LOMONT CASE AND ITS FUTURE APPLICABILITY

Lomont Case Summary and Its Future Applicability

By Jordan Parker

Certain cases only have an impact on the parties involved, and then there are cases with widespread implications. The landmark Louisiana legal malpractice case Lomont v. Bennett falls squarely in the latter category.

 

This case stems from the handling of divorce and related domestic matters. The client hired an attorney who was supposed to provide legal services which granted the client full ownership of her family home. The attorney, however, failed to make any record of the agreement. Later, the client’s former spouse recorded a lien through a creditor. This lien was not discovered by the client until two years later during an attempt to refinance the home.

 

The attorney made the argument that the client contacted her about the lien, she alerted the client that the agreement had not been recorded, informed the client of her right to obtain independent counsel, but the client declined the pursuit of a malpractice action. The client refuted the attorney’s claims and said that she was neither informed of the attorney’s malpractice nor of the wisdom in obtaining outside counsel. The attorney tried to remedy their mistake by telling the client that they would take appropriate corrective actions. The attorney made the client believe that she drafted a lawsuit to have the lien removed, contacted the ex-spouse regarding service, and negotiated with the bank attorney. With this information in mind, the client was under the assumption that the lien could be resolved and took no further action. It took fifteen months following the discovery of the lien for the attorney to communicate with the client that there was a conflict of interest, which could not be waived, and that the attorney could no longer assist the client with the lien. By this time, the three-year preemptive period to bring a legal malpractice suit against the attorney had already elapsed.

 

The Louisiana Supreme Court questioned the legitimacy of the attorney’s claims on three grounds. First, The Court was suspicious of why 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.”

 

Once the evidence was reviewed, 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 Court found that the attorney had “deliberately hid the truth” about her ability to have the lien taken care of when she assured the client that lawsuits were filed and moving forward. In fact, the Court found that the attorney “waited until the peremptive period for legal malpractice had presumably expired before disclosing the unwaivable conflict of interest and discontinuing her representation.” This action induced the client into believing to her detriment that the lawsuits would remove the lien. Also, the client “was unaware she should have pursued a legal malpractice claim.” The Court concluded that the attorney “intended to deceive [the client] thereby giving an advantage by avoiding a malpractice suit.”

 

The Court then shifted to the fraud exception and 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.” The Court applied this definition of fraud under Civil Code Article 1953 and stated that any action consisting on misrepresentations or suppressions of the truth (with intent to obtain an unjust advantage) will prohibit the application of the peremptive period. The concealment of prior malpractice to avoiding a legal malpractice lawsuit fits with the definition of fraud. Accordingly, 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).”

 

This Louisiana Supreme Court decision overrides a bevy of cases which held that the fraud exception as inapplicable to post-malpractice concealment which would have left the client in Lomont without a remedy. The Lomont decision is undoubtedly a win for all future victims of legal malpractice.

 

The only case since Lomont that has been able to distinguish itself from that decision is Firefighters’ Retirement System v. Grant Thompson, LLP. In this case, the plaintiffs contended that the peremptive periods were suspended by either (1) the equitable doctrine of contra non valentum or (2) [the law firm’s] post-malpractice fraudulent concealment. First, it was noted that the Supreme Court has already distinguished prescription from peremption in that contra non valentum does not apply to peremption. So, while contra non valentum does prevent the commencement of the running of prescription when the plaintiff does not know nor reasonably should know of a cause of action, the doctrine did not extend the peremptive period in that case. Second, the Plaintiffs failed to allege that the law firm made any omissions to them “with specific intent to deceive, made deliberate misrepresentations, or concealed the alleged misrepresentations.” Because these are elements of post-malpractice concealment, the plaintiffs did not allege a plausible fraud claim, and thus the fraud exception is not available to suspend the peremptive period. Further, the Court discussed the peremptive period in terms of the alleged malpractice in accounting. The Court found that while their claim was filed within the three-year peremptive period for fraud, it was filed well outside the one-year peremptive period for submission to an accounting review panel. Because Louisiana law is clear that Plaintiffs cannot bring a malpractice claim against [the firm] before submitting their claim to an accountant review panel, the Plaintiffs claims were filed outside the peremptive period and therefore extinguished. 

 

The difference pointed out by the Court in accounting malpractice cases is key to watch for those particular types of alleged malpractice. This case is by no means a resounding defeat for victims of legal malpractice and Lomont is still a landmark legal malpractice case in Louisiana.

 

2019-09-26T14:23:07+00:00