Category: Louisiana

Who’s Left Holding the Bag? Indemnity in Construction Contracts

01.12.2018

The period of time before the contract is signed in one of optimism. After all, few sign a contract expecting problems. But if you do not consider the many “what ifs,” you may be left holding the bag. And this “bag” may include indemnity provisions which could force you respond for the actions of other parties.

Many contracts include “indemnity” or “hold harmless” provisions. Black’s Law Dictionary defines indemnity as “a duty to make good any loss, damage, or liability incurred by another.” Like many states, Louisiana allows one party to agree to pay for the damages caused by the fault of the other, if this intention is sufficiently expressed. However, there are broad statutory exceptions that can nullify the indemnity requirement.

Parties to construction contracts should be careful not to blindly rely upon indemnity provisions because the Louisiana legislature in La. R.S. 9:2780.1 declared invalid any indemnity provision where a party seeks indemnity from another for its own fault.

Despite the broad nullification of certain types of indemnity provisions in construction contracts, current Louisiana law allows a party to be indemnified for its own fault when the other party obtains insurance to cover the risk, and recovered the cost of insurance in the contract price. For example, a general contractor can require a subcontractor to indemnify the general contractor for the general contractor’s fault, as long as the subcontractor obtains insurance for this obligation, and was paid that amount under the contract.

Indemnity obligations are not always as they seem. Even in the pre-contract period of optimism, you may want to contact an attorney so you won’t be left holding the bag.

Chelsea Payne is an associate at Keogh Cox and has been practicing for three years. Her practice mainly relates to construction law and complex litigation. Chelsea enjoys playing tennis and spending time with her family.

Is Your Neighbor a Nuisance?

12.18.2017

The poet Robert Frost famously wrote that: “Good fences make good neighbors.” But what if there is a problem even fences won’t solve? Louisiana law offers some answers.

Under Louisiana law, a landowner cannot use their property in a manner that interferes with their neighbor’s enjoyable use. While a neighbor may have to put up with some inconveniences, excessive inconveniences that cause damage may be actionable. If a landowner’s activity is considered a nuisance, he may be liable for damages, and the court may require the landowner to stop the activity.

To determine whether a particular activity is considered a nuisance, courts look to the following factors: (1) the character of the neighborhood; (2) the degree of the intrusion; and, (3) its effect on the use and enjoyment of neighboring properties. For example, a person living in a heavy industrial area may have to put up with more noise than someone living in the suburbs. Whether activity is considered a nuisance is determined on a case-by-case basis.

Further, the nature of the noise and its persistence and duration can be a factor in determining whether the activity is a nuisance. For example, in Parish of E. Feliciana ex rel. E. Feliciana Parish Police Jury v. Guidry 2004-1197 (La. App. 1 Cir. 8/10/05), 923 So. 2d 45, writ denied, 05-2288 (La. 3/10/06), 925 So. 2d 515, the court looked not only at the level of the noise, but also at the “nature” of the noise. The court held that noise from a motor cross track was a nuisance, likening the noise to a chainsaw, a buzzing bee, or a dentist drill.

Even when a landowner has a right to conduct a business on his property, he cannot create a nuisance in running the business. Louisiana courts have held that noxious smells, dust, debris, rats, flies, and noise may all constitute a nuisance, even if the business was otherwise lawful.

The duty owed to neighbors applies not only to the landowner, but may also apply to tenants or contractors performing “work” on the property. To prove a nuisance, the offended neighbor must show that the landowner/tenant/contractor either “knew or should have known” that the activity was a nuisance.

When mending fences is not possible, you may have other options.

Jury Duty Part 2: Am I exempt from being a juror?

11.10.2017

“There were eleven votes for ‘guilty.’ It’s not easy for me to raise my hand and send a boy off to die without talking about it first.” – Reginald Rose, Twelve Angry Men

Jury service is a civil duty. Our system would collapse without the diligent individuals who respond and serve, but the law does provide exemptions and exceptions which may be utilized to be excused. Part 2 of this blog will explore those circumstances.

General Exemptions

Louisiana provides two general exemptions from jury service.

1 – Age. Persons seventy years of age or older shall be exempt from jury service and may decline to serve as jurors. La. Const. Ann. art. V, § 33. However, they are free to serve if otherwise qualified.

2 – Prior Service. The second, all “persons who have served as grand or petit jurors in criminal cases or as trial jurors in civil cases or in a central jury pool during a period of two years immediately preceding their selection for jury service.” La. Sup. Ct. R. 25.

No exemption is automatic. A prospective juror qualifying for one of the above exemptions must assert the exemption by contacting the appropriate jury commission.

Recognized Excuses

In criminal cases, a juror may be excused when such service “would result in undue hardship or extreme inconvenience.” C.Cr.P. art. 783

In civil cases, a juror may be excused when service would result in “undue or extreme physical or financial hardship.” However, these circumstances are limited to circumstances in which an individual would:

1. Be required to abandon a person under his or her personal care or supervision due to the impossibility of obtaining an appropriate substitute care giver during the period of participation in the jury pool or on the jury; or

2. Incur costs that would have a substantial adverse impact on the payment of the individual’s necessary daily living expenses or on those for whom he or she provides the principal means of support; or

3. Suffer physical hardship due to an existing illness or disease. La. Rev. Stat. Ann. § 13:3042

With respect to both criminal and civil service, a request for excusal can be mailed to the issuing court and should include an explanation of circumstances. In most cases, the letter must also include supporting documentation, such as, “state income tax returns, medical statements from licensed physicians, proof of dependency or guardianship, and similar documents, which the judge finds to clearly support the request to be excused.” “Failure to provide documentation shall result in a denial of the request for a waiver.” La. Rev. Stat. Ann. § 13:3042

You should serve if you can but, if you need to be excused, questions regarding exemptions, excusals, and/or qualifications should be directed to the appropriate jury commissioner’s office.

Jury Duty Part 1: Am I qualified to be a juror?

11.03.2017

“Jury: A group of 12 people, who, having lied to the judge about their health, hearing, and business engagements, have failed to fool him.” – Henry Louis Mencken

Congratulations, you have been selected for jury duty. As American as baseball, jury duty is a pillar of the American system of justice, and you can step right up and participate-if you are qualified. In this two-part series, we outline the qualifications and exemptions for potential jurors in Louisiana.

In Louisiana, “all qualified citizens shall have the opportunity to be considered for jury service in the district courts of Louisiana and shall have an obligation to serve as jurors when summoned for that purpose, and that no citizen shall be excluded from jury service in the district courts of Louisiana on account of race, color, religion, sex, national origin or economic status.” La. Sup. Ct. R. 25

To serve as a juror for a civil or criminal case, you must meet the following criteria:

Be both a citizen of the United States and Louisiana who has resided within the parish in which he or she is to serve for at least one year immediately preceding his jury service.
Be at least eighteen years of age.
Be able to read, write, and speak the English language and be possessed of sufficient knowledge of the English language.
Not be under interdiction or incapable of serving as a juror because of a mental or physical infirmity, provided that no person shall be deemed incompetent solely because of the loss of hearing in any degree.
Not be under indictment for a felony nor have been convicted of a felony for which he has not been pardoned by the governor. C.Cr.P. art. 401, La. Rev. Stat. Ann. § 13:3041.

If you receive a jury duty notice and do not meet one of the above requirements, you are encouraged to contact the jury commissioner’s office. Who knows, you may be free in time for the first pitch.

SHOW ME YOUR TAX RECORDS: Why You Should Preserve Business and Tax Records

09.22.2017

A case successfully handled by Keogh Cox on behalf of the Louisiana Department of Revenue serves a strong reminder of the importance of maintaining business tax records, and of the significant burden imposed on Taxpayers who do not.

In Barfield v. Diamond Construction, Inc., 51,291 (La. App. 2 Cir. 4/5/17), 217 So.3d 1211, writ denied, 2017-0751 (La. 9/15/17), 2017 WL 4105839, the Louisiana Second Circuit affirmed the Trial Court who granted summary judgment in favor of the Louisiana Department of Revenue in response to a Taxpayer’s failure to pay sales and use taxes over the span of several years.

Although the burden of proof on a motion for summary judgment is usually imposed on the party who filed the motion, a Louisiana statute (La. R.S. 13:5034) shifts the burden in suits filed by the Department of Revenue to collect unpaid taxes. Therefore, to defeat the Department’s motion in Barfield, the Taxpayer possessed the burden to demonstrate that taxes were not owed on the various transactions at issue. Because the law presumes that sales and rentals of tangible personal property are fully taxable, the Taxpayer possessed the additional burden to show that the sales and rentals involved exempted categories. In the face of this “double burden,” the Taxpayer was unable to provide business records to demonstrate the nature of each transaction as these records were not preserved by the Taxpayer.

During the Department’s audit, the Taxpayer was unable to present the necessary records to prove it did not owe taxes on certain transactions. As a result, the Department was allowed to complete the audit by making an estimate of the amount of taxes owed for the subject transactions. The resulting audit findings were then treated as prima facie correct and were ultimately accepted because the Taxpayer offered no contrary evidence.

Noting the Taxpayer’s poor record-keeping, the Court cited the failure to produce the necessary records in support of its conclusion that the Taxpayer did not create a “material issue of fact” in opposition to the Department’s motion. This warranted the entry of judgment in favor of the Department and should remind every business of the real-world need to keep your tax records.

Written by: Chris Jones

Another Year, Another Natural Disaster: What to do if Your Home is Damaged by a Storm or Flood

09.11.2017

Unfortunately, Louisianans (and their property insurers) have endured many natural disasters in the past several years. From the historic flooding in the greater Baton Rouge area in August 2016 to the devastation caused by Hurricane Harvey in August 2017, Gulf Coast residents are all too familiar with significant storms and flooding events. While the rebuilding process will take months or years, this article is designed to provide some basic information on how to document your property claim and apply for and obtain disaster assistance.

DOCUMENT, DOCUMENT, DOCUMENT – Once able, make sure to document the damages to your home and contents. Whether for a homeowners or flood insurance policy or to obtain government assistance, take plenty of photos and even video of the damage. Make a list of the items in your home that were damaged or destroyed. One way to organize this list is to group items from each room together; approximate the item’s age, where it was purchased, and its value when purchased. If you have receipts, try to salvage them. As you rebuild, and materials and items are thrown out, it will become more difficult to document your claim. Proper documentation will lessen the burden upon your insurer’s claims handlers and adjusters and may speed the processing of your claim. A lack of documentation may require the insurer to investigate longer and result in delay.

OBTAIN MULTIPLE ESTIMATES – Although the volume of work and distractions which follow a natural disaster make this difficult, try to obtain estimates for the work needed on your home. Pay for the estimate, if necessary. If you have three estimates and the amounts are close, they are more credible. Also, try and get as much detail as possible in each estimate, including specific materials to be used, dimensions, and finishes. Your insurer is looking to determine the true amount of the loss and thorough estimates help to define your claim.

APPLY FOR ASSISTANCE – Especially if your property is not insured, make sure to immediately apply for government assistance. You can apply for federal assistance at disasterassistance.gov. Oftentimes, the state government will also administer federal and state disaster assistance funds.

Recovering after a disaster may not be a quick or easy process, but spending more time and effort initially may ultimately save you time and allow you to present a claim your insurer will agree to pay.

You’ve Been Served – Now What? Understanding “Louisiana’s Pre-trial Procedure”

08.29.2017

A deputy arrives at your home or office and announces that you have been served. You quickly realize you have been named as a defendant in a lawsuit. Now what?

Whether the suit involves a breach of contract, an automobile accident, or the one and a million other circumstances that can lead to a suit being filed, the process is essentially the same in Louisiana state courts. This blog provides a general roadmap of Louisiana’s “pre-trial” procedure, which applies in most situations. Different procedures are involved with workers’ compensation claims, administrative proceedings, medical malpractice claims, and other areas.

Petition/Answer – When a person or company believes they have been damaged by fault, breach, or neglect, Louisiana law provides that the person allegedly wronged, the plaintiff, may file a Petition for Damages. Louisiana does not have a “loser pays” system. For this reason, there is little disincentive to a plaintiff who wants to sue. Once the Petition is filed with the Clerk of Court, the Sheriff serves the defendant with a certified copy of the Petition and the “Citation.”

A defendant has fifteen days to file an Answer or to secure an extension from either the plaintiff attorney or the Judge, by filing a Motion for Extension of Time to File Responsive Pleadings. A failure to respond to a suit or obtain an extension within 15 days of service may result in a default judgment.

Trial by Judge or Jury -The parties advise if they desire a judge or jury trial in the initial filings. There is no right to a jury in cases which do not have a possible value of more than $50,000. If a plaintiff “stipulates” that case value is at or below $50,000, the defendant has no right to demand a jury trial under Louisiana Code of Civil Procedure article 1732.

Exceptions – Defendants have the right to raise “exceptions” to the suit. Common exceptions include a claim that the suit is vague; is filed in the wrong venue (i.e., the wrong location); or is untimely, and therefore “prescribed.” Defendants can use the exception process to challenge the plaintiff’s legal ability to recover. Many exceptions are waived if they are not filed before or with the Answer.

Discovery

Written – After the Answer is filed, the discovery process typically begins. Discovery is an information-gathering process done through different methods. The parties to a lawsuit may issue written Interrogatories, Requests for Admission, and Requests for Production of Documents.
Depositions – Depositions are a key component of discovery. A deposition allows the attorneys (or the parties themselves, if unrepresented) to ask questions of witnesses before a court reporter. The testimony is taken under oath and can be used later for certain purposes. For example, if the witness is not available to testify at trial, the deposition testimony can often be introduced in lieu of live testimony. Also, if a witness changes his testimony at trial, the deposition can be used to attack the testimony and credibility of the witness.

Case Deadlines – Typically, the court will establish a scheduling order to establish key dates such as deadlines to identify witnesses, exhibits, and any experts who may testify on behalf of the parties. The court often sets a deadline to file “dispositive” motions, such as motions for summary judgment where the plaintiff or the defendant tries to have the case determined before the trial.

Alternative Dispute Resolution – Frequently, the parties agree to attempt to mediate the case with the assistance of a mediator. This is a voluntary process. In some cases, the parties will be bound by an agreement to arbitrate which will be conducted outside of the normal court process.

There is no law or statute which sets the time frame for the “pre-trial” process. Depending upon the complexity of the suit, the pre-trial phase of a suit may take months, and often years.

Is Texting While Driving The New Drunk Driving?

08.11.2017

Earlier this year, Apple was sued in the California class action of Ceja v. Apple, BC #647057, Superior Ct. of California, County of Los Angeles. In the Ceja suit, it was alleged that Apple is liable for automobile-related injuries and death. The “theory of recovery” against Apple is fairly straight-forward: 1) since 2008, Apple has possessed the “lock-out” ability to prevent texting while driving; and, 2) it is liable because it failed to do so. Whether or not the plaintiffs prevail against Apple, the national trend is toward stricter anti-texting laws and harsher consequences for those who text and drive. While this post does not intend to suppose a moral equivalence between drunk driving and driving while texting, the building momentum against texting while driving is reminiscent of the development of the anti-drunk driving laws and message.

It was not until 1938 when 0.15 became the first commonly-used blood alcohol level for intoxication (nearly two times today’s legal limit). Today, driving with a .08 will land you in a Louisiana jail. Many states such as Louisiana have enacted punitive damage statutes that allow for substantial money awards against drunk drivers. For instance, under Civil Code Article 2315.4, punitive damages (a.k.a. “exemplary” damages) are available against any driver whose intoxication causes injury. The message has been heard: drunk driving is illegal and may costs you your freedom, your money, or both.

The prohibitions against texting while driving (and even the broader category of “distracted driving”) are expanding. The State of Washington was the first state to ban texting while driving in 2007. Almost every state has since followed suit. Attitudes are also changing, perhaps in response to public service announcements and targeted media campaigns.

While once legal here, Louisiana, at least on paper, now completely bans texting while driving under La. R.S. 32:300.5. This law was later expanded to prohibit driving while accessing, reading, or posting to a “social networking site.” Last year, related fines and penalties were increased.

The practice of texting while driving has been said to involve three forms of distraction:

1. Manual distraction- taking your hands away from the wheel;

2. Visual distraction- diverting your eyes away from the road;

3. Cognitive distraction- taking your attention away from safely driving.

In the last few years, at least two drivers (one in New Jersey and one in Pennsylvania) have been sued under allegations that they are liable for injury because they sent texts to persons they knew or should have known were driving. Kubert v. Best, 75 A.3d 1214 (2013) and Gallatin v, Gargiulo, #10401 of 2015, Lawrence County, PA.

At some point, auto manufacturers and phone/electronics suppliers may choose or be forced to render texting while driving impossible. Until such a time, the trend against texting while driving continues.

Homeowners Awarded Money Damages Against “Good Faith” Seller of In-Ground Swimming Pool

06.09.2017

Anyone who has spent time in the humid South knows why swimming pools are popular. The Hoffmanns, Louisiana residents, tried to purchase an in-ground swimming pool to entertain their grandchildren but found the pool was far from the oasis they imagined. Recently, in Hoffmann v. B & G, Inc., 2016-1001 (La. App. 1 Cir. 2/21/17), 215 So.3d 273, the First Circuit upheld an award in their favor which returned the price of the pool and additional costs related to its installation even though the seller was unaware of the problems with the pool at the time of sale.

The Hoffmanns asserted what is known in Louisiana law as a “redhibition” claim. Redhibition allows purchasers to void a sale if the thing bought has a “vice or defect” that makes it either:

(1) useless, or

(2) so inconvenient that the buyers would not have bought the thing had they known of the problem.

When the Hoffmanns purchased the pool, the seller arranged to have it installed, which was included in the price. The Hoffmanns used the pool for two summers. However, when they uncovered the pool for its third summer of use, they discovered that the pool liner had detached. The Hoffmanns later learned that the manufacturer no longer recommended their specific pool to be installed completely in-ground.

With redhibition, “good faith” sellers (sellers who did not know of the defect) must be given the chance to repair or replace the defective thing. Instead of repairing the pool, the seller of the Hoffmanns’ pool arranged for a new pool to be installed by a third party. Unfortunately, this second “replacement” pool also failed, this time because of an installation issue. After the second pool failed, the Hoffmanns filed suit.

The pool company argued that the Hoffmanns could not support a redhibition claim because the second pool they provided did not have a defect, but instead failed because of faulty installation. It claimed that it discharged its redhibition duties with respect to the first pool when it replaced the pool. The court disagreed and found that the “object” of the sale was a functioning in-ground swimming pool and that, after all of the efforts to repair and/or replace the original pool, the Hoffmanns still did not have a “defect-free useable in-ground swimming pool.”

The Hoffmanns won, making their summer a little more bearable.

“IME” Killer Bill Put Down

05.19.2017

The Louisiana plaintiffs’ bar recently sought to tilt the scales of justice through Senate Bill 185, a bill seeking to complicate a defendant’s efforts to obtain an Independent Medical Examination (“IME”). An IME is an examination of the plaintiff by a physician or medical examiner hired by the defense. IMEs are important in the defense of a case and often act as a catalyst for settlement or to reduce the value of a claim.

Bill 185 was introduced by Senator Jay Luneau (D) and passed with a unanimous 35 – 0 vote in the Senate. The bill proposed amendments to Louisiana Code of Civil Procedure Article 1464 to impose the following conditions upon IMEs:

All parties would be barred from referring to an IME as “independent” in the presence of a jury.
A plaintiff could not be ordered to submit to multiple examinations by multiple physicians within the same field of specialty, regardless of the number of defendants.
The party to be examined would have the right to have a person of his or her choosing present during the exam, including the plaintiff’s attorney.
The party to be examined would have the right not only to have the entire examination videotaped, but the ability to force the party requesting the examination to pay for all associated costs.

Were these conditions enforced, many physicians might have chosen not to provide IMEs at all when the process would involve: a potentially adversarial plaintiff’s attorney; a patient room packed with video equipment; and, the spectacle of it all captured on tape. Further, the bill would have stifled the ability to defend injury claims.

We may never know what effect these changes might have brought. On May 16, 2017, the House Civil Law and Procedure Committee, involuntarily deferred on a 4-4 vote. This action effectively killed the bill and saved the IME as currently understood.

By: John Grinton, a Keogh Cox associate whose practice areas include commercial and construction litigation. When he is not practicing law, John spends most of his time with his wife, Kellye, and their two dogs.

One More Reason: Louisiana’s “Drunk Driving” Immunity

11.11.2016

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. 1^st 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.

The “Great Flood of 2016”–Update and Resources

08.17.2016

“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