Tag: liability

Louisiana Second Circuit Applies Anti-Dram Shop Statute to Grant Summary Judgment

02.05.2024

Louisiana’s “anti-dram shop” statute, La. R.S. 9:2800.1, limits the ability of a claimant to hold a provider of alcohol liable for damages resulting from the acts of an intoxicated patron. Subsection A of the statute declares that the consumption of intoxicating beverages, rather than the sale, serving, or providing of those beverages, is the proximate cause of any injury or property damage that the consumer may cause. Under Subsection B, anyone who lawfully serves alcohol to a person of legal age is provided immunity for any injury caused by the consumer that occurs “off the premises.” This immunity extends to sellers of alcohol and social hosts.

The Louisiana Second Circuit recently examined these provisions of this statute in Rugg v. Horseshoe Entertainment, et. al. The plaintiff alleged she was injured when an intoxicated patron (John Doe) fell onto her at a hotel bar. She alleged that the defendant, which operated a casino bar, was liable because it ignored multiple complaints about John Doe’s drunken state prior to the incident and failed to escort him out.

The defendant moved for summary judgment, arguing that Louisiana’s anti-dram shop statute prevented any finding of liability on its part. In opposing the summary judgment, the plaintiff argued that the statute did not rule out liability because the injury occurred on the premises.

The Second Circuit determined that the immunity afforded in Subsection B of the statute was not available because, as the plaintiff argued, the injury occurred on the premises. However, Subsection A of the statute, which declares the consumption, not the serving, of alcohol is the proximate cause of injury inflicted by an intoxicated person, still applied.

Under these circumstances, the Court held it had to determine whether the bar owner violated general negligence principles. In conducting this analysis, the court was required to focus on two issues: 1) whether the alcohol provider acted reasonably under the circumstances, and 2) whether the alcohol provider took any “affirmative acts” that increased the chances of the incident.

The Court of Appeal granted summary judgment under the facts of the case. The court found no evidence in the record that Horseshoe acted unreasonably leading up to the incident. Testimony indicated that the complaints about John Doe’s behavior arose after the incident occurred, not before. Similarly, the court reasoned that the failure to escort John Doe out of the bar was not an “affirmative act” that increased the risk of the incident because the record did not indicate Horseshoe had any reason to do so prior to the injury.

In conclusion, the court noted “that in no case will the serving of alcohol be held as the proximate cause of a tort in which alcohol was involved.” Therefore, the plaintiff had to show Horseshoe did something more to cause her injury than just serve John Doe alcohol.  Because the plaintiff failed to do so, summary judgment was granted. Under these facts, Louisiana’s dram shop statute still applied to protect the defendant provider of alcohol, even though the injury occurred on its premises and the statutory immunity was not available.

References:

La. R.S. 9:2800.1

Mechelle Rugg v. Horseshoe Entertainment, et al., 55,239 (La. App. 2 Cir. 1/10/24), 2024 WL 104143.

Summary Judgment Affirmed Because Alleged Defect was Open and Obvious

01.10.2024

The First Circuit Court of Appeals recently affirmed summary judgment in Rainey v. Knight, on grounds that the alleged defect was open and obvious. Its ruling shows that the open and obvious defense remains viable and supports summary judgment when reasonable minds can only agree that a condition is not unreasonably dangerous.

In Rainey, the plaintiff fell and was injured while leaving a veterinary hospital. Evidence showed the plaintiff frequented the premises for nearly twenty years before the incident. The plaintiff attempted to descend four steps from the hospital’s elevated porch but stepped off the porch and fell twenty-one inches to the ground. Rainey filed suit for his injuries, alleging the defendant failed to maintain its property. Specifically, he claimed that the elevated porch lacked a railing, which created a defect.

The defendant filed a motion for summary judgment and argued (1) the front porch ledge was an open and obvious defect and (2) the plaintiff could not show the defendant had knowledge of the allegedly dangerous condition of the porch. The defendant also produced evidence to show it had no prior problems with anyone falling from the porch.

The plaintiff opposed the defendant’s motion, but his opposition was filed one day late. Because the opposition was not filed timely, the appellate court noted it was unable to consider the plaintiff’s opposition and exhibits under the Louisiana Supreme Court’s ruling in Auricchio v. Harriston.

On appeal, the court focused its analysis on whether the defendant breached a duty owed to the plaintiff, applying Louisiana’s risk/utility balancing test to consider the utility of the condition, the likelihood and magnitude of harm, the cost of preventing the harm, and the nature of the plaintiff’s activities.

In examination of the likelihood and the magnitude of the harm, the appellate court noted that summary judgment may be granted if a condition is open and obvious. If reasonable minds could only agree that the condition was not unreasonably dangerous, that condition would be open and obvious, and the plaintiff would be unable to establish the defendant breached any duty owed to the plaintiff. 

Considering the evidence before the court, the First Circuit found a reasonable person would have found the lack of a railing on the porch open and obvious and would have avoided the area where plaintiff fell when exiting the building. Importantly, the court found the lack of a railing was apparent to all who encountered it such that it was open and obvious.

The Rainey court also noted that the lack of reported complaints about the alleged condition indicated a low risk of harm. The height of the porch also showed the likelihood and magnitude of the plaintiff’s harm was minimal.  In light of this evidence, the lack of railing around the entire porch was not an unreasonably dangerous condition. No reasonable factfinder could find that the defendant breached any duty owed to the plaintiff, and summary judgment was appropriately granted.

References:

Rainey v. Knight, 2023-0133 (La. App. 1 Cir. 11/3/23) (La. App. 1st Cir. Nov. 3, 2023)

Auricchio v. Harriston, 2020-01167 (La. 10/10/21), 332 So.3d 660

Louisiana Supreme Court Now Allows Direct Negligence Claims Against Employer

07.01.2022

In a previous blog, we outlined developing law in the Louisiana appeals courts, and federal district courts in Louisiana on the issue of whether a claimant may maintain a separate cause of action against an employer for independent negligence when it is stipulated that the employee was in the course and scope of employment.1 Most courts held a claimant could not maintain a separate action against the employer under these circumstances, reasoning that the employee’s fault would impute to the employer, and therefore, additional inquiry was not appropriate. However, the Louisiana Supreme Court recently addressed the issue and stated:

“(A) plaintiff may pursue both a negligence cause of action against an employee for which the employer is vicariously liable and a direct claim against the employer for its own negligence in hiring, supervision, training, and retention as well as a negligent entrustment claim, when the employer stipulates that the employee was in the course and scope of employment at the time of the injury.” (Emphasis added) See Martin v. Thomas et al., 21-1490 (La. 12/21/21), 328 So. 3d 1164.

This holding notably overturned the 1st Circuit Court of Appeal ruling in Elee v. White, – – So.3d – – (La. App. 1 Cir 7/24/20), 2020 WL 4251974 and other Louisiana 5th Circuit Court of Appeals decisions. The Supreme Court in Martin reasoned that “the initial assessment of fault required by the law is not bypassed due to the employer-employee relationship” and “shielding a potential tortfeasor from liability is not compatible with a comparative negligence regime.” The Court further stated that the possibility that both the employee and employer may be at fault is not “subsumed” by the employer’s admission on course and scope. In fact, if the fault of the employee is shown, then the issue of whether there is also fault on the part of the employer remains and must be decided by the evidence on a case-by-case basis.

The consequences of this decision remain to be seen, but it is expected that claimants may also pursue employers separately on theories such as negligent hiring, supervision, and entrustment. The scope of such discovery will remain within the sound discretion of the trial judge.

By: John P. Wolff, III and Richard W. Wolff

1Louisiana Appeal Courts Prohibit Direct Negligence Claims Against Employer; US District Court Uses Rule to Limit Discovery – Keogh Cox

Summary Judgment Affirmed in Premises Liability Case Upon Court’s De Novo Review

05.17.2021

In Marrero v. I. Manheim Auctions, Inc., the plaintiff fell after he exited a building during a rainstorm and stepped off a curb into a parking lot. He claimed he stepped into a divot where asphalt had washed away. The defendant moved for summary judgment.

In opposition, the plaintiff offered an expert affidavit that cited a lack of handrails, code violations, and loose pebbles as contributing to the plaintiff’s fall. To recover in the case, the plaintiff possessed the burden under La. R.S. 9:2800.6 to establish three elements: 1) the parking lot presented an unreasonable risk of harm, 2) this risk of harm was reasonably foreseeable, and 3) the defendant possessed actual or constructive notice of the alleged defect.

The defense argued the plaintiff could not show the parking lot presented an unreasonable risk of harm that was reasonably foreseeable and produced an expert affidavit to show the divot was only 3/16” deep. Evidence also showed the plaintiff was familiar with the area where he fell. The defendant also had received no prior complaints about the area. The trial court found that the parking lot did not present an unreasonable risk of harm because the divot was only 3/16” deep and granted summary judgment.

On appeal, the plaintiff argued that the trial court should not have granted summary judgment in light of the competing expert affidavits regarding whether the parking lot presented an unreasonable risk of harm. However, when a motion for summary judgment is appealed, the court uses a de novo standard of review. Under this standard, the appellate court reviews all issues and considers all evidence submitted to the trial court in its ruling.

The First Circuit affirmed summary judgment but did so for different reasons than the trial court. The Marrero court found the plaintiff failed to produce any evidence of the third element, i.e., whether the defendant knew or should have known of the defect. Because the plaintiff failed to establish a material issue of fact as to all three required elements, summary judgment was granted. Marrero reminds that appellate courts may consider facts and legal issues the trial court did not address in its ruling.

Premises Liability: Defense Summary Judgment in an Accident Involving Rolling Chair

09.01.2020

A recent decision from the Louisiana Third Circuit Court of Appeal re-affirms the merchant liability rules.  In Carolyn R. Miller and Steven Rathjen v. Willis Communications, et. al., 19-787 (La. App. 3 Cir. 6/24/20), the plaintiff was an elderly patron of an AT&T store.  Plaintiff and her daughter were assisted at the customer service desk, and plaintiff took a seat in a rolling chair.  When she attempted to stand up, the rolling chair moved, and she fell to the floor breaking a hip.

Plaintiff filed suit under the merchant’s liability statute, La. R.S. 9:2800.6.  Per the statute, if a negligence claim is brought against a merchant by a person lawfully on the merchant’s premises for injuries sustained because of a fall, then plaintiff must prove: 1) that the condition of the merchant’s premises presented an unreasonable risk of harm that was reasonably foreseeable; 2) that the merchant created the risk or had actual or constructive knowledge of the condition; and 3) that the merchant failed to exercise reasonable care to address the unreasonable risk of harm.  Plaintiff argued that an unreasonable risk of harm was created when she was given a chair on rollers on flooring allegedly unsafe for use with a rolling chair.

The defendants filed a motion for summary judgment, which was denied by the trial court.  The appellate court reversed and entered summary judgment.  The appellate court found that the critical element of plaintiff’s burden of proof was missing – any defect in the rolling chair.  Plaintiff admitted that the chair was not defective.  Instead, she argued that she should not have been given a rolling chair to sit in because of her age, obvious mobility issues, and because the rolling chair was unsafe on the flooring of the store. 

Evidence was presented that: 1) plaintiff’s daughter was able to maneuver the rolling chair without incident; 2) the daughter did not believe that plaintiff would have trouble navigating the rolling chair; and 3) no other customer had ever fallen out of one of the rolling chairs.  Simply, what occurred at the AT&T store was an accident, for which AT&T and its employees were not responsible.  Plaintiff, well aware of her own physical limitations, chose to sit in a rolling chair that she physically was unable to get out of on her own.  Based upon this evidence, the court reasoned that plaintiff did not prove that: 1) the rolling chair posed an unreasonable risk of harm; or 2) the merchant possessed actual or constructive knowledge of any defect.

Following decisions which imposed harsh standards upon retailers, the Louisiana Legislature adopted the merchant’s liability statute to limit recovery to cases involving true negligence.  The Carolyn R. Miller decision demonstrates that the statute is properly used in motion practice to resolve cases where the merchant lacks advance knowledge of the claimed unreasonable risk. Sometimes, an accident is just an accident.

Virginia “Jenny” McLin is a partner at Keogh Cox who practices in the fields of corporate litigation, insurance defense and workers compensation defense.  When she is not practicing law, Jenny can be found volunteering with the Junior League of Baton Rouge; cheering for the LSU Tigers with her husband Ryan; or shuffling her two kids to and from dance practice.

Real Estate Liability: Recovery Denied in “As Is” Sale Despite Quick Discovery of Mold

05.31.2019

In the recent case of Riedel v. Fenasci, 2018-0540 (La. App. 1 Cir. 12/28/18), _______ So. 3d _______, 2018 WL 6818716, home buyers sued the sellers and the involved real estate agents after mold was discovered shortly following the sale. This is a common fact pattern in humid South Louisiana. The buyers lost in the trial court when there was no evidence that the sellers or the agents knew of the problem. The result was affirmed by the First Circuit Court of Appeal. 

The Riedels identified mold weeks after the closing and filed a claim with their homeowner’s insurer. But the claim was denied when the insurer’s inspection revealed long- term damage, rot, and deterioration in a ceiling due to water damage.  That finding prompted the suit.

Against the sellers, the Riedels contended that they “had to have known” about the moisture and mold in the home prior to the sale.  Because the home was sold “as is,” they had to establish fraud to recover. However, the sellers had not lived in the home for years and had received no complaints from tenants over this time. Under such facts, the claim of fraud was not supported.

The Riedels also sued both agents for negligent misrepresentation, and their own agent for breach of fiduciary duty.  In assessing the claim against the agents, the Riedel Court agreed that real estate agents are liable for negligent misrepresentation when they fail to disclose hidden defects in the property which were known or should have been known to them. The Court also agreed that a purchaser’s real estate agent owes a fiduciary duty, the highest duty of care recognized by law.  Nevertheless, when the plaintiffs’ own inspector found no visible evidence of mold prior to the sale and there was no indication that the agents possessed prior knowledge of the mold, the claim against the agents was also dismissed.

Marty Golden has been practicing law based in Baton Rouge, Louisiana for over thirty years, concentrating in civil litigation primarily involving injuries, property damage, insurance coverage, and contract disputes. Much of his practice is defending and advising real estate agents in suits by property buyers and sellers, but Marty also defends other professionals, insurance companies, manufacturers, and business owners. Marty has a special interest in all things procedural, because they are the rules of the road for litigators and knowing them better than his opponent gives him a leg up in court.

RENTER BEWARE: Hidden Risks in Lease Agreements

09.15.2017

With home prices soaring in today’s housing market, many people choose to rent rather than buy. Factored into their decision is the style, the square footage, the location, and other criteria, but few renters consider one risk that comes with many, if not most, leases. Many renters are exposed to personal liability for accidents occurring on the premises, and they don’t even know it.

A lease is executed between the renter/tenant (the “lessee”) and the property owner (the “lessor”). By law, the lease imposes general obligations on both parties.

The lessee (renter) is bound:

1. to pay the rent in accordance with the agreed terms;

2. to use the thing as a prudent administrator and in accordance with the purpose of which it was leased; and,

3. to return the thing at the end of the lease in a condition that is the same as it was when the thing was delivered to him, except for normal wear and tear. LSA C.C. Art. 2683

The lessor (property owner) is bound:

1. to deliver the thing to the lessee;

2. to maintain the thing in a condition suitable for the purpose of which is was leased; and,

3. to protect the lessee’s peaceful possession for the duration of the lease.” LSA C.C. Art. 2682.

These general obligations are typically expanded by terms in the lease because the lessee and lessor are “free to contract for any object that is lawful, possible and determined or determinable.” Family Care Services, Inc. v. Owens, 46 So.3d 234 (La. App. 2 Cir. 8/11/10). This “freedom of contract” allows the parties to construct their own bargains, shifting certain rights and obligations. In many commercial and residential lease agreements, this shifting includes a transfer of the liability for vices or defects on or in the leased premises.

Although the lessor warrants that the leased premises is free of vices or defects, Louisiana law allows the lessee to assume responsibility for the condition of the leased premises under LA. R.S. 9:3221. Often, lessees assume that the lessor, as the owner of the premises, will be responsible if there is an accident. However, cases such as Jamison v. D’Amico, 955 So.2d 161 (La. App. 4th Cir. 3/14/07) demonstrate that the owner may be entirely free of fault even though they owned a defective premises which caused an accident. In Jamison, a worker was injured when a floor collapsed beneath her. There was insufficient evidence that the owner was aware of the defective floor. Because the lease contained a clause shifting responsibility, the owner was under no duty to inspect the premises and was dismissed from the case.

A lesson to all renters: read and understand the provisions in your lease. Even if you like the colors and the location, you should also like the lease contract before you sign it.

The Duty to Defend Continues to Evolve in Louisiana

07.07.2017

Louisiana is a “direct action” state that continues to present new challenges for insurers. Over the years, Louisiana courts have expanded the duty to defend. This expansion created pitfalls for the insurer and forced the provision of a complete defense, even when all or a majority of the claim was not covered by the insurance policy. However, some of this expansion has been drawn back by the Louisiana Supreme Court which recently ruled that, in latent, long-term exposure cases, the duty to defend is to be spread across a number of years­­­–as opposed to the arbitrary selection of a single insurer to defend the entirety of the case. This change presents opportunities for immediate risk transfer and reimbursement to recoup what can be significant dollars invested in the defense of legacy and environmental actions.

A General Overview: Like many other states, an insurer’s duty to defend suits against its insured is broader than its liability for damage claims. The duty to defend is determined by the factual allegations contained in the plaintiff’s petition, which are to be broadly construed. American Home Assurance Co. v. Czarniecki, 230 So.2d 253 (La. 1969). The court examines the duty under the “eight corners” rule which means that the duty attaches if a review of the four corners of the policy and the petition raises the potential for coverage and coverage is not unambiguously excluded. Once a complaint states one claim within the policy’s coverage, the insurer has the duty to defend the entire claim, even though other claims in the complaint fall outside the policy’s coverage. Treadway v. Vaughn, 633 So.2d 626 (La. App. 1 Cir. 1993), writ denied, 635 So.2d 233 (La. 1994).

Execution of the defense duty can present big challenges given that Louisiana is a direct action state where the attorney is often called upon to represent both the insured and the insurer. If the insurer does not properly handle the assignment, coverage positions can be waived. See Steptore v. Masco Const. Co., 643 So. 2d 1213 (La. 8/18/94); Sosebee v. Steadfast Ins. Co., 701 F.3d 1012, 1020 (5th Cir. 2012).  Additionally, insurers must recognize that Louisiana has recognized Cumis (insured selected) counsel in situations when coverage positions issue. Belanger v. Gabriel Chemicals, Inc., 00-0747 (La.App. 1 Cir. 5/23/01); 787 So.2d 559, writ denied, 01-2289 802 (La. 2001); So.2d 612 (citing 46 C.J.S.§ 1157 (1993). In such a situation, independent counsel must be separately retained to represent the diverging interests.

When is the duty to defend discharged: The court will determine whether exhaustion of policy limits will terminate an insurer’s obligation to defend the insured on a case-by-case basis, taking into consideration whether the settlement was made in good faith. Holtzclaw v. Falco, 355 So.2d 1279 (La. 1977). An insurer that “hastily enters a questionable settlement simply to avoid further defense obligations under the policy” does not act in good faith and may be held liable for damages caused to its insured. Pareti v. Sentry Indemnity Co., 536 So.2d 417, 423 (La. 1988). The timing of its withdrawal from the suit is critical to a determination of the insurer’s good faith. A tender of policy limits into the registry of the court may terminate the duty to defend; however, the tender must comply with all of the statutory requirements (to include the admission of liability). In this connection, an insurer who wishes to tender its limits and admit liability may well face a challenge from the insured that such action is a breach of its good faith obligations. Pareti, supra.

Long-Tail Exposure Cases: For some time now, Louisiana courts have recognized the concept of “horizontal spreading” over a number of years based on the “trigger” of coverage each year a policy was in place. See Cole v. Celotex Corp., 599 So. 2d 1058 (La. 1992) and Norfolk Southern Corp. v. Cal. Union Ins. Co., 859 So. 2d 167, 192 (La. App. 2003),writ denied, 861 So. 2d 578 (2003). The practical effect is to hold each insurer liable to indemnify only for its pro-rata time on the risk and, if the insured was not covered for a period of time, it bore its own pro-rata portion of the risk.

Until recently, the courts held that the duty to defend in such actions was a solidary (joint and several) obligation, meaning that the insured could select any carrier and require it to defend the entire claim. Simply, the courts held that the duty to defend was not subject to proration such that an insurer who was on the risk for a very short time could be compelled to pay all of the fees and costs and must then file a reimbursement action to collect from other insurers. But, the Louisiana Supreme Court recently ruled that defense costs are now subject to proration in the same manner as with indemnity. Arceneaux v. Amstar Corp., 15-0588 (La. 9/7/16); 200 So 3d 277.

At the outset, almost every long-tail exposure claim is a complex action that can take years to resolve. It is nearly always a very expensive proposition in terms of defense costs.  The Arceneaux decision has meaningful, real-world impact upon both the insurer and the insured.

From the insurer’s perspective, it can easily calculate its percentage of time on the risk and thereby readily ascertain what it owes in the defense of the action. Insurers can applaud the fact that they no longer pay for uninsured time on the risk or the portion of recalcitrant insurers who do not wish to “participate” in a joint defense.

From the insured’s perspective, new incentive exists to scour all avenues to find older policies that may have been on the risk to avoid having direct participation in defense costs. In this regard, the insured will now have strong monetary incentive to keep all policies on file (or to take depositions of agents and brokers to identify coverage that may have been in place). Of course, insurers who otherwise might have remained unknown might now have an active role in long-tail exposure cases.

 

John Wolff is a member of the management committee and a senior partner at Keogh Cox with more than thirty years of experience. John has made his mark in a practice that has included complex litigation, commercial disputes, serious injury, bad-faith and insurance coverage, legacy/long-term exposure, and other matters. He has litigated numerous significant cases in state and federal courts and regularly appears before the courts of appeals in and out of the state. John has devoted attention to non-profit boards dedicated to assisting at-risk children. In his spare time, he enjoys spending time with wife, his three children, and grandchildren, playing tennis, and hiking.