Louisiana Supreme Court Clarifies Analysis for Open & Obvious Conditions

As part of its travel pitch, Louisiana tourism once used the slogan: “Louisiana. Come as you are. Leave different.” If an out-of-state insurer writes in Louisiana and does not understand the ramifications of “Gasquet,” then they may leave different, very different.

The term “Gasquet” comes from the case of Gasquet v. Commercial Union Ins. Co., 391 So. 2d 466 (La. App. 4th Cir. 1980). The case considered how a settlement of the plaintiff's claims against the primary carrier and a partial settlement of claims against the tortfeasor/insured impacted the excess carrier.

In Gasquet, the plaintiff alleged serious personal injury. Prior to trial, he settled with the primary insurer, Commercial Union, for $200,000, even though it had a $300,000 policy limit. In the deal, the plaintiff fully released Commercial Union. He also released the tortfeasor/insured from all liability not insured by the excess carrier, Stonewall Insurance. The insured therefore remained in the lawsuit as a “nominal defendant” to allow the plaintiff to pursue the excess carrier.

After settlement, the excess carrier denied the claim and asserted that payment by the primary carrier of less than policy limits did not trigger its policy, which required that the primary policy be "exhausted." Without exhaustion, the excess carrier argued that it could not be called upon to respond under its policy language. The court rejected this argument and held that the plaintiff was entitled to a direct action against the excess carrier who would, in turn, receive a credit for the full limits of the primary policy. The “Gasquet release” has since become a staple of Louisiana litigation.

In Louisiana, unlike many states, a primary insurer owes no general duty to the excess carrier under Great Southwest Fire Ins. Co. v. CNA Insurance Companies, 557 So. 2d 966 (La. 1990). This creates a dynamic not present in states where the primary carrier is duty bound to consider the interests of the excess carrier. This lack of duty magnifies the vulnerability of the excess carrier’s position in Gasquet-friendly Louisiana.

An excess carrier in Louisiana should measure its reliance upon a primary carrier who can independently settle out with the plaintiff, sometimes on the eve of trial. If the excess carrier relied upon the primary carrier to defend the case, the excess carrier could be placed in the unenviable position of scrambling to defend a case where the insured (protected by Gasquet) may be suddenly disinterested in the outcome. Excess carriers with real potential exposure need to stay involved in the litigation and be prepared.

Following Gasquet, permutations have developed such as a “reverse-Gasquet,” where the excess carrier settles with the plaintiff and then pursues the primary insurer to recoup its payment. So, come to Louisiana, but know that we are sometimes different.

Collin LeBlanc is a Keogh Cox partner and experienced litigator who concentrates in injury, commercial, and legal malpractice disputes. He lives in nearby Zachary, Louisiana with his wife Melissa and three all-too-active children. He is an outdoorsman, a tennis player, a cook, and a hobbyist writer.

The Louisiana First Circuit Court of Appeal recently ruledon the duty of law enforcement and the potential for tort liability should thatduty be breached. In Aaron L. Van Cleave and Christy Van Cleave v.Arthur Wayne Temple, et. al., 2018 CA 1353 (La. App. 1 Cir. 5/31/19), theappellate court considered the duty of law enforcement to the general publicafter the police receive a report of erratic driving.

Arthur Wayne Temple was driving a 2006 Ford F-250 truck inSt. Helena Parish when he crossed the center line of Louisiana Highway 16 andstruck a truck driven by Allen Marchand. Aaron Van Cleave was a passengerinjured in the accident.

About an hour before the collision, June Blades was driving behind Temple, observed erratic driving, and called the police. In response, a sheriff’s deputy was dispatched to the area but could not locate the truck. Van Cleave sued a number of potentially liable parties. Aware that the police knew of the erratic driving before the accident, he included the sheriff’s department as a defendant. He argued that the sheriff’s department possessed a duty to locate the erratic driver before they cause harm.

Louisiana jurisprudence recognizes that the police have an affirmative duty to ensure that motorists are not subjected to an unreasonable risk of harm. But, the scope of that duty is based on the particular facts of the case and the relationships of the parties; and must be reasonable. In this case, the court found that the sheriff’s department acted reasonably by immediately dispatching an officer to attempt to locate the truck, even if they were unable to ultimately stop the accident.

Virginia "Jenny" McLin has experience handling cases from the initial client consultation to preparing a writ of certiorari to the United States Supreme Court. Her experience allows her to work with clients to develop a cost-effective litigation plan for each case. Recently, Jenny was on the defense team that prevailed in a workers' compensation case involving a discovery-related issue that was upheld on appeal to the Louisiana Supreme Court. This had a state-wide effect on the handling of discovery in workers’ compensation matters.

In cases that involve physical injury, defendants often request an “Additional Medical Opinion [AMO]” from a physician of their choice as part of the defense of the case. Louisiana Code of Civil Procedure article 1464 allows a defendant to select a physician to perform a physical and/or mental examination of a plaintiff to challenge the plaintiff’s claimed physical and mental injuries. At times, a plaintiff may voluntarily agree to the examination. However, if an objection is lodged to the requested examination, a defendant must proceed with a Motion to Compel the Additional Medical Opinion. In the context of the motion, the defendant must establish the following for the AMO to be ordered pursuant to article 1464:

1. The mental or physical condition of a party is in controversy; and
2. “Good cause” exists for the AMO.

Because Louisiana courts routinely hold that a plaintiff puts his or her physical and mental condition in “controversy” by filing suit and requesting damages for physical and mental pain and suffering, the focus of a motion for an AMO is often on the “good cause” requirement. “Good cause” is not defined in La. CCP article 1464, and its meaning is not clear. Recently, however, the Louisiana Supreme Court provided guidance on the issue in the case of Hicks v USAA General Indemnity Company, et al., holding that a showing of “good cause” requires that a moving party establish a reasonable nexus between the requested examination and the condition in controversy.

In Hicks, the defendant moved for an AMO with an orthopedic surgeon after plaintiff filed suit, alleging personal injuries to his neck, back, and arm as a result of an accident. In the context of the Motion to Compel, it was argued the plaintiff put his physical condition in controversy by alleging injury. The defendant noted plaintiff treated with two physicians, one of whom did not believe plaintiff was a surgical candidate. The defendant also maintained “good cause” existed because a plaintiff “who asserts mental or physical injury… places that mental or physical injury clearly in controversy and provides the defendant with good cause for an examination to determine the existence and extent of such asserted injury.” In support of this argument, the defendant also highlighted inconsistent medical testimony concerning plaintiff’s physical conditions and treatment in support of “good cause.”

In opposing the motion, the plaintiff argued “good cause” was absent because two physicians already had offered opinions on plaintiff’s condition and treatment.

The trial court denied defendant’s Motion to Compel AMO on grounds that “good cause” did not exist. The trial court noted that two physicians already had been deposed and that a physician selected by the defendant could review plaintiff’s medical records and the depositions of the other doctors to offer an additional medical opinion at trial. The case proceeded to trial, where the defendant introduced testimony from a physician who relied upon the materials referenced in the court’s ruling to support his medical opinion. Not surprisingly, the plaintiff argued the opinion of the defendant-selected physician should be discredited because he never examined plaintiff.

After a trial judgment in favor of plaintiff, the defendant appealed. The appeal court also concluded “good cause” did not exist for the AMO, noting the absence of “definitive guidelines as to what constitutes good cause.” The appeal court also noted the fact that defendant had the ability to obtain the desired information by other means was relevant in deciding whether good cause was shown.

The Louisiana Supreme Court reversed the lower courts’ decisions. It started its analysis by noting the basic premise of our system of justice: that both sides to a dispute stand on equal footing in gathering evidence and preparing for trial. It noted the AMO allowed under La. CCP article 1464 actually limits the extensive discovery permitted under Louisiana law, as it balances considerations of “sanctity of the body and the right to privacy with considerations of fairness in the judicial quest for truth.” Article 1464 seeks to achieve balance by requiring more than “relevance” for an AMO, granting the right to courts to order an AMO only when a plaintiff’s condition is “in controversy” and “good cause” supports allowing the examination. The Supreme Court also noted that an AMO may be one party’s only opportunity to independently ascertain the existence and extent of the other party’s claimed injuries.

After balancing these competing interests, the Louisiana Supreme Court found “good cause” under article 1464 requires the moving party to establish a reasonable nexus between the requested examination and the condition in controversy. The decision as to whether the moving party has demonstrated both the “in controversy” and “good cause” requirements lies in the sound discretion of the trial court. At times, the pleadings alone may contain sufficient information to establish a reasonable nexus.

As part of its decision, the Louisiana Supreme Court noted that although meeting the statute’s requirements may entitle a defendant to an examination, a defendant is not entitled to any AMO it request; reasonable limitations may still be applied. It remains the trial court’s role to balance the competing interests and rights of the parties, considering both “sanctity of the body” and the implication of one party’s privacy rights against considerations of fairness for the moving party.

After employing its analysis, the Louisiana Supreme Court concluded the defendant in Hicks demonstrated “good cause” because plaintiff alleged severe injuries as a result of the accident, claimed damages, and inconsistent medical testimony concerning plaintiff’s physical condition existed. It remanded the case for a new trial.