Insurance Dispute

November 21, 2011

Louisiana Fourth Circuit Court of Appeal Punishes For Duplicitous Suits

As part of our Constitutional right to due process, an individual is allowed to bring grievances before a court. However, certain judicial policies may be enacted to deny plaintiffs from bringing suits that have already been litigated, are being brought with the intent to harass, or are frivolous. The purpose behind such policies is to make courts as efficient as possible by deterring such actions. A recent case out of the Louisiana Fourth Circuit Court of Appeal shines a light on several of these deterrents.

In Mendonca v. Tidewater, Inc., the plaintiff sought to nullify several final judgments made by the district court. Mendonca’s list of suits stretched over four years, with multiple appeals and pleas for annulment. However, none of Mendonca’s nullity claims or his appeals were successful. In his final appeal for anulment, the Fourth Circuit Court of Appeals handed down three restrictions that laid Mendonca’s long line of cases to rest.

The first of these restrictions was the court’s upholding of the defendent’s plea of res judicata and failure to state a claim. When res judicata is enacted, the court declares one of two denials. First, that the claim has been subject to a final judgment and thus no longer qualifies for an appeal, or second, that the litigant cannot bring a claim against the same party in a second claim because all claims should have been brought against that party in the initial suit. The policy considerations supporting res judicata is to preserve court resources and protect defendants from being subject to litigation multiple times, with the possibility of having to pay damages more than once. A defendant’s plea that a plaintiff has failed to state a claim goes hand-in-hand with res judicata. If res judicata is applicable, then all duplicitous claims cancelled. In Mendonca’s case, this means that there were no new claims. Since there were no such claims, the court held that Mendonca’s nu

November 15, 2011

Baton Rouge Plaintiff Loses Defamation Claim Due to Prescription

by Berniard Law Firm

The following case highlights the importance of waiting no time in bringing a cause of action that is available. In 2008, Debra Goulas worked as a bookkeeper for Sunbelt Air Conditioning Supply in Baton Rouge. Jessie Touchet, owner of Sunbelt, and Diane Jones, Goulas’s manager, accused her of stealing over $500 from the company during February and April that year. This serious accusation resulted in Goulas being tried for felony theft. The crime of theft is committed when one is involved in a trespassory taking and carrying away of the property of another with the intent to permanently deprive the true owner of that property. Goulas was subsequently acquitted of this particular theft.

Following the criminal trial and Goulas’s ultimate accquital, she filed a lawsuit against Touchet and Jones in July, 2010 alleging defamation. Specifically, Goulas argued that Touchet and Jones “intentionally and negligently inflicted emotional distress” upon her, and that their accusations were “founded in malice to damage her person and reputation.” The complaint sought damages for medical expenses, physical and mental pain and suffering, and loss of wages. The defendants filed an exception of prescription. The basis of the exception was that Goulas’s claims were based on the defendants’ actions that allegedly occurred during February and April of 2008. By the time Goulas filed suit in 2010, more than one year had passed, thereby prescribing the claims. In October, 2010, the trial judge granted the defendants’ exception of prescription and dismissed Goulas’s claims with prejudice.

Goulas appealed, alleging error on the trial court’s ruling that her defamation claim was prescribed. Goula’s reasoned that she could not initiate her defamation action until her criminal trial was concluded in March, 2010; accordingly, she argued that prescription did not begin to run until Frederick Jones publicly accused her of theft when testifying at her trial. The First Circuit noted that Louisiana recognizes a qualified privilege that protects parties from charges of defamation related to statements they make during a trial. “It necessarily follows that, during this time, the one-year period that applies to the filing of a defamation action is suspended.” However, the court explained, the suspension of prescription applies “only to allegedly defamatory statements made by parties to a lawsuit.” In this situation, Frederick and Jones were not parties to Goulas’s criminal prosecution, so the prescription suspension did not apply. The court concluded that “since there has been no suspension of the 2008 alleged defamatory statements,” the trial court properly granted the defendants’ exception of prescription.

November 5, 2011

Failure to Properly Serve a Personal Injury Lawsuit Does Not Require Dismissal, Louisiana First Circuit Court Rules

by Berniard Law Firm

In a recent Louisiana First Circuit Court of Appeals ruling, a plaintiff successfully appealed an earlier dismissal of his case for failure to properly serve all of the correct parties.

After Hurricane Gustav, Mr, Preston was working on the Southern University campus removing debris, including trimming tree branches, when he slipped and fell into a hole in the ground. He sustained injuries and sued Southern University for negligence, claiming that the campus allowed an unreasonably dangerous condition to exist and it failed to warn him of the dangerous condition.

Under a Louisiana statute (La. R.S. 13:5107), when a plaintiff sues the State of Louisiana or a state agency, he must serve the Louisiana attorney general and the head of the agency. Furthermore, if the suit is a personal injury lawsuit (tort lawsuit), the Office of Risk Management must be notified and served as well, according to La. R.S. 39:1538.

October 27, 2011

Bossier City House Fire Tragedy Prompts Court’s Review of Landlord’s Duty to Tenants

by Berniard Law Firm

Louisiana law reflects the state legislature’s interest in protecting the health and safety of residents of rental property. For instance, landlords are required to warrant that a house is “suitable for the purpose for which it was leased” and that it is “free of vices or defects that prevent its use for that purpose.” La. C.C. art. 2696. The warranty extends even to problems that are not personally known to the landlord, though there is an obligation on the part of tenants to report any unsafe conditions. La. C.C. art. 2697. Some limited waivers of this warranty are permitted, but only by “clear and unambiguous language that is brought to the

attention of the lessee.” La. C.C. art. 2699. So strong is the state’s intent to protect tenants that the law imposes strict liability on a landlord for damages that arise from defects to the property. To prevail against a landlord, the tenant must only prove that the landlord had control over the thing that caused injury; the thing that caused injury suffered from a condition that created an “unreasonable risk of harm”; and that the condition caused the tenant’s injury. In fact, the landlord’s liability is based entirely on his status as the landlord, not his personal fault. Thus, a landlord’s “lack of knowledge regarding a [particular] defect is inconsequential.”

A case that recently came before the Second Circuit Court of Appeal demonstrates the operation of this statutory warranty. In 2000, Antonio Wells, Sr. signed a lease to rent a house on Julia Avenue in Bossier City from William Norris. Wells’s family, who lived with him in the house, included his wife, Amanda, and three children: Amber, Antinio Jr., and Arquisia. When the family moved in, several electrical outlets were not working. Wells and his wife got into the habit of using extension cords to power lights and other appliances in the home that were not located near working outlets. Discovered later was the fact that many of the 20-amp fuses in the home’s fuse panel had been replaced with 30-amp fuses to prevent overloads; this caused excessive heat to build up in the circuits. Around lunch time on July 1, 2001, the house caught fire when an air conditioner overloaded a circuit with an altered fuse and ignited. The Bossier City Fire Department responded and extinguished the fire, but, tragically, not before Arquisia was killed and both Amber Antonio Jr. were severely injured. Wells filed suit against the landlord, Norris, in June of 2002. Wells alleged that Norris was strictly liable for the damages sustained by him and his family in the fire. A trial was held in March, 2010 in which the trial judge, without oral or written reasoning, ruled in favor of Wells and awarded $207,572.79 in damages. Norris appealed.

October 23, 2011

Second Circuit Case Demonstrates Importance of Proper Contracts

by Berniard Law Firm

Our previous post discussed the various principles of contract law at work in the Mendoza case, which can be viewed here. This case involved a dispute between an injured worker’s employer and another company with which that employer had a contract. A provision of this contract provided for indemnification, the assuming by one entity of the liability of another.

Companies often assume the liabilities of other entities with which they hold contracts. This is seen as a cost of doing business. Indemnification makes up part of or the entirety of the consideration for some corporate contracts. Contracting away your liability can be extremely valuable. The dispute in this case was when the contract actually became effective. The court used various principles discussed in its opinion and the previous post on this topic to determine that the trial court was correct in denying summary judgment to one party and granting it to the other. Mid South, Mr. Mendoza’s employer, was to be indemnified and held blameless by EXCO as per their 2008 agreement.

In general, this dispute really came down to an issue of timing. The two companies in question signed an agreement in December 2008. The incident that created Mr. Mendoza’s cause of action occurred in October 2007. He filed suit in August of 2008. Mid South did not file an answer to the complaint until July of 2009. After this filing Mid South demanded defense from EXCO; this defense was promptly denied. Mid South again attempted to illicit indemnification and defense from EXCO in September 2009 based on a 2004 contract that Mid South held with Anadarko, a company whose interests were subsequently absorbed by EXCO. EXCO did not respond until after Mid South filed a cross-claim against EXCO. EXCO filed an exception and answer in April 2010 along with a motion for summary judgment. In July 2010, Mid South filed its cross-motion for summary judgment. The former motion for summary judgment was denied and the latter granted in August of 2010. When the trial court denied EXCO’s motion to designate the judgment as appealable, EXCO sought aid from a higher court. The Court of Appeal for the Second Circuit of Louisiana granted EXCO’s writ application but ultimately sided with the trial court.

October 21, 2011

Texas Contract Law Informs Second Circuit Decision

by Berniard Law Firm

A well-written contract can not only solve most problems, it can prevent most problems from becoming problems in the first place. For a contract to have its maximum problem eliminating effect, however, all parties to the contract must agree as to what it mean. Contract law is filled with cases that could have been avoided if the entities involved had simply expressed their terms more clearly or asked the right questions before, during and after the drafting of the contract. While this ambiguity may be intentional by one side or both in the event they think a benefit can be attained, the truth is the best contract is often the one where both parties are simply looking to achieve the main goal fairly. Those instances where ambiguity dominates, however, cause problems. The case of Mendoza v. Grey Wolf Drilling Co., discussed in an earlier post, is one such case.

The Mendoza case was two-fold. It involved questions as to whether and when one company assumed liability for another company. Several contract law principles were implicated in this dispute from which this opinion resulted. Contracts get drafted under the assumption that the parties have reached an agreement. This alleged agreement is nowhere to be found when there is a dispute over the meaning of a contract. When adverse parties give contradictory interpretations of the same contract language a suit often ensues. It is because of the relative frequency of this occurrence that the courts have come up with various rules for interpreting contracts when the parties themselves cannot.

The Court of Appeal for the Second Circuit of Louisiana applied Texas contract law in this case. This was due to an agreement between the parties which was most likely part of the contract itself; there was no dispute over this portion of the contract. For guidance, Texas law contains several well-established principles for evaluating disputed contracts:

October 19, 2011

Tractor-Trailer Accident on I-20 Leads to Court’s Consideration of Request for Remittitur

by Berniard Law Firm

A defendant who wishes to challenge a jury’s damages award can petition the court for a new trial. As this is often an undesirable path for both the defendant and the plaintiff, Louisiana law offers an alternative approach: when the trial court believes that the verdict is “so excessive … that a new trial should be granted for that reason only,” La. Code Civ. Proc. art. 1814, it can order remittitur. This option is available only if the plaintiff agrees to it, under the assumption that accepting a lower amount of damages may prove preferable to another trial. The trial court is permitted to order remittitur “only if the issue of quantum is clearly and fairly separable from other issues in the case.” The recent case of Great West Casualty Co. v. AAA Cooper Transport offers an instructive example of Louisiana’s remittitur statute as applied by the Court of Appeals for the Fifth Circuit. On November 27, 2006, a tractor-trailer which operated by Juan Rodriguez-Salas was struck by another tractor-trailer; the second truck was being driven by Ray Johnson and was owned by AAA Cooper Transportation. Rodriguez-Salas’s truck rolled over, and he suffered injuries to his right shoulder as a result. Rodriguez-Salas sued Johnson and AAA Cooper in the U.S. District Court for the Middle District of Louisiana. He sought to recover for his medical expenses and damages for pain and suffering and lost wages. After a trial, the jury awarded Rodriguez-Salas $38,000 for lost wages; $120,000 for pain, suffering, and mental anguish; and $10,000 for loss of enjoyment of life. AAA Cooper, objecting to the damages award, filed a motion for a new trial. The district court entered judgment on the verdict and denied AAA Cooper’s motion. AAA Cooper appealed, seeking a reduction in Rodriguez-Salas’s $130,000 general damages award on the theory that Rodriguez-Salas’s injuries were to only one shoulder and only required treatment for eight months; in AAA Cooper’s view, $40,000 was an appropriate amount.

The Fifth Circuit, in applying Louisiana law, first reviewed the district court’s finding that a new trial was unnecessary. The district court determined that sufficient evidence of Rodriguez-Salas’s “injuries, medical treatment and recovery, and the effect of both on his work and daily activities” had been presented at trial “to reach a fair determination of his general damages and lost wages.” The Fifth Circuit agreed, noting that the record included such evidence as Rodriguez-Salas’s testimony about his injuries, testimony from doctors about Rodriguez-Salas’s condition, and Rodriguez-Salas’s medical records. Accordingly, in affirming the trial court’s judgment, the Fifth Circuit concluded that “the district court did not abuse its discretion” and that “the award [was] not against the great weight of the evidence.”

Although remittitur offers the parties in litigation a more efficient means by which to resolve a dispute over a damages award, it is still subject to many of the same limitations that apply to appeals in general — that is, that great deference must be afforded a jury’s award of damages. Only through a showing of abuse of discretion by the trial court can a defendant prevail on a remittitur action.

October 15, 2011

Second Circuit Second Guesses Trial Court’s Apportionment of Fault in Caddo Parish Car Wreck

by Berniard Law Firm

When apportioning fault between two or more parties in a negligence action, the finder of fact is given great deference on review. An appellate court may not set aside a trial court’s finding unless there is “manifest error” or it is “clearly wrong.” Cole v. Dept. of Public Safety & Corrections. In order

to reverse the trial court’s apportionment of fault, the appellate court must “find from the record that a reasonable factual basis does not exist for the finding of the trial court and that the record establishes that the finding is clearly wrong.” The Louisiana Supreme Court has provided extensive guidance on the trial court’s responsibility for allocating fault. The court is “bound to consider the nature of each party’s wrongful conduct and the extent of the causal relationship between that conduct and the damages claimed.” Watson v. State Farm. Furthermore, in assessing fault, the trial court can consider several factors related to a party’s conduct, including:

“(1) whether the conduct resulted from inadvertence or involved an awareness of the danger, (2) how great a risk was created by the conduct, (3) the significance of what was sought by the conduct, (4) the capacities of the actor, whether superior or inferior, and (5) any extenuating circumstances which might require the actor to proceed in haste, without proper thought.”Watson

September 19, 2011

Statute of Limitations on Medical Malpractice Claims in Louisiana: Information Every Patient Should Know

by Berniard Law Firm

One of the first things that must be determined in a potential medical malpractice claim is whether the statute of limitations bars the claim. An otherwise legitimate malpractice lawsuit may be invalid simply because the injured party waited too long to file the claim. In the State of Louisiana, the statutory period in which a claim must be filed is referred to as the “prescriptive period.” If a case is “prescribed”, it is beyond the statutory period. Louisiana statutory law (La. R.S. 9:5628(A)) states that malpractice suits must be filed “within one year from the date of the alleged act, omission, or neglect, or within one year from the date of discovery of the alleged act, omission or neglect.”

In a recent Louisiana Court of Appeals Case, Amos v. Crouch, the court addressed the issue of what constitutes “discovery” of the alleged negligent act or omission. In the Amos case, Dr. Crouch, a Jackson Parish general surgeon, diagnosed a patient with severe hemorrhoids when in fact the patient had colorectal cancer. After receiving the hemorrhoids diagnosis from Dr. Crouch, the patient decided to see another doctor for a second opinion. After a brief examination, the second doctor ordered tests that ultimately revealed the colorectal cancer. The Court of Appeals concluded that it was at the time of his cancer diagnosis that the statutory period began to run. The Court declared, “Prescription begins when a plaintiff obtains actual or constructive knowledge of facts indicating to a reasonable person that he or she is the victim of a tort.” It is important to note that knowledge only refers to “such information that ought to put the alleged victim on inquiry.” Therefore, in certain circumstances, a correct diagnosis from a second physician can equate to “discovery” of the doctor’s negligent act, triggering the prescriptive period.

However, the court refused to treat a correct secondary diagnosis as a per se reasonable belief that the original doctor committed malpractice. Instead, the court declared, “it depends on the particular circumstances of each case.” But, the Amos case does infer that a correct secondary diagnosis, although not conclusive, acts as strong evidence toward proving that a reasonable person would have discovered the possibility of malpractice at that time.

September 15, 2011

The Complexities of the Involuntary Dismissal of a Claim

by Berniard Law Firm

A lawsuit can be resolved in many ways. Prior to formal court proceedings, the suit may be dropped voluntarily for one reason or another, or the parties might come to an agreement in mediation. If the case goes to trial, it may be resolved with the judge or jury entering a verdict after a full trial. It may also be resolved before the close of proceedings by way of dismissal. If a case is dismissed it can have serious repercussions for a suit, and often destroys the likelihood of recovery if a dismissal is entered against a plaintiff. There are many types of possible dismissals that can end a proceeding including the involuntary dismissal of a claim.

Louisiana Code of Civil Procedure Article 1627 governs involuntary dismissal. The plaintiff presents their case first, and upon the completion of the presentation of the plaintiff’s case, the defendant may make a motion for involuntary dismissal. The judge then reviews the evidence presented. If he finds the plaintiff has shown no right to relief, he may grant the motion for involuntary dismissal. On a motion for involuntary dismissal, the plaintiff’s testimony should generally be accepted as true. So long as the plaintiff has presented enough evidence to establish his argument by a preponderance of the evidence, a fairly low burden of proof, the case should be allowed to proceed and the motion denied. If the motion is granted, the plaintiff can appeal the decision. A decision granting involuntary dismissal is difficult to overcome on appeal but it is not impossible. The 2011 case of Settle v. Paul illustrates what can happen where a plaintiff successfully appeals an involuntary dismissal.

In 2009, James Settle sued Brenda Michelle Paul, his ex-girlfriend, in a dispute over the existence of a partnership agreement between the parties. Mr. Settle and Ms. Paul formed a construction company and took on several small projects in the company’s infancy. In 2003, Ms. Paul filed the necessary paperwork to have the company incorporated in Louisiana, forming the limited liability corporation Landmark Construction Company of Coushatta (Landmark). She was listed as the sole member of Landmark. Mr. Settle agreed that the parties decided Ms. Paul would be the sole member of the corporation because they wanted the company protected from seizure against Mr. Settle’s child support obligations. The company was profitable throughout the duration of its operation.