Oil & Gas Clean-Up Not "Capped"

The Louisiana Supreme Court recently held that a request for service of process made by facsimile filing within ninety days from the filing of the petition, but not perfected until after the ninety days has passed, is a timely request for service of process under LSA-C.C.P. art. 1201. See Brenda Morales and Jerson Rodriguez v. State of Louisiana Through the Board of Supervisors of LSU Through Earl K. Long Medical Center, 12-2301 (La. 1/11/13), --So.3d---.

In reaching its decision, the Morales court addressed whether Louisiana's Facsimile Filing Statute, LSA- R.S. 13:850, required both the payment of fees and the receipt of the original request for service before service is considered to have been requested. Under Louisiana procedure, the petitioner has 90 days to request service upon all defendants. See LSA-C.C.P. art. 1201. When service is not timely requested, the case can be involuntarily dismissed without prejudice on the motion of another party. See LSA-C.C.P. art. 1672(C). This dismissal can result in a later bar to the claim if the re-filed suit is then prescribed and the defendants can show bad faith in the failure to request service or the suit involves a claim against the state or a political subdivision of the state.

In Morales, the Louisiana First Circuit had found that the request for service was not timely because the fax filing fees were not paid by the attorney until after the ninetieth day. The First Circuit relied on the Louisiana Supreme Court's previous ruling in Trachant v. State of Louisiana, Louisiana State University Health Sciences Center, 08-0978 (La. 1/21/09), 5 So.3d 832 which stated that "[a] valid request for service under La. R.S. 13:6107(D)(1) is made when the clerk receives the request for service and can then act on it." The First Circuit reasoned that a clerk cannot act upon a request for service when there is no original request and the corresponding fees had not been paid. However, Trachant did not involve fax filing and instead considered whether a request for service is effective when it is placed in the mailbox or when it is received by the clerk. This is sometimes referred to as the "mailbox rule." The Trachant court held that actual receipt of the request was required.

The Louisiana Supreme Court in Morales disagreed with the First Circuit and found that the clerk can "act upon" receipt of the facsimile filing. The Court emphasized that LSA- R.S. 13:850(A) provides that a facsimile filing "shall be deemed complete at the time that the facsimile transmission is received and a receipt of transmission has been transmitted to the sender by the clerk of court." The Morales Court harmonized its ruling with Trachant by finding that the Court has always held that the receipt of the request must occur within the 90 day period.

Even after Morales, a request for service of process should be followed by the prompt mailing of the original signed document and the required transmission fee. However, Morales indicates that Louisiana's highest court is likely to give consideration to preserving a claim when interpreting the otherwise strict requirements of Louisiana's Facsimile Filing Statute.

Louisiana Code of Civil Procedure article 1464 allows a defendant to select a physician to perform a physical and/or mental examination of a plaintiff to challenge the plaintiff’s claimed physical and mental injuries. This is called an Additional Medical Opinion (AMO); this was previously referenced as an Independent Medical Examination (IME). Earlier this year, the Louisiana Supreme Court, outlined the “good cause” requirement of the statute—an essential element required to proceed with an AMO. But, what remained as a question was the scope of an AMO and which party had the burden to deal with requested restrictions on the physician’s medical exam. This question was answered: In Augustine v. Safeco Insurance Company of Oregon, the Louisiana Supreme Court held that after “good cause” has been shown for the examination, the party seeking to limit the scope of the AMO bears the burden to justify the restrictions.

In Augustine, a sequel to Hicks v. USAA General Indemnity Company, Et al, the Court held that if the party to be examined for the AMO, usually the plaintiff, wants to place limits upon the examination, that party then has the burden of proof to justify the need for any restrictions or limitations with competent evidence. This ruling appears to show a trend in which the Court is confirming a defendant’s ability to obtain an AMO to support its defenses to a personal injury claim. Augustine follows another Supreme Court decision from March of 2022, in which the Court held that a party establishes “good cause” for an AMO if that party shows a “reasonable nexus” between the requested examination and the condition in controversy. See Hicks v. USAA General Indemnity Company, Et al. The Hicks decision eased the hurdles that defendants faced when seeking to compel AMOs pursuant to Louisiana Code of Civil Procedure article 1464. For more information on the Hicks decision, see our prior blog here. Supreme Court Clarifies “Good Cause” for Additional Medical Opinion (“AMO”) (keoghcox.com)

In Augustine, the defendants requested an AMO. The plaintiff agreed to the examination, but the parties were unable to agree on “certain restrictions” the plaintiff sought to impose on the scope of the examination. The defendants ultimately filed a Motion to Compel regarding this issue. The District Court limited the examination to only those tests that the plaintiff’s treating physicians had performed. The District Court also noted that it did not want the AMO to turn into a “fishing expedition.” The Court of Appeal denied the defendant’s request for review of the Trial Court’s decision. The defendants then sought relief from the Supreme Court, which vacated the Trial Court’s ruling and remanded the case for further proceedings consistent with its opinion.

In its opinion, the Supreme Court set forth the burden of proof each party has in the context of a Motion to Compel an AMO. As outlined in Hicks, the party requesting the AMO initially has the burden to establish “good cause” for the AMO. Importantly, the Augustine court found that once “good cause” has been found, “the court should presume that the examination will be conducted in a reasonable manner.” Because it is presumed the examination will be conducted reasonably, if a party opposing the AMO wants to place restrictions on the examination, the burden now shifts to that party to establish “special circumstances” that justify the restrictions they request. To meet this burden, the opposing party must produce “competent evidence” to establish (1) the need for the restriction and (2) that harm that will result if the restrictions are not imposed. The type of evidence that may support AMO restrictions under Augustine likely will vary depending on the unique facts of each case. However, Hicks and its “sequel,” Augustine, provide clarification and guidance to parties seeking to compel or limit an AMO under article 1464.

Case References:

Augustine v. Safeco Insurance Company of Oregon, 2021-01753 (La. 10/1/22), __ So.3d __.

Hicks v. USAA General Indemnity Company, Et al., 2021-00840 (La. 3/25/22), 339 So.3d 1106.

Written by Chad A. Sullivan and George A. Wright

The Supreme Court ruling in Couvillion Group, LLC v. Plaquemines Parish Government, 2020 -00074 (La. 4/27/20) is a reminder that an indemnity claim must be sufficiently related to the principal demand and that contract indemnity provisions are to be strictly construed.

In Couvillion, the general contractor sued the owner of a public works port project for contract delay damages resulting from a cease work order issued to allow redesign of a fuel tank platform. When the contractor submitted its delay claim, the owner requested that its project engineer review it and make recommendations. The engineer recommended payment of a little over $1 million dollars. When the owner refused to pay, the contractor sued. In response, the owner filed a third-party demand against the engineer alleging that its recommendation was erroneous and excessive and that, if it was bound by the engineer’s recommendation, then the engineer must indemnify the owner.

On behalf of the engineer, Keogh Cox attorneys argued that the engineer should not be required to reimburse the owner for any delay costs and asked for dismissal through an exception of no cause of action. Code of Procedure Article 1111 provides that a defendant in a principal action may bring in any person who may be liable to him for all or part of the principal demand. Here, that was not the situation. The engineer was not liable to the owner for any part of the contractor’s delay claim because the engineer did not cause the delay. The delay damages were incurred before the engineer made a recommendation for payment. The events giving rise to the two claims were separate and distinct: the main demand arose from the project delay and the third- party demand arose from the engineer’s recommendation of the claim amount. The Court commented that the principal claim against the owner for delay damages was too attenuated from the owner’s claim against the engineer, thus the third-party demand was improper.

The owner also relied on the indemnity provision in the engineer’s contract that required the engineer to indemnify the owner against any and all claims for personal injury or “damages to property” that may arise from its services. The Court held that the plain meaning of the term did not include the economic-only losses related to the subject delay claim. The Court further reasoned that indemnity agreements are to be strictly construed, rejecting the owner’s broader interpretation.