Category: Louisiana Supreme Court

The Louisiana Supreme Court rules that amount billed by healthcare providers beyond what has been paid by a Workers Compensation insurer is NOT a collateral source that is recoverable against tort defendants

In a very important ruling by the Louisiana Supreme Court, a tort defendant is no longer liable for any “actual charges” by medical providers above the amount paid by a Workers Compensation insurer pursuant to promulgated Workers Compensation fee schedule . In Simmons v. Cornerstone Investments, LLC,  2018-cc-0735 (La. 5/18/19), the court concluded:

“…the amount of medical expenses charged above the amount actually incurred is not a collateral source and its exclusion from the purview of the jury was proper.” See http://www.lasc.org/opinions/2019/18-0735.CC.OPN.pdf

The court conducted a detailed analysis of the development of the collateral source rule under applicable jurisprudence noting that the genesis of the collateral source rule:

“Under the collateral source rule, a tortfeasor may not benefit, and an injured plaintiff’s tort recovery may not be reduced, because of monies received by the plaintiff from sources independent of the tortfeasor’s procuration or contribution. Under this well-established doctrine, the payments received from the independent source are not deducted from the award the aggrieved party would otherwise receive from the wrongdoer.” See Louisiana Dept. of Transp. & Dev. v. Kansas City Southern Railway Co., 02-2349, p. 6 (La. 5/20/03), 846 So.2d 734, 739.

Essentially, the court asks two questions when assessing whether the collateral source rule should apply. First, does the claimed benefit arise from some payment, wage deduction or other contribution by the Plaintiff that would diminish the plaintiff’s patrimony?  Second, will the goal of tort deterrence be promoted by allowing the windfall?  In a series of cases culminating in the case at bar, the court has been limiting the application of the collateral source rule in a number of contexts.

The court in Bozeman v. State, 03-1016 (La. 7/2/04), 879 So.2d 692, found that the collateral source rule did not apply when Medicaid was the payor such that the defendant could not be responsible for any amounts above what Medicaid paid to the provider. The court reasoned that it would be “unconscionable” to require taxpayers to pay the bills and then let a plaintiff recover the full undiscounted medical expenses and “pocket the windfall.” The court continued by noting in “Cutsinger v. Redfern, 08-2607 (La. 5/22/09), 12 So.3d 945, this court found the collateral source rule did not apply to prevent the plaintiff’s uninsured motorist carrier from receiving a credit for workers’ compensation benefits paid by her employer, even though the plaintiff paid for the UM coverage herself.” In Hoffman v. 21st Century North American Ins. Co., 14-2279 (La. 10/2/15), 209 So.3d 702, the court held that the collateral source rule does not apply to attorney-negotiated medical discounts. The court also looked at the US 5th Circuit in Deperrodil v. Bozovic Marine, Inc., 842 F.3d 353 (5th Cir. 2016), that the collateral source rule does not apply above any amounts actually paid by the employer in the context of the LHWCA.

In each of the instances outlined, the court noted that the patrimony of the plaintiff was not impacted by limiting recovery to the amount of medical bills actually paid. Moreover, the court noted that the goal of tort deterrence is not negatively impacted, and that allowing a plaintiff to recover a windfall in this context is tantamount to an award of punitive damages that are not recoverable absent statutory authority which is not present in this context.   The Simmons decision now extends that same logic to cases where a Workers Compensation insurer has paid the medical benefits pursuant to the Louisiana Workers Compensation Law.

This ruling will have significant impact on the evaluation, settlement and trial of tort cases that have corresponding Workers Compensation claims.

Submitted by John P. Wolff, III (Partner)

Sudden Emergency Defense: Now More Dispositive

On August 28, 2015, the Louisiana Supreme Court denied a Writ Application in Leandro Carias v. Vernon A. Loren, et al. This denial signifies that the “sudden emergency” defense may be properly applied at the summary judgment level. The defense in the Carias litigation was handled by Keogh Cox attorneys Gracella Gail Simmons and Collin J. LeBlanc.

Claims for Negligent Spoliation of Evidence Not Supported by Louisiana Law, Reynolds v. Bordelon

In Reynolds v. Bordelon, 2014-2362 (La. 6/30/15), — So.3d—, 2015 WL 3972370, the Louisiana Supreme Court definitively ruled that Louisiana law does not recognize a cause of action for negligent spoliation of evidence. This resolved a disputed issue of Louisiana law.

The Reynolds plaintiff was involved in a multi-car accident in which his airbag failed to deploy. His insurance company paid what was owed for the totaled vehicle under its policy and, in the normal course of business, disposed of the vehicle by auctioning it to a salvage yard. Plaintiff’s petition included a claim against the auto manufacturer for the airbag failure. It also included a claim against his insurance company and the salvage yard for failure to preserve the vehicle as evidence likely to be used in litigation.

Back to the Beginning – Veil Piercing

The longstanding rule that the analysis for “piercing the corporate veil” of an LLC is substantially the same as the analysis for piercing the veil of corporations has been called into question by the recent Louisiana Supreme Court decision in Ogea v. Travis Merritt and Merrit Construction, LLC, 2013-1085, — So.3d —. In Ogea, the Court addressed “the extent of the limitation of liability afforded to a member of an LLC” and the statutory basis for exceptions to this limited liability.

Fraud Just Got More Expensive – Equity as a Factor in Attorney Fee Awards

The Louisiana Supreme Court recently held that the New Home Warranty Act (“NHWA”) is not the exclusive remedy for a purchaser of a new home where the builder fails to disclose known defects in the Residential Property Disclosure Act (“RPDA”). Stutts v. Melton, 2013-0557, — So.2d. —-. The Court also upheld an award of damages and attorney fees for fraud victims who elect not to seek rescission of a sales contract despite no Civil Code article expressly allowing for attorney fees in such instances.

The Results Are In

Keogh Cox’s recent blog entry “Did I pass?” looked at recent changes to the Louisiana attorney’s “bar” examination and discussed the negative impact these changes seem to be having on the bar passage rate. Since that post, the results from the July, 2013 exam were released, and they are not good. In fact, the overall passage rate (53.34%) was among the lowest ever for a July examination.

Did I pass? – A Terrifying Question Gets More Terrifying

The July 2013 Louisiana Bar Examination results are set to be announced on October 11, 2013. Until then, applicants have but a few remaining hours to ponder whether the recent changes to the bar examination will have the same negative effect on passage rates as they did last year.

On October 19, 2011, the Louisiana Supreme Court ordered the implementation of the first changes to the grading standards of the Louisiana Bar exam since the exam was instituted. These changes: began “compensatory scoring;” eliminated essay portions of the test; included “multiple choice” format portions; doubled the score value of the “Code subjects;” ended the “conditional failure” status; and, placed a five-time limit on unsuccessful attempts to pass. Under the new rules, an applicant must score a 650 or higher or will be required to retake the nine (9) section, week-long test encompassing over twenty one (21) hours of testing.

An Exercise in Inaction

I never worry about action, only inaction.”

– Winston Churchill

The Louisiana Supreme Court’s decision not to take up a case is sometimes just as important as a decision to grant Writs and issue a ruling. Recently, much attention has been given to the Court’s decision not to grant a Writ filed by Louisiana State University.

To Err is Human, To Rescind-Declined

The Louisiana Supreme Court recently addressed the impact of contractual “errors” in Cynthia Fry Perionnet and Elizabeth Fry Franklin v. Matador Resources Company, 2012-2292, 2012-2377, — So. 3d –.

The Perionnet case involved a dispute over the intent of a contract to extend a mineral lease. The property owners believed that the lease was extended as to only 168.95 acres of nonproducing land. The defendant/lessors argued that the contract contemplated that the lease would extend to the entire 1850.34 acres to include producing wells. Plaintiffs/property owners argued that their unilateral error regarding the terms of the contract was ground for rescission. The jury ruled in favor of the defendant/lessors. The Court of Appeal reversed. The Supreme Court granted writs.

Modern Problems: Paternity in a New Age

Can a child have more than one father? Yes, according to Louisiana law which allows for “dual paternity.”

Louisiana’s “family law” has undergone many changes in an attempt to react to the challenges presented by new medical technology and a breakdown of the traditional family structure. The recent Supreme Court decision in Derek Alan Pociask v. Kera Mosely is the latest effort to address these “modern problems.”

“Cash Balance” Retirement Plan Bounces

The Louisiana Supreme Court recently held that the enactment of the “Cash Balance Plan” was unconstitutional. See The Retired State Employees, Association et. al v. The State of Louisiana et. al., 2013-0499, – So.3d -. The Cash Balance Plan is a 401-k style retirement plan that was to be put in place for state employees, including teachers, hired after July 1, 2014.

The key issues in The Retired State Employees litigation were: 1) whether the Cash Balance Plan was a new retirement plan or merely a modification of an existing retirement plan; and 2) whether the Cash Balance Plan had an “actuarial cost.” If the Cash Balance Plan was a new plan or had an actuarial cost, a two-thirds vote would be required to pass the legislation rather than a mere majority of votes under Louisiana Constitution Article X, § 29(F).

Parish Finds Debris Clean-Up Doesn’t Come For Free

The Louisiana Supreme Court has ruled that St. Tammany Parish must pay for hurricane clean-up services even though it had no formal contract with the party that did the work. See USA Disaster Discovery, Inc. v. St. Tammany Parish Government, 2013-0656, — So.3d —.

Fallen trees and loose debris were familiar sights across Louisiana in the aftermath of Hurricane Katrina. Immediately after the storm, emergency protocols were followed to rescue those trapped in their homes or in other buildings. To perform search and rescue, trees and debris had to be cleared. This duty fell to the Sheriff’s office under St. Tammany’s emergency operation plan. However, neither the Parish nor the Sheriff’s office had the necessary resources. Therefore, the Parish contracted with various entities to help clear the debris.