Louisiana Legislature Passes the Civil Justice Reform Act of 2020

Sometimes in law, the facts of a case may threaten to eclipse the legal issue. However, Louisiana law instructs the fact finder to see through the facts, and their sometimes tragic nature, and apply the law as written. As Aristotle once wisely said, “The Law is reason free from passion.”

In Kazan, et. al. v. Red Lion Hotels Corporation, et. al., 2021-CC-01820 (La. 6/29/22), the Louisiana Supreme Court recently ruled on a case with tragic facts, and its ruling provides an example of Aristotle’s description of law in action. In Kazan, a female patron was in the parking lot of a motel when a male patron approached her and used Kazan’s vehicle to abduct her from the premises. The car was later found submerged in a lake, and Kazan’s body was recovered from the water. The family filed a tort suit against several parties, including the motel’s owner and its insurer, the Great Lakes Insurance Company SE.

Great Lakes filed a motion for summary judgment and asked to be dismissed on grounds that coverage for the event was excluded from its policy. Specifically, the insurer argued that bodily injury caused by an “assault,” “battery,” or “physical altercation” was excluded under the policy’s terms. Great Lakes further argued that the kidnapping and ultimate death of the patron was excluded under the policy as bodily injury caused by an assault, battery, or physical altercation. The Louisiana Supreme Court agreed and reversed the decision of the trial and appellate courts.

Under Louisiana law, “[a]n insurance policy is a contract between the parties and should be construed using the general rules for the interpretation of contracts.” Id. at p. 3. “When the words of an insurance policy are clear and explicit and do not lead to absurd consequences, courts must enforce the language as written.” Id. at p. 3. “Courts lack authority to alter the terms of an insurance policy under the guise of interpretation and should not create an ambiguity where none exists.” Id. at p. 3.

With these basic rules in mind, the Court carefully reviewed the wording of the exclusion in the Great Lakes policy which stated as follows: “This insurance does not apply to ‘bodily injury,’ ‘property damage,’ or ‘personal advertising injury’ arising out of an ‘assault,’ ‘battery,’ or ‘physical altercation.’” “Physical altercation” was defined in the policy as “a dispute between individual [sic] in which one or more persons sustain bodily injury arising out of the dispute.” Citing Merriam-Webster’s dictionary, the Court defined the term “dispute” as “verbal controversy” or “quarrel.”

Based upon the evidence in the case, the Court found the female patron was involved in a “dispute” with her male attacker, and ultimately sustained bodily injury as a result of the dispute. Therefore, the patron was injured in a physical altercation, as defined under the specific terms of the Policy, and coverage for the event was excluded under the policy’s terms.

The Court noted as follows: “The facts of this case are undoubtedly tragic. Nonetheless, absent a conflict with statutory provisions or public policy, insurers are entitled to limit their liability by imposing reasonable conditions upon the policy obligations they contractually assume. That is what Great Lakes did in the insurance policy at issue here.” Despite the tragic facts presented in the case, in so holding, it appears the court agreed with Aristotle’s belief that the Law is Reason Free from Passion.

Historically, Louisiana law provided that a professional rescuer injured in the performance of his or her duties “assumes the risk” of an injury and is not entitled to damages. See Worley v. Winston, 550 So.2d 694, 696 (La. App. 2 Cir.), writ denied, 551 So.2d 1342 (La. 1989). This is known as the Professional Rescuer’s Doctrine and applied as a defense to claims raised by firefighters, policeman, and others. The doctrine prevented recovery because the professional rescuer “assumed the risk” of injury. Recently, the Louisiana Supreme Court in Doe v. McKesson, 2021-00929 (La. 3/25/22) rejected the doctrine as a bar to suit by the professional rescuer.

In Doe, the Supreme Court of Louisiana accepted a certified question from the Fifth Circuit of the United States Court of Appeals as to the viability of the doctrine. In response, the Supreme Court held that the Professional Rescuer’s Doctrine has been abrogated in Louisiana both legislatively under La. C.C. art. 2323 and jurisprudentially in Murray v. Ramada Inns, Inc., 521 So.2d 1123, 1132 (La. 1988).

The Court cited La. C.C. art. 2323(A), which provides that the fault of “all persons […] shall be determined” in a civil action. Subsection (B) of the article provides this rule applies “to any claim for recovery of damages for injury, death, or loss asserted under any law or legal doctrine or theory of liability, regardless of the basis of liability.”

In Murray, the Supreme Court previously held that the doctrine of assumption of risk no longer had a place in Louisiana tort law following the adoption of comparative fault. Nevertheless, the Murray Court identified two exceptions:

• Cases “where the plaintiff, by oral or written agreement, expressly waives or releases a future right to recover damages from the defendant,” if “no public policy concerns would invalidate such a waiver, the plaintiff's right to recover damages may be barred on a release theory;” and

• “[I]n the sports spectator or amusement park cases (common law’s “implied primary” assumption of risk cases).”

Murray, 521 So.2d at 1134. (internal citations omitted).

The Doe court observed that Murray provided no exception relative to professional rescuers. The Court further observed that, while the legislature had enacted statutes that bar plaintiff recovery in other settings, no such statute had been passed to codify the Professional Rescuer’s Doctrine.

Although professional rescuers injured in the performance of their duties may still be found at fault, the is no longer an automatic bar to suit.

As the old adage goes, it’s always safest to get an agreement in writing. In Louisiana, when an agreement is about the sale of real estate, the adage is law. A contract for sale must be in writing as provided in Louisiana Civil Code articles 1839 and 2440.

This long-standing rule was at issue in the recent case of Holmes v. Paul, 19-130 (La. App. 5 Cir. 10/2/19), 279 So. 3d 1068. In Holmes, the plaintiff/seller and defendants/purchasers entered into a purchase agreement for a Metairie home which required a closing by no later than April 29, 2016. The contract was a standard form Louisiana purchase agreement which required that any change in the closing deadline be written and signed by both parties. The parties later entered a written extension of the closing deadline to May 6, 2016.

Three days before the closing, the home appraised for $14,000 below the purchase price, leading the seller’s agent to encourage the purchasers’ agent to pursue an appraisal review. However, the parties did not sign a written extension of the May 6, 2016 closing deadline. Thereafter, the seller agreed to decrease the purchase price to the appraised value, but on the same day the purchasers sent a signed cancellation. The seller sued the purchasers for breach of contract, arguing that the parties verbally agreed to extend the closing deadline and intended to execute a written extension as soon as they determined a feasible closing date.

The purchasers moved for summary judgment on the ground that the purchase agreement had expired and was unenforceable. The Court agreed. The purchase agreement expressly required that extensions be made in writing signed by both parties. Upon the expiration of the May 6, 2016 closing deadline, the contract was unenforceable.

The seller also asserted a detrimental reliance claim, arguing she was lulled into not insisting on a written extension because the purchasers’ agent agreed to it orally. However, the seller conceded her awareness that an extension had to be in writing. As such, her reliance was not reasonable. The court further noted the absence of evidence that the purchasers themselves agreed to orally extend the contract or to waive the writing requirement.

Unfortunately, business deals in the modern world cannot be finalized by a handshake. Remember that when you buy and sell property in Louisiana -- get it in writing.

Marty Golden has been practicing law based in Baton Rouge, Louisiana for over thirty years, concentrating in civil litigation primarily involving injuries, property damage, insurance coverage, and contract disputes. Much of his practice is defending and advising real estate agents in suits by property buyers and sellers, but Marty also defends other professionals, insurance companies, manufacturers, and business owners. Marty has a special interest in all things procedural, because they are the rules of the road for litigators and knowing them better than his opponent gives him a leg up in court.