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Insight
Arbitration: Losing Your Day in Court with a Click of the Mouse?
Almost everyone has signed a phone contract, home-repair agreement, or other contract filled with terms and provisions they might not fully understand, or navigated a website only to receive a prompt to “accept these terms and conditions” before continuing. Most, and hopefully all attorneys, have that moment of hesitation- right before they click "yes."
If you clicked "yes" or signed the contract, and the contract included an “arbitration clause,” you may have just signed away your right to access the court system; and you didn’t even know it. But are such arbitration agreements enforceable? Generally, these clauses are enforceable and found to be consistent with a strong public policy in favor of arbitration. However, a recent decision from the Louisiana Supreme Court places arbitration clauses in consumer transactions under scrutiny and may render arbitration provisions unenforceable in some cases.
In Duhon v. Activelaf, LLC, 2016-0818 (La. 10/19/16), the plaintiff brought a negligence suit against an indoor trampoline park. In an effort to prevent a formal trial, the defendants attempted to enforce the arbitration clause found in the Participant Agreement, Release, and Assumption of Risk document that was electronically signed by plaintiff to gain entry into the trampoline park. In this setting, the Court applied a "contract of adhesion" analysis to test the validity of the arbitration clause.
The Court set forth the following factors to gauge the enforceability of the arbitration clause: (1) the physical characteristics of the arbitration clause; (2) the distinguishing features of the arbitration clause; (3) the mutuality of the arbitration clause; and (4) the relative bargaining strength of the parties.
Under the facts in Duhon, the Court found that the lack of distinguishing features and the specific placement of the text served to conceal the arbitration clause from the plaintiff. While the arbitration language was consistent in size and font with the other contractual provisions, the clause was located in the eleventh line of a paragraph that covered multiple topics. The arbitration agreement also required only the plaintiff to arbitrate any dispute. Further, it required the plaintiff to pay $5,000 if he ignored the arbitration clause and instead filed a lawsuit. According to the Court, this “lack of mutuality” supported its conclusion that the arbitration clause was adhesionary.
Ultimately, the Duhon Court struck down the arbitration clause. While courts generally uphold arbitration clauses, especially in a commercial setting, Duhon shows that arbitration clauses are not per se valid and that the consumer, in some cases, still may have their day in court.
Arbitration
Resource
WORKER'S COMP IMMUNITY/ SCHOOL BOARD LIABILITY
Does the responsibility placed upon a school for the actions of its students eliminate worker's compensation tort immunity when a student injures a teacher? The answer is no, according to the recent decision in the Field v. Lafayette Parish School Board, 2016 WL 6609839 (La. App. 3 Cir. 11/9/16).In Field, a pregnant teacher was injured when she attempted to halt an altercation between two students. When one of her students attempted to go out into the hallway to fight, the plaintiff/teacher blocked the classroom door and was struck multiple times by the student.In defending the suit, the school board argued that the plaintiff's exclusive remedy was worker's compensation and that the school’s conduct did not constitute the "intentional act" needed to evade immunity. In turn, the plaintiff claimed that, pursuant to Civil Code article 2320, the school system was vicariously liable for the student’s conduct and therefore responsible, even if the school board’s own conduct was not “intentional.” Rejecting the plaintiff’s argument, the Third Circuit determined that the school board could not be held liable without the requisite finding of an intentional act.According to the Field court, the school’s knowledge of prior disciplinary issues with the student and its decision to re-admit the student did not amount to an “intentional act" sufficient to vitiate the worker's compensation immunity. Citing to cases such as Reeves v. Structural Preservation Systems, 731 So. 2d 208 (La. 1999), the court found that “believing someone may, or even probably will, eventually get hurt if a workplace practice is continued does not rise to the level of an intentional act.” To quote the trial judge, "there's a big gap between … not following their procedures, negligence, even gross negligence, and intentional act.”
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Insight
One More Reason: Louisiana’s “Drunk Driving” Immunity
A conviction for DWI brings the consequences you might expect, such as the loss of driving privileges, expensive attorneys’ fees, and public embarrassment. However, there is one additional, less-obvious consequence of which many are unaware; Louisiana provides immunity from claims brought by a drunk driver who was at least 25% at fault in the accident which caused his injuries, no matter how severe the injuries.
Generally stated, if you are driving drunk and are in an accident that is mostly someone else’s fault, you will not be able to recover for the injuries you sustain. Similarly, if your fault injures a drunk driver, the statute may shield you from liability. The “drunk driving” immunity is found in La. R.S. 9:2798.4. The statute provides immunity against the claims of a driver with a blood alcohol level of .08 or higher.
The immunity may even apply to defendants who were not directly involved in the accident. In Stewart v. Daiquiri Affair, Inc., 20 So.3d 1041 (La. App. 1st Cir. 2009), writ denied, 19 So.3d 477 (La. 2009), the immunity was found to apply to claims brought by an 18-year-old employee who consumed alcohol on the premises and was subsequently injured in a motor vehicle accident. Rejecting the argument that immunity should not apply when the employer arguably contributed to the under-age plaintiff’s consumption of alcohol, the appellate court in Stewart concluded that the statute’s language required immunity because the employee was more than 25% at fault and her blood alcohol content was over the legal limit.
Because the “drunk driving” immunity statute is supported by the legislature’s strong and long-standing interest in protecting citizens against drunk driving, it has been upheld and applied in many instances. Although you should not need another reason to not drive drunk, you now have one.
Louisiana
Resource
SPOLIATION
A recent Fourth circuit decision raises doubts regarding whether a claim for spoliation of evidence can be dismissed through summary judgment. In Fiveash v. Pat O’Brien’s Bar, Inc., 2015-1230 (La. App. 4 Cir. 9/14/16), — So.3d —, 2016 WL 4820387, the plaintiff fell on a step in the entrance to the piano bar at the popular Pat O’Brien’s on Bourbon Street. Plaintiff’s counsel requested to inspect the step with his expert. However, before the scheduled inspection date, the step was damaged when a garbage can hit the face of the step and knocked loose the metal threshold.
The defendant informed the plaintiff and assured that the step would be repaired to the same condition as before the garbage can incident. In reaction, the plaintiff raised a spoliation claim which contended that the defendant intentionally destroyed the step to impair her liability claim. In response, the defendant filed a motion for summary judgment.
The defendant argued that the step was not repaired with an intent to deprive plaintiff of its use at trial and that plaintiff possessed no evidence to establish a wrongful intent. The defendant produced two affidavits to demonstrate that the step was repaired to eliminate a safety risk and not to intentionally destroy evidence. The trial court found this evidence “persuasive” and granted the motion for summary judgment.
The Fourth Circuit reversed, reasoning that it is “rarely appropriate” to grant summary judgement when questions of intent are in dispute. The Fourth Circuit also found that the trial court inappropriately “weighed” evidence when it deemed defendant’s affidavits to be “persuasive.” Because the affidavits were the only evidence used to establish the defendant’s intent, the court held that the veracity of the affidavits presented a question to be decided by the trier of fact.
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Resource
PREMISES LIABILITY: Chatman v. S. Univ. at New Orleans
Can a university be held liable in a dorm-room fight involving two adult students?
Yes, according to the court in Chatman v. S. Univ. at New Orleans, 2015-1179 (La. App. 4 Cir. 7/6/16), — So.3d —, 2016 WL 3613265. The decision provides an interesting analysis of legal causation, the “scope of protection” element of a Louisiana negligence action.The plaintiff and her roommate lived together for about one week before the incident but had been best friends for several years. The roommate allowed her 16-year-old cousin to stay at the apartment. Concerned that this may violate Southern University (New Orleans) campus rules, plaintiff attempted to discuss the issue with the resident “Community Assistant.” The “CA” was a student/employee who lived in the building and whose role included enforcement of school policies. However, the CA was not available. The CA was similarly unavailable to address the resident’s safety concern after the roommate’s boyfriend ran around the apartment, banging on doors and demanding entry.On the first Thursday they lived together, plaintiff, her roommate, and the roommate’s cousin went to the store together to buy food for the apartment. Plaintiff went home for the weekend and returned only to find that her roommate, the cousin, and other guests had eaten most of the food she had purchased. Tensions escalated, and later, the roommate and her cousin entered plaintiff’s bedroom and attacked her. Plaintiff testified the roommate stomped on her head while wearing high-heel shoes. Plaintiff eventually lost her eye as a result of the incident. The roommate was convicted of second degree battery and imprisoned.Under these facts, the jury allocated 70% fault to the roommate, 15% to the cousin, and 15% to the university. In affirming the trial court’s decision, the Fourth Circuit found that legal causation was established because the plaintiff’s injury, which resulted from an intentional, violent attack from a roommate, fell within the “scope of protection” the university owed its student. While the court acknowledged that “a risk may be found not within the scope of a duty where the circumstances of that injury to the plaintiff could not reasonably be foreseen or anticipated,” the court found the plaintiff’s injuries were compensable against the school. Previously, in Veazey v. Elmwood Plantation Associates, Ltd., 93-2818 (La. 11/30/94), 650 So. 2d 712, an argument that the “scope of the duty” of a negligent actor included responsibility for intentional conduct was successfully used to disregard the fault of an intentional actor in a similar setting, resulting in the full allocation of fault to a negligent apartment complex owner. However, after Veazey, the law was amended to clarify that the fault of all actors, including intentional actors, must be considered.In Chatman, the court found that the university was “unreasonably lax in the enforcement of its written policies” because it did not provide sufficient access to its CA’s and failed to prevent the roommate’s minor, non-student cousin from staying in the apartment. As such, it appears the court found this evidence sufficiently created an “ease of association” between plaintiff’s injury and the duty owed under the facts of this case. However, two judges dissented to this ruling on grounds that the jurors were not properly instructed to examine whether the incident was reasonably foreseeable or, stated differently, whether legal causation was properly established.
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Insight
When the Stakes are High: Class Actions in Louisiana
They make movies about “class actions” exactly because they can involve high stakes, with millions, even billions of dollars on the line. The class action procedure can create exposure at this level because of the large numbers of potential claims involved. Class actions are used to address losses experienced from unfair or fraudulent business practices, natural disasters, industrial explosions, or any event or action which is alleged to have damaged a large group in a similar way.
As a procedural device, the class action combines several claims (often hundreds or thousands) into a single action. A key battle in most Louisiana class actions is whether the proposed claim can properly be “certified” as a class action under Louisiana procedure. The recent Fourth Circuit decision in Duhon v. Harbor Homeowners’ Ass’n., Inc., 2016 WL 3551620 (La. App. 4 Cir. 6/30/16) addressed whether the lower court’s class “certification” was proper under Louisiana Code of Civil Procedure Article 591.
Duhon involved damages experienced following hurricanes Katrina and Rita. In particular, the class representatives sought damages against the Harbor View Condominium Association and its insurers claiming that the association was guilty of faulty repairs following these two hurricanes. In deciding whether certification was proper, the Duhon court considered the following elements, all of which must be present to certify a proper class action:
Numerosity- the class must be so numerous that joinder of all involved persons would prove impractical;
Commonality- the case must present questions of law and fact that are common to the class;
Typicality- the claims and defenses of the representative parties must be typical of the claims or defenses of the class; and,
Adequacy of representation- the representative parties must be positioned to fairly and adequately protect the interest of the class.
After analyzing each of these “elements,” the Duhon court upheld the Trial Court’s certification of the claim as a class action. Further, the court concluded that the questions of law and fact common to the members of the class predominated over any questions affecting only individual members such that a class action was superior to other available methods to fairly and efficiently adjudicate the controversy.
While the class action procedure has its detractors, it is sometimes the only real option to address a harm to a large group. Now that the class in Duhon has been certified, the case will proceed through discovery and towards trial on the merits. Who knows, they may make a movie about it someday.
Class Actions
Litigation
Torts
Insight
The “Great Flood of 2016”--Update and Resources
“Disaster Declaration” Expanded. The list of parishes now declared disaster areas by the federal government has increased to include the following parishes: Acadia, Ascension, East Feliciana, Iberia, Lafayette, Pointe Coupee, St. Landry, and Vermilion.
http://gov.louisiana.gov/news/additional-parishes-added-to-federal-disaster-declaration-8-16-16
Potential Tax Implications for Flood Victim. For those insured, it is critical that you document your losses with as much detail as possible; serial numbers, make/model/description—the more detail the better. Keep receipts and credit card statements. Time-dated photos are also important. Even those without flood insurance should do the same as it may assist in obtaining FEMA assistance. However, the same documentation of your losses could also help to reduce your tax exposure. The attached link provides key information and outlines the impact the flooding may have on tax-filing and other deadlines.
https://www.irs.gov/uac/tax-relief-for-victims-of-severe-storms-flooding-in-louisiana
Flood
Louisiana
News
A visit to Cuba
Gracella Simmons wrote an article entitled “A Visit to Cuba” that was published in the September edition of Around the Bar.
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Resource
APPEALS/ NEW TRIAL
APPEALS/NEW TRIAL- The recent decision in Logan v. Schwab, Jr., 15-C-1508 (La. 5/27/16), ______ So. 3d _______ addressed serious concerns about the conduct of a trial judge during trial. On appeal, this conduct, described as “bizarre and disturbing,” was sufficient to cause the need for a new trial.
The Logan plaintiff alleged damages as a result of a gallbladder removal surgery. The jury verdict was in favor of the surgeon, and the plaintiff appealed. The cited grounds for appeal included alleged improper conduct by the trial judge which may have biased the jury in favor of the defendant and caused juror confusion. Finding insufficient support in the record and a lack of contemporaneous objections, the First Circuit Court of Appeal affirmed the defense verdict.
While questions were raised as to the sufficiency of the plaintiff’s proof, the plaintiff alleged that the trial judge’s improper conduct involved: warmly greeting and embracing the defendant’s expert witness in the presence of the jury; questioning the plaintiff’s medical expert regarding the amount of fees he was being paid (after he was released as a witness); walking around the courtroom while witnesses were being examined; and, looking out windows and sitting in various seats throughout the courtroom. Allegedly, the trial judge even sat amongst the jurors in the jury box and ate candy--while testimony was being given. Nevertheless, the Court of Appeal ruled that this “inappropriate and untoward” conduct was insufficient to deprive the plaintiff of a fair trial.
The Louisiana Supreme Court reversed in a three sentence per curiam opinion. The Court ordered a new trial, finding that “the trial judge’s actions resulted in a miscarriage of justice.”
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Insight
2016 Historic Flood
Thousands of people are currently dealing with the devastating flooding in Baton Rouge and surrounding areas. Here are a few pieces of information that may assist you as you begin to recover from this event:
- Do your best to document your property damage claim as best you can. Take as many pictures of the damage as possible, whether of your house, commercial building, personal contents or inventory. These photos will be your proof of damage for whatever damage claim you are able to make, whether through your insurance company or otherwise.
- Similarly, try and compile whatever pictures you can of your house or business, and its contents, from before the flood. To the extent, there is a dispute of whether a specific item was damaged or not, or even existed in the home or building before the flood, these pictures will be invaluable.
- As soon as possible, attempt to itemize all of the contents in your home. A handwritten list is fine. Go through each room and attempt to list out every one of your possessions. Try and identify the make or model of each item, what you paid for it, and how old it is. Some insurance companies will require this specific information before you will be paid for each item. Of course, it is unlikely that you will have purchase documents for each item in your possession. Although this type of documentation is not required to prove your claim, it is obviously helpful for the insurance company to process it.
- Keep records of what you spend to live elsewhere, including food and toiletries. If you rent a hotel room or are required to rent a house, make sure to keep records of what you pay.
- Likewise, keep good records of any expenses you incur to repair your home or business. An organized and well-documented insurance or property damage claim is always better received and more quickly processed than one that is not.
- With respect to insurance claims, and to the extent the policy provides coverage for your specific loss, an insurance company has an obligation, by law, to pay all undisputed amounts to you within a certain period of time. In other words, your insurance company has to at least pay you for everything that is undisputed. If there is a legitimate dispute over something, the insurance company can withhold payment for those items but must pay you for the items for which there is no disagreement. If the insurance company does withhold payment without a legitimate reason or fails to pay you within a certain amount of time, it may be responsible for certain statutory penalties and costs. You will need to discuss this with an attorney if you feel your insurance company is not treating you fairly.
- To this point, because the insurance company must pay all undisputed amounts if there remain any disputed items, do not sign anything until the claim is fully resolved. You are not required to sign anything to receive any undisputed money under your policy.
- If you have flood insurance, depending on the policy language, you may be eligible to receive immediate, emergency payments. Ask your insurance company what your policy provides, but do not assume what you are told is correct. Ask for a copy of your policy and read it for yourself.
- To date, President Obama has made available federal disaster aid to residents of the parishes of East Baton Rouge, Livingston, Tangipahoa, and St. Helena. If you do not have flood insurance, you should immediately register with FEMA. You can also call FEMA at 800-621-3362. More information about the available federal assistance, including those for some businesses, can be found here.
- The Louisiana State Bar Association and the Baton Rouge Bar Association will be providing free legal services to assist anyone with any legal issues arising from this disaster. For now, you can call the LSBA at 504-566-1600 or 800-421-5722 or the BRBA at 225-344-4803. More information will be disseminated as efforts are further coordinated.
Hopefully, this information will provide you with a little bit of information about the property damage claim process.
Flood
Louisiana
Resource
CONSTRUCTION: SORTING THROUGH LOUISIANA PEREMPTION LAW
The five-year time limit for suits under the New Home Warranty Act (“NHWA”) and La. R.S. 9:2772 benefit contractors, but can also set a trap that may cost general contractors their ability to pursue indemnity. As a result of the peremption period in 9:2772, a general contractor may be called upon to pay for the faulty workmanship of its “subs” with no recourse against those same contractors.
In Kelleher v. Custom Homes, 15-1798 (La.App. 1 Cir. 6/3/16), the First Circuit clarified the law by affirming dismissal of the builder’s third-party indemnity demand against a subcontractor. The homeowner timely sued the builder for construction defects just before expiration of the NHWA’s five year peremption period, and the builder filed its indemnity demand within 90 days. The indemnity demand was properly dismissed under 9:2772 because more than five years had passed since the home was occupied.
The Kelleher Court relied on its ruling in Peck v. Richmar Construction, Inc, 13-1170 (La.App. 1 Cir. 2/26/14), 144 So.3d 1042, which held that the 90 day grace period in Code of Civil Procedure art. 1067 did not apply to the more specific peremption rule of La. R.S. 9:2772. Further, the legislature’s amendment to La. R.S. 9:2772 to add a 90 day grace period did not become effective until after suit was filed.
Relying on the Louisiana Supreme Court ruling in Ebinger v. Venus Const. Corp., 10-2516 (La. 7/1/11), 65 So.3d 1279, the Kelleher Court concluded that the filing of the main action did not toll the peremption period, which by definition cannot be interrupted. (Civil Code art. 3461). In this situation, the indemnity claim perempted just as the cause of action arose, leaving the general contractor solely liable.
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Insight
Walking Drivers: A “Sudden” Defense to Rear-end Liability
A rear-end collision is a unique animal in the law. Plaintiff’s attorneys seek them out, and insurance companies fear them--sometimes for good reason. The "rear-end" accident is unique because proof of the mere fact that one vehicle strikes the rear of another creates a strong legal presumption of fault under La. R.S. 32:81. While this presumption is formidable, it may be overcome.
The rear-end presumption is premised upon the duty to not follow too closely and the law will assume that the following driver breached this duty when there is impact. However, the following driver can escape liability if he shows that his vehicle was under control, that he followed at a safe distance, and that the lead driver negligently created a hazard which could not have reasonably been avoided. For instance, if it is shown that the reckless or unpredictable driving of the lead motorist created a sudden emergency, the following driver will not be at fault. Brewer v. J.B. Hunt Transport, Inc., 35 So.3d 230 (La. 2010). Once established, the sudden emergency defense trumps the “rear-end presumption.”A "sudden emergency" is created when a driver is placed in a position of imminent peril that he or she did not create through their own conduct. Hickman v. Southern Pacific Transport Company, 262 So.2d 385 (La. 1972). When a driver can demonstrate the existence of a sudden emergency, they are not negligent for failing to do what a reasonable person might have done to avoid the accident had they been given enough time to assess and react to the situation.In Jewitt v. Alvarez, 179 So.3d 645 (La. App. 2 Cir. 9/30/15), a following driver who rear-ended the vehicle of the lead driver was free from fault as a result of the sudden emergency defense where the facts revealed that the accident was solely caused by the slow speed of the lead driver (who almost came to a complete stop on the interstate) and the presence of surrounding traffic prevented the following vehicle from taking evasive action.In Carias v. Loren, 2015 WL 1019481 (La.App. 1 Cir. 3/9/15), an eighteen-wheeler was traveling in the middle lane of the interstate when a "phantom driver" moved without warning from the left lane to the middle lane and slammed on its brakes in front of the eighteen-wheeler. In attempt to avoid the collision, the driver of the eighteen-wheeler swerved to his right and impacted a vehicle which then struck the plaintiff's vehicle. The driver of the eighteen-wheeler invoked the sudden emergency defense; the court agreed and found the defendant-driver free from fault.Rear-end collisions are hard to defend, but a defendant may want to gather a clear understanding of all of the facts before accepting liability. If these facts support the sudden emergency defense, the driver may "walk."
Attorney
Collision
Insurance