Civil Matter

March 2, 2017

Inadequate Remedies Under Foreign Law Do Not Make Arbitral Awards Unenforceable on Public Policy Grounds (Part I)

new-york-city-xmas-2007-15-1213202-768x1024 The world we live in today is more interconnected than ever before. International commerce has led to rapid economic development in the United States and abroad. As more and more firms participate in international commerce, complex legal disputes arise. International disputes involve a multitude actors of different nationalities, implicating various national and international legal frameworks. In the mid-20th century, the United States and countries around the world sought to harmonize international commerce by codifying rules governing the resolution of international disputes. As a global commercial hub, United States courts have been pivotal in interpreting these international rules and more generally, contributing to the development of private international law. In 2015, the United States Fifth Circuit Court of Appeal interpreted the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York convention”), adding clarity as to when a court may refuse to recognize foreign arbitral awards on public policy grounds.

In this case, Lito Martinez Asignacion, a citizen of the Philippines was hired by Rickmers, a German corporation to work aboard its vessel, which sailed under the flag of the Martial Islands. While docked in the Port of New Orleans, Asignacion suffered injuries in an accident aboard the ship. After receiving medical treatment in Baton Rouge and the Philippines, Asignacion sued Rickmers in Louisiana state court. However, the Louisiana court ruled that the dispute should proceed to arbitration in the Philippines. The Philippine arbitration panel refused to apply the law of the Marshall Islands, the law of the flag state (a potential legal error), applied the Philippine law and awarded Asignacion the lowest grade of compensable disability under the Standard Terms in his contract, a lump sum of $1,870.

Asignacion returned to Louisiana state court seeking to have the Philippine arbitral award set aside for violating United States public policy. Rickmers removed the case to the United States District Court for the Eastern District of Louisiana. The District Court held that the Philippine arbitral award violated United States public policy because it effectively denied Asignacion the opportunity to pursue damages he would be entitled to as a seaman. The Fifth Circuit reversed and remanded the case to the District Court to enforce the award. It held that even with regard to seamen – who are normally accorded special remedies under United States law – the provision of lesser remedies under the foreign law does not violate United States public policy.

March 1, 2017

Louisiana Supreme Court: Defendants in Civil Cases Must Be Afforded an Opportunity to Be Heard Before Striking Deficient Answers and Entering Default Judgements (Part II)

by Berniard Law Firm

This post follows up on our discussion of the Louisiana Supreme Court’s 2015 ruling requiring that a contradictory hearing is held before striking a defendant’s deficient answer and entering a default judgment in favor of a plaintiff. In this case, the defendant (Dirt Worx of Louisiana, L.L.C.) wrote a letter to the Clerk of Court denying the allegations in plaintiff’s (Citadel Builders, L.L.C.) petition. Citadel moved to strike Dirt Worx’s letter from the record, arguing that Dirt Worx’ letter did not meet the requirements of an answer under the Louisiana Code of Civil Procedure, and even if it did, Dirt Worx’s letter was filed by a non-lawyer in violation of the Louisiana Revised Statutes.

In Louisiana, the defendant’s answer must comply with certain requirements under the Louisiana Code of Civil Procedure. Generally, the defendant’s answer must admit or deny the allegations in the plaintiff’s petition and – in “short and concise terms” – state the material facts upon which the defendant’s defenses will be based, and any affirmative defenses the defendant will attempt to prove at trial. The plaintiff will then scrutinize the defendant’s answer. If the plaintiff finds any arguable deficiencies, he or she will move to strike the defendant’s answer from the record as insufficient and move for a default judgment. Before deciding to strike the defendant’s answer the Trial Court must conduct a contradictory hearing, allow both parties to be heard. Failure to conduct a contradictory hearing on a motion to strike may constitute a legal error. However, a Court of Appeal can still confirm a Trial Court’s erroneous ruling if the error is harmless; i.e. does not affect the outcome of the case.

In this case, the Louisiana Supreme Court vacated the default judgment, finding that the Trial Court’s failure to conduct a contradictory hearing was harmful to Dirt Worx’s case. The Supreme Court found that the Court of Appeal’s ruling failed to consider that Citadel’s motion to strike was based on an allegation that Dirt Worx answer was filed by a non-lawyer, an allegation which requires proof. The Louisiana Supreme Court noted that the Trial Court granted Citadel’s motion ex parte, without hearing any evidence from the parties. Had the Trial Court conducted the hearing, Citadel would have had the opportunity to offer proof in support of its motion, and Dirt Worx would have been able to cure any deficiencies in its answer either by contesting Citadel’s evidence or by hiring a lawyer to appear on its behalf in court. As the Louisiana Supreme Court noted, neither alternative was made available to Dirt Worx. Thus, it held that the Trial Court erred in granting the Citadel’s motion to strike and entering the default judgment.

February 28, 2017

Louisiana Supreme Court: Defendants in Civil Cases Must Be Afforded an Opportunity to Be Heard Before Striking Deficient Answers and Entering Default Judgements (Part I)

by Berniard Law Firm

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In Louisiana, the plaintiff initiates a civil lawsuit by filing a petition with the Clerk of the Court and serving the defendant with a copy of the petition and citation. The defendant must answer the plaintiffís petition or risk a default judgment. A default judgment is a binding judgment in favor of one party based on the other party’s failure to take action in a case. If the defendant fails to properly respond to a plaintiff’s petition or appear before the court, a skilled litigation attorney will timely move for a default judgment to quickly end the case in plaintiff’s favor without going to trial. However, the defendant is not without recourse. In a 2015 case, the Louisiana Supreme Court held before striking a defendantís deficient answer from the record and entering a default judgment, a Louisiana Trial Court must give both parties an opportunity to be heard, and allow the defendant to correct any deficiencies in his or her answer.

The plaintiff, in this case, Citadel Builders, L.L.C. sued Dirt Worx of Louisiana, L.L.C. for breach of a contract to provide work for its construction project. After serving its citation and petition initiating its case, Citadel obtained a preliminary default judgment. Dirt Worx then filed a letter to the Clerk of Court denying all of Citadelís claims. The Clerk of Court filed Dirt Worx letter as an Answer to Original Petition. A few months later, Citadel sent a letter to Dirt Worx, stating that it intended to file a motion to confirm the default judgment. Citadel explained that it did not receive Dirt Worx’s letter; Dirt Worx’s letter did not meet the requirements of an answer under the Louisiana Code of Civil Procedure; and even if it did meet the requirements of an answer, Dirt Worx’s letter was filed by a non-lawyer in violation of the Louisiana Revised Statutes.

Citadel followed up on its letter by filing two pleadings with the court: a motion to strike Dirt Worx’s answer, and a motion for final default judgment. The Trial Court granted Citadel’s motion to strike Dirt Work’s answer, ordered Dirt Worx’s answer to be stricken from the record, and rendered a default judgment of $1,256,205.39 plus interest in Citadel’s favor. The Trial Court ruled on Citadel’s motion ex parte (without Dirt Worx being present or allowing it to be heard on the matter).

February 26, 2017

How Long Do You Have To File Your Lawsuit Once You Realize You Have A Lawsuit To File?

by Berniard Law Firm

When a person is injured, a countdown begins. If you think you have a lawsuit, you need to file that lawsuit within a certain amount of time or else you will lose the right to that claim. Similar to what some states would call a statute of limitations, Louisiana uses something called “liberative prescription” or just “prescription.” Under this legal doctrine, after a certain amount of time has passed, a plaintiff can no longer bring their claim. The claim is treated as if it never came into being. In some cases, this period is one year. See La. C.C. art. 3492. A defendant can avoid a claim that has passed this period under the defense of peremptory exception, which dismisses a claim for being untimely filed. For some plaintiffs, there is relief in the form of the legal doctrine contra non valentum. Under this idea, the time period to bring a claim does not begin on the day the injury occurred but rather when the person realizes what has happened with enough certainty to file a lawsuit. See Bailey v. Khoury, 891 So.2d 1268 (La. 2005). Prescription exists to keep parties from being surprised by claims from events that have happened years in the past. Contra non valentum likely exists to help people who have been prevented in some way from discovering exactly who or what has caused their injury.

The Louisiana Fifth Circuit Court of Appeal recently applied these legal theories on a work-related illness. Natividad Tenorio worked from 1981 to 1988 in his employer’s (Alpha Technical Service) yard removing radioactive substances (oilfield-generated radiation or OGR) from oil and gas pipes. In November 2009, Mr. Tenorio was diagnosed with throat cancer. In 2013, a former co-worker informed Mr. Tenorio about the dangerous airborne radiation to which the workers had been exposed during that period of years. One year later, Mr. Tenorio brought a lawsuit against numerous gas and oil companies that had used the radiation-generating pipes. The Defendants asserted their affirmative defense of peremptory exception under the notion that the time period for prescription had passed. The Trial Court sided with the Defendants and dismissed the lawsuit; Mr. Tenorio appealed.

On appeal, Mr. Tenorio argued that the Trial Court should not have deemed his lawsuit “prescribed” after only one year. He claimed that the grace period should have been extended under the theory of contra non valentum since he did not discover that his work put him at risk of cancer until four years after his diagnosis. Defendants argued that Mr. Tenorio should have known the cause within the year following his diagnosis and that he did not show any evidence of anything that may have prevented him from discovering that the radiation from his former job led to his cancer. The Court of Appeal noted that under these circumstances, the burden of proving that his claim was not prescribed rested with Mr. Tenorio. As such, he offered evidence that showed he only found out about the radiation in 2013. However, the Court of Appeal found for the Defendants, reasoning that when a person fails to realize that he or she has a potential claim through only his or her own neglect or ignorance, that person should not be granted a grace period. Moreover, a year-long prescription period in a personal injury case such as this one is deemed to begin when a plaintiff knows or should know the relevant facts. The Court of Appeal believed that Mr. Tenorio should have researched possible causes of his cancer immediately after the diagnosis in order to be able to begin his lawsuit within that first year. But because he did not, the Court of Appeal found that Mr. Tenorio was unreasonably late in filing his lawsuit and the Trial Court’s dismissal of his claim was upheld.

February 24, 2017

Can An Architect Escape Liability for Unauthorized Changes To Building Plans Even Though His Professional Seal Is On The Plans?

by Berniard Law Firm

Good news for professionals; potentially bad news for consumers. Affixing a professional seal to a document does not alone expose a professional to liability if the professional does not directly offer any services to the consumer. The Louisiana Fourth Circuit Court of Appeal recently heard a case that dealt with this very issue.

Martha Hohensee wished to build a new home in New Orleans, Louisiana. She discussed her plans to construct a residential home with Raymond Bergeron of Raymond C. Bergeron, Jr., Architects, LLC (“Bergeron Architects”). Mr. Bergeron informed her that he did not provide residential architectural services and referred Ms. Hohensee to an architectural designer, Sean Turner of Turner Design Collaborative (“TDC”), who was not a licensed architect. After consulting with Mr. Turner, Ms. Hohensee hired him to design her house. Turner drew up plans for the new home, but the plans could not be submitted to the City of New Orleans without the seal of a licensed architect.

As a favor to Mr. Turner, Raymond Bergeron affixed his seal to Turner’s plans regarding Ms. Hohensee’s home and the plans were submitted to the City for approval. Mr. Turner was told by city officials that certain modifications to the plans needed to be made for City before approval could be given. Accordingly, Mr. Turner made the necessary modifications but never consulted with Mr. Bergeron. As it turns out, the changes to the plans both increased the cost of construction and produced a structurally unsound home. Parts of the house were not up to code and the floor buckled from the addition of a crawlspace under the home.

February 23, 2017

Court of Appeal Upholds Class Action Against Housing Authority of New Orleans For Mold

by Berniard Law Firm

Class action lawsuits are nontraditional litigation procedures. The ultimate purpose is to not only get relief for a defined class of persons but also a relief for all others similarly situated. See Brooks v. Union Pacific R.R. Co., 13 So.3d 546 (La. 2009). Oftentimes, the issue of who is in the defined class can be complicated in its own right, apart from the substantive issues of the particular case. The trial court has broad authority in deciding whether to certify a class. See Chiarella v. Sprint Spectrum LP, 921 So.2d 106 (La. Ct. App. 2005).

Recently, the Housing Authority of New Orleans (HANO) was facing a class action lawsuit for breach of contract. HANO failed to uphold its responsibilities and duties to the tenants of a housing development pursuant to a lease agreement. The District Court defined the class to include all leaseholders and permanent residents under HANO’s jurisdiction who were adversely affected by the presence of toxic mold in their apartments. The class action plaintiffs asserted that HANO’s failure to keep the apartments and common areas free of mold violated its contractual duty to the federal government, specifically the Department of Housing and Urban Development (HUD).

This case centers on whether plaintiffs, Janice Claborne and Sheryl Jones, could rightfully bring a class action under Louisiana law. In other words, were Claborne and Jones part of the defined class of persons. There are several requirements that must be satisfied before a class action can be brought under Louisiana law: (1) numerosity, (2) commonality, (3) typicality, (4) adequacy of representation, and (5) predominance and superiority.

February 22, 2017

Failure To Follow Correct Procedure Proves Fatal for Appeal

by Berniard Law Firm

One important process in our legal system is the ability to petition a higher court to review a lower court’s decision that you feel was wrongly decided. This appellate process is vital in making sure justice is upheld because it allows a losing party in a lawsuit to get a second opinion on how the particular issues of their case were handled. However, as with most other court procedures, the process of appealing a case can be complicated. Seeking counsel from an excellent attorney can make all the difference in whether your case succeeds or fails.

The Louisiana Fourth Circuit Court of Appeal recently heard a case that dealt with what the proper appeal procedures were. In this case, Mr. Ramirez and Iokon, LLC were appealing a partial summary judgment in favor of their opposition, Mr. Bagot and Evonir, LLC. Their appeal was dismissed as their failure to recognize certain procedures resulted in their forfeiting their right to appeal. Before the appeal process is available, the lower court must issue a final judgment. Here, the judgment was not finalized and instead, the proper procedure was to file for supervisory relief, which Ramirez and Iokon did not do.

One prerequisite before you’re able to appeal a decision in your case is that the case must be decided. This seems common sense – if a case is still ongoing, you can’t claim that the case has been wrongly decided. On the other hand, it is not always obvious whether a judgement from the court is final. Sometimes, as in this case, the judge will give a non-final judgement and it will take a good attorney to know the difference between this type of judgment and a final judgement.

February 21, 2017

What Authority, If Any, Do Courts of Law Have In Reviewing Arbitration Awards?

by Berniard Law Firm

When entering into a contract it is important to read all the terms, especially the general provisions near the end of the agreement. Oftentimes those provisions state that a party must waive their right to a jury trial and settle all disputes arising from the contract by arbitration. Arbitration is an alternative to the judicial system when it comes to settling disputes. Each party chooses an arbitrator, which is usually a lawyer or former judge with experience in the subject matter, and then agree on a third, neutral arbitrator to comprise a panel. Generally, their decision is binding and final. It pays to hire a good attorney if you find yourself on the wrong end of an arbitration decision.

Recently, Medistar Home Health of Baton Rouge (“Medistar”) contracted to buy from Lakeview Home Care, LLC (“Lakeview”) the property rights and assets used in the operation of a home health agency. The parties agreed on a purchase price of $4,250,000. Lakeview financed a portion of the price through a $1,250,000 promissory note. The note required Medistar to make five annual payments of $250,000 with a seven percent interest rate.

Medistar did not make its first payment and claimed that Lakeview owed it for breaching their Asset Purchase Agreement and causing Medistar to suffer losses. An arbitration panel awarded Medistar $350,000 in costs and attorney’s fees. However, in Louisiana there is a law that permits parties to request a court to confirm an arbitration award or vacate or modify the award within one year after an arbitration decision. The court will only vacate an arbitration award if it was procured by corruption or misconduct of the arbitrators.

February 17, 2017

Insurers in Louisiana Have Duty to Defend Unless Complaint Unambiguously Excludes Coverage

by Berniard Law Firm

home-sweet-home-1228389-1024x768 Insurance is such a lucrative business because while almost everyone will purchase some form of it, very few will ever make a claim against the insurance company, and even fewer will be successful. This allows insurance companies to generate huge profits on premiums paid by policyholders. Unsurprisingly, those who do make claims against insurance companies can count on being challenged at every turn, as the insurance companies will hire some of the best attorneys in order to avoid shelling out a dime to cover the policyholder. That is exactly what happened when Shelter Mutual Insurance Company became a party to a suit brought by a University of Louisiana Lafayette student after her professor, the insured, went on a tirade in class.

The incident began in 2004 when UL Lafayette student Kacie Renee Spears attended a class taught by Dr. Louis Houston. During that class, Dr. Houston became extremely agitated and, in a fit of rage, threatened to kill Ms. Spears if she attempted to leave the classroom, spat in her face, and physically struck one of her fellow students. Ms. Spears was so severely distressed by the experience that she sued for damages associated with emotional and physical trauma and medical expenses, naming Dr. Houston, his homeowner’s insurer Shelter Mutual Insurance Company, and the Board of Supervisors for the University of Louisiana System as defendants.

In her complaint, Ms. Spears alleged that the University of Louisiana System was liable due to its negligent hiring, retaining, and supervising of Dr. Houston, given that he had a history of delusional and outrageous acts and had a previous delusional episode while employed by the University. Ms. Spears also asserted that Dr. Houston suffered from bipolar disorder, a mental illness that causes delusions and that, at the time that Dr. Houston exhibited the aforementioned behavior, he was suffering a delusion that may have manifested from his mental illness.

February 16, 2017

Plaintiff in Minor Car Accident Unable to Recover Damages Because of Failure to Meet Burden of Proof

by Berniard Law Firm

louisiana-swamp-2-1489252-1024x674 Minor car accidents occur on a daily basis. Many of us have probably been involved in a fender bender or two, ourselves. The usual course of action includes exchanging information and getting insurance companies involved, but even the smallest car accidents can lead to litigation. It is imperative to understand everything that is necessary in order to prevail at trial in such matters. Unfortunately for one plaintiff in Crowley, Louisiana, the complexities involved with these seemingly small lawsuits left him unable to overcome his burden of proof at trial.

In March of 2013, Jahlia Joubert (Mr. Joubert ) was involved in a minor car accident at the West Hutchinson Avenue and North Western Avenue intersection. Mr. Joubert was driving west on West Hutchinson Avenue when he came to a four-way stop. Shella Poullard (Ms. Poullard) was traveling southward on North Western Avenue when she came to the same four-way stop.

There was a dispute as to which party failed to stop at the intersection. The police were called, but because of the conflicting accounts of the events by the parties involved, the officer at the scene could not assess fault. None of the parties involved reported injuries at the scene of the accident, but Mr. Joubert and his passenger both later complained of injuries and were treated by a chiropractor for roughly three and a half months.