Articles Posted in Litigation

A case arising out of the State of Louisiana First Circuit Court of Appeal considers whether defendants should have been permitted to raise certain peremptory contractual exceptions in the trial court: namely, objections of prescription, peremption, no cause of action, no right of action, and a dilatory exception of vagueness. See LA. C.C.P. Art. 927.  Unfortunately for the Plaintiffs, the trial court sustained all of defendant’s exceptions, and dismissed their case.

The case involved two plaintiffs Ryan and Vicki Williams—who entered a contractual agreement with Genuine Parts Company to reopen and operate a previously closed NAPA Auto Parts store in Ponchatoula, Louisiana. The Plaintiffs invested approximately $60,000 to start up the store, and obtained a six-year loan guaranteed by the Genuine Parts Company for the remainder of the costs. Plaintiffs were later offered the chance to operate another NAPA Auto Parts store in Hammond, Louisiana, but when plaintiffs declined that opportunity, Genuine Parts Company contracted with Jeffrey Boone to operate that Hammond store instead. After that, plaintiffs were told their financing would not be renewed, because of their NAPA store’s declining performance. When plaintiff’s loan matured, Genuine Parts Company acquired it, and liquidated plaintiff’s store inventory. Plaintiffs then filed a lawsuit for damages, because of the alleged unfair and deceptive practices by Genuine Parts company and Jeffrey Boone. In its response, Genuine Parts Company filed the peremptory exceptions mentioned above. Mr. Boone also adopted the same exceptions in his response. The trial court granted all exceptions and dismissed plaintiff’s case, so plaintiffs appealed.

Defining the Exceptions

Summary judgments are procedural devices used when no genuine issue of material fact exist that should be litigated in a full trial. The burden of proving that there is no issue as to material facts is on the party who is seeking the summary judgment. Once the moving party establishes that no genuine issue of material fact exists, the burden then shifts to the opposing party to present evidence that indicates that there is in fact a dispute as to material facts.  A recent lawsuit arising from Ascension Parish Louisiana discusses the standards used by courts to evaluate summary judgment motions.

In 2006, First American Bank and Trust (“the Bank”) issued a loan to Commerce Centre, LLC, (“Commerce Centre”), with an interest rate of 7.75%. The loan was secured by the guarantees of ten individuals and companies. Soon after the original 2006 loan, the Bank and Commerce Centre negotiated a subsequent 2007 loan, which included a lower interest rate, and was secured by only six of the ten original guarantors.

The 2007 loan ultimately defaulted, and the Bank filed a lawsuit seeking repayment. The lower court granted the Bank’s motion for summary judgment. The remaining six individuals and companies that were secured guarantors on the loan, appealed the summary judgment asserting that material issues of fact as to the Bank engaging in fraud existed. The main contention of the opposing parties was that the Bank did not disclose that some of the original individuals and companies that were guarantors on the 2006 loan, were no longer guarantors on the 2007 loan.

If a person defaults on student loan payments, the loan issuer can obtain a order from the court, directing an employer to withhold money from the person’s earnings until the defaulted loan has been paid in full. A Bossier Parish School Board (“BPSB”) employee stopped paying her student loans. In order to recover the default amount, the student loan company hired a collection agency, Pioneer Credit Recovery Inc. (“Pioneer”) top. Pioneer sent BPSB an order from a court (making them a garnishee) requiring it to deduct the employee’s earnings to a sufficient amount to make payments on the loan. BPSP complied, taking money out of the employee’s paycheck monthly, until the default amount was completely satisfied.

Once the loan was paid off in full, Pioneer sent BPSB notice stating it could stop the deductions from the employees wages. BPSB complied with the release order and ceased deducting any further funds from the employee’s paycheck; however, BPSB continued sending Pioneer money as a result of a clerical error. The error went on for some time, so long that BPSB overpaid over five thousand dollars of its own funds. Upon discovering the error, BPSB demanded a refund from Pioneer in the amount it had overpaid. Pioneer replied that since they already sent the overpayments to the employee they had no further obligation to pay BPSB back. Based on a belief that Pioneer still had an obligation to refund the money, BPSB filed a lawsuit to recover the overpayment and the case proceeded to trial.

In support of its claim, BPSB presented an argument based on a theory of payment for a thing not owed. See La. C.C. arts. 2299  and 2300. Pioneer did not deny that it received the money; however, they argued BPSB was at fault for failing to comply with the rules for withholding and further they ignored the order stating they no longer had to make the payments. Furthermore, Pioneer argued that all overpayments had been refunded to the employee under the mistaken belief that it was hers. The trial court agreed with BPSB holding that Pioneer had received a payment it was not owed and was bound by law to refund BPSB. The trial court based its decision on a finding that BPSB had made the payments, not the employee, and restoring the overpayment to the employee did not amount to restoring it to BPSB.

Antitrust laws protect competition and prevent monopolies. Ultimately, they are meant to protect consumers by ensuring healthy competition. Yet it is a common misconception that antitrust laws protect individual competitors in the marketplace; that each unique competitor is itself the competition that antitrust laws seek to protect. False. Antitrust laws are designed to protect competition – the integrity of the marketplace in which competition occurs – not individual competitors. See Brown Shoe Co. v. United States, 370 U.S. 294, 320 (1962). This is a lesson that Felder’s Collision Parts, Inc., a Louisiana company learned the hard way.

Felder’s is a Baton Rouge based dealer of after-market auto body parts. It sells body parts that are congruent with a major auto makers (“GM”) vehicles, but are not manufactured by GM. Felder’s filed an antitrust lawsuit against All Star dealers and GM alleging that GM’s “Bump the Competition” program was an illegal predatory pricing program which violated Louisiana and federal antitrust law. This GM program allowed competitors who purchase genuine GM parts for resale to sell those parts at a price designed to be lower than the local competitor’s price for the after-market equivalent of the same part. This bottom-line price was often lower than what All Star paid GM. The program subsequently allowed All Star to not only recoup the loss, but also recover a 14% profit.

The District Court ruled against Felder in his antitrust claims, reasoning that he fell short in his attempts to sufficiently delineate the relevant geographic market and to allege below-cost pricing. Because the Louisiana law claims were dependent on the federal antitrust claims, these claims were also dismissed. Felder’s appealed, alleging that the District Court erred in adding the payback amount to the price at which All Star sold its parts to customers.

It  costs money to file a lawsuit against a party who has wronged you, and it also costs money to defend yourself when another party brings a lawsuit against you. Imagine taking on those costs only to lose the case in the end — and then imagine having to also pay for the winner’s attorney’s fees.

The general rule in the United States, known as the American Rule, is that each party only pays their own attorney’s fees, regardless of who wins. This is unlike some other countries, such as England, where courts often require the losing party to pay the other side’s attorney’s fees. One leading policy behind the American Rule is to ensure that potential plaintiffs aren’t discouraged from bringing meritorious lawsuits out of fear that, if they lose, they will have to incur even more costs by having to pay the other side’s lawyer. There are exceptions to the American Rule, however. One common exception is where there is a statutory provision requiring the losing side to pay attorney’s fees to the winning party, as illustrated in a recent case in Baton Rouge.

In Heck v. Triche, the district court found (and the appellate court affirmed) that the defendant, Wayne Triche, was liable under state law — not federal law — for securities fraud. After this finding, however, the plaintiffs requested an award of attorney’s fees pursuant to Louisiana laws (La. Rev. Stat. Ann. § 51.712 & 51.714; Local Rule 54.2). The plaintiffs eventually submitted the documents needed for the district court to determine the reasonable amount of attorney’s fees. The district awarded attorney’s fees pursuant to a federal statute, 15 USC § 78r, in the amount of $121,800.

Discrimination can come in many forms and if you are faced with a potential workplace discrimination issue it is important to take your concerns to a good lawyer because the contours of discrimination cases can be very complicated.  Esma Etienne, a waitress and bartender, found herself in just such a situation when she alleged that the general manager at the Spanish Lake Truck & Casino Plaza in New Iberia, Louisiana refused to trust and promote qualified employees simply because their skin was of a darker shade.  According to Etienne, she was passed over for promotion to a managerial position at Spanish Lake because she was “too black.”  Based on this belief that she had faced discrimination in the workplace, Etienne filed a Title VII suit in the Western District for Louisiana Federal Court.    

In support of her claim, Etienne presented an affidavit from a former manager at Spanish Lake stating that the general manager did not trust darker skinned black people with certain responsibilities, such as handling money.  Further, the manager alleged that the general manager and his wife made several statements that Etienne was “too black to do various tasks at the casino.”  In response, Spanish Lake argued that it hired a more qualified candidate than Etienne and the decision was based purely on merit.  The district court agreed and granted summary judgment in favor of Spanish Lake.  The court based its decision on its finding that Etienne had merely supplied circumstantial evidence, shifting the burden away from Spanish Lake and on to Etienne, and pointed to the fact that a majority of the managers at Spanish Lake were black.  The court seemed to believe that the fact that so many managers were black was dispositive under Title VII and that the allegation that the discrimination was based on shade of skin was insufficient.  The Fifth Circuit Court of Appeals did not agree.  It reversed the grant of summary judgment in favor of Spanish Lakes and remanded the case for consideration by a jury.

The Fifth Circuit pointed out that while there had never been an explicit ruling in the circuit that color was an unlawful basis for discrimination in the workplace, the text of Title VII is clear that employment discrimination is prohibited on the basis of an individual’s “race, color, religion, sex, or national origin.”  It was improper for the district court to rely so heavily on the fact that Spanish Lake had hired numerous black managers when the issue at bar was discrimination based on skin shade.  Etienne was alleging that Spanish Lake discriminated based on the fact that she was too dark, not the fact that she was black.