Louisiana Supreme Court Addresses Mental Anguish Awards When No Other Injury Is Claimed

The Louisiana Supreme Court recently held that a claim for defense and indemnity may be asserted before a judicial finding of liability. The Court’s decision overruled prior decisions that held claims for defense and indemnity were premature until it was determined that damages were actually owed and the party claiming indemnity sustained a loss.

In Daniel Bennett v. Demco Energy Services, the plaintiff alleged he was injured when he drove over a downed power line that belonged to Cox Communications. Evidence showed Cox Communications contracted with Cable Man to provide services, maintenance, and repair for its telecommunication companies. The contract covered maintenance and repair of the subject phone line.

The contract included an indemnification provision that required Cable Man to indemnify and defend Cox Communications from any and all claims relating to Cable Man’s work, Pursuant to the contract, Cox Communications sent Cable Man a request to tender defense and indemnification under the contract. Cable Man refused the tender and Cox Communications filed a cross-claim against Cable Man asserting that it was owed defense and indemnification. In response, Cable Man filed an Exception of Prematurity and maintained that the claim for indemnity had not accrued because there had not been a judgment or a finding a Cable Man’s fault or liability.

The Louisiana First Circuit Court of Appeals granted the Exception of Prematurity and stated that “It is well-established that claims for indemnity, as well as claims for defense arising under an indemnity agreement, are premature prior to a determination that damages are actually owed and the indemnitee sustains a loss.” The court reasoned that the lawsuit was still pending against both parties and no liability determination had been made. Therefore, under the “well-established” law, Cable Man owed no obligation to Cox Communications for indemnity and costs at the time Cox asserted its cross-claim.

However, the Louisiana Supreme Court reversed the First Circuit’s decision and Cable Man’s claims of prematurity were denied. Acknowledging such claims for indemnification previously were considered premature, the Court held the law moving forward should allow for a claim for indemnity, whether in a third-party demand or a cross-claim, that is raised during the course of litigation and before a finding of liability. Further, the Court recognized potential inconsistencies with prior judicial determinations and stated, “in light of our ruling today, to the extent any prior jurisprudence can be interpreted otherwise, we now clarify that such a claim for indemnity is not prohibited before a liability adjudication.”

This ruling makes clear that “asserting a claim for indemnity, arising out of the same facts and circumstances, is not premature before a judicial finding of liability.” The right to collect on an indemnity agreement continues to be determined upon a finding of liability or loss, but a claim for indemnity can now be asserted in the same proceeding.

References:

Daniel Bennett v. Demco Energy Services, et al, 2023-CC-01358 (La. 5/10/24); 386 So.3d 270.

La Code Evid. Art. 704 addresses the use of expert testimony in Louisiana Courts and provides, “Testimony in the form of an opinion or inference otherwise admissible is not to be excluded solely because it embraces an ultimate issue to be decided by the trier of fact.” Though the text of this article is simple, Louisiana trial courts often face questions about when an expert’s opinion crosses a line and invades the jury’s fact-finding function. These questions often arise in the context of Daubert hearings under La. Code Civ. P. art. 1425.

The Louisiana Supreme Court recently addressed this issue in Hulin v. Snow, where the Court was asked to review the extent to which an expert in a civil case could offer testimony that addressed the ultimate issues of law and fact in the case. The ultimate issue in the Hulin case, which involved parental care, was the alleged negligence of the defendants. The Court examined multiple tendered opinions of the plaintiffs’ expert, including expert testimony about the defendants’ negligence and credibility.

In a Per Curiam opinion, the Court ruled that it was improper for the expert to testify on the ultimate issues of whether the defendants were negligent or credible. It held that “(a)lthough experts may aid the trial court in the determinations of ultimate facts, the final conclusions drawn from those facts belong exclusively to the trier of fact.” The testimony of plaintiffs’ expert stated conclusions about these ultimate issues. Therefore, it was inadmissible.

However, the Court did allow the expert, a board-certified pediatrician, to opine on the parental care of the defendants. “Even though this testimony may embrace some of the ultimate issues to be decided by the trier of fact, it is permissible.” It appears the Court found that this testimony did not state conclusions about ultimate issues, as the Court held that the trier of fact could accept or reject the expert’s opinions on parental care as they relate to ultimate facts.

Reference:

Hulin v. Snow, 2023-00530 (La. 6/26/23), --- So.3d ---, 2023 WL 4199310.

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.

Two individuals, acting as a joint venture, approached a representative of the Sheriff's office and volunteered to assist in the removal of the debris. Although these individuals did not have a contract with the Parish, they were "confident" the Parish would pay them for their services. As such, they went to work with no assurance of payment. The confident volunteers later sent bills to the Parish and the Sheriff's office, but both refused to pay.

The joint venture incorporated itself as USA Disaster Recovery, Inc. ("USA") and sued the Parish and Sheriff to collect the unpaid bills. The trial court found that USA provided the Parish with valuable services following the storm. Under a theory of "unjust enrichment," it held that the Parish had to pay for the work.

The Supreme Court's recent ruling reaffirmed the five elements necessary to show that one party was "unjustly enriched" through the action of another, namely:

1) an "enrichment" of one party;

2) an "impoverishment" of the other;

3) a connection between the enrichment and the impoverishment;

4) no justification or cause for the enrichment and the impoverishment; and,

5) no other legal remedy available to the plaintiff.

On appeal, the appellate court examined the facts and held that unjust enrichment was not available because USA did not factually demonstrate criteria #2, #4 and #5. In short, the appellate court found that USA did the work at its own risk, knowing that payment was not guaranteed. Therefore, its "impoverishment" was not established.

The Supreme Court disagreed and reinstated the trial verdict. An appellate court is to review a trial court's factual findings under a "manifest error" standard. In USA Disaster, the Supreme Court held that the appellate court incorrectly substituted its own factual findings for those of the trial court. As a result of the deference to be given to a trial court's findings of fact, the "volunteers" in USA Disaster were rescued by an uneasy application of the unjust enrichment doctrine.