Sanchez v. Liberty Lloyds

672 So. 2d 268, 95 La.App. 1 Cir. 0956, 1996 La. App. LEXIS 794, 1996 WL 155283
CourtLouisiana Court of Appeal
DecidedApril 4, 1996
Docket95 CA 0956
StatusPublished
Cited by19 cases

This text of 672 So. 2d 268 (Sanchez v. Liberty Lloyds) 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
Sanchez v. Liberty Lloyds, 672 So. 2d 268, 95 La.App. 1 Cir. 0956, 1996 La. App. LEXIS 794, 1996 WL 155283 (La. Ct. App. 1996).

Opinion

672 So.2d 268 (1996)

Gloria SANCHEZ
v.
LIBERTY LLOYDS, et al.

No. 95 CA 0956.

Court of Appeal of Louisiana, First Circuit.

April 4, 1996.
Writ Denied June 7, 1996.

*269 Arthur Cobb, Baton Rouge, for Plaintiff Gloria Sanchez.

Steve E. Adams, Thomas D. Fazio, Baton Rouge, for Defendant Louisiana Insurance Guaranty Association.

Michael A. Patterson, Baton Rouge, for Defendants Kirk A. Patrick, III and McGlinchey, Stafford & Lang.

Before CARTER and PITCHER, JJ., and CRAIN, J. Pro Tem.[1]

PITCHER, Judge.

This is an appeal of a trial court's judgment, imposing sanctions against the Louisiana Insurance Guaranty Association (LIGA), Kirk Patrick (Mr. Patrick), an attorney for LIGA, and McGlinchey, Stafford & Lang (McGlinchey), the law firm that employs Mr. Patrick. Plaintiff, Gloria Sanchez (Ms. Sanchez), also appeals and seeks an increase in the sanction award.

FACTS AND PROCEDURAL HISTORY

On April 29, 1992, Ms. Sanchez was a guest passenger in a vehicle driven by Steven Fondren. Mr. Fondren was driving his 1991 Ford in a westerly direction on La. Highway 1148 in the Parish of Iberville, Louisiana. Upon approaching a railroad crossing approximately 110 feet from La. Highway 1, with the barrier down and a train in sight, Mr. Fondren drove his vehicle around the barrier in an attempt to beat the on-coming train to the crossing. As the Fondren vehicle crossed the tracks, the train struck the vehicle, causing Ms. Sanchez to suffer multiple injuries.

Mr. Fondren was insured by Liberty Lloyds Insurance Company (Liberty Lloyds) and had bodily injury coverage up to $10,000.00. Mr. Fondren reported the accident to Liberty Lloyds and provided it with a copy of the accident report. Shortly thereafter, Liberty Lloyds settled Mr. Fondren's property damage claim.

After unsuccessful attempts to settle her claim, Ms. Sanchez filed suit on December 16, 1992, against Mr. Fondren, Liberty *270 Lloyds, and LIGA, in solido. At this juncture, Liberty Lloyds had not been declared insolvent but had been placed in voluntary rehabilitation on December 14, 1992.

By letter dated March 2, 1993, LIGA requested that it be dismissed from the suit because Liberty Lloyds had not been declared insolvent, citing LSA-R.S. 22:1379(4)(B) as authority for the dismissal. However, on May 16, 1993, a declaration of insolvency was entered against Liberty Lloyds, and a stay order was imposed, halting all proceedings against Liberty Lloyds. In addition to the imposition of the stay order, LIGA took over all of Liberty Lloyds' files and claims pursuant to LSA-R.S. 22:1376.

On or about October 21, 1993, Kirk Patrick, an attorney with the law firm of McGlinchey, Stafford & Lang (McGlinchey), was assigned some eighty (80) of Liberty Lloyds' files, including the Sanchez file. These files were obtained by the Commissioner of Insurance from the law firm of McNulty & O'Connor. When Mr. Patrick reviewed the Sanchez file, he discovered an unsigned draft answer, a draft set of interrogatories, a draft Request for Production of Documents, and an unsigned cover letter. The file was devoid of an accident report or the name of the adjuster who was assigned to the claim. Mr. Patrick also reviewed the suit record and found that Mr. Fondren was served with the Sanchez petition. Concerned about a possible default, Mr. Patrick filed an answer on January 19, 1994, in the form of a general denial. Mr. Patrick also plead the affirmative defenses of contributory negligence, failure to mitigate damages, and statutory limitations upon LIGA's liability, as set forth in LSA-R.S. 22:1375 et seq. In addition to filing an answer, Mr. Patrick also sought to discover whether there was other insurance to cover the Sanchez claim.

On March 24, 1994, Mr. Fondren was deposed. At his deposition, Mr. Fondren admitted that he was solely at fault in the accident.

On April 14, 1994, Mr. Patrick received his discovery responses, which indicated that there was no other insurance to cover the claim. Mr. Patrick then recommended that the Sanchez claim be settled for Liberty Lloyds' policy limits, less LIGA's $100.00 deductible. In June, 1994, Mr. Patrick conveyed LIGA's settlement offer to Ms. Sanchez.

On June 8, 1994, Ms. Sanchez filed a "Motion for Heavy Sanctions." In her motion, Ms. Sanchez alleged that neither LIGA nor its representative talked to the insured (Mr. Fondren) or the bankrupt insurance company (Liberty Lloyds) but still filed an answer denying fundamental truths in violation of LSA-C.C.P. art 863.

A final settlement was effected between the parties, and a partial dismissal was filed on August 23, 1994, dismissing the suit against Mr. Fondren with prejudice. Ms. Sanchez, however, reserved all of her rights against LIGA.

A hearing on the motion for sanctions was held on October 17, 1994. During the hearing, the trial court found that, because Mr. Patrick filed an answer without discussing the matter with anyone and without getting an extension of the time to file his answer, he committed a technical violation of law. At the close of the hearing, the trial court held that sanctions should be imposed against Mr. Patrick, McGlinchey, and LIGA in the amount of $1,500.00. It is from this judgment that Mr. Patrick, McGlinchey, and LIGA appeal.

Mr. Patrick and McGlinchey have set forth the following assignments of error for our review:

1. The trial court erred in sanctioning Kirk Patrick for filing a general denial answer without obtaining an extension of time to further investigate the claim.
2. The trial court erred in holding the law firm of McGlinchey, Stafford & Lang liable for C.C.P. art. 863 conduct.
3. The trial court erred in finding and holding Kirk Patrick and McGlinchey, Stafford & Lang and LIGA solidarily liable under the facts of this case.

LIGA alleges the following assignments of error:

1. The Trial Court erred in sanctioning Mr. Patrick for filing an answer in the *271 form of a general denial for lack of sufficient information without first getting an extension of time to further investigate the claim.
2. Alternatively, the Trial Court erred in sanctioning LIGA in the absence of a showing that LIGA participated in, or had actual knowledge of, the filing of an allegedly improper Answer.

Ms. Sanchez, in her single assignment of error, alleges that the trial court's award of $1,500.00 in sanctions was manifestly erroneous.

DISCUSSION

Mr. Patrick, McGlinchey, and LIGA all contend that the trial court erred in imposing sanctions against Mr. Patrick for filing an answer in the form of a general denial without first getting an extension to further investigate the claim. On the other hand, Ms. Sanchez contends that, because the answer denied fundamental truths, sanctions should be imposed.

LSA-C.C.P. art. 863 provides, in pertinent part, as follows:

A. Every pleading of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated. A party who is not represented by an attorney shall sign his pleading and state his address.
B.

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Bluebook (online)
672 So. 2d 268, 95 La.App. 1 Cir. 0956, 1996 La. App. LEXIS 794, 1996 WL 155283, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sanchez-v-liberty-lloyds-lactapp-1996.