Property Rights

Playstation Network to Return: Legal Concerns Still Remain

Published on: June 1, 2011 | By Berniard Law Firm

Sony announced yesterday that the Playstation Network (PSN) is set to return by the end of this week. Reports indicate access began to be provided to users starting on May 15 with different regions being incrementally phased in worldwide. Questions remain, however, as to the extent of previous breaches of the gaming network’s security and just how safe gamers are from having the incidences of May occur again.

With its restoration of access to Playstation and Qriocity users in US, Europe and Asia, Sony is ending a month of outage that was first spurred by a breech of the networks’ security. As we explored previously, that Sony has admitted that the breech occurred due to the exploit of a known vulnerability opens a rather clear inquiry of just how negligent the electronics giant was in the matter. Down since April, the Playstation gaming network and Qriocity, a movie and music service, have been sorely missed by users that frequently accessed the services for their entertainment needs. However, with that access came the disclosure of information that is now likely in the open. What this information can be used for, and the subsequent ramifications for the users, remains to be seen but there is no doubt the courts will begin seeing discussion on the damages caused.

Sony has been adamant about the upgrades they have made to their system, stating they have “been conducting additional testing and further security verification of our commerce functions in order to bring the PlayStation Network completely back online so that [their] fans can again enjoy the first class entertainment experience they have come to love.” This statement, made by Sony Executive Deputy Vice President Kazuo Hirai, also came with an expression of gratitude for the patience and support offered by fans. The reality of the situation, however, is that those whose information was disclosed have zero patience for an invasion of their privacy.

Playstation Network Breeched Again in Late May

Published on: May 25, 2011 | By Berniard Law Firm

In what can only be considered a confusing lapse in digital security, Sony announced another breach of their network security in late May. This news comes on the heels of the major shutdown that aggravated a world of gamers. As the length of downtime nears a month, questions linger as to how much knowledge the electronics giant had regarding system vulnerabilities and why a breach was what it took to search for solutions.

Relating to a vulnerability regarding password resets, the most recent security breach is a major headache for Sony. The Playstation 3 Network, albeit free, is relied upon by millions of users for online gaming and, more importantly, includes a wealth of personal information for all of these users. Within the first security breach, this personal information, unfortunately, also includes billing details that could lead to vulnerability for customers who only wished to enjoy their games as sold.

Regarding the most recent breach, reports indicate that users will know their account has been compromised if they received an email indicating that their password had been changed. While the information made vulnerable in this act remains unclear, it is just yet another incident in a problematic series of events that raise significant questions about the protection being utilized by Sony and the amount of negligence that may be at play. Negligence claims involve an injured party suing a defendant for the damages suffered that were avoidable through the direct intervention of that party. In short, negligence claims deal with the ‘avoidable;’ news reports that have come out regarding this matter indicate that Sony was aware of the vulnerability.

Third Circuit Explains Process for Court’s Interpretation of Insurance Policy in Vernon Parish Wreck

Published on: May 16, 2011 | By Berniard Law Firm

Previously on our personal injury blog, we have seen that an automobile liability insurance carrier’s coverage of a substitute vehicle is determined by the language of the insurance policy. Courts apply “ordinary contract principles” and interpret the policy’s language, and this interpretation “is usually a legal question that can be properly resolved in the framework of a motion for summary judgment.” Indeed, when the language of a policy is “clear and unambiguous a reasonable interpretation consistent with the obvious meaning and intent of the policy must be given.”

The court’s interpretation of an insurance policy’s language was central to the summary judgment in the recent case of Newman v. State Farm Mutual Auto Insurance Co., et al. In this case, the Third Circuit Court of Appeal for the State of Louisiana reviewed the Beauregard district court’s grant of the Clarendon American Insurance Company’s motion for summary judgment. On June 30, 2007, Ann Newman’s car was rear-ended by Leslie Roshong on Louisiana Highway 109 between Leesville and Vinton. Roshong was driving his personal vehicle, a 2006 Dodge Ram pickup truck, to a site in Vinton where he was to set up a mobile home that he moved from DeRidder as part of his business, Arrow Mobile Home Movers. Newman filed suit against Roshong and the insurer of his truck, State Farm. She later amended her complaint to add Clarendon, the provider of auto liability insurance for Arrow. Clarendon filed a motion for summary judgment, asserting that it did not cover Roshong’s personal truck. The trial court agreed and dismissed Newman’s claims against Clarendon. On appeal, Newman argued that two of the endorsements in Roshong’s policy with Clarendon which concerned interstate commerce extended coverage to the accident. The court found these endorsements inapplicable because Roshong’s truck did not carry a permit from the Interstate Commerce Commission (as required by one) and did not leave the state of Louisiana on the day in question (as required by the other). The court concluded that “there is no genuine issue of material fact as to coverage under the Clarendon policy, as under the clear language of the policy, neither [endorsement] provision provides coverage for the accident at issue.” Further, “the trial court committed no error in its interpretation of the Clarendon policy.” Thus, the court upheld the summary judgment in favor of Clarendon.

It is understandable that Newman would want to ensure to include in litigation all insurance companies who may be liable for her damages related to the accident. However, courts will not overlook the plain language of an insurance policy to invent ways for a litigant to recover from an insurer who had no contractual connection with the incident in question. This decision reflects Louisiana’s public policy concern that insurance companies must be permitted to limit their liability by contract in order to, for example, cover a driver’s personal vehicle without committing to cover other vehicles owned by the driver’s business. Without this ability to define coverage, insurance companies would face too much exposure and would likely withdraw from the market.

Smooth Away Product Not All It’s Purported to Be

Published on: May 9, 2011 | By Berniard Law Firm

Infomercials, commonplace in the wee nights for insomniacs, often push the envelope of how groundbreaking and innovative their products are. Using notions of mystery and incredible results, these product “debuts” draw the viewer in by promising results, and features, that commonplace items cannot. While most people would take these promises with a grain of salt, the notion that the product may not even resemble the claims presented is something that seems improbable. In the case of “As Seen on TV” product Smooth Away, this actually is the case as plaintiffs have begun to voice their displeasure of the false reality surrounding this hair removal item.

Smooth Away is a hair removal product that is pitched through the premise that it is a pain-free solution for hygiene purposes. Advertised as an instant and painless manner to tackle shaving needs, Smooth Away has had a very solid sales cycle due to these very attractive promises. The truth, however, behind the New Jersey-based corporation’s product is not so simple. While their claims are smooth, the truth is much more rough and cloudy.

Marketed online and in local stores like Walgreens and others, it is without question that Smooth Away has found a niche in the marketplace. What’s more, sales appear to be solid as buyers, mostly women, are looking for what is being promised: a simple, painless and easy way towards hair removal. The cost of trusting this product, though, is enough to be concerned with.

Hurricane Katrina Case Allowed to Move Forward

Published on: April 17, 2011 | By Berniard Law Firm

On August 29, 2005, Hurricane Katrina devastate much of the Gulf Coast, prompting the Louisiana Legislature to enact Acts 2006, which extended the prescriptive period within which insured’s were allowed an additional year to file certain claims under their insurance policies for losses incurred by the storms. Despite many insurance contracts granting only one year for insured’s to file claims, this prescriptive period extension allowed many residents more time to file as a result of the difficult circumstances caused by the storm. The Louisiana Supreme Court recently were asked to determine whether the Plaintiffs’ lawsuit, seeking damages from the Louisiana Citizens Property Insurance Corporation (LCPIC), filed nearly three years after Hurricane Katrina had prescribed. In an earlier decision made by the Fourth Circuit Court of Appeal, the prescriptive period was held to be interrupted by a timely filing of a class action petition against the insurer, which included the Plaintiffs as putative class members. Time is of the essence when filing lawsuits, here, the Louisiana Supreme Court held that the plaintiffs were timely and permitted to continue their lawsuit against LCPIC.

The plaintiffs, like so many other Gulf Coast residents, suffered extensive property damage as a result of Hurricane Katrina. Maneuvering through the insurance filing process became tedious and very difficult, the plaintiff’s constantly received refusals by the insurance company to make any payments on their policy limits. Thus, the plaintiff’s turned to legal help in order to obtain help to rebuild their homes and their lives. On June 27, 2008, the Plaintiffs filed a petition against their insurer, LCPIC, seeking payment of their policy limits and damages, including damages for emotional distress and mental anguish. The allegations included: The plaintiff’s property was completely destroyed during the storm, the properties in question were covered by a policy of insurance issued by the defendant LCPIC, yet, the company refused to pay the policy limits. In response, LCPIC filed an Exception of Prescription, arguing that the suit was not filed within one year of loss and that the extended period of prescription provided by legislation had also expired. The trial court initially granted the defendant’s exception of prescription and dismissed the plaintiff’s claim with prejudice, finding that they had failed to file their claim timely. However, on appeal the trial court’s decision was reversed, the prescriptive period had been interrupted by the timely filing of a class action against the defendant insurer in which the Plaintiff’s were putative class members.

Prescription, as defined by Louisiana’s civilian tradition, is defined as a means of acquiring real rights or of losing certain rights as a result of the passage of time. In the case of Cichirillo v. Avondale Industries, Inc, the court reasoned that prescription is designed to “afford a defendant economic and psychological security if no claim is made timely and to protect the defendant from stale claims and from the loss or non-preservation of relevant proof.” Prescription itself is a safety measure that was created in order to prevent defendants from the constant fear of a lawsuit twenty or more years after the fact. Conversely, the other type of period that exists in Louisiana, is liberative prescription. This is a period of time fixed by law for the exercise of a right, yet, a contractual limitation period is not a period of time fixed by law, it is a fixed agreement between the parties. Time is of the essence, yet, there are exceptions to the rule, this is exemplified by the fact that Louisiana extended the initial one year prescriptive period for property damage claims against insurers, for one additional year, allowing victims fo Hurricane Katrina more time to organize the various aspects of their lives that were devastated by the storm.

The primary issue in this recent Louisiana Supreme Court decision, was whether or not the class action suit in which the plaintiff’s were putative class members, interrupted prescription, thus, allowing them continued access to their legal claim against the insurance company. Louisiana civil code article 1793 states, “Any act that interrupts prescription for one of the solidary obligees benefits all the others.” Thus, by becoming putative class members in the initial lawsuit against the insurance company, the plaintiff’s maintained their legal claims against the defendants, allowing them to pursue further legal action against the company despite the passage of time. The court of appeal held that the filing of the class action suits against LCPIC suspended or interrupted the running of prescription against the plaintiff’s property damage claims since they were found to be putative class members when the original class action petitions were filed.

The defendant insurer argued that the contract, which provided one year from the date of the property damage, was the governing time period, even over the statutory extension provided by the Louisiana Legislature. The defendants supported this assertion by declaring that the public interest is served by permitting the insurer to limit the time of its exposure, as Louisiana Civil Code 802 states, “any suit not instituted within the specified time and any claims relating thereto, shall be forever barred unless a contract or the parties thereto provide for a later time.” However, even though the plaintiff’s did not unilaterally file a claim against the insurer within the one year contractual time period, they did enter into the class action against the insurer within the aforesaid time period. Upon the filing of the class action, liberative prescription on the claims arising out of the transaction or occurrences described in the petition were suspended as to all members of the class. The insurance contract provided a contractual time period, not a prescriptive time period, as a result, the additional one year time period afforded to Gulf Coast residents affected by the storm governs. The insurance company attempted to assert the contractual nature of its agreement to circumvent the application of the general codal and statutory rules of prescription is adverse to Louisiana civil Code Article 3471, which clearly circumscribes the limits of any contractual agreement attempting to incorporate a limitation period different from that established by law. Specifically, Louisiana Civil Code Article 3471 states:

A juridical act purporting to exclude prescrption, to specify a longer period than that established by law, or to make the requirements of prescription onerous, is null.

Thus, parties cannot “opt out” of prescriptive periods created by general codal and statutory rules. The plaintiff’s entered into a class action within the prescriptive time period, this interrupted the passage of time that would have taken away their legal rights to sue the insurer. Thus, the subsequent suit against the defendants was timely, and despite the contractual language that attempted to circumvent the Louisiana Legislature, the plaintiff’s filing was timely.

Insurance Company to Pay Damages to Mother of Man Killed in Automobile Accident

Published on: April 5, 2011 | By Berniard Law Firm

On May 28, 2005, Brian Smith was delivering a car as a surprise gift to his mother. Chaos unfolded, however, when a trailer came loose in Morehouse Parish from a truck being driven by one of the defendants, Joshua Pruett. The truck, at the time, was being utilized as part of his delivery duties for Broubar, Inc., which was doing business as Acadia Crawfish. The trailer crossed the centerline and collided with the driver’s side of Mr. Smith’s car, and Mr. Smith died as a result of the injuries he sustained in the accident.

Mr. Smith’s mother, Gracie Smith, filed lawsuits against Acadia Crawfish, Pruett, Scott Broussard (the owner of Broubar, Inc.), and Farm Bureau as liability insurer and as Brian Smith’s uninsured motorist (UM) insurer. She later filed a separate lawsuit against Progressive Security Insurance Company and Broubar, Inc. The lawsuits were later consolidated into one lawsuit.

All of the parties to the lawsuit agreed that the defendants were liable for the accident because it was clear that the ball on the truck driven by Mr. Pruett was too small for the trailer hitch and he had not used any safety chains to ensure that the trailer would remain attached to the truck. They went to trial on the issue of damages for survival and wrongful death.

A survival action compensates the survivors for the damages suffered by a victim from the time of injury to the moment of his or her death. The cause of action is “inherited” – it belongs to the victim and is passed on at death. Damages in a survival cause of action can include the victim’s pre-impact fear, and if there is even a tiny amount of evidence showing any pain of suffering by a victim before his death, damages are warranted. The evidence in this case showed that the victim undoubtedly was in great fear as he attempted to avoid the collision. He had massive abdominal and chest injuries, with partial amputation of his lower left leg and hemorrhage in his brain. The Second Circuit therefore ruled that an award of $250,000 was not an abuse of discretion.

A wrongful death action, on the other hand, compensates the beneficiaries, usually family members, for their own injuries which they suffer from the moment of the victim’s death on. In this way, the wrongful death action belongs to the survivors, not the victim. Usually, the plaintiff in a wrongful death action can claim loss of love and affection, loss of services, loss of support, medical expenses and funeral expenses. In this case, Mr. Smith had supported her financially and was very close with her, more so than any of his eleven siblings. Awards for lost future income or support are, however, intrinsically difficult to calculate with absolute certainty and a plaintiff must be able to show an amount with reasonable certainty, not rely on mere speculation. Mrs. Smith was a widow and her only source of income was Social Security. As a result, she relied heavily upon the money her son often gave her. Except for an error in calculating the value of the car that Mr. Smith was driving, the appellate court affirmed all other aspects of the wrongful death action and Mrs. Smith was awarded a total of $584,368 for compensatory damages, loss of support, loss of services, and funeral expenses.

Progressive Insurance appealed the trial court’s determination that it was the primary insurance carrier for a substitute truck and was therefore liable for damages. Mrs. Smith had settled out of court with Farm Bureau for $100,000 under the liability coverage and $10,000 under the UM coverage. Farm Bureau then wanted to be indemnified by Progressive Insurance and filed a cross claim against Progressive. If the truck, which was a temporary truck (a 1998 Dodge) being driven by Mr. Pruett because the one he usually drove was being repaired, was insured by Progressive, then Progressive would ultimately be responsible for paying damages. The 1998 Dodge in connection with the trailer was found to be one vehicle and was a “temporary substitute vehicle” which, under La. R.S. 22:1296 requires insurance companies to extend coverage to temporary substitute motor vehicles. The 1998 Dodge was owned on paper by Broubar, Inc., but was normally used by Mr. Broussard, and he considered it his personal truck. The trial court found that all of the companies that Mr. Broussard owned were operated independently, so the truck could not be seen as an uninsured vehicle belonging to Broubar, Inc. (which would disqualify it from being a temporary substitute vehicle and, therefore, being covered by the policy). An insurance company cannot escape liability by not defining “temporary substitute vehicle” in its policy. The trial court ordered Progressive to pay all the damages, and that determination was upheld on appeal.

Although obviously complex, insurance dispute is a subject matter that attorneys like ours feel comfortable navigating. If you have any questions regarding a matter like this, it is important to consult with an attorney about your legal rights.

Chinese Drywall Claims Continue as Thousands Still Face Problems

Published on: March 25, 2011 | By Berniard Law Firm

In a recent decision, a Palm Beach County, Florida, judge ruled that because homebuilders did not manufacture the defective drywall that eventually caused damage to homes, and because they were not within the “chain of distribution,” they could not be held strictly liable for the alleged defects. Strict liability would make it easier for a potential victim to recover money from the homebuilder because the victim would not have to prove that the homebuilder had been negligent in any way. The victim would merely have to show that a product standard was not met along the supply line that led to their injury.

In this case, the homeowner, Marlene Bennett, sued the homebuilder under several theories: 1) breach of contract, 2) tort law, and 3) private nuisance law. The plaintiff asserted damages against the homebuilder, installer, supplier, and manufacturer of the drywall for installing faulty materials, economic losses for declines in home values, and personal losses for the alleged nuisance caused by the drywall emitting fumes. All of these claims, and defendants, are designed to cover the wide spectrum of expenses and responsibilities that can develop as a result of this caustic material being installed and slowly ruining a family home.

Upon going to trial, the case hit its first roadbump when the judge did not let the private nuisance claim go forward. Usually, nuisance law claims are used when someone is unreasonably interfering with the private property rights of another. The judge analyzed Florida law and decided that nuisance law usually had to do with things tied to the land itself, not parts of the house like drywall. The plaintiff may still be able to claim under a breach of contract claim (for breach of implied warranty or other claim) but because there are so many parties involved from the manufacture of the drywall to its installation, it is difficult for plaintiffs to recover damages.

It is important, however, to note that this is only one case, and was in a Florida court, not a Louisiana court. It has not yet been adopted by other judges or upheld by higher courts, and the case law is still developing in this area. It is possible that a Louisiana court could decide the case completely differently. The proper attorney with the most thorough understanding of product liability and insurance dispute (like those at our firm) will use legal theories and tools like this to navigate the judicial process.

In addition to this case, there are a number of ongoing legal efforts in the courts right now in Louisiana, Virginia, California, and Florida dealing with the issue of whether builders can be held liable for defective drywall. Much of the drywall involved in the litigation was manufactured during a specific period of time in China and believed to cause damage to electrical wiring and fire safety equipment.There has been a settlement in federal court involving Knauf Plasterboard Tianjin, which produced one-fifth of the defective drywall, recently settled in federal court to help pay to fix the damage their defective drywall caused. Homeowners may choose to have their homes repaired or to sue for money damages and do the work themselves.

Our firm has made steady progress within the courts and continues to take on clients looking to receive the damages they deserve due to this defective wallboard. If you are a homeowner with defective drywall that is emitting fumes, lowering your home value, or other damage, we may be able to help you.

Interpreting Insurance Policies: What does a Term really Mean?

Published on: March 19, 2011 | By Berniard Law Firm

Insurance policy terms may appear to be easily understandable and concise. However, the interpretation a lay person may give to an insurance policy agreement’s meaning versus a court’s interpretation of the same policy, may substantially differ. It is true that under Louisiana law, words in a contract are presumed to have the plain and ordinary meaning they are generally given. However, an insurer may bear the burden of proof and demonstrate that a certain provision in an insurance policy exempts coverage for such an event in question.

A recent decision by Louisiana’s Second Circuit Court of Appeal, explored the meaning of an insurance policy in order to determine whether or not the insurer was responsible for the plaintiff’s additional damages. The court looked at the totality of the circumstances to aid their decision. The facts are as follows:

In DeSoto Parish, a series of connected collisions occurred which permanently injured one man, and killed another. The chain of events started with Mr. Mike Miles McCauley, who was employed by the defendant, Steve Kent Trucking Inc., he traveling in his 18-wheeler on Highway 5 through DeSoto Parish. Mr. McCauley dropped his cell phone on the floorboard of the truck and decided to retrieve it, at this point he crossed the center line of the highway, then overcorrected and lost control of the vehicle. The 18-wheeler turned over on its side and onto a vehicle, driven by the plaintiff, Henry Washington, who was traveling in the opposite direction on Highway 5. As a result of the size and ass of the 18-wheeler, Mr. Washington’s vehicle was pushed into a small body of water, the 18-wheeler was still sliding at this point and collided with a car driven by Allan C. Richard, who was killed instantly. Mr. Washington suffered numerous serious injuries which left him permanently incapacitated.

Mr. Washington at trial, sought to recover for numerous damages as a result of the serious injuries he incurred from the accident. Mr. Washington sought past and future mental and physical pain and suffering; past and future physical disability and physical impairment; past and present and future loss of enjoyment of life; past and present and future medical expenses; and the loss of economic opportunity. The trial court entered a judgment allowing Mr. Washington’s curator to settle claim arising from the accident for $4.5 million. The defendant insurer, Greenwich paid $4 million and Steve Kent Trucking, Inc., paid $500,000. The only claim left at this point, was the plaintiff’s claim against defendant insurer Greenwich for an additional $1 million in coverage remained. Greenwich filed a motion for summary judgment and subsequently won, as a result of the interpretation of a term in the policy agreement. The defendant insurer, Greenwich was released from liability to the plaintiff on the basis of the court’s interpretation of one single phrase within the policy, “one accident.”

The defendant insurer relied on the company’s interpretation of the policy agreement in order to evade additional liability to the plaintiff. The defendant argued that the policy specified a $5 million “per accident” limit and that an accident is defined as “the continuous or related exposure to the same exposure to the same conditions resulting in bodily injury.” Greenwich also contended that the limit was a combined single limit.” Essentially, this means that according to the policy agreement, if there are multiple parties that are involved within event, their ability to collect for any resulting damages will be combined and they may all collect no more than $5 million collectively. The court reasoned that there was one accident in this matter, although there were two collisions. Greenwich’s liability was limited to no more than $5 million per accident, thus, the company had paid the policy limits by settling with Mr. Washington for $4 million and the second fatally injured driver’s survivors for $1 million. Therefore, according to the court’s interpretation, the defendant insurer had fulfilled their contractual obligation under the policy and were dismissed. Obviously, the plaintiff was not satisfied with this result in consequence to the numerous future medical procedures needed as a result of the accident, so he appealed the decision.

The appeal consists of essentially a battle of interpretations. On the one hand, the plaintiff assert that under the language of the policy, “accident” and “loss” are different and alternative bases of coverage. Further, they urged that Mr. Washington and Mr. Richard, the deceased second driver involved, sustained separate losses and the policy limit is $5 million per loss. The focal concern of the court, is whether or not the $5 million policy limit is to be applied to each person who suffers bodily injury or death, not all such persons. On the other hand, the defendants assert that the plain, ordinary meaning that Louisiana asserts shall be given to contract terms, is that “per accident” a maximum of $5 million shall be allocated. Here, even though there were two victims, they were involved within one incident that caused such injury, thus, they fulfilled the policy limit by allocating between the two victims, a total of $5 million.

Interpretation of an insurance policy is usually resolved by a summary judgment motion, which is what the defendant insurer claimed. When determining whether a policy affords coverage for an incident, the insured bears the burden of proving that the incident falls within the policy’s terms. The court determined that a lack of coverage under the insurance policy was appropriate because there was no reasonable interpretation of the policy, and when applied to the undisputed material facts shown by the evidence supporting the motion, coverage was not additionally afforded to the plaintiff.

The court in this case, made their determination based on the totality of the circumstances. The accident or occurrence was explored in order to determine the extent of the harm, the seriousness of the injuries, and the insurance coverage in light of the facts presented by the various factors involved. The 18-wheeler fatally killed one man as a result of sliding into the man’s vehicle, and caused the other driver to become permanently incapacitated. These injuries occurred from one event, by one negligent act of the driver, and therefore, was not going continue or persist in injuries to the plaintiff. rather, the plaintiff was suffering as a result of the one act by the driver, thus, according the court’s interpretation of the insurance policy, the plaintiff and the deceased driver’s survivors together, obtained $5 million from the injuries they sustained from the tragic accident. Thus, the insurer fulfilled their contractual obligations and were not responsible for any additional amounts urged by the plaintiff.

Interpretation is a powerful tool, as this case illustrates, contractual terms may be difficult and hard to understand.

Bossier Parish Police Jury Ordered to Repair Faulty Pipes

Published on: March 15, 2011 | By Berniard Law Firm

A recent ruling by the Second Circuit Court of Appeal for the State of Louisiana ordered the Bossier Parish Police Jury to repair the pipes running under the land that the plaintiffs, Steven and Melanie Petchak, own in Bossier Parish. It was also ordered to pay damages to the plaintiffs for damage to their house.

Mr. and Mrs. Petchak bought Lot 363, which was part of a subdivision plat (Subdivision No. 5), in 1994. In the conveyance records for Subdivision No. 5, several drainage easements, or rights of way, were referenced. These included a 25-foot easement running north to south and a 10-foot easement running east to west. The 10-foot easement extended 5 feet into the Petchaks’ lot. In 1978, the Bossier parish Police Jury had enacted a resolution which agreed to maintain the drainage facilities of Subdivision No. 5. Additionally, Ordinance 509 of Bossier Parish stated that the Police Jury were to forever have a right of way in order to maintain the drainage channels, and that no buildings were to be erected on the right of way.

The house that the Petchaks bought was built between 1983 and 1985, and the Petchaks purchased the home in 1994. They soon noticed a sinkhole developing on their property, and found out that the previous owner had noticed a different sinkhole, in a different place. The previous owner had called the Police Jury, who filled in the sinkhole twice, first with dirt and later with concrete. The Petchaks called the Police Jury about the new sinkhole, which was then filled in with dirt.

Ten years later, in 2005, the Petchaks began to notice problems with their home, including broken windows, sticking doors, and damaged flooring, walls, and woodwork, which were concentrated at the part of the house closest to the sinkholes. A new sinkhole appeared, and the Petchaks hired a civil engineer to inspect the house, who recommended that the drainage system be repaired before attempting to repair the home’s foundation.

In January 2006, the parish engineer offered to fix the drainage system, but only if the Petchaks would agree to sign a release for any past and future damages associated with the problem, which the Petchaks refused to do.

After more investigation, it was discovered that the pipe was not constructed in accordance with good engineering practices. Despite the pipe changing direction, the parish had not installed junction boxes, which would have stabilized the joint and prevented the separation of the concrete. Because the pipe did not contain any junction boxes, experts believed that either water was escaping or dirt was infiltrating in, causing destabilization of the soil around the drain. The drain was likely bedded in a granular fill, which is a quick-to-erode material, instead of the usual clay. All of this together caused a massive loss of support soil from under the foundation of the house and resulted in damage to the house.

The Second Circuit Court of Appeal decided that the recordation of the easement and Ordinance 509 created duties on the part of the Police Jury to maintain the drainage system as well as a burden on the owner of the land to let the Police Jury onto the land when required. Although the suit would not have been allowed if it were a tort suit under sovereign immunity, it was allowed to go forward because it was based on the special relationship between the Petchaks and the Bossier Parish Police Jury created by the easement. The court also pointed out that prospective owners usually do not conduct underground surveys of the condition of the utilities in easements. Additionally, the Petchaks knew that the right of way existed, could see the manhole cover which was evidence of the right of way, and trusted that the easement would not make the condition of their property worse. The court also found that the Police Jury constructively knew of problems with the drainage system by 1992, when the first sinkhole was reported, so it could not at this time claim lack of knowledge.

Natchitoches Parish House Fire Ignites Dispute Over Insurance Coverage

Published on: March 3, 2011 | By Berniard Law Firm

In a recent post, we reviewed the Nolan v. Mabray case which discussed the requirement under Louisiana law that an insurance company must mail a written notice of its intent not to renew an existing policy at least thirty days prior to the policy’s expiration. La.R.S. 22:636.6. The purpose of the notice is to provide the insured sufficient opportunity to obtain insurance with another company before the existing policy expires. In the event of a dispute, the insurer faces the initial burden to prove that it mailed the required notice. Then, the property owner may rebut this presumption by offering evidence that the notice was never delivered. The ultimate factual determination must be made by the jury. The recent case of Johnson v. Louisiana Farm Bureau Casualty Insurance Co. offers another look at the rule’s application.

In 2001, Janice Johnson bought a homeowner’s insurance policy from the Louisiana Farm Bureau Casualty Insurance Company (“Farm Bureau”) for her home in Campti. She set up a bill-pay debit arrangement with her bank under which her monthly premiums were automatically paid to Farm Bureau. In 2006, after completing a routine inspection of Johnson’s property, Farm Bureau decided not to renew the policy when it expired the following July. Accordingly, on May 2, 2007, Farm Bureau mailed a written notice of non-renewal to Johnson and the policy expired on July 10, 2007. Tragically, Johnson’s house was destroyed by fire on November 7, 2007. Farm Bureau rejected Johnson’s subsequent claim for total loss on the grounds that she did not have a policy in place at the time of the incident. Johnson filed suit on July 24, 2008 seeking monetary relief for the losses she sustained in the fire. In her petition, Johnson asserted that she was covered by the
policy and that she was not notified that the policy had expired until after the fire. Farm Bureau responded with a general denial, arguing that Johnson was provided with written notice of non-renewal and that the policy was not in effect at the time of the fire. At the conclusion of a jury trial, the jury found Farm Bureau had properly mailed the non-renewal notice on May 2, 2007 as required under Louisiana law. However, it also found that the notice had not been delivered to Johnson. The trial court entered judgment in favor of Johnson and awarded her damages in the amount of the policy limits: $297,000 less a $500 deductible. Farm Bureau appealed, contending that the jury “committed manifest error” and was “clearly wrong” in determining that the non-renewal notice had not been delivered.

The Third Circuit Court of Appeal reviewed the trial record which contained the evidence Johnson offered to rebut the presumption of delivery. Johnson testified that she always opens every piece of mail she receives except for her bank statements, and that she never received the notice Farm Bureau. Johnson’s testimony was corroborated by her sister, who often picked up Johnson’s mail from the post office box which was Johnson’s registered address on her insurance policy. In response to Farm Bureau’s argument that Johnson should have known that her policy was expired because the company stopped withdrawing payments in May 2007, Johnson stated that she did not routinely open mail from her bank or reconcile her checking account. The court noted that “the jury was able to take [all of this] testimony into consideration” in making “a determination of the credibility of the witnesses.” Mindful of its duty to “afford great deference to the factfinders’ determinations,” the court concluded that, “although some of the testimony presented is questionable,” it could not find “manifest error in the jury’s credibility determination nor in their determination that the notice of non-renewal was not delivered to Johnson.”

The Johnson case, much like the Nolan case, turned on the critical role that the jury plays in settling issues of fact. Even if an appellate court believes after reviewing the record that its credibility determination is more accurate than the jury’s, it cannot substitute its own view unless it finds that the jury’s conclusion was based on testimony “so absurd that a reasonable person would not credit it.” Clearly, in this case, Johnson’s even somewhat suspect testimony did not rise to this level.