Paul Breaux, an employee injured on the job, hired an attorney to represent him in a personal injury suit against his employer, Jade Marine. Unbeknownst to Breaux, the company settled the matter out of court. A check in the amount of $60,000 was sent to the attorney, which was immediately forged and deposited into the attorney’s IOLTA account at Gulf Coast Bank. After about fourteen months, Breaux finally learns of this despicable action by the attorney and files a claim against the bank for conversion. Specifically, the action was for check conversion or conversion of a negotiable instrument.
However, Breaux hit a wall when the defendant raised the exception that the statute of limitations for such a claim under La.R.S. 10:3-420 is strictly one year. Accordingly, Breaux appealed, arguing that the defendant’s exception was ineffective based on the doctrine of contra non valentem, specifically that “a prescription does not run against one who is unable to act.” Breaux emphasized that he was not equipped to discover what his attorney did, as he was under the impression that his case was ongoing. The court was not convinced.
Breaux sought the support from the case of Marin v. Exxon Mobil Corp., 09-2368, 09-2371(La. 10/19/10), 48 So.3d 234, which outlined four situations when contra non valentem (doctrine outlining prescription and when an individual knows the clock of liability begins) applies to defeat prescription. The fourth and most difficult category, known as the “discovery rule,” is where Breaux saw an opportunity. Under this exception, a plaintiff’s claim is not barred when the statute of limitations has run if the defendant has acted in fraudulent concealment.
Unfortunately Breaux’s argument failed for the following reason:
Here, the bank could not be held responsible for the lost funds, as it did not act out of the ordinary. Banks are accustomed to depositing large client checks into lawyers’ trust accounts, and had no reason to suspect that the instrument had been forged. The bank did not participate in any fraudulent acts to conceal anything. Although exceptions of prescription require a substantive case-by-case factual analysis, the courts share a common goal to encourage consistency and uniformity. The holding in this case is aligned with the Uniform Commercial Code and reinforces the legislative intent of the utility of negotiable instruments, that they “are intended to facilitate the rapid flow of commerce by providing certainty and finality in commercial transactions” as stated in the court’s opinion.
The real question: Breaux possibly saw a chance for full compensation with the bank as the defendant. However, it is clear that Breaux’s true cause of action should have been filed against his attorney along with a heavy claim for malpractice. At the very least, the fourth class of contra non valentem exceptions is satisfied by the attorney’s actions, irrespective of other possible victories against this unethical practitioner.
Cases such as this are not only a valuable tool for learning legal practices but also why hiring the proper attorney is crucial.
If you suspect your attorney has embezzled your funds, please contact the Berniard Law Firm Toll-Free at (866)-574-8005. We will work to get your money back.