Louisiana Litigation in Review Q1 2025

This quarterly review is an opportunity to update you on recent developments in Louisiana litigation.  In this edition, Andy Mendez, Emily Hickman, and John Myles summarize six Louisiana cases.  These articles feature recent court decisions that may be of interest to business people and legal professionals alike.

A LAWSUIT MUST BE FILED BY THE PROPER PARTY, AND THE RIGHT TO SUE MAY BE TRANSFERRED.  Gulf Production Company, Inc. v. Halliburton Energy Services, Inc., 2023-1111 (La. App. 1st Cir. 8/6/2024), 394 So. 3d 856.

A "right of action" means the party who files a lawsuit (the plaintiff) is, in fact, the proper party to bring the claim. Although this seems like an obvious requirement, determining whether the plaintiff has the right to bring a particular claim is not always straightforward, as illustrated by Gulf Production Company, Inc. v. Halliburton Energy Services, Inc.

There, Gulf Production Company, Inc. had entered into an operating agreement with Gulf Explorer, LLC, which named Gulf Production as the operator for oil and gas operations in Plaquemines Parish. Gulf Production began drilling using equipment supplied by Halliburton. After the equipment became stuck in a well (causing additional complications), Gulf Production sued Halliburton, alleging it was damaged by its negligence.

Gulf Explorer was not a party to the lawsuit. After years of litigation, Gulf Production produced an agreement between itself and Gulf Explorer, in which Gulf Explorer had assigned its litigious rights (right to sue) against Halliburton to Gulf Production. Previously, Gulf Production had failed to allege that it was Gulf Explorer's assignee. Halliburton filed an exception (objection) that Gulf Production had no right of action, because it had not alleged an assignment of Gulf Explorer's rights to Gulf Production, and Gulf Production admitted it suffered no damages of its own (instead, any damages were suffered by Gulf Explorer).

The trial court sustained Halliburton's exception. On appeal, the First Circuit Court of Appeal affirmed. It found that Gulf Production failed to plead any facts in its petition to show that it was bringing its claim as Gulf Explorer's assignee, and therefore it had no right of action to pursue a tort or contract claim as the assignee. Coupled with Gulf Production's admission that it suffered no damages of its own, its lawsuit failed to establish it had any right of action against Halliburton.

This case illustrates the importance of identifying the proper party to bring a claim, and alleging facts in the petition to establish a right of action. It is also a reminder that the right to bring a lawsuit may be assigned or transferred between parties by contract.

TIMELY FILING A LAWSUIT IS CRITICAL, BUT DETERMINING THE TIME TO FILE MAY BE DIFFICULT.  Washington v. Robinson Bros Farms, LP, 55,707 (La. App. 2 Cir. 7/24/2024), -- So. 3d. --, 2024 WL 3958251.

Whether a lawsuit has been timely filed is an important issue. In most jurisdictions, the time to file is governed by a "statute of limitations," but in Louisiana it is referred to as a "prescriptive period" and the doctrine that a lawsuit may be barred as untimely is called "prescription." Sometimes, determining whether a lawsuit is prescribed is simple, but it can get complicated.

In Washington v. Robinson Brothers Farms, in March 2021, members of a church discovered their church had been torn down, items had been removed, and "no trespassing" signs posted where the church once stood. The church members sued the landowner. The landowner sought to dismiss the case on prescription, because plaintiffs had allegedly discovered the damage and seen the signs in March 2021, but did not sue until September 2022 (beyond the one-year prescriptive period that applied to all of the plaintiffs' claims at that time).

In response, plaintiffs asserted the "continuing tort" doctrine. If an act causes continuing damages (as opposed to discrete, one-time damages), the time to sue may be extended. In this case, plaintiffs alleged the "no trespassing" signs remained posted until January 2022, amounting to a continuing tort, and that their lawsuit was timely filed because it was filed within one year of that date. Defendant disputed the continuing tort doctrine's applicability.

The trial court found the plaintiffs' claims had prescribed and were not saved by the continuing tort doctrine. The Second Circuit Court of Appeal affirmed. It explained that when damage is caused to immovable (real) property, the one-year prescriptive period for a trespass claim begins to run from the day the owner knew (or should have known) of the trespass. Similarly, the one-year prescriptive period for conversion (destroying or stealing property) begins to run when the plaintiff knew or should have known of the property damage or loss.

The court acknowledged that Louisiana law recognizes a continuous tort of trespass where the defendant places an object on the plaintiff's land and fails to remove it. It noted, however, no Louisiana case recognized a "no trespassing" sign as constituting a continuous trespass. Additionally, the court found the original act of trespass was entering the church property, taking things, and demolishing the building. The alleged torts were entering without permission (trespass) and taking or damaging property (conversion), not posting signs. The signs did not result in continuous injury or damage, as contemplated by the continuing tort doctrine. 

This case is a reminder of the importance of timely filing a claim, and that determining the deadline to file a claim may be nuanced. An attorney should be consulted to advise on the applicable prescriptive period for a potential claim. Finally, it is noted that as of July 1, 2024, the prescriptive period for many torts was extended from one year to two years (without retroactive effect).

IMPLIED CONTRACTS ARE RECOGNIZED IN LOUISIANA.  Miazza v. Board of Supervisors of La. State Univ. & Agric. & Mech. Coll., 2023-1149 (La. App. 1 Cir. 8/9/24), 394 So. 3d 874.

In Miazza v. Board of Supervisors of Louisiana State University, an LSU student filed a class action lawsuit against the university, alleging it breached an implied contract to provide students with in-person educational services and activities for the Spring 2020 semester. Due to the pandemic, LSU had switched to online instruction. The trial court certified a class of students who paid tuition to attend LSU's main campus for the Spring 2020 semester. LSU appealed the class certification.

It was undisputed that no written, express contract for in-person educational services existed. But that did not end the inquiry: Louisiana recognizes the common-law concept of contracts that are "implied in fact," where the "facts and circumstances" establish a mutual intent to contract on certain terms. To support their argument that the parties intended to contract for in-person services, the plaintiff class pointed to LSU's website materials depicting in-person instruction.

The First Circuit Court of Appeal reversed class certification. It noted the website materials related only to the College of Art & Design, whereas the class included students from 15 undergraduate colleges, plus graduate and professional programs. Whether students intended to contract only for in-person instruction, and whether they suffered a financial loss due to online instruction, could only be determined on an individual -- not class-wide -- basis. Thus, class certification was improper.

Miazza reminds us that contracts do not need to be express and may be implied from the circumstances. Whether an implied contract exists depends on the unique facts of each situation. While some scenarios (like the pandemic) are difficult or impossible to anticipate, experienced counsel can draft written contracts that reduce the risk of protracted litigation over what the parties actually intended.

LEASE REQUIRED LOSING TENANT TO PAY LANDLORD'S ATTORNEY'S FEES.  Crosby v. Sahuque Realty Co., Inc., 2024-0029 (La. App. 4 Cir. 8/13/24), -- So. 3d ---.

In Crosby v. Sahuque Realty Co., a tenant and landlord were embroiled in litigation for over a decade over water damage to the tenant's property. The landlord filed a counterclaim (or "reconventional demand" in Louisiana parlance) for its attorney's fees and costs based on an indemnity provision in the lease. "Indemnity" is where one party agrees to protect another from financial loss under certain circumstances.

The trial court rejected the tenant's claims as untimely because he waited too long to sue after the roof leaked and his property was water damaged. Worse still for tenant, he was required to pay the landlord's attorney's fees and costs. Tenant appealed.

The appellate court began its analysis of the indemnity issue by quoting the lease, in which tenant indemnified landlord for "any injury or damage happening on or about the leased premises." Tenant argued this language was ambiguous and should be construed against landlord. The court disagreed, finding the lease unambiguously required tenant to indemnify landlord for fees and costs incurred in successfully defending against his claim for injury or damage on the leased premises.

This case is a reminder of the importance of understanding the implications of indemnity language in any lease or contract. When entering into a lease, or any contract, it is wise to consult an attorney to negotiate and understand the contractual terms.

VENUE IS NOT ALWAYS PROPER WHERE ALLEGEDELY WRONGFUL ACTS OCCURRED.  Aguiluz v. BP Prods. N. Am., Inc., 24-246 (La. App. 5 Cir. 8/14/24), 2024 WL 3805727.

Aguiluz v. BP Products North America, Inc. involved the issue of venue, which means the proper court where a given lawsuit may be filed. Venue in Louisiana courts is governed by a set of rules, and different types of cases are governed by different rules. If a defendant believes venue is improper, it may seek to have the case dismissed or (in certain circumstances) transferred to a court of proper venue.

Aguiluz involved a decedent who resided in Texas at the time of his death. His survivors sued for wrongful death in Jefferson Parish, Louisiana, alleging decedent died of cancer caused by exposure to harmful materials in Jefferson Parish between 2003-2005, and in Texas from 2005-2010. 

Defendant excepted (objected) to venue in Jefferson Parish. The trial court sustained the objection, and Plaintiff was granted writs (immediate review) by the appellate court. The Louisiana Fifth Circuit Court of Appeal affirmed. The court explained that, under Louisiana's venue laws, where a plaintiff suffers damage in the same parish where wrongful conduct occurred, that parish is the only proper venue. If no damages are caused to the plaintiff in a parish where wrongful conduct occurred, however, any parish where damages were sustained is a proper venue.

Because the decedent was alleged to have both been exposed to harmful materials and suffered damages (cancer) in Texas, venue was only proper in Texas. The appellate court thus found the trial court correctly sustained the objection to venue in Jefferson Parish.

The decision of where to file a lawsuit is significant; filing in what turns out to be an improper venue may result in additional costs, delay, or an untimely lawsuit. In addition, where multiple venues are proper, the decision may turn on strategic concerns (e.g., the relative efficiencies of different court systems, the composition of different jury pools, etc.). And, unlike tort cases, venue in contract cases may be determined by the parties by agreement in advance. That is another reason it is advisable to have an attorney review and negotiate venue provisions in any contract.

MAJOR CHANGES TO LOUISIANA INSURANCE LAWS.  Louisiana Revised Statutes, Title 22 (Insurance Code), Sections 1269, 1973 & 1892.

The Louisiana Legislature made significant changes to Louisiana insurance law with Act Nos. 3 and 275 of the 2024 legislative session, which recently went into effect. Among the major changes:

• "Bad faith" damages and penalties available against insurance companies have been modified;
• The duty of "good faith and fair dealing," which was formerly imposed only on insurance companies, now also applies to insureds asserting a claim for insurance coverage;
• Actions that constitute a breach of the insurer's duty of fair dealing have been amended and clarified;
• Insurers now have a 60-day "cure period" to cure any alleged breach of the duty of good faith and fair dealing; and
• The "direct action" – the right of an injured third party to directly sue the insurer of the party that allegedly caused damages – has been greatly reduced, but is still available under certain circumstances (including where the insured is deceased, insolvent, bankrupt, or cannot be served with a lawsuit; where the claim is between certain family members; where the insurer is an uninsured motorist carrier; and where the insurer denies (or reserves the right to deny) coverage to the insured).

These are major changes to Louisiana insurance law that will greatly impact both the rights of policyholders and the manner in which claims against insurers may be pursued.