Category: Appeals court

An Insurer’s Duty: To Defend or Not To Defend

Primary insurance policies include the duty to defend an insured in connection with a covered loss. The insurer is sometimes presented with the question of whether a defense is owed when many of the allegations are not apparently covered by a particular policy. In this circumstance, how does an insurer determine its obligation? The law provides the answer: the “eight corners” rule—do the four corners of the policy unambiguously exclude coverage in all respects when viewed within the context of the four corners of the petition? If the answer is “no,” the duty to defend arises. Mossy Motors, Inc. v. Cameras America, 2004-0726 (La. App. 4 Cir. 3/2/05), 898 So.2d 602, 606.

Courts generally hold that the duty to defend the case extends to ALL claims, not just the covered claims. This duty can often prove quite costly, especially when non-covered claims are high-value or involve extensive factual development or testimony to defend. In some instances, the answer under the eight corners analysis is not so clear. The safe choice for the insurer is to provide a defense and hire separate counsel to handle the coverage side of the case.

In this scenario, where an insurer has serious coverage defenses, but agrees to provide the defense, when does the duty to defend terminate? The Louisiana First Circuit Court of Appeal recently ruled on this issue again in Ponchartrain Natural Gas System, K/D/S Promix, L.L.C. and Acadian Gas Pipeline System v. Texas Brine Company, L.L.C., No. 2018 CA 0254 (La. App. 12/12/19), stating:

            “Our previous decisions in the related sinkhole appeals clearly set out the well-established rule of law that an insurer’ s duty to defend terminates once the undisputed facts establish, or a judicial determination is made, that the claims asserted are not covered under the policy. See Florida Gas, 272 So. 3d at 551; Pontchartrain, 264 So.3d at 553- 54; Crosstex, 240 So.3d at 1032.”

So, the duty to defend ends when undisputed facts establish OR a judicial determination is made that the asserted claims are not covered. Of course, who is to say that the facts are “undisputed” without a judicial determination that confirms this conclusion.  An insurer could unilaterally determine that facts are undisputed and terminate the defense before a judicial determination, but if the court does not agree, the insurer may have issues. Accordingly, the safe course is to await a judicial determination before an insurer terminates the defense.

It is important to distinguish the duty of an excess carrier because such policies generally do not provide an obligation to defend. Instead, the excess carrier may exercise its “right to defend.”

Who Gives a Fuss about an Oxford Comma?

Who Gives a Fuss about an Oxford Comma?

Some judges do. And a missing comma might cost $10 million.

By: C. Reynolds LeBlanc

Let’s take a trip back to middle school for a quick grammar review. Before I was a lawyer, I taught English. Diligently, I taught my students the importance of proper comma usage but never imagined that the fate of a multi-million dollar lawsuit would rest on how this simple mark on the page can change the meaning of a sentence.

As I taught my students, the Oxford comma comes into play when you have a series of words, phrases, or clauses. Take a look at the previous sentence. I used an Oxford comma. It is the one between “phrases” and “or.” People who like the Oxford comma say that it makes it easier for the reader to understand what the author is trying to say.

Not everyone thinks the comma is necessary. Every now and then, a student, whose curiosity would override their fear of appearing “too interested” in grammar, would ask, “Why do you even need a comma if you can tell what the author is trying to say without it?” It is a good question, and grammar nerds have been arguing about its answer for more than a century.

But the Oxford comma can make a dramatic difference. Consider these two sentences:

Darren is excited about his vacation with his wife, his best friend, and his cousin.

vs.

Darren is excited about his vacation with his wife, his best friend and his cousin.

Here, the Oxford comma makes all the difference. It distinguishes between (1) a nice vacation Darren will have with three other people and (2) an awkward situation where Darren should be advised that he is living a weird, taboo lifestyle and that his marriage to his best friend and cousin is absolutely null under La. C.C. art. 94.  While we can safely assume that Darren was excited about a group trip, this example makes the point.

In O’Connor v. Oakhurst Dairy, 851 F. 3d 69 (1 Cir. 3/13/17), a federal court refused to make a similar assumption, and it might cost more than $10 million, all because a statute did not use an Oxford comma. In O’Connor, dairy truck drivers filed a lawsuit to recover overtime pay. In Maine, overtime pay law does not apply to “canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of” food.

The defendant (the Oakhurst dairy) argued that the case should be dismissed because the drivers were involved in the “distribution of” food and were not entitled to overtime pay. The district court agreed and dismissed the case.

On appeal, the drivers countered that because there was no Oxford comma after “shipment,” the statute only applied to the act of “packing” food (for shipment or distribution), which they did not do. An Oxford comma would have made the dairy’s argument correct and the case would have been dismissed. However, no comma was used and the federal court of appeals found that the statute was ambiguous. The case was sent back to district court, where the dairy may now get squeezed for someone else’s $10 million comma omission.

Maybe the Maine legislators should have paid a little more attention in class.

Louisiana Courts Continue Re-Establishment of the Open and Obvious Defense

Under traditional Louisiana law, if somebody tripped and fell, the property owner would not be liable for an injury (1) if the person reasonably should have seen the thing that caused them to fall or (2) if it was as obvious to the person as it was to the property owner. Stated another way, if the alleged condition was “open” and “obvious,” then that condition could not be “unreasonably dangerous,” and the property owner would not be liable. This thinking formed the basis of the “open and obvious defense” in Louisiana law.

A few years ago, the Louisiana Supreme Court issued a ruling in Broussard v. State, 2012-1238 (La. 2013), 113 So.3d 175 that raised doubts about the usefulness of the open and obvious defense. However, recent decisions by the Louisiana Supreme Court and various courts of appeal have clarified that the open and obvious defense is not dead.

A recent example of this trend is seen in Morel v. Cheema Properties, LLC, 16-666 (La. App. 5 Cir. 4/12/17), — So.3d —. This case involved a trip-and-fall accident at a gas station. On her way inside to pay for her gas, an elderly plaintiff saw two hoses next to a curb where she stepped up to enter the store. When she exited the store, she saw that the two hoses had separated and now blocked her path. She fell and was injured when she tried to navigate through these hoses. The property owner asserted the open and obvious defense and plaintiff’s suit was dismissed.

The court found that the plaintiff “was aware of the open and obvious risk” and that she fell while attempting to step over the hoses. The court observed that the plaintiff could have avoided the risk by asking for assistance or for the hoses to be moved. To the court, it was significant “that the plaintiff saw the hoses and was aware that the hoses could cause her to fall.” Therefore, because the alleged condition was open and obvious, it did not present an unreasonable risk.

This recent Fifth Circuit decision is consistent with recent trends in Louisiana law and shows that the open and obvious defense remains alive and well.

One Particular Mosquito: West Nile Virus Found to be a Compensable Workers’ Compensation Claim

A Workers’ Compensation Judge in Monroe, Louisiana found that a claimant met his burden of proving that a specific mosquito bite at work caused him to contract the West Nile Virus, resulting in permanent total disability.

At trial, the claimant asserted that “he specifically remembers being bitten on his left leg by a mosquito” while working in the break room of his employer, Graphic Packaging. Claimant presented evidence that mosquitoes were present at the work site, although his purported eyewitness to the event (who also contracted the disease) was proven to have not been at work that day.

The director of the Ouachita Parish Mosquito Abatement District was offered by the claimant and testified that there was a prevalence of mosquitoes in Ouachita Parish during that summer which carried the West Nile Virus. Mosquitoes trapped near both the employer’s location and the claimant’s house tested positive. According to the director, the only way to determine if a mosquito is infected with West Nile is to have that particular mosquito tested. An expert epidemiologist for the employer added that the most commonly infected mosquitoes would not have been active during the middle of the day when the claimant alleges he was bitten.

Based upon the testimony of the claimant, his witness, and the experts, the Workers’ Compensation Judge ruled that the claimant had sufficiently proven that the specific mosquito infected with the West Nile Virus had bitten him at work. The court also stung the employer and its workers’ compensation insurer with penalties and attorneys’ fees, finding that they had not contested the claim on a reasonable basis.

The Court of Appeal in Allen vs. Graphic Packaging, No. 51,080 (La. App. 2d Cir. 1/11/17), – – So 3d – -, upheld the Workers’ Compensation Judge. The court noted that all proof of the “accident” rested upon circumstantial evidence and that the claimant possessed no direct evidence that the break room mosquito carried the disease. In this setting, the claimant “faced a burden of proof to show circumstantially that the break room mosquito carried the disease.” Utilizing the “manifest error or clearly wrong standard,” the appellate court held that the claimant had met his burden despite his indirect proof.

The Allen court ultimately reversed the finding of permanent total disability, because the Workers’ Compensation Judge misapplied the statutory requirements. It also reversed the award of penalties and attorneys’ fees noting that “there were numerous factors sufficient to validate Graphic’s reasonable controversion of Allen’s claim.”

Grounds for Appeal: Preparing for Round Two

phone retnolds post

Lawsuits begin in the trial court. For that reason, the immediate focus remains in the trial court where the case will be decided by the jury or the trial judge. However, once the judgment is entered or the verdict reached, the focus quickly shifts to the appeals court. In many cases, what happens in the trial court is just “round one” and cases are often truly decided on appeal. This post will help to identify the types of issues considered when there is an appeal.