EAGLE INDUSTRIAL ASSO., INC. v. Universal Oil Corp.

277 So. 2d 720, 1973 La. App. LEXIS 5839
CourtLouisiana Court of Appeal
DecidedApril 23, 1973
Docket12111
StatusPublished
Cited by6 cases

This text of 277 So. 2d 720 (EAGLE INDUSTRIAL ASSO., INC. v. Universal Oil Corp.) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
EAGLE INDUSTRIAL ASSO., INC. v. Universal Oil Corp., 277 So. 2d 720, 1973 La. App. LEXIS 5839 (La. Ct. App. 1973).

Opinion

277 So.2d 720 (1973)

EAGLE INDUSTRIAL ASSOCIATES, INC., Plaintiff,
v.
UNIVERSAL OIL CORPORATION, Defendant.

No. 12111.

Court of Appeal of Louisiana, Second Circuit.

April 23, 1973.
Rehearing Denied May 30, 1973.

*721 Donald L. Miller, Shreveport, for Jerry L. Finley, applicant.

Jerry L. Finley, Monroe, for Eagle Industrial Associates, Inc.

Charles E. Tooke, Jr., J. W. Jones, Shreveport, for Universal Oil Corp., Ruby C. Tatman and others.

Cook, Clark, Egan, Yancey & King by Edwin Blewer, Jr., Shreveport, for James M. Goslin, Sheriff.

Before AYRES, BOLIN, HEARD, PRICE and HALL, JJ.

BOLIN, Judge.

The lower court found Jerry L. Finley, attorney, in contempt of court for failure to testify relative to information furnished him by clients. We granted writs and the sole issue before us is the correctness of this ruling of the district court.

Eagle Industrial Associates, Inc., obtained a judgment by default against Universal Oil Corporation in the District Court of Caldwell Parish on November 3, 1972, for $120,000 plus attorney's fees, interest and costs. In order to satisfy this judgment plaintiff caused a writ of fieri facias to be issued in Caddo Parish and in connection therewith the sheriff seized several oil and gas leases owned by defendant oil corporation and attached two bank accounts by garnishment proceedings.

Ruby C. Tatman, alleging she had an interest in the oil and gas leases, instituted summary proceedings requesting that Eagle Industrial Associates be ordered to show cause why the mineral leases and bank accounts should not be released from seizure. After numerous pleadings were filed and while the rule was pending, Universal Oil Corporation and others filed an intervention and reconventional demand, alleging that the judgment was procured by fraud perpetrated by H. Wheat Bailey, Betty R. Johnson and Jerry L. Finley, and asking that the seizure be released; that the writ of seizure and sale be recalled; and for damages. After numerous exceptions to the petition of intervention and reconventional demand were filed and overruled, the sheriff was temporarily restrained from selling the mineral leases and the matter went to trial on the question of whether a preliminary injunction should issue.

During that trial Finley objected to answering several questions propounded to him about conversations he had with H. Wheat Bailey and Betty R. Johnson, secretary of plaintiff corporation, on the basis that such conversations were privileged communications between an attorney and his clients. The trial judge at first sustained these exceptions until he was apparently convinced from other evidence that a prima facie case of fraud between the attorney and his clients had been shown, after which he ordered Finley to answer a specific question. The attorney refusing to answer the question, the court found him in contempt and sentenced him to serve twenty-four hours in jail but stayed the execution of this sentence pending the filing of his application for writs and the disposition thereof.

The hearing continued but the attorney refused to testify as to other conversations with a client and the court made a similar ruling, stating that if and when this ruling was upheld Finley would be given an opportunity to purge himself by answering the questions. Finley applied to this court for writ of certiorari, claiming the attorney-client relationship protected him from answering the questions, and the trial judge filed a response to the application. We granted the writ and the entire record was ordered sent up in order that we might ascertain the correctness of the lower court's ruling.

From our study of the record we find the trial judge correctly assessed the facts in finding a prima facie case of fraud had been established which vitiated any privilege that might have been claimed by Finley on behalf of his clients.

*722 The response filed by the trial judge contains a detailed statement of facts and reasons for the ruling below. For this reason we take the liberty of quoting extensively from his response:

"On or about August 2, 1972, Universal Oil Corporation was the operator of about sixteen oil and gas wells located in Caddo Parish, Louisiana. Its business office was located in Caddo Parish, Louisiana. It was represented by Mr. Blaylock, an attorney, whose office was in Monroe. Mr. Blaylock also represented, at times, Eagle Industrial Associates, Inc., and an individual named H. Wheat Bailey. Mr. Jerry L. Finley, attorney, occupied an office adjoining Mr. Blaylock's law office in Monroe and rented from Mr. Blaylock. As part of his rent payment, he received the part-time services of Mr. Blaylock's receptionist to act as his receptionist and to perform secretarial services for him.

"On or about August 2, 1972, Mr. Finley and Mr. Blaylock rode together in an automobile to the office of Universal Oil Corporation in Shreveport, Louisiana, to attend a Board of Directors meeting. Mr. Finley testified that he did so as representing H. Wheat Bailey who was a director and an officer of the corporation.

"While there, Mr. Bailey was the only director that appeared. Mr. Bailey purported to conduct the Board of Directors meeting; to move and vote to expel the existing president; to move and vote to elect Jerry L. Finley, President; and to take other actions. Thereafter, Jerry L. Finley signed documents to authorize his signature at a bank as President of the corporation.

"Mr. Finley testified that about August 4, 1972, Mr. Finley and Mr. Blaylock again rode together from Monroe to the office of Universal Oil Corporation in Shreveport, Louisiana. There, with Mr. H. Wheat Bailey and other directors present, it was brought to the attention of Mr. Finley that a quorum was not present at the August 2nd meeting as was required by the by-laws of the corporation. Mr. Finley also frankly testified that he then made oral demand on the other directors for his client, Mr. H. Wheat Bailey, for the sum of $65,000.00 in cash and $10,000.00 as attorney fees for himself in order to terminate the interest of Mr. Bailey, or he would bring the records of the corporation to the attention of the office of the District Attorney and U.S. Internal Revenue Service.

"Mr. Finley further testified that the above demand was not met, but that all parties did agree to an audit of the books and to pay to the corporation what sums that the auditor found due to it from the directors.

"Mr. Finley next testified that he was contacted sometime before August 30, 1972, by Miss Johnson, as Secretary of the Eagle Industrial Associated, Inc., and hired to file suit against Universal Oil Corporation on a promissory note. This note was payable to Eagle Industrial Associates, Inc., which was executed as maker by Universal Oil Corporation, signed on behalf of Universal Oil Corporation by H. Wheat Bailey, dated April 15, 1971, for the principal sum of $120,000.00. He further testified that his client, through Miss Johnson, instructed him to go to Caldwell Parish to file the suit. Before he prepared the suit, however, he talked to Mr. Bailey in Monroe and asked him to go to Caldwell Parish and accept service since Mr. Bailey was registered agent for the service of process for the defendant, Universal Oil Corporation. He further testified that Mr. Bailey did not specifically agree not to raise the legal issue of improper venue, but that he did assume that Mr. Bailey did so agree because he consented to go to Caldwell Parish for service.

"A certified copy of the proceedings in the suit in Caldwell Parish, Louisiana, No.

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Bluebook (online)
277 So. 2d 720, 1973 La. App. LEXIS 5839, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eagle-industrial-asso-inc-v-universal-oil-corp-lactapp-1973.