CORPORATE PROTECTIONS – Generally, a shareholder of a corporation or member of a Louisiana LLC are not liable for the debts or liabilities of the entity. In Charming Charlie, Inc. v. Perkins Rowe Associates, LLC, 2011- CA 2254, the plaintiff/lessee alleged that the defendant/lessor was liable for $682,500 in lease reimbursements. The plaintiff also alleged that the managing member of the lessor, a LLC, was personally liable under allegations that he was: 1) the “alter ego” of the LLC; and, 2) fraudulently induced the plaintiff into the lease. These allegations were dismissed under an exception of no cause of action.
In its ruling, the First Circuit confirmed that corporate protections from personal liability are not to be easily set aside. Because the petition failed to set forth facts showing fraud or that plaintiff could satisfy the “piercing the veil” factors, the granting of the exception was upheld. However, the matter was remanded to allow the plaintiff an opportunity to plead facts, if any exist, to support a cause of action. CCP Art. 934 gives a plaintiff one chance to cure a defect when an amended petition may resolve the issues raised through the defendant’s exception.
CONSTRUCTION LAW – In 2010, the Legislature enacted R.S. 9:2780.1, an anti-indemnity statute that rendered null any indemnity, defense or hold harmless provision in certain motor carrier transportation and construction contracts. The Act became effective in January 2011 and was a significant change in the law.
The statute’s impact has been greatly limited through amendments which are effective this summer. The following modifications were made:
The definition of a “third party” was modified to exclude any party who contracted with the indemnitor or who was at the indemnitee’s facility at the invitation or direction of the indemnitor. This narrows the scope of the ban on indemnity.
A new section was added to allow indemnity up to the amount of insurance if insurance was procured as a cost of the contract or under an “additional insured” listing.
MEDICAL MALPRACTICE – The recent First Circuit ruling in Shawn Crystal v. F. Allen Johnston, 2011-CA 1264, provided an interesting commentary upon the expert testimony required to demonstrate a breach of the standard of care in a medical malpractice claim. In Crystal, the plaintiff complained of the method used by the physician in the performance of an arthroscopic surgery.
During a bench trial, it was factually established that the best method to perform a part of the surgery was the method outlined in Campbell ‘s Operative Orthopedics. Even though the defense expert conceded that the method described in Campbell ‘s “may be the safest way to perform the procedure,” the trial court concluded that a physician is not required to utilize the safest method. Instead, the focus should be upon whether the method utilized by the doctor was reasonable and supported by sound medical judgment.