Phillip v. Home Ins. Co.

671 So. 2d 943, 1996 WL 88273
CourtLouisiana Court of Appeal
DecidedApril 17, 1996
Docket95-CA-406
StatusPublished
Cited by8 cases

This text of 671 So. 2d 943 (Phillip v. Home Ins. Co.) 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
Phillip v. Home Ins. Co., 671 So. 2d 943, 1996 WL 88273 (La. Ct. App. 1996).

Opinion

671 So.2d 943 (1996)

Beverly Picarella PHILLIP, et al.
v.
The HOME INSURANCE COMPANY, et al.

No. 95-CA-406.

Court of Appeal of Louisiana, Fifth Circuit.

February 27, 1996.
Opinion on Rehearing April 17, 1996.

*945 Eric A. Holden, W. Reed Smith, New Orleans, for appellants.

Lemle & Kelleher, Paul B. Deal, New Orleans, for defendants/exceptors/appellees Daniel A. Ranson and New England Insurance Company.

Daniel A. Rees, Christovich & Kearney, New Orleans, for defendant/appellee The Home Insurance Company.

Before DUFRESNE, GOTHARD and CANNELLA, JJ.

CANNELLA, Judge.

In a legal malpractice action, plaintiffs, Beverly Phillip and Albert Phillip, Sr., appeal from a judgment granting an exception of prescription filed by defendants, Daniel Ranson (Ranson) and his insurer, The Home Insurance Company. We affirm.

Appellants filed a petition for legal malpractice against appellee, Ranson, on March 8, 1993. The petition alleged that they sought legal advice from Ranson about methods of protecting the family home from the claims of creditors and to assure that the interests of their children in the home would be safeguarded. The petition asserted that Ranson drew up a revocable trust, which established appellants as the settlors, their children as the beneficiaries and appellant, Albert Phillip, Sr., as the trustee. The document was executed on January 29, 1986. Appellants further asserted that, sometime in the summer of 1987, their Certified Public Accountant, Kernion Schafer, told them that the trust would not protect the home from the claims of creditors because it was revocable. He referred appellants to another attorney, Steve Hurstell, for consultation. Appellants said that Hurstell agreed with Schafer. They assert that, as a result, Albert Phillip, Sr. contacted Ranson about these concerns and he reassured them that the trust would do what they wanted, so they took no further action.

On November 21, 1991, appellants filed a petition in bankruptcy. On February 5, 1992, the trustee for the bankruptcy, David Adler, filed a Motion To Extend The Deadline To File Objections To Debtor's Claimed Exemptions. The motion included the family home, which was the object of the trust. On March 11, 1993, Adler filed a petition for declaratory judgment and temporary restraining order, asking that the appellants be restrained from alienating the property and that the trial court recognize his Act of Revocation of the trust. Alternatively, the trustee requested that the trial court find the trust invalid and declare the property to be an asset of the estate. Subsequently, the property was sold, for less than its value of $120,000, to an irrevocable trust set up by appellants for the benefit of their children.

In response to appellants' petition for legal malpractice, appellees filed several exceptions of prescription based on La.R.S. 9:5605 and/or C.C. art. 3492. At the hearing on December 2, 1994, the parties submitted the matter on the documentary evidence attached to the exception. Attached were appellants' petition for legal malpractice, the trust document, the deposition testimony of Kernion Schafer and Steve Hurstell, the bankruptcy trustee's Motion to Extend the Deadline To File Objections To Debtor's Claimed Exemptions, a copy of the proposed Objections To The Debtor's Claimed Exemptions showing that the trustee intended to challenge the trust, the Verified Complaint For Declaratory Judgment And Temporary Restraining Order and the temporary restraining order rendered by the bankruptcy judge. On December 5, 1994, the trial judge *946 granted the exception of prescription, finding that appellants knew or should have known that the trust was questionable in the summer of 1987. Thus, she held that the claim was prescribed under the one year prescriptive period of C.C. art. 3492, in effect when the trust was confected, under R.S. 9:5605, the prescription statute for legal malpractice enacted in 1990, or under the 1992 amendment to R.S. 9:5605.

Historically, prescription for legal malpractice claims was governed by the general prescription articles, La.C.C. art. 3492 or La. C.C. art. 3499, depending on whether the claim was in tort or for breach of contract, respectively. Under La.C.C. art. 3492, the prescriptive period for a legal malpractice claim sounding in tort was one year. That period did not run until discovery and the prescriptive period could be suspended during the continuous representation of the client by the attorney regarding the specific subject matter in which the alleged wrongful act or omission occurred. Brand v. New England Ins. Co., 576 So.2d 466 (La.1991). Under La.C.C. art. 3499, the prescriptive period on a breach of contract claim was 10 years. That prescriptive period begins to run from the date that the contract is allegedly breached. Deshotels v. Fruge, 364 So.2d 258 (La.App. 3rd Cir.1978).

Most legal malpractice actions are delictual and are governed by the one-year prescriptive period. This rule was historically subject to two exceptions: (1) when the attorney expressly warrants a specific result and fails to obtain that result, and (2) when the attorney agrees to perform certain work and does nothing whatsoever. In these two contexts, the action would be in contract and subject to the ten-year prescriptive period. Lima v. Schmidt, 595 So.2d 624 (La.1992). However, in 1990, the legislature changed the prescriptive periods for legal malpractice claims by enacting La.R.S. 9:5605 ... That statute was amended in 1992, and, as amended, is the current law applicable to prescription of legal malpractice actions. La.R.S. 9:5605 now provides:

A. No action for damages against any attorney at law duly admitted to practice in this state, any partnership of such attorneys at law, or any professional corporation, company, organization, association, enterprise, or other commercial business or professional combination authorized by the laws of this state to engage in the practice of law, whether based upon tort, or breach of contract, or otherwise, arising out of an engagement to provide legal services shall be brought unless filed in a court of competent jurisdiction and proper venue within one year from the date of the alleged act, omission, or neglect, or within one year from the date that the alleged act, omission, or neglect is discovered or should have been discovered; however, even as to actions filed within one year from the date of such discovery, in all events such actions shall be filed at the latest within three years from the date of the alleged act, omission, or neglect.
B. The provisions of this Section are remedial and apply to all causes of action without regard to the date when the alleged act, omission, or neglect occurred. However, with respect to any alleged act, omission, or neglect occurring prior to September 7, 1990, actions must, in all events, be filed in a court of competent jurisdiction and proper venue on or before September 7, 1993, without regard to the date of discovery of the alleged act, omission, or neglect. The one-year and three-year periods of limitation provided in Subsection A of this Section are preemptive periods within the meaning of Civil Code Article 3458 and, in accordance with Civil Code Article 3461, may not be renounced, interrupted, or suspended.
C.

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Bluebook (online)
671 So. 2d 943, 1996 WL 88273, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phillip-v-home-ins-co-lactapp-1996.