Justia Contracts Opinion SummariesArticles Posted in Louisiana Supreme Court
DePhillips v. Hospital Service Dist. No. 1 of Tangipahoa Parish d/b/a North Oaks Medical Center et al.
This matter arose from alleged violations of the Health Care Consumer Billing and Disclosure Protection Act (“Balance Billing Act” or “Act”). The Louisiana Supreme Court granted certiorari review to resolve the question of whether a patient’s claims against a contracted healthcare provider for an alleged violation of La. R.S. 22:1874(A)(1) were delictual in nature. The consolidated lawsuits in this matter were filed by Matthew DePhillips and Earnest Williams, individually and on behalf of putative classes, against Hospital District No. 1 of Tangipahoa Parish d/b/a North Oaks Medical Center/North Oaks Health System (“North Oaks”). In February, 2011, Williams was injured in a motor vehicle accident. He sought emergency medical treatment from North Oaks. At the time of the accident, Williams was insured under an insurance policy administered by Louisiana Health Service & Indemnity Company d/b/a Blue Cross and Blue Shield of Louisiana (“BCBS”). North Oaks is a contracted healthcare provider with BCBS pursuant to a certain Member Provider Agreement (the “MPA”) between North Oaks and BCBS. After Williams’ treatment, North Oaks filed a claim with BCBS, and BCBS paid a discounted rate on the claims as provided by the MPA. Thereafter, North Oaks sought to collect from Williams by filing a medical lien against his liability insurance claim for the full and undiscounted charges. Williams alleged that North Oaks filed this lien despite being a contracted healthcare provider with BCBS and despite its legal and contractual requirements to accept the insurance as payment in full. The trial court denied the exceptions of no right of action for breach of contract and prescription, but granted the North Oaks’ exception of no cause of action for claims arising before the effective date of the Balance Billing Act. The court of appeal granted writs in part, finding DePhillips did not have a right of action to assert a claim for breach of the MPA, as he was neither a party nor a third-party beneficiary to that agreement. The appellate court denied North Oaks’ writ application insofar as it related to the trial court’s denial of its exception of prescription. After review, the Supreme Court determined plaintiff's claims were delictual in nature, subject a one-year prescriptive period. View "DePhillips v. Hospital Service Dist. No. 1 of Tangipahoa Parish d/b/a North Oaks Medical Center et al." on Justia Law
Donelon v. Shilling
The Louisiana Supreme Court granted review in this case to determine whether the Louisiana Commissioner of Insurance was bound by an arbitration clause in an agreement between a health insurance cooperative and a third-party contractor. The Louisiana Health Cooperative, Inc. (“LAHC”), a health insurance cooperative created in 2011 pursuant to the Patient Protection and Affordable Care Act, entered an agreement with Milliman, Inc. for actuarial and other services. By July 2015, the LAHC was out of business and allegedly insolvent. The Insurance Commissioner sought a permanent order of rehabilitation relative to LAHC. The district court entered an order confirming the Commissioner as rehabilitator and vesting him with authority to enforce contract performance by any party who had contracted with the LAHC. The Commissioner then sued multiple defendants in district court, asserting claims against Milliman for professional negligence, breach of contract, and negligent misrepresentation. According to that suit, the acts or omissions of Milliman caused or contributed to the LAHC’s insolvency. Milliman responded by filing a declinatory exception of lack of subject matter jurisdiction, arguing the Commissioner must arbitrate his claims pursuant to an arbitration clause in the agreement between the LAHC and Milliman. The Supreme Court concluded, however, the Commissioner was not bound by the arbitration agreement and accordingly could not be compelled to arbitrate its claims against Millman. The Court reversed the appellate court's judgment holding to the contrary, and remanded the case for further proceedings. View "Donelon v. Shilling" on Justia Law
Luv N’ Care, Ltd. v. Jackel International Limited
Luv N’ Care, Ltd. (“LNC”), a Louisiana corporation, filed suit against Jackel International Limited (a corporation established under the laws of England and Wales, having its principal place of business in England) and others, relating to a distribution agreement for child and baby care items. Jackel would be the exclusive distributor of certain LNC products. LNC contended Jackel agreed bot to copy any of LNC's products, their design, prototypes, packaging, methods, or any other proprietary information without LNC's written permission. However, LNC alleged that, on or about October 2009, it learned that Jackel had been selling child and baby products not covered under the terms of the distribution agreement with LNC, but which closely resembled LNC products. Furthermore, in April of 2010, LNC learned that Jackel began to commercialize additional child and baby products, which allegedly incorporated LNC’s products, design, and/or packaging in violation of the contract between the parties. This case presented an issue of first impression for the Louisiana Supreme Court regarding whether La. R.S. 13:4611(1)(g) authorized an award of attorney fees to a party in a contempt proceeding, who had been found not guilty of contempt of court, or whether an award of attorney fees was only authorized in favor of a party who successfully prosecuted a contempt action. The district court awarded, and the appellate court affirmed, attorney fees to Jackel, who was found not to be in contempt, as the “prevailing party.” Having determined that La. R.S. 13:4611(1)(g) only authorized courts to award attorney fees to a party who successfully prosecuted a rule for contempt of court, the Supreme Court concluded the district court erred in awarding attorney fees in favor of Jackel, and reversed the appellate and district courts holding otherwise. Insofar as the judgment awarded attorney fees, that portion was vacated. View "Luv N' Care, Ltd. v. Jackel International Limited" on Justia Law
Smith vs. Citadel Insurance Company
This litigation arose from a suit filed by plaintiff Beverly Smith against Darlene Shelmire and her insurer, GoAuto Insurance Company (“GoAuto”), as a result of an automobile accident in 2010. In 2015, following a trial on the merits, the district court entered judgment in favor of plaintiff against Shelmire and GoAuto in an amount in excess of the insurance policy limits. GoAuto appealed that judgment, but Shelmire did not. The court of appeal ultimately affirmed the district court’s judgment in March 2016. Thereafter, Shelmire assigned her rights to pursue a bad faith action against GoAuto to Smith. Through that assignment of rights, Smith filed the underlying suit against GoAuto on March 10, 2017, and amended her petition on September 27, 2017, asserting a bad faith claim based on GoAuto’s violation of its duties under La. R.S. 22:1973(A) as well as the recognized duty of good faith pre-existing the statute. GoAuto answered the petitions, asserting the prescriptive period for a bad faith claim against an insurer was a delictual action, and subject to a one-year prescriptive period. Plaintiff opposed the exception arguing a bad faith claim against an insurer was a contractual action and subject to a ten-year prescriptive period. The Louisiana Supreme Court granted this writ application to determine whether a first-party bad faith claim against an insurer was indeed a delictual action subject to a one-year prescriptive period, or whether it was a contractual claim subject to a ten-year prescriptive period. Finding the bad faith claim arose as a result of the insured’s contractual relationship with the insurer, the Court held it was subject to a 10-year prescriptive period. View "Smith vs. Citadel Insurance Company" on Justia Law
Creekstone Juban I, LLC v. XL Insurance America, Inc.
This case concerned a disagreement over a claim for flood damage submitted by Plaintiff-Respondent Creekstone/Juban I, LLC (“Creekstone”), a Delaware limited liability company, under a commercial property and casualty insurance policy issued by Defendant-Appellant XL Insurance America, Inc. (“XL Insurance”), a Delaware corporation. The Policy was issued to named insured MRMG Commercial and delivered to MRMG Commercial in Lufkin, Texas. According to the parties, though not evident from the record, Creekstone was one of 20 unrelated additional insureds who obtained coverage under the Policy, which covered over 100 properties in more than 20 states. The Louisiana Supreme Court granted certiorari review to resolve the question of whether La. R.S. 22:868(A)(2) prohibited the enforcement of the forum selection clause in dispute. The Court determined the statute did not prohibit enforcement of the forum selection clause to which these parties contractually agreed. Accordingly, the Supreme Court reversed the ruling of the trial court and remanded the matter to the trial court for further proceedings. View "Creekstone Juban I, LLC v. XL Insurance America, Inc." on Justia Law
Stemcor USA Inc. v. CIA Siderurgica Do Para Cosipar
The Louisiana Supreme Court accepted a certified question of Louisiana law presented by the U.S. District Court of Appeals for the Fifth Circuit. This case involves a dispute between two creditors, each of which attached the same pig iron owned by the common debtor, America Metals Trading L.L.P. (“AMT”). Daewoo International Corp. (“Daewoo”), a South Korean trading company, entered into a series of contracts with AMT in May 2012 for the purchase of pig iron, to be delivered in New Orleans. The sale contracts contained arbitration clauses. Although Daewoo made payments under the contracts, AMT never shipped the pig iron. Daewoo sued AMT in the United States District Court for the Eastern District of Louisiana seeking an order compelling AMT to arbitrate the dispute pursuant to the terms of the contract and also seeking a writ of attachment of AMT’s pig iron on board the M/V Clipper Kasashio under the Louisiana non-resident attachment statute, Louisiana Code of Civil Procedure article 3542. The writ was granted and served by the U.S. Marshals Service on December 22, 2012. Noting that La. C.C.P. art. 3542, Louisiana’s non-resident attachment statute, allows a party to obtain a writ of attachment in "any action for a money judgment, whether against a resident or a nonresident, regardless of the nature, character, or origin of the claim, whether it is for a certain or uncertain amount, and whether it is liquidated or unliquidated," the federal court stated the issue as "whether Daewoo’s suit to compel arbitration and obtain provisional relief is an 'action for a money judgment' to which Louisiana’s non-resident attachment statute applies." The Louisiana Supreme Court responded: "Louisiana Code of Civil Procedure article 3542 allows for attachment in aid of arbitration if the origin of the underlying arbitration claim is one pursuing money damages and the arbitral party has satisfied the statutory requirements necessary to obtain a writ of attachment." View "Stemcor USA Inc. v. CIA Siderurgica Do Para Cosipar" on Justia Law
Forvendel v. State Farm Mutual Automobile Insurance Co.
Plaintiff Brandon Forvendel was injured in a multi-vehicle accident in 2013. At the time of the accident, plaintiff was driving a Chevrolet Equinox owned by him and insured under a policy issued by State Farm Mutual Automobile Insurance Company (“State Farm”), which included uninsured motorist (“UM”) coverage. Plaintiff recovered the limits of his UM coverage under his State Farm policy. At the time of the 2013 accident, plaintiff lived in the household of his mother, Deborah Forvendel, who was also insured by State Farm. Plaintiff also sought to recover under his mother’s State Farm UM policy, which carried significantly higher policy limits. State Farm refused to allow him to recover under his mother's policy, citing the anti-stacking provisions of La. R.S. 22:1295(1)(c). In this case, the issue presented for the Louisiana Supreme Court’s review centered on whether the insurer waived its defenses to plaintiff’s current claim by paying on an earlier claim to him in error. The Court found the insurer did not waive its rights. Accordingly, the Court reversed the judgments of the courts below. View "Forvendel v. State Farm Mutual Automobile Insurance Co." on Justia Law
Duhon v. Activelaf, LLC
Customers of an indoor trampoline park, of Sky Zone Lafayette, must complete a “Participant Agreement, Release and Assumption of Risk” document (“Agreement”) prior to entering the facility. The Agreement contains a clause waiving the participant’s right to trial and compelling arbitration. Plaintiff, James Duhon, was such a customer, and was injured in the course of participating in the park’s activities. After plaintiff filed suit seeking damages, Sky Zone moved to compel arbitration pursuant to the Agreement. The district court overruled Sky Zone’s exception, but the court of appeal reversed, finding the arbitration provision should be enforced. After review, the Supreme Court found that the arbitration clause in the Sky Zone agreement was adhesionary and therefore unenforceable. View "Duhon v. Activelaf, LLC" on Justia Law
Alicea v. Activelaf, LLC
Customers of an indoor trampoline park, of Sky Zone Lafayette, must complete a “Participant Agreement, Release and Assumption of Risk” document (“Agreement”) prior to entering the facility. The Agreement contains a clause waiving the participant’s right to trial and compelling arbitration. Plaintiff Theresa Alicea executed the Agreement prior to her husband, Roger Alicea, taking their minor sons to Sky Zone. The Aliceas’ son, Logan, was injured while jumping on a trampoline. The Aliceas filed suit against Sky Zone, individually and on behalf of Logan. Sky Zone moved to compel arbitration pursuant to the Agreement. The district court overruled Sky Zone’s exception and the court of appeal denied Sky Zone’s writ application. After review, the Supreme Court held the arbitration clause in the Sky Zone agreement was adhesionary and therefore unenforceable. Accordingly, the Court affirmed the rulings of the lower courts. View "Alicea v. Activelaf, LLC" on Justia Law
Arceneaux v Amstar Corp.
The issue this case presented for the Louisiana Supreme Court's review was whether the duty to defend in long latency disease cases could be prorated between an insurer and its insured when occurrence-based policies provide coverage for only a portion of the time during which exposure occurred. In the underlying Arceneaux suit, plaintiffs alleged that they suffered hearing loss from exposure to unreasonably loud noise in the course of their work at American Sugar’s refinery in Arabi, Louisiana. Two sets of plaintiffs, the Barbe plaintiffs and the Waguespack plaintiffs, filed suit against American Sugar in 2006. These suits were consolidated with the Arceneaux action, which was filed in 1999 against American Sugar’s predecessor, Tate & Lyle North American Sugars, Inc. This opinion concerned only the Barbe and Waguespack plaintiffs, and not the Arceneaux plaintiffs whose claims had been litigated extensively in the trial court, the court of appeal, and the Louisiana Supreme Court. Continental Casualty Company argued that defense costs should have been prorated among insurers and the insured if there were periods of non-coverage. American Sugar Refining, Inc. claimed that the duty to defend as agreed upon in the policy provided for a complete defense so long as the duty to defend attached, even if some claims fell outside of coverage. The Supreme Court held that the duty to defend should have been prorated in this case based upon policy language. View "Arceneaux v Amstar Corp." on Justia Law