Franklin Financial, Inc. v. Lawrence B. Sandoz III

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

06-1606

FRANKLIN FINANCIAL, INC.

VERSUS

LAWRENCE B. SANDOZ III, ET AL.

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APPEAL FROM THE
TWENTY-SEVENTH JUDICIAL DISTRICT COURT
PARISH OF ST. LANDRY, NO. 06-C-0926-C
HONORABLE ALONZO HARRIS, DISTRICT JUDGE

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OSWALD A. DECUIR
JUDGE

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Court composed of Sylvia R. Cooks, Oswald A. Decuir, and James T. Genovese,
Judges.

Cooks, J., concurs in the result only and would find that prescription did not
begin to run until November of 2004.

AFFIRMED.

Elliott W. Atkinson, Jr.
Atkinson & Martin, L.L.C.
11953 Coursey Boulevard
Baton Rouge, LA 70816
(225) 293-7100
Counsel for Plaintiff/Appellant:
Franklin Financial, Inc.

Nora M. Stelly
Allen & Gooch
P. O. Box 3768
Lafayette, LA 70502-3768
(337) 291-1000
Counsel for Defendant/Appellee:
Lawrence B. Sandoz III
Sandoz & Sandoz

DECUIR, Judge.

In this legal malpractice suit, the plaintiff, Franklin Financial, Inc., appeals the

judgment of the trial court granting the defendant’s exception of prescription. For the

following reasons, we affirm the judgment rendered in favor of the defendant,

Lawrence Sandoz III.

FACTS

Sometime prior to October of 2002, Franklin Financial purchased an Orleans

Parish judgment which had been rendered against Clarence and Sandra Landry on

April 18, 1994. Franklin retained Sandoz in October of 2002 to assist with the

collection of the judgment. Sandoz was asked to have the judgment made executory

in Jefferson Parish, where the Landrys owned property. In its petition, Franklin stated

that it hired Sandoz on an hourly basis to “revive the judgment and ensure proper

perfection of the judgment against the real property of the judgment debtors in

Jefferson Parish, Louisiana.”

On November 15, 2002, Sandoz recorded the judgment as requested, and it was

made executory by judicial order dated December 2, 2002. Sandoz informed his

client that the judgment would have to be revived by April 18, 2004. In August of

2003, Franklin instructed Sandoz to revive the judgment. Sandoz responded by letter

dated August 19, 2003, wherein he stated that the judgment was revived and would

be in effect until December 2, 2012. A year later, after receiving information

showing that the Landrys had refinanced their home with Ameriquest Mortgage,

Franklin contacted Sandoz to inquire how a mortgage could have been issued on

property encumbered by Franklin’s lien.

In response to a telephone conversation between Sandoz and Franklin’s

president, Nick Valorie, Franklin sent a letter to Sandoz on August 24, 2004, detailing

the conversation and specifying the numerous errors Sandoz had committed in the

course of representing Franklin. Assessing its losses at $70,000.00, Franklin

specifically accused Sandoz of failing to revive the original judgment, failing to

properly record the Jefferson Parish executory judgment, failing to protect Franklin’s

interests, and misrepresenting his own previous communications with Franklin.

Nevertheless, Sandoz’s representation continued, and the parties made an effort to

determine whether Ameriquest simply overlooked the Franklin mortgage or whether

the correct filings had not taken place and a judicial mortgage never perfected.

Letters to this effect were exchanged on September 7, 2004 and again on September

28, 2004. Finally, in a letter dated December 10, 2004 to Sandoz’s malpractice

insurer, Franklin stated that Sandoz admitted his mistakes in November 2004.

PROCEEDINGS BELOW

Franklin filed suit against Sandoz on October 24, 2005 in Jefferson Parish.

Sandoz responded by asserting a declinatory exception of improper venue which was

maintained by the trial court on February 10, 2006. The venue ruling was not

appealed, and the suit was then transferred to St. Landry Parish. In his answer,

Sandoz raised the peremptory exception of prescription and/or peremption based on

the provisions of La.R.S. 9:5605(A), which states in part:

No action for damages against any attorney . . . 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.

The trial court considered the arguments of counsel and ruled in favor of

Sandoz for the following reasons:

Prescription on a legal malpractice claim is one year
from the date the alleged act, omission or neglect is

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discovered or should have been discovered. La.R.S.
9:5605. Prescription begins to run at the time a claimant
knew or should have known of the existence of facts that
enable him or her to state a cause of action for legal
malpractice. Vaughn v. Slaughter, 94-0552 (La.App. 1 Cir.
3/3/95), 653 So.2d 36 [writ denied, 95-828 (La. 5/5/95),
654 So.2d 339].

In the present case, attention was given to the
defendant’s argument that the suit filed in October 26,
2005 in Jefferson [P]arish was timely. He based this
argument that the plaintiff did not have a clear
understanding of Sandoz’s negligence until November
2004. Plaintiff’s attorney refers to the December 10, 2004
letter written to the malpractice insurer as evidence of this.
This court finds that the letter dated August 23, 2004,
written by Franklin Financial to Lawrence Sandoz sets out
the plaintiffs knowledge that several errors of legal
representation had occurred. Reviewing the content of this
letter, the plaintiff cites clearly that the services he
contracted Lawrence Sandoz to provide were not done
properly. Therefore, using this date, the plaintiff had until
August 23, 2005 to file suit against the defendant in this
case. However, the suit in this case alleging legal
malpractice was not filed until October 24, 2005 in an
improper venue. The suit was not filed in a court of proper
venue until February 21, 2006. This far exceeds the one-
year period from the above date of the act set forth in the
plaintiff’s letter.

ANALYSIS

At issue in this appeal is the date on which Franklin discovered or should have

discovered the alleged malpractice committed by Sandoz. Franklin contends that it

did not become aware of sufficient facts indicating it may have a cause of action

against Sandoz until October or November of 2004. Franklin also suggests that its

continuing relationship with Sandoz shows that it did not realize the full extent of his

errors until November of 2004. Franklin argues that its suit filed in Jefferson Parish

on October 24, 2004 was therefore timely.

The trial court considered the letter of August 24, 2004 to be proof of

Franklin’s knowledge of the alleged malpractice. Therefore, the date of the letter is

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the date prescription began to run. After reviewing the evidence in the record before

us, we find no error in that conclusion. As of August 24, 2004, Franklin had

sufficient information to realize that Sandoz had not protected its interest in the

Landry judgment. Franklin then had one year from that date in which to file suit.

Even if we were to agree with Franklin’s position that prescription did not

begin to run until November of 2004, we would still be compelled to affirm the trial

court’s ruling on prescription. The Jefferson Parish suit, whether filed timely or not,

was not filed in a court of proper venue and therefore cannot interrupt prescription.

We will not revisit the validity of the venue ruling, as that judgment was not appealed

and is now final.

For the above and foregoing reasons, the judgment before us is affirmed. Costs

of this appeal are assessed to the plaintiff, Franklin Financial, Inc.

AFFIRMED.

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