of Claim" which was sent to Landry & Watkins. Mr. Repaske did not realize that a claim had not been filed until an August 5, 1998 telephone conversation with the disbursing attorney. According to his testimony, Mr. Repaske relayed this information to his client shortly thereafter, and agreed to investigate possible alternatives. Mr. Repaske explained to Mr. Dauterive that he had malpractice insurance and his client could make a claim. He could not say for sure, however, whether he told Mr. Dauterive "talk to someone else" at this point. Mr. Repaske did not refer to his error as legal malpractice, nor did he explain that there was a period of time during which malpractice claims must be filed. He did not comment on the potential conflict of interest, nor did he seek to terminate the attorney-client relationship.
Upon investigation, Mr. Repaske was told by a former U.S. bankruptcy trustee that bankruptcy courts had been known, in some instances, to honor late claims. He conferred with Mr. Dauterive and decided to file a new proof of claim. It was signed by Mr. Dauterive on November 9, 1998, and mailed on or about November 11, 1998, roughly 18 months after the original "bar date." Mr. Dauterive testified that filing the new proof of claim indicated to him that there was a chance for recovery in the bankruptcy proceedings; he believed there was only a "minute chance" that Dauterive Contractors would not recover. According to Mr. Dauterive's testimony, he was not told that the claim was forever barred in bankruptcy, nor was he told that the late filing amounted to an act of malpractice. He was not told to seek independent counsel, was not told of any conflict of interest, and, according to his testimony, his attorneys remained silent on the period of limitation for the malpractice suit, and they did nothing to interrupt it.
*1247 Ms. Julie Badeaux, secretary in charge of accounts receivable at Dauterive Contractors (and former employee of Landry & Watkins), testified regarding the November 9, 1998 proof of claim that though she knew it could be rejected for being untimely, she nevertheless believed it had as good a chance of being honored as if it had been filed timely. She testified that it was not until November 1998 that she first learned that the filing deadline had been missed, and that Mr. Repaske had admitted to Mr. Dauterive that he had made a mistake. She was never told that the claim was forever barred in bankruptcy. She testified that Mr. Repaske did not seek to terminate the attorney-client relationship with her, did not advise her to seek independent counsel, nor did he inform her that there was a period of limitation for the legal malpractice claim.
Mr. Repaske's testimony is significant especially since the trial judge found his recollection more complete. He claimed that when the November 9, 1998 document was signed, he told his client that his malpractice insurance would compensate for the mistake and that Mr. Dauterive was free to make a claim. He also encouraged his client to "talk to someone else" and explained that if an objection was filed against the new proof of claim, there would be no chance for recovery.
On January 18, 1999, an objection was lodged against the proof of claim. When Mr. Repaske contacted Mr. Dauterive with news of the objection, he specifically recalled telling his client that there was no longer any possibility of recoverythat "that was the end." He explained that a claim could be made against the malpractice insurance carrier and that "you need to talk to someone else."
Mr. Dauterive testified that by January 1999, Mr. Repaske had admitted his mistake and had mentioned the malpractice insurance carrier. He testified that on the date the objection was filed, he was told by the law firm to wait for the bankruptcy court decision on the objection. Only then would he know the success of the late-filed proof of claim. Contrarily, Mr. Repaske testified that he would not have told his client to do nothing, and that by telling them that he had malpractice insurance, he was not discouraging them from pursuing a malpractice claim. Mr. Repaske agreed that he never discussed the period of limitation for legal malpractice, nor did he take any action to interrupt it.
By January 18, 1999, Mr. Repaske considered the attorney-client relationship to have ceased and testified that after such date, he no longer had any contact with Mr. Dauterive or his business. Though there is no document reflecting the relationship's alleged termination, Mr. Repaske no longer participated in the bankruptcy proceeding. Mr. Dauterive agreed with Mr. Repaske that at some point after January 18, 1999, Mr. Repaske no longer took his calls; however, Mr. Dauterive testified that he still felt represented by the firm. Mr. Repaske testified that he spoke with Ms. Badeaux via telephone sometime after January 1999 and suggested she draft a demand letter to Landry & Watkins.
Testimony revealed that during the course of these events, Mr. Edward Landry, another partner in the firm, continued to represent Mr. Dauterive and his company in other matters. Mr. Landry was not responsible for the submission of the proof of claim and Mr. Dauterive admits that he never discussed the Grant matter with Mr. Landry until 1999. From 1999 to 2000, there were several occasions when Mr. Dauterive made inquiries to Mr. Landry *1248 about the status of the malpractice matter. Each time, Mr. Landry relayed information obtained from the attorney representing Landry & Watkins and the malpractice insurance carrier.
Mr. Dauterive never gave Mr. Landry any specific authority to negotiate a settlement with the insurance carrier. Mr. Landry testified that he was not familiar enough with the situation to know that the period of limitation for the malpractice claim would be at issue. He did not seek to formally terminate the attorney-client relationship, primarily because he had not been representing Dauterive Contractors on the bankruptcy matter.
In March 1999, the bankruptcy court ruled the new proof of claim untimely. Ms. Badeaux testified, and Mr. Dauterive agreed, that this was the first time that Dauterive Contractors learned that the claim against Grant was forever barred in bankruptcy. According to Mr. Dauterive, this was the first time Landry & Watkins informed him that an act of malpractice had been committed and that insurance coverage was in effect. When informing him of the bankruptcy court's March 1999 ruling, the firm did not, according to Mr. Dauterive, tell him to seek independent counsel, did not explain the period of limitation for legal malpractice, and did not take any action to interrupt it. Mr. Dauterive still believed he was involved in an attorney-client relationship with Landry & Watkins.
On June 1, 1999, Dauterive Contractors made a formal demand on Landry & Watkins and/or its malpractice carrier for payment of $304,915.74. A second demand letter was sent to Mr. Repaske on August 31, 1999, which referenced the first. Ms. Badeaux testified that these demand letters were written with full knowledge of the failure to timely file the proof of claim. According to Mr. Dauterive, the letters were written with full knowledge that the claim in bankruptcy was forever barred.
Mr. Landry testified that on January 26, 2000, he informed Mr. Dauterive that the insurance carrier's attorney believed that a legal malpractice claim against Landry & Watkins may be prohibited as untimely, at which point he told Mr. Dauterive to retain another attorney. Mr. Dauterive testified that until January 2000, he believed that Landry & Watkins was representing him.
On February 11, 2000, Dauterive Contractors filed the instant action against Landry & Watkins, alleging legal malpractice on the part of two partners, Mr. Repaske and Mr. Landry. The suit was met by an exception of prescription/peremption. The law firm contends that this action is untimely, having been filed more than one year from Dauterive Contractors having knowledge of the facts sufficient to place them on notice of their potential claim against the defendants.
On March 27, 2001, an evidentiary hearing on the exception was held, and the trial court signed a judgment on May 14, 2001, granting Landry & Watkins' exception of prescription/peremption. Dauterive Contractors filed this appeal.
III.
LAW AND DISCUSSION
Standard of Review
An exception of prescription is a peremptory exception that is among those listed in La.Code Civ.P. art. 927. The list is nonexclusive. A peremptory exception may therefore rightfully include an exception of peremption, the effect of which would be to terminate the litigation.
*1249 A peremptory exception may be raised at any stage of the proceeding in the trial court prior to the submission of the case for a decision. La.Code Civ.P. art. 928(B). Where, as here, a peremptory exception is pled prior to trial, the exception is tried and disposed of in advance of or on the trial of the case. La.Code Civ.P. art. 929. When evidence is introduced and evaluated at the trial of the exception, an appellate court must evaluate subject to the traditional rules governing appellate review of facts. Parker v. Buteau,
Reconciling La.R.S. 9:5605
The law governing legal malpractice actions has evolved in recent years. What was once adjudicated in the context of tort and contract theories is now statutorily controlled. The court in Phillip v. Home Ins. Co.,
Historically, prescription for legal malpractice claims was governed by the general prescription articles, La.C.C. art. 3492 or La.C.C. art. 3499, depending on whether the claim was in tort or for breach of contract, respectively. Under La.C.C. art. 3492, the prescriptive period for a legal malpractice claim sounding in tort was one year. That period did not run until discovery and the prescriptive period could be suspended during the continuous representation of the client by the attorney regarding the specific subject matter in which the alleged wrongful act or omission occurred. Braud v. New England Ins. Co.,576 So.2d 466 (La.1991). Under La.C.C. art. 3499, the prescriptive period on a breach of contract claim was 10 years. That prescriptive period begins to run from the date that the contract is allegedly breached. Deshotels v. Fruge,364 So.2d 258 (La.App. 3rd Cir.1978).
Most legal malpractice actions are delictual and are governed by the one-year prescriptive period. This rule was historically subject to two exceptions: (1) when the attorney expressly warrants a specific result and fails to obtain that result, and (2) when the attorney agrees to perform certain work and does nothing whatsoever. In these two contexts, the action would be in contract and subject to the ten-year prescriptive period. Lima v. Schmidt,595 So.2d 624 (La. 1992). However, in 1990, the legislature changed the prescriptive periods for legal malpractice claims by enacting La. R.S. 9:5605 ... That statute was amended in 1992, and, as amended, is the current law applicable to prescription of legal malpractice actions.
Id. at 946 (emphasis added).
The current and controlling law is found at La.R.S. 9:5605, which reads in full:
A. No action for damages against any attorney at law duly admitted to *1250 practice in this state, any partnership of such attorneys at law, or any professional corporation, company, organization, association, enterprise, or other commercial business or professional combination authorized by the laws of this state to engage in the practice of law, whether based upon tort, or breach of contract, or otherwise, arising out of an engagement to provide legal services shall be brought unless filed in a court of competent jurisdiction and proper venue 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 provisions of this Section are remedial and apply to all causes of action without regard to the date when the alleged act, omission, or neglect occurred. However, with respect to any alleged act, omission, or neglect occurring prior to September 7, 1990, actions must, in all events, be filed in a court of competent jurisdiction and proper venue on or before September 7, 1993, without regard to the date of discovery of the alleged act, omission, or neglect. 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 3461, may not be renounced, interrupted, or suspended.
C. Notwithstanding any other law to the contrary, in all actions brought in this state against any attorney at law duly admitted to practice in this state, any partnership of such attorneys at law, or any professional law corporation, company, organization, association, enterprise, or other commercial business or professional combination authorized by the laws of this state to engage in the practice of law, the prescriptive and peremptive period shall be governed exclusively by this Section.
D. The provisions of this Section shall apply to all persons whether or not infirm or under disability of any kind and including minors and interdicts.
E. The peremptive period provided in Subsection A of this Section shall not apply in cases of fraud, as defined in Civil Code Article 1953.
(emphasis added).
The Louisiana Supreme Court has referred to "the clear wording of this statute...." Reeder v. North, 97-0239, p. 5 (La.10/21/97);
Subsections C and E are the two sources of confusion. Subsection C states that "the prescriptive and peremptive period shall be governed exclusively by this Section." (emphasis added). Since the word "period" is singular, the implication in Subsection C is that either the one-year or the three-year period (the statute *1251 does not clarify which) is both prescriptive and peremptive. Peremption can be categorized as a species of prescription, indeed, and has been referred to as a form of prescription. Flowers, Inc. v. Rausch,
Peremption differs from prescription in several respects. Although prescription prevents the enforcement of a right by legal action, it does not terminate the natural obligation (La.Civ.Code art. 1762(1)); peremption, however, extinguishes or destroys the right (La.Civ. Code art. 3458). Public policy requires that the rights to which peremptive periods attach are to be extinguished after passage of a specified period. Accordingly, nothing may interfere with the running of a peremptive period. It may not be interrupted or suspended [La.Civ. Code art. 3461]; nor is there provision for its renunciation. And exceptions such as contra non valentem are not applicable. As an inchoate right, prescription, on the other hand, may be renounced, interrupted, or suspended....
(footnote omitted). See also Reeder,
Finally, Subsection E sets out a special rule in cases of fraud. It refers to "[t]he peremptive period provided in Subsection A of this Section ...." (emphasis added). Here again, the word "period" is singular. However, Subsection A refers to two periods, which, according to Subsection B, are both peremptive. The statute does not clarify whether the fraud exception applies to the one-year or the three-year period. In our estimation, therefore, La.R.S. 9:5605 is susceptible of different meanings.
We have been unable to locate one Louisiana case (save, perhaps, Reeder) that sheds light upon these inconsistencies. The circuits are understandably scattered. Select cases have been listed below for effect, to underscore the disparate treatment of La.R.S. 9:5605. Some cases refer to the one-year period as prescriptive. See Allen v. Carollo,
Some cases refer to the three-year period as peremptive. See Kennedy v. Macaluso, *1252 XXXX-XXXX (La.App. 1 Cir. 2/16/01);
Still other cases refer to both the one-year and the three-year period as peremptive. See Reeder,
In Reeder, the Louisiana Supreme Court said that "[t]he legislature was particularly clear in wording La.R.S. 9:5605 so as to leave no doubt as to its intent." Reeder,
We hold that both the one-year and three-year periods are peremptive and are subject to all rules governing peremption. *1253 This holding is buttressed primarily by our supreme court's clear language in Reeder. Moreover, as the court in Boykin,
For reasons delineated in the appropriate section below, we further hold that in cases of fraud, the "peremptive period" referenced in La.R.S. 9:5605(E) refers to the three-year peremptive period only. Therefore, if fraud is proven, the three-year peremptive period will be inapplicable. The presence of fraud notwithstanding, however, the one-year peremptive period is always applicable, and the malpractice action must still be brought within one year of the alleged act or within one year from the date that the alleged act is discovered or should have been discovered.
Present Application of La.R.S. 9:5605
The trial judge correctly noted in her Reasons for Ruling that the legal malpractice occurred on May 7, 1997, when Mr. Repaske failed to file the proof of claim in the bankruptcy court. Dauterive Contractors alleges such in paragraph 18 of its petition. The burden of proving prescription is typically on the party pleading it. However, when the action is prescribed on the face of the petition, the burden shifts to the plaintiff. He must prove that the claim has not prescribed by showing either suspension, interruption, or renunciation prescription. Bourque v. Hoychick,
We recognize that these jurisprudential rules apply to prescription. However, both the running of prescription and the running of peremption have the effect of terminating the litigation. Though different in their operation, the relatedness of the two theories justifies application of prescription's burden-shifting principles enunciated in the jurisprudence to peremption. See Academy Mortg. Co., L.L.C.,
The petition in this case was filed on February 11, 2000, more than one year after the act of malpractice. On the face of the petition, the action is perempted. As such, the burden of proof is on Dauterive Contractors to overcome the allegation of peremption. Even in light of each assignment of error, the plaintiff has failed to carry this burden. According to La. R.S. 9:5605, no malpractice action may be filed unless done so within one year from *1254 the date of the act of malpractice (which was on May 7, 1997). On the one hand, this means that the malpractice action must have been brought by May 7, 1998. However, the statute clearly goes on to say in Subsection A that the action may be brought within one year from the date the act was discovered or should have been discovered.
In Griffin v. Kinberger,
The standard imposed in Griffin is that of a reasonable man. This standard is designed to establish a rule that any plaintiff who had knowledge of facts that would place a reasonable man on notice that malpractice may have been committed shall be held to have been subject to the commencement of prescription by virtue of such knowledge even though he takes the position that he did not know because these facts were not sufficient to trigger such knowledge in his mind.
Taussig,
The trial judge found Mr. Repaske's recollection more complete. And we note that "[w]hen findings are based on determinations regarding the credibility of witnesses, the manifest errorclearly wrong standard demands great deference to the trier of fact's findings; for only the factfinder can be aware of the variations in demeanor and tone of voice that bear so heavily on the listener's understanding and belief in what is said." Rosell,
By early August 1998, Mr. Dauterive was apprised of the late filing when Mr. Repaske relayed the information to him. According to his testimony, Mr. Repaske explained at that point that he had malpractice insurance and that Mr. Dauterive could make a claim. He could not say for sure, however, whether he told Mr. Dauterive "talk to someone else" at this point. Mr. Repaske claimed that on November 9, 1998, he told his client that his malpractice insurance would compensate for the mistake and that Mr. Dauterive was free to make a claim. He also encouraged his client to "talk to someone else" and explained that if an objection was filed against the new proof of claim, there would be no chance for recovery. So, if not by August 1998, Mr. Dauterive knew of Mr. Repaske's mistake by November 9, 1998, when he signed the new proof of claim. *1255 When the objection was lodged against the new claim on January 18, 1999, Mr. Repaske specifically recalled telling his client that there was no longer any possibility of recoverythat "that was the end." He again explained that a claim could be made against the malpractice insurance carrier and that "you need to talk to someone else."
The trial court found by preponderance of the evidence that on or about August 5, 1998, Mr. Dauterive knew of the existence of facts which would have enabled him to state a cause of action for legal malpractice. We do not believe that this finding is manifestly erroneous. However, to take the analysis a step further, we note that in light of the facts, Mr. Dauterive, as a reasonable man, either discovered or should have discovered the malpractice by August 1998 (as the trial court found), or if not then, by November 1998, or if not then, by January 1999. It is unnecessary for us to pinpoint exactly which of these dates is controlling. It is enough to say that the act of malpractice was discovered or was reasonably discoverable sometime between August 1998 and January 1999. Therefore, even if Mr. Dauterive did not discover or should not have discovered the malpractice until January 1999 at the latest, the suit was still untimely when filed in February 2000. Because Dauterive Contractors' did not file suit within one year from the date of discovery, the three-year peremptive period is inapplicable. Bourque,
Termination of the Attorney-Client Relationship Between Mr. Repaske and Mr. Dauterive on January 18, 1999, and Mr. Landry's representation of Mr. Dauterive after January 18, 1999.
The first two issues for review can be treated in conjunction with one another, as they are interrelated. The first is whether Mr. Repaske terminated his attorney-client relationship with Mr. Dauterive on January 18, 1999, and the second is whether Mr. Landry represented Mr. Dauterive in bankruptcy and/or malpractice proceedings after January 18, 1999. The trial judge stated in her Reasons for Ruling that "if the continuous representation doctrine is alive and well in the Third Circuit, which is doubtful, the meritorious reasons for application of that doctrine to this factual situation ceased in January of 1999... After January 18, 1999, Mr. Repaske no longer represented Aubry [sic] Dauterive or Dauterive Contractors, Inc." She stated further that though "[t]he critical question in this case ... is the nature of the relationship between Edward Landry and Aubry [sic] Dauterive from January 1999 through the filing of the suit in February 2000[;] ... there was not a reasonable basis for a belief that Landry undertook representation for this claim."
As discussed in detail below, we are confident that the continuous representation rule is not alive and well in our circuit. As such, though not manifestly erroneous in result, we need not consider the propriety of the trial court's determination of when the attorney-client relationship between Mr. Repaske and Mr. Dauterive ended, or, for that matter, whether or not Mr. Landry undertook to represent Mr. Dauterive or the nature of their relationship. In short, because the continuous representation rule does not apply to peremptive periods, the result is the same, whether in regard to Mr. Repaske or Mr. Landrythe statutory dictates maintain regardless of when the attorney-client relationship ended. The one-year peremptive period still operates to bar this malpractice action.
*1256 On August 5, 1998, Mr. Repaske realized that a proof of claim had not been filed. From then until January 18, 1999, when an objection was filed, he engaged in efforts to repair the damage caused by the malpractice and to keep his client fully informed of his efforts. In March 1999, the bankruptcy court ruled the late proof of claim untimely. Mr. Dauterive claims that only then did he learn that the failure to timely file meant the claim was forever barred. He claims that Mr. Repaske did not advise him of any conflict of interest in further representing the company, did not terminate the attorney-client relationship, and did not advise Mr. Dauterive to seek independent counsel concerning the malpractice. Instead, according to Mr. Dauterive, the firm undertook to represent Mr. Dauterive in dealing with the malpractice insurer. Mr. Landry neither terminated the attorney-client relationship, nor advised him to pursue a malpractice insurance claim with independent counsel until January 26, 2000.
By January 18, 1999, Mr. Repaske considered the attorney-client relationship to have ceased and after such date, he no longer had any contact with Mr. Dauterive or his business. Though there is no document reflecting the relationship's termination, Mr. Repaske no longer participated in the bankruptcy proceeding. Mr. Dauterive agreed with Mr. Repaske that at some point after January 18, 1999, Mr. Repaske no longer took his calls; however, Mr. Dauterive testified that he still felt represented by the firm, especially when, according to him, Mr. Landry undertook to advise him on the malpractice claim.
In Reeder,
The court in Andre,
Until sometime in 2001, Mr. Landry continued to represent Mr. Dauterive on legal matters unrelated to the bankruptcy proceeding. This is uncontested. Mr. Landry had not been responsible for the submission of the proof of claim, however, and Mr. Dauterive admits that he never discussed the matter with Mr. Landry until 1999. From 1999 to 2000, when Mr. Dauterive made inquiries to Mr. Landry about the status of the malpractice matter, Mr. Landry relayed information obtained from the attorney representing Landry & Watkins and the insurance carrier. Mr. Landry did not seek to formally terminate the attorney-client relationship, primarily because he had not been representing Dauterive Contractors on the bankruptcy matter. According to Mr. Landry's testimony, on January 26, 2000, he informed Mr. Dauterive that the insurance carrier's attorney believed that a claim against Landry & Watkins may be prescribed, at which point he told Mr. Dauterive to retain another attorney. Mr. Dauterive testified that until January 2000, he believed that Landry & Watkins was continuing to represent him.
The Louisiana Supreme Court in Lima,
However, as the court in Reeder explained, Lima's facts centered around a legal malpractice suit that was filed prior to the enactment of La.R.S. 9:5605. Therefore, the one-year prescriptive period of La.Civ.Code art. 3492 governed and because prescriptive periods may be suspended, the continuous representation rule was applicable. Because La.R.S. 9:5605 now governs and because both the one-year and the three-year periods of limitation are peremptive, the rule no longer applies to legal malpractice actions. "As a suspension principle based on contra non valentem, the `continuous representation rule' cannot apply to peremptive periods." Reeder,
In Lambert, we said that "the continuous representation rule, which is rooted in the doctrine of contra non valentem, is not *1258 available in legal malpractice actions." Lambert,
Though the Fifth Circuit recognized that the continuous representation rule does not suspend the running of peremption, the court misinterpreted Lima's application of the rule to the old law as justification for the rule's application to La.R.S. 9:5605. There is no doubt that the continuous representation rule applied under the old, pre-La.R.S. 9:5605 law. However, as discussed above, the law has changed. The supreme court in Lima recognized this change in footnote 1, by stating that "[i]n 1990, the legislature enacted LSA R.S. 9:5605, which sets forth a specific statutory provision governing the liberative prescriptive period for legal malpractice actions. As the Limas' cause of action arose before the effective date of this statute, we conclude that this statute cannot apply." Lima,
Continuing Tort and Separate Torts
Dauterive Contractors contends first that the continuing attorney-client relationship gave rise to continuing torts and that the one-year period of limitation did not begin to run until the continuously tortious conduct terminated, which, according to the plaintiff, was March 1999 at the earliest, when the company discovered the legal malpractice. The most obvious alleged continuously tortious conduct was the firm's failure to inform of the time limitations associated with legal malpractice actions or take any acts to interrupt such limitations.
Moreover, Dauterive Contractors alleges that when Mr. Repaske learned of the malpractice on August 5, 1998, he should have notified Mr. Dauterive of the act, explained that he had a conflict of interest in further representation, advised Mr. Dauterive to find independent counsel, and terminated the attorney-client relationship. Because the firm did none of these things, Dauterive Contractors argues that the representation continued, and that the firm continued to violate the Rules of Professional Conduct. The client argues that the failure of the firm to comply with these Rules constituted new, independent, and separate acts of malpractice, and that the statute of limitations runs from the date of each such infraction. The most obvious violation of the Rules of Professional Conduct, according to Dauterive Contractors, was the failure to inform the company of time limitations associated with legal malpractice actions or failure to interrupt such.
*1259 The trial court found that because there was no attorney-client relationship between Mr. Dauterive and either Mr. Repaske or Mr. Landry, there could be no continuous representation and no duty breached which would give rise to a continuing tort or additional torts. The trial court's failure to find continuing or separate torts was not manifestly erroneous.
For its continuing tort argument, Dauterive Contractors cites South Central Bell Tel. Co. v. Texaco, Inc.,
First of all, Dauterive Contractors did not plead the existence of a continuing tort in its petition. Nevertheless, while we agree that continuous tortious conduct and continuous damages may suspend prescription, we note again that the pertinent time limitation in this case is peremptive. Peremption may not be suspended. Moreover, not only were there no continuous acts of fault, there were no continuous damages. The one act of fault occurred on May 7, 1997, with the failure to timely file the proof of claim. At that point, the damage was done. There was no further damage beyond that date. Whether or not the firm had a duty to inform of the action's peremptive period is a non-issue, since we have already explained that the continuous representation rule does not apply to peremptive periods.
We are not persuaded by Dauterive Contractors' separate tort argument either. In Taussig,
In its petition, Dauterive Contractors lists a number of acts allegedly committed by Landry & Watkins, claiming that each "constitute new and separate acts of malpractice by the Defendant law firm." In brief, the plaintiff argues repeated violations of the Rules of Professional Conduct, resulting in independent acts of malpractice, namely, the failure to both inform the client of the time limitation and to interrupt such. We disagree. Whether or not these acts constituted separate acts of malpractice, only one tort is alleged herelegal malpracticeoccasioned by the one act of fault that occurred on May 7, 1997. Additionally, in keeping with the Taussig findings, all of the factual bases are the same and all of the alleged acts occurred during a continuous period of representation.
Fraud
Subsection E of La.R.S. 9:5605 states that, as defined in La.Civ.Code art. 1953, *1260 the existence of fraud operates to make Subsection A's peremptive period inapplicable. La.Civ.Code art. 1953 defines fraud as the "misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other. Fraud may also result from silence or inaction."
Dauterive Contractors alleges that Landry & Watkins failed to inform its client that the claim was forever barred in bankruptcy, failed to inform its client that it had committed legal malpractice, and failed to inform its client of the statute of limitations concerning the malpractice claim. All this, according to Dauterive Contractors, lulled the company into a false sense of security and prevented it from gaining knowledge of and asserting the claim. Specifically, Dauterive Contractors alleges in Paragraph 15 of its petition:
The Defendant law firm also had an affirmative duty to speak or disclose to Petitioner that its claim for the act of malpractice was about to prescribe. Instead, the Defendant law firm said nothing and did nothing to alert Petitioner about the possible prescription of its claimnothing until the very day the claim prescribed. The Defendant law firm acted with a selfish pattern of deceit and suppression of the truth to obtain an unjust advantage over Petitioner, its own client. The silence of the Defendant law firm was intended toand did in factinduce, mislead and fraudulently deceived [sic] the Petitioner into allowing the claim for the act of malpractice to prescribe.
Fraud must be plead in accord with La.Code Civ.P. art. 856, which states in pertinent part that "[i]n pleading fraud or mistake, the circumstances constituting fraud or mistake shall be alleged with particularity." The trial court believed that the plaintiffs petition lacked the specificity required by law. However, even if fraud had been properly pleaded, according to the trial court, evidence at the hearing failed to establish that the firm acted with intent to seek a benefit for itself.
We are not entirely in agreement with the trial court or the defendant that the allegations in the petition were not pled in accord with La.Code Civ. P. art. 856. We believe that, because the petition's formal allegations were sufficiently particularized, that there was a general indication as to the content or nature of the allegation, and that it was neither too general nor conclusory. The allegations, therefore, may not be disregarded. Laneaux v. Theriot,
Subsection E of La.R.S. 9:5605 states that the existence of fraud operates to make Subsection A's peremptive period inapplicable. Earlier in this opinion, we held that in cases of fraud, the singular "peremptive period" referenced in Subsection E refers to the three-year peremptive period only. Contra Coffey,
Whether or not fraud exists in this case, Dauterive Contractors failed to bring the malpractice action within one year of the alleged act or within the always-applicable one-year period, beginning from the date that the alleged act was discovered or should have been discovered. Because the act of malpractice was discovered or was reasonably discoverable sometime between August 1998 and January 1999, the suit was still untimely filed in February 2000. The three-year peremptive period is therefore inapplicable, as is the fraud exception thereto.
Constitutionality of La.R.S. 9:5605
Dauterive Contractors claims that because the peremptive periods of limitation cannot be suspended by either the continuous representation rule or contra non valentem, La.R.S. 9:5605 denies due process of law and unreasonably limits access to the courts in violation of Articles IV and V and the Fourteenth Amendment of the United States Constitution and Article 1, Sections 2 and 22 of the Louisiana Constitution of 1974.
Though there is no singular procedure or type of proceeding that must be employed when urging a statute's unconstitutionality, there are a number of formalities. If the constitutionality of a statute is challenged in a proceeding other than one for a declaratory judgment, as here, "the attorney general should be served notice and/or a copy of the pleading and, at his discretion, be allowed to be heard and to represent or supervise the representation of the interests of the state in the proceeding. LSA R.S. 49:257(B)." Vallo v. Gayle Oil Co., 94-1238, p. 7 (La.11/30/94);
The trial court reasoned that the issue of constitutionality was not properly before the court. However, in its amended and supplemental petition, Dauterive Contractors properly makes Louisiana's Attorney General a party for purpose of service under La.Code Civ.P. art. 1880[1] and, in paragraph 17, alleges that "[t]he prescriptive periods for legal malpractice claims contained in Louisiana Revised *1262 Statute 9:5605 are unconstitutional in that they deny Petitioner due process of law and unreasonably limit access to the court in violation of Article 1, Sections 2 and 22 of the 1974 Louisiana Constitution." We, therefore, think the issue was properly before the court. The trial court did, however, consider the issue notwithstanding its own finding of improper posture for review, and concluded that "[i]t is more probable than not that a time limitation on claims against attorneys would be found to be rationally related to furthering a proper legislative purpose, whether that might be protection of the legal practice, prevention of stale claims, or another." Because we agree with the result of the trial court's findings, legal error is not present.
"The requirement of specially pleading the unconstitutionality of a statute in pleadings implies that this notable issue will receive a contradictory hearing, wherein all the parties will be afforded the opportunity to brief and argue the issue." Vallo,
[t]he test for determining the constitutional validity of a limitation statute is whether it allows a reasonable time for the assertion of the right or the enforcement of the obligation; the legislature is primarily the judge of the reasonableness of the time allowed. Unless the time allowed is so short as to amount to a denial of justice, the courts will not interfere.
Guillory v. Guillory by Arceneaux,
IV.
CONCLUSION
We conclude by reiterating the words from the Louisiana Supreme Court, that "[w]hile the terms of the legal malpractice statute of limitations statute may seem unfair in that a person's claim may be extinguished before he realizes the full extent of his damage, the enactment of such a statute of limitations is exclusively a legislative prerogative." Reeder,
All costs are assessed to Dauterive Contractors, Inc.
AFFIRMED.
AMY, J., CONCURS.
NOTES
Notes
[1] When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding. In a proceeding which involves the validity of a municipal ordinance or franchise, such municipality shall be made a party, and shall be entitled to be heard. If the statute, ordinance, or franchise is alleged to be unconstitutional, the attorney general of the state shall also be served with a copy of the proceeding and be entitled to be heard.