NEW ORLEANS — A state appeals court has declined to order payment of legal costs for a man whose New Orleans attorney appealed a judgment of more than $500,000 in a legal malpractice judgment over a botched bankruptcy case.
In its seven-page judgment issued March 27 in the breach of contract and legal malpractice appeal, the Louisiana Fourth Circuit Court of Appeal affirmed a lower court's dismissal with prejudice of a petition to annul by the attorney, his law firm and insurance company. The appeal court also sustained the exception of prescription filed the attorney's former client, Kevin Williams.
"We also decline to award damages for a frivolous appeal," the appeal court's judgment said.
Judges on the appeal court's panel were Chief Judge James McKay III, and judges Terri Love and Edwin Lombard.
The case stems Williams hiring now-defendants P. Michael Breeden and the Breeden Law Firm in December 2011 to represent him in his bankruptcy filing, according to the background portion of the appeal court's judgment. Williams argued the defendants failed to timely institute a Chapter 13 bankruptcy filing on his behalf of Williams, resulting in the loss of "two pieces of immovable property" he owned that were sold in a sheriff's sale.
In May 2013, Williams petitioned for damages, alleging legal damages against Breeden, his law firm and the third named defendant, XYZ Insurance Co., and filed a motion for preliminary default in July 2014. The following month, Orleans Parish Civil District Court Judge Kern Reese entered default judgment in favor of Williams, awarding him $536,000 in damages.
In August 2015, the defendants petitioned to annul the award, claiming it was "an absolute nullity" under Louisiana law and based on an alleged failure of notice. That petition was dismissed without prejudice in February of the following year for failure to issue citation and service to Williams.
After consolidation of the proceedings, Williams then filed a peremptory exception of prescription, claiming a new petition to annul was prescribed under state law. In July 2018 Reese issued a judgment that maintained the exception of prescription, dismissed the defendants' petition to annul the default judgment and ordered the defendants to pay costs.
The defendants appealed, arguing the trial court was wrong to grant exception of prescription, alleging they had not been served prior to the hearing date. The defendants also said the petition to annul "clearly demonstrates on its face that the judgment is an absolute nullity, which can be brought at any time," the appeal court's judgment said.
In his answer to the appeal, Williams sought "attorney's fees and costs for a frivolous appeal."
In reviewing the case, the appeal court disputed the defense claim of having received no notice, pointing to notice the defendant received in May 2018 in open court that the matter would be continued until the following June.
"Accordingly, the record does not support the argument by Mr. Breeden that he had no notice of the June 29, 2018 hearing," the judgment said.
The appeal court also did not agree with the defense claim of absolute nullity of the previous judgment, pointing out the original petition for nullity had been filed in August 2015.
"Therefore, Mr. Breeden had knowledge on that date of the facts supporting his petition for nullity," the appeals court's judgment said. "When his petition was dismissed without prejudice Feb. 2, 2016, he could have refilled it at any time. However, he chose to wait until Feb. 20, 2018, to file another petition [a delay of more than two years]. Clearly, his claim has prescribed."
The court also found that Williams' request for fees and costs over an allegedly frivolous appeal was based on a state statute that "is penal in nature and must be strictly construed."
"Moreover, appeals are favored, and damages for frivolous appeal are not granted unless they are clearly due," the appeal court's judgment continued. "Even when an appeal lacks serious legal merit, damages for frivolous appeal will not be made unless it is clear that the appeal was taken solely for the purpose of delay or that appellant's counsel is not serious in the position that he advances."