Opinion
2022 CA 0848
12-29-2023
Gregory FAIA v. ABC INSURANCE COMPANY and Stacy Palowsky
Jason Z. Landry, Lawrence J. Centola, III, Scott R. Bickford, New Orleans, Louisiana, Counsel for Plaintiff/Appellant Gregory Faia Gustave A. Fritchie, III, McDonald G. Provosty, New Orleans, Louisiana, and Joseph R. Ward, Jr., Covington, Louisiana, Counsel for Defendants/Appellees Stacy Palowsky and Palowsky Law, LLC
On Appeal from the Twenty-Second Judicial District Court, In and for the Parish of St. Tammany, State of Louisiana, Docket No. 2021-11829, Honorable Ellen Creel, Judge Presiding
Jason Z. Landry, Lawrence J. Centola, III, Scott R. Bickford, New Orleans, Louisiana, Counsel for Plaintiff/Appellant Gregory Faia
Gustave A. Fritchie, III, McDonald G. Provosty, New Orleans, Louisiana, and Joseph R. Ward, Jr., Covington, Louisiana, Counsel for Defendants/Appellees Stacy Palowsky and Palowsky Law, LLC
BEFORE: GUIDRY, C.J., McCLENDON, HOLDRIDGE, CHUTZ, AND GREENE, JJ.
The Honorable Guy Holdridge, retired, is serving as judge pro tempore by special appointment of the Louisiana Supreme Court.
HOLDRIDGE, J.
2In this legal malpractice action, the plaintiff appeals the judgment of the trial court that sustained the defendants’ peremptory exception raising the objection of peremption and dismissed his petition for damages with prejudice. For the reasons that follow, we reverse the judgment and remand for further proceedings.
FACTS AND PROCEDURAL HISTORY
On April 23, 2021, Gregory Faia, a Louisiana attorney, filed a Petition for Damages against Stacy Palowsky and Palowsky Law, LLC (Ms. Palowsky), in the 22nd Judicial District Court for the Parish of St. Tammany. Therein, he alleged that Ms. Palowsky committed legal malpractice and breached her fiduciary duties of loyalty and confidentiality arising out of her representation of Mr. Faia in the matter entitled Solares v. Faia, Docket No. 785-016, in the 24th Judicial District Court for the Parish of Jefferson (the Solares suit). In that matter, Sigmund Solares filed suit against his former business partner, Michael Gardner, and his attorney, Mr. Faia, among others, alleging that he had been defrauded by the defendants in their business dealings with Mr. Solares. Ms. Palowsky had previously represented both Mr. Faia and Mr. Gardner in the Solares suit.
In the matter currently before us, Mr. Faia alleged that Ms. Palowsky had been representing both Mr. Faia and Mr. Gard- ner since 2017 when Ms. Palowsky was employed at the Bezou Law Firm, and that her representation of Mr. Faia and Mr. Gardner continued with Palowsky Law, LLC, after her disassociation with the Bezou Law Firm. Mr. Faia also asserted that Ms. Palowsky was still representing Mr. Faia on April 29, 2020, when she filed a cross-claim on behalf of Mr. Gardner against him in the Solares suit. Mr. Faia averred that Ms. Palowsky did not discuss filing the cross-claim with him, nor did she attempt to obtain a waiver from him, in violation of several Louisiana Rules of Professional Conduct. Mr. Faia then claimed that, as his counsel, Ms. Palowsky owed Mr. Faia a fiduciary duty of loyalty and that 3during her representation of Mr. Faia, he relied on that duty of loyalty, which resulted in Mr. Faia sharing confidential information with Ms. Palowsky. Mr. Faia alleged that "Ms. Palowsky divulged confidential attorney-client information to [Mr.] Gardner in advance of the April 29, 2020 filing of the cross-claim in the Solares suit" and that the "divulgence of Mr. Faia’s confidential information by Ms. Palowsky caused damages to [Mr. Faia]."
Further, Mr. Faia asserted that Ms. Palowsky withdrew from representing him on May 6, 2020, but that by the time of her withdrawal, Ms. Palowsky had already breached her duties to Mr. Faia causing him damage. Lastly, Mr. Faia alleged that the filing of the cross-claim in the Solares suit on April 29, 2020, was the first date on which he knew or should have known that Ms. Palowsky breached her duties to him.
On June 11, 2021, Ms. Palowsky filed an Answer, Affirmative Defenses, and Reconventional Demand. In her answer, Ms. Palowsky denied most of Mr. Faia’s allegations, but admitted to representing both Mr. Faia and Mr. Gardner for approximately three and a half months from April 29, 2019 to August 12, 2019. Ms. Palowsky stated that the representation of both Mr. Faia and Mr. Gardner was arranged and set up by Mr. Faia, who had been the attorney for Mr. Gardner and Mr. Solares since approximately 2009. Ms. Palowsky further set forth that on August 12, 2019, the trial court signed an order allowing Ms. Palowsky, as well as the Bezou Law Firm, to withdraw as counsel for Mr. Faia and Mr. Gardner in the Solares suit, and that on August 22, 2019, she re-enrolled in the Solares suit as the attorney for Mr. Gardner only. Ms. Palowsky specifically denied that she represented Mr. Faia in the Solares suit after August 22, 2019. Ms. Palowsky stated that Mr. Faia was not her client on April 29, 2020, and further that she did not sue Mr. Faia, as another 4attorney filed the cross-claim. However, Ms. Palowsky acknowledged that she was listed on the cross-claim as an attorney for Mr. Gardner in his status as a defendant in the Solares suit.
Ms. Palowsky attached to her answer all motions to enroll and to withdraw relevant to this matter.
Ms. Palowsky also asserted that Mr. Gardner put Mr. Faia on notice on March 12, 2020, that Mr. Gardner had just learned that he had been misled for years and defrauded by Mr. Faia, just as Mr. Solares had been. This information was discovered through documents that Mr. Faia and his business partner, Vernon Decossas, had produced in a related Florida bankruptcy proceeding, instituted by one of Mr. Faia’s companies against a company owned at the time by Mr. Gardner. Ms. Palowsky then pointed out that the next day, in his deposition, Mr. Faia testified that he had no objection to Ms. Palowsky’s continued representation of Mr. Gardner even though they were adverse to each other and that if there was any conflict, he waived it. Ms. Palowsky further answered that on March 24, 2020, she put two of Mr. Faia’s attorneys on notice, via a telephone call and in writing, that Mr. Gardner was aware that Mr. Faia had defrauded him. She also asserted that on April 16, 2020, she was informed by one of those attorneys that, while he personally would not "do anything" to Ms. Palowsky based on any alleged conflict of interest, he could not "control" Mr. Faia. In her answer, Ms. Palowsky specifically denied that she filed suit against Mr. Faia or that she divulged any confidential information. Additionally, in her reconventional demand, Ms. Palowsky averred that the allegations in Mr. Faia’s petition constituted defamation, libel, and slander, as well as intentional infliction of emotional distress, inasmuch as Mr. Faia intentionally asserted false allegations of fact and law in bad faith against her.
Thereafter, on August 26, 2021, Ms. Palowsky filed a peremptory exception raising the objection of peremption, asserting that Mr. Faia’s claims were time barred based on the one-year peremptive period for legal malpractice claims. Ms. Palowsky averred that Mr. Faia is a practicing attorney in Louisiana since 1991 and, therefore, 5is a sophisticated party who understood the circumstances and consequences of the events between March 13, 2020, and April 16, 2020. Mr. Faia opposed the exception.
On January 13, 2022, the trial court held a hearing on the peremptory exception raising the objection of peremption. The parties introduced into evidence, without objection, the exhibits attached to Ms. Palowsky’s exception and Mr. Faia’s opposition thereto. On April 12, 2022, the trial court issued Reasons for Judgment sustaining the peremptory exception and dismissing with prejudice all claims of Mr. Faia. On May 5, 2022, the trial court signed a judgment in accordance with its ruling, and this appeal followed.
ASSIGNMENT OF ERROR
In his appeal, Mr. Faia contends that the trial court erred in sustaining the peremptory exception because the harm to him did not begin until Ms. Palowsky, on behalf of Mr. Gardner, filed the crossclaim in the Solares suit. Mr. Faia argues that he did not discover that Ms. Palowsky had been assisting Mr. Gardner to sue him until she filed the cross-claim on behalf of Mr. Gardner on April 29, 2020. Therefore, according to Mr. Faia, his lawsuit, filed on April 23, 2021, was timely.
APPLICABLE LAW
[1] Peremption is a period of time fixed by law for the existence of a right. Unless timely exercised, the right is extinguished upon the expiration of the peremptive period. La. C.C. art. 3458. When the peremptive period has run, the cause of action itself is extinguished unless timely exercised. Straub v. Richardson, 2011-1689 (La. App. 1 Cir. 5/2/12), 92 So.3d 548, 552, writ denied, 2012-1212 (La. 9/21/12), 98 So.3d 341, cert. denied, 569 U.S. 918, 133 S.Ct. 1805, 185 L.Ed.2d 811 (2013). Except as otherwise provided by law, peremption may not be renounced, interrupted, or suspended. La. C.C. art. 3461.
[2] 6The objection of peremption is raised by the peremptory exception. La. C.C.P. art. 927(A)(2). Peremption has been likened to prescription; namely, it is prescription that is not subject to interruption or suspension. Rando v. Anco Insulations, Inc., 2008-1163 (La. 5/22/09), 16 So.3d 1065, 1082. Thus, the rules governing the burden of proof as to prescription also apply to peremption. Id. Ordinarily, the exceptor bears the burden of proof at the trial of the peremptory exception. However, if prescription (or peremption, as herein) is evident on the face of the pleadings, the burden shifts to the plaintiff to show the action has not prescribed. Lomont v. Bennett, 2014-2483 (La. 6/30/15), 172 So.3d 620, 627, cert. denied, 577 U.S. 1139, 136 S.Ct. 1167, 194 L.Ed.2d 178 (2016).
[3–5] At the hearing on a peremptory exception pleaded prior to trial, evidence may be introduced to support or controvert the exception. La. C.C.P. art. 931. In the absence of evidence, an objection of peremption must be decided upon the facts alleged in the petition with all of the allegations accepted as true. Lomont, 172 So.3d at 627. However, when evidence is introduced, as in this case, the court is not bound to accept plaintiff’s allegations as true. If evidence is introduced, the trial court’s findings of fact are reviewed under the manifest error-clearly wrong standard of review. 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.
[6] 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, Lomont, 172 So.3d at 627.
Louisiana Revised Statutes 9:5605 governs the peremptive period within which to initiate an action for legal malpractice and provides, in pertinent part:
7A. 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 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.
C. Notwithstanding any other law to the contrary, in all actions brought in this state against any attorney at law duly admitted to practice in this state, any partnership of such attorneys at law, or any professional law 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, the prescriptive and peremptive period shall be governed exclusively by this Section.
[7] A straightforward reading of the statute clearly shows that it sets forth two peremptive limits within which to bring a legal malpractice action, namely one year from the date of the alleged act or one year from the date of discovery with a three-year limitation from the date of the alleged act, omission, or neglect to bring such claims. Teague v. St Paul Fire and Marine Ins. Co., 2007-1384 (La. 2/1/08), 974 So.2d 1266, 1274. Thus, under the provisions of La. R.S. 9:5605, an action is not perempted if it is brought within one year of the date of discovery and the record shows that the claimant was reasonably unaware of malpractice prior to the date of discovery and his delay in filing suit was not due to his willful, negligent, or unreasonable action. Teague, 974 So.2d at 1275.
[8, 9] The "date of discovery" from which peremption begins to run is the date on which a reasonable person in the position of the plaintiff has, or should have, either actual or constructive knowledge of the damage, the delict, and the 8relationship 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. Put more simply, the date of discovery is the date the negligence was discovered or should have been discovered by a reasonable person in the plaintiff’s position. Teague, 974 So.2d at 1275. See also Currier v. Anding, 2017-0438 (La. App. 1 Cir. 11/1/17), 235 So.3d 1204, 1208-09, writ denied, 2018-0038 (La. 3/2/18), 269 So.3d 714.
[10–12] While it is true that prescription does not begin to run until discovery of facts which give rise to a cause of action, it is equally clear that ignorance of one’s legal rights based upon known facts does not delay the running of prescription. See CamSoft Data Systems, Inc. v. Southern Electronics Supply, Inc., 2019-0730 (La. App. 1 Cir. 7/2/19), 2019 WL 2865138, *7 (unpublished), writs denied, 2019-01232, 2019-01436, 2019-01349 (La. 11/19/19), 282 So.3d 1069, 1070, 1073. 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 he is a victim of a tort. The ultimate issue in determining whether a plaintiff had constructive knowledge is the reasonableness of his action or inaction, in light of his education, intelligence, and the nature of the defendant’s conduct. Id., citing Bailey v. Khoury, 2004-0620 (La. 1/20/05), 891 So.2d 1268, 1276. These rules are applicable to peremption.
[13, 14] Further, there is no requirement that the quantum of damages be certain or that they be fully incurred, before a plaintiff has a right of action. Bailey, 891 So.2d at 1276. In cases in which a plaintiff has suffered some but not all of his damages, prescription runs from the date on which the plaintiff first suffered actual and appreciable damage, even though the plaintiff may thereafter come to a more precise realization of the damages he has already incurred or incur further damage as a result of the completed tortious act. Id.
9 DISCUSSION
[15] Mr. Faia maintains that prior to the filing of the April 29, 2020 cross-claim in the Solares suit by Mr. Gardner against Mr. Faia, he had no way to know, or even suspect, that Ms. Palowsky had breached her fiduciary duty of loyalty and had been assisting Mr. Gardner in suing him. Therefore, he had no reason to file a legal malpractice action against Ms. Palowsky. Mr. Faia maintains that the April 29, 2020 cross-claim filing put him on notice for the first time that Ms, Palowsky had been working on behalf of Mr. Gardner to sue Mr. Faia and that Ms. Palowsky may have used sensitive confidential information gleaned from her private and privileged conversations with Mr. Faia or disclosed such information to Mr. Gardner and his other attorney to assist Mr. Gardner in suing Mr. Faia. Therefore, according to Mr. Faia, the trial court was manifestly erroneous in concluding that he had knowledge prior to April 29, 2020, of Ms. Palowsky’s allegedly harmful acts and the damages stemming therefrom.
Because peremption is not evident on the face of the pleadings herein, Ms. Palowsky had the burden of proof on the peremptory exception. In support of her objection of peremption, Ms. Palowsky introduced into evidence her affidavit, with excerpts from Mr. Faia’s deposition and the emails from March 23 and 24, 2020, between herself and two of Mr. Faia’s attorneys, attached thereto. In opposition to the peremptory exception, Mr. Faia submitted his affidavit, with several exhibits attached, including emails from August 13 and 14, 2019, between Ms. Palowsky, Mr. Faia, and Mr. Gardner regarding her representation of both of them in the Solares suit, together with an engagement letter; the engagement letter signed by Mr. Faia on August 15, 2019; excerpts from Mr. Faia’s deposition; the ex parte motion to enroll Jean-Paul Layrisson as additional counsel of record for Mr. Gardner in the Solares suit in April of 2020; a letter dated April 30, 2020, to Ms. Palowsky from Michael W. Magner, an attorney for Mr. Faia and several of his companies; Mr. 10Faia’s motion to disqualify Ms. Palowsky in the Florida bankruptcy proceeding; Ms. Palowsky’s, response to the motion to disqualify, which included a detailed outline of relevant events; and a screenshot of text messages between Mr. Faia and Ms. Palowsky on March 12, 2020. Mr. Faia also introduced into evidence the affidavit of one of his attorneys, Walter J. LeBlanc, Jr., and a copy of his Petition for Damages.
In granting the peremptory exception, the trial court, in its written reasons, first summarized the history of the parties:
Faia, an attorney, represented Gardner personally, in family matters, and in business matters, including a business in which Solares was a co-owner. That representation went on for decades. Ultimately[,] Faia, Gardner, and Solares, together with Vernon Decossas (also heavily involved in the businesses as a top executive) became entangled in multiple businesses and lawsuits, including one in which one of Faia’s businesses sued one of Gardner’s businesses in Florida, These lawsuits existed even while Faia was still representing Gardner and long before the two had their "falling out" in March, 2020, The lawsuits and the parties and businesses were so entangled that they have operated pursuant to a Joint Defense Agreement from the outset of these suits which involve Faia personally, Faia’s law practice, Gardner, Decossas, Solares, and a number of businesses they owned. Neither party provided a copy of the agreement to this court, but both agreed that the Joint Defense Agreement specifically addresses conflicts of interest.
The very existence of such an agreement is indicative that all were aware from the very beginning of the possibility, indeed the likelihood, of the precise scenario that has arisen here. Faia knew of the extensive entanglements and was a party to the Joint Defense Agreement since he represented Gardner personally, with his family, and his business interests over many years. Additionally, Faia had an ownership interest in several of the businesses involved in the litigation as well as being sued personally in his individual and professional capacity through his law firm.
The backdrop against which this lawsuit is set comes into sharper focus starting in March, 2020. On or around March 10, 2020, financial documents were disclosed in the Solares suit in which Palowsky represented Gardner.
Those documents revealed financial information that Gardner interpreted to mean that Faia had not only defrauded Solares (the subject matter of the Jefferson Parish suit), but had defrauded Gardner as well. On March 12, 2020, Gardner confronted Faia in regards to the financial discrepancies and the fraud implications.
11Against this history, the record then shows that emails between Ms. Palowsky and two of Mr. Faia’s attorneys on March 23 and 24, 2020, after the production of the tax returns and other financial documents, revealed the actual and substantial income of the companies owned by Mr. Faia and Mr. Decossas. With the production of the documents by Mr. Faia, through one of his companies, the emails indicated that Mr. Gardner became aware that he had been financially misled and possibly defrauded by Mr. Faia.
The record also establishes that on April 16, 2020, a telephone conversation took place between Ms. Palowsky and Mr. LeBlanc, an attorney for Mr. Faia. In her affidavit submitted in support of her peremptory exception, Ms. Palowsky attested that, during that conversation, there was discussion regarding Ms. Palowsky’s alleged conflict of interest and whether Mr. Faia might choose to take legal action against her as a result. In his own affidavit submitted in opposition to the exception, and as noted by the trial court, Mr. LeBlanc never refuted this allegation. However, and more importantly, Mr. LeBlanc attested that at no point in their conversation was there any discussion about Ms. Palowsky or Mr. Gardner taking steps to sue Mr. Faia. While the parties discussed in detail the possible conflict of interests, in no conversation was it indicated that Ms. Palowsky or Mr. Gardner were going to sue Mr. Faia.
Specifically, Ms. Palowsky attested:
Following the sending of these emails referenced above, I had a telephone conversation on April 16, 2020, with WJ LeBlanc, the attorney representing Mr. Faia and Faia Development Group, LLC. During that conversation, the subjects of my having an alleged conflict of interest with Mr. Faia and whether Mr. Faia might take legal action against me as a result of that alleged conflict of interest arose.
The trial court found that Mr. Faia was aware of the alleged acts of legal malpractice that formed the basis of his claims for more than one year before he filed suit against Ms. Palowsky. The trial court specifically found, based on the evidence presented, that Mr. Faia was aware of his alleged cause of action for legal 12malpractice against Ms. Palowsky no later than April 17, 2020. In its reasons, the trial court stated:
While the April 16th telephone call referenced what Faia could do, even more telling is what Faia actually did the very next day. On April 17th[,] Faia hired yet another attorney who enrolled in [the] state court litigation on behalf of all defendants except Gardner. … Retaining an attorney the day after the April 16, 2020, phone call to handle exactly this malpractice part of the litigation is proof that Faia in fact knew by April 17th of any actions Palowsky may have taken against his interest, of the damage caused, and of the strong possibility that a suit by Gardner was coming his way. The fact that Gardner’s suit
We note that in Ms. Palowsky’s response to Mr. Faia’s motion to disqualify her in the bankruptcy proceeding, she stated that Mr. Magner enrolled in the state court litigation as additional counsel of record for all of the defendants except for Mr. Gardner, attaching a copy of the motion to enroll as an exhibit. The exhibit is not part of this record.
against Faia did not get filed until April 29th, and that Faia did not respond to that suit until the conflict and malpractice demand letter [of] April 30th, does not mean he was not aware of the damage and potential malpractice claim.
The April 30, 2020 letter, by Mr. Magner, on Mr. Faia’s behalf, requested among other things that Ms. Palowsky immediately place her "malpractice insurance carrier on notice that Mr. Faia is considering initiating a claim to recover damages" against her.
Thus, the trial court found that Mr. Faia knew by April 17, 2020, of the actions Ms. Palowsky took against his interests, of the damage caused, and that Mr. Gardner would be filing suit against him. However, the trial court failed to explain or discuss how Mr. Faia suffered any actual or appreciable damages prior to the cross-claim being filed against him. The trial court acknowledged that for many years the parties had "extensive entanglements" and were parties to a Joint Defense Agreement. The trial court further stated that "[t]he very existence of such an agreement is indicative that all were aware from the very beginning of the possibility, indeed the likelihood, of the precise scenario that has arisen here." Against the facts of this case, it is clear that Mr. Faia would not have had any basis to file a legal malpractice case against Ms. Palowsky until he was actually sued by Mr. Gardner and Ms. Palowsky.
In this case, Ms. Palowsky had the burden of proving Mr. Faia’s claims were perempted. See Lomont, 172 So.3d at 627. Mindful of our standard of review, we 13hold that the trial court lacked a reasonable basis for its factual findings, and its holding was manifestly erroneous. As noted by the trial court, the parties had an extended period of time possible to assert a conflict of interest and/or ethical claim. However, the extent of the conflict of interest and possible cause of action for legal malpractice would not have been known by Mr. Faia until Mr. Gardner filed his April 29, 2020 cross-claim for fraud against Mr. Faia in the Solares suit. See Lomont, 172 So.3d at 639. Before the cross-claim was filed, there was no way that Mr. Faia could have alleged or filed an action for damages based upon the legal action filed by Mr. Gardner. While the parties had a long history of questionable legal practices, it was not until the cross-claim was filed that Mr. Faia knew or should have known that this action by Ms. Palowsky was different from her past practices. No cause of action against Ms. Palowsky for alleged legal malpractice or breach of her fiduciary duties of loyalty and disclosure owed to Mr. Faia could have accrued as a matter of law until the cross-claim was filed. Specifically, the alleged legal malpractice based on Ms. Palowsky’s alleged improper divulgence of Mr. Faia’s privileged information to Mr. Gardner and the filing of the crossclaim by Mr. Gardner did not arise until April 29, 2020, when the cross-claim was filed against Mr. Faia in the Solares suit. Before then, Mr. Faia knew that Ms. Palowsky had a fiduciary duty not to divulge his privileged information and knew she had an obligation under the Rules of Professional Conduct to give him notice and seek his informed consent before taking any adverse action against him. As acknowledged by the trial court, the parties worked under a Joint Defense Agreement for years, whereby confidential information was divulged to parties that may have had conflicting or competing interests. However, in these years of conflict, Ms. Palowsky did not use the confidential information she acquired to instigate a cause of action being filed against Mr. Faia. A reasonable client, and even more so, a reasonable client who is also an attorney, would not reasonably think that his own 14attorney would breach that fiduciary duty, i.e., use information from her ongoing representation of him to help a co-defendant sue him. Mr. Faia’s cause of action for legal malpractice and claim for damages did not arise or become exigible until the crossclaim was filed against him by Mr. Gardner on April 29, 2020.
Further, contrary to the trial court’s findings, the fact that Mr. Faia hired an attorney on April 17, 2020 does not reasonably indicate that he knew Ms. Palowsky had divulged his privileged information to Mr. Gardner or that he knew that there was a "strong possibility that a suit by Gardner was coming his way." Even if Mr. Faia thought an action would be filed against him, his cause of action did not arise until the cross-claim was actually filed on April 29, 2020. Mr. Faia did not know, nor should he have known, the date the cross-claim against him would be filed by Mr. Gardner. Upon the filing of the cross-claim, Mr. Faia’s cause of action for legal malpractice and claim for damages against Ms. Palowsky became exigible and the peremptive period began.
[16] Based on our thorough review of the record, we find that the trial court lacked a reasonable basis for its factual findings. The trial court manifestly erred in finding that Ms. Palowsky carried her burden of proving that Mr. Faia knew, or should have known, of his legal malpractice cause of action against Ms. Palowsky existed prior to April 29, 2020. Accordingly, we reverse the trial court’s May 5, 2022 judgment sustaining Ms. Palowsky’s peremptory exception raising the objection of peremption and dismissing Mr. Faia’s claims with prejudice and remand this matter for further proceedings.
Mr. Faia argues on appeal that the trial court erred in failing to apply the fraud exception found in La. R.S. 9:5605(E). Mr. Faia contends that Ms. Palowsky’s nondisclosure of her harmful acts is fraud by omission, which implicates the fraud exception. Louisiana Revised Statutes 9:5605(E) provides that the peremptive period found in Subsection A of the statute "shall not apply in cases of fraud, as defined in Civil COGC Article 1953." Article 1953 provides that "[f]raud is a misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss or inconvenience to the other. Fraud may also result from silence or inaction." Mr. Faia made no allegation of fraud in his petition, fraud was not argued in the trial court, and the trial court made no finding regarding same. As a general rule, appellate courts may not address issues raised for the first time on appeal; rather, we address only those issues previously presented by the parties and considered by the trial court, Jackson v. Home Depot, Inc., 2004-1653 (La. App. 1 Cir. 6/10/05), 906 So.2d 721, 725. Furthermore, because of our holding in this matter, we pretermit any discussion of the fraud exception.
15 CONCLUSION
For the above reasons, we reverse the May 5, 2022 judgment of the trial court that sustained the peremptory exception raising the objection of peremption and dismissed all claims with prejudice by Gregory Faia against the defendants, Stacy Palowsky and Palowsky Law, LLC, and we remand this case to the trial court for further proceedings. All costs of this appeal are assessed against the defendants, Stacy Palowsky and Palowsky Law, LLC.
REVERSED AND REMANDED.
McClendon, dissents with reasons.
McClendon, J., dissenting.
1The majority errs in holding that no cause of action against Ms. Palowsky could have accrued, as a matter of law, until the cross claim was filed. While the full extent of the damages may not have been known by Mr. Faia until the filing of the cross claim, the sharing of a client’s confidential information and the breach of the fiduciary duty owed to that client would cause actual and appreciable harm sufficient for a cause of action to accrue, regardless of whether that information is subsequently acted upon.
Moreover, even though I may have found differently, under our manifest error standard of review, I cannot say that the trial court lacked a reasonable basis for its factual finding that Mr. Faia knew or should have known by April 17, 2020, that Ms. Palowsky assisted Mr. Gardner in gathering information to be used to file a claim against Mr. Faia. In making its determination, the trial court specifically referenced the April 16, 2020 telephone conversation between Ms. Palowsky and Mr. LeBlanc, one of Mr. Faia’s attorneys, regarding Ms. Palowsky’s alleged conflict of interest and whether Mr. Faia might take legal action against her as a result of that alleged conflict of interest. Additionally, Mr. Faia hired a new attorney, Mr. Magner, the day after the telephone call, who later sent a letter on behalf of Mr. Faia to Ms. Palowsky stating that she should immediately contact her malpractice insurer. Further, as admitted by Mr. Faia in his petition, the divulgence of the confidential information by Ms. Palowsky in advance of the filing of the cross claim, caused him damages.
2Therefore, based on the totality of the circumstances presented, a reasonable basis existed for the trial court’s determination that Mr. Faia’s cause of action against Ms. Palowsky accrued no later than April 17, 2020. Accordingly, I would have found no error by the trial court in sustaining Ms. Palowsky’s peremptory exception raising the objection of peremption and dismissing Mr. Faia’s claims with prejudice.
For these reasons, I respectfully dissent.