Unfair Business Practices

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.

After Car Accident Death, Insurance company Refuses Liability Coverage Claim

Published on: February 27, 2011 | By Berniard Law Firm

The sad fact is that everyday accidents happen on our nation’s roads. Especially tragic are ones where a family member is killed. Combined with the pain of losing a
loved one comes the burden of dealing with insurance policies, who is insured and who is uninsured at the time
of the accident and trying to get coverage. In prior posts. we have discussed how liability is hard to assign at times, especially when it takes a fact-finder to establish who is at fault. In this Louisiana court case, an insurance company refused to pay uninsured/underinsured motorist (UM) liability coverage to the daughter of the deceased driver of a vehicle which was struck by an oncoming motorist.

In March of 2006, Donald Anderson was killed in a car accident when his car was hit by an oncoming motorist, Gordon Pugh, Jr. During the time of his death, Donald Anderson was within the scope of his employment with Labor Finders. Labor Finders had a liability insurance policy issued by National Union which was in effect at the time of Anderson’s accident. After the accident, Anderson’s daughter filed a survival and wrongful death action naming Pugh and his insurer as the defendants. Several months later in December, Anderson amended her petition to include National Union as the defendant. Anderson claimed that since her father was insured under the liability policy issued by National Union to Labor Finders at the time of the accident, then he was entitled to the mandated uninsured/underinsured motorist (UM) insurance. National Union denied this fact while Anderson was able to settle the claims with Pugh’s insurer. National Union filed for summary judgment and the trial court stated that their policy was clear, unambiguous and that under the terms the policy provided, Donald Anderson was not an insured at the time of the accident to whom it could afford coverage. Therefore, the trial court granted summary judgment in favor of National Union leaving Anderson with nothing after her father’s death.

Summary judgments are reviewed based on material facts in order to avoid a full scale trial. The courts grant this motion when there is no issue as to material facts, and the moving party is entitled to judgment as matter of law. In this case, it was up to the Anderson to show that the insurance company was not entitled to judgment as a matter of law.

Insurance policies in the state of Louisiana function much like contracts, and are, therefore, interpreted as such. When the court interprets an insurance policy, it generally interprets the intent of the parties in forming the contract. In order to get to the common intent of the parties, the court looks primarily at the language of the insurance policy; Louisiana courts have struggled with this because at times, the technical meaning of the words is hard to differentiate from the generally prevailing meaning. If words in an insurance contract have a “technical meaning” then this meaning must be applied when the contract is interpreted. In addition to interpreting the meaning of words, each provision and section of this contract must be interpreted in light of the other provisions. Matters become more complex here because one provision cannot and should not be interpreted at the expense of another. Should the court find that words in an insurance contract are clear and explicit, it must strictly apply those words as written. Things become more difficult when ambiguities in the contract still remain even after the general rules of the contract have been applied; this may cause problems for both the policy holder and the insurance company.

All liability insurance policies issued in the state of Louisiana are required to issue UM coverage equal to the amounts in liability coverage when there is no express waiver of reduction of the UM coverage. This type of policy only requires that the person be injured by a UM. To simplify this complexity, there exists a test to determine whether a person qualifies for UM coverage under liability insurance. The test is to determine whether this person would be covered if they were liable for the accident.

In this case, National Union maintained that Donald Anderson was not an insured under the original terms of the National Union Policy. A section of the policy clearly stated that all Labor Finders’ employees (which Anderson was at the time of the accident) were insured as long as they were within the score of their employment at the time of the accident (Anderson met this criteria as well). A reader can see that the plain language of the contract points to the fact that Anderson was insured at the time of his accident, unless there was some exclusion.

The caveat here is that insurers have the right to limit coverage in any way they desire as long as these limitations are clearly set forth in the contract. It is at times like these that you need a professional in the field who will know how to maximize coverage. Coverage exclusions are construed strictly against the insurer. In the current case, the policy contained an Endorsement which stated that National Union shall not pay for any damage which arises out of aircraft, auto or watercraft injury owned or operated by the insured. Anderson fell into this exclusion because his injury and subsequent death arose out of the operation of his own vehicle. While Anderson fell into a clearly stated exception in the policy, many other endorsements are more ambiguous and require thorough interpretation and scrutiny.

Berniard Law Firm Investigating Unfair AT&T Overage Charges

Published on: February 2, 2011 | By Berniard Law Firm

While AT&T has become renowned across the country because of its success with Apple’s iPhone, a new lawsuit is developing regarding data overbilling that may see the communications giant seeing red. The Berniard Law Firm, as part of its ongoing efforts to protect consumers from unfair company policies, is looking into nationwide reports that AT&Ts billing practices are unfair and have left people charged for services they did not utilize.

Reports are emerging that AT&T may be billing customers a set expectation or presumed usage that does not take into account actual service utilization. In test cases, some are finding that, despite all data-based services being turned off and the device unused, data usage charges are still occurring. While the overage is relatively small, combined with the millions (some estimate more than 6 million) of cell phones out there, AT&T stood to profit a serious amount of money. As this money is derived from overage fees, especially against those with 200 MB plans, the effects could be widespread and amount to millions of ill-gained dollars.

Unfair business practices often rely upon these sort of seemingly trivial discrepancies that, in the end, turn out to lead to surprisingly large amounts of money. The DataPlus plan, which provides AT&T users with 200 MB of data for $15 per month, is the minimum required for the iPhone. When one reads the fine print on AT&Ts website regarding the DataPlus plan, you can see that exceeding the initial data allowance (200MB) leads to a customer being automatically charged an additional $15 for each additional 200 MB provided. As these overage “allowances” do not roll over but, instead, must be used in the billing period they were charged, it is inherently possible that hundreds of thousands, if not millions, of AT&T customers went just “a little bit over” and ended up being charged $15. Because AT&T does not take into account this possibility “silent” connectivity that can lead to overages despite no clear usage, it is definitely possible to go over without knowing it despite carefully planning your usage. This simply is not only unfair but unlawful.