Articles Posted in Business Dispute

vacancy-1232656-1024x768Ever feel like you have been wrongfully brought to court? If so, then what legal remedies do you have at your disposal? In Louisiana, the law provides a person who has wrongly been brought to court with a tort cause of action called abuse of process. A recent Fifth Circuit Louisiana Court of Appeal decision highlights some of the procedural and legal requirements for this lesser known tort.

The alleged “frivolous” lawsuit centers around an eviction lawsuit. Allicen and Kenneth Caluda filed an eviction lawsuit against Fifth Business, LLC (“Fifth Business”). In the lawsuit, the Caludas also added No Drama, LLC (“No Drama”) as a defendant. Nearly seven years after the eviction lawsuit, No Drama filed an abuse of process lawsuit. To prove an abuse of process claim, No Drama needed to prove 1) the Caludas sued No Drama for an improper purpose and 2) the Caludas engaged in improper conduct during the prosecution of the action. See Goldstein v. Serio, 496 So. 2d 412, 415 (La. Ct. App. 1986). No Drama alleged the Caludas improperly filed suit in order to hold the company financially liable for the couple’s lease dispute with Fifth Avenue. It also claimed that the cost of defending the lawsuit, after informing the couple of its independent status, forced it to halt operations. The Caludas’ countered, arguing that No Drama was prescribed from bringing the abuse of process claim because it failed to file the claim within the appropriate time period required by Louisiana law which, for an abuse of process claim, is one year. The trial court agreed with the Caludas, dismissing No Drama’s lawsuit. No Drama appealed the trial court’s ruling.

On appeal, No Drama argued that the prescription period never commenced because the underlying eviction case needed to be decided prior to it bringing the abuse of process lawsuit. No Drama also argued the prescription period was suspended because Caludas was committing a “continuous tort.” A continuous tort is an ongoing unlawful course of conduct that results in uninterrupted injury to the plaintiff. Crump v. Sabine River Auth., 737 So.2d 720, 728 (La. 1999). No Drama alleged the Caludas, by maintaining a wrongful lawsuit and causing ongoing financial injury, committed a continuous tort and therefore, the prescription period was suspended or tolled as a result.

books-illustations-1489534-768x1024Labor contracts are often tricky and scary because potential employees generally find it difficult to negotiate with employers for terms favorable to them, while employers use standard contracts with terms potential employees don’t understand or aren’t used to seeing, which guarantee the employers a better deal.

The National Labor Relations Act (“NLRA”), whose purpose is to provide protection to employees from unfair labor practices of employers, provides that an employer commits an unfair labor practice when it coerces or prevents employees from engaging in their legal rights, including, but not limited to, the rights of employees to band together in a union or otherwise. A recent case out of the United States Fifth Circuit Court of Appeals (“the Court”) addressed this problem in a labor contract case between a retail gas station and its employee.

Murphy Oil Inc. (“Murphy Oil”) operates retail gas stations in many cities in the United States, but the following dispute takes place at the Calera, Alabama location. Sheila Hobson, upon starting employment with Murphy Oil, was required to sign a binding arbitration agreement—an agreement which prevented herself and other employees working at this location from settling any disputes with management by any means other than arbitration—a process which would require both employee and employer to meet with a professional mediator for all legal claims.

shaking-hands-1240911-1024x768Leasing agreements often are complex and lengthy, especially in a commercial context. A common provision contained in most leasing agreements is an indemnity provision. An indemnity provision is a section in a leasing agreement that requires the leasee (the person who leases the property) to take responsibility for certain lawsuits involving the leased property. A recent decision from the Second Circuit Court of Appeal for Louisiana illustrates the power of an indemnity provision.

The case revolves around a leased commercial building located in Bastrop, Louisiana. The building’s owner, Hollis Charles Larche, entered into a leasing agreement with Paul Eikert. Mr. Eikert obtained the lease in order to open up a grocery store. Contained in the lease is a provision that stated that Mr. Larche would be held harmless for any damages or injuries caused by defects on the building’s premises.

A couple of years after entering into the lease agreement, an employee of Mr. Eikert’s grocery store, Deborah Beebe, was injured while on the job. Ms. Beebe sustained her injuries after she slipped on water that came from a leak in the building’s ceiling. Ms. Beebe filed a lawsuit against Mr. Larche claiming that Mr. Larche knew of the leaking ceiling and failed to take appropriate measures to fix the leak. Mr. Larche, citing the indemnity provision contained in the leasing agreement, argued that Mr. Eikert is responsible for any damages resulting from Ms. Beebe’s injury. Mr. Eikert never responded to Mr. Larche’s claim that the indemnity provision allocated responsibility of Ms. Beebe’s injuries to Mr. Eikert. The trial court agreed, granting a default judgment on the issue for Mr. Larche. A default judgment is a judgment that a court can grant if one side in a legal matter fails to take steps to resolve the legal controversy. The default judgment is granted to the side who did take steps to resolve the legal controversy, in this case, Mr. Larche.

fencing-1434215-1024x855People have bargained with one another since the dawn of time. Many agreements occur through mere conversation, but memory may be faulty or even denied. Thus, written contracts exist to keep a record of agreements made by two people or business entities. When a disagreement over the meaning of a contract is brought to court, the court will refrain from unnecessarily changing the meaning of words in a contract, opting instead to take the written words literally and simply. RJAM, Inc. v. Miletello, 44 So. 3d 283 (La. Ct. App. 2010). This means that even a single word can completely change how a contract is enforced. A lawsuit concerning that exact issue arose in Parish of Bossier.

In 2004, Endurall, Inc. was created out of an older company that made supplies for oil and gas lines. This new company provided a specific tool for oil rigs. As part of the process of forming the corporation, the four founders signed a non-compete proprietary agreement. This agreement would prevent any of them from going into the same line of business in the same geographical area for two years after leaving the company. In 2012, two of the founding shareholders formed a similar company. They were immediately fired for possibly having used Endurall information to form their new venture, but they did keep their stock. Soon afterward, the two petitioned the court to dissolve Endurall due to the disagreement amongst the stockholders. As a result of the filing, Billy Joe Edwards was no longer a shareholder. His stock and that of the other fired shareholder was sold at private auction to the other two shareholders that had not been involved in the scheme. The two remaining shareholders filed to dismiss the dissolution which was granted.

Soon after, Mr. Edwards and his son created another company that would sell the exact same product line as Endurall only twenty miles away. He also worked for another company selling paraffin products to customers he had worked with while at Endurall. In 2014, the two remaining shareholders sued to have the court enforce the non-compete provision against Mr. Edwards. Any court order which requires a party to do or cease from doing something is an injunction. The trial court granted an injunction ordering Mr. Edwards to stop the competitive business until the agreement expired. Mr. Edwards appealed.

wood-floor-texture-1181928-1024x731It’s a common belief that a landlord is always responsible for the upkeep of a property, and if an injury occurs because of the landlord’s failure to keep premises safe the landlord is financially responsible for any injury suffered. As Kwan Anderson learned the difficult way, however, this is not always the case. A lawsuit out of Parish of Evangeline shows that when a tenant contracts to take on responsibilities of upkeep, they could lose their ability to collect damages for an injury caused by that failure of upkeep.

On September 7, 2012, Anderson fell through a weak part of the floor of a house rented by Meagan Thomas, his girlfriend, and mother of his child. Thomas had rented the house from Wanda Ardoin-Bailey, the owner, on June 9, 2012, and Anderson lived there with Thomas up to the time of his fall. The weak part of the floor had been noted in the lease and the lease also said that Thomas agreed to be responsible for the house’s condition, which included fixing the weak part in the floor. Thomas said her “paw paw” would fix it in exchange for a reduction in rent.  The floor was never repaired.

Anderson filed a petition for damages against Ardoin-Bailey, who answered the petition but also filed a third-party demand against Thomas to have the lease provisions enforced. Ardoin-Bailey also filed a motion for summary judgment. A Motion for Summary Judgment is rendered if “there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law.” La. C.C.P. art. 966 (B)(2).  “A material fact is one that would matter on the trial on the merits.” Southpark Cmty. Hosp., LLC v. Southpark Acquisition Co., LLC, 126 So.3d 805, 815 (La. Ct. App. 2013).  If there is no issue on the facts that would matter at a trial, then there is no need for the parties to go further on the lawsuit and it should be dismissed. Summary judgment was granted and Anderson’s lawsuit was dismissed. Anderson appealed.

motel-sign-1258206-1024x768When a patron is injured by a third party at a hotel, the patron might wish to seek damages from a national franchisor. There are however several criteria to establish a franchisor’s liability making it very difficult for a patron to recover in the absence of direct links between the injury and negligence.  In a recent case out of New Orleans, a shooting victim was left with little recourse against the big company behind the local Motel 6.  

In this case, Jorge A. Espinosa was staying at the Motel 6 on Gentilly Boulevard in New Orleans, Louisiana when he was shot in the Motel’s parking lot. The armed robber entered the Motel’s parking lot through a missing section in the Motel’s fence.  Mr. Espinosa’s injuries left  Mr. Espinosa a paraplegic.  Mr. Espinosa filed a lawsuit against the national franchise, Accor Franchising North America (“Accor”) as well as the local franchisee, Century Bayou Hospitality, LLC (“Bayou”) and their respective insurance companies.  Mr. Espinosa claimed the missing section of the Motel’s fence led to the robber entering the property and shooting Mr. Espinosa.  The District Court for the Parish of Orleans granted Accor’s motion for summary judgment reasoning that Accor could not be held liable because there was no evidence that Accor controlled, owned, or operated the Motel.  Mr. Espinosa appealed to the Louisiana Fourth Circuit Court of Appeal asserting that Accor was directly negligent and that the company had authority over Bayou making them vicariously liable.     

To establish liability, a plaintiff must first show that the defendant had a duty to protect against the plaintiff’s injury.  To prove that defendant had a duty to protect against a property defect, the plaintiff must show that the defendant had custody over the thing which caused the damage and this thing contained a defect posing an unreasonable risk of harm which caused the plaintiff’s injuries.  See Wiley v. Sanders, 796 So. 2d 51, 55 (La. Ct. App. 2001).  The defective condition must be of a dangerous nature which would be reasonably expected to cause an injury to a prudent person using ordinary care.   A business has a duty to take reasonable care to ensure the safety of its patrons.  However, this duty does not extend to unforeseeable injuries that were caused by the criminal acts of third parties.  See Mundy v. Dep’t of Health & Human Res., 609 So. 2d 909, 912 (La. Ct. App. 1992).  Moreover, vicarious liability will not apply to the principal when an independent contractor relationship exists and the principal actor does not control the contractor’s day to day operations. See Morales v. Davis Bros. Const. Co.,  647 So. 2d 1302, 1305 (La. Ct. App. 1994).   

the-pig-1189462-1024x807When employees are fired they can often be entitled to benefits upon termination; including money payments to act as a substitute salary while the terminated employee searches for another job. While there is no federal requirement in the United States for an employer to offer severance pay, many do as it can be an attractive benefit to potential employees. Many employers choose to adopt a plan that falls under the Employee Retirement Income Security Act (“ERISA”).  Employers can get tripped up however when they fail to support a denial of severance pay by substantial evidence.   

In this case, Mr. Napoli was denied severance pay because the company he worked for claimed that he was terminated for violating company policies. Mr. Napoli was hired by Scios, Inc. in 2001 which was subsequently acquired in 2003 by Johnson and Johnson. He enrolled in the severance pay plan through Johnson and Johnson. After he was terminated, Mr. Napoli filed for severance pay and was initially told he was eligible. However, Johnson and Johnson later denied his claim asserting that Mr. Napoli committed a “Group 1 Violation” and that he made around $3,000 in wrongful charges to a corporate credit card. Mr. Napoli, in a wise move, hired an attorney who subsequently applied for severance pay again and requested additional information about why the claim was denied. Johnson and Johnson again denied the claim and included the provision of the severance agreement Mr.Napoli allegedly violated. Mr. Napoli appealed through the corporation’s internal procedures in 2012 and the claim was denied again.  

Mr. Napoli filed a lawsuit in state court alleging that the company denied him benefits without just cause and that such an act violated ERISA. Johnson and Johnson responded by removing the case to federal court and counterclaiming for $3,000 in unauthorized credit card charges. The United States District Court for the Middle District of Louisiana agreed with Johnson and Johnson that the denial was based on a reasonable interpretation of the severance pay plan. Mr. Napoli appealed that decision to the United States Court of Appeals for the Fifth Circuit.  

drag-line-equipment-taking-a-swim-1219894-1024x659A primary concern that all business owners have is how to insulate themselves from any improper actions that their business engages in. Without some mechanism to separate the actions of the business from the business owner, a business owner would be personally liable for the business’s actions and could face legal claims against him or her for actions that the business engaged in. States, recognizing this problem, created many forms of corporate structures with varying levels of liability protection. Examples of such corporate structures are limited liability companies (L.L.C.), professional corporations (P.C.), and C corporations. While these, and other types of corporate structures, provide business owners with insulation from liability, business owners could still be personally liable for their company’s actions if those actions fall under a narrow set of circumstances. Recently, the Louisiana Supreme Court addressed whether one of these narrow circumstances occurred when determining whether an owner of a home construction company was personally liable for the actions of the company.

Jennifer Nunez contracted with Pinnacle Homes, L.L.C. (Pinnacle) to construct a home in Cameron Parish. Allen Lenard, a state licensed construction contractor and owner of Pinnacle, entered into a contract with Ms. Nunez on behalf of Pinnacle. The contract stated that the construction of the home would comply with all applicable national, state, and local building codes and laws. The Cameron Parish permitting board required that Ms. Nunez’s new home be ten feet above sea level. Not only would Ms. Nunez’s home need to be ten feet above sea level to comply with the permitting board, but the home would need to be ten feet above sea level for Ms. Nunez to obtain flood insurance.

After Pinnacle completed construction, Ms. Nunez ordered an elevation certificate so that she could obtain flood insurance. Through the certification process, Ms. Nunez was informed that her house did not meet the ten-foot base flood elevation as the permit required. Ms. Nunez’s home only stood at an elevation of approximately 8 and one-half feet. The house was fully constructed on a concrete slab and it was determined that it would cost approximately $201,600 to raise the base to the required ten-foot elevation.

closed-window-1218252-1024x683It is no secret that lawsuits are expensive creatures. It is perhaps baffling then that a party would retain an attorney, file a lawsuit, and maintain that lawsuit for over thirteen years without sufficiently actively pursuing that lawsuit.  Yet, that is exactly what happened in a recent case out of Livingston Parish.  And as the case explains, such inactivity within a case subjects the lawsuit to dismissal for abandonment.  Money and time wasted for all parties involved.  

In 2001, R.L. Hall and Associates, Inc. (“R.L. Hall”) filed a lawsuit against Brunt Construction, Inc. (“Brunt”) and Fidelity Deposit Company of Maryland (“Fidelity”) over a lien arising out of a construction contract.  The next action on record does not occur until 2005 when R.L. Hall filed a motion to compel discovery.  Then, in 2007,  R.L. Hall filed the first motion to set a scheduling conference. After the 2007 telephone conference between the parties, nothing else appeared in the record until the plaintiff filed a second motion to set a conference in December of 2010. After the court established discovery deadlines following the 2010 conference, nothing appeared in the record again until the plaintiff filed a third motion to set a conference on June 4, 2014. During 2011 however, counsel for R.L. Hall did send letters to lawyers for the defendants in an attempt to schedule depositions.  The informal correspondence, however, was not filed and does not appear in the court record.  The defendants then filed a motion to dismiss R.L. Hall’s claim because there were no steps taken to further the action in over three years.   The Judicial District Court for the Parish of Livingston dismissed the matter as abandoned.  

R.L. Hall appealed the dismissal to the Louisiana First Circuit Court of Appeal.  Pursuant to La. C.C.P. art. 561 an action “is abandoned when the parties fail to take any step in its prosecution or defense in the trial court for a period of three years[.]”  Upon the passage of three years without any steps taken in the case, the case is automatically dismissed without the need for a court order.  To maintain a case, a party needs only to take some step within three years of the last action toward the prosecution or defense of the action and the step must be in the proceeding and on the record. See Clark v. State Farm Mutual Automobile Insurance Corporation, 785 So.2d 779 (La. 2001).   Attempting to schedule a deposition through informal correspondence without a filed formal notice of deposition does not constitute a “step” which would interrupt the abandonment clock.   

no-fine-print-1419142-1024x768One of the least know parts of a personal injury suit occurs after trial or settlement. It’s called subrogation. Subrogation is the reimbursement of third parties for payments made relating to an accident. Many times, a subrogation claim is made by the injured’s own vehicle insurance provider or by the injured’s own medical insurance provider. Embedded in many insurance contracts is a “subrogation waiver.” As the name suggests, a subrogation waiver in an insurance contract provides that one party agrees to waive its subrogation rights against another party in the event of a loss. Typically, this waiver takes the form of insurers agreeing to forego its ability to seek payment from third parties who may be responsible for losses the insurer had to pay to its insured. In a workers’ compensation context, such waivers would prevent an insurer from seeking compensation from a party who may have been responsible for an employee becoming injured. Absent such waiver, an insurer would have the ability to seek compensation for what it paid in benefits from the party responsible for the work injury.

Recently, a Louisiana Court of Appeal ruled on a case involving a dispute regarding the scope of a subrogation waiver in an insurance policy between Offshore Energy Services, Inc. (“OES”) and Liberty Mutual. In this case, a man named Anthony Beslin was injured while working as an employee for OES. OES had a contract with Liberty Mutual where Liberty Mutual agreed to pay workers’ compensation benefits to any injured OES employee. The contract also contained a subrogation waiver where Liberty Mutual agreed to waive its right of subrogation against “[a]ll persons or organizations that are parties to a contract that requires you to obtain this agreement . . . . ” Based on the insurance contract with OES, Liberty Mutual paid workers’ compensation benefits to Mr. Beslin.

At the time of the accident, OES provided services to Anadarko Petroleum Co. (“Anadarko”) on an oil rig. Based on the contract between OES and Anadarko, OES had to provide workers compensation insurance to its employees and also agree that its insurer (Liberty Mutual) waive its right of subrogation against Anadarko and its Indemnitees (someone who is secure from the legal responsibilities of his or her action). One such indemnitee, Grey Wolf Drilling Co, L.P. (“Grey Wolf”), owned the rig on which Mr. Beslin was injured. It was alleged that a Grey Wolf’s employee’s negligence caused Mr. Beslin’s injuries. In addition to seeking workers’ compensation, Mr. Beslin filed suit against Anadarko, Grey Wolf, and the allegedly negligent employee seeking compensation. Liberty Mutual then intervened, asserting a subrogation claim against Grey Wolf for the workers’ compensation benefits it paid Mr. Beslin.