Make Sure You Are Sure! – A Comment on the Finality of Settlement Agreements under Louisiana Law

The poet Robert Frost famously wrote that: “Good fences make good neighbors.” But what if there is a problem even fences won’t solve? Louisiana law offers some answers.

Under Louisiana law, a landowner cannot use their property in a manner that interferes with their neighbor’s enjoyable use. While a neighbor may have to put up with some inconveniences, excessive inconveniences that cause damage may be actionable. If a landowner’s activity is considered a nuisance, he may be liable for damages, and the court may require the landowner to stop the activity.

To determine whether a particular activity is considered a nuisance, courts look to the following factors: (1) the character of the neighborhood; (2) the degree of the intrusion; and, (3) its effect on the use and enjoyment of neighboring properties. For example, a person living in a heavy industrial area may have to put up with more noise than someone living in the suburbs. Whether activity is considered a nuisance is determined on a case-by-case basis.

Further, the nature of the noise and its persistence and duration can be a factor in determining whether the activity is a nuisance. For example, in Parish of E. Feliciana ex rel. E. Feliciana Parish Police Jury v. Guidry 2004-1197 (La. App. 1 Cir. 8/10/05), 923 So. 2d 45, writ denied, 05-2288 (La. 3/10/06), 925 So. 2d 515, the court looked not only at the level of the noise, but also at the “nature” of the noise. The court held that noise from a motor cross track was a nuisance, likening the noise to a chainsaw, a buzzing bee, or a dentist drill.

Even when a landowner has a right to conduct a business on his property, he cannot create a nuisance in running the business. Louisiana courts have held that noxious smells, dust, debris, rats, flies, and noise may all constitute a nuisance, even if the business was otherwise lawful.

The duty owed to neighbors applies not only to the landowner, but may also apply to tenants or contractors performing “work” on the property. To prove a nuisance, the offended neighbor must show that the landowner/tenant/contractor either “knew or should have known” that the activity was a nuisance.

When mending fences is not possible, you may have other options.

Chelsea Payne is an associate at Keogh Cox and has been practicing for three years. Her practice mainly relates to construction law and complex litigation. Chelsea enjoys playing tennis and spending time with her family.

In a very important ruling by the Louisiana Supreme Court, a tort defendant is no longer liable for any “actual charges” by medical providers above the amount paid by a Workers Compensation insurer pursuant to promulgated Workers Compensation fee schedule . In Simmons v. Cornerstone Investments, LLC, 2018-cc-0735 (La. 5/18/19), the court concluded:

“…the amount of medical expenses charged above the amount actually incurred is not a collateral source and its exclusion from the purview of the jury was proper.” See http://www.lasc.org/opinions/2019/18-0735.CC.OPN.pdf

The court conducted a detailed analysis of the development of the collateral source rule under applicable jurisprudence noting that the genesis of the collateral source rule:

“Under the collateral source rule, a tortfeasor may not benefit, and an injured plaintiff’s tort recovery may not be reduced, because of monies received by the plaintiff from sources independent of the tortfeasor’s procuration or contribution. Under this well-established doctrine, the payments received from the independent source are not deducted from the award the aggrieved party would otherwise receive from the wrongdoer.” See Louisiana Dept. of Transp. & Dev. v. Kansas City Southern Railway Co., 02-2349, p. 6 (La. 5/20/03), 846 So.2d 734, 739.

Essentially, the court asks two questions when assessing whether the collateral source rule should apply. First, does the claimed benefit arise from some payment, wage deduction or other contribution by the Plaintiff that would diminish the plaintiff’s patrimony? Second, will the goal of tort deterrence be promoted by allowing the windfall? In a series of cases culminating in the case at bar, the court has been limiting the application of the collateral source rule in a number of contexts.

The court in Bozeman v. State, 03-1016 (La. 7/2/04), 879 So.2d 692, found that the collateral source rule did not apply when Medicaid was the payor such that the defendant could not be responsible for any amounts above what Medicaid paid to the provider. The court reasoned that it would be “unconscionable” to require taxpayers to pay the bills and then let a plaintiff recover the full undiscounted medical expenses and “pocket the windfall.” The court continued by noting in “Cutsinger v. Redfern, 08-2607 (La. 5/22/09), 12 So.3d 945, this court found the collateral source rule did not apply to prevent the plaintiff’s uninsured motorist carrier from receiving a credit for workers’ compensation benefits paid by her employer, even though the plaintiff paid for the UM coverage herself.” In Hoffman v. 21st Century North American Ins. Co., 14-2279 (La. 10/2/15), 209 So.3d 702, the court held that the collateral source rule does not apply to attorney-negotiated medical discounts. The court also looked at the US 5^th Circuit in Deperrodil v. Bozovic Marine, Inc., 842 F.3d 353 (5th Cir. 2016), that the collateral source rule does not apply above any amounts actually paid by the employer in the context of the LHWCA.

In each of the instances outlined, the court noted that the patrimony of the plaintiff was not impacted by limiting recovery to the amount of medical bills actually paid. Moreover, the court noted that the goal of tort deterrence is not negatively impacted, and that allowing a plaintiff to recover a windfall in this context is tantamount to an award of punitive damages that are not recoverable absent statutory authority which is not present in this context. The Simmons decision now extends that same logic to cases where a Workers Compensation insurer has paid the medical benefits pursuant to the Louisiana Workers Compensation Law.

This ruling will have significant impact on the evaluation, settlement and trial of tort cases that have corresponding Workers Compensation claims.

Submitted by John P. Wolff, III (Partner)

On April 20, 2010, BP's Deepwater Horizon rig exploded at a cost of eleven lives. What followed was the largest accidental marine oil spill in history. In the aftermath, BP looked for a solution, ostensibly to cap its exposure and address a swirling PR disaster. BP began to actively negotiate a settlement.

On March 2, 2012, BP agreed to a detailed settlement which set forth specific criteria for recovery under the Fund created by the Agreement. In August of that year, BP asked U.S. District Judge Carl Barbier to approve the settlement. The Agreement was approved.

Despite championing the settlement, BP later filed a lawsuit seeking to set aside the settlement, unless it was interpreted as suggested by BP. BP's challenges were rejected by the Federal District Court. Thereafter, the New Orleans-based Fifth Circuit Court of Appeals affirmed that ruling in a 2-to-1 decision. BP then applied for a Petition of Writ for Certiorari with the United States Supreme Court in a final challenge to the settlement.

About BP's legal maneuvers, Samuel Issacharoff, a New York University Law Professor, said the following: "This case is about a contract that BP signed that it now wishes it hadn't."

One of BP's primary complaints was that, in effect, the settlement could be interpreted to provide recovery for individuals or businesses who could not show a direct link between a financial downturn and the spill. In response, it was stated that the settlement was crafted to use objective measures to gauge whether losses are recoverable.

On December 8, 2014, the U.S. Supreme Court rejected BP's Petition for Writ of Certiorari. As such, the settlement agreement first proposed by BP will remain in place. No higher court remains.

Under the Agreement, potential claimants have 6 months from the Supreme Court's Petition denial to file claims.