Were You Lying Then, Or Are You Lying Now?

In Dunlap v. Empire Trading Group, LLC, the buyers of a home sued the seller and the seller’s real estate agent for fraud after the home flooded three times in the first year after they bought the home. The seller was a home-flipper who disclosed two prior flooding incidents, both of which occurred during the ten months the seller owned the home.

However, the plaintiffs later discovered the home had a substantial flooding history when they requested a flood insurance quote from the National Flood Insurance Program. The quote included a report that identified eighteen incidents of flooding and flood insurance claims at the property over the ten years before the plaintiffs purchased their home.

The plaintiffs argued the seller’s agent committed fraud because she concealed her knowledge of previous flood claims. The seller’s agent moved for summary judgment, arguing that the plaintiffs could not prove that she knew about any of the prior undisclosed flooding incidents. The plaintiffs had no direct evidence to dispute the agent’s defense.

Instead, they argued that circumstantial evidence was sufficient to defeat the motion. They claimed that because the seller had a flood policy on the home, it also would have received the same flood claim history the plaintiffs received in connection with the same federal program. However, the plaintiffs had no evidence to show the seller, or anyone affiliated with the agent’s firm, actually received the flood claim history as they alleged.

Based upon these facts, the court agreed that without evidence that the seller’s agent actually received the flood claim history or otherwise had knowledge of it, the plaintiffs could not carry their burden of proving misrepresentation by the agent.

Case Reference: Dunlap v. Empire Trading Group, LLC, 2021-0180 (La. App. 1 Cir. 10/18/21), 331 So. 3d 932.

The Louisiana Supreme Court recently ruled that a co-defendant who pleads comparative fault as an affirmative defense may appeal a summary judgment that dismisses a co-defendant, even when the plaintiff did not file an appeal. The Court’s decision in Amedee v. Aimbridge Hospitality resolved a circuit split among the Louisiana Courts of Appeal regarding this issue.

The Amedee plaintiff filed a personal injury suit against multiple defendants including the City of New Orleans and Premium Parking of South Texas, LLC. After discovery, the City of New Orleans filed a Motion for Summary Judgment seeking dismissal from the suit. The plaintiff did not oppose the city’s motion. Premium Parking was the only party to file an opposition. The trial court granted the city’s motion and dismissed it from the suit. Premium Parking appealed the court’s judgment.

The Fourth Circuit did not address the merits of Premium Parking’s appeal. Instead, the court dismissed the appeal because it found Premium Parking did not have a legal right to appeal the city’s dismissal when the plaintiff did not appeal the judgment.

The Supreme Court disagreed and reversed the appellate court’s ruling. The Court noted that “to prohibit appellate review of a summary judgment by a co-defendant, even where a plaintiff did not appeal, diminishes the search for truth—the object of a lawsuit—and denies a defendant the ability to fully defend itself.” To reach this conclusion, the Court first asked, who may appeal a judgment?

To answer this question, the Court looked to La. C.C.P. art. 2082 and observed the article makes no restriction regarding what party may appeal a final judgment. Further, the Court noted that the right to an appeal is even extended third parties, not involved in the suit, when that third party is allegedly aggrieved by the judgment. See La. C.C.P. art. 2086.

The Court also considered a defendant’s right to appeal in the context of Louisiana’s pure comparative fault system and summary judgments. Under La. C.C. art. 2323, Louisiana’s comparative fault statute, the fault of all parties is to be quantified. La. C.C.P. art. 966(G), provides that when summary judgment is granted in favor of a party or non-party to a suit, the fault of the dismissed party may not be considered in any subsequent allocation of fault in the matter.

The Court noted that while art. 966(G) precludes an allocation of the fault of a party dismissed under the statute, it does not limit the right of a defendant to appeal the dismissal of a co-defendant. No statute limited a defendant’s right to appeal a summary judgment only to those situations where a plaintiff also filed an appeal. Therefore, a defendant who hopes to keep a co-defendant in the case so that fault still may be allocated to the dismissed party at trial now may appeal the co-defendant’s dismissal, even when the plaintiff fails to do so.

Case Reference: Amedee v. Aimbridge Hosp. LLC, 2021-01906 (La. 10/1/22), --- So.3d ---, 2022 WL 12338929.

In 2021, the Louisiana Legislature amended La. R.S. 9:2800.9 to provide that a legal action against a person for sexual abuse of a minor, if barred by liberative prescription prior to the effective date of the amendment, is revived for a three-year period after the effective date of the amendment. In 2022, La. R.S. 9:2800.9 was amended again to specifically state the Legislature’s intent to revive any cause of action related to sexual abuse of a minor that previously prescribed under any Louisiana prescriptive period.

On March 22, 2024, the Louisiana Supreme Court issued its decision in Douglas Bienvenu, et al. v. Defendant 1 and Defendant 2, and found the statute was unconstitutional because it conflicted with due process protections set forth in the Louisiana Constitution. Specifically, the Court found that a defendant has a vested property right in accrued prescription and that revival of a prescribed cause of action violated due process.

However, the Louisiana Supreme Court granted the plaintiffs’ request for rehearing, and on June 12, 2024, the Court vacated its prior ruling and found that the amendments to La. R.S. 9:2800.9 were constitutional.

On rehearing, the court agreed that a defendant has a vested property right in accrued prescription but found another step in constitutional analysis was required— examination of whether the legislature’s revival of prescribed causes of action for sexual abuse of minors “comports with substantive due process.” The Court noted, “The essence of substantive due process is protection from arbitrary and capricious action.”

In Bienvenu, the defendants’ right to plead prescription was an economic interest that did not implicate fundamental rights. The statute at issue was social welfare legislation, enacted to address societal costs of child sexual abuse. Therefore, the Court found the applicable due process test was whether the legislation was reasonable in relation to the goal to be attained and was adopted in the interest of the community as a whole. The statute needed only to have a rational relationship to a legitimate governmental interest to survive due process scrutiny.

The Court found the amendments to La. R.S. 9:2800.9 passed this test because (1) the provision assists in identifying hidden child predators so children will not be abused in the future; (2) shifts the costs of the abuse from the victims and society to those who actually caused it; and (3) educates the public about the prevalence and harm from child sexual abuse to prevent future abuse. These interests were found legitimate and compelling. Thus, the statute was constitutional and could be applied retroactively “to revive, for the period stated, all causes of action related to sexual abuse of a minor that previously prescribed under any Louisiana prescriptive period.”

References:

Bienvenu v. Defendant 1, 2023-01194 (La. 3/22/24), 382 So. 3d 38, reh'g granted, 2023-01194 (La. 5/10/24), and opinion vacated on reh'g, 2023-01194 (La. 6/12/24).

Bienvenu v. Defendant 1, 2023-01194 (La. 6/12/24).