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Category: Term Definitions

  • Subrogation Rights Upheld: Insurer’s Claim Prevails Despite Settlement

    In the realm of insurance claims and legal disputes, the concept of subrogation often plays a crucial role. Subrogation allows an insurer, after paying a claim to its insured, to step into the insured’s shoes and seek reimbursement from the party responsible for the loss. But what happens when the insured settles their claim directly with the at-fault party? Does the insurer lose its right to subrogation? A recent Louisiana Court of Appeals case, Louisiana Farm Bureau Casualty Insurance Company v. David Scott Burkett, et al., sheds light on this issue.

    The Accident and the Claim:

    The case stemmed from a car accident where Katherine Burkett, insured by Shelter Mutual Insurance Company, collided with Jessica Hall, insured by Louisiana Farm Bureau Casualty Insurance Company. Farm Bureau paid Hall $5,000 for medical expenses under her policy and became subrogated to her claim for that amount.

    The Settlement and the Lawsuit:

    Hall later sued the Burketts and Shelter for her injuries. However, before Farm Bureau could intervene, Hall settled her claim with Shelter for $53,500. Farm Bureau, unaware of the settlement, filed a separate lawsuit against the Burketts and Shelter to recover the $5,000 it had paid to Hall.

    The Trial Court’s Decision:

    The trial court granted summary judgment in favor of the defendants, stating that Hall’s settlement released them from any further liability, including Farm Bureau’s subrogation claim.

    The Court of Appeals’ Reversal:

    The Court of Appeals reversed this decision. It emphasized that Farm Bureau had notified Shelter of its subrogation claim well before Hall’s settlement. This prior notice prevented the defendants from using the settlement as a shield against Farm Bureau’s claim. The court highlighted that a subrogated insurer has an independent right to pursue reimbursement from the at-fault party, even if the insured has settled their claim.

    Key Takeaways:

    • Timely Notice is Key: Insurers must promptly notify the at-fault party’s insurer of their subrogation interest. This notice protects the insurer’s right to reimbursement, even if the insured later settles their claim.
    • Subrogation is an Independent Right: Subrogation is not dependent on the insured’s actions. An insurer can pursue its subrogation claim even if the insured has settled their claim, as long as the at-fault party was previously notified of the subrogation interest.
    • Understanding Solidary Obligations: In Louisiana, when multiple parties are liable for the same debt, they are considered solidary obligors. This means the creditor (in this case, Farm Bureau) can seek full payment from any of the liable parties.

    The Louisiana Farm Bureau case serves as a crucial reminder for insurers to be proactive in protecting their subrogation rights. Timely notice to the at-fault party is essential to ensure that a subsequent settlement between the insured and the at-fault party does not extinguish the insurer’s right to reimbursement.

    Written by Berniard Law Firm

    Other Berniard Law Firm Blog Articles on Subrogation: Insurance Ruling Upholds Third-Party Fire Damage Claims and Read the Fine Print, Louisiana Court Finds Company Falls With Subrogation Waiver

  • Insurance Coverage Turns On Distinction Between Flood Damage And Mechanical Issue

    Dealing with the aftermath of a flood is never fun. This is especially true when the flood damages one of your vehicles. This is the situation Michael Jacobs found himself in after one of his cars was damaged in a flood. After a long fight with his insurance company, he eventually prevailed and was awarded damages. 

    Jacobs owned multiple vehicles that GEICO insured. His parish in North Louisiana was affected by heavy flooding. When the flooding started, Jacobs and his brother tried to move the vehicles from his house to higher ground but were unable to remove them before the floodwaters rose, so they could not drive up to the house. Jacobs waded through the floodwater to retrieve one of the vehicles, a 2001 Honda Accord. In the days following the flood, the Honda kept overheating. Jacobs claimed this had only occurred after the flood. 

    Jacobs submitted a claim to GEICO for the damage to the vehicle. The insurance inspector did not identify any flood-related problems and determined the upper radiator hose had blown out. Another mechanic gave Jacobs an opinion and concluded there were issues with his spark plugs. GEICO ultimately denied Jacobs’ claim because it had suffered a mechanical failure that was not flood-related. Jacobs filed a lawsuit against GEICO, alleging his Honda had been damaged from the flooding. At trial, the court ruled the Honda had suffered water damage and awarded vehicle property damages and attorney fees. GEICO filed an appeal.

    On appeal, GEICO argued the trial court erred in finding it was liable because the relevant insurance policy had not been provided as evidence. The trial court record indicated GEICO had not raised issues related to insurance coverage at trial. GEICO had also not objected to letters it had sent to Jacobs recognizing “flood damage” insurance being entered as evidence. Therefore, the assumption at trial was Jacobs had flood damage coverage but not coverage for mechanical issues with the vehicle. An appellate court will generally not consider issues raised for the first time on appeal. See Costello v. Hardy. As a result, the appellate court held that the insurance policy was not introduced as evidence did not make the ruling wrong.

    GEICO also argued the trial court erred in finding the flood had damaged the Honda. The appellate court pointed to conflicting testimony at trial from different witnesses about the cause of the Honda’s damage.  An appellate court can only overturn a trial court’s factual finding if it is manifestly erroneous or clearly wrong. See Cole v. State, Dept. of Public Safety and Corr. The trial court appeared to have found the witness who testified the flooding had caused the Honda’s damage to be more credible. Because there was nothing clearly wrong or erroneous in the trial court’s finding, the appellate court did not disturb the trial court’s finding.

    As seen here, although GEICO initially denied Jacobs’ claim, Jacobs prevailed at trial. If you feel like your insurance company has improperly denied a claim, an experienced attorney can advise you on possible legal remedies. 

    Additional Sources: Michael J. Jacobs v. GEICO Indemnity Co.

    Article Written By Berniard Law Firm

    Additional Berniard Law Firm Article on Insurance Coverage for Flood Damage: Homeowners Recover Full Amount of Wood Floor Damages, and Home Insurance Company is Sanctioned for Delay

    Dealing with Flood Damaged Property? Be Prepared to Show Causation

  • A Life-Altering Car Accident Ignites a Legal Feud

    Imagine, for a moment, living a life of normalcy, the humdrum of day-to-day routines, a steady job, a peaceful existence. Suddenly, an unexpected accident shakes your world, thrusting you into the tumultuous tides of legal proceedings. This is the daunting reality Patricia and Calvin Henderson found themselves in, initiating a monumental case against Amy Lashouto and her insurer, State Farm Mutual Automobile Insurance Company (State Farm).

    In a startling sequence of events, Patricia and Calvin Henderson found themselves in a legal confrontation against Lashouto. The case revolves around Patricia’s car accident, where a motor vehicle driven by Lashouto rear-ended her. Following the accident, the Hendersons filed a lawsuit against Lashouto, her insurer, and State Farm, contending that they were insured under a policy that could compensate them for their losses. State Farm, however, countered this claim, maintaining that the policy did not provide uninsured/underinsured motorist (UM) coverage for the accident.

    After Lashouto and her insurer settled their case with the Hendersons, the couple found themselves embroiled in a legal dispute with State Farm. The latter moved for summary judgment, arguing that Calvin Henderson had validly rejected UM coverage on the policy. Despite the Hendersons’ absence from the hearing, the trial court sided with State Farm, dismissing the UM coverage claims.

    Under Louisiana law, a motion for summary judgment shall be granted only if the evidence admitted for purposes of the motion for summary judgment shows there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. LA Code Civ. Pro 966. During their appeal, the Hendersons argue that neither Patricia nor Calvin received sufficient information to make an informed decision. 

    State Farm’s evidence includes a UM Coverage form, signed by Calvin, indicating the rejection of UM coverage. Further evidence includes excerpts from Calvin’s deposition, where he identified his signature on the rejection form. However, the Hendersons disputed these claims, presenting an affidavit by Calvin stating that he was instructed to sign an initial at certain places on the form to obtain maximum UM coverage. He further attests that his wife Patricia was never informed about this coverage.

    Based on Louisiana’s Court Civil Procedure, the Court of Appeals used the same criteria for rendering judgment as the trial court. Schultz v. Guoth. Considering the Hendersons’ absence, the Court further concluded that the affidavit is insufficient evidence to establish that the Hendersons will be able to satisfy their evidentiary burden of proof at trial. Despite Henderson’s assertions, the affidavit was inconsistent with his previous deposition testimony. Due to the inconsistencies and the absence of the Hendersons at the summary judgment hearing, the Court affirmed the trial court’s decision.

    Overall, the case of Henderson v. Lashouto shines a spotlight on the intricacies of personal injury lawsuits, underlining the importance of understanding the specifics of insurance policies and the implications of informed consent. As such, it is advised to seek expert legal counsel to navigate such multifaceted scenarios and safeguard all parties’ interests.

    Additional Source: Henderson v. Lashouto

    Written by Brian Nguyen

    Additional Berniard Law Firm Article on Insurance Dispute: Understanding Insurance Exclusions: A Case of Property Damage Coverage for Borrowed Cars

  • How do Conditions on Payments in Louisiana Workers’ Compensation Work?

    Louisiana’s Workers’ Compensation fund exists to pay employees injured at work.  Payment can be used for medical care and lost wages.  When parties sign a settlement agreement on payment terms, an employee may assume payment is imminent.  In a recent case from Rapides Parish, an employee discovered some conditions in a settlement may delay payment.  

    Mary Ortega sustained an injury while employed by Cantu Services.  Ortega filed a Disputed Claim for Compensation, and the parties entered a settlement agreement.  The parties settled for $120,000.  $56,049 of the total was allocated to a Medicare set-aside agreement (MSA) to cover future medical expenses related to the work injury. The MSA was filed with the Centers for Medicare and Medicaid Services (CMS) for approval.  The parties agreed that if CMS did not approve the full amount in the MSA, the employer would adjust the amount paid in monetary benefits, so Ortega would still receive $120,000.  Several months after signing the agreement, Ortega had not received any payments.   She filed a motion to enforce the settlement agreement plus a request for fees and penalties before the Office of Workers’ Compensation.   

    The Workers’ Compensation Judge (WCJ) denied Ortega’s request because payment under the settlement agreement was conditioned on first getting approval from the MSA.   Pending approval suspended the statutory requirement of payment within thirty days.    Ortega appealed to the Louisiana Third Circuit Court of Appeal.     

    The main issue on appeal was whether pending approval of the MSA was a condition that suspended any payments to Ortega.  Ordinarily, Louisiana law requires payment following final judgment or settlement to be made within thirty days.  However, nonpayment due to conditions over which the employer had no control prohibits nonpayment penalties.  See La. R.S. 23:1201(G). A suspensive condition suspends enforcement of an obligation until a certain event occurs.  See La. C.C. 1767.   A suspensive condition that depends solely on the whim of the obligor voids the condition.  See La. C.C. 1770.  The Louisiana First Circuit Court of Appeal found that in a case factually similar to Ortega’s, pending CMS approval of an MSA suspended, the obligation to fund the MSA account until approved.  See Harrelson v. Arcadia.  

    In Ortega’s case, the settlement agreement specifically allocated $56,049 to the MSA, contingent on CMS’ approval.  The Third Circuit agreed with the WCJ that this was a suspensive condition out of the employer’s control.  The parties agreed that if the full amount submitted in the MSA was not approved, the monetary award would be adjusted so Ortega would still receive $120,000. The Third Circuit noted as a practical matter, the employer would not know how much to disburse until CMS approved a total for the MSA monetarily.  Ortega’s attempt to enforce the settlement agreement was denied.   

    Terms of a settlement agreement must be adhered to, and an experienced lawyer can help decipher and appropriately advise on those terms.  In this case, the settlement agreement specified a condition that had to be met before payment disbursement.  A careful understanding and explanation by an excellent lawyer is required to understand conditions to payments in workers’ compensation cases.    

    Additional Sources: Mary Ortega v. Cantu Services, Inc. et. al.

    Written By: Stephanie Burnham 

    Additional Berniard Law Firm Articles on Workers’ Compensation: Is Strict Compliance With Settlement Agreement Terms Required?

  • Louisiana Court Finds Hospital Director Void of Liability in Medical Malpractice Suit Involving His Staff

    A visit to the hospital is a stressful and anxious time for patients and family members. Most people, however, assume that their doctors are competent and will administer the proper standard of care. This was not the case for Richard Smallwood. 

    Smallwood fell at his home and sustained bilateral patella tendon ruptures. He was admitted to the Ochsner-Baptist Hospital for surgery to repair the ruptures in his tendon. After a complicated postoperative course, Smallwood was discharged to another Oschner unit. After some time in the nursing unit, Smallwood died. The autopsy revealed that he had suffered a pulmonary embolism, a secondary result of his deep vein thrombosis (DVT). Since Smallwood had been in “generally good health” before the surgery, his sudden death was shocking. The petition for this case alleged that Smallwood was not given the appropriate prophylactic anti-coagulant medication in violation of the standard of care.

    Since pulmonary embolisms are a common secondary result of DVT, Dorothy Pennington alleged a medical malpractice claim against the doctors and nurses in charge of Smallwood’s care. This included Dr. Todd, Dr. Hawawini, Dr. Jones, Dr. Ulfers, and the Ochsner Clinic Foundation. After moving for a directed verdict, the trial court found that all parties except Dr. Hawawini were liable for medical malpractice. Since Dr. Hawawini acted as the Hospital Director at the time of Smallwood’s death, it was challenging to show that Dr. Hawawini had breached a standard of care. This case centered around whether Pennington had properly established the standard of care and breach with respect to Dr. Hawawini. 

    La. R.S. 40:1231.1 A(13) defines how medical malpractice occurs under Louisiana law. To allege a medical malpractice claim, the plaintiff must prove the three elements outlined in La. R.S. 9:2794 A. First, the plaintiff must establish the ordinary degree of knowledge, skill, or care exercised by physicians licensed to practice in Louisiana. Second, the plaintiff must establish that the defendant doctor lacked that degree of knowledge or skill or failed to exercise reasonable care. Finally, the plaintiff must also show that a lack of knowledge, skill, or reasonable care caused the plaintiff’s injuries. 

    Generally, expert testimony must “establish the applicable standard of care in medical malpractice cases. Schultz v. Guoth. Thus, Pennington retained Dr. Frangipane to testify as an expert to prove the applicable standard of care. Dr. Frangipane was a general surgeon and did not practice in the unique specialties of each named defendant. The trial court, however, allowed Dr. Frangipane to testify because he was qualified enough to be deemed an expert in the field. On appeal, the Fourth Circuit Court of Louisiana looked to determine whether the trial court ruled properly in allowing Dr. Frangipane to testify as an expert. 

    The Fourth Circuit determined that Dr. Frangipane’s expert testimony was proper because his knowledge overlapped the various disciplines of the named defendant doctors. Furthermore, the court indicated that “[g]enerally, the fact that a medical doctor is not a specialist in a particular field applies only to the effect on the weight to be given such testimony, not to its admissibility.” Hubbard v. State, 852 So. 2d 1097 (2003). The Fourth Circuit affirmed the directed verdict for Dr. Hawawini and reversed the directed verdict for the remaining defendants. 

    Home accidents are scary enough without the added fear of medical malpractice once you reach the hospital. A good attorney will fight to ensure that your doctor gives you the proper standard of care during your stay at the hospital or another affiliated facility. 

    Additional Sources: Pennington v. Ochsner Clinic Foundation, 245 So. 3d 58 (2018) 

    Written by Berniard Law Firm Writer Riley Calouette

    Additional Berniard Law Firm Article on Medical Malpractice: Doctors Not Required To Act Perfectly: Determining The Applicable Standard of Care In Medical Malpractice Lawsuits

  • Final Judgment Required For Appellate Court To Consider Merits Of Case

    Words matter, especially when it comes to trial court orders. Without the proper language, a judgment is not an appealable, valid final judgment, so an appellate court cannot consider the merits of an appeal. 

    McKinley Taylor filed a lawsuit against Cajun Constructors, his former employer. He claimed Cajun Constructors owed him unpaid wages for his work as a carpenter. He claimed they had decided upon a daily per diem rate during his first week on the job. The trial court issued an untitled document, which appeared to be written reasons for a ruling, not a final judgment. The trial court found Taylor was not paid the agreed-upon per diem. The trial court also awarded Taylor penalty wages and attorneys fees under La. R.S. 23:632 because Cajun Constructors’ failure to pay him the per diem was not in good faith. Cajun Constructor appealed. 

    Cajun Constructors was ordered to show why its appeal should not be dismissed because there was no valid final judgment. In its response, Cajun Constructor acknowledged the trial court’s ruling did not contain the required language “ordered, adjudged and decreed.” See GBB Props. Two, LLC v. Stirling Props. LLC. Additionally, there was not a separate document from the trial court other than the written reasons for its ruling, as contemplated under La. C.C.P. art. 1918. Therefore, Cajun Contractors agreed the trial court’s ruling did not appear to be a final appealable judgment. The trial court also had not yet determined the amount of attorney fees to award to Taylor. Despite agreeing the trial court’s document was not an appealable valid judgment, Cajun Constructors explained it had filed the appeal to preserve its right to appeal. Cajun Constructors then requested the appellate court dismiss the appeal without prejudice and send the case back to the trial court to enter a valid, appealable final judgment. 

    In reviewing the trial court’s document, the appellate court noted the document was untitled. It also did not include the phrase “ordered, adjudged and decreed.” The appellate court concluded the document was only the trial court’s reasons for its ruling. The document did not provide the parties with adequate notice that it was a final judgment, so there was no final judgment from which Cajun Constructors could appeal. Because there was no final judgment, the appellate court did not have jurisdiction to consider the merits of the appeal. Therefore, the appellate court dismissed the appeal without prejudice and remanded it to the trial court so a final judgment could be entered within sixty days. 

    Here, Cajun Constructors filed an appeal even though it agreed there was no valid final judgment to preserve its right to appeal. A good lawyer can advise you on whether a similar strategy makes sense for you. Additionally, a good lawyer can help you review a prospective final judgment to ensure it includes the required language for an appellate court to consider the merits of an appeal to avoid the situation Cajun Constructors found itself in here. 

    Additional Sources: McKinley Taylor v. Cajun Construtors, Inc.

    Article Written By Berniard Law Firm

    Additional Berniard Law Firm Article on Final Judgments: Trial Courts Must Use Clear, Definite Language For a Final Judgment to be Valid and Appealable

  • The Consequences of Ignoring Court Notices in Louisiana

    If you receive notice of a court hearing, you must pay attention to it. The following case shows the potential adverse consequences if you ignore a court hearing notice. These can include a warrant being issued for your arrest or having your lawsuit dismissed. However, the case also unveils a glimmer of hope for those entangled in such legal dilemmas, offering a glimpse into the avenues available to those who believe justice has been denied.

    Rita and Summer Brown were arrested for outstanding warrants from their failure to appear at a judgment debtor rule hearing. After their arrest, they filed lawsuits against the Terrebonne Parish Sheriff’s Office, Sheriff Jerry Larpenter, and an unnamed insurance company, seeking damages for false arrest. The claims against the Terrebonne Parish Sheriff’s Office were dismissed. The lawsuit against Larpenter went to trial. The court ruled in favor of Larpenter. The Browns then appealed. 

    The Browns argued they had never been served the notice for the judgment debtor rule court hearing, so they were unaware they were required to appear in court. They also claimed they were unaware of the subsequent warrants for their arrest after they failed to appear at the hearing. 

    A process server testified he had personally served the Browns at their home. The process server’s supervisor also testified he had never received any complaints about the process server’s work. Despite the conflicting testimony about whether the Browns had been properly served, the appellate court found the evidence supported the finding that the Browns had been properly served the notice of the hearing for the judgment debtor rule court date. Nonetheless, they failed to appear. 

    In making this determination, the appellate court deferred to the trial court’s credibility determinations. See Stotbart v. State through Dept. of Transp. and Development. Additionally, the arresting officer testified he had followed the normal procedure in executing the Browns’ arrest warrants. Therefore, the appellate court held the Browns’ arrests were proper and affirmed the trial court’s judgment. 

    The saga of Rita and Summer Brown is a reminder that vigilance in legal matters is paramount. From their bewildering arrests due to missed court appearances to the intricate dance of lawsuits and appeals, the narrative underlines the potential pitfalls of disregarding court notices. In a world where credibility and evidence intertwine, even conflicting testimony couldn’t obscure the central lesson: the court’s decisions are based on timely information and adherence to legal processes. 

    Whether you find yourself questioning the validity of an arrest or the adequacy of notice, a proficient lawyer can be your staunch advocate in the pursuit of justice. So, as the gavel falls and the legal tapestry unfolds, remember the power of attention, the gravity of consequences, and the potential for restoration through legal guidance.

    Additional Sources: Rita Brown v. Terrebonne Parish Sheriff’s Office, Sheriff Jerry J. Larpenter, and XYZ Ins. Co.

    Article Written By Berniard Law Firm

    Additional Berniard Law Firm Article on False Arrest: Police Department’s Improper Arrest Target of Louisiana Woman’s Claim

  • Fifth Circuit Court of Appeal Rules on Reasonableness of Forum Selection Clause

    Most of us get into contracts, not fully understanding all the ins and outs of what we are signing. Similarly, the multiple provisions that can slither their way into contracts can include things like forum selection clauses which can be easily overlooked. But when a lawsuit erupts, can you argue a provision isn’t applicable? The United States Court of Appeals for the Fifth Circuit addresses this question in the following case.

    Al Copeland Investments, L.L.C. owned a food manufacturing facility in Louisiana. In October and December of 2015, there was some property damage to the facility, and they submitted a reimbursement claim under an insurance policy. Their insurance was held with First Specialty Insurance Corporation (“First Specialty”). They denied this claim, and AI Copeland sued in the Eastern District of Louisiana, believing they were entitled to recover from the costs and damages of the property. First Specialty asked the court to dismiss the case because the policies forum selection clause requires litigation in New York State court, not Louisiana. 

    A forum selection clause is a section in a contract that states how all disputes must be litigated in a specific court in a jurisdiction that the parties agreed to. 

    The specific policy in this case stated that:

    The laws of the State of New York, without regard to any conflict of laws rules that would cause the application of the laws of any other jurisdiction, shall govern the construction, effect, and interpretation of this insurance agreement.

    The parties irrevocably submit to the exclusive jurisdiction of the Courts of the State of New York, and to the extent permitted by law, the parties expressly waive all rights to challenge or otherwise limit such jurisdiction.

    The district court ruled in favor of First Specialty and dismissed the case based on forum non conveniens. AI Copeland then appealed the case to the Court of Appeals for the Fifth Circuit, believing the district court erred in denying their motion to recover the costs from First Specialty. 

    A forum non conveniens motion is similar to venue rules where the court decides where the case can be heard, and it allows a court to decline to hear a case if there is a more appropriate forum in which the case could and should be heard instead. 

    The appellate court explained that a forum selection clause would only be unreasonable and, therefore, not allowed for a few circumstances. (1) The incorporation of the forum-selection clause into the agreement was the product of fraud or overreaching; (2) the party seeking to escape enforcement will, for all practical purposes, be deprived of his day in court because of the grave inconvenience or unfairness of the selected forum; (3) the fundamental unfairness of the chosen law will deprive the plaintiff of a remedy; or (4) enforcement of the clause would contravene a strong public policy of the forum state. Haynsworth v. The Corporation

    AI Copeland relied on Louisiana Revised Statute § 22:868, which states that no insurance contract in Louisiana can have any condition that does not allow the courts of Louisiana any jurisdiction to review the case against the insurer. 

    The court explained there are two distinct definitions between the words “venue” and “jurisdiction.” 

    They disagreed with AI Copeland’s reliance on § 22:868 because it specifically stated that provisions in an insurance contract are not allowed only when it would deprive Louisiana courts of jurisdiction. A forum selection clause, which First Specialty had in their contract, deals specifically with venue. 

    AI Copeland’s first defense was how prior courts used the terms ‘forum’ or ‘venue’ interchangeably instead of the word ‘jurisdiction.’ However, the appellate court explained that this still does not answer the question as to whether § 22:868 prevents forum-selection clauses in insurance contracts.

    AI Copeland’s second contention was the district court did not correctly rely on Shelter Mutual Insurance Co. v. Rimkus Consulting Group, Inc. Copeland argued the statutes in the Shelter forbid forum selection clauses in certain contracts and are not limited to just those examples put forth in that case. In other words, AI Copeland argued there are many reasons why a forum selection clause should not be allowed. The appellate court disagreed with AI Copeland and stated that Shelter does not deal with interpreting § 22:868, as the court did here. 

    The Court of Appeals for the Fifth Circuit agreed that First Specialty made a case to keep the forum selection clause because AI Copeland’s reliance on § 22:868 did not apply. 

    Contracts are complicated enough even without the problems with clauses that affect where your case can be tried. Ensuring that you are fully and justly compensated for injuries caused by the fault of others requires the assistance of the very best attorneys.

    Additional Sources: AL COPELAND INVESTMENTS, L.L.C.; DIVERSIFIED FOODS & SEASONINGS, L.L.C., V. FIRST SPECIALTY INSURANCE CORPORATION

    Written by Berniard Law Firm Writer Brianna Saroli

    Other Berniard Law Firm Articles on Forum Selection Clauses & Contracts: Jefferson Parish Maritime Case: Are Forum Selection Clauses in Employment Contracts Enforceable in Louisiana? Upholding Contractual Obligations: Legal Remedies for Noncompliance

  • Summary Judgment for Malicious Prosecution Improper Without Adequate Discovery

    Sufficient evidence is required to prevail in any lawsuit. Generally, each side obtains additional evidence through the discovery process. However, what happens if a court grants a summary judgment motion for one party before the other party has time to complete adequate discovery? The following case helps answer this question.

    Shannon James Suarez supposedly threw a Twinkie box at Jerry W. Peloquin II. Peloquin claimed Suarez had previously been stalking him for months and battered him. Lori Smith also claimed Suarez had stalked her. Suarez was subsequently arrested and charged with stalking under La. R.S. 14:40.2(A). 

    The investigator, Bill Pousson, went to Suarez’s workplace to talk to him about the charges. Suarez claims Pousson spoke to him, told him he could make his problems disappear, and encouraged him to plead guilty, even though he knew Suarez had an attorney. Suarez then filed a lawsuit against Pousson and John DeRosier, the district attorney (the “Defendants”), claiming malicious prosecution and misconduct related to the District Attorney’s Office’s investigation. 

    Suarez’s attorney sent discovery requests via certified mail to the Defendants. Defendants then filed a summary judgment motion, claiming the lawsuit should be dismissed because they had absolute immunity given their positions as prosecutors. The defendants’ counsel repeatedly asked for extensions to the time to respond to Suarez’s discovery requests. They also impeded Suarez’s attorney’s efforts to schedule depositions. Suarez’s attorney filed a motion to compel discovery. The trial court granted the Defendants’ summary judgment motion. The trial court also held the motion to compel discovery was now moot. Suarez appealed.

    Summary judgment is appropriate if there are no genuine issues of material fact after adequate discovery. See La. C.C.P. art. 966. Defendants argued they were entitled to summary judgment because a prosecutor has absolute immunity. Suarez claimed adequate discovery was needed to determine if the torts in his petition fell under absolute or qualified immunity. Prosecutors are only entitled to qualified immunity when the tort at issue involves administrative, ministerial, or investigative tasks. 

    The appellate court considered the history of the at-issue discovery requests. Here, Defendants did not respond to Suarez’s discovery requests for months. Although the trial court had instructed Defendants to comply with Suarez’s discovery requests and indicated they would, they never responded. The defendants’ counsel denied receiving certain requests, which had been sent via certified mail, asked for multiple extensions to the deadlines to respond, and impeded Suarez’s counsel’s efforts to schedule depositions. As a result of Defendant’s unresponsiveness, Suarez had not been able to obtain adequate discovery to oppose Defendants’ summary judgment motion. Therefore, the appellate court reversed the trial court’s grant of summary judgment in favor of the Defendants and sent the case back to the trial court so that Suarez could have an opportunity for adequate discovery. The appellate court did not address the merits of Suarez’s claim for malicious prosecution. 

    This case serves as a powerful reminder of the significance of adequate discovery in the pursuit of justice. When a court grants summary judgment before allowing sufficient time for discovery, it undermines the fundamental principles of fairness and due process. In Suarez’s situation, the Defendants’ repeated delays and lack of responsiveness to discovery requests impeded his ability to obtain crucial evidence to counter the summary judgment motion. The appellate court rightfully recognized this injustice and reversed the trial court’s decision, granting Suarez the opportunity for adequate discovery. 

    If you find yourself involved in a lawsuit, it is vital to have a competent attorney who can guide you through the discovery process, ensuring that you serve the necessary requests and gather the evidence essential to support your claim. Remember, the path to justice demands diligent pursuit and a commitment to safeguarding your right to a fair trial with adequate discovery.

    Additional Sources: Shannon James Suarez v. John Derosier, Individually and in His Capacity as the Calcasieu Parish District Attorney et al.

    Additional Berniard Law Firm Article on Malicious Prosecution: Malicious Prosecution Case Lends Elements of Successful Gain

  • Seeking Liability for Water Damage: A Case Study on Responsibility and Legal Remedies

    Mardi Gras, a time of joyous celebration, took an unexpected turn for a store near a French Quarter hotel when a sprinkler head malfunctioned, resulting in significant water damage. Despite the storeowner’s insurance covering the damages, a lawsuit ensued to determine the hotel’s liability for the losses incurred. This case highlights the complexities of determining responsibility and legal remedies in property damage cases, emphasizing the importance of seeking legal counsel to navigate such situations effectively.

    Hotel Management of New Orleans (“HMNO”) owned and operated the French Market Inn. A sprinkler head located in the hotel was triggered during Mardi Gras, which caused a water leak and flooding in the store two floors below. The storeowner claimed water leaked into its store for approximately two hours. During that time, HMNO did not try to turn off the sprinkler but instead waited for the fire department to turn off the sprinkler. This caused damage to the store.

    State Farm insured the storeowner and paid the storeowner approximately $41k under its policy. State Farm then filed a lawsuit against HMNO and its insurer, Companion Property, and Casualty Insurance Company, seeking repayment of the $41k it paid to the storeowner under its policy. The trial court found in favor of State Farm and ordered HMNO and Companion to pay the stipulated damages of $41k. HMNO and Companion appealed, arguing that the trial court erred in finding that HMNO knew or should have known the sprinkler was defective, HMNO employees were negligent, and denying HMNO’s motion for involuntary dismissal. 

    In civil cases such as this, an appellate court cannot set aside a factual finding unless the trial court’s finding is clearly wrong or manifestly erroneous. An appellate court also applies the manifest error standard in reviewing a motion for involuntary dismissal. Under La. C.C. art. 2316, a person is responsible for damage caused by their negligence. 

    Here, there was no dispute that the water that leaked from HMNO’s sprinkler damaged the store. The parties also agreed to damages of $42k. In Louisiana, a business does not have a duty to protect nearby buildings from water from a fire sprinkler system. However, there is a duty to use reasonable care to avoid injuring others. Here, the evidence showed that HMNO’s employees followed the appropriate procedure in requiring the fire department to turn off the activated sprinkler. State Farm did not present any evidence that requiring the fire department to turn off the sprinkler created an unreasonable risk of harm. Further, there was no evidence that the sprinkler was defective. Therefore, the appellate court found that State Farm did not establish HMNO was negligent. 

    HMNO and its insurer also argued that the trial court erred in denying their motion for involuntary dismissal. Under La. C.C.P art. 1672(B), a defendant can move for an involuntary dismissal following a bench trial where the plaintiff has not shown a right to relief. Because the appellate court found the trial court committed manifest error in finding in favor of State Farm, it was also not entitled to an involuntary dismissal. 

    In the case of State Farm v. Hotel Management of New Orleans, the appellate court reversed the trial court’s ruling and found that the hotel, HMNO, was not negligent for the water damage suffered by the store. While the hotel’s sprinkler malfunctioned during Mardi Gras, causing water leakage and subsequent damage, the evidence demonstrated that HMNO’s employees followed standard procedures by waiting for the fire department to handle the situation. 

    Moreover, there was no evidence of a defective sprinkler or any unreasonable risk of harm created by the hotel’s actions. As a result, the appellate court found in favor of HMNO and its insurer, Companion Property, and Casualty Insurance Company, denying the repayment of damages sought by State Farm. When faced with property damage, seeking the guidance of a knowledgeable attorney can help you understand your legal options and pursue appropriate remedies to recover for the losses you have suffered.

    Additional Sources: State Farm Fire and Casualty Co. v. Hotel Management of New Orleans, LLC

    Written by Berniard Law Firm

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