Insurance Dispute Lawyer Blog

In a recent case, a federal appeals court ruled on a longshoreman's right to recover for injuries sustained when a pile-driving hammer unexpectedly released from a crane and fell on him. His employer had leased the crane from another company in order to perform restoration work on the docks and bulkheads at the Turtle Cove Research Center near Manchac. Luckily, both companies carried insurance. Unfortunately, both insurers quickly pointed the finger at each other.

Such situations occur frequently when contracting parties in large projects require multiple insurance policies to cover the myriad situations which could give rise to liability. The most important question from the victim's perspective, however, is simply how and when he or she will be compensated.

When such finger-pointing occurs, the task devolves upon the courts to "rank" the policies. The longshoreman's case, Deville v. Conmaco/Rector L.P., involved competing claims of three insurance companies. The crane owner carried general liability insurance and the employer carried an "excess" insurance policy — a policy which kicks in only after coverage limits have been reached on other applicable policies. In addition to these policies, however, the crane lease itself required the employer to obtain a third policy to cover its use of the crane.

In the longshoreman's suit to recover damages against the crane owner, the crane owner's insurer pointed to this lease policy. It claimed that the company underwriting the lease policy should be held liable because that policy was obtained for the specific purpose of insuring against the conduct at issue — namely, accidents resulting from operation of the crane.

The terms of the lease policy, however, created a problem: it appeared only to apply in
"excess" of any amounts covered by other applicable policies. In resolving this problem, the United States Court of Appeals for the Fifth Circuit rejected the third insurer's arguments, agreeing with the District Court that the lease policy became "primary" upon the occurrence of two conditions specified in another provision of the policy.

When multiple insurance contracts potentially apply to the same injuries, the insurer issuing the "primary" insurance policy must compensate the injured party to its coverage limit before any other insurer is required to pay. In determining which policy is "primary" courts interpret the policies applying ordinary principles of contract law. These principles attempt to give effect to the language of each policy as to their stated ranking. As one might expect, insurance companies would prefer that their policies not be deemed "primary." Accordingly, they attempt to give their policy a lower rank by way of inserting what the policies refer to as "other insurance" provisions. Thus, giving effect to the language of each policy is, in many cases, impossible.

In the longshoreman's case, the "other insurance" provisions of each contract gave both insurers room to argue that the court should rank its policy lower than the other. The crane owner's policy claimed to be excess over any other "primary" insurance and the lease policy in turn claimed to be excess over "any other insurance." The court resolved this tension by finding that another provision in the lease policy made that policy primary whenever the accident giving rise to the need for coverage resulted from obligations under the lease. Because the lease obligated the employer to assume liability for any accidents arising out of its use of the crane, the court determined that the lease policy was "primary."

As this confusion illustrates, while the victim of a work-related accident might be somewhat comforted to learn that his or her employer maintains insurance policies covering those injuries, the existence of multiple policies can needlessly delay compensation. Insurance companies often use the language of their policies to drag out litigation over which insurer is primarily liable. In these situations, obtaining competent legal counsel is essential to minimizing the delays resulting from competing insurance provisions and obtaining the fastest possible compensation for your injuries.

Settlement agreements are compromises between two people or companies that face a lawsuit. Their purpose is to avoid the high costs and extensive time involved in taking a case to trial. These settlements, however, include terms that require careful consideration before signing.

In the case of Montgomery v. Montgomery, Chad was trimming a tree on his brother Richard's land, using a frontloader to lift him high enough to reach the limbs. His father, R.L., was operating the frontloader. R.L. accidently hit the quick release, dropping Chad and injuring him. R.L. was covered by homeowners insurance and farm insurance from Farm Bureau. Richard's land was covered by insurance from American Reliable Insurance Company. Chad sought a recovery from both Farm Bureau and American Reliable. Chad was able to receive money from both companies through settlements. In the American Reliable settlement agreement, Chad received a $100,000 settlement in turn for agreeing to release both insurance companies and his father from any further claims. The Farm Bureau only agreed to give $1,000, but also included a statement that it was released from all claims.

This release from all claims is a common feature of settlements. The insurance company agrees to pay some amount of money in return for no further liability, or obligation to pay any more. However, this is a major concession on the part of the injured person. In the words of the Farm Bureau agreement, Chad agreed to "release, acquit and forever discharge" the insurance company for any injury sustained, even if it is "not yet evident, recognized or known." The American Reliable agreement stated that he gave up "any and all...claims" from "any and all known and unknown personal injuries."

This agreement can only be questioned by a court if there is "substantiating evidence" of mistaken intent. This means that there is evidence showing that the person signing "was mistaken as to what he or she was signing" or that the person "did not intend to release certain aspects of his or her claim." Otherwise, any challenge to such a settlement will be thrown out of court through summary judgment. The insurer also has a duty to "adjust claims fairly and promptly and to make a reasonable effort to settle claims with the injured [person]." If the insurer misrepresents "pertinent facts or insurance policy provisions relating to any" injury coverage that is at issue, then it violates this duty.

Some time after signing the agreements, Chad began to feel that his injuries were worse than he had originally thought. He then filed a lawsuit against Farm Bureau. He claimed that the agreement with Farm Bureau had been misrepresented to him. The court, however, granted summary judgment to Farm Bureau. It stated that Chad had presented no evidence that he had misunderstood what he was signing. In addition, the American Reliable agreement released Farm Bureau from any claims. Chad argued that there was misrepresentation regarding Farm Bureau, but not regarding the American Reliable agreement.

Settlement agreements involve signing away significant rights to future damages. Such an agreement should be made only with the advice of an experienced attorney.

Continue reading "Injuries Realized After Settlement Fail to Receive Compensation" »

The settlement in Orrill v. Louisiana Citizens Fair Plan demonstrates some of the hurdles faced by class action litigants and the benefits of having experienced class counsel. In that case, Katrina and Rita victims sought statutory penalties for their insurers’ failure to pay claims within the 30 days required by statute. The long history of the case dates to 2005, immediately after the storms first hit. The Berniard Law Firm vigorously pursued their claims past procedural roadblocks along the way to a final settlement this past January.

While class actions provide an obviously efficient way of adjudicating large controversies, the drawbacks associated with this device are equally apparent. Class actions allow courts to resolve all claims related to an occurrence in a single proceeding. This means, however, that even claims of those who do not participate must be decided. Otherwise, class members could “free ride” off the efforts of others, waiting to see whether a legal strategy or theory will succeed or fail without expending any efforts or resources. Courts have long resolved this dilemma by requiring class action plaintiffs to provide adequate notice to those who might have claims and by requiring that participants meet a series of requirements.

First, the class must consist of a sufficiently large number of claimants. Courts have not defined this “numerosity” requirement precisely; rather, a plaintiff satisfies this requirement by establishing that traditional methods of joining parties would be unreasonably difficult or expensive. Second, the claims of the class members must involve common issues. To meet this “commonality” requirement, it is not enough simply to have claims resulting from the same injury. Instead those claims must be capable of resolution in the same way. As the United States Supreme Court has stated, what is important is not the raising of common questions, but “capacity of a classwide proceeding to generate common answers.”

Third, the "named plaintiff," the party actively pursuing the case on behalf of the other members in the class, must establish that her injuries are of the same kind, that is, that they are “typical” of those experienced by the class. This requirement ensures that the party litigating the case has the same incentives and motivations as those for whose benefit the claims are being pursued. Fourth, she must establish her ability to “fairly and adequately protect the interests of the class” in pursuing the claims. Finally, the plaintiff must define the class “objectively” and by “ascertainable criteria.” This requirement aims to inform prospective class members whether they come within the class definition, so they may decide whether to participate.

These five prerequisites apply before any class action may be instituted. However, in most class actions, the plaintiff must also establish what courts refer to as “predominance” and “superiority.” These final two requirements are often critical in determining whether a court will certify a class for trial or settlement. “Predominance” means that the issues that the class members share in common must, on balance, outweigh the issues that require individual treatment.

In the Orill case, state law required the insurance company to pay claims within thirty days after receiving “satisfactory proof of loss.” The insurers argued that determining whether each storm victim provided “satisfactory proof of loss” and the timing of that proof would defeat the purpose of the class action by requiring the court to make individualized determinations as to each class member, the very problem the class action mechanism seeks to avoid. In this sense, the “superiority” requirement is closely related to the predominance requirement: when individual issues predominate over common issues, the court will likely find that the class action mechanism is not superior to other methods of adjudication.

In denying the motion to de-certify, however, the court noted that the predominance requirement should not so seriously constrain use of the class action mechanism. The court focused primarily on two points. First, it noted that class actions usually consist of two stages; one disposing of common issues and another adjudicating the individualized issues. Second, the court emphasized the discretion accorded trial court judges in determining whether or not the predominance requirement has been satisfied.

As a result of its ruling, the insurance companies resumed settlement talks with the class counsel, who negotiated a $20 million settlement of the claims at issue. Attorney Jeffrey Berniard, lead counsel for the plaintiff class, played a crucial role in both persuading the court to deny the insurer’s de-certification motion and finally settling the case. As a result, this case has finally come to a long-awaited resolution.

Choosing the right attorney for your lawsuit is crucial, not only for receiving the proper compensation for your damages but also to be protected by the legal representative themselves. The issue at hand for this post comes from a case heard in the Court of Appeal for the Fourth Circuit of Louisiana. The plaintiffs, Jill and Claud Brown, brought a case against their former attorney Mr. Lehman.

Mr. Lehman represented the Browns in a case to recover damages suffered from Hurricane Katrina. However, Lehman soon after withdrew from the case with the court's permission on July 23, 2009. In the spring of the next year Mr. Lehman filed a "motion to set fees" requesting the Browns to pay him legal fees after the Browns had received a settlement in their case. Although the lower court granted Mr. Lehman a large percentage of the settlement received by the Browns, amounting to $12,300.00, the Court of Appeals reversed that decision because Mr. Lehman had withdrawn from the case and failed to first file a motion to intervene before he filed the motion to set fees. The motion to intervene in the action was deemed to be necessary by the appeals court and that was the reason for the reversal.

The case shows the unfortunate side of what can happen when individuals hire legal representation to handle their claims. The trial court's determination of the rule about a former attorney intervening after withdrawing from a case created a tenuous situation for the Browns and anyone in the same situation, as they were forced to pay for and hire subsequent representation in order to protect themselves from their former lawyer. The Browns' situation is one that anyone can easily finds themselves especially considering the difficulty for most people to navigate the language of the law in Louisiana.

The law is filled with minute details that can affect the outcome of an entire case, as in the case involving the Browns. The details need to be scoured over by our legal representation and the courts of the state are expected to know the ins and outs of the law in a way that some would argue was lacking in the case of the lower court's decision above. The Browns faced an unfortunate situation in the financial claim and subsequent legal process, but these problems were eventually corrected by the workings of the system on appeal with proper representation. It is easy to relate to their situation and future plaintiffs and courts need to be aware of details that can save them from decisions that wrongfully punish plaintiffs.

After a man was seriously injured in a one-car accident in Lafayette Parish, Louisiana, and rendered disabled to the point that he was no longer able to complete his job, he began to receive short term disability benefits from his employer. After those benefits expired, the man filed a claim for long term disability benefits. However, this claim was denied by the provider. The company's policy with regard to long term disability benefits expressly prohibits the coverage of losses that are due to illegal acts. In this case, the man involved in the accident was reported to have had a blood alcohol level of 0.15, almost twice the legal limit in Louisiana, at the time of the accident.

Once his claim was denied, the man requested an appeal, claiming that the insurance company could not deny him coverage under the clause regarding illegal acts. The man provided several reasons why his act of driving under the influence should not be included in this clause: the policy did not include a specific "intoxication" provision; driving under the influence did not constitute an illegal act; even if it was an illegal act, the company could not prove that the accident happened because of his intoxication. At the time of the accident, two cars were racing towards him, and he had to swerve to miss them. The man claims that this was the real reason for the accident and that it had nothing to do with his intoxication.

In response to the man's claims, the policy provider underwent an intensive investigation to determine whether or not it should grant the injured man's long term disability claims. As part of the investigation, they found that the man's blood alcohol level would have impaired his reflexes and reaction time at the time of the accident. Furthermore, by this time the man was indicted and given a DUI. Because of the DUI, medical records, and an export report that stated that the intoxication and resulting impairment contributed to the accident, the policy provider once again denied the man's claims for coverage.

At this time, the man brought his claim against the policy provider to court. The trial court actually sided with the injured man, granting his motion for summary judgment with regard to coverage because it agreed that applying the "illegal acts" clause to the man's case was unjust. Naturally, the policy provider appealed the case, claiming that the trial court had erred in reaching its decision. Specifically, the policy provider claimed that the trial court had abused its discretion in reaching its decision.

If the policy provider had the authority to interpret the terms of the policy and determine the individual's eligibility for benefits, then the abuse of discretion standard would be the proper standard to employ. Under the "abuse of discretion" standard, the trial court or any other court reviewing the choices made by the policy provider should uphold the company's decisions unless the person bringing claim against the company can prove that the company's decisions were arbitrary. While the man argues that this is not the appropriate standard to use, the appellate court agrees that the policy expressly gave the policy provider the right to make all determinations with regard to eligibility for benefits.

So, now the court must simply decide whether or not this determination to deny the man's claims was capricious or not. According to relevant case law, under the abuse of discretion standard, as long as the policy provider's decision was supported by substantial evidence and was neither arbitrary nor capricious, then deference should be given to that decision. After reviewing the evidence, the court agreed that the policy provider interpreted the policy reasonably and that there was substantial evidence for the policy provider to deny the man's claim. Because of this finding, the appellate court ultimately reversed the trial court's judgment regarding the policy provider's denial of coverage and remanded the case back to the trial court for further proceedings.

Continue reading "Disability Benefits Center of Car Accident-Based Appeal" »

Each type of lawsuit has a prescription period that explains that a plaintiff must file suit before a certain amount of time. Often, the period depends on the seriousness of the crime or certain facts of the crime, such as whether the injury was intentional or just a grave mistake. The prescription period encourages plaintiffs to file suit right away while the evidence and memories are fresh. In addition, it also allows the party that could potentially be sued to not have to wait around in fear of being sued for wrongdoing.

A case appealed to the Fourth Circuit for the State of Louisiana from Orleans Parish explains the prescription period for a number of potential causes of action. In that case, an individual sought the help of a lawyer for tax and investment purposes. She allowed the lawyer to be in charge of her trust account; however, he made several “loans” to friends from her trust account and charged her fees that she was unaware would be charged. As a result, she initially settled with the lawyer when she found out about the fees, but that settlement did not address the “loans.”

The investor, plaintiff, claimed that she did not fully understand that the lawyer was making loans until the lawyer was indicted by the Grand Jury regarding investment fraud and various other claims. However, she did ask for an accounting statement in 2003, which listed all of the loans that the lawyer made from her account. Additionally, the lawyer worked for Bank One, which the plaintiff was also aware of in 2003. Therefore, plaintiff sued both Bank One, and the lawyer, among others.

Initially, the lower court barred the plaintiff's claim because the prescription period had already run. However, the Fourth Circuit Court of Appeals for the State of Louisiana explained that the court should consider each prescription period for each individual claim. This is necessary because the prescription period often varies by the type of claim. Therefore, the Court walked through each of her eight claims to determine whether the claim would apply and what the prescription period should be.

First, plaintiff argued a violation under the Louisiana Racketeering Act under La. R.S. 15:1351-56. The Court determined that the Racketeering Act had a prescription period of one year. Then, plaintiff argued unjust enrichment, that is, the bank profited from the lawyer's wrongdoing. However, the Court pointed it out that this claim can only apply if there are no other claims that the plaintiff can use, even if those other claims are barred by the prescription period. Therefore, the Court did not determine a prescription period for unjust enrichment because the plaintiff could not use it regardless of the prescription period. Third, plaintiff argued breach of fiduciary duty and breach of contract, which has a one-year prescription period.

Fourth, plaintiff argued that the lawyer committed fraud. There is a longer prescription period for deliberate fraud, ten years, and a shorter period for fraud that occurred by carelessness or mistake, which is only one year. The Court determined that this fraud was deliberate, so it should be subject to the ten-year limitation. Then, the plaintiff argued negligent misrepresentation, which has a one-year prescription period. Next, plaintiff argued that she detrimentally relied on the lawyer's recommendations and misrepresentations in the contract. Under this claim, non-action on a contract has a ten-year limitation, and acting on the contract incorrectly has a tort prescription of only one year. The Court determined that since the lawyer acted on the contract, although incorrectly, then the one-year period should apply.

Lastly, plaintiff brought a claim for conspiracy. However, under the Louisiana Code, the claim of conspiracy is not a crime in itself because it must be connected to some other crime. That is, you must conspire to do something illegal, just not conspire generally. The prescription period, then, depends on what the individual is conspiring to do. In this case, the alleged crime is conspiracy to commit misrepresentation, and since misrepresentation has a one-year prescription period, then the conspiracy claim does as well.

The Court then determined when the period started. The plaintiff argued that the doctrine of contra non valentem agree nulla currit praescriptio should apply--allowing the prescription period to begin only when the plaintiff knew about the fraud or misrepresentation. The plaintiff explained that she did not fully understand the misrepresentation until 2011, but the Court disagreed, stating that she should have known about it when she received the accounting for her trust in 2003. When the plaintiff should have reasonably known, that is known as constructive knowledge. The Court determined that since she had constructive knowledge in 2003, then her fraud claim is the only active claim since it had a prescription period of ten years.

This case explains that the prescription periods can be very complicated, depending on the nature of your claim. It also emphasizes that you should act quickly if you have a potential claim. While the one-year period may seem like a long time, it takes a considerable amount of time to gather all the information and documents needed to bring a case to court.

Continue reading "Finding the Correct Prescription Period Essential for Claims" »

A recent United States Court of Appeals for the Fifth Circuit case set out an extensive definition and explanation of summary judgment. Summary judgment occurs when there are “no genuine dispute[s] as to any material fact.” That is, both parties agree with all of the facts that are used to determine the case. A “material fact” is one that could affect the overall outcome of the case based on the applicable law. When summary judgments are appealed, the appeals court uses a de novo standard--they look at all the facts and apply the same standards as the lower court would. They examine the facts “in the light most favorable to the nonmoving party.” However, the court will not just accept unsubstantiated allegations in favor of the nonmoving party; the claims have to have some support. The nonmoving party is the party that won summary judgment in the lower court, so the moving party is the party that is contesting the summary judgment.

When examining a summary judgment on appeal, the moving party has the burden of proving that summary judgment is inappropriate. In order to do that, the moving party must show that there is some dispute regarding a material fact. The burden is somewhat light if the moving party would not have the burden if the case went to trial. Instead, the moving party would only have to show, “that there is an absence of evidence to support the nonmoving party's case” instead of proving that the evidence may weigh in the moving party's favor. Once the moving party has proven their burden, then the nonmoving party will take the burden and must counter the moving party's arguments.

In the Fifth Circuit case, a homeowner alleged that Hurricane Ike caused damage to his roof that his insurance company should cover. His roof was leaking and he pointed out that the wind likely damaged his roof, causing water leaks. State Farm, his insurance company, completed an evaluation of the roof and determined that he was missing four shingles, had four damaged ridge caps and had acquired one fresh interior water spot. State Farm concluded that most of the damage that the plaintiff complained of was actually damage that could have only occurred over several years due to deterioration or faulty workmanship when the roof was installed. The State Farm insurance policy did not cover these two latter instances, but provided reimbursement for the damaged shingles, ridge caps, and the new water spot in the ceiling. State Farm awarded roughly $450.00.

The plaintiff was very unhappy with this result and conducted damage evaluations of its own, each of which concluded that the damage was considerably higher than State Farm provided. However, these damage reports did not mention how the damage was caused; they just explained how much it would cost to fix the water damage as a whole. State Farm also conducted damage evaluations that separated any damage likely caused by Hurricane Ike and damage caused by leaking over time. Their evaluations were consistent with what they already awarded the plaintiff.

Based on the various evaluations, the lower court granted summary judgment for State Farm and the Fifth Circuit affirmed that decision. The Fifth Circuit found that the plaintiff, as the moving party, could not meet his burden to override the summary judgment determination. The Court found that the evaluations as to any damage that Hurricane Ike may have caused were extremely important in this case. Since the only wind damage would have been related to the missing shingles, damaged ridge caps, and small water spot, and State Farm already paid for that, the Court found no reason to override the summary judgment.

Once summary judgment has been awarded, it is somewhat difficult to overcome on appeal.

Continue reading "Summary Judgment Prevails Against Hurricane Ike Damages" »

A recent case in the Parish of Lafayette, Louisiana, demonstrates conflictive viewpoints and the shifting burden of responsibility that can take place in an automobile accident, much less one taking place in a parking lot. The plaintiff, Ms. Duhon, was driving her 2009 Lincoln MKX in a parking lot on property in Lafayette when a 2006 Toyota Sequoia driven by Ms. Foley entered the parking lot from Ambassador Caffery Parkway and the vehicles collided. The defendant was insured by State Farm Mutual Automobile Insurance Company (State Farm).

Ms. Duhon filed suit against Ms. Foley and her insurer, State Farm, seeking recovery for (1) the out of pocket deductible she paid for repairs to her vehicle; (2) the out of pocket rental expenses she paid; and, (3) the diminution in value of her vehicle as a result of this accident. However, the trial court held a bench trial and ruled in favor of Ms. Foley, finding Ms. Duhon one hundred percent at fault for the incident, eventually leading to an appeal.

Ms. Duhon asserts the trial court erred in finding her at fault and denying her recovery of the damages she allegedly sustained in the accident. The Court of Appeal, for the Second Circuit of Louisiana, amended the trial court's decision to a fifty-fifty fault allocation. The Court applies the manifest error standard of review in their findings. Under this standard, the Court of Appeal must meet the following two-part test: (1) find that a reasonable factual basis does not exist for the finding, and (2) further determine that the record establishes that the fact finder is clearly wrong or manifestly erroneous. After reviewing the record in its entirety, the Court of Appeal found that a reasonable factual basis does not exist for the trial court's findings and that the trial court's determination of negligence exclusively on the part of Ms. Duhon was manifest error. Not only did Ms. Foley’s testimony conflict with Ms. Duhon’s, it was also not corroborated by the physical evidence. Even the trial court intimated comparative fault of the drivers when it stated in its oral reasons for judgment that “neither party entered with enough caution to avoid the accident.” Thus, the trial court erred in assessing no fault to Ms. Foley for this accident.

In her appeal, Ms. Duhon also disputed the figure involving the diminished value of her 2009 Lincoln MKX. At trial, both Ms. Duhon and State Farm submitted estimates of the diminished value for the trial court's consideration. Ms. Duhon determined the diminished value at $6,730.76 by using an online website while State Farm offered a diminished value assessment prepared by Crawford & Associates at $2,179.54. The Court of Appeal accepted the valuation offered by State Farm.

According to the foregoing holdings, the Court of Appeal amended the trial court's judgment to reflect an award of fifty percent of $454.09 (the total amount paid by Ms. Duhon for her deductible and rental expenses) and fifty percent of $ 2,179.54 for the diminution in the value of Ms. Duhon's vehicle.

This complicated case showcases the ability for a loss at the trial level to be overturned on appeal and is a great indicator of why proper representation is key. Had Ms. Duhon not received quality representation on the second level, she may have been completely out of luck in her appeal and not received any of the compensation she deserved.

The Louisiana Supreme Court has recently undertaken a case deciding whether arbitration clauses in attorney-client retainer agreements are appropriate. In the past, Louisiana has favored the enforcement of arbitration clauses in written contracts. Arbitration avoids taking a case to trial and is a thrifty and efficient way to conduct the resolution of disputes outside of the courts. During arbitration, each party refers its dispute to an arbitrator, who then imposes a decision that is legally binding for both sides. However, Louisiana law also imposes a fiduciary duty requiring attorneys to act with the utmost fidelity and forthrightness in their dealings with clients and any contractual clause, which may limit the client’s rights against the attorney is subject to the upmost scrutiny.

According to the Louisiana Supreme Court in Hodges v. Reasonover, there is no per se rule against such binding arbitration clauses, provided that they are fair and reasonable to the client. In Hodges v. Reasonover, Jacqueline Hodges, the founder, sole shareholder, and CEO of Med-Data Management, Inc., hired Kirk Reasonover of the law firm of Reasonover & Olinde to sue a company known as MedAssets, Inc. in federal court in Atlanta, Georgia. In the retainer agreement between Hodges and Reasonover there was an arbitration clause, which essentially provided that any dispute shall be submitted to arbitration in New Orleans, Louisiana and that such arbitration shall be submitted to the American Arbitration Association (AAA).

Hodges was ultimately unsuccessful on her suit against MedAssets, Inc., which led her to file suit for legal malpractice against Reasonover. According to the Louisiana Supreme Court, Courts must closely scrutinize attorney-client agreements for signs of unfairness or overreaching by the attorney. Further, Louisiana Rule of Professional Conduct 1.8(h)(1) prohibits a lawyer from “prospectively limiting the lawyer’s liability to a client for malpractice unless the client is independently represented in making the agreement.”

According to the state of Louisiana as well as the American Bar Association (ABA), an arbitration clause does not violate Rule 1.8(h)(1) unless some aspect of the arbitration clause limits the lawyer’s substantive liability. According to ABA Formal Ethics Opinion 02-425:

[M]andatory arbitration provisions are proper unless the retainer agreement insulates the lawyer from liability or limits the liability to which she otherwise would be exposed under common or statutory law. For example, if the law of the jurisdiction precludes an award of punitive damages in arbitration but permits punitive damages in malpractice lawsuits, the provision would violate Rule 1.8(h) unless that client is independently representing in making the agreement.

The Louisiana Supreme Court agrees with the aforementioned opinion by the ABA and states that an arbitration clause which does not inherently limit or alter either party’s substantive rights, but rather it simply provides for an alternative venue for the resolution of disputes is enforceable. In the case of Jacqueline Hodges, the Court found that there is no evidence that arbitration conducted in accordance with AAA rules and before AAA-approved arbitrators would in any way be presumptively unfair or biased. Thus, the Court said that arbitration provides a neutral decision maker and is otherwise fair and reasonable to the client.

For clients, the word “binding” can have an intimidating effect. At the Berniard Law Firm, our lawyers do not take arbitration matters lightly and understand the gravity of such situations, particularly in personal injury and insurance disputes. Our attorneys are here to provide experience and quality representation from the beginning of our time with clients until the very end. We will explain and discuss contracts, such as retainer agreements, in great detail so that you as the client can feel comfortable with your signature on the dotted line. The Berniard Law Firm always has your best interests in mind and we are happy to counsel you if you have legal questions regarding arbitration.

You have just been involved in a car accident. Someone else was driving, and you bring suit against them and several insurance companies that are involved. But who has the burden of proof to prove how much you should be able to recover from the insurance companies? In Louisiana, that burden is on the plaintiff. The plaintiff, when seeking a declaration of coverage under an insurance policy, has to prove that his or her claims are covered under the policy coverage and also has to establish all essential facts in order to recover.

How would this play out? Well, recently, this exact situation played out in Louisiana. A couple was riding in a car driven by another man. The man driving had rented the car from Houston, Texas, but the case was tried in Louisiana. At some point while driving the couple, the man lost control of the vehicle and ended up flipping the car twice. The couple suffered severe injuries from the accident and then filed suit.

Not only did the plaintiffs (the couple) file suit against the man driving, but they also filed suit against several insurance companies involved. Before actually bringing the case to trial, the couple tried to settle the case with a couple of the insurance companies, and the couple received checks in the full amount of the coverage under those insurance companies. However, it was not clear whether or not this was a full recovery. The plaintiffs also wanted to receive payment from the insurance company from the uninsured/underinsured motorist coverage (UM coverage). During the time the parties were trying to decide if this was a complete settlement or not, the plaintiffs' attorney went ahead and gave his clients the check. The defendants then filed a motion for summary judgment, stating that UM insurance coverage was not available. After several motions and cross motions, the trial court decided that UM coverage was not available to the plaintiffs and granted the motion of summary judgment in favor of the defendants.

When this case was brought to the appellate court, the court analyzed the case de novo (or as if the trial court had not already tried the case) and decided to affirm the trial court's ruling. Why did they affirm the trial court's ruling? This is primarily because the plaintiff has the burden of proving what he or she is owed under the insurance policy, and the plaintiffs in this case could not prove that they should be able to recover under UM coverage.

The reason that the plaintiffs could not prove that they should be able to recover under UM coverage is because of the plain language of the insurance coverage policy. Normally, summary judgment should only be granted if there is no reasonable interpretation of the policy, supported by evidence and the facts of the case, that would support granting coverage. This seems like a pretty lenient standard for the plaintiffs, but it still requires that the plaintiffs prove that there is a reasonable interpretation of the policy that does allow them to recover in the manner that they are seeking. And in this case there was not.

In the language of the policy, several clear definitions were given, and as long as the policy wording is clear, then the agreement has to be enforced as it is written. In this case, the policy language stated that in order to recover under UM coverage, the vehicle cannot be available for regular use. However, in this case, the rented vehicle was clearly available for regular use during the rental period, and the vehicle, therefore, could not be classified as underinsured. So the plaintiffs were not entitled to recover any more than they already had.

If you have been involved in a car accident, you want to make sure that you claim and recover the proper amount that is available to you under the various insurance policies involved in the case.

Continue reading "Louisiana Couple Injured in Car Accident Seeks Recovery from Insurance Companies " »

Do you drive an automobile insured through an employer? How well do you know the policy? It's possible that you aren't covered as well as you think.

The petitioners of Broussard v. Progressive Sec. Ins. Co. were merely seeking coverage compensation after a seemingly simple traffic accident in Maurice, Louisiana. They ended up in court and dealt with costly appeals over whether or not the driver of the other automobile, a dump truck, was insured by the business who hired him for this particular haul. The driver, who owned the dump truck, was a contractor, and thus not an employee. As a result, he was screened out of much of the hiring company's insurance policies, thus potentially inhibiting the petitioners' attempt to recover.

The major questions regarding the insurance coverage were over the definition of a “hired” auto and the definition of a “nonowned auto,” in light of the specific policy at hand. While it may seem at first glance that the dump truck had to qualify under one of these categories, the court found there was a genuine issue of material fact as to whether the company had “hired” the truck or “hired” the services of the driver. This distinction is important because specifically hiring the truck would result in coverage under this insurance policy, whereas hiring the full services of a driver would not result in coverage for the truck. The court considered invoice tickets engaging the driver's company generally, and not a specific vehicle, to be a relevant factor in deciding this issue.

This distinguishing issue regarding what exactly the company had "hired" was also relevant to the consideration of whether the truck was covered as a “nonowned auto” when it was being driven by someone who was not an employee. Although the insurance policy in question offered several examples and designations of a "nonowned auto," the petitioners were still able to proffer several cases where a "nonowned auto" had been defined by the court. The court ultimately found this case as factually distinguishable from all of the proposed case law comparisons. Although this truck was not owned by the hiring company, it still might not qualify as a "nonowned auto" for insurance purposes. The insurance policy potentially covered the operation of a "nonowned auto" with the following language: "anyone else while using with your permission a covered 'auto' you own, hire or borrow [is covered under this section]." As discussed above, the court found a genuine issue of material fact regarding whether or not the vehicle had actually been "hired."

If you have a similar insurance policy, or are potentially covered through your employer, there are a few other important issues to note regarding "nonowned auto[s]." If a "nonowned auto" is covered, it is likely that the coverage is contingent upon the vehicle being used specifically for the business or personal purposes of the insured.

Insurance agreements are like all other contracts—they're complicated! You may need a lawyer to help you determine what rights you have regarding a policy. Whether you've been in an auto accident in a company vehicle or suffered a collision in your personal automobile, call the Berniard Law Firm today to speak with an attorney.

Uninsured motorist (UM) coverage protects drivers from individuals not carrying sufficient insurance. The importance of such coverage makes waiving it a somewhat complicated procedure, designed to make sure the driver truly does not want it. A case in Abbeville, Louisiana, illustrates the complexities of when corporations waive UM coverage on company automobiles.

Plaintiff James Bergeron sued to recover damages after being rearended in the vehicle provided by his employer, Murphy Oil. All defendants were dismissed from the suit except Liberty Mutual, which contended it didn't include uninsured motorist coverage in the policy it issued to Murphy Oil.

In Louisiana, uninsured motorist coverage is provided by a specific statute, La.R.S. 22:1295. Court decisions have recognized the importance of UM insurance as a matter of public policy, to the extent that the coverage is implied as an amendment to any automobile liability policy (even policies not expressly providing for it).

An insurer is required to prove that the insured either explicitly rejected UM coverage or opted for a lower policy limit. Further, a specific commissioner of insurance form, with several requirements for proper execution, must be used to waive UM coverage.

In this case, the issue was whether the employee who signed this UM rejection form on behalf of Murphy Oil had the authority to do so. Specifically, plaintiff contends there was no evidence that the employee had express written authority to sign the form.

The trial court granted Liberty Mutual's summary judgment motion dismissing the plaintiff's claims. In support of its motion, Liberty Mutual offered two affidavits attesting to the employee's authority to accept or reject UM coverage.

Plaintiff brought up a court decision in which an insured's mother was found not to be acting as a "legal representative" of the insured, because there was nothing in writing evidencing such authority. But the appellate court distinguished the decision from the facts of this case by pointing out that the insured is a corporation. Officers, employees, and agents act on behalf of corporations, and the employee who signed the UM rejection form acted on behalf of Murphy Oil.

The key issue, then, is "whether the person who signed the form was authorized by the corporation to reject UM coverage." The individual who signed the waiver in this case was found to be acting in his capacity as a Murphy Oil employee.

Uninsured motorist insurance provides critical protection to injured drivers when the party at fault is not sufficiently covered. If your insurance company is refusing to cover your automobile accident, speak with an attorney at Berniard Law Firm today.