Is Your Neighbor a Nuisance?

In response to the COVID-19 pandemic, the Louisiana legislature enacted and modified several statutes to limit the liability of individuals, businesses, and government agencies for exposure claims. However, the immunity is not absolute. While the immunity applies to “ordinary” negligence claims, it does not apply where acts are grossly negligent, wanton, or involve reckless misconduct. Further, as a condition to the protection afforded, the entity must show substantial compliance with the applicable COVID-19 procedures established by government authorities.

La. R.S. 9:2800.25, entitled “Limitation of liability for COVID-19” (the general immunity statute) provides that no person, business, or government entity shall be liable for injury or death resulting from exposure to COVID-19 through the performance of its business operations unless the entity failed to substantially comply with at least one set of procedures established by the federal, state, or local agency that governs the business operations, or the injury was caused by gross negligence or wanton, reckless misconduct. With respect to employer immunity, the statute provides that, regardless of whether an employee’s COVID-19 illness is covered under workers’ compensation law, the employee shall have no tort-based remedy against his employer unless the exposure was caused by an intentional act.

The exception to immunity in the general immunity statute calls into question the type of conduct that would rise to a level of gross negligence. Gross negligence is defined in Louisiana case law as “willful, wanton, reckless conduct that falls between intent to do wrong and ordinary negligence,” “lack of even slight care and diligence,” and “utter, complete or extreme lack of care.” While the definition does not provide a bright line rule, it reflects that the conduct must move well beyond simple negligence to defeat immunity.

For a business seeking to manage the risks arising from COVID-19, some best practices emerge: (1) monitor the COVID-19 procedures of government authorities to keep informed of the latest recommended or mandated procedures, (2) institute compliance protocols, (3) document and administer those procedures to show compliance, and (4) most obviously, avoid actions or omissions that may be construed as grossly negligent, wanton, or reckless.

Mary Anne Wolf is an engineer/attorney with a construction background who represents design professionals, contractors and others in construction litigation. She also gives seminars on the subject. She enjoys travel, yoga and encouraging her husband in his gardening and cooking endeavors.

The Louisiana Fourth Circuit Court of Appeal recently considered a medical malpractice case with an unusual set of facts. Rather than the standard medical malpractice case, where a patient argues that he was misdiagnosed and/or claims that the doctor made a mistake when administering medical treatment, in Dufreche v. Jeffery Wayne Coco, MD and Internal Medicine Specialists, Inc., 2020-CA-0030 (La. App. 4^th Cir.), the patient alleged that his doctor committed malpractice by failing to communicate test results.

In Dufreche, the patient showed signs of an HIV infection. He was tested twice before being treated by the infectious disease specialist. Both tests were negative. During his examination, the infectious disease doctor thought it was unlikely that the patient had HIV, but tested him anyway at the patient’s insistence. According to the patient, he was notified by the doctor that he would be provided the results upon receipt.

Unfortunately, the test results showed that the patient was HIV positive; however, he was not contacted. Fifteen months passed, during which the patient was unaware that he was HIV positive. Because he was not contacted, he assumed he was negative. When testing by another physician showed he was positive, the patient/plaintiff filed suit to recover damages allegedly suffered through a delay in treatment and psychological shock, including a claim for “emotional distress.”

To recover, the patient was required to establish: 1) the standard of care; 2) breach of that standard of care; and 3) that the breach caused his emotional distress. At trial, the doctor testified that he required his patients to follow up in person to receive test results, and expected the patients to contact his office to schedule an appointment. The court found that expecting a patient to follow up in person to receive sensitive test results was not a breach of the standard of care. However, the evidence established that the patient was not instructed that he must schedule an in-person appointment to obtain his test results.

The Dufreche court agreed with the lower court in finding that a failure to notify the patient of the doctor’s policy was a breach of the standard of care. Further, the court found that the infectious disease specialist, who admitted to a duty to the public to protect them from HIV, had also breached his duty for failing to notify an HIV positive patient of his diagnosis for over fifteen months. The doctor’s failure to communicate the results caused the patient’s emotional distress – resulting in an award of $45,000 in damages.

Virginia “Jenny” McLin is a partner at Keogh Cox who practices in the fields of corporate litigation, insurance defense and workers compensation defense. When she is not practicing law, Jenny can be found volunteering with the Junior League of Baton Rouge; cheering for the LSU Tigers with her husband Ryan; or shuffling her two kids to and from dance practice.

Imagine you are a defendant sued because you negligently injured someone in Louisiana. In the accident, the plaintiff received extensive medical treatment. The health insurer paid $50,000 for medical costs even though the doctors billed $150,000 for the plaintiff’s care. The plaintiff was only out-of-pocket $500 for his health insurance deductible. What amount should you have to pay: $150,000, $50,000, or only $500?

The answer to this question is not so simple. You will certainly have to pay more than the plaintiff’s deductible, that much is clear. But whether you are required to pay the medical providers’ full rate of $150,000, the insurer’s discounted rate of $50,000, or some other amount for the medical services provided is a more complicated issue.

This blog is broken down in a two-part series. This installment will address the background of the collateral source rule and the public policy behind the rule.

What is the Collateral Source Rule?

The collateral source rule provides that a tortfeasor is generally not entitled to a credit for payments made to a plaintiff through “collateral sources,” i.e., sources not provided by the defendant. Under this rule, a tortfeasor’s exposure for damages should be the same regardless of whether or not the plaintiff purchased health insurance.

The collateral source rule permits the plaintiff to recover medical expenses in excess of the amounts actually paid by the plaintiff or their insurer. Critics therefore assert that the rule provides a “windfall” to the plaintiff that violates the goal of Louisiana tort law, namely to make the victim “whole.” As applied, the rule can make the victim more than whole.

Origins of the Collateral Source Rule

To understand the collateral source rule, it helps to look at its origins. The rule in the United States at least dates back to the 1854 case The Propeller Monticello v. Mollison, 58 U.S. (17 How.) 152, 15 L.Ed. 68 (1854). In Propeller Monticello, two ships wrecked and one sank. The insurer of the ship that sank paid for the loss. The owner of the at fault ship asserted that the plaintiff had been fully compensated by the insurer’s payment and that it was therefore not obligated to pay for the damage. In rejecting this argument, the Propeller Monticello Court held the defendant was not a party to the insurance contract and could not reduce exposure by citing to the insurance available to the plaintiff.

Policies Behind the Collateral Source Rule

In Dep't of Transp. & Dev. v. Kansas City S. Ry. Co., 846 So. 2d 734 (La. 5/20/03), the Louisiana Supreme Court detailed the public policy concerns that support the collateral source rule. According to the court, the policies in favor of the rule include:

i. Fairness- a defendant should not gain an advantage from benefits provided to the plaintiff independent of any act of the defendant;

ii. Deterrence- the rule provides a deterrence to negligent conduct; and,

iii. Promotion of Insurance- victims could be dissuaded from purchasing insurance if that act could affect tort recovery.

So, how much do you owe: $50,000, $150,000, or some other amount? We’ll tell you in Part II of this blog.