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Insight
The Louisiana Legislature Overhauls the “Direct Action” Statute
For decades, Louisiana law provided a claimant or injured person an uncommon opportunity (1) to directly name an insurer in a lawsuit, and (2) to make the jury aware of the presence of insurance. This was known nationally as the “Louisiana Direct Action Statute.” This statute, embodied in LSA—R.S. 22:1269, has long been a topic of debate.
The Louisiana Legislature recently amended the “direct action statute” in Act 275 and declared that the injured person “shall have no right of direct action against the insurer” unless at least one of the exceptions applies: the insured files for bankruptcy, the insured is insolvent, service cannot be made on the insured, a tort cause of action exists against a family member, uninsured motorist claims, the insured is deceased, or when the insurer issues a reservation of rights or coverage denial (but only for the purpose of establishing coverage). The Act further provides that the insurer shall not be included in the caption of the case. And, the existence of insurance is not to be disclosed unless the Louisiana Code of Evidence requires it. This new legislation is effective August 1, 2024.
But, the Act also provides for new provisions that allow for the joinder of an insurer after settlement or in connection with a final judgment. The Act further includes specific provisions enacted to provide notice to an insurer of an action and outlines the procedures and timelines for how insurers assert reservation of rights or a denial of coverage.
The revisions to LSA—R.S. 1269 represent a significant change in how lawsuits involving insurance companies will proceed.
Insurance
Litigation
Louisiana
Direct Action
Insurer
Insight
What is a Design Professional’s Tort Duty?
A design professional’s duties and responsibilities on a construction project generally are outlined in its contract with the owner. Does a design professional’s duty extend to third parties? The Supreme Court recently addressed this issue and held that the design professional’s duty to third parties is limited to the terms of the contract documents.
In Bonilla, a construction worker was injured while performing demolition work on a construction project. The worker, who was a subcontractor on the project, filed suit against the architect and the engineer on the project alleging that these design professionals failed to monitor and supervise the execution of the plans to ensure safety on the job site.
The engineer and the architect filed summary judgment motions arguing that they owed no duty to oversee, supervise, or maintain the construction site. The trial court granted their motions. However, the appellate court found the contract between the architect and the owner may have inferred a duty was owed to the worker.
The appellate court referenced contract provisions that required the architect to make weekly site visits and to report to the owner any deviations from the plans. The court noted that the architect was on site the day of the accident and photographed potential unsafe conditions, which would have deviated from the plans. The appeal court reversed the trial court’s ruling granting summary judgment.
The architect filed a writ with the Louisiana Supreme Court, which reversed the appellate court’s ruling and reinstated summary judgment in favor of the design professionals. The Supreme Court emphasized “the duty owed to an employee of a contractor by an engineer or architect is determined by the express provisions of the contract between the parties.”
While the contract documents required the architect to make weekly visits to the jobsite, the purpose of this duty was to ensure that the owner received the building it paid for and that the progress and quality of the work met the plans. More importantly, the contract also provided that these site visits did not create a duty to supervise construction. In contrast, under the terms of the contract, the contractor had control over construction means and methods and responsibility for site safety, specifically including site safety for all employees.
The clear and unambiguous language of the contract dictated that the design professions owed the worker no duty. Therefore, the Supreme Court held that the architect could not be held liable for failing to perform a duty that it had no responsibility to undertake.
Reference:
Bonilla v. Verges Rome Architects, 2023-00928 (La. 3/22/24), 382 So. 3d 62.
Architects
Construction
Engineers
Insight
Court Grants Summary Judgment and Takes Stock of Evidence Needed to Support Merchant Liability Claims
In Hawkins v. Hi Nabor Supermarket, LLC, the First Circuit recently affirmed summary judgment in favor of Hi Nabor finding that Hi Nabor could not be liable to the plaintiff for injuries she allegedly sustained when she tripped and fell over a stocking cart while she was shopping in its store.^
The plaintiff claimed the stocking cart created an unreasonably dangerous condition that was foreseeable to the defendant. Hi Nabor filed a motion for summary judgment in response and attached affidavits of its employees, the store’s surveillance video of the incident, and excerpts of the plaintiff’s deposition.
The plaintiff failed to timely oppose Hi Nabor’s motion and then filed a motion for leave to file a late opposition. However, she did not attach or file any documents or exhibits in support of her opposition. The trial court granted Hi Nabor’s motion, and the plaintiff appealed the decision. On appeal, the plaintiff argued (1) summary judgment was granted “solely because an opposition was filed late” and (2) there was in sufficient proof that movers were entitled to judgment.
In response to the plaintiff’s first argument, the Court addressed the plaintiff’s failure to file an opposition to the defendants’ motion. See our prior blog for analysis of the impact of a party’s failure to timely oppose a motion for summary judgment here. The Court noted that a failure to timely oppose a motion for summary judgment does not automatically require that the motion be granted. However, if the mover meets its burden in its motion, and the plaintiff fails to file an opposition, the motion should be granted.
The court examined whether the defendant met its burden to support its motion in response to the plaintiff’s second argument. The Court found the defendant produced evidence to show that the stocking cart did not present an unreasonably dangerous condition such that liability could not attach.
The Court found that “stocking carts are necessary and useful in grocery stores to restock shelves, and that their common use and obviousness to a shopper make any risk slight.”* Further, surveillance video showed the size of the stocking cart (its’ tall sides were approximately the height of the plaintiff), the placement of caution cones around the stocking cart and the Plaintiff's interactions with the cart prior to the accident.
In light of the evidence filed in support of its motion, the Court found Hi Nabor met its burden of proof to show that plaintiff could not establish the stocking cart presented an unreasonable risk of harm that was reasonably foreseeable. When the plaintiff failed to produce evidence to meet her burden of showing genuine issues of material fact regarding whether the cart presented an unreasonable risk of harm, summary judgment was properly granted. The Court's decision highlights the importance of procedural requirements and reaffirms the principle that mere allegations of danger are insufficient and cannot defeat summary judgment without substantive proof.
References:
^Hawkins v. Hi Nabor Supermarket, LLC, 2023-0978 (La. App. 1 Cir. 2/23/24), 2024 WL 743080.
*Citing Russell v. Morgan's Bestway of Louisiana, LLC, 47,914 (La. App. 2 Cir. 4/10/13), 113 So. 3d 448, 453.
Evidence
Liability
Summary Judgment
Insight
Louisiana Appellate Court Examines How Accidents are Defined under Louisiana Workers’ Compensation Law
Generally, Louisiana Workers’ Compensation laws provide coverage for an employee who sustains personal injuries by an accident arising out of and in the course of his or her employment. La. R.S. 23:1021(1) defines “accident” as:
"An unexpected or unforeseen actual, identifiable, precipitous event happening suddenly or violently, with or without human fault, and directly producing at the time objective findings of an injury which is more than simply a gradual deterioration or progressive degeneration."
In Rayborn, Sr. v. Continental Cement Company, LLC et al, the plaintiff-employee filed suit when the worker’s compensation carrier terminated benefits based on its assertion that the plaintiff’s left knee injury was not the result of an “accident” as defined in the statute. The evidence presented at trial established the following:
- After returning home from work one day, the plaintiff began to feel soreness behind his left knee and believed he “may have pulled a muscle.”
- The plaintiff sought medical attention at a local clinic 2 days later.
- The plaintiff told clinic staff that his “leg was hurting,” and that he “was at work climbing up and jumping down off of barges all week.”
- After returning from a pre-planned family trip one week later, the plaintiff told to his managers at work that he hurt his knee “some kind of way” and that he was “doing too much climbing up and jumping down from barges “and his knee “just started hurting.”
- The chart from follow-up clinic visits stated, “Patient had [an] injury while at work when he jumped from a height and later that day felt a discomfort in the left lateral knee.”
- Additional records noted the plaintiff “injured his knee on the job; however it was not readily apparent until [his] knee became stiff later that evening.”
- The plaintiff later consulted with an orthopedic surgeon whose initial chart entry stated, “Over the course of the week, his knee began bothering him in the patellofemoral area and it started to become tight and swollen.”
At the conclusion of trial, the workers’ compensation court ruled that the plaintiff successfully proved that he sustained a work-related injury of his left knee on a particular date by climbing and jumping while performing his work duties. On appeal, the workers’ compensation carrier argued that plaintiff’s assertion that he was injured “some kind of way” over the course of a week was not sufficient to meet the requirement of a specific, identifiable accident in the course and scope of employment under La. R.S. 23:1021(1).
In affirming the decision of the OWC judge, the appellate court highlighted numerous opinions from the Louisiana Supreme Court and other courts of appeal wherein the statutory definition of “accident” was liberally construed to reject an interpretation that excluded “those workers who are worn down, rather than immediately crippled by, their work.” The opinion notes that it is well-settled in the case law that an “accident” exists when “heavy lifting or other strenuous efforts, although usual and customary, cause or contribute to a physical breakdown or accelerate its occurrence because of a pre-existing condition.”
The opinion added, “It is presumed the legislature is aware of how Louisiana courts have interpreted the statute; yet, it has taken no steps to overrule more than thirty years of Louisiana jurisprudence.” In so holding, it is unclear whether the court considered La. R.S. 23:1020.1(D), in which the Legislature specifically rejected the jurisprudential doctrine requiring a liberal interpretation of Workers Compensation statutes in favor of an employee. Despite this statement from the Legislature on the construction of Workers Compensation statutes, the Rayborn opinion suggests that courts may continue to base their decisions on the liberal interpretation of “accident” that has been developed and adopted by Louisiana courts when analyzing what types of injuries are covered under Louisiana Workers’ Compensation Law.
References:
Rayborn v. Cont'l Cement Co., LLC, 2023-0403 (La. App. 1 Cir. 1/10/24), 2024 WL 132802.
Injury
Louisiana
Workers' Compensation
Employer Liability
News
Mary Anne Wolf will present Project Communications & Documentation - Best Practices & Liability Issues at the Louisiana Engineering Society Baton Rouge Chapter Luncheon.
Mary Anne Wolf will present Project Communications & Documentation – Best Practices & Liability Issues at the Louisiana Engineering Society Baton Rouge Chapter luncheon on March 28, 2024.
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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