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Insight
Louisiana Supreme Court Sets New Standard for Review of General Damage Awards
In recent years, the dollar amount of general damage awards to personal injury plaintiffs has been on the rise. However, the Louisiana Supreme Court recently issued an opinion that may signal greater scrutiny for heightened general damage awards going forward. In Pete, v. Boland Marine and Manufacturing Co., the state’s highest court changed the standard of review in quantum disputes to require courts of appeal to consider general damage awards in similar cases when determining whether a trial court has abused its discretion in awarding a specific general damage award.
In Pete, a 74-year old mesothelioma patient was awarded $9.8 million in general damages after it was found he was exposed to asbestos. The jury awarded $2 million for past and future physical pain and suffering, $2.3 million for past and future mental pain and suffering, $3 million for past and future disability, and $2.5 million for past and future loss of enjoyment of life. The appellate court held the defendant failed to demonstrate the general damage award “shocks the conscience,” and found the jury did not abuse its discretion.
The Louisiana Supreme Court reversed the decision. In so holding, it also changed the standard by which appellate courts evaluate whether a trial court abused its discretion in awarding general damages. The Louisiana Supreme Court now instructs appellate courts to compare general damage awards to those awarded in similar cases in their review of the reasonableness of the trial court’s award. Applying the new standard, the Louisiana Supreme Court found the trial court abused its discretion and reduced the Pete plaintiff’s general damage award from $9.8 million to $5 million.
Previously, Louisiana courts employed a two-step analysis in evaluating general damage awards. First, the court of appeal determined whether the trial court’s award constituted a clear abuse of discretion. Second, and only if the court first determined that there was an abuse of discretion, the appellate court would consider prior damage awards in similar cases to determine what an appropriate award should have been. This test had proven problematic because there were no clear objective standards for determining whether the trial court’s award was an abuse of discretion.
The appellate court’s decision in Pete v. Boland Marine serves as an excellent example of the problems this test presented. While the majority found that the $9.8 million awarded to Pete did not “shock the conscience,” a dissenting judge believed the award did shock the conscience, because it far exceeded general damage awards in similar cases. The “shocking the conscience” test has been long criticized because of its lack of objectivity, as the result ultimately depended on the thoughts and feeling of the presiding judges. Critics argued this led to unpredictability within the law.
The Louisiana Supreme Court’s decision reforms the two part test in an attempt to resolve this issue. The new test mandates that appellate courts consider damage awards in similar cases in the initial inquiry, to objectively consider whether the trial court abused its discretion under the particular facts and circumstances of the case at hand. The second step of the test remains unchanged. If the court finds that the trial court abused its discretion, then the appellate court will look to recent cases to determine what is the highest or lowest award a reasonable trier of fact could have found and then reform the damage award accordingly.
This decision is a significant change in the law. It aims to increase predictability within the law and affords defendants objective standards by which to challenge damage awards. However, it remains to be seen how courts will implement this new test in practice.
References:
Pete v. Boland Marine & Mfg. Co., LLC, 23-170 (La. 10/20/23), reh'g denied, 23-170 (La. 12/7/23), 374 So. 3d 135.
Judicial Review
Louisiana Supreme Court
News
Mary Anne Wolf will join the panel for the Baton Rouge Bar Association's Celebrating Women's History Month luncheon
Mary Anne Wolf will join the panel for the Baton Rouge Bar Association's Celebrating Women’s History Month luncheon on March 27, 2024.
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Insight
Court Finds Medical Malpractice Claim Prescribed, Rejecting Argument Based Upon “Discovery Rule”
For medical malpractice claims in Louisiana, the general rule is that a plaintiff has one year from the date of the alleged malpractice to bring his claim for damages. However, La. R.S. 9:5628 also recognizes an exception to this one-year prescription period, when the plaintiff claims he was unaware of the malpractice and there was a delay in the discovery of the alleged malpractice. This is known as the “discovery rule.”
Under the discovery rule, the prescriptive period begins to run on the date the injured party obtains actual or constructive knowledge of facts “indicating to a reasonable person that he or she is the victim of a tort.”^ Constructive knowledge is “whatever notice is enough to excite attention and put the injured person on guard and call for inquiry.”^ When a plaintiff has knowledge of facts strongly suggesting that the complaint may be the result of improper treatment, and the medical provider has not misled the patient, then “the cause of action is reasonably knowable to plaintiff.”*
The court recently examined these principles in In re Singleton, where the plaintiff relied upon the discovery rule to assert a malpractice claim against his medical provider. The plaintiff alleged his physician negligently performed a lumbar procedure in May 2017. The plaintiff initiated proceedings against the medical provider on February 6, 2019, alleging he did not discover the alleged malpractice until February 10, 2018, when he experienced a “sudden onset of excruciating pain.”
In response to the plaintiff’s claim, the medical provider produced evidence to show the plaintiff went to the emergency room on November 21, 2017, with complaints of severe lower back pain that radiated into his hips and legs. Based upon this evidence, the defendant doctor argued the actual date of delayed discovery was November 21, 2017, and that the plaintiff’s claims prescribed because they were filed more than one year after that date.
The court agreed. It held the medical provider met his burden of proof when he presented evidence that “severe” or “excruciating” pain, which allegedly advised plaintiff of his claim, was first experienced in November 2017, not February 2018 as alleged in plaintiffs’ complaint. The plaintiff was unable to produce any evidence to support the allegations in his complaint about the timing of his episode of pain or to refute the medical provider’s arguments. Therefore, the plaintiff could not show his claim of delayed discovery until February 2018 was “reasonable.” The court affirmed that the date of discovery was in November 2017, and therefore the plaintiff’s claims prescribed before suit was filed in February 2019.
References:
In re Singleton, 23-190 (La. App. 5 Cir. 2/28/24), 2024 WL 826169.
^Campo v. Correa, 01-2707 (La. 6/21/02), 828 So.2d 502.
*Carter v. Haygood, 892 So.2d 1261, 1273 (La. 2005).
Constructive Notice
Discovery Rule
Medical Malpractice
Prescription
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Insight
Louisiana Second Circuit Applies Anti-Dram Shop Statute to Grant Summary Judgment
Louisiana’s “anti-dram shop” statute, La. R.S. 9:2800.1, limits the ability of a claimant to hold a provider of alcohol liable for damages resulting from the acts of an intoxicated patron. Subsection A of the statute declares that the consumption of intoxicating beverages, rather than the sale, serving, or providing of those beverages, is the proximate cause of any injury or property damage that the consumer may cause. Under Subsection B, anyone who lawfully serves alcohol to a person of legal age is provided immunity for any injury caused by the consumer that occurs “off the premises.” This immunity extends to sellers of alcohol and social hosts.
The Louisiana Second Circuit recently examined these provisions of this statute in Rugg v. Horseshoe Entertainment, et. al. The plaintiff alleged she was injured when an intoxicated patron (John Doe) fell onto her at a hotel bar. She alleged that the defendant, which operated a casino bar, was liable because it ignored multiple complaints about John Doe’s drunken state prior to the incident and failed to escort him out.
The defendant moved for summary judgment, arguing that Louisiana’s anti-dram shop statute prevented any finding of liability on its part. In opposing the summary judgment, the plaintiff argued that the statute did not rule out liability because the injury occurred on the premises.
The Second Circuit determined that the immunity afforded in Subsection B of the statute was not available because, as the plaintiff argued, the injury occurred on the premises. However, Subsection A of the statute, which declares the consumption, not the serving, of alcohol is the proximate cause of injury inflicted by an intoxicated person, still applied.
Under these circumstances, the Court held it had to determine whether the bar owner violated general negligence principles. In conducting this analysis, the court was required to focus on two issues: 1) whether the alcohol provider acted reasonably under the circumstances, and 2) whether the alcohol provider took any “affirmative acts” that increased the chances of the incident.
The Court of Appeal granted summary judgment under the facts of the case. The court found no evidence in the record that Horseshoe acted unreasonably leading up to the incident. Testimony indicated that the complaints about John Doe’s behavior arose after the incident occurred, not before. Similarly, the court reasoned that the failure to escort John Doe out of the bar was not an “affirmative act” that increased the risk of the incident because the record did not indicate Horseshoe had any reason to do so prior to the injury.
In conclusion, the court noted “that in no case will the serving of alcohol be held as the proximate cause of a tort in which alcohol was involved.” Therefore, the plaintiff had to show Horseshoe did something more to cause her injury than just serve John Doe alcohol. Because the plaintiff failed to do so, summary judgment was granted. Under these facts, Louisiana’s dram shop statute still applied to protect the defendant provider of alcohol, even though the injury occurred on its premises and the statutory immunity was not available.
References:
La. R.S. 9:2800.1
Mechelle Rugg v. Horseshoe Entertainment, et al., 55,239 (La. App. 2 Cir. 1/10/24), 2024 WL 104143.
Liability
Negligence
Insight
Bad Faith Action Brought Against an Insurer Less than Ten Years after the Date of Loss Dismissed As Prescribed
The Louisiana Supreme Court recently ruled a plaintiff’s bad faith insurance claim was prescribed where the policy at issue required actions to be brought within two years after the date of loss.
In Phyllis Wilson v. Louisiana Citizens Property Insurance Corporation, the plaintiff asserted a bad faith claim against an insurer. The applicable policy of insurance provided “[n]o action can be brought unless the policy provisions have been complied with and the action is started within two years after the date of loss.” The plaintiff alleged that the insurer failed to timely tender payments for losses that occurred on August 27, 2020 and October 20, 2020. However, the plaintiff did not file her suit unit January 9, 2023.
Prior to the Wilson decision, courts frequently relied on the Louisiana Supreme Court’s decision in Smith v. Citadel Ins. Co., which held that actions against insurers under Louisiana’s bad faith statutes are subject to a ten-year prescriptive period. In Smith, the Supreme Court addressed the issue of whether a bad faith action against an insurer was a delictual or tort action subject to a one-year prescriptive period, or a contractual action, which is subject to a ten-year prescriptive period under Louisiana law. The Smith court concluded that the duty of good faith owed by the insurer to the insured “emanates from the contract between the parties” such that the “insured’s cause of action is personal and subject to a ten-year prescriptive period.”
In Wilson, the Louisiana Supreme Court examined whether Smith required the Court to uphold a ten-year prescriptive period for bad faith actions even though the insurance policy at issue prohibited actions brought more than two years after the date of loss. The Wilson court ultimately concluded that an action against an insurer brought more than two years after the date of loss is prescribed where the applicable insurance policy set a term of two years for filing a claim against the insurer.
To reach this conclusion, the Wilson court cited Taranto v. Louisiana citizens Prop. Ins. Corp., which held “in the absence a statutory prohibition, a clause in an insurance policy fixing a reasonable time to institute suit is valid.” The Wilson court then turned to the applicable statute and noted that La. R.S. 22:868(B) “expressly provides that no policy ‘shall contain any condition, stipulation, or agreement limiting right of action against the insurer to a period of less than twenty-four months next after the inception of the loss when the claim is a first-party claim…’” The Wilson court noted the two-year limitation in the applicable policy was consistent with La. R.S. 22:868(B).
The court’s ruling supports the argument that policy provisions requiring actions to be filed within two years of the date of loss are enforceable. However, the Court did not disturb its holding in Smith, noting the Smith case was factually distinguishable because it did not involve a policy that contained a contractual limitation on the insured’s institution of suits.
References:
Phyllis Wilson v. Louisiana Citizens Property Insurance Corporation, No. 2023-CC-01320 (La. 1/10/2024) (per curiam), 2024 WL 108714.
Smith v. Citadel Ins. Co., 2019-00052 (La. 10/22/19), 285 So.3d 1062.
Taranto v. Louisiana citizens Prop. Ins. Corp., 2010-0105 (La. 3/15/11), 62 So.3d 721, 728.
Contracts
Insurance
Prescription
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News
Keogh Cox Named a Tier 1 firm in Baton Rouge for Professional Malpractice Law – Defendants in the 2024 edition of Best Law Firms®.
Keogh Cox is pleased to announce that the firm has been named a Tier 1 firm in Baton Rouge for Professional Malpractice Law - Defendants in the 2024 edition of Best Law Firms®. Firms included in the 2024 "Best Law Firms" list are recognized for professional excellence. The receipt of a tier designation reflects the level of respect a firm has earned among other lawyers and clients in their communities and practice areas.
Best Law Firms® - Ranked by Best Lawyers | Best Law Firms
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Insight
Summary Judgment Affirmed Because Alleged Defect was Open and Obvious
The First Circuit Court of Appeals recently affirmed summary judgment in Rainey v. Knight, on grounds that the alleged defect was open and obvious. Its ruling shows that the open and obvious defense remains viable and supports summary judgment when reasonable minds can only agree that a condition is not unreasonably dangerous.
In Rainey, the plaintiff fell and was injured while leaving a veterinary hospital. Evidence showed the plaintiff frequented the premises for nearly twenty years before the incident. The plaintiff attempted to descend four steps from the hospital’s elevated porch but stepped off the porch and fell twenty-one inches to the ground. Rainey filed suit for his injuries, alleging the defendant failed to maintain its property. Specifically, he claimed that the elevated porch lacked a railing, which created a defect.
The defendant filed a motion for summary judgment and argued (1) the front porch ledge was an open and obvious defect and (2) the plaintiff could not show the defendant had knowledge of the allegedly dangerous condition of the porch. The defendant also produced evidence to show it had no prior problems with anyone falling from the porch.
The plaintiff opposed the defendant’s motion, but his opposition was filed one day late. Because the opposition was not filed timely, the appellate court noted it was unable to consider the plaintiff’s opposition and exhibits under the Louisiana Supreme Court’s ruling in Auricchio v. Harriston.
On appeal, the court focused its analysis on whether the defendant breached a duty owed to the plaintiff, applying Louisiana’s risk/utility balancing test to consider the utility of the condition, the likelihood and magnitude of harm, the cost of preventing the harm, and the nature of the plaintiff's activities.
In examination of the likelihood and the magnitude of the harm, the appellate court noted that summary judgment may be granted if a condition is open and obvious. If reasonable minds could only agree that the condition was not unreasonably dangerous, that condition would be open and obvious, and the plaintiff would be unable to establish the defendant breached any duty owed to the plaintiff.
Considering the evidence before the court, the First Circuit found a reasonable person would have found the lack of a railing on the porch open and obvious and would have avoided the area where plaintiff fell when exiting the building. Importantly, the court found the lack of a railing was apparent to all who encountered it such that it was open and obvious.
The Rainey court also noted that the lack of reported complaints about the alleged condition indicated a low risk of harm. The height of the porch also showed the likelihood and magnitude of the plaintiff’s harm was minimal. In light of this evidence, the lack of railing around the entire porch was not an unreasonably dangerous condition. No reasonable factfinder could find that the defendant breached any duty owed to the plaintiff, and summary judgment was appropriately granted.
References:
Rainey v. Knight, 2023-0133 (La. App. 1 Cir. 11/3/23) (La. App. 1st Cir. Nov. 3, 2023)
Auricchio v. Harriston, 2020-01167 (La. 10/10/21), 332 So.3d 660
Injury
Liability
News
Keogh Cox Recognizes Attorneys Selected to the 2024 Louisiana Super Lawyers List
Keogh Cox is pleased to announce that five attorneys were named to the 2024 Louisiana Super Lawyers List:
- John P. Wolff, III listed in Civil Litigation
- Andrew Blanchfield listed in Professional Liability
- Kirk L. Landry listed in Workers’ Compensation
- Christopher K. Jones listed in Class Action & Mass Torts
- Mary Anne Wolf listed in Construction Litigation
Four attorneys were selected to the 2024 Louisiana Super Lawyers “Rising Stars” list:
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Insight
Wage Garnishment –Failure to Comply with Louisiana Procedures Can Result in Costly Penalties for Louisiana Employers
Although courts have described the outcome as “harsh,” a recent ruling shows that a judgment creditor can recover the full amount of an employee’s unpaid debt from an employer if that employer fails to comply with specific garnishment procedures.
A party that prevails in a lawsuit and is awarded damages is known as a judgment creditor. In order to collect on the judgment, Louisiana law allows a judgment creditor to garnish the wages of the judgment debtor, the party cast in judgment. Once a judgment against an employee is obtained, the judgement creditor may issue garnishment interrogatories to the employer requesting information related to the employee’s job, rate of compensation, manner of payment, and whether there are other judgments or garnishments affecting the employee’s compensation.
It is imperative that the employer file sworn answers to all garnishment interrogatories within 30 days from the date of service.^ Louisiana courts treat unsworn answers to interrogatories as a failure to answer,* and an employer’s failure to timely answer garnishment interrogatories can result in costly penalties. In fact, a Louisiana employer can be held liable for the full amount of the employee’s judgment if procedural requirements are not followed.
La. C.C.P. art. 2413(A) states that if the employer fails to answer the garnishment interrogatories within 30 days from the date of service, then the judgment creditor may proceed against the employer for the amount of the unpaid judgment, with interest and costs. La. C.C.P. art. 2413(B) provides that the employer must pay the entire amount of the judgment unless it proves the actual amount it owed to the employee at the trial on the contradictory motion. Regardless of the decision on the contradictory motion, La C.C.P. art. 2413(C) requires the employer to pay the costs and reasonable attorney’s fees of the judgment creditor.
The First Circuit Court of Appeals recently examined these procedures in Tower Credit, Inc. v. Williams.^^ The judgment creditor in the Tower Credit case issued garnishment interrogatories to the judgment debtor’s employer. However, the employer failed to timely respond to garnishment interrogatories. When the judgment creditor filed a Motion for Judgment Pro Confesso against the employer to require it to appear and present evidence regarding the amount of wages it should have withheld after receiving the garnishment interrogatories, the employer failed to appear for the hearing.
Given the employer’s failure to timely respond to the interrogatories and its failure to appear for the hearing, the First Circuit found that the creditor was entitled to a judgment pro confesso against the employer for the entire amount of the employee’s debt. Citing the unique facts of the case, which included evidence that the judgment debtor/employee no longer worked for the employer cast in judgment, the Louisiana Supreme Court recently granted vacated part of the judgment pro confesso and remanded the matter for rehearing.**
However, this case shows that Louisiana courts will enforce La. C.C.P. art. 2413 and cast an employer in judgment for its employee’s debt, even though courts have described the statute’s penalties as “harsh.” Tower Credit shows that employers should respond to garnishment interrogatories within the timeframe provided by law. In the event the deadline is passed, La. C.C.P. art. 2413(B) requires the employer to appear for the judgment pro confesso hearing if it intends to argue it should not be indebted for the judgment. Failure to do both could result in the employer being held liable for the full amount of its employee’s unpaid debt.
References:
^ See La. C.C.P. art. 2412(D).
*See All Star Floor Covering, Inc. v. Stitt, 804 So. 2d 705 (La. Ct. App. 1st Cir. 2001).
^^Tower Credit, Inc. v. Williams, 2022-0106 (La. App. 1 Cir. 9/16/22), 352 So. 3d 1029, writ granted, judgment vacated in part, 2022-01556 (La. 2/7/23), 354 So. 3d 659.
**Tower Credit, Inc. v. Williams, 2022-01556 (La. 2/7/23), 354 So. 3d 659.
Attorney
Employer Liability
Louisiana
Insight
Judicial Interest Rate for Louisiana Hits a 17-Year High
The Judicial Interest Rate for 2024 in the State of Louisiana has been set at 8.75%. This is the highest the rate has been since 2007.
Generally, judicial interest is interest payable on a judgment that has not been satisfied. Depending on the underlying basis for the judgment, the date that the interest begins to accrue can be before the judgment is rendered. For example, La. R.S. 13:4203 provides, “Legal interest shall attach from date of judicial demand, on all judgments, sounding in damages, ‘ex delicto’, which may be rendered by any of the courts.”
In Workers Compensation matters, La. R.S. 23:1201.3 states, “Any compensation awarded and all payments thereof directed to be made by order of the workers' compensation judge shall bear judicial interest from the date compensation was due until the date of satisfaction. The interest rate shall be fixed at the rate in effect on the date the claim for benefits was filed with the office of workers' compensation administration.”
La. R. S. 13:4202 sets forth the method for the annual calculation of judicial interest in Louisiana: “The commissioner of financial institutions shall ascertain, on the first business day of October of each year, the Federal Reserve Board of Governors approved ‘discount rate’ published daily in the Wall Street Journal. The effective judicial interest rate for the calendar year following the calculation date shall be three and one-quarter percentage points above the discount rate as ascertained by the commissioner.” In consideration of these factors set by statute, the Judicial Interest Rate for 2024 will be set at 8.75%.
For context, the historic rates for the last 20 years are:
2023- 6.50%
2022- 3.50%
2021- 3.50%
2020- 5.75%
2019- 6.00%
2018- 5.00%
2017- 4.25%
2016- 4.00%
2015- 4.00%
2014- 4.00%
2013- 4.00%
2012- 4.00%
2011- 4.00%
2010- 3.75%
2009- 5.50%
2008- 8.50%
2007- 9.50%
2006- 8.00%
2005- 6.00%
2004- 5.25%
Louisiana
Workers' Compensation
Verdict