Ryland v. LAW FIRM OF TAYLOR, PORTER, BROOKS & PHILLIPS

Citation: 496 So. 2d 536Docket: 85 CA 0848

Court: Louisiana Court of Appeal; October 15, 1986; Louisiana; State Appellate Court

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Rhett R. Ryland filed a malicious prosecution lawsuit against Gulf States Utilities (GSU) and the law firm Taylor, Porter, Brooks, and Phillips, including attorneys Eugene R. Groves and Frederick Tulley, regarding a disputed utility bill of $707.86. A jury found that GSU had engaged in malicious prosecution, but did not find Groves, Tulley, or the law firm liable. Additionally, the jury determined Ryland was at fault, barring him from any damages.

The dispute began when Ryland received an unusually high utility bill in February 1978, significantly exceeding his previous average bills. Ryland repeatedly contacted GSU, believing the bill was erroneous, but GSU maintained that the meter readings were accurate. After unsuccessful negotiations, GSU referred the matter to Taylor, Porter for collection. Groves communicated with Ryland but their discussions did not resolve the issue. On June 21, 1978, Groves sent a demand letter to Ryland, a necessary step before filing suit under Louisiana law. After this, Groves assigned the case to Tulley, who reportedly attempted to notify Ryland before filing suit.

Ryland claimed he received a disconnect notice from GSU on August 16, prompting him to pay the bill in full the next day, without notifying the law firm. However, Tulley filed a lawsuit on August 23, which became publicly known in the legal community. Upon learning that Ryland had paid the bill, the firm dismissed the suit. Ultimately, Ryland's appeal followed the jury's decision, which barred him from recovering damages due to his own fault in the matter.

Ryland requested a clarification from Taylor, Porter regarding a judgment of dismissal, but did not receive a response. Consequently, Ryland initiated a malicious prosecution lawsuit on September 28, 1978, with the trial occurring in February 1985. Ryland's appeal included several claims of error, notably: the trial judge's instructions suggesting contributory negligence could negate malicious prosecution; jury questions implying plaintiff fault; and the jury's determination that neither the law firm Taylor, Porter, nor its associates were guilty of malicious prosecution. Additionally, Ryland contested the legality of allowing Taylor, Porter to represent all defendants due to a conflict of interest, and argued incorrect jury instructions about ethics concerning payment to Gulf States Utilities (GSU).

The court required six elements to establish malicious prosecution, including the initiation of a legal proceeding, causation by the defendant, a favorable termination for the plaintiff, absence of probable cause, presence of malice, and resulting damages. The first four elements were uncontested. Malice is presumed when a suit is filed without probable cause, indicating reckless disregard for rights. GSU argued its actions were reasonable; however, the jury found its negligence constituted indifference to Ryland's rights. The evidence indicated GSU had received payment before filing suit but failed to relay this to its attorneys, leading to the suit despite evidence of payment. GSU claimed the clerk's oversight of payment status justified the filing. The jury's conclusion that GSU acted with inexcusable indifference was supported by the facts presented.

Ryland's account was not marked as paid in full due to an outstanding balance of $36.17 from August, despite his timely payments on subsequent bills. The disputed amount persisted on each new bill, and his utilities were never disconnected. The jury could reasonably infer that Gulf States' actions demonstrated reckless indifference, as their clerk allowed a lawsuit to proceed despite knowledge of Ryland's payment history. A basic review of the account would have revealed the discrepancy, and GSU's collections procedures lacked safeguards to address issues when payments were made on accounts in litigation. 

The jury found no malicious prosecution by the law firm Taylor, Porter, Groves, and Tulley, as their reliance on GSU's information prior to the lawsuit was deemed reasonable. A key point of contention was whether Groves provided assurance that Ryland would receive notification before any lawsuit; the jury sided with the defendants, emphasizing the credibility of witnesses. 

Most of Ryland's claims of error related to contributory negligence were not preserved for appeal, except for one specific jury instruction that was found to be erroneous and prejudicial, leading to a reassessment of the jury's verdict. Additionally, Ryland contested the trial court's instruction regarding the Canons of Ethics, which suggested that he could not pay GSU directly while they were represented by counsel, citing DR 7-104(A)(1), which restricts communication with a party known to be represented by a lawyer without consent.

The jury was instructed that Ryland, as an attorney, could be considered to have breached the Code of Ethics by communicating with GSU, which he knew was represented by another attorney. The defendants argued that there is no change in obligations when an attorney represents himself. However, the key issue is whether Ryland acted as his own attorney or merely as an aggrieved individual regarding his utility bill. The defendants bear the burden to prove contributory negligence, but no evidence indicated that Ryland acted in a representative capacity as an attorney. A prudent individual would typically seek legal representation only when facing litigation, which Ryland did not do until he received a demand letter. The application of the Code of Ethics was deemed inappropriate without evidence of actions exclusive to an attorney. Although the defendants claimed the jury instruction aimed to demonstrate a breach of community standards, it implied unethical conduct, potentially prejudicing the jury against Ryland.

Contributory negligence is generally not a defense in cases of malicious prosecution, which is recognized as an intentional tort in Louisiana law. It has not been acknowledged as a defense to aggravated negligence either, which is characterized by intent. The jury was improperly instructed that contributory negligence could be a defense in malicious prosecution, undermining the trial court's judgment and verdict. Louisiana courts mandate that appellate courts conduct a trial de novo when jury instructions are erroneous. In this case, the jury's factual findings regarding the defendants' liability were unaffected by the faulty contributory negligence instructions. The jury found that GSU exhibited reckless indifference to Ryland's rights, a finding that stood independently from any potential fault attributed to Ryland. Thus, the jury's responses to interrogatories regarding the defendants' actions are upheld, while those related to Ryland's conduct are set aside.

In the case discussed, Ryland claims damages to his personal and professional reputation due to a lawsuit, alleging it implied financial instability and caused a loss of income from personal injury referrals. The court notes that while damages from malicious prosecution are presumed, Ryland failed to provide evidence of actual damage to his community standing or loss of business, leading to the conclusion that only nominal damages are warranted. The court awards $1,500 for reputational harm but denies any claims for lost profits due to lack of evidence. Conversely, it finds sufficient evidence for mental anguish, humiliation, and embarrassment, awarding Ryland $7,500 for these damages. The total damages awarded amount to $9,000, with Gulf States Utilities held liable. The judgment is partially reversed and affirmed, and GSU is responsible for costs. The court also acknowledges that Ryland likely owed the disputed bill, stemming from prior meter reading errors, and notes that the stigma from a civil suit is less severe than from a criminal one.