Interdiction of Wright

144 So. 3d 7, 2013 La.App. 1 Cir. 0862, 2014 WL 1258363, 2014 La. App. LEXIS 837
CourtLouisiana Court of Appeal
DecidedMarch 27, 2014
DocketNo. 2013 CA 0862
StatusPublished
Cited by5 cases

This text of 144 So. 3d 7 (Interdiction of Wright) 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
Interdiction of Wright, 144 So. 3d 7, 2013 La.App. 1 Cir. 0862, 2014 WL 1258363, 2014 La. App. LEXIS 837 (La. Ct. App. 2014).

Opinion

DRAKE, J.

|gThe plaintiff/appellant, Harold Asher, in his capacity as succession representative of the Estate of Harold Otis Wright, appeals a final judgment of the district court, which granted a motion for summary judgment and sustained a peremptory exception of compromise and a peremptory exception of acceptance of arbitration award in favor of the defendant/appellee, A.G. Edwards and Sons, Inc. (“A.G. Edwards”), and dismissed the plaintiffs claims, with prejudice. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

In the prior appeal in this matter, the facts of this case were previously set forth by our supreme court in In re Interdiction of Wright, 10-1826 (La.10/25/11), 75 So.3d 893. Harold Otis Wright was paralyzed and incapacitated by a medical accident in 1973. He received damages totaling ap[9]*9proximately $1.7 million as a result of the ensuing litigation. See Wright v. United States, 507 F.Supp. 147 (E.D.La.1981). Thereafter, his wife, Audrey Wright, filed a petition for interdiction in the Twenty-First Judicial District Court. The court declared Mr. Wright an interdict and appointed Mrs. Wright as his curatrix. In conjunction with the interdiction proceeding, the court issued an order (“1982 Order”), which allowed Mrs. Wright to invest the money from the judgment in long-term bonds. Additionally, the court ordered all interest income be deposited and channeled through a Custodian Account, with the provision “that no portion of the Interdict’s capital estate be withdrawn from any of the said long-range investment accounts, without further and specific orders of this Court.” With the permission of the court, Mrs. Wright established an account with A.G. Edwards through one of its investment brokers, Edwin Reardon.

In 2002, Mrs. Wright filed a petition for damages in the Twenty-First Judicial District Court against several defendants, including Mr. Reardon and A.G. |3Edwards, alleging breach of fiduciary and contractual duties, including violations of securities law. Particularly, Mrs. Wright argued that Mr. Reardon had misappropriated the entire $1.7 million and disbursed the principal from the account, without court approval, from February 1994 to December 2002, thereby violating the 1982 Order. Additionally, Mrs. Wright alleged further violation of the court’s order when Mr. Reardon left A.G. Edwards, went to work for Morgan Stanley Dean Witter, Inc. (“Morgan Stanley”), and took the remaining principal of the account ($700,000) with him to Morgan Stanley. Also, Mrs. Wright contended that A.G. Edwards had failed to supervise Mr. Reardon’s management of the account.

In response, A.G. Edwards filed an exception of prematurity based on the account agreements signed by Mrs. Wright, which called for binding arbitration prior to any judicial action. The parties consented to a stay of all further proceedings in this action pending the completion of arbitration. Mrs. Wright also consented to arbitration of the claim through a National Association of Securities Dealers (“NASD”) Arbitration Uniform Submission Agreement. Thereafter, the district court issued a judgment on the parties’ consent motion to stay the action pending arbitration before the NASD. While the arbitration was pending, Mr. Wright died, thereby terminating the interdiction proceeding. Harold Asher was appointed as the decedent’s succession representative and was substituted for Mrs. Wright in the arbitration.

On November 28, 2005, in a stipulated judgment, the district court rendered judgment against Mr. Reardon in the amount of $100,000, which was to be paid to the plaintiff.1 The plaintiff also settled with Morgan Stanley on the loss of 14$699,280.75 of trust funds that A.G. Edwards had transferred to Morgan Stanley.2 The arbiters were advised of the judgment against Mr. Reardon, as well as the amount of the Morgan Stanley settlement. See In re Interdiction of Wright, 75 So.3d at 895. On July 31, 2006, the NASD arbitration panel issued an award in favor of [10]*10the succession representative against A.G. Edwards, who was “liable and shall pay [to the plaintiff] compensatory damages in the amount of $150,000.00, plus interest at the Louisiana legal rate of interest accruing from December 31, 2003 until the date of payment of the Award.” On August 22, 2006, in compliance with the arbitration ruling, A.G. Edwards forwarded a check to plaintiffs counsel, made payable to the plaintiff in the amount of $180,735.30, representing the amount of the arbitration award, plus judicial interest. Accompanying the check was an A.G. Edwards cover letter, which stated, in pertinent part:

Enclosed please find A.G. Edwards & Sons, Inc.’s check in the amount of $180,735.30 in satisfaction of the award in the above-referenced matter. Pursuant to NASD directives, the award is paid to the Claimants and their attorneys, and A.G. Edwards is required to notify the NASD that the award has been satisfied and complied with.

The plaintiff accepted the check.

In 2008, Mr. Asher filed a motion for contempt of court against A.G. Edwards under Louisiana Code of Civil Procedure article 36113 for alleged ^violations of the 1982 Order.4 In response, A.G. Edwards filed several exceptions, including an exception of res judicata, wherein it contended the NASD arbitration proceeding was between the same parties, based on the same alleged wrongful conduct, and awarded the same damages sought in the motion for contempt of court. The district court denied the exception of res judicata. The First Circuit granted a writ application, reversing the district court’s ruling and dismissing the plaintiffs claims as res ju-dicata. See Interdiction of Harold Wright, 10-0449 (LaApp. 1 Cir. 7/21/10) (unpublished writ action). Particularly, this court stated:

The trial court erred in denying A.G. Edwards and Sons, Ine.’s Exception of Res Judicata The arbitration proceeding was between the same parties, based on the same alleged wrongful conduct, and awarded the same damages sought in Harold Asher’s Motion for Contempt (which we find to be a misnamed petition for damages, given that there was no injunction issued). Therefore, the arbitration award, albeit unconfirmed, is res judicata and precludes Mr. Asher’s suit. See Aucoin v. Gauthier [09-1245 (LaApp. 1 Cir. 2/12/10), 35 So.3d 326, writ granted, 10-0585 (La.6/18/10), 38 So.3d 312.]. Accordingly, the exception is hereby granted, dismissing the claims of Harold Asher against A.G. Edwards and Sons, Inc.

[11]*11While A.G. Edwards’s writ on the res judicata issue was pending, A.G. Edwards filed a motion for summary judgment on July 13, 2010, arguing that it was entitled to summary judgment, dismissing all claims against it contained in the plaintiffs motion for contempt, because the district court never issued an injunction in this case, and that the compensatory damages sought are unavailable to the plaintiff as a matter of law.

In 2011, our supreme court reversed the decision of the First Circuit on the -res judicata issue, holding that an unconfirmed arbitration award does not have a 1 fipreclusive effect. See In re Interdiction of Wright, 75 So.Sd 898. Following the decision of the supreme court, the plaintiff re-asserted the claims previously set forth in the 2002 petition for damages. In response, A.G.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
144 So. 3d 7, 2013 La.App. 1 Cir. 0862, 2014 WL 1258363, 2014 La. App. LEXIS 837, Counsel Stack Legal Research, https://law.counselstack.com/opinion/interdiction-of-wright-lactapp-2014.