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Is  arbitration the best choice even if you don’t think you chose it? In this case out of Orleans Parish the Louisiana Fourth Circuit Court of Appeals decided on an appeal for a declaratory judgment action seeking a decision that the parties had not agreed to arbitrate in their contract. A declaratory judgment is a decision by the court resolving a matter that was uncertain for the parties. Delta Administrative Services (“DAS”) brought this action against Limousine Livery, Ltd. (“LLI)”) and they are seeking not only a declaratory judgment saying that they did not agree to arbitration but an injunction against LLI to prevent them from moving forward with the arbitration it had already begun. An injunction is an order by the court telling a party to stop or to keep from beginning an action that could be harmful to another party.

In 2010, DAS and LLI entered into a contract for DAS to provide payroll and human resources services to LLI. The contract was a basic contract that was being used by DAS in its business at the time it made the agreement with LLI. The owner and manager of DAS customized the contract to fit the agreement before sending it to LLI. Neither DAS or LLI discussed that dispute resolution clause in the contract. The dispute resolution clause in this contract required choosing between and “either/or” provision and neither party made any indication that a choice was made. Both parties had representatives sign the agreement making both provisions of the alternative dispute clause an effective part of the contract.

When the contractual relationship between DAS and LLI ended, both parties invoked the contract. LLI attempted to follow the provision of the alternative dispute clause by going to mediation before resorting to arbitration. Mediation involves both parties meeting with a neutral third-party in hopes of settling the matter. Arbitration is an out of court dispute resolution where the parties agree to be bound by the arbitrator’s decision. DAS was aware and did not object to LLI’s attempt to set up mediation. LLI and DAS had two unsuccessful mediations, both of which DAS participated in without objection. LLI then filed for arbitration with the American Arbitration Association (“AAA”). At this point, DAS objected, stating that it had never agreed to arbitrate. AAA decided that the dispute met the requirements for them to move forward with the arbitration. DAS then filed a petition for declaratory judgment and a preliminary and permanent injunction. The basis for this petition is that DAS believed the “either/or” provisions that had been made a part of the contract were in conflict with each other and that because no choice was made there was never an agreement to arbitrate. The parties agreed to wait on the arbitration until the court could come to a determination. The District Court of Orleans Parish decided that DAS showed consent to arbitrate by signature and by participating in the mediation as a step of the arbitration agreement.

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openly-sky-1227535-1-1024x768In  Louisiana, the objection of prescription extinguishes a legal right of recovery when a party fails to exercise it over a given period of time. It is essentially a time limit on a claim, which can be raised in a couple of ways. Typically, it is raised by a peremptory exception, but it can also be raised by way of a prescriptive motion for summary judgment. One defense to the objection of prescription is the doctrine of contra non valentem. This doctrine is used to “soften the occasional harshness of prescriptive statutes.” Carter v. Haygood, 892 So.2d 1261, 1268 (La. Ct. App. 2005). A 2015 case from the Louisiana Fourth Circuit Court of Appeal discusses the operation of contra non valentem when pleaded in opposition to a peremptory exception or prescriptive motion for summary judgment.

The dispute in this case arose out of a construction project in which Plaquemines Parish sought to rebuild a parish-oriented drainage pumping station damaged by Hurricane Katrina. Shortly before the project’s completion, M.R. Pittman Group, L.L.C. filed a lawsuit against Plaquemines Parish and several of the parish’s engineering firms. Plaquemines Parish answered, bringing a reconventional demand (or counterclaim as it is known in other states) against Pittman, alleging a tort-based property claim for damages to the pumping station’s wing wall, and a third-party direct action claim against Pittman’s insurer, Gray Insurance Company. Both Pittman and Gray sought to have Plaquemines Parish’s tort claim dismissed on the basis of prescription. Gray filed a peremptory exception of prescription while Pittman filed a motion for summary judgment adopting the reasons put forward by Gray in support of its exception. Plaquemines Parish argued that the doctrine of contra non valentem should apply to toll the one-year prescriptive period.

According to the Fourth Circuit, Louisiana recognizes four situations where contra non valentem applies to prevent prescription: “1) where there was some legal cause which prevented the courts or their officers from taking cognizance of or acting on the plaintiff’s action; 2) where there was some condition coupled with the contract or connected with the proceedings which prevented the creditor from suing or acting; 3) where the debtor himself has done some act effectually to prevent the creditor from availing himself of his cause of action; and 4) where the cause of action is not known or reasonably knowable by the plaintiff, even though this ignorance is not induced by the defendant.” In determining whether any of these categories apply, Louisiana courts will look at the individual circumstances of each case. Marin v. Exxon Mobil Corp., 48 So.3d 234, 245 (La. Ct. App. 2010).

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megalong-landscape-iii-1542182-1-1024x712A land dispute in Evangeline Parish once again highlights the intricacies of Louisiana property law, and the need for an experienced lawyer if you ever find yourself involved in a property dispute. The dispute in question involves the title to 18 acres of a 23-acre tract of immovable property located in Evangeline Parish. Acme Land Company purchased the full 23 acres in 1910. In 1910, the property purchased by Acme was located in what was then St. Landry Parish, but the property was subsequently carved out with other immovable property to establish what is today Evangeline Parish, and the deed of acquisition is duly recorded in the conveyance records of Evangeline Parish.

From the time of its purchase of the 23 acres, Acme annually paid the property taxes on the land but did not do much else with the property. In 1975, Acme granted Louisiana Gas a pipeline right-of-way across the tract. In 1990, Acme leased the 23 acres to Devco Explorations for oil, gas, and mineral exploration. At some time during Acme’s leasing of the land, someone constructed a fence traversing the tract from east to west along the northern portion of the tract. The 18 acres at issue lie to the south of this fence.

In 1998, a married couple began possessing this 18 acre portion of the property, after they purchased a 23-acre tract of immovable property shaped similarly to the property owned by Acme and located immediately southeast of the Acme property. The cash sale deed for the couple’s purchase was recorded in the Evangeline Parish conveyance records in 1998. The couple acknowledged their title does not encompass the 18 acres owned by Acme, but the husband asserted he walked across both tracts of land and assumed the fence line on the northern portion of the Acme property would be his northern property line. Thus, a fence line built by an unknown third party led to the married couple believing they had a right to possess land which legally belonged to Acme.

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church-1442139-1024x768Suppose a pedestrian is hit by a driver who is leaving a poorly-maintained parking area in rural Louisiana that is little more than a partially cleared grassy area. The pedestrian sues the property owner and its insurers, among other defendants. Now suppose that this plaintiff, on being questioned in a deposition taken by the defendants’ attorneys, cannot articulate anything at all that the property owner did or did not do to cause this accident. Suppose also that the pedestrian fails to refute evidence that this type of unpaved, unmarked “clearing in the woods” parking area is common in rural Louisiana and that there have never been any parking problems or collisions in this particular lot before. Will the case go to the jury, or will the judge find for the defendants due to a lack of disputed facts for the jury to consider, leaving the injured pedestrian without a chance to prove she has suffered damages and deserves compensation from the property owners?

The Supreme Court of Louisiana has considered just this issue in several recent cases; the latest was Allen v. Lockwood, decided in 2015. In that case, the Wesley Chapel United Methodist Church which is located in a rural area of St. Helen’s Parish, off Louisiana Highway 448, was sued by a pedestrian who was hit by an elderly church member driving in reverse at a high rate of speed through the church parking area, an unmarked grassy clearing in the woods. In her deposition, the pedestrian said “not really” when asked if she could think of anything the church did wrong that caused the accident. The plaintiff also failed to refute evidence from a church member’s affidavit that parking areas in this condition are common in rural Louisiana and that there had never been any accidents in the church lot before.

Most personal injury cases are tried under a negligence theory. To prove that the defendant was negligent, the plaintiff must show that the defendant had a legal duty toward him or her and caused the accident or injury by failing to fulfill that duty. When a court grants summary judgement in a case, the case does not go to the jury. Instead, the judge decides the case on the basis of the law because he or she has determined that there are no disputed issues of fact for the jury to consider. In its recent personal injury cases involving summary judgement, the Supreme Court of Louisiana has decided that the question of whether the defendant had a legal duty toward the plaintiff is a question of law that the judge decides. If the judge decides there was a legal duty, the case goes to the jury, who decides, based on the evidence, whether the defendant fulfilled the duty. If the judge decides that there was no legal duty toward the plaintiff because the dangerous condition that caused the accident was “open and obvious,” the defendant can be granted summary judgement, which is an “automatic win.”

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rural-courthouse-1466073-1024x709A recent case from the Fifth Circuit Court of Appeal for the State of Louisiana demonstrates the importance of ensuring a client has all relevant evidence before proceeding with a lawsuit. Although the Plaintiffs eventually had all sanctions dropped for “pursuing a meritless case”, they could have saved a lot of time and effort had they properly investigated all of the facts prior to filing the lawsuit.

The underlying proceedings prior to the appeal involved the Plaintiffs filing a “Petition for Enforcement of Mortgage on Real Estate.” alleging that their spouse/father had loaned $50,000,00 to the Defendant. The Plaintiffs alleged there was a promissory note executed for the debt.

To secure the debt, the Defendants property was encumbered with a mortgage that would, over twenty-five years, repay the debt. The loaner passed away, and the surviving spouse and heirs (the Plaintiffs in this case) inherited the mortgage and wanted the remaining balance paid.

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pharmacy-1507606-1-1024x768Recently, the Louisiana Fifth Circuit Court of Appeals increased a trial court’s award of damages to a plaintiff in a negligence action against Walgreens. Negligence involves showing the court that one person (or company) failed to do their duty—and as a result, someone was hurt. In this case, Peggy Williams asked her son Derrick to pick up a medication for her from the Walgreens pharmacy in Gretna. Walgreens’ pharmacist handed Derrick another person’s medication, and Ms. Williams took the pills without noticing the mistake. As a result, she suffered several strokes and long-term loss of physical capacity. The jury found that Ms. Williams and her son were 40% at fault, and that Walgreens was 60% at fault for the harms Ms. Williams suffered.

Ms. Williams appealed the judgment on two grounds.

First, she argued that the trial judge made a mistake by entering a judgment different from the jury’s responses on the verdict form. The verdict form apportioned the fault to the parties in the following manner:

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parking-lot-1445848-768x1024When a person is injured and they file a lawsuit to recover damages for their injuries, they expect to “have their day in court,” to be able to present their case and all of the facts and evidence that support their case. But what if the other side argues that there is no real disagreement about the facts and that the facts do not support the injured party’s claim? A judge can decide early on in a lawsuit that there is no real question about a material fact and that reasonable persons would come to the same conclusion when considering the facts. This is what happened to Mr. Salvadore Tramuta when he filed suit for personal injuries in Jefferson Parish, Louisiana.

Mr. Tramuta fell as he stepped from the raised sidewalk in front of a strip mall to the parking lot. The reasons for his fall are the crux of the lawsuit. The strip mall’s owners, Lakeside Plaza, L.L.C., had recently corrected what they thought was a dangerous hazard to customers and unwittingly created for themselves the basis for Mr. Tramuta’s lawsuit.

Lakeside’s strip mall has about eight stores with a raised sidewalk running the length of the building. At first, the step was reasonably manageable from the sidewalk to the parking lot, but over time the soil settled and the step became larger as the parking lot settled lower. Lakeside corrected this problem by having an additional step made between the sidewalk and the parking lot so that customers would not have such a large step down or up. The parking lot had parking spaces fronting the sidewalk and perpendicular to it. Each parking space also has a parking bumper parallel to the sidewalk. When Lakeside added the additional step they chose to leave the parking bumpers in place. As a result, the step down from the sidewalk was shorter but the area between the parking bumpers and the step was lessened, creating less space for customers to step as they exited the stores.

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build-4-1213636-1-768x1024Insurance companies are coming under increasing pressure due to the recent proliferation of natural disasters in the United States. For an insurance company, navigating the boundary between legitimate and bad faith denial of claims can be a very risky business. However, courts are providing more and more guidance for insurers of companies who find themselves targeted by disaster. Recently, in Citadel Broadcasting Corp. v. Axis U.S. Insurance Co., 2014-CA-0326, the Fourth Circuit  Court of Appeal in Louisiana clarified the requirements a claimant must meet in order to receive payment  through an insurance plan.

Citadel Broadcasting (“Citadel”) was based in New Orleans at the time it sustained crippling damage from Hurricane Katrina. Prior to the incident, Citadel was insured by Axis U.S. Insurance (“Axis”) for physical damage and business interruption (“BI”) losses, including contingent business interruption income. This means that in addition to physical damage, Axis covered the loss of profits suffered by Citadel while it was restoring its locations and broadcasting capabilities. This BI coverage was to extend for 365 days from the date of the incident. Axis denied coverage to Citadel relying on “exclusion k”, a loss of market exclusion. Loss of market means that the coverage would be denied because Citadel had lost the opportunity to market their broadcasting to their listeners. A jury returned a verdict against Axis in the amount of $11,813,976, and this amount was mostly affirmed by the Court of Appeal.

Louisiana law imposes a relaxed burden of proof showing  that a particular catastrophic event actually caused the damage. Damages must be proven to a reasonable certainty, and the proof of loss must only be as precise as circumstances allow. See La Louisiane Bakery Co. v. Lafayette Ins. Co, 09-825, p. 28 (La.App. 5 Cir. 2/8/11) The court is given broad discretion over these questions due to the imprecise nature of the calculation of lost profits. The formula examines a company’s actual loss by comparing expected performance prior to the incident with actual performance after the incident, and does not require direct proof of loss of customers. For example, Citadel satisfied this requirement by demonstrating a loss of market share at the expense of an increased market share of its competitors, and by calculating actual loss according to Axis’ insurance coverage provisions.

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asbestos-1522143-1-1024x768Insurance agreements often include a provision stating that the insurance company will defend their client or absorb the cost of defending if the client is sued. Eagle Incorporated – a New Orleans based provider of drywall, insulation, plaster, and other building materials – was previously insured by OneBeacon Insurance Company (OneBeacon) and United States Fidelity and Guaranty Company (USFG). Both of the insurance companies issued policies covering legal defense costs. That insurance paid off for Eagle when an employee sued for injury sustained from prolonged exposure to asbestos over his twenty-one years of employment.

When the injury alleged arrises over the course of many years and several insurance companies had polices with the defendant over that time, the insurance companies will split the cost to defend. In this case, USFG was the provider for three of the twenty-one year injury period so they would typically pay for that proportion of defense costs. When the employee brought the lawsuit, OneBeacon was the only listed insurance company set to defend Eagle. OneBeacon then asked the court to join USFG so they could split the cost to defend. However, USFG and Eagle had been parties of a prior lawsuit wherein they reached a settlement agreement stating that USFG would pay Eagle an undisclosed amount and in exchange their insurance policy would be altered to free them of the obligation to pay for past, present, or future defense costs. USFG brought this agreement to the court’s attention as a reason why they should not be liable for the present case.

OneBeacon did not want to shoulder the entire cost of defending so it asked the court for a summary judgment voiding the effects of the settlement agreement and ordering USFG to participate. USFG then asked for their own summary judgment validating the settlement agreement and freeing them from defense costs. The trial court sided with OneBeacon, finding that Louisiana disfavors insurance contract alteration when it will prejudice an injured third party and that allowing the settlement agreement alteration to stand would surely affect the other parties.  An appeal of the Louisiana Fourth Circuit Court of Appeal followed.

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lawyers-1491730-1024x768The last thing that you want to do after dealing with litigious matters is have to hire more lawyers.  However, if you believe your lawyer committed legal malpractice thats exactly what you will be forced to do.  Lawsuits containing claims of legal malpractice are taken very seriously by the courts presiding over them.  Very strict timelines dictate when you must file a lawsuit alleging legal malpractice and if your not careful your case could be dismissed before it gets started.  A recent case out of the Louisiana Fourth Circuit Court of Appeal discusses a lower courts ruling in a legal malpractice lawsuit in favor of Defendants, Romauldo Gonzalez, Sr., and the Law Offices of Romauldo Gonzalez, L.L.C. d/b/a Braden Gonzalez and Associates (collectively, “Mr. Gonzalez”) based on prescription arguments.

In July of 2013, Marco Tulio Miralda filed a legal malpractice lawsuit against Mr. Gonzalez. In his petition, Mr. Miralda alleged that he retained Mr. Gonzalez in early 2008 in regards to renegotiating a mortgage note held by Wells Fargo on his New Orleans home. Mr. Miralda was in default on his mortgage note and Wells Fargo had initiated foreclosure proceedings on the property. Mr. Miralda alleged that Wells Fargo was inclined to negotiate reinstatement of the loan.

Mr. Miralda was allegedly advised by Jose Chacon, a non-attorney employee of Mr. Gonzalez’s law firm, to deposit $30,000 into a trust account to serve as a down payment, for purposes of the renegotiation. Per the instructions, Mr. Miralda deposited $33,864.75 into the trust account.

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