Michael Belanger v. Spencer H. Calahan, LLC, Spencer Calahan, Jonathan D. Mayeaux, Brady Patin, and ABC Insurance Company

Louisiana Court of Appeal·Decided April 16, 2021·No. 2020CA0763, 2020CA0764·Unknown

Opinion

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

NO. 2020 CA 0763

MICHAEL BELANGER

VERSUS

SPENCER H. CALAHAN, L.L.C., SPENCER CALAHAN, JONATHAN D. MAYEAUX, BRADY PATIN, AND ABC INSURANCE COMPANY

CONSOLIDATED WITH

NO. 2020 CA 0764

MICHAEL BELANGER

VERSUS

SPENCER H. CALAHAN, L.L.C., SPENCER CALAHAN, JONATHAN D. MAYEAUX, BRADY PATIN, AND ABC INSURANCE COMPANY

Judgment Rendered:

APR 16 2021

On Appeal from the

19th Judicial District Court Parish of East Baton Rouge, State of Louisiana Trial Court No. 644691

The Honorable Janice G. Clark, Judge Presiding

Christopher L. Whittington Attorneys for Defendants -Appellees, Baton Rouge, Louisiana Spencer H. Calahan, L.L.C., Spencer Calahan, and Brady Patin Collin J. LeBlanc Baton Rouge, Louisiana

John W. Redmann Attorneys for Plaintiff A - ppellant,

Edward L. Moreno Michael Belanger

Travis J. Causey, Jr. Gretna, Louisiana

BEFORE: THERIOT, WOLFE, AND HESTER, JJ.

WOLFE, J.

In these consolidated appeals, Michael Belanger challenges two judgments

rendered by the trial court after a bench trial in December 2019. The first judgment concludes that attorneys, Spencer H. Calahan and Brady K. Patin, along with the Spencer H. Calahan, L.L.C. law firm, did not commit legal malpractice in handling a bad faith claim on behalf of Michael Belanger, and dismisses the malpractice case.

The second judgment rendered on the same day as the first, awards attorney' s fees to the Calahan law firm on a reconventional demand against Michael Belanger. We

affirm both judgments.

FACTS AND PROCEDURAL HISTORY

This legal malpractice action arises out of the Calahan law firm' s handling of litigation that began when Belanger was involved in a motor vehicle accident on

December 7, 2007. The other driver, Natalie N. Stephen, was insured by GEICO General Insurance Company. The Calahan law firm filed suit on behalf of Belanger against Stephen and GEICO. Spencer Calahan (" Spencer"), on behalf of Belanger,

demanded that GEICO settle the accident claim for its policy limits of $25, 000. 00. GEICO rejected the demand for its policy limits, and the matter proceeded to a jury trial on April 26, 2011. The jury returned a verdict in favor of Belanger in the amount of $450, 000. 00, and the trial court signed a judgment in accordance with the

jury' s verdict. GEICO and Stephen appealed the trial court' s judgment to this court, and we affirmed the judgment. The Louisiana Supreme Court denied GEICO' s writ

application on April 1, 2013, and in May of 2013, GEICO paid its policy limits to Belanger. See Belanger v. Stephen, 2012- 0278 ( La. App. 1st Cir. 11/ 14/ 12), 2012 WL 5506648 ( unpublished), writ denied, 2012- 2679 ( La. 4/ 1/ 13), 110 So. 3d 581.

After all appeal delays had run, Spencer held a meeting with Belanger on April 29, 2013, wherein a settlement distribution sheet was given to and signed by Belanger. On the distribution sheet, $ 4, 200.00 was deducted and retained from the

distribution for "Estimated Future Costs." The Calahan law firm earned an attorney fee of $12, 284. 68 for its work on Belanger' s personal injury case. However, because of the large excess judgment, Belanger and Spencer agreed that the Calahan law firm would move forward with a bad faith action against GEICO. There is no dispute

that Belanger agreed to have the Calahan law firm continue to represent him in the

future bad faith litigation. Approximately five months after the supreme court denied supervisory review of GEICO' s appeal, Stephen assigned to Belanger her rights to any bad faith claim against GEICO due to the excess judgment on September 25, 2013.

On October 4, 2013, the Calahan law firm, on behalf of Belanger as assignee

of Stephen, filed a petition in the Nineteenth Judicial District Court (" 19th JDC")

against GEICO, alleging that GEICO had entered into a contract with Stephen and had acted in bad faith resulting in an excess judgment against Stephen. Belanger

prayed for reasonable damages together with legal interest, but did not seek

attorney' s fees or penalties. GEICO removed the bad faith case to the United States District Court for the Middle District of Louisiana and, thereafter, filed a Rule

12( b)( 6) motion to dismiss for failure to state a claim or an alternative motion for

summary judgment. GEICO argued that the cause of action against an insurer is

codified in La. R.S. 22: 1973 ( renumbered from La. R.S. 22: 1220 by 2008 La. Acts, No. 415 § 1, effective January 1, 2009), which is delictual in nature and therefore, subject to the one- year prescriptive period provided in La. Civ. Code art. 3492, rather

than the ten-year prescriptive period provided in La. Civ. Code art. 3499. Thus,

GEICO asserted that Belanger' s bad faith claim had prescribed.

In defense of the motion to dismiss, the Calahan law firm, on behalf of

Belanger, argued that the application of the doctrine of contra non valentem

suspended the prescription period. The Middle District ultimately held that Belanger' s bad faith claim against GEICO prescribed one year from the date of the judgment rendered in accordance with the jury verdict, rather than subsequent to the appeals process and writ denial by the Louisiana Supreme Court. Thus, the Middle District found that the bad faith claim prescribed on April 26, 2012, thereby making Belanger' s October 4, 2013 petition against GEICO untimely. Belanger v. GEICO General Ins. Co., 2014 WL 7338837, at * 5 ( M.D. La. Dec. 22, 2014).

Belanger appealed to the United States Court of Appeals for the Fifth Circuit,

which clarified that Stephen was legally obligated to pay the excess judgment in 2011, which is when the bad faith claim against GEICO arose. Belanger v. GEICO General Ins. Co., 623 Fed. Appx. 684, 689 ( 5th Cir. 2015). Additionally, the Fifth Circuit noted that Belanger, as an assignee of Stephen, stood in her shoes, and that

Belanger had argued for the first time on appeal that the prescriptive period for a bad

faith claim against an insurer by an insured under La. R.S. 22: 1973 was subject to a ten-year prescriptive period for contractual actions rather than the one- year

prescriptive period for delictual actions. The Fifth Circuit found that Belanger had

waived his right to advance the ten- year prescription argument, and affirmed the

decision of the Middle District. Id. The Fifth Circuit was of the opinion that

Belanger' s counsel, the Calahan law firm, made a conscious decision not to raise the

ten-year prescriptive period at the Middle District level. Id. at 691.

Belanger filed this legal malpractice action against the Calahan law firm in

the 19th JDC, claiming that by not raising the ten-year prescription argument in opposition to GEICO' s federal court motion to dismiss, Belanger was forever

precluded from collecting the excess judgment due to the Calahan law firm' s negligence. In its defense, the Calahan law firm presented the testimony of an expert on the standard of care required of lawyers, and argued that the prescriptive period

at issue was an unsettled area of the law at the time that GEICO moved to dismiss Belanger' s bad faith claim. Additionally, the Calahan law firm reconvened against Belanger, seeking reasonable attorney' s fees and expenses for representing Belanger W1

in the separate bad faith action against GEICO. After a summary judgment was

rendered in favor of the Calahan law firm, and then was reversed by this court on October 25, 2018, Belanger' s malpractice claim proceeded to a bench trial in

December 2019. See Belanger v. Spencer H. Calahan, L.L.C., 2018- 0111 ( La.

App. 1st Cir. 10/ 25/ 18), 2018 WL 5307712 ( unpublished), writ denied, 2018- 1887 La. 1/ 18/ 19), 262 So. 3d 898.

The trial court ultimately ruled in favor of the Calahan law firm, dismissing Belanger' s legal malpractice claim in one judgment and, in a separate judgment

awarding the Calahan law firm $ 15, 000. 00 for attorney' s fees, less a credit in the amount of $1, 642. 27 for earned fees ( the balance left in the retained funds), and

costs.

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Michael Belanger v. Spencer H. Calahan, LLC, Spencer Calahan, Jonathan D. Mayeaux, Brady Patin, and ABC Insurance Company (Michael Belanger v. Spencer H. Calahan, LLC, Spencer Calahan, Jonathan D. Mayeaux, Brady Patin, and ABC Insurance Company) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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