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Changing Face of Legal Malpractice in Louisiana

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The Louisiana Supreme Court recently gave victims of legal malpractice in Louisiana important new rights. The Court’s decision in Lomont v. Bennett, 2014-2483 (La. 6/30/15), — So. 3d — will likely make it easier for victims of legal malpractice to obtain redress. Before reviewing the Lomont decision, however, it is worthwhile to consider what “legal malpractice” really is.

What Is Legal Malpractice?

Malpractice is another word for negligence or carelessness on the part of a professional person, such as a lawyer. Malpractice, or negligence, is simply the failure to provide the quality and kind of service that another legal professional would provide under the circumstances and consistent with generally accepted standards of care. That standard of care is critical in the attorney-client relationship.

The attorney-client relationship is a special one. The client entrusts his attorney to not only hold confidences and provide adequate advice but to handle the matters entrusted to him in a competent fashion. Most clients have neither the experience, education, nor sophistication to know whether the attorney they hired is actually doing that. That makes it that much more critical for attorneys to handle any matter — but particularly matters affecting the livelihoods of their clients — in an appropriate manner.

When an attorney agrees to handle a specific matter for a client, that attorney implies that he or she possesses the required degree of learning, skill, experience, and ability that other attorneys handling those types of cases ordinarily possess. If not, that lawyer should associate additional counsel.  The attorney also implies that he or she will exercise reasonable and ordinary care and diligence in the use of legal skills and in the application of legal knowledge to the client’s cause.

Of course, attorneys are not the guarantors of a particular result. An attorney is not expected to be infallible or perfect. A poor result or bad advice alone is not evidence of legal malpractice. But when that poor result is the result of negligence — failure to provide the quality and kind of service that another legal professional would provide under the circumstances and consistent with generally accepted standards of care like in this case — a legal malpractice claim by a client against his former attorney is appropriate.  Indeed, it is required.

Claims For Malpractice Have A Definite Time Period in Louisiana.

In Louisiana actions for legal malpractice must be brought 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. In no event can such actions be filed beyond three years from the date of the alleged act, omission, or neglect. However, La. R.S. 9:5605(E) provides that in cases of fraud, the peremptive period provided in 9:5605(A) does not apply. This is commonly known as the “fraud exception.”

Louisiana appellate courts have near-unanimously held that the fraud exception is applicable only in cases where the fraudulent act itself constitutes the malpractice. (See, e.g., Broadscape.com, Inc. v. Matthews; Brumfield v. McElwee; Smith v. Slattery; Atkinson v. LeBlanc) These courts have rejected the idea that post-malpractice concealment can constitute fraud under La. R.S. 9:5605(E). Under this jurisprudential rule, a negligent attorney may fraudulently conceal his malpractice from the client, usually until the three year peremptive period has expired and lawsuit may no longer be brought, without running afoul of the fraud exception.

This all changed in Lomont.

In Lomont, the client hired an attorney to handle a divorce and related domestic matters. As a part of the representation, the attorney was to record a partition agreement, which granted the client full ownership of her family home. The attorney, however, failed to record the agreement. A creditor of the client’s former spouse subsequently recorded a lien against the home. The client discovered this lien when she attempted to refinance the home two years later.

The attorney claimed that when the client contacted her about the lien, she notified the client of her malpractice, advised the client of her right to obtain independent counsel, but the client refused to pursue a malpractice action. The client disputed this claim and stated that she was never informed of the malpractice nor her option to obtain separate counsel. The attorney then informed the client that she would take actions in an attempt to remedy her mistake. The attorney claimed that she drafted a lawsuit to have the lien removed, contacted the ex-spouse regarding service, and negotiated with the bank attorney. Based on this information, the client assumed that the lien could be successfully removed and took no further actions. Fifteen months after the discovery of the lien, the attorney communicated to the client that she discovered an unwaivable conflict of interest and could no longer help the client with removing the lien. At this point, the three-year preemptive period to bring a legal malpractice claim had already expired.

The Supreme Court questioned the veracity of the attorney’s claims. First, the Court questioned the fact that the attorney “with considerable legal experience would admit to the client she committed malpractice, advise the client of her right to obtain independent counsel to pursue a malpractice claim, and accept the client’s decision not to pursue a malpractice claim without confirming any of these details in writing or providing written documentation to her file.” Second, the Court found that despite the attorney’s claim of work to “fix the problem,” the attorney “failed to produce any evidence of this alleged work.” Third, the Court found it highly suspicious that the attorney “would claim she was completely unaware of the conflict of interest during [the] fifteen months but, conveniently, learned of the unwaivable conflict shortly after the three-year preemptive period had expired.”

After reviewing the evidence, or the lack thereof, the Court held that “there is no other plausible explanation for [the attorney’s] actions other than she intended to defraud [the client] by lulling her into inaction.” The attorney was found to have “deliberately hid the truth regarding her ability to have the lien removed by giving [the client] assurances that lawsuits were filed and proceeding.” The attorney “waited until the peremptive period for legal malpractice had presumably expired before disclosing the unwaivable conflict of interest and discontinuing her representation.” The client, to her detriment, “believed that lawsuits […] would successfully remove the lien” and “was unaware she should have pursued a legal malpractice claim.” The attorney, the Court concluded, “intended to deceive [the client] thereby gaining an advantage by avoiding a malpractice suit.”

Turning to the fraud exception, the Court held that to the extent previous cases “hold an attorney’s post-malpractice actions consisting of fraudulent concealment cannot amount to fraud within the meaning of [La. R.S. 9:5605(E)], they are overruled.” Applying the definition of fraud under Civil Code Article 1953, the Court stated that any action consisting of misrepresentations or suppressions of the truth, made with intentions of obtaining unjust advantages over another, will prohibit application of the peremptive period. Post-malpractice concealment in order to avoid a legal malpractice lawsuit conforms to the definition of fraud. It would be absurd, the Court explained, to interpret the fraud exception to exclude fraudulent post-malpractice concealment. Therefore, the Court ruled that “allegations of misrepresentation, suppression or concealment of malpractice can constitute fraud within the meaning of La. R.S. 9:5605(E).”

But for the Louisiana Supreme Court overruling the long line of cases holding that fraud exception is not applicable to post-malpractice concealment, the client in Lomont would have been left without any recourse. The Lomont decision is truly a tremendous victory for victims of legal malpractice. Applying Lomont going forward, courts will unquestionably look at attorney’s actions post-malpractice. The courts likely will have to consider whether failing to fully and timely articulate the existence of malpractice is enough to trigger the fraud exception to the three year peremptive period.

*Special thanks to Luke Zhu, JD/MBA Candidate, for his research and assistance in drafting this article.