Louisiana Supreme Court Vacates Prior Decision and Finds Prescriptive Periods for Child Abuse Claims Can Be Revived

A federal court for the Middle District of Louisiana recently ruled that a 1½ inch elevation change in a Walmart parking lot did not present an unreasonable risk of harm to the plaintiff patron in Lacaze v. Walmart Stores, Inc. The case involved a slip and fall/trip and fall accident in the parking lot of Walmart’s Burbank Drive store in Baton Rouge. The defendant moved to dismiss the suit where the plaintiff claimed she tripped and fell as she crossed the area where the black asphalt parking lot adjoined the concrete crosswalk as pictured below.

In the area where the asphalt meets the crosswalk, the surface presented a ¼ inch to 1½ inch change in elevation. Plaintiff admitted the black pavement was distinct in appearance and color from the concrete crosswalk. Surveillance showed that plaintiff looked down at her cell phone at the time she tripped and fell. Though in a high pedestrian traffic area, Wal-Mart maintained this was the first reported incident.

The Court found the condition was open and obvious and did not present an unreasonable risk of harm. To reach this decision, the Court made the following observations:

1. Parking lots have clear and apparent utility. Crosswalks do as well. Crosswalks give patrons a designated area to traverse the lot safely.
2. The likelihood and magnitude of the risk posed by the condition was low. The Court noted it is common for surfaces of parking lots and sidewalks to be irregular, and no other patrons reported problems or accidents.
3. The cost of preventing the harm was high. The Court would not consider only the cost of fixing the specific injury-causing defect. Rather, it considered the cost of eliminating all defects in the Walmart parking lot.
4. Plaintiff conducted an ordinary commercial activity that was not dangerous in nature.

The Court concluded that all but factor four pointed to a single conclusion: the 1½ inch elevation difference did not pose an unreasonable risk of harm. The Court reached this conclusion even though the plaintiff retained an expert who gave opinions regarding possible violations of the Americans with Disabilities Act (ADA) and OSHA regulations. The expert’s opinions were insufficient to defeat summary judgment when the condition was open and obvious. In reaching its ultimate conclusion, the Court joined with several other courts, including the following:

• Chambers v. Vill. of Moreauville, where a one-and-one half inch deviation did not present an unreasonable risk of harm;
• Reed v. Wal-Mart Stores, where a height variance of one-fourth to one-half inch between concrete blocks in parking lot did not present an unreasonable risk of harm; and
• Boyle v. Board of Sup'rs, Louisiana State University, where a depression of up to one inch in a sidewalk did not pose unreasonable risk of harm.

Case References: Lacaze v. Walmart Stores, Inc., No. CV 20-696-JWD-EWD, 2022 WL 4227240 (M.D. La. Sept. 13, 2022); Chambers v. Vill. of Moreauville, 2011-0898 (La. 01/24/12), 85 So.3d 593; Reed v. Wal-Mart Stores, 97-1174 (La. 03/04/98), 708 So.2d 362; and Boyle v. Board of Sup'rs, Louisiana State University, 96-1158 (La. 01/14/97), 685 So.2d 1080.

Uninsured/underinsured motorist coverage (“UM coverage”) is included in all automobile liability policies by Louisiana law unless the insured “rejects [UM] coverage, selects lower limits, or selects economic only coverage.” What constitutes an adequate rejection of UM coverage has been the crux of countless lawsuits across the state. Recently, in Havard v. Jeanlouis, et al, 2021-C-00810 (La. 6/29/22), the Louisiana Supreme Court examined the validity of a corporate representative’s signature in the context of execution of a UM waiver form. Louisiana courts have found that without a valid signature, UM coverage generally may not be waived.

The Havard court recognized that a corporation cannot “sign” its own name, and that an authorized representative must act on its behalf. Under the facts of this case, an administrative assistant attempted to execute a UM waiver form at the corporate representative’s direction with a stamp of the representative’s signature. The plaintiff argued that the use of the stamp did not meet the requirements for proper execution of the UM waiver form at issue.

Considering these facts, the court noted that Louisiana law of mandate provides that “when the law prescribes a certain form for an act, a mandate authorizing the act must be in that form.” The court continued: “Accordingly, where one individual signs a UM form on behalf of another individual and authority is not conferred by law, our Civil Code requires this authority be in writing.”

While the corporate representative in Havard verbally instructed his administrative assistant to complete the waiver with his signature stamp, no written mandate existed between the representative and the assistant to confirm this authority. Absent the written mandate, the court disregarded the express intention of the corporate representative and held the form invalid.

The court recognized the impracticality of its holding. However, it also commented “Concerns over the practical impact within the insurance industry in scrutinizing stamped signed UM forms are unavailing. Inconvenience is not absurdity. The insurer has the authority, opportunity, and responsibility to assure the UM form is completed properly. … Practical considerations regarding increased due diligence requirements are matters of policy best directed to the legislature.”

Cases involving UM waiver forms are fact-sensitive. Havard involved unique facts where the company’s authorized agent did not sign the UM waiver form personally. While Havard may be limited to its facts, it reminds that proper execution of a UM waiver form is necessary for UM coverage to be properly waived.

Louisiana Supreme Court Provides Updated Guidance on Execution of UM Waiver Forms

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.