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Jenkins v. Starns
Citations: 85 So. 3d 612; 2012 WL 182135; 2012 La. LEXIS 105Docket: 2011-C-1170
Court: Supreme Court of Louisiana; January 24, 2012; Louisiana; State Supreme Court
The Supreme Court of Louisiana considered the case Laurie Jenkins v. Larry G. Starns, determining whether the continuous representation rule could suspend the one-year peremptive period established by La. R.S. 9:5605 in legal malpractice claims. The court reversed the court of appeal's decision, ruling that the peremptive period cannot be suspended by this doctrine. The case stemmed from a contract dated April 27, 2006, between Laurie Jenkins and Chet Medlock for the sale of a metal building for $25,000. Jenkins paid an initial deposit but withheld the final payment due to quality issues. After Medlock sued Jenkins for breach of contract on November 28, 2006, seeking the final payment, Jenkins, through attorney Larry Starns, attempted to negotiate a resolution. However, Starns did not file a timely response, leading to a default judgment against Jenkins on December 20, 2006, which was confirmed on January 3, 2007. Following the default judgment, Starns filed a petition to annul it on January 25, 2007, claiming fraud and ill practices. However, the trial court dismissed Jenkins' petition due to issues with service and representation. Jenkins later experienced financial losses and, after consulting a different attorney, filed a legal malpractice suit against Starns on November 5, 2008. The case raises significant questions regarding the implications of representation continuity on the timing of malpractice claims. Jenkins filed a petition for damages against Starns, alleging that Starns' negligence in not filing a responsive pleading to Medlock's breach of contract petition led to the garnishment of her assets. Jenkins claimed Starns failed to represent her adequately at a critical hearing on April 16, 2007. Starns responded, indicating he believed he had an informal extension for filing due to the holiday season and was unaware of a preliminary default entered against Jenkins. He also claimed not to have received notice of the April hearing but had informed the court of his late arrival due to another matter. Jenkins moved for judgment on the pleadings, arguing that Starns' claims regarding the extension and his absence were insufficient defenses. The trial court partially granted Jenkins’ motion, establishing a legal malpractice claim against Starns while reserving the issue of damages. Starns later filed an exception of prescription/peremption, contending that Jenkins did not file her malpractice suit within the one-year peremptive period mandated by La. R.S. 9:5605. This statute requires that any legal malpractice actions must be filed within one year of the alleged negligence or its discovery, and no later than three years after the event. The statute is strictly applied and cannot be interrupted or suspended, nor does it apply in cases of fraud. Starns contended that any malpractice occurred in December 2006 and January 2007 when a default judgment was confirmed. Jenkins was served the default judgment on January 12, 2007, leading Starns to argue that Jenkins' claims for damages began to run at that point, making her November 5, 2008 petition untimely. However, the trial court ruled against Starns on December 9, 2009, awarding Jenkins $9,311.04. The court referenced the case Naghi v. Brener, which established that the one-year and three-year periods in La. R.S. 9:5605 are peremptive and uninterruptible. Still, the trial court distinguished Naghi by emphasizing that it did not address when the one-year period begins. According to La. R.S. 9:5605, the one-year period starts either on the date of the alleged act or when it should have been discovered. The doctrine of contra non valentem applies, meaning prescription does not begin if the claimant was unaware of the negligence or if the attorney obstructed this knowledge. In legal malpractice claims, Louisiana courts have recognized the 'continuous representation rule,' which delays the prescription of a malpractice claim while an attorney continues to represent the client and address the malpractice. Jenkins testified she believed Starns was managing her case and only recognized issues when her checking account was garnished, which occurred within a year of filing her suit. The trial court noted Starns' ongoing efforts to annul the default judgment as a significant factor, applying the continuous representation rule to suspend the commencement of prescription. The court concluded that Jenkins 'discovered' the malpractice when her funds were garnished, meaning her claim had not prescribed. The damages awarded included $7,965 for estimated remediation costs and $1,346.04 for payments made to Medlock, which were necessary for clearing a legal lien on her property. The court of appeal upheld the trial court's decision, supporting the continuous representation rule and recognizing that while peremptive periods in La. R.S. 9:5605 cannot be suspended, the discovery of malpractice can affect when the prescriptive period begins. The court of appeal upheld the trial court's ruling, which did not suspend the running of prescription but instead employed an equitable doctrine to delay the start of the prescriptive period, aligning with the legislative intent of La. R.S. 9:5605. It found the trial court's reference to Hendrick inappropriate, as that case pertained to prior law, yet the appeal heavily cited Hendrick's interpretation of contra non valentem, emphasizing that this doctrine protects clients who trust their attorneys. However, if a client actively questions their attorney's performance, they may lose the protection of contra non valentem unless equity demands otherwise. The court acknowledged that while peremptive periods cannot be suspended, the legislature intended for principles of equity to apply to La. R.S. 9:5605. The court clarified that the prescriptive period begins when a plaintiff gains actual or constructive knowledge of facts suggesting they are victims of a tort, referencing Campo v. Correa's definition of constructive knowledge as sufficient notice to prompt inquiry. It also cited Carter v. Haygood, which applied the continuous representation rule to medical malpractice. In Jenkins' case, the court found she was notified of the default judgment and acted reasonably by inquiring with her attorney, who indicated a mistake had been made. Jenkins filed her malpractice claim within a year after her annulment suit was dismissed, leading the court to conclude that her actions were reasonable. The court distinguished Jenkins' situation from other cases due to the fiduciary duties of attorneys, asserting that requiring clients to consult different attorneys would lead to unnecessary litigation. Ultimately, the court deemed Jenkins' claim timely, as the continuous representation rule suspended the one-year prescriptive period. Judge Whipple concurred, noting Starns' malpractice in both allowing the default judgment and failing to address it thereafter. Judge Whipple determined that the malpractice actions leading to the seizure of Jenkins' funds occurred within one year prior to the lawsuit's filing, making the suit timely. In dissent, Judge McClendon argued that the one-year peremptive period began on January 16, 2007, when Jenkins was notified of the default judgment. La. R.S. 9:5605 establishes both one-year and three-year periods as peremptive. While agreeing with the majority that the malpractice involved a preliminary default against Jenkins, Judge McClendon asserted that the latest malpractice incident was on April 16, 2007, when Starns failed to appear in court. He contended that the one-year period did not start until Starns’ annulment suit was dismissed on July 28, 2008, and found the application of contra non valentem inappropriate. Judge McClendon criticized the majority for incorrectly relying on Hendrick, which applied outdated law prior to La. R.S. 9:5605, and noted that the continuous representation rule does not apply to peremptive periods as established in Reeder, which emphasized that such periods cannot be interrupted or suspended. He also stated that the majority's concerns regarding trust in attorneys were unfounded, particularly in cases of fraud, which were not present in Jenkins' allegations. Ultimately, Judge McClendon concluded that the trial court erred by applying the continuous representation rule to delay the one-year peremptive period. The one-year peremptive period established by La. R.S. 9:5605 is not subject to suspension. Jenkins discovered the alleged malpractice on January 16, 2007, with the incidents occurring by April 16, 2007. Consequently, Judge McClendon ruled that Jenkins' legal malpractice suit, filed on November 5, 2008, was untimely. Starns sought supervisory review, arguing that the court of appeal incorrectly applied the continuous representation rule, thereby suspending the one-year period until Jenkins' annulment suit was dismissed on July 28, 2008. Starns contended that being served with a default judgment should have alerted Jenkins to the malpractice, initiating the peremptive period. He claimed that the court of appeal's decision contradicted precedent established in Naghi and Reeder, which affirm that the one-year period is peremptive and begins on the date of discovery or should have been discovered. Jenkins countered that the trial court had determined she did not recognize the malpractice until her account was garnished, a realization within one year of filing the suit. She argued that the trial court's factual findings regarding her awareness were reasonable and not manifestly erroneous. Jenkins also referenced the continuous representation rule, asserting that Starns' attempts to annul the default judgment extended the time frame for filing her malpractice suit. Thus, she maintained that the court of appeal properly upheld the trial court's ruling against Starns' prescription exception. Under La. R.S. 9:5605(A), legal malpractice claims must be filed within one year of the act or within one year of discovering the act, but no later than three years from the act. The court of appeal noted the lack of clarity regarding the interpretation of 'discovery' in malpractice claims, yet relied on precedents from a medical malpractice case, Campo. In Campo, it was established that the prescription period begins when a plaintiff has actual or constructive knowledge of facts indicating they may be a victim of a tort. Constructive knowledge arises when a reasonable inquiry would alert the injured party to potential malpractice, even if they lack actual knowledge. The mere suspicion that something is wrong does not suffice to start the prescription period unless the plaintiff, through reasonable diligence, should have recognized the issue as potentially malpractice-related. The Court emphasized that the reasonableness of a patient’s actions or inactions hinges on various factors, including their education and the severity of symptoms. The court of appeal erred by claiming this Court had not addressed 'discovery' in legal malpractice; in fact, it was clarified in Teague v. St. Paul Fire and Marine Ins. Co., outlining that the date of discovery is when a reasonable person would have actual or constructive knowledge of the damage and the relationship to the delict, indicating potential tort liability. Thus, the rules for determining the discovery date in medical malpractice also apply to legal malpractice, affecting the computation of peremptive periods. Peremption in legal malpractice claims begins when a claimant is aware or should be aware of facts that could establish a cause of action. Mere suspicion of wrongdoing is insufficient; a claimant must have knowledge or constructive knowledge through reasonable diligence. Even when a client recognizes an adverse outcome, peremption does not commence if the client reasonably does not connect that outcome to malpractice. In this case, Jenkins’ peremptive period began when she received a default judgment notice and was informed by her attorney, Starns, of a mistake he made in January 2007. These events provided Jenkins with constructive knowledge of the malpractice, specifically Starns' failure to file a responsive pleading, as they indicated a direct relationship between his actions and the judgment against her. The court found that Jenkins' awareness of the judgment, coupled with Starns' admission of error, was sufficient to trigger the one-year peremptive period. The court did not consider a later date mentioned in Jenkins' petition, as her discovery of the malpractice occurred in January 2007. The court of appeal had previously applied the continuous representation rule, suggesting it might suspend the peremptive period despite Jenkins being put on notice. The key issue is whether this rule is applicable to delay the one-year peremptive period under Louisiana law. Starns argues that Jenkins' malpractice suit is perempted due to her failure to file within one year of being served with the confirmed judgment on January 16, 2007, claiming that this is when Jenkins became aware of the malpractice—specifically, Starns' failure to file a responsive pleading that resulted in a default judgment. Starns contends that the time limits established by La. R.S. 9:5605 are peremptive, meaning they cannot be extended or suspended by the continuous representation rule. Conversely, Jenkins and the court of appeal maintain that the continuous representation rule suspended the one-year period until her annulment suit was dismissed on July 28, 2008. The court agrees with Starns, determining that the continuous representation rule does not suspend the peremptive period under La. R.S. 9:5605. Historically, legal malpractice actions were subject to the one-year prescription under La. C.C. art. 3492. Louisiana courts have occasionally recognized exceptions to prescription through the doctrine of contra non valentem, which allows for suspension of prescription in certain circumstances—namely, when a legal cause prevents the action from being recognized, a condition related to the contract obstructs the creditor, the debtor acts to prevent the creditor from pursuing the claim, or the cause of action is unknown to the plaintiff. This court acknowledges that the third scenario aligns with the continuous representation rule, which allows clients to rely on their attorney's good faith without needing to question their methods. The rule safeguards the attorney-client relationship and prevents attorneys from undermining claims by invoking statutes of limitations. In Plaquemines Parish, the court determined that the continuous representation of plaintiffs by defendants, who were both public officials and attorneys, justified the application of the contra non valentem exception to suspend prescription. The court acknowledged in Braud that prescription is suspended during an attorney's ongoing representation concerning the specific matter related to the alleged malpractice. Similarly, in Lima, the continuous representation rule was applied to delay the one-year prescriptive period for a legal malpractice claim while representation continued. In Hendrick, the court addressed whether contra non valentem could suspend liberative prescription. It ruled that La. R.S. 9:5605 did not apply to the plaintiff’s malpractice claim, as the claim had prescribed before the statute's enactment in 1990. The court rejected the application of the continuous representation rule to suspend prescription because the plaintiff had actual knowledge of the potential malpractice by December 1988 and only filed suit in January 1991. The court clarified that contra non valentem does not suspend prescription if a litigant is capable of bringing a claim but fails to do so. A client who actively questions their attorney’s performance may not benefit from contra non valentem if equity does not warrant it. La. R.S. 9:5605, enacted in 1990 and amended in 1992, establishes the time limits for filing legal malpractice claims, requiring that actions be filed within one year from the date of the alleged act or discovery and, in any case, within three years of the act. These time limits are peremptive and cannot be renounced, interrupted, or suspended, as specified in Civil Code Articles 3458 and 3461. The statute exclusively governs the prescriptive and peremptive periods for actions against attorneys in Louisiana. La. R.S. 9:5605 establishes one-year and three-year peremptive periods for legal malpractice claims, as defined by Civil Code Articles 3458 and 3461, which cannot be renounced, interrupted, or suspended. Clear and unambiguous laws must be applied as written, without seeking legislative intent. The court has consistently affirmed that these periods are peremptive, as seen in cases like Naghi and Teague. In Reeder v. North, the appellate court ruled that a legal malpractice claim does not begin to accrue until the attorney-client relationship ends and a judgment is definitive, but the higher court disagreed, asserting that the three-year peremptive period applies regardless of when the claim is discovered. This means the plaintiff's claim was barred since it was not filed within three years of the negligent act. The legal malpractice statute is noted to have stronger language than the medical malpractice statute regarding peremption. The court acknowledged that while the three-year limit may seem harsh, it reflects the legislature's decision to impose a definitive timeframe for filing claims. In Teague, the court reiterated that the statute provides two peremptive limits: one year from the alleged act or discovery and a three-year absolute limit from the act itself. This three-year period serves as an exception to the commencement of peremption, distinct from the discovery rule. Ultimately, the court found the plaintiff lacked evidence linking his settlement outcome to his attorneys' alleged malpractice. The malpractice suit was deemed timely as it was filed within one year of discovering the malpractice and within three years of the malpractice act itself. The court reinforced its prior ruling in Reeder during the case of Naghi v. Brener, addressing whether an amended petition could relate back to the original filing under La. C.C.P. art. 1153 in the context of a peremptive time frame. The court clarified that the time limits established by La. R.S. 9:5605 are peremptive, leading to the conclusion that the plaintiff's claim in Reeder was untimely despite the delayed discovery of malpractice. The court acknowledged the potential unfairness of this strict application but upheld the legislative authority to set such time limits. Further analysis confirmed that both the one-year and three-year periods are peremptive. The statute outlines three peremptive periods: one year from the act, one year from the discovery, and a three-year limit when malpractice is discovered after the act. The court ruled that the continuous representation rule cannot suspend these peremptive periods, as doing so would undermine the statute's intent. The circumstances in Reeder were deemed relevant to the current case. In Reeder, the plaintiff argued that his attorney did not include all claims from a single transaction in the original federal complaint, which led to a bar on his subsequent state law claims due to res judicata. The trial court initially upheld the defendant's peremption claim under La. R.S. 9:5605, but the court of appeal reversed this decision, citing the continuous representation rule as a reason to suspend the peremptive period. The higher court determined that the court of appeal incorrectly applied this rule, clarifying that the continuous representation rule, based on the principle of contra non valentem, only pertains to prescription periods, not peremptive periods like those established in La. R.S. 9:5605. The Court emphasized that peremptive periods cannot be interrupted, suspended, or renounced, as stated in both La. R.S. 9:5605 and La. Civ. Code art. 3461. It distinguished peremption, which extinguishes rights after a specified time, from prescription, which only prevents enforcement without terminating the underlying obligation. As a result, the Court found the malpractice claim was filed too late, falling outside the three-year peremptive period outlined in La. R.S. 9:5605. This reasoning affirmed the statute's strict peremptive nature, underscoring that no exceptions apply to its timeframe. Jenkins had constructive knowledge of Starns' malpractice in January 2007 and filed her lawsuit in November 2008, which was within three years of the malpractice but over one year after discovery. The lower courts found her claim timely by applying the continuous representation rule to suspend the peremptive period, citing Lima and Hendrick. However, this court determined that reliance on Lima was misplaced, as neither Lima nor Hendrick addressed La. R.S. 9:5605 in the context of legal malpractice claims; they pertained to the one-year prescriptive period under La. C.C. art. 3492, which can be suspended or interrupted. The court clarified that the continuous representation rule operates as a suspension principle based on contra non valentem and cannot apply to peremptive periods, which are unaffected by such exceptions. The court referenced its previous rulings, stating that nothing can interfere with the running of a peremptive period and reiterated that exceptions like contra non valentem do not apply to peremption. In light of these principles, the trial court and court of appeal incorrectly applied the continuous representation rule to suspend the peremptive period for Jenkins' malpractice suit. The court emphasized that the statutory limitations in La. R.S. 9:5605 are peremptive and cannot be renounced, interrupted, or suspended, thereby reinforcing that the continuous representation rule cannot serve as an exception to the commencement of the peremptive periods. The statute La. R.S. 9:5605 establishes that the time periods it prescribes are peremptive, meaning they cannot be renounced, interrupted, or suspended, unlike prescriptive periods. The Court reaffirmed its decision in Reeder, clarifying that the continuous representation rule does not apply to suspend the three-year peremptive period, nor does it apply to the one-year peremptive period in La. R.S. 9:5605. Consequently, the Court reversed the appellate court's judgment, ruling that Jenkins' legal malpractice suit is untimely and dismissing the case. Justice Johnson dissents, arguing that the continuous representation rule should be applied analogously to the continuous treatment rule in medical malpractice, which suspends prescription while a healthcare provider continuously treats a patient. He argues that failing to apply this rule in legal malpractice cases results in illogical outcomes, where an attorney could avoid consequences by prolonging litigation past the peremptive period. Johnson asserts the legal malpractice claim should have been recognized from July 28, 2008, when the trial court dismissed the Petition to Annul, as Starns was still representing Jenkins and attempting to address the negative impacts of a default judgment. Justice Clark also dissents, supporting Justice Johnson's reasoning. Notably, the excerpt highlights that Jenkins was aware of her legal issues as early as January 2007 when she received the judgment, contradicting the trial court's and appellate court's mischaracterization of the one-year deadline as prescriptive rather than peremptive. The Court defined peremption as a fixed period for exercising a right, which, if not timely exercised, extinguishes the right. It is further noted that a cause of action for malpractice arises when the client experiences appreciable harm, even before all damages are realized.