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Homeowner's insurance and the business pursuits exclusion

Buiness pursuit liability coverage exclusions: 2 from the 3rd Circuit

Parker v. American Western Home Ins. Co., 18-392 (La.App. 3 Cir. 12/28/18)

Latour v. Allstate Ins. Co., 18-395 (La.App. 3 Cir. 12/28/18)

        The Third Circuit released two opinons on December 28, 2018 guiding litigants through the narrows of buisness pursuits exclusions to homeowner's insurance liability coverage.

        The scrutinized activities included a day care operation and rental of an insured property. In Latour, a three judge panel reversed the trial court and granted summary judgment for Allstate Insurance Company on finding that the policyholder breached a duty to properly supervise a child under her paid care. Judge Sylvia Cooks dissented. A five judge panel in Parker held that "there are genuine issues of material fact as to whether the property at issue was being leased on an occasional basis," potentially triggering an exception to the exclusion (emphasis added). Judge Cooks authored the Parker opinion.

The majority in Latour looked to "the alleged actions or omissions of the insured upon which liability is asserted and whether those actions further the operation of the daycare." The Parker, opinion quotes The Law of Liability Ins., Rowland Long, Matthew Bender & Co., Inc., § 9.06[2]:

Many courts that have examined the definition of business and the business pursuits exclusion agree that a business pursuit must involve two elements: continuity of the activity, and monetary gain, or at least the hope or expectation of monetary gain.

See Parker at p. 8.

        These opinions work remarkably well together to define understandable parameters for analysis of a buisness pursuits exclusion defense.

Posted: Jan. 4, 2019

An interesting issue of LIGA credit

Judge Piper Griffin recently ruled in favor of LIGA, allowing a credit for medical expenses incurred by a Medicaid eligible plaintiff even though she had not and could not submit the bills for payment under the program. See, Anderson v. Gutierez-Cruz, 2015-00611 (Civil District Court 10/24/18).

At issue were $5,408.12 of billed medical expenses related to treatment for injuries incurred in a March 1, 2014 motor vehicle accident. The deadline for submitting the bills to Medicaid for payment was November 12, 2015.

Plaintiff filed suit against an insured of Affirmative Casualty Insurance Company. Rather than going through Medicaid, she sought recovery of medical expenses through liability insurance. When Affirmative was declared insolvent on March 24, 2016, the Medicaid deadline was expired.

LIGA claimed a credit for medical expenses under Louisiana Revised Statute 22:2062. Plaintiff opposed the credit, arguing that before LIGA's obligation ever existed, her right to the alternative benefits was extinguished.

Judge Griffin recognized the "unfortunate" consequences, but concluded that the statutory "expression of legislative will" superseded "plaintiffs' equity argument."

Posted: Nov. 27, 2018

Duplessis v. Turner - JNOV Denied

By judgment signed October 4, 2018, the trial court denied defendant's motion for judgment notwithstanding the jury's verdict. The jury awarded plaintiff $6,470,000 general damages following trial from April 2-10, 2018. See Duplessis v. Turner, 2015-4256 (Civil District Court 06/22/18).

Posted: Oct. 22, 2018

"Statement on the physician acting as an expert witness" - The Bulletin of the American College of Surgeons, Vol. 96 No. 4

With the kind permission of the publishers of the Bulletin of the American College of Surgeons, CompQuantum is posting its "Statement on the physician acting as an expert witness" for your reference.

Posted: Oct. 19, 2018

Two Trials in Terrebonne

In 2016 we reported on the Supreme Court's remand of a Houma medical malpractice suit for retrial based on the "miscarriage of justice" brought about Judge Timothy Ellender's "bizarre and disturbing behavior" during trial. See A judge is gone, but not forgotten. Preparing for my October 29 CLE presentation on 2018 trials for the Terrebonne Bar Association, I ran across the re-trial result.

The second time around was no more successful for the plaintiff. Another 32nd JDC jury concluded that plaintiff failed to prove Dr. Schwab's treatment fell below the standard of care. See, Logan v. Schwab, 165,756 (32nd JDC 03/22/18). Perhaps Justice Crichton correctly dissented on the majority conclusion that a re-trial was necessary.

This trial will be among several from Houma discussed as part of my 3:00 p.m. hour on 2018 trials in Houma on October 29. We will, of course, cover many more from across Louisiana. Join us if you are able.

Posted: Oct. 8, 2018

Rainy day, a slippery floor and constructive notice

In one of those opinions concluding oddly in relation to the text, a Third Circuit panel reversed a defense merchant liability, slip and fall summary judgment. See, Barton v. Wal-Mart Stores, Inc., 18-146 (La.App. 3 Cir. 09/26/18).

Several paragraphs describe details that don't seem to suggest a final statement on the impropriety of credibility determinations for summary judgment purposes. Rather, the facts, as described, could be grounds for explanation that the plaintiff's credibility alone, no matter how strong, could not overcome an "absence of factual support for" proof of constructive notice. Nevertheless, the matter returns to the 9th JDC for further proceedings.

Posted: Sept. 27, 2018

$4.2M Bench Trial Judgment - Open, but Not Obvious

Manson Gulf, LLC v. Modern American Recycling Service, Inc.,
15-3627 (USDC-EDLA 09/04/18);
on remand from
Manson Gulf, LLC v. Modern American Recycling Service, Inc.,
17-30007 (U.S. 5th Circuit 12/18/17)

Witness: “grating can play tricks on your eye... . " From four to eight feet away, the hole in the platform looked like solid floor.

Inspecting a salvaged oil production platform for "excess oil in pipes," James LaFleur fell through a hole 50 feet to his death on a barge deck below. His surviving spouse and children brought survival and wrongful death claims under the Longshore and Harborworkers' Compensation Act and state tort law.

Louisiana's federal Eastern District trial court granted defense summary judgments. Plaintiffs appealed the court's finding of fact supporting Manson Gulf's motion that the hole was an "open and obvious" danger that a "reasonably competent stevedore should anticipate encountering." See Scindia Steam Navigation Co. v. De Los Santos, 451 U.S. 156, 164 (1981). The U.S. Fifth Circuit reversed on finding contradictory evidence about the appearance of the hole.

On remand, the court recited that contrary testimony - quoted above - in findings of fact favoring plaintiff recovery. A September 4, 2018, judgment based on those findings awarded damages of $4,210,756.00, composed of the following:

  • Survival damages for conscious pain and suffering - $400,000;
  • Loss of earnings and earning capacity - $810,756.00;
  • Spouse's wrongful death damages - $1,500,000;
  • Each of three children's wrongful death damages (ages 14, 15 and 16 at time of death) - $500,000.

Testimony supporting survival damages suggested severe pain throughout "approximately ten to fifteen minutes" of consciousness. Compare McBride v. Estis Well Serv., L.L.C., 16-30481 (U.S. 5th Circuit 04/10/17), 853 F.3d 777.

Posted: Sept. 10, 2018

An Issue Laden Opinion

On Friday, a five judge First Circuit panel issued an opinion discussing evidence, Daubert, new trials, JNOV motions and general damages. See, Spann v. Gerry Lane Enterprises, Inc., 2016-0793 (La.App. 1 Cir. 08/24/18). Judge Whipple wrote the majority opinion and Judge McDonald dissented on evidentiary grounds. The majority included Judges Higginbotham, Theriot and Chutz.


Patricia Spann lost control of her Chevrolet Cobalt on S. Acadian Thruway in Baton Rouge and collided with "several vehicles driving in the opposite lanes." She fractured multiple facial bones, two thoracic vertebrae, one lumbar vertebra, a wrist and elbow. Ms. Spann sued Gerry Lane Enterprises for alleged defective performance of power steering system recall repairs.

Judge Robert Downing, sitting on the 19th JDC bench pro tempore, dismissed Gerry Lane on summary judgment. Judge Donald Johnson granted a new trial motion supported with subsequently obtained expert evidence.

Later, Judge Johnson denied a re-urged defense summary judgment motion and a jury assigned 70% fault to Ms. Spann and 30% fault to Gerry Lane at trial. Total damages awarded by the jury prior to comparative fault reduction included $122,338.80 past medical expenses, $25,000 past loss of earnings and $25,000 "for loss of physical abilities, disfigurement, and impairment." The jury declined to award damages for pain and suffering, mental anguish, permanent disability and loss of enjoyment of life.

Judge Johnson granted a plaintiff JNOV motion and increased general damages by $700,000, for a total of $725,000.

The First Circuit affirmed Judge Johnson's pre-trial and evidentiary rulings, but reduced general damages to $125,000, "the highest reasonable amount that can be awarded." Judge McDonald, dissenting, would have reversed Judge Johnson's grant of a new trial and reinstated the summary judgment entered by Judge Downing in favor of Gerry Lane.

Evidence and Daubert

An initial joint vehicle inspection was completed by defense and plaintiff experts. After Gerry Lane was dismissed on summary judgment, plaintiff's mechanical engineering expert, Edward Carrick, conducted two additional inspections and testing of Ms. Spann's vehicle without defense participation. These inspections occurred, in the words of Judge McDonald, "in clear violation of [a] February 4, 2015 consent judgment, which prohibited Ms. Spann, and anyone on her behalf, from altering her car, performing tests without prior court approval, removing parts from the car, and conducting destructive tests."

The majority found no merit in a defense Daubert argument which it described as attacking the expert's credibility, but not methodology. Further, regarding civil contempt as grounds for reversal, although the plaintiff's second and third expert inspections in contravention of the consent order "troubl[ed] the [trial] court," admitting the evidence was not an abuse of discretion.

New Trial

Plaintiff presented the trial court with results of the additional expert analysis in support of the motion for new trial. She argued the evidence could not have been obtained prior to the hearing. The First Circuit "pretermitted" discussing prior availability of the evidence, a peremptory ground for new trial under La. C.C.P. 1972(2). Instead, the majority concluded that Judge Downing's original judgment summarily dismissing the defendant was "contrary to the law and evidence," and appropriate for new trial under La. C.C.P. art. 1972(1).

JNOV, Inconsistent Verdict and Quantum

The First Circuit agreed with Judge Johnson and the plaintiff that the jury's verdict awarding $122,338.80 past medical expenses, but nothing for pain, suffering and mental anguish was inconsistent and an abuse of discretion. In an effort to salvage the result, the defendant argued that the evaluation should consider general damages as a whole. See, Mason v. Hilton, 2012 CA 2073 (La.App. 1 Cir. 11/07/13). For that reason, argued the defense, the jury's $25,000 award, ostensibly for impairment and disfigurement, was within the discretionary range. On the contrary, the First Circuit review led to the conclusion "that reasonable and impartial jurors in this case could not differ as to the fact that an award of $25,000.00 for general damages is abusively low, especially in light of the type of physical injuries sustained by Ms. Spann, the duration of her hospital stay, and the continued assistance that she needed at home after being discharged from the hospital." Judge Johnson's decision to grant plaintiff's JNOV was affirmed.

On quantum, the defense appeal found substantial relief. Here, the majority focused primarily on plaintiff's successful, albeit protracted, recovery from her injuries. In conclusion, the opinion states:

In light of the absence of medical testimony regarding any future medical care or procedures that Ms. Spann may need and Ms. Spann's own testimony regarding the time frame in which she became generally able to resume her normal activities, we find that $125,000.00 is the highest reasonable amount that can be awarded to Ms. Spann for general damages. Accordingly, as the jury previously awarded Ms. Spann $25,000.00 for general damages and the trial court maintained this award, we find that the trial court should have awarded Ms. Spann an additional $100,000.00 for general damages, not an additional $700,000.00. Accordingly, while we find that the trial court properly granted the motion for JNOV, we amend the amount of general damages awarded by the trial court in the JNOV.

Posted: Aug. 26, 2018

Summary judgment deadlines - a med-mal lesson

Amendments to La. C.C.P. art. 966 a few years ago challenged the capacity of the procedurally habituated to adjust. A recent med-mal defense summary judgment and reversal at the Third Circuit illustrates. See Dufour v. The Schumacher Group of Louisiana, Inc., 2018-0020 (La.App. 3 Cir. 08/01/18).

Beth Dufour, in pain during pregnancy, arrived at the Rapides Regional emergency room for care. Four hours later she was discharged after learning that she miscarried. She was not seen by an Ob/Gyn.

Later, with "increased pain and bleeding, fever, and further complications", Ms. Dufour was seen by her personal Ob/Gyn who diagnosed an ectopic pregnancy. Emergency surgery with removal of a fallopian tube ensued.

A medical review panel found no breach of the standard of care by the hospital or attending ER physician. Ms. Dufour and her husband filed suit in the 9th JDC. After a period of discovery, the defendants filed a motion for summary judgment. Following two continuances, a hearing was scheduled for June 12, 2017. The Dufours filed an opposition with attached affidavit of Dr. Thomas Arnold addressing informed consent. The June hearing was also continued and the court "permitted [plaintiffs] to engage in additional discovery for the purpose of adequately defending against RMC's summary judgment motion." After plaintiffs initiated further discovery, the defendants filed a motion to quash and for protective order.

On August 4, prior to the re-scheduled hearing on August 21, the Dufours filed a supplemental opposition attaching an additional affidavit of Dr. Arnold and an affidavit of Dr. Christina Lord. The court initially overruled a defense objection and allowed the new evidence. Later, the trial judge reversed that decision, excluded the affidavits and found that plaintiffs failed to produce evidence raising a genuine issue of material fact as to breach of the standard of care.

Exclusion of the evidence turned on the application of La. C.C.P. art. 966(B)(2) requiring opposition memoranda to be filed 15 days prior to the hearing. Although the Dufours final opposition with supporting affidavits was filed 17 days prior to the August hearing, the deadline had passed if calculated in relation to the June hearing date.

The Third Circuit reversed. Key points from Judge Kyzar's opinion include:

  • "[D]istrict courts, in applying the deadline imposed by the article [966(B)], ... have the discretion to consider late-filed opposition materials, absent prejudice to the mover. Smith v. Rapides Healthcare Sys., L.L.C., 13-1172 (La.App. 3 Cir. 3/5/14), 134 So.3d 122";
  • "The rescheduling of the hearing reset the time for the filing of opposition documents. Mahoney v. East Carroll Parish Police Jury, 47,494 (La.App. 2 Cir. 9/26/12), 105 So.3d 144, writ denied, 12-2684 (La. 2/8/13), 108 So.3d 88";
  • "While ... the Dufours did not request time to file additional expert affidavits nor did the trial court order that they be allowed to file additional expert affidavits, we note that neither did the trial court deny the right to file any supplemental response affidavits";
  • "Baez [v. Hospital Service District No. 3 of Allen Parish, et al, 2016-951 (La.App. 3 Cir. 4/5/17), 216 So.3d 98] does not stand for the proposition that a party is only permitted to file a single opposition without the ability to supplement that opposition even when the supplemental opposition is filed within the delays provided for in La.Code Civ.P. art. 966(B);"
  • The "purpose of a surreply is to enable the non-movant to contest matters presented for the first time in the opposing party's reply";
  • "The filings on behalf of the Dufours were not filed as a surreply; ... [they] were filed as part of the Dufours' response to the original motion for summary judgment"; and
  • "Because the hearing on the motion for summary judgment was reset, the deadline for filing opposition documents to the motion was reset as well in the absence of any limiting orders from the trial court, of which there were none in this case."

Posted: Aug. 20, 2018

Burden of proof - MVA disputes edition

A pair of recent CDC defense judgments found the plaintiffs failing to carry their burden of proof in motor vehicle accidents. See Williams v. Liberty Mut. Ins. Co., 2015-4019 (Civil District Court 07/18/18); and Vallejos v. USAA General Indemnity Co., 2016-9368 (Civil District Court 08/03/18).

Judge Robin Giarrusso succinctly noted in Williams Reasons for Judgment: "A picture is worth a thousand words. There is no damage to Mr. Lewis' car."

A little more explanation was needed from Judge Bruno before he concluded that "equivocal" evidence is not a preponderance. In Vallejos, the drivers disputed who sideswiped whom by changing lanes on Veterans Memorial Boulevard.

Posted: Aug. 10, 2018