Martinez Management, Inc. v. Caston

900 So. 2d 301, 2005 WL 839721
CourtLouisiana Court of Appeal
DecidedApril 13, 2005
Docket39,500-CA
StatusPublished
Cited by12 cases

This text of 900 So. 2d 301 (Martinez Management, Inc. v. Caston) 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
Martinez Management, Inc. v. Caston, 900 So. 2d 301, 2005 WL 839721 (La. Ct. App. 2005).

Opinion

900 So.2d 301 (2005)

MARTINEZ MANAGEMENT, INC. and Jack Gamble, Plaintiffs-Appellees,
v.
Deborah L. CASTON and Community of Acquets and Gains Shared With Lawrence Caston, Defendants-Appellants.

No. 39,500-CA.

Court of Appeal of Louisiana, Second Circuit.

April 13, 2005.

*303 Wiener, Weiss & Madison by M. Allyn Stroud, for Appellants.

Rogers, Hearne & Carter by E. Keith Carter, for Appellees.

Before WILLIAMS, PEATROSS & DREW, JJ.

PEATROSS, J.

This civil action arises out of the allegation that Deborah Caston, former bookkeeper and secretary to Plaintiff Jack Gamble ("Gamble") and bookkeeper for Plaintiff Martinez Management, Inc. ("MMI"), misappropriated or converted funds in bank accounts belonging to Gamble and MMI.

Jack and Carol Gamble are 50 percent owners of MMI, with A.T. Martinez and Nanette Martinez (through AT & N Martinez Land Co., L.L.C.) owning the remaining 50 percent. Gamble and MMI sued Mrs. Caston, also naming as a defendant her husband, Lawrence Caston, alleging that his community share is liable for Mrs. Caston's alleged acts. The Castons' financial accounts were sequestered and Mrs. Caston also faced felony charges for the alleged conversion. Due to the pendency of the criminal case, Mrs. Caston's criminal defense counsel advised her civil counsel that she should not testify on her own behalf in the civil trial and should invoke the Fifth Amendment right against self-incrimination should she be compelled to testify. The Castons then filed a motion to stay the civil trial, which was denied. This court denied writs on that ruling, as did the supreme court.[1] The civil case proceeded to trial and Mrs. Caston invoked her Fifth Amendment right. At the conclusion of the civil trial, judgment *304 was rendered in favor of the plaintiffs in the aggregate amount of $628,705.89, plus legal interest. The Castons filed this devolutive appeal.

On appeal, the Castons assert three assignments of error concerning the denial of the motion to stay, denial of an exception of prescription and challenging the quantum of damages. For the reasons set forth herein, we affirm.

FACTS

Mrs. Caston worked for Gamble for approximately 22 years as a bookkeeper and secretary. Her job duties for Gamble included issuing checks on and reconciling three accounts that belonged to him, including a "Law Office Account," "Client Trust Account" and his personal bank account. As bookkeeper for MMI, Mrs. Caston's duties included issuing checks and reconciling MMI's checking account, plus receiving rental payments from tenants of an apartment complex owned by MMI and paying fees and expenses of the apartment complex as well as providing financial information to MMI's accountant for tax return preparation. Beginning in 1998, Mrs. Caston began issuing checks without authorization from the various accounts described above, in some cases cashing the checks and in other cases moving funds between the accounts. Mrs. Caston continued to convert funds of Gamble and MMI until her activity was discovered by Gamble in July 2002. The instant suit was filed on August 21, 2002.

Mrs. Caston's deposition, taken in October 2002, was introduced at trial; however, as previously stated, she exercised her Fifth Amendment right not to testify at the trial. Copies of checks and check stubs were introduced attached to affidavits of Gamble and Nanette Martinez. The parties stipulated that the copies of the checks and stubs were true and accurate copies.

The Castons do not challenge on appeal that Mrs. Caston did, in fact, convert funds and issue unauthorized checks from the various Gamble and MMI accounts. The issues raised in the Castons' appeal are set forth in the following assignments of error (verbatim):

Assignment of error number 1: The trial court erred by denying Defendants' motion to stay the civil proceeding due to the pendency of the criminal charges against Deborah Caston.
Assignment of error number 2: The trial court erred by denying Defendants' peremptory exception of prescription.
Assignment of error number 3: The trial court erroneously calculated the amount due and allowed plaintiffs double recovery for the same alleged loss.

DISCUSSION

Prescription

We will first address assignment of error number two, challenging the trial court's denial of the Castons' exception of prescription. The Castons argue that the trial judge committed legal error in holding that a ten-year prescriptive period applies to Gamble's and MMI's claims in this case rather than the one-year prescriptive period for delictual actions. Further, with the one-year period applicable, the Castons assert that Gamble had knowledge that something was wrong with his accounts, i.e. possible unethical activity, by Mrs. Caston as early as 1997. They argue that both Gamble and MMI failed to use reasonable diligence in monitoring the activity and reconciliation of the various accounts involved and that a simple check of the accounts would have alerted them that there was questionable activity occurring. For these reasons, the Castons assert that *305 the one-year prescriptive period should start running anew with each alleged unauthorized transaction; therefore, a major portion of the claimed damages have prescribed. They further assert that the doctrine of contra non valentem does not operate to preclude the running of prescription on Gamble's and MMI's claims. We disagree.

First, we conclude that Mrs. Caston owed a fiduciary duty to Gamble and MMI; a duty of loyalty and fidelity arising out of the employment contract between her and Gamble and as an independent contractor of MMI. See Odeco Oil & Gas Co. v. Nunez, 532 So.2d 453 (La.App. 1st Cir.1988), writ denied, 535 So.2d 745 (La. 1989); Cenla Physical Therapy & Rehabilitation Agency, Inc. v. Lavergne, 94-1538 (La.App. 3d Cir.5/3/95), 657 So.2d 175. Second, we conclude that Mrs. Caston was a mandatary for Gamble as well as his employee. Id. In ODECO, supra, the court recognized that, while, generally, a mandate is distinguishable from the master/servant relationship in that a mandate can be gratuitous, an employee may also be the mandatary of the employer where the employee is authorized to act on behalf of the employer as principal. The court further explained that the mandatary owes the principal a duty of fidelity. Such is the case here, where Mrs. Caston was Gamble's employee, but was also authorized to act on his behalf in managing his financial affairs, including issuing checks and reconciling his various bank accounts. Likewise, Mrs. Caston was a mandatary for MMI as she was authorized to issue checks and reconcile its bank accounts.

In summary, Mrs. Caston owed Gamble and MMI a duty of loyalty and fidelity and, therefore, she had a fiduciary duty in discharging her responsibilities arising out of the contractual, employment and mandate relationships. These personal actions are subject to a prescriptive period of ten years. La. C.C. art. 3499. As such, we find no legal error in the trial court's conclusion in this regard.

Assuming, arguendo, however, that the one-year prescriptive period for delictual actions applies,[2] we conclude that the doctrine of contra non valentem would have operated in this case to interrupt the prescription of Gamble's and/or MMI's claims. La. C.C. art.

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Cite This Page — Counsel Stack

Bluebook (online)
900 So. 2d 301, 2005 WL 839721, Counsel Stack Legal Research, https://law.counselstack.com/opinion/martinez-management-inc-v-caston-lactapp-2005.