Dennis Cunnikin v. Ms and Ef LLC

NOT DESIGNATED FOR PUBLICATION

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

22-65

DENNIS CUNNIKIN, ET AL.

VERSUS

MS AND EF LLC, ET AL.

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APPEAL FROM THE
NINTH JUDICIAL DISTRICT COURT
PARISH OF RAPIDES, NO. 267,591
HONORABLE DAVID MICHAEL WILLIAMS, DISTRICT JUDGE

**********

CANDYCE G. PERRET
JUDGE

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Court composed of Elizabeth A. Pickett, Van H. Kyzar, and Candyce G. Perret,
Judges.

AFFIRMED.

Daniel G. Brenner
David A. Karst, Jr.
Bolen, Parker Brenner, Lee & Miller, APLC
709 Versailles Boulevard
Post Office Box 11590
Alexandria, LA 71315-1590
(318) 445-8236
COUNSEL FOR PLAINTIFFS/APPELLANTS:
Dennis Cunnikin and Renee Cunnikin

Hansel Mark Harlan
Harlan Law Firm
9100 Bluebonnet Center Boulevard #102
Baton Rouge, LA 70809
(225) 442-1056
COUNSEL FOR DEFENDANTS/APPELLEES:
Dana Roxanne Lee
Alexandria Land and Title, LLC

Michael Paul Bienvenu
Kinchen, Walker, Bienvenue, Bargas, Reed & Helm, L.L.C.
9456 Jefferson Highway, Building III, Suite F
Baton Rouge, LA 70809
(225) 292-6704
COUNSEL FOR DEFENDANT:
Louisiana Lagniappe Realty, LLC

Jeremy C. Cedars
Fine Legal Services, LLC
4615 Parliament Drive, Suite 202
Alexandria, LA 71303
(318) 767-2226
COUNSEL FOR DEFENDANTS:
MS and EF LLC
Elaine Setliff
Mark Setliff

PERRET, Judge.

Plaintiffs-Appellants, Dennis and Renee Cunnikin, appeal the trial court’s

October 28, 2021 Judgment, which effectively dismissed Appellants’ claims

against Alexandria Land & Title, LLC (“ALT”) and Dana Roxanne Lee (“Lee”)

(hereafter referred to as “Appellees”), with prejudice. The Judgment granted the

Peremptory Exception of Peremption of Alexandria Land & Title, LLC, and Dana

Roxanne Lee and dismissed Appellants’ First Supplemental and Amending

Petition for Damages. For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY:

This case arises from the purchase of property by Appellants from MS and

EF, LLC, Mark Setliff, and Elaine Setliff, and the subsequent discovery that the

land was not properly subdivided.

Appellants filed suit against MS and EF, LLC, Louisiana Lagniappe Realty,

LLC, Mark Setliff, and Elaine Setliff (“the defendants”), on February 27, 2020.1 In

that petition, Appellants alleged that on July 31, 2018, the defendants sold

Appellants the property described as “Tract 2 (1 acre) being part of Lot 30 Holiday

Estates Extension No. 1” with the knowledge that Appellants intended to place a

mobile home on the property. Appellants alleged the defendants failed to

subdivide the property prior to the sale and failed to have the subdivision approved

by the Rapides Area Planning Commission (“Commission”) and the Rapides

Parish Policy Jury (“RPPJ”). This failure allegedly prevented Appellants from

securing the proper permits necessary to occupy their home and to secure utilities

to the home.

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These parties remain defendants in the case.

Despite the defendants’ application to the Commission to re-subdivide the

property, on October 22, 2019, the Commission, and later the RPPJ on November

12, 2019, declined to do so based on the “law of ownership.” The Commission

also denied a request by the defendants on February 24, 2020. Thus, the property

has yet to be subdivided and Appellants have been prevented from using the

property for their intended purpose.

In their July 23, 2020 Answer with Affirmative Defenses, MS and EF, LLC,

Mark Setliff, and Elaine Setliff, asserted the affirmative defense of plaintiff and

third-party fault, alleging that Appellants failed to perform proper due diligence

and that their title agent failed to locate any ordinances preventing the re-

subdivision of the subject property or failed to advise Appellants of any problems

relating to permits.

Thereafter, on December 22, 2020, Appellants filed a First Supplemental

and Amending Petition for Damages naming ALT and Lee as additional

defendants. Specifically, Appellants alleged that ALT and Lee conducted the

closing of the July 31, 2018 sale, and that it was Lee’s obligation as a closing

attorney to verify that the property was properly subdivided and that a

merchantable title could pass to Appellants. Thus, Appellants contend ALT and

Lee’s failure to verify the foregoing was a deviation below the standard of care

constituting legal malpractice. Appellants further alleged that ALT and Lee are

solidarily bound with the original defendants.

Appellees filed their answer on April 22, 2021, and the exception of

peremption at issue on June 22, 2021. In the exception, Appellees argued that

Appellants became aware or should have been aware of claims against Appellees

as late as October 28, 2019, the date Appellants’ counsel sent a letter to ALT

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advising ALT to contact its Errors and Omissions insurer. Thus, the December 22,

2020 petition was filed more than one year later and perempted under La.R.S.

9:5605 and 9:5606. Appellees supported their exception with Lee’s affidavit, the

Act of Cash Sale, the title insurance policy, the Stop Work order issued by the

Commission to Appellants, the October 28, 2019 letter, and the first supplemental

and amending petition.

Appellants opposed the exception, asserting that Appellees have not carried

their burden in proving the date Appellants knew or should have known of the

negligence/malpractice, and that the October 28, 2019 letter does not establish

Appellants knew or should have known of any negligence/malpractice claim. The

purpose of the letter, Appellants explain, was to request ALT’s file on the closing

so that Appellants could determine if any acts of negligence/malpractice could be

demonstrated. Appellants attached the original petition, the Agreement to

Purchase or Sell, the Commission meeting record and Development Review

Memorandum, the RPPJ denial, the supplemental and amending petition, the

October 28, 2019 letter, and Renee Cunnikin’s affidavit in support of their

opposition.

After a reply memorandum from Appellees, the trial court admitted evidence

and heard argument on the exception on October 18, 2021. Although the court

agreed with Appellants that the burden of proof remained with the Appellees to

prove the peremption, the trial court ultimately found Appellees met that burden:

As I stated before I don’t think the petition gives rise to – on its face
to a claim . . . that peremption would . . . be proper. However, after
reviewing the letter and the other documents presented in front of this
court, I agree with [Appellees]. I think at this time, even if you’re not
a reasonable person, with the assistance of a well capable attorney
knowing that property wasn’t subdivided properly, knowing that
something that – that a title attorney in his title search should review

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and should give information as it relates to whether or not it was
properly done, I think that’s something they should have known or
should have been known by either a reasonable person and definitely
by a person with extremely capable counsel.

The trial court rendered judgment accordingly and declared the judgment was final

pursuant to La.Code Civ.P. art. 1915(A)(1).

Now, on appeal, Appellants assert that the trial court manifestly erred in

finding Appellants had or reasonably should have had knowledge of facts

establishing a claim against Appellees and, thus, erred in granting the exception of

peremption.

STANDARD OF REVIEW:

As explained by our supreme court, the appellate standard for reviewing a

judgment on an exception of peremption depends on whether evidence was

admitted on the motion:

If evidence is introduced at the hearing on the peremptory exception
of peremption, the district court’s findings of fact are reviewed under
the manifest error-clearly wrong standard of review. Rando [v. Anco
Insulations, Inc., 08-1163 (La. 5/22/09),] 16 So.3d [1065] at 1082. If
those findings are reasonable in light of the record reviewed in its
entirety, an appellate court cannot reverse even though convinced that
had it been sitting as the trier of fact, it would have weighed the
evidence differently. Id.

Lomont v. Bennett, 14-2483, p. 8 (La. 6/30/15), 172 So.3d 620, 627, cert. denied,

577 U.S. 1139, 136 S.Ct. 1167 (2016). As evidence was admitted on the motion in

the current case, we will apply a manifest error standard of review. We are also

mindful of the legal rule: “Peremptive statutes are strictly construed against

peremption and in favor of the claim. Of the possible constructions, the one that

maintains enforcement of the claim or action, rather than the one that bars

enforcement should be adopted.” Rando, 16 So.3d at 1083.

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DISCUSSION:

First, although not raised by the parties, after a review of the hearing

transcript we note that only the exhibits attached to Appellees’ exception motion

and memorandum were properly admitted into evidence, as Appellants did not

offer their exhibits into evidence. As the supreme court has stated, “Evidence not

properly and officially offered and introduced cannot be considered, even if it is

physically placed in the record. Documents attached to memoranda do not

constitute evidence and cannot be considered as such on appeal.” Denoux v. Vessel

Mgmt. Servs., Inc., 07-2143, p. 6 (La. 5/21/08), 983 So.2d 84, 88.

Although consideration of exhibits not admitted into evidence
was not assigned as an error in this case, the Supreme Court and this
Court have routinely held that appellate courts may not consider
evidence not properly admitted into evidence, whether the lack of
admission into evidence was assigned as error or not. Quinn v. La.
Citizens Prop. Ins. Corp., 12-152 (La. 11/02/12), 118 So.3d 1011;
Barnes v. Jacob, 13-596 (La. App. 5 Cir. 12/12/13), 131 So.3d 363,
364. Here, the parties referred to plaintiff’s exhibits and relator’s
exhibits; however, none of these exhibits were offered or admitted
into evidence. Exhibits not formally admitted into evidence could not
be considered by the trial court in its decision, they are not properly
before this Court, and we cannot consider them.

Freeman v. Ochsner Clinic Found., 20-283, pp. 3-4 (La.App. 5 Cir. 11/10/20), 307

So.3d 335, 338. See also Quinn, 118 So.3d 1011 (finding documents attached to

an exception of prescription memorandum were not properly admitted and could

not be considered).

Accordingly, while the issue was not raised as an error, we cannot consider

the exhibits attached to Appellants’ opposition memorandum as they were not

formally admitted into evidence at the hearing. Instead, we may only review those

documents submitted by Appellees as evidence.

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Regarding the matter at hand, the time limits to file a legal malpractice

action and a negligence claim against professional insurance agents are set forth in

La.R.S. 9:5605 and 9:5606, respectively. Both are substantially similar. Louisiana

Revised Statutes 9:5605 provides in pertinent part:

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 peremptive periods within the meaning of Civil Code
Article 3458 and, in accordance with Civil Code Article 3461, may
not be renounced, interrupted, or suspended.

Similarly, La.R.S. 9:5606 provides:

A. No action for damages against any insurance agent,
broker, solicitor, or other similar licensee under this state, whether
based upon tort, or breach of contract, or otherwise, arising out of an
engagement to provide insurance 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.

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....

D. The one-year and three-year periods of limitation provided
in Subsection A of this Section are peremptive periods within the
meaning of Civil Code Article 3458 and, in accordance with Civil
Code Article 3461, may not be renounced, interrupted, or suspended.

Both statutes provide that the running of peremption may begin with the date

the malpractice/negligence was or should have been discovered. Our courts have

defined the “date of discovery” as follows:

The “date of discovery” from which prescription or peremption
begins to run is the date on which a reasonable man in the position of
the plaintiff has, or should have, either actual or constructive
knowledge of the damage, the delict, and the relationship between
them sufficient to indicate to a reasonable person he is the victim of a
tort and to state a cause of action against the defendant.

Teague v. St. Paul Fire and Marine Ins. Co., 07-1384, p. 13 (La. 2/1/08), 974

So.2d 1266, 1275. The Teague Court further explain the “date of discovery” rule:

A prescriptive period will begin to run even if the injured
party does not have actual knowledge of facts that would
entitle him to bring a suit as long as there is constructive
knowledge of same. Constructive knowledge is whatever
notice is enough to excite attention and put the injured
party on guard and call for inquiry. Such notice is
tantamount to knowledge or notice of everything to
which a reasonable inquiry may lead. Such information
or knowledge as ought to reasonably put the alleged
victim on inquiry is sufficient to start running of
prescription. Nevertheless, a plaintiff’s mere
apprehension that something may be wrong is
insufficient to commence the running of prescription
unless the plaintiff knew or should have known through
the exercise of reasonable diligence that his problem may
have been caused by acts of malpractice. Even if a
malpractice victim is aware that an undesirable condition
has developed after the medical treatment, prescription
will not run as long as it was reasonable for the plaintiff
not to recognize that the condition might be treatment
related. The ultimate issue is the reasonableness of the
patient’s action or inaction, in light of his education,
intelligence, the severity of the symptoms, and the nature
of the defendant’s conduct.

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Teague, 974 So.2d at 1275 (quoting Campo v. Correa, 01-2707, pp. 11-12 (La.

6/12/02), 828 So.2d 502, 510-11)(citations omitted).

By bringing the exception, Appellees bore the burden of proving that the

claim was filed more than one year from the date the negligence/malpractice was

or should have been discovered. Lomont, 172 So.3d 620. When peremption is

apparent on the face of the pleadings, the burden shifts to the non-exceptors to

show the action was not perempted. Id.

Although the parties continue to dispute on appeal who carried the burden of

proof on the motion, even maintaining the burden of proof with Appellees, as the

trial court did, we find no manifest error in the trial court’s judgment.

In this case, Appellants’ supplemental and amending petition was filed on

December 22, 2020. Appellants alleged that the July 31, 2018 sale contract was

closed by Appellees and that it was the obligation of Lee to verify that the subject

property was “properly subdivided, such that a merchantable title could pass from

the original defendants to [Appellants].” Appellants claim Appellees failed to

verify that the property was properly subdivided prior to the closing, and said

failure constituted legal malpractice.

Thus, Appellees had the burden of proving that the alleged

malpractice/negligence was or should have been discovered prior to December 22,

2019, for the claim to be perempted, i.e., that Appellants “knew or should have

known through the exercise of reasonable diligence that [their] problem may have

been caused by acts of malpractice.” Campo 828 So.2d at 511.

In Teague, 974 So.2d 1266, the supreme court engaged in an in-depth

discussion regarding what triggers the running of peremption in a legal malpractice

action. In Teague the plaintiff, a doctor against whom a medical malpractice claim

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was filed, sought a legal malpractice action against the attorneys who represented

him in the medical malpractice case. The case was settled without his knowledge

and participation. The settlement was reported by his insurance to the National

Practitioner Data Bank. After learning of the settlement on October 29, 1999 (the

day the settlement occurred), and becoming dissatisfied with the report, the doctor

hired outside counsel. Thereafter it was discovered that the original attorneys

failed to post the jury bond for trial and never informed the plaintiff. Said failure

led to the mediation and settlement of the case. The plaintiff filed the legal

malpractice suit on November 3, 2000. The defendants ultimately filed an

exception of peremption that was granted by the appellate court. The supreme

court reversed. In doing so, the court explained: “The question, therefore, becomes

whether the date of discovery alleged by Dr. Teague, as well as his actions

following such discovery, were reasonable, with the burden placed squarely on the

exceptor to prove otherwise and to establish the action perempted.” Id. at 1275.

The Teague defendants argued that peremption began to run from the date

the plaintiff learned that the settlement occurred. The supreme court disagreed

finding that it would not be “apparent to a reasonable person on that date that the

jury trial had been lost due to the failure by his attorneys to post a jury bond and

that the loss of the jury served as the motivation for the mediation and settlement.”

Id. at 1277. The court further noted:

To hold that peremption commences from the date of knowledge of a
bad result would precipitate lawsuits unnecessarily to preserve rights.
An investigation might prove the absence of any malpractice or that
the result was not caused by the defendant’s negligence. . . . In the
present case, an investigation was necessary for Dr. Teague to
reasonably learn of the malpractice.

Id.

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The supreme court also addressed the running of peremption for a legal

malpractice claim in Jenkins v. Starns, 11-1170 (La. 1/24/12), 85 So.3d 612. In

Jenkins the plaintiff had knowledge of a judgment against her and that her attorney

failed to file a responsive pleading and appear at a hearing. After contacting her

attorney, she was told by her attorney that he made a mistake and would try to fix

it. The supreme court determined this information was sufficient to begin the

running of peremption and stated:

When Jenkins received the default judgment and made an inquiry to
her attorney, she had constructive knowledge of: (1) the damage in the
form of an $8,563.33 judgment against her; (2) the delict, or Starns’
failure to file a responsive pleading; and (3) the relationship between
Starns’ action and the resulting default judgment, which she learned
when he told her he had made a mistake. We find Jenkins’ knowledge
of the bad result coupled with the admission of counsel sufficient to
put her on notice Starns was negligent in his representation and
commenced the running of the one-year peremptive period.

Id. at 621-622 (footnote omitted).

Appellants here contend that, unlike Jenkins, while they knew at the time of

the letter that damage had been done, the connection between the damage and ALT

and Lee’s possible acts/omissions/errors was not stated. Thus, like Teague,

Appellants assert an investigation was necessary to discover the malpractice.

Appellants’ brief asserts that the October 28, 2019 letter does not set out any

specific known act of negligence on the part of Appellees and that the clear intent

of the letter was to request Appellees’ file in order to determine if negligence on

their part existed.

On the other hand, Appellees argue that, in order for the peremptive period

to begin, Appellants only needed “knowledge of facts that would place a

reasonable man on notice that malpractice may have been committed[.]”

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Appellees assert that, in this case, knowledge of the alleged negligence is self-

evident from the bad result.

The October 28, 2019 letter states in its entirety as follows:

This letter will serve to advise that I have been retained to
represent the interest of Dennis and Renee Cunnikin in connection
with property that was closed by your company by closing agent Jana
Calhoun and Attorney Roxanne Lee.

On behalf of my clients, I request that you provide me with a
complete copy of the file with reference to the closing on the property
subject to an Agreement to Purchase executed by sellers MS&EF,
L.L.C. and Mark D. Setliff to buyers Dennis Cunnikin and Renee
Cunnikin.

This letter will further request that you advise your Errors and
Omissions Insurance Company of a potential claim which may be
submitted in this matter on behalf of the Cunnikins. As you may
know, the property which you closed apparently had not been
properly sub-divided by the sellers, resulting in the buyers being
unable to use the property for the purpose intended (location of a
manufactured home).

Finally, I would ask that you provide me with the name of your
Errors and Omission Insurer, together with your policy number so that
I may address this issue with them.

Appellants’ supplemental and amending petition alleges that the standard of

care required Appellees to “verify” that the property was “properly subdivided,

such that a merchantable title could pass from the original defendants to

petitioners.” The alleged negligence was that Appellees failed to do so. The

October 28, 2019 letter states that Appellants were not provided merchantable title

and the property was not properly subdivided. While Appellants blame the

original defendants for failing to subdivide the property, based on the negligence

alleged against Appellees, it was also Appellees’ responsibility to ensure the

subdivision occurred prior to closing. Thus, when Appellants became aware that

they did not receive merchantable title and that the property was not subdivided,

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they should have been placed on notice that Appellees may not have done their job.

Furthermore, Appellants were represented at the time of the October 28, 2019

letter. The trial court took this fact into account when ruling:

[A]fter reviewing the letter and the other documents presented in front
of this Court, I agree with Mr. Harlan. I think at this time, even if
you’re not a reasonable person, with the assistance of a well capable
attorney knowing that property wasn’t subdivided properly, knowing
that something that – that a title attorney in his title search should
review and should give information as it relates to whether or not it
was properly done, I think that’s something they should have known
or should have been known by either a reasonable person and
definitely by a person with extremely capable counsel.

In fact, the trial court questioned counsel at the hearing:

THE COURT: Mr. Brenner, you got a response [to
opposing counsel’s argument]?

MR. BRENNER: . . . .We know of the bad result, we suspect it
may be malpractice. We know it’s the – the sellers, because we talk
about the sellers in that letter. We think it might be the lawyer. We
don’t know, because we don’t have the file. So it – my opinion that
we do not have information or reasonable information to think that –
that at this point discovery did continue, to answer counsel’s questions,
discovery continued. . . . We were investigating the rest of the file
through other sources, through other means of discovery with other
parties after that letter and before we filed our petition. . . .

....

THE COURT: Let me ask you this. If the property was –
had not been properly subdivided by the – by the sellers, which is
indicated by the letter, is that something that you think the closing
attorney should have known?

MR. BRENNER: I – I think – I think they should have known
that. I do think they should have known that. And I don’t know –

THE COURT: Is that something that would be prevalent in
a title search?

MR. BRENNER: It would be. It should have been caught. I
think it should have been caught. Now, why they didn’t catch that,
was it due to malpractice? I don’t know. I really don’t know what the
answer will be.

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As previously stated, constructive knowledge is sufficient to begin the

running of peremption. Campo, 828 So.2d 502. “Constructive knowledge is

whatever notice is enough to excite attention and put the injured party on guard

and call for inquiry. Such notice is tantamount to knowledge or notice of

everything to which a reasonable inquiry may lead.” Id. at 510-11 (emphasis

added). “The focus is on the appropriateness of the claimant’s actions or inactions,

and therefore, the inquiry becomes when would a reasonable man have been on

notice that malpractice may have been committed.” Straub v. Richardson, 11-1689,

p. 7 (La.App. 1 Cir. 5/2/12), 92 So.3d 548, 553, writ denied, 12-1212 (La. 9/21/12),

98 So.3d 341.

Based on the record, we cannot say that the trial court was manifestly

erroneous in granting the exception of peremption. While Appellants may not

have had the knowledge of the specific facts that led to Appellees’ possible failure

to discover the unsubdivided nature of the property and failure to inform

Appellants prior to closing, Appellants clearly had enough notice of the problem to

excite their attention and request Appellees’ file on October 28, 2019. While

Appellants state they never received the file for review, a reasonable person,

represented by counsel, who “suspects it may be malpractice[,]” would have

followed up on the inquiry. Instead, Appellants waited nearly fourteen months

after the letter, without inquiring further regarding the file, to file their

supplemental and amending petition adding Appellees as defendants and alleging

malpractice.

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DECREE:

For the foregoing reasons, the trial court’s October 28, 2021 Judgment is

affirmed. Costs of this appeal are assessed to Appellants, Dennis and Renee

Cunnikin.

AFFIRMED.

This opinion is NOT DESIGNATED FOR PUBLICATION.
Uniform Rules—Courts of Appeal, Rule 2-16.3.

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