Hampton v. GreenfieldHampton v. Greenfield
In 1986, while being treated at Charity Hospital of New Orleans1, Cathy Hampton suffered a cardiac arrest and lapsed into a coma from which she emerged mentally and physically impaired. Josie Hampton, as curatrix of Cathy Hampton and tutrix of
Thereafter, the State, through the Division of Administration, invoked a concursus proceeding depositing $2,027,382.082 in the registry of the court and impleading the Internal Revenue Service; Josie Hampton; her attorneys, Joseph W. Thomas and Henry P. Julien; Claudette Thomas, former spouse of Joseph W. Thomas; John T. Pender, bankruptcy trustee of Joseph W. Thomas; the State of Louisiana; and the Office of Risk Management. The State alleged that the defendants had conflicting claims to the deposited funds. The Internal Revenue Service, John T. Pender, and Claudette Thomas were dismissed with prejudice. A stipulation between the remaining parties resulted in the release of $878,363.72 to Hampton and her attorneys. The State and the Office of Risk Management claimed the remaining funds arguing that they owed no enforceable duty to pay the Hampton judgment absent legislative appropriation. Hampton and her attorneys claimed the remaining funds pursuant to the Hampton judgment. Hampton, Julien, and Thomas filed exceptions of no cause of action and no right of action and a motion to dismiss.
The trial judge found that the State was using the concursus proceeding to relitigate retroactive application of the $500,000 cap on damages under
The issues for our determination are whether a court of appeal may award sanctions under
Under
Next, we must determine whether an award of damages against the State is warranted under art. 2164 which, as stated above, permits an appellate court to award damages for frivolous appeal. Appeals are always favored and, unless the appeal is unquestionably frivolous, damages will not be allowed. City of Shreveport v. U.S.F. & G. Co., 131 La.933, 60 So. 621, 622 (1913).
Damages for frivolous appeal are only allowed when “it is obvious that the appeal was taken solely for delay or that counsel is not sincere in the view of the law he advocates even though the court is of the opinion that such view is not meritorious.” Parker v. Interstate Life & Accident Ins. Co., 248 La.449, 179 So.2d 634, 636-37 (1965).
First, we find that the State did not appeal the trial court‘s ruling merely to delay payment of the Hampton judgment. We find support for our conclusion in the State‘s dismissal of its appeal after Hampton‘s attorneys obtained legislative appropriation for the judgment. Moreover, nothing in the record suggests that the appeal was filed solely for delay. Accordingly, the State‘s appeal does not fall within the first category of frivolous appeals under Parker.
On appeal, the State argued that the judgment was “unenforceable” because the legislature had not appropriated money to pay the judgment as required by the Louisiana Constitution. Moreover, the Office of Risk Management lacked statutory authority to pay the judgment. Although the State had previously paid judgments without prior legislative appropriation, the State argued that it had no legally enforceable duty to do so. The State noted that Hampton and her attorneys were free to seek special appropriation from the legislature for payment of the Hampton judgment.
Article XII, § 10(C) of the 1974 Louisiana Constitution provides that:
The legislature shall provide a procedure for suits against the state, a state agency, or a political subdivision. It shall provide for the effect of a judgment, but no public property or public funds shall be subject to seizure. No judgment against the state, a state agency, or a political subdivision shall be exigible, payable, or paid except from funds appropriated therefore by the legislature or by the political subdivision against which judgment is rendered.
The relevant statutes establishing procedures for suits against the state have, consistent with the constitution, required legislative appropriation for the payment of judgments against the state. For instance,
In 1980, the legislature devised a mechanism for the payment of certain claims against the state and state agencies with appropriated funds. Specifically, the legislature created the Self-Insurance Fund which consisted of premiums assessed against state agencies for the payment of losses which they incurred. La.Acts 1980, No. 520 (codified as
Missing from this statutory scheme is clear authority requiring the Office of Risk Management to pay final judgments
Based on the foregoing discussion, we find that the State raised legitimate issues on appeal regarding whether it had a legally enforceable duty to pay the Hampton judgment absent special legislative appropriation. Therefore, we believe that the State sincerely advocated its legal position on appeal and that the appeal was not taken for ulterior purposes. Accordingly, we conclude that the State‘s appeal does not fall within the second category of frivolous appeals under Parker. Therefore, damages for frivolous appeal under
DECREE
For the foregoing reasons, the judgment of the court of appeal is reversed insofar as it awarded sanctions against the State of Louisiana. The judgment affirming the trial court‘s judgment ordering disbursement of the funds is affirmed.
ORTIQUE, J., concurs in part and dissents in part and assigns reasons.
ORTIQUE, Justice, concurring in part and dissenting in part.
The majority affirms the judgments of the lower courts ordering the immediate disbursement of the funds. This is now a moot issue.
The Court correctly decides that the imposition of sanctions by a court of appeal based upon
At the outset it is important to identify the actions which are challenged by the plaintiffs’ sanction request. After trial by jury, judgment was entered for plaintiffs and against defendants in the amount of $1,500,000.00 plus interest and costs. Subsequent to this judgment becoming final, the State of Louisiana, through the Division of Administration (“State“), instituted a concursus proceeding in which it named as defendants in concursus Cathy Hampton, her attorneys, Henry P. Julien and Joseph Thomas, the U.S. Internal Revenue Service, Claudette Thomas, John Pender and the State of Louisiana, through the
This case is troubling in several respects, not the least of which is the majority‘s concern with the State‘s uncertainty as to whether it had a legally enforceable duty to pay the Hampton judgment absent special legislative appropriation. The appellate court on consideration of the State‘s appeal on the merits found that the State had conjured a distinction between “entitlement to a judgment” and “enforcement of a judgment” in order to relitigate the liability issue. I heartily agree with the appellate court‘s conclusion that the concursus proceeding was not the proper mechanism to challenge the enforceability of a judgment.
Simply stated, it was unreasonable, in the context of client litigation, that an attorney in this state should anticipate that his former wife, his trustee in bankruptcy and his other creditors would be hauled into court and made claimants to the proceeds of a judgment that he has been successful in obtaining FOR A CLIENT.
In my view, the State and its counsel have openly abused the judicial system by invoking a concursus proceeding in which the State named the Internal Revenue Service, the ex-wife of one of the plaintiff‘s attorneys, plaintiff, her attorney and itself as defendants. It is an abuse of the judicial process for the party placing funds into concursus to implead itself as a defendant.2 The trial court had already determined that the State was attempting to relitigate the issue of liability. The State‘s appeal of the trial court‘s dismissal of the concursus petition constitutes a frivolous appeal, for which damages should be awarded.
Under
The appellate court shall render any judgment which is just, legal, and proper upon the record on appeal. The court may award damages for frivolous appeal; and may tax the costs of the lower or appellate court, or any part thereof, against any party to the suit, as in its judgment may be considered equitable.
If the appellate court determines that the appeal is frivolous, it has the authority and responsibility within its supervisory jurisdiction to initiate and to decide the question of sanctions. No such determination has been specifically made by the appellate court.3
The majority applies the “extremely subjective test”4 set forth over 27 years ago in
Prior to the majority opinion, I doubt that there was an attorney in this state who expected that upon obtaining a favorable result for his client that he might be impleaded with his personal creditors, his client, the Internal Revenue Service and the original defendant. Such actions as those exhibited by the State and its counsel in this matter are not in the furtherance of imaginative lawyering. Rather such actions appear to be maliciously contemplated to embarrass counsel and to harass a prevailing party. These actions can only be viewed as designed to delay payment of the judgment. As such, these actions constitute vexatious litigation replete with rank and unconscionable ill-practices, unknown to our noble profession. At the point in this litigation, when the defendant filed this concursus proceeding, the award was the property of the prevailing client. The attorney may have had a claim to such portion as he had personally earned. But this record indicates on its face that plaintiff had engaged additional counsel. Were the creditors impleaded by defendant, being invited to attack the attorney‘s fees, or only such portion earned by Mr. Thomas? The sincerity of counsel for the defendant becomes more disingenuous when counsel impleaded the defendant, his client, as a party to the concursus proceeding. Such machinations should not be countenanced or encouraged by our courts.
Accordingly, I would remand this case to the court of appeal, so that court could decide the question of whether the State‘s appeal was frivolous or not, under the proper codal articles and jurisprudence. To this end, that court might wish to evaluate and appraise the actions of counsel and assess damages against the State and its counsel, in an amount sufficient to redress the abuses they contrived. Alternatively, since the flagrant abuse of the judicial process is already contained in the record, the court of appeal might remand this case to the trial court to give a valuation to each aspect of the obvious abuses.
Nothing in this opinion opposes or even dissuades imaginative and/or creative lawyering. The Civil Rights Movement would not have succeeded except for creative and imaginative lawyering, at every level of the judicial process. Imaginative and creative lawyering has been and must be encouraged. The genius of a lawyer in a free society, must not be curtailed or stilted. To alert the U.S. Internal Revenue Service or an ex-spouse of one of the attorneys who has won a judicially deserved award for his client, is neither imaginative nor creative!
Notes
The last and perhaps greatest difficulty in the application of article 2164 is the extremely subjective test set forth by the Louisiana Supreme Court in Parker v. Interstate Life & Accident Insurance Co. as to when damages may be awarded. Under that test, if the appellant‘s counsel professes sincerity in the position he advocates, a court may award damages only if “the proposition advocated is so ridiculous or so opposed to rational thinking that it is evident beyond any doubt that it is being deliberately professed for ulterior purposes.” The test is so difficult for an appellee to meet that article 2164 is rendered almost meaningless except to those seeking damages for delay caused by an abandoned appeal. This is evidenced by the paucity of awards made to appellee under article 2164. (citations and footnotes omitted).