Maritime

Vicarious Liability Explored in Jones Act Case

Published on: July 9, 2013 | By Berniard Law Firm

What is vicarious liability? Vicarious liability, simply put, is the common law principle that an employer may be liable for its employee’s negligence if that employee’s negligence occurred within the course or scope of his or her employment.

In the Beech v. Hercules Drilling Company, L.L.C., case coming out of the Eastern District of Louisiana, vicarious liability principles came into play. In this case, certain bizarre events led the United States Court of Appeals for the Fifth Circuit to make a ruling as to whether Hercules Drilling Company should be held vicariously liable for the actions of Michael Cosenza, its employee, who accidentally shot and killed his co-worker, Keith Beech, while both were aboard a Hercules owned vessel.

The facts of the case were not in dispute. Beech was a crane operator aboard a jack-up drilling rig that Hercules owned, while Cosenza was a driller aboard the vessel. On December 13, 2009, the fateful events that led to the aforementioned case, took place. Cosenza happened to own a firearm, which he accidentally took aboard the vessel; Hercules policy prohibited any firearms from being aboard their vessels. Not only did Cosenza bring a firearm aboard the vessel, violating the policy, but when he realized that he had inadvertently brought it aboard (he found it among his laundry) he did not inform anyone about it and placed it in his locker, further violating Hercules policy. Cosenza was aware of the policies regarding firearms.

Certification and Settlement in Katrina/Rita Class Action Claims

Published on: June 7, 2013 | By Berniard Law Firm

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.”

Understanding the Federal National Flood Insurance Program as Hurricane Season Approaches

Published on: April 17, 2013 | By Berniard Law Firm

The Federal National Flood Insurance Program (“NFIP”) is a federal program that allows homeowners to protect against flooding because most homeowners insurance does not cover flooding (You can check out their website here). It is offered to homeowners, renters and some business owners. The federal government works with private insurance companies to encourage them to offer insurance. The government sets a standard rate and then the insurance is actually through the private insurance company, but involves the federal government to a great degree. The federal government underwrites, or supports the insurance company, but the private insurance company does all of the related administrative tasks.

Because of the federal government’s involvement, when there are issues with the insurance company, you must follow unique litigation paths in order to recover for any damages in many occasions. For example, the federal government will normally cover any litigation costs for the private insurance company. As such, some procedures that would normally be acceptable at the state level may not be allowed in the federal court.

A case in Mississippi that was appealed to the Fifth Circuit Court of Appeals helps explain these differences. In that case, Grissom, the insured individual, had insurance under the NFIP through Liberty Mutual. He was eligible for a preferred risk insurance policy, but did not know he was eligible. After Hurricane Katrina, he argued that he would have purchased the preferred risk insurance policy if he had known about his eligibility.

Hurricane Damage Appraisals at Core of Insurance Dispute

Published on: April 14, 2013 | By Berniard Law Firm

Even in 2012, issues regarding Hurricane Katrina, which occurred in 2005, are still prevalent. Insurance companies are particularly affected by Katrina, and they are still attempting to sort out many claims. Some of the contract claims that are still moving through the courts are somewhat unique. For example, contracts occasionally have provisions where both parties can appoint an appraiser if the two parties cannot decide how much damage actually occurred. The insurance policies will only insure up to a certain amount, of course, but determining the amount of damage is a vital part of reimbursement of the claim.

An apartment building in Metairie, Louisiana carried insurance that had such an appraisal policy. The contract explained that both parties were to appoint their own appraiser, who is supposed to be fair and impartial. Then, a third individual, the umpire, would be appointed. The umpire takes both of the appraisers’ estimates, examines them, and then comes up with a third number that will be the final number for total damage. The two parties are supposed to appoint the umpire as well, but if the two parties cannot decide on an umpire, then the court can appoint one for them.

In this case, the court did appoint an umpire. However, the court not only appointed an umpire, but also imposed certain rules and restrictions to the appraisal process. In particular, the court restricted the documents that the umpire could receive and required that if the umpire needed to communicate with either party then the opposing party would also be included in the conversation. The communication issues required the umpire to copy both parties on e-mails, letters, and make conference calls. Communication with just one party was strictly not allowed. In addition, neither party was to give the umpire documentation of a legal nature that would attempt to convince the umpire that the award should be a certain amount. Instead, the documentation was limited to receipts, inspections, and other impartial information.

The apartment’s appraiser valued the damage at approximately $200,000, but the insurance company’s appraiser valued the damage at zero. The apartment owner argued that the insurance company’s appraiser was not being impartial because they did not award any damages. However, the insurance company noticed that the apartment owners had already fixed most of the damage using funds from other insurance companies, so the insurance company’s appraiser determined that the apartment owners were not entitled to any more damage payments.

The umpire agreed with the insurance company’s appraiser and recommended that the damage award be zero. Naturally, the apartment owner was upset by this result, so he appealed the decision to the Fifth Circuit Court of Appeals for the State of Louisiana. The apartment owner argued that the court interfered too much with the process–the apartment owner should have been able to give the umpire whatever documentation they wanted and communicated however they wanted.

The Court disagreed. It began its analysis by underscoring that although the two parties had an appraisal clause in their contract, the clause does not take away the court’s right to hear a case. In addition, insurance policies are contracts, and should be interpreted under the regular principles of contracts. Therefore, the court will interpret the contract using its regular meaning unless some of the phrases have gained technical definitions in that particular line of business.

The Court explained that the two parties deliberately involved the court when they stated in the contract that the court was to assign an umpire if the two parties could not agree to one. The appraisal portion of the contract did not set specific guidelines in the process, so the court stepped in to create them. The lower court explained that they were afraid the umpire was getting far too much irrelevant information, so they intervened. The Court deemed this a completely acceptable practice under the circumstances. The Court also decided that the insurance company’s appraiser was sufficiently impartial. Lastly, the Court concluded that since the lower court acted appropriately, the award of zero damages should still stand.

This case illustrates a unique clause that could potentially be helpful for the insured, but since the clause was not detailed enough to limit the court’s actions, it turned out to be detrimental.

Attorney Jeffrey Berniard makes New Orleans Magazine top lawyers list

Published on: April 4, 2013 | By Berniard Law Firm

Licensed attorneys in New Orleans were asked which attorney they would recommend to residents in the New Orleans area. Attorney Jeffrey Berniard, of the New Orleans-based Berniard Law Firm, LLC, was named one of the best mass litigation and class action attorneys in New Orleans in the November 2012 issue of the magazine. Propelled into success by holding insurance companies accountable in the wake of Hurricane Katrina, Berniard has built the Berniard Law Firm into one of the premiere personal injury law practices in not only New Orleans, but the entire state of Louisiana. Since Hurricane Katrina, Berniard Law Firm has focused on insurance disputes and class action litigation.

Jeffrey Berniard has been involved in several high-profile cases, solidifying his expertise in complex high risk litigation. He worked on the highly publicized Deep Water Horizon oil rig case in the Gulf Coast, representing a very large group of individuals affected by the sinking oil rig. In 2008, Berniard Law Firm secured a $35 million dollar settlement for a class of 70,000 members seeking bad faith penalties for tardy payments by a Louisiana insurance company in the wake of Hurricane Katrina and Hurricane Rita. In 2009, the Berniard Law Firm participated in five class actions against insurance companies and corporations. In the process of these major claims, the firm also helped many residents of the Gulf Coast with their personal injury concerns, insurance claims and business disputes.

– What is Mass Tort Litigation? –

Happy Mardi Gras!

Published on: February 12, 2013 | By Berniard Law Firm

As a Louisiana law firm, our practice takes great pride and enjoyment from Fat Tuesday and all of the history that follows. For all of our readers in the New Orleans area, have a safe and happy holiday.

Postings will resume shortly. In the meantime, laissez les bon temps rouler!

Difficulty in Setting Aside Insurance Release Forms and Settlements

Published on: November 19, 2012 | By Berniard Law Firm

Settlements are an important part of the legal process. They save time, money, allow the parties to negotiate their own terms, and, above all, they keep the parties from having to go to court to litigate their claims. In the case of settling with insurance companies, the companies like to avoid court because it not only costs them time and money, but also may negatively affect their reputation in the community. As such, it is common practice for an injured person to sign a release form after they receive settlement money. This release form bars the person injured from any future claims against the insurance company. Both parties usually end up happy in this situation because the person who was injured gets some compensation and the insurance company avoids the negative effects of going to court.

What happens if an injured person settles and signs a release form before they realize how badly they are injured? For example, perhaps an individual thinks they only bruised their ribs, but actually suffered from more long term effects such as kidney injuries. In that case, the injuries are likely to be much more expensive than both parties originally anticipated. Then, the injured individual does not have enough money to cover medical expenses and the insurance company gets out of paying for the extra expenses.

In Louisiana, a general release will not necessarily bar recovery for aspects of the claim that the release was not intended to cover. However, most releases are very broad in that they cover any existing injuries and injuries that may occur because of the accident in the future. Louisiana law only allows settlements to be set aside if there was an error when the settlement was signed. Two major mistakes could set aside a settlement: 1) the injured party was mistaken as to what he or she was signing even if there was no fraud involved, or 2) the injured party did not fully understand the nature of the rights being released or that they did not intend to release certain rights. A settlement can also be set aside if there is fraud or misrepresentation involved.

Louisiana Civil Code Article 1953 defines fraud as “. . . misrepresentation or a suppression of the truth made with the intention either to obtain an unjust advantage for one party or to cause a loss of inconvenience to the other. Fraud may also result from silence or inaction.” In order to determine if there is fraud involving a release, which is also a contract, the court will only look to the document itself to determine if fraud is evident. Evidence of fraud in this situation could include any intentionally incorrect statement of material fact, such as stating items that are not covered by the insurance company when those items are actually covered.

A recent case gives an excellent example of a settlement with an insurance company. In that case, an individual fell off a tractor and injured himself. Two insurance companies provided compensation for injuries relating to his fall. Once each insurance company provided compensation, they each had the injured party sign a release form to keep him from filing claims against them in the future should the injuries be worse than originally anticipated.

The injured individual did have complications with his injuries and tried to get the settlements set aside so that he could get more money based on the coverage, but because he signed the release forms and there was no evidence of fraud, the court would not set aside the settlement agreements. The court stated that the injured individual knew exactly what he was releasing and there was no mistake in the settlement. The insurance companies both provided clear statements of what they did and did not cover and provided compensation for the things they did cover. The release statements specifically said that the injured party could not sue again for the same fall even if the injuries got worse, so he could not file claims again.

One lesson to take away from this example is that it might be helpful to find out the extent of your injuries before you enter into any settlements or sign any release forms.

Court Explains the Requirements of a Settlement Agreement

Published on: October 23, 2012 | By Berniard Law Firm

Recently, in the State of Louisiana Court of Appeal for the Third Circuit, a case was decided that effectively laid out the requirements of a settlement agreement. These requirements are especially important because many cases are settled before they get to court. In fact, settlement is often preferable because it saves a significant amount of time, money, and it allows the parties to reach a compromise that they not only come up with themselves, but that is also acceptable to both parties. That way, the parties share the benefits instead of there being a clear-cut loser and clear-cut winner as is usually the situation should a case go to trial.

In this case, an individual was seeking to enforce a settlement agreement with an insurance company regarding a life insurance policy. The life insurance policy involved three beneficiaries; however, it was unclear as to when the money should go to each beneficiary. There may have been a contingent beneficiary. That is, the policy was set up so that if one of the beneficiaries had passed away prior to the money dispersion, then it would go to a different beneficiary. However, the insurance company was unsure of this stipulation, so they did not give out any money at all.

As a result of all of this confusion, one of the beneficiaries entered into negotiations with the insurance company in order to get at least some money out of the life insurance policy. Louisiana Civil Code, Article 3071, defines compromise as “a contract whereby the parties, through concession made by one or more of them, settle a dispute or an uncertainty concerning an obligation or other legal relationship.” Therefore, the parties in this case sought to compromise regarding the payment of the insurance policy.

In addition to defining compromise, the Court also points out that the settlement agreement must be in writing and signed by both parties as required by Louisiana Civil Code Article 3072. In this case, there was an oral agreement, but when the parties attempted to put the terms in writing, there was still dispute regarding the agreeability of quite a few of the terms of the settlement. They created drafts and sent them back and forth, but nothing was ever finalized by way of a signature from either party. The Court recognizes that there are no other cases where a settlement was validated even though neither party signed the final settlement agreement.

The Court also goes on to explain that contracts, which are the basis of a compromise, require that there be a “meeting of the minds.” That is, both parties should completely understand and agree to the terms in the contract. The contract embodies the intention of both parties and if the intention of both sides is not fully included in the settlement, then that settlement cannot be valid. In this case, both sides described other terms that were either not included in the agreement or that appeared, but they did not approve of their inclusion in the settlement. The Court notes that there was no “acceptance and acquiescent from both parties” in this case.

Although the settlement agreement can be included in more than one document, it is apparent that there was no such agreement. It based this conclusion on the testimony of both parties, lack of signature on the settlement agreement, and other communications between the parties at the negotiation stages in this case (such as letters between the attorneys that expressed displeasure with terms in the agreement). Therefore, the Court concluded that a settlement agreement did not actually exist and that it could not enforce a settlement agreement that does not actually exist.

Obtaining settlement agreements can be somewhat complicated because they involve getting both sides to agree to many different terms. However, they are very valuable because they allow the parties to avoid trial and get their conflicts resolved quickly. The Berniard Law Firm is always interested in solving our clients’ problems quickly and effectively.

Drilling Accident Shows Standards for Reasonable Care

Published on: September 7, 2012 | By Berniard Law Firm

A field service technician sued a crew boat operator and several entities related to the drilling operations when he was injured during a personnel basket transfer and a mobile drilling unit. The trial court, applying a “reasonable care” standard, granted summary judgment in favor of the drilling companies and the service technician, Callahan, appealed the decision.

Callahan, an employee of Cooper Cameron Corporation, was hired to help install, repair and replace equipment on the offshore oil well. While transferring the mobile drilling unit, the ship moved abruptly, causing Callahan’s back to pop and sharp pain to shoot through it. Callahan returned to his cabin and later executed a successful personnel basket transfer. Once he arrived on the barge, he reported his injury to the medic. Callahan argued various claims of negligence, revolving around the decision to transfer him to the barge in unreasonably dangerous conditions. However, according to the district court, since no employee of the crew boat directed Callahan to leave his cabin for transfer, these companies could not be held liable, particularly given Cooper Cameron Corporation’s “stop work” policy which gives employees the right to stop working if they find the conditions to be unsafe. Callahan clearly knew of this policy since he has used it before, but did not apply in these circumstances.

On appeal, Callahan claimed that the trial court made a mistake in finding that the conduct of the drilling companies (Diamond, Golf Logistics, Eagle Consulting, and LLOG) was reasonable and therefore in granting them summary judgment. Summary judgment is appropriate if “there is no genuine dispute as to any material fact”. FED. R. CIV. P. 56(a). A material fact is one that might affect the outcome of the case if it is found in favor of a particular party.

BP Refinery Sued for Negligence in Gas Release

Published on: September 1, 2012 | By Berniard Law Firm

Contractor company employees working at a British Petroleum (BP) refinery sued the oil company for negligence. Workers at the refinery reported a “weird” gas smell while they were employed at the factory. None of the gas monitors about the refinery sounded an alarm. About 100 employees went to the hospital but none showed any injury due to gas exposure.

The employees claim that the substance was carbon disulfide gas. The mask of one of the plaintiffs tested positive for traces of carbon disulfide gas but the lab technician who took charge of the mask noted that the mask had not been well maintained enough to be tested properly. When the district court found for the plaintiffs, BP appealed the verdict. BP argues that it was wrong for the trial judge to have instructed the jury on res ipsa loquitur and that without that instruction, the plaintiffs could not have shown that the company to be negligent.

Res ipsa loquitur is a doctrine used in certain types of cases when the circumstances surrounding the accident constitute sufficient evidence of the defendant’s negligence to support such a finding. Basically translated, the doctrine concludes that if an accident could not have come about by any other method than the one claimed, then the fact that the event happened is proof enough that it happened in the manner claimed; in other words, “the thing speaks for itself”. Res ipsa loquitur is applicable only when: (1) the character of the accident is such that it would not ordinarily occur in the absence of negligence; and (2) the cause of the injury is shown to have been under the management and control of the defendant. Using res ipsa loquitur, negligence can be inferred by the jury without evidence of wrongdoing.