Harvey v. Cole

845 So. 2d 591, 2003 WL 21101281
CourtLouisiana Court of Appeal
DecidedApril 30, 2003
Docket2002-CA-1704
StatusPublished
Cited by6 cases

This text of 845 So. 2d 591 (Harvey v. Cole) 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
Harvey v. Cole, 845 So. 2d 591, 2003 WL 21101281 (La. Ct. App. 2003).

Opinion

845 So.2d 591 (2003)

Maximillion HARVEY, et al.
v.
William COLE, Jr., et al.

No. 2002-CA-1704.

Court of Appeal of Louisiana, Fourth Circuit.

April 30, 2003.
Rehearing Denied May 30, 2003.

*593 Stephen D. Marx, Chehardy, Sherman, Ellis, Breslin, Murray & Recile, Metairie, LA, for Intervenor/Appellant.

Court composed of Judge JOAN BERNARD ARMSTRONG, Judge MAX N. TOBIAS, JR., and Judge LEON A. CANNIZZARO, JR.

MAX N. TOBIAS JR., Judge.

The appellant/intervenor, Consumer Capital, Inc., appeals from a judgment granting an exception of no right of action, which dismissed its intervention.[1] After a review of the record and the applicable law, we reverse the trial court and remand the matter for further proceedings.

This case began as a personal injury lawsuit with four plaintiffs, two of whom, Maximillion Harvey and Leroy Treadwell (hereinafter "the plaintiffs"), were represented by Evan Tolchinsky, a now disbarred lawyer.[2] Tolchinsky had a written retainer agreement with both of the plaintiffs. The legal representation was terminated upon Tolchinsky's disbarment and the plaintiffs were referred to Ivan David Warner, III for representation. Mr. Warner and Tolchinsky executed two written contracts whereby Mr. Warner agreed to give Tolchinsky 60% of the attorney's fees generated in each case.

Tolchinsky, while a practicing attorney, and Consumer Capital entered into a contractual arrangement under which Consumer Capital advanced money to or on behalf of Tolchinsky's clients to pay medical, litigation, and living expenses during the pendency of the lawsuits (hereinafter referred to as the "Loan Program"). Under the terms of the Loan Program, Consumer Capital is repaid out of the proceeds of any settlement or judgment that may result from the litigation. Further, Tolchinsky agreed that even if no settlement or judgment proceeds were obtained, he remained liable to Consumer Capital for repayment of the monies advanced to his clients. The Loan Agreement was executed on 31 July 1996.

In addition, Tolchinsky executed a continuing guaranty on 31 July 1996, wherein he personally guaranteed repayment of all indebtedness due to Consumer Capital by all of his clients. Tolchinsky also executed a security agreement, wherein he secured his personal guaranty to Consumer Capital by assigning to it any and all rights he had to attorney's fees, present and future. Finally, Tolchinsky executed a financing statement (hereinafter referred to as the "UCC-1"), which enabled Consumer Capital to perfect its security interest in his right to receive payment for professional services rendered by him. The UCC-1 was recorded by Consumer Capital with the Louisiana Secretary of State on 1 August 1996 and given the filing number XX-XXXXXXX, thereby perfecting Consumer Capital's security interest as to third parties.

During the course of the Loan Program, Consumer Capital advanced a significant *594 amount of money to Tolchinsky on behalf of his clients. Many of the loans were made to Tolchinsky's clients whose cases did not generate any money or sufficient funds to repay the loans. However, under the terms of the Loan Program and the continuing guaranty, Tolchinsky remained obligated to repay the money, but, despite amicable demand by Consumer Capital, did not. Consumer Capital has been unable to locate Tolchinsky and believes that he may be residing out of the country.

The plaintiffs ultimately prevailed in the captioned lawsuit and a contingency fee was generated; as the original attorney, Tolchinsky was entitled to some portion of the fee.[3] In order to recover his fee, Tolchinsky retained counsel, Robert G. Harvey, who filed an intervention on 8 March 2002 in the underlying suit to protect Tolchinsky's interests. Based on the documents executed by Tolchinsky as discussed above, Consumer Capital intervened on 17 August 2001.

In response to both interventions, the plaintiffs filed numerous exceptions, which were set for hearing on 4 April 2002. The trial court denied those relating to Tolchinsky's intervention and sustained the exception of no right of action relating to Consumer Capital's intervention. In the reasons for judgment, the trial court stated:

The issue of a Creditor intervening in litigation to collect a debt was addressed by the Fourth Circuit Court of Appeal in Lewis v. Kubena, 2000-2362 (La.App. 4 Cir. 10/24/01), 800 So.2d 68. In Lewis a finance company, Oceanside, Inc. provided attorneys with loans to finance litigation expenses including advances to the clients. Oceanside intervened in the Lewis matter for the repayment of the loans.
The Fourth Circuit affirmed the District Court's dismissal of Oceanside's intervention holding that Louisiana Code of Civil Procedure article 1091 requires that:
the right asserted by the intervenor must be so related or connected to the facts or object of the principal action that a judgment on the principal action will have a direct impact on the intervenor's rights.
Oceanside's loan agreement specifically stated that "if the case is lost the loan becomes due and payable immediately." That sentence establishes that Oceanside's claim of repayment would be unaffected by any judgment rendered in the case.
This Court finds the same set of circumstances surrounding the loan agreements Consumer Capital asserts gives them [sic] the right to intervene. Consumer Capital's rights are unaffected by the outcome of any judgment in the above captioned matter. Thus, Consumer Capital does not meet the requirements of Louisiana Code of Civil Procedure article 1091.[4]

After it granted the exception of no right of action, counsel for the plaintiffs and counsel for Tolchinsky allegedly met with the trial court in chambers and "tried" Tolchinsky's claim to a portion of the fee. Consumer Capital's attorney represented at oral argument that he was *595 excluded from the "trial," as reflected in the judgment of 4 April 2002.[5] A consent judgment in favor of Tolchinsky in the amount of $25,000.00 plus costs was rendered on 4 April 2002. Despite objections by Consumer Capital, counsel for Tolchinsky was permitted to withdraw the money from the registry of the court for immediate disbursement "without respect to appellate delays."[6]

Consumer Capital appeals the judgment, arguing that the trial court erred in granting the exception of no right of action and that the court's reliance on Lewis v. Kubena, 2000-2362 (La.App. 4 Cir. 10/24/01), 800 So.2d 68, is misplaced. It also contends that the trial court erred in allowing Tolchinsky to "resolve" his claim for attorney's fees as his claim had been assigned to Consumer Capital. Finally, Consumer Capital asserts that the trial court erred in permitting the parties to withdraw all the funds from the registry of the court, despite Consumer Capital's right to a suspensive appeal from the granting of the exception.

An action can only be brought by a person having a real and actual interest which he asserts. La. C.C.P. art. 681. The exception of no right of action is designed to test whether the plaintiff has a real and actual interest in the action. La. C.C.P. art. 927(5). The function of the exception of no right of action is to determine whether the plaintiff belongs to the class of persons to whom the law grants the cause of action asserted in the suit. Babineaux v. Pernie-Bailey Drilling Co., 261 La. 1080, 262 So.2d 328 (1972).

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Cite This Page — Counsel Stack

Bluebook (online)
845 So. 2d 591, 2003 WL 21101281, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harvey-v-cole-lactapp-2003.