Insurance Defense Archives - MBLB /insurance-defense/ Trust anchors everything we do Thu, 01 Dec 2022 00:17:42 +0000 en-US hourly 1 https://mblb.com/mblb/wp-content/uploads/2020/10/mblb_favicon2020-150x150.png Insurance Defense Archives - MBLB /insurance-defense/ 32 32 COVID, Cajuns and Raw Oysters: A Tale of Business Interruption Insurance https://mblb.com/insurance-defense/covid-cajuns-and-raw-oysters-a-tale-of-business-interruption-insurance/#utm_source=rss&utm_medium=rss&utm_campaign=covid-cajuns-and-raw-oysters-a-tale-of-business-interruption-insurance Wed, 30 Nov 2022 23:38:02 +0000 https://mblb.com/?p=14605 Since the start of the COVID-19 pandemic and lockdowns, there has been a brewing and boiling conflict between business owners and their insurers. Did the pandemic and the attendant lockdowns cause a covered interruption of business activities? In Louisiana, we may soon find out. On November 22, 2022, the Louisiana Supreme Court granted writ of … More»

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Since the start of the COVID-19 pandemic and lockdowns, there has been a brewing and boiling conflict between business owners and their insurers. Did the pandemic and the attendant lockdowns cause a covered interruption of business activities? In Louisiana, we may soon find out. On November 22, 2022, the Louisiana Supreme Court granted writ of certiorari[1] to review the Louisiana Fourth Circuit Court of Appeal’s ruling in Cajun Conti LLC v. Certain Underwriters at Lloyd’s, 2021-CA-0343 (La. App. 4 Cir. 06/15/22), reh’g denied, a case about business interruption insurance vis-à-vis the COVID pandemic.

In the trial court

To kick this matter off, Plaintiff, operating a restaurant in New Orleans, filed a Petition for Declaratory Judgment seeking a declaration that their all-risks insurance policy provided coverage for any loss or damage caused by direct physical loss of or damage to their premises due to “continuous contamination by COVID-19.” Defendants, on the other hand, claimed the COVID-19 virus did not constitute a “direct physical loss or damage,” as required by the insurance policy, and sought summary judgment on that issue. The trial court first denied the Motion for Summary Judgment, then held a bench trial—resulting in denial of Plaintiff’s Petition.

On Appeal – the main ruling

Plaintiff appealed the trial court’s ruling to the Louisiana Fourth Circuit Court of Appeal. Upon reviewing the policy, the five-judge panel split 3-2 on reviewing the contract. Due to this ambiguity, the Court stated the contract should be interpreted in favor of the appellant Plaintiff. Therefore, the trial court’s denial of the Petition for Declaratory Judgment was reversed.

The Court noted that matters of contractual interpretation are subject to the Appellate Court’s de novo review—meaning the Court had to give little to no weight to the ruling at trial. Factual findings, however, were subject to a higher standard of “manifest error” or “clearly wrong.”

The Court thereafter provided a rundown of contractual interpretation precepts: words must be given their generally prevailing meaning, technical terms must be given their technical meanings, etc.  If different meanings are possible, a contract must be interpreted with a meaning that renders it effective rather than a meaning that makes it ineffective—meaning an insurance contract must be interpreted in favor of coverage rather than denying coverage.[2] Further, as the Court noted, if an insurance policy is susceptible of two or more reasonable interpretations, then it is considered ambiguous and must be liberally interpreted in favor of coverage.[3] The Court also noted that an all-risk policy will cover all risks “unless clearly and specifically excluded.”[4]

The Court looked to the all-risk policy, which covered loss of business income sustained due to necessary suspension of operations during the period of restoration—with the suspension needing to come from a direct physical loss of or damage to the property. Utilizing definitions for “direct” and “suspension” derived in other insurance-based cases, the Court found that the policy indeed provided coverage. The appellee Defendants noted that some jurisdictions had found the term “physical” meant a tangible or corporeal loss of property—rather than a less-definite loss of use. The Court, however, noted that other jurisdictions had come to the exact opposite conclusion as well.

In the end, after parsing through multiple interpretations of multiple words or previsions of the applicable portion of the policy, the Court stated:

“Given the existence of multiple plausible interpretations of these two provisions, the policy is ambiguous as to what constitutes a covered “direct physical loss of or . . . to the property” [*20]  and coverage should, therefore, be construed in favor of the appellants.”

Given the ambiguity, the Court also resorted to parole evidence—i.e., evidence outside the four corners of the contract. The Court found that multiple policies with viral exclusions were available on the market, yet this policy did not include a specific viral exclusion. Furthermore, the Plaintiff’s general manager testified, stating that a policy with a virus exclusion would never have been purchased since the restaurant sold raw oysters. That testimony, the Court found, strengthened the equitable interpretation in favor of appellant Plaintiff.

The Dissent

Two Judges[5] on the Fourth Circuit dissented from this ruling and would have upheld the trial court’s findings in favor of Defendant insurer. These judges would have ruled in line with similar federal court cases which did not find coverage for restaurants whose businesses were hampered by the COVID pandemic, even though applying Louisiana law. These judges found the term “physical loss of or damage to” was not ambiguous[6]  and that the suspension of operations must be due to some “tangible alteration” to the property requiring repair, rebuilding, or replacement.

The dissent also noted that the restaurant was cleaned; that no testing for coronavirus had been undertaken inside the restaurant; and that the restaurant lost no physical equipment. The dissent also noted Defendant’s expert testimony at trial, which noted there had been no known infections by surface-to-human transfer. Furthermore, the restaurant engaged in curbside pickups and re-opened with safety precautions and modifications—it was not totally unusable.

As such, the dissent did not find the trial court’s ruling in error.

What to expect

The Court is not required to accept a writ application, but at the same time might want to provide some finality to COVID-19 business interruption coverage disputes—at least for policies with language similar to this one.

Right now, the results are anyone’s guess. Per the Court’s order granting the writ of certiorari, the applicant (Defendant insurer) must file its brief by December 19, 2022, with respondent Plaintiff filing its brief in opposition by January 6, 2023—the official start of Carnival Season.

We’ll be following this case and will provide future updates on the results.

[1] 2022-01349 (LA 11/22/22).

[2] Citing  Davis v. Nola Home Construction, L.L.C., 16-1274, p. 14 (La. App. 4 Cir. 6/14/17), 222 So. 3d 833, 844 (citing Supreme Services and Specialty Co., Inc. v. Sonny Greer, Inc., 06-1827, p. 6 (La. 5/22/07), 958 So. 2d 634, 638)

[3] Citing Supreme Services, 06-1827, n. 2, supra, 958 So. 2d at 638 (citing Reynolds v. Select Properties, Ltd., 93-1480 (La. 4/11/94), 634 So. 2d 1180, 1183Newby v. Jefferson Parish Sch. Bd., 99-0098 (La. App. 5 Cir. 6/1/99), 738 So. 2d 93)

[4] Citing Widder v. La. Citizens Prop. Ins. Corp., 11-0196, p. 4 (La. App. 4 Cir. 8/10/11), 82 So. 3d 294, 296writ denied11-2336 (La. 12/02/11), 76 So. 3d 1179.

[5] Judge Belsome authored the dissent, joined by Judge Pro Tempore Lynn Luker.

[6] Citing Yount v. Lafayette Ins. Co., 2008-0380 (La.App. 4 Cir. 1/28/09), 4 So.3d 162.

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Defendant Asserting Comparative Fault May Appeal a Summary Judgment Dismissing a Co-Defendant https://mblb.com/trucking-transportation/defendant-asserting-comparative-fault-may-appeal-a-summary-judgment-dismissing-a-co-defendant/#utm_source=rss&utm_medium=rss&utm_campaign=defendant-asserting-comparative-fault-may-appeal-a-summary-judgment-dismissing-a-co-defendant Mon, 14 Nov 2022 19:41:54 +0000 https://mblb.com/?p=14566 In Amedee v. Aimbridge Hosp. LLC, 2021-01906 (La. 10/21/22), the Louisiana Supreme Court resolves a circuit split and holds a defendant pleading comparative fault may appeal a summary judgment dismissing a co-defendant even if the plaintiff does not. Amedee v. Aimbridge Hosp. LLC – Background Plaintiff brought suit for personal injuries he sustained at the … More»

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In Amedee v. Aimbridge Hosp. LLC, 2021-01906 (La. 10/21/22), the Louisiana Supreme Court resolves a circuit split and holds a defendant pleading comparative fault may appeal a summary judgment dismissing a co-defendant even if the plaintiff does not.

Amedee v. Aimbridge Hosp. LLC – Background

Plaintiff brought suit for personal injuries he sustained at the entrance of the Embassy Suites Hotel in New Orleans. Plaintiff named as defendants: Premium Parking, the City of New Orleans, and three other parties.

After conducting discovery, several defendants filed motions for summary judgment, one of which was granted, dismissing plaintiff’s claims against the City of New Orleans. Premium Parking was the only party to oppose the City’s summary judgment and was the only party to appeal the judgment.

On appeal, the Louisiana Fourth Circuit raised the issue whether Premium Parking had the right to appeal a trial court’s judgment dismissing a co-defendant. After briefing, the Fourth Circuit noted a split among the circuits, and relying on La. C.C.P. art. 966(G) and Nunez v. Commercial Union Ins. Co., 00-3062, p. 1 (La. 02/16/01), 780 So. 2d 348, 349, held a defendant had no right to appeal a dismissal of a co-defendant when the plaintiff had not appealed.

Premium Parking subsequently timely filed a writ application to the Louisiana Supreme Court.

Louisiana Supreme Court analysis

The Louisiana Supreme Court, citing Emmons v. Agric. Ins. Co., 245 LA. 411, 158 So. 2d 594, 597 (1963), Nunez v. Com. Union Ins. Co., 2000-3062 (La. 2/16/01), 780 So. 2d 348, and Grimes v. Louisiana Med. Mut. Ins. Co., 2010-0039 (La. 5/28/10), 36 So. 3d 215, noted Louisiana jurisprudence had long implicitly recognized a defendant’s right to appeal the dismissal of a co-defendant, even when the plaintiff had not appealed. The Court disagreed with the Fourth Circuit’s interpretation of Nunez, and noted that Nunez was concerned with the consequences of a plaintiff’s failure to appeal a judgment and not whether a defendant had the right to appeal a judgment against a co-defendant.

The Court further cited: State Farm Mut. Auto. Ins. Co. v. McCabe, 2014-501 (La. App. 3 Cir. 11/5/14), 150 So. 3d 595, 597, Stafford v. Exxon Mobile Corp., 2016-1067, (La. App. 1 Cir. 2/17/17), 212 So. 3d 1257, Cotton v. Kennedy, 2015-1392, (La. App. 1 Cir. 9/19/16), 2016 La. App. Unpub. LEXIS 343, 2016 WL 5061113, noting these cases also implicitly found a defendant’s right to appeal the dismissal of a co-defendant. The Court then cited: Dixon v. Gray Ins. Co., 2017-29 (La. App. 5 Cir. 6/15/17), 223 So. 3d 658, noting this case found a defendant did not have a right to appeal the dismissal of a co-defendant when the plaintiff had not appealed. The Court further noted the Third Circuit had rendered conflicting decisions on whether defendant had a right to appeal the dismissal of a co-defendant when the plaintiff had not appealed.

The Court began its analysis by stating an appeal is the “exercise of the right of a party to have a judgment of a trial court revised, modified, set aside, or reversed by an appellate court.” La. C.C.P. art. 2082. Article 2082 does not contain any restrictions regarding which “party” may appeal the final judgment, and even non-parties have the right to appeal. La. C.C.P. art. 2086. A motion for summary judgment dismissing a party is an appealable judgment. La. C.C.P. art. 1915(A)(3).

Louisiana law requires a defendant assert any affirmative defenses, including its affirmative defense of the fault of others, in its answer. La. C.C.P. art. 1005. Defendants also bear the burden of proving their affirmative defenses. The Court stated as obvious a defendant who pleads an affirmative defense must be given the opportunity to prove it. If the affirmative defense is comparative fault, La. C.C. art. 2323, requires the trier of fact to make a determination of fault as to all persons, whether the person is a party to the lawsuit or not. This is in contrast to La. C.C.P. art. 966(G) which prohibits the trier of fact from considering the fault of any parties dismissed on summary judgment.

The Court stated that La. C.C. art. 2323 and La. C.C.P. art. 966(G) do not conflict. The trier of fact can quantify the fault of all persons under La. C.C. art. 2323, while also being prohibited from determining the fault of any party dismissed under La. C.C.P. art. 966. The Court stated that it is important, however, that any decision on a motion for summary judgment dismissing a party be correct. The only way to ensure a judgment is correct is to make those decisions subject to review. The Court stated it would be “patently unjust” to bar a defendant from appealing a trial court’s summary judgment dismissing a co-defendant when the defendant has pled comparative fault. Amedee p. 30.

The Court further stated:

It is illogical that a defendant participating in opposing a summary judgment would not be allowed to appeal an adverse result, particularly given that La. C.C.P. art. 2086 allows a non-party to do so. That a non-party would have greater rights than a party to a lawsuit is nonsensical. Id.

The Decree

The Court ultimately held “a defendant who pleads the affirmative defense of comparative fault may appeal a summary judgment dismissing a co-defendant, even absent an appeal by a plaintiff.” Id. at 31.

The Court reversed and remanded the case back to the court of appeal for consideration of the merits of Premium Parking’s appeal.

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IME Parameters Revisited: A New Restriction Framework for Louisiana Additional Medical Examinations https://mblb.com/trucking-transportation/ime-parameters-revisited-a-new-restriction-framework-for-louisiana-additional-medical-examinations/#utm_source=rss&utm_medium=rss&utm_campaign=ime-parameters-revisited-a-new-restriction-framework-for-louisiana-additional-medical-examinations Fri, 28 Oct 2022 16:28:19 +0000 https://mblb.com/?p=14520 In April, 2021, we reported on a case involving restrictions on Independent Medical Examinations.  Though that opinion was unpublished, it seemed to be out of line with a published opinion in a neighboring appellate Circuit. A few days ago, the Louisiana Supreme Court gave us more guidance on the issue of restrictions in independent medical … More»

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In April, 2021, we reported on a case involving restrictions on Independent Medical Examinations.  Though that opinion was unpublished, it seemed to be out of line with a published opinion in a neighboring appellate Circuit.

A few days ago, the Louisiana Supreme Court gave us more guidance on the issue of restrictions in independent medical examinations in Augustine v. Safeco Ins. Co. of Ore., 2021-CC-01753 (La. 10/21/2022).

IME RESTRICTIONS IN CONTROVERSY

This case involved review of a Louisiana District Court’s order granting a defense motion for additional medical examination (the newer term in Louisiana law for an IME), but placing some restriction on that examination. Plaintiff alleged injuries from an automobile accident. Defendants retained a neuropsychologist to perform an additional medical examination under LA CCP Art. 1464. Under this provision, a defendant is allowed to obtain an IME for “good cause.” The Louisiana Supreme Court has previously ruled that, when a Plaintiff raises personal injury damages, “good cause” exists for an IME, as there would be a reasonable nexus between the requested examination and the condition in controversy. Hicks v. USAA Gen. Indemn. Co. et al., 2021-C-840 (LA 03/25/2022); 339 So.3d 1106.

Faced with a lack of agreement on the conditions of the exam (which are within the Court’s control under CCP Art. 1464(A)), Defendants filed a Motion to Compel the IME. Plaintiffs opposed, requesting that the Court limit the examination to only those tests performed by Plaintiff’s treating physicians. As noted by the Supreme Court, Plaintiffs’ justification was that the examination should not be “just a fishing expedition.”  After the trial judge granted the restrictions, the appellate Court denied the request for supervisory review, and Defendants took the matter to the Louisiana Supreme Court.

LASC REACHES A NEW IME FRAMEWORK

The Louisiana Supreme Court took the matter for review. After well-reasoned discussions of the matter, the Court reached a new framework for dealing with requested IME restrictions.

The Court noted that, in applying article 1464, the basic premise of our system of justice is that both sides to a dispute stand on equal footing in gathering evidence and preparing for trial—something that an IME offers to the party defending against claimed injuries.[1]  While the district court believed Plaintiffs’ physical and mental conditions were in controversy, and that an IME was warranted, it maintained Plaintiffs’ requested limitations on examination. Defendants contended the restrictions prevented a fair trial by preventing them from conducting full testing on the Plaintiffs, who were able to present their own favorable evidence without restriction.

The Supreme Court stated that “any decision which places undue restrictions on the health care provider’s ability to perform the examination could frustrate the other party’s ability to obtain relevant evidence.” It went on to state that “[i]t must be presumed that doctors will conduct their physical examinations properly.”[2]

With this in mind, and citing several cases, the Louisiana Supreme Court stated that, to rebut the presumption that a doctor would properly perform an examination, the party seeking restrictions or condition on the IME must show a special circumstance justifying the requested restrictions. The Court stated, in combining its review of law and prior cases, it arrived at the following practical framework to address requested restrictions to IMEs. First, the initial burden of establishing good cause rests with the party seeking the independent medical examination. Once that burden is satisfied, the court should presume that the examination will be conducted in a reasonable manner. The burden then shifts to the party wishing to place restrictions on the additional medical examination to establish “special circumstances justifying the imposition of restrictions on the examination.”

As for the burden of the party requesting IME restrictions, the court stated that “the party may not rely on mere allegations or speculation, but should produce competent evidence establishing a need for restrictions and the harm which may result if such restrictions are not imposed.”

Under this newly announced framework, the Court vacated the ruling granting Plaintiffs’ requested restrictions.

CONCLUSION

This case provides much needed clarity on the issue of IMEs and potential restrictions in Louisiana. In terms of general personal injury claims, and combining the recent pronouncements from the Louisiana Supreme Court, we are left with a very clear and succinct outline for obtaining “additional medical examinations.” First, if a particular injury or condition is in controversy, the opposing party will generally have a right to an IME. At that point, if the party whose condition is in controversy wishes to restrict the IME in any fashion, that party bears the burden of demonstrating, through competent evidence and not mere speculation or allegations, that restrictions are warranted and harm may result in the absence of restrictions. Otherwise, it will be presumed that a medical professional will perform a reasonable and proper additional medical examination.

While these precepts appear rather clear, it remains to be seen how Louisiana Courts will apply the parameters at the district level and up through the appellate courts. We will keep an eye on these issues and report accordingly.

[1] Citing Hicks at 1112.

[2] Citing Simon Castille, 174 So.2d 660, 665 (La. App. 3 Circ.), writ denied (La.), cert denied, 86 S.Ct. 325 (1965).

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Louisiana’s Rear-Ending Motorist Presumption in a Disputed Fact Scenario https://mblb.com/insurance-defense/louisianas-rear-ending-motorist-presumption-in-a-disputed-fact-scenario/#utm_source=rss&utm_medium=rss&utm_campaign=louisianas-rear-ending-motorist-presumption-in-a-disputed-fact-scenario Fri, 05 Aug 2022 17:02:13 +0000 https://mblb.com/?p=14088 Under Louisiana law, a motorist who rear-ends another vehicle is presumed to be at fault based on interpretations of La. R.S. 32:81(A). This presumption can be overcome, or rebutted, by evidence that the preceding vehicle operator, or someone else, was at fault. But what if you question whether the rear-ending motorist actually “rear-ended” the vehicle … More»

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Under Louisiana law, a motorist who rear-ends another vehicle is presumed to be at fault based on interpretations of La. R.S. 32:81(A). This presumption can be overcome, or rebutted, by evidence that the preceding vehicle operator, or someone else, was at fault. But what if you question whether the rear-ending motorist actually “rear-ended” the vehicle in front of it? Does a court automatically presume that the vehicle in the rear was at fault under the legal presumption?

The answer is “No,” according to the Louisiana Fifth Circuit Court of Appeal in its recent decision in Smith v. Charles Murret, 21-CA-662 (La. App. 5 Cir. 08/03/2022).[1]

FACTS OF THE CASE AND CONFLICTING TESTIMONY

In this car accident case, the Plaintiff, Ms. Smith, filed a lawsuit claiming that a Mr. Murret was at fault for her claimed injuries because Mr. Murret rear-ended her. Smith stated she was stopping for traffic while in the far-left lane of Veterans Boulevard in Jefferson Parish, a heavily trafficked area. As she stopped, she claimed Murret ran into her from the rear. Murret and his insurer filed an Answer, denying liability and claiming that Smith, indeed, backed into the front of his vehicle.

The matter proceeded to a judge trial before the Hon. Paul A. Bonin[2] in First Parish Court (the equivalent of a small claims court). Smith testified that she stopped to allow a truck to merge into her lane and that she was stopped for a minute or two before being hit from behind, her testimony indicating a relatively minor collision. She informed Murret he had rear-ended her, but he claimed she backed into him.

On the other hand, Murret testified that Smith began to back up, as if she wanted to change lanes. He honked his horn, but she did not stop until front-ending his bumper. He claimed Smith jumped out of her car, accusing him of striking her vehicle. He replied that he was stopped and could not have rear-ended her.

Judge Bonin rendered judgment in favors of the Defendants. In reasons for judgment, the Court stated that Murret’s statements remained consistent, whereas Smith’s statements at trial, in discovery, and to treating providers were inconsistent, both on liability and injuries. Therefore, the Court was “unconvinced that Mr. Murret’s truck rear-ended Ms. Smith’s car.” Ms. Smith filed for appeal.

FINDINGS ON APPEAL

As grounds for error, Smith argued that the trial Court disregarded evidence of how the accident occurred and failed to apply Louisiana’s presumption on rear-end accidents. Essentially, she claimed that the disputed facts did not negate the presumption that Murret, as the rear-ending motorist, should be liable. Defendants, in responding, contended that the rear-ending motorist presumption did not apply because a rear-end collision did not occur. With the Court making credibility determinations as to how the accident occurred (rear versus front-end), and with the finding that Smith backed into Murret, the presumption was not applicable.

The Court of appeal noted that great deference must be given to the findings of fact and credibility determinations of the fact finder, and only when those findings are manifestly erroneous should they be overturned. “Where two permissible views of evidence exist, the factfinder’s choice between them cannot be manifestly erroneous.” Citing Henderson v. Nissan Motor Corporation, 03-606 (La. 02/06/2004), 869 So.2d 62, 69. Based on the conflicting testimony in this case, the Court of Appeal found that the trial court was within its proper discretion of believing Murret over Smith. There was no manifest error.

Under these circumstances, the Court of Appeal ruled that Smith’s reliance on the rear-ending motorist presumption was misplaced. The Court stated:

In order for the presumption to apply, the following motorist must strike the preceding motorist’s vehicle….The trial court stated that it was unconvinced that Mr. Murret’s truck struck the rear of Ms. Smith’s vehicle. Because the trial court did not find that Mr. Murret’s truck struck the rear of Ms. Smith’s vehicle, the following motorist presumption does not apply in this case.

THE LESSON

This confirms that the rear-ending motorist presumption is a presumption of liability and not one of fact. Simply because one vehicle is behind or in front of another does not mean the vehicle in the rear is presumed to be at fault. The finder of fact must first find whether or not the accident constituted a “rear-end” collision. The vehicle in the rear must be the one to strike the vehicle preceding it. We do not automatically presume that the vehicle in the rear struck the vehicle in front of it.

Only if it is established that the following vehicle struck the preceding vehicle will the presumption on liability go into effect. If the fact finder believes that a rear-end collision occurred, then the fact finder must presume liability on the part of the rear vehicle unless that liability is rebutted by other facts. If the fact finder does not believe the following vehicle struck the preceding vehicle in the rear, as in this case, then there is no presumption. The Plaintiff claiming to be rear-ended must first prove that, indeed, the other vehicle struck the Plaintiff from behind. Only then does the Plaintiff have the benefit of a rebuttable presumption on liability.

[1] Opinion not yet final as of this publication and subject to change.

[2] Judge Bonin, having retired in 2020, was sitting pro tempore at the time of this trial (i.e., he was sitting as a substitute judge for the time being). Judge Bonin has had an interesting career as a jurist, spanning New Orleans Traffic Court, Criminal District Court for Orleans Parish, and the Louisiana Fourth Circuit Court of Appeal.

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Louisiana Legislation Mandating Coverage for Permissive Use of Non-Owned Vehicles Signed Into Law https://mblb.com/trucking-transportation/louisiana-legislation-mandating-coverage-for-permissive-use-of-non-owned-vehicles-signed-into-law/#utm_source=rss&utm_medium=rss&utm_campaign=louisiana-legislation-mandating-coverage-for-permissive-use-of-non-owned-vehicles-signed-into-law Wed, 27 Jul 2022 15:45:02 +0000 https://mblb.com/?p=14048 We previously reported regarding proposed House Bill 870 which will require all insurers to provide coverage when any insured is driving a non-owned vehicle with the permission of the vehicle’s owner. HB870 was passed by the Louisiana legislature and signed by Governor John Bel Edwards on May 23, 2022. The law went into effect on … More»

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We previously reported regarding proposed House Bill 870 which will require all insurers to provide coverage when any insured is driving a non-owned vehicle with the permission of the vehicle’s owner. HB870 was passed by the Louisiana legislature and signed by Governor John Bel Edwards on May 23, 2022. The law went into effect on August 1, 2022. As previously reported, auto insurers will be required to provide coverage in Louisiana when its insureds are temporarily driving someone else’s vehicle with permission. The new law will be codified at La. R.S. 22:1296.1.

As noted in Gerard Dragna‘s article, “Proposed Louisiana Legislation Seeks to Mandate Coverage for Permissive Use of Non-Owned Vehicles,” the legislation is in direct response to the Louisiana Supreme Court’s recent decision in Landry v. Progressive Security Insurance Company, 2021-00621 (La. 1/28/22), 2022 WL26303.

Read “Proposed Louisiana Legislation Seeks to Mandate Coverage for Permissive Use of Non-Owned Vehicles” >

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Fifth Circuit Court of Appeals Denies COVID-19 Business Interruption Claim Consistent With Trend Across All Federal Circuit Courts https://mblb.com/insurance-defense/fifth-circuit-court-of-appeals-denies-covid-19-business-interruption-claim-consistent-with-trend-across-all-federal-circuit-courts/#utm_source=rss&utm_medium=rss&utm_campaign=fifth-circuit-court-of-appeals-denies-covid-19-business-interruption-claim-consistent-with-trend-across-all-federal-circuit-courts Mon, 13 Jun 2022 18:01:21 +0000 https://mblb.com/?p=13921 Since the COVID-19 pandemic, businesses affected by state-mandated closures have been filing business interruption claims to seek compensation for their lost income, profits, and expenses. However, in a recent case, Ferrer & Poirot, GP, et al v. Cincinnati Insurance Company, the Fifth Circuit Court of Appeals has denied business interruption claims specifically caused by COVID-19 closures. … More»

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Since the COVID-19 pandemic, businesses affected by state-mandated closures have been filing business interruption claims to seek compensation for their lost income, profits, and expenses. However, in a recent case, Ferrer & Poirot, GP, et al v. Cincinnati Insurance Companythe Fifth Circuit Court of Appeals has denied business interruption claims specifically caused by COVID-19 closures.

Ferrer & Poirot, GP, et al v. Cincinnati Insurance Company – Background

The Fifth Circuit, in Ferrer & Poirot, GP, et al v. Cincinnati Insurance Company, a law firm with offices in Dallas, Texas and Atlanta, Georgia, sued to recover lost income and expenses attendant to the COVID-19 pandemic. In the early stages of the COVID-19 pandemic, when stay-at-home mandates were in full force and effect, the Plaintiff law firm purchased equipment and supplies to prevent the spread of the virus and to facilitate remote work. Plaintiff filed a claim with Defendant to recover the costs of the equipment and supplies and to recover lost income. The Plaintiff’s insurance policy issued by Defendant provided property damage, business income, extra expense, and civil authority coverage.

Defendant denied Plaintiff’s claim, and Plaintiff sued alleging breach of contract. Plaintiff further alleged that the physical presence of the COVID-19 virus caused its loss and met the policy’s conditions. Defendant filed a Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim. The district court granted the motion, and Plaintiff appealed.

The Fifth Circuit Ruling

The Fifth Circuit affirmed the dismissal. In interpreting the Plaintiff’s policy with the Defendant, the Fifth Circuit held that the Defendant was only obligated to pay for lost business income and expenses where there civil authority prohibited access to Plaintiff’s premises in response to “dangerous physical conditions.” In interpreting other parts of Plaintiff’s policy, the covered loss was limited to physical loss or physical damage to Plaintiff’s premises, which did not occur. Thus, there was no cause of action, and the dismissal was affirmed.

The Upshot for COVID-19 business interruption claims

This is a continuing trend throughout the courts of appeals, as similar decisions have been reached by all federal courts of appeals. Most recently the First Circuit issued three decisions all affirming the dismissal of suits filed for denial of business interruption claims, noting that surface-level contamination that can be removed by cleaning does not constitute physical damage under the plaintiff’s policy.

This trend may now be completely written in stone: the United States Supreme Court just denied certiorari to a Tenth Circuit Court of Appeals case filed by Goodwill Industries, where the Tenth Circuit held that there was no direct physical loss or damage to Goodwill’s property and further held that a covered loss under that Plaintiff’s policy required a “tangible dispossession of property.” With all federal courts of appeals denying this type of claim, and with the Supreme Court  denying cert. to hear this type of claim, COVID-19 business interruption claims have little hope of gaining traction in the future.

Read Other MBLB Articles on COVID-19 Business Interruption Claims

Business Interruption Claims and Hurricane Ida: A Primer >

Insurer-Specific Multi-District Insurance Litigation Uncertain With Scores Of COVID-Related Business Interruption Claims >

Michigan Court Delivers First US Decision on COVID Business Interruption Claims >

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Proposed Louisiana Legislation Seeks to Mandate Coverage for Permissive Use of Non-Owned Vehicles https://mblb.com/trucking-transportation/proposed-louisiana-legislation-seeks-to-mandate-coverage-for-permissive-use-of-non-owned-vehicles/#utm_source=rss&utm_medium=rss&utm_campaign=proposed-louisiana-legislation-seeks-to-mandate-coverage-for-permissive-use-of-non-owned-vehicles Thu, 12 May 2022 16:47:18 +0000 https://mblb.com/?p=13851 In the current 2022 session of the Louisiana legislature, there is a proposed bill, House Bill 870, that would require all insurers to provide coverage when any insured is driving a non-owned vehicle with the permission of the vehicle’s owner. HB 870 a Response to Louisiana Supreme Court Decision The proposed legislation is in direct … More»

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In the current 2022 session of the Louisiana legislature, there is a proposed bill, House Bill 870, that would require all insurers to provide coverage when any insured is driving a non-owned vehicle with the permission of the vehicle’s owner.

HB 870 a Response to Louisiana Supreme Court Decision

The proposed legislation is in direct response to the Louisiana Supreme Court’s recent decision in Landry v. Progressive Security Insurance Company, 2021-00621 (La. 1/28/22), 2022 WL26303. In Landry, the Louisiana Supreme Court upheld a provision in an insurance policy which restricted the definition of a “non-owned” vehicle to those vehicles: 1) used as a temporary substitute for the covered auto which was out of normal use because of breakdown, repair, servicing, loss or destruction; 2) rented by an insured; or 3) being test driven by the insured. Essentially, the insurer sought to severely limit when its insured would be covered when driving someone else’s vehicle with permission. Unless the vehicle was a rental vehicle or a test-drive vehicle, the only time the insured would be covered when driving someone else’s vehicle is if the insured’s own vehicle was out of service due to damage, breakdown, service or repair.

Traditionally, auto policies written in Louisiana had provided broad coverage for the insured’s operation of another vehicle if being operated with the permission of the owner. The Louisiana Supreme Court, in upholding the policy definition, noted that there is no public policy in Louisiana that requires automobile insurance liability coverage for a defendant driver’s negligent operation of a non-owned vehicle.

What HB 870 Would Require of Louisiana Insurers

In response to the Landry decision, House Bill 870 has been introduced in the Louisiana Legislature and, if passed, would require coverage when the insured is operating a non-owned vehicle with the express or implied permission of the vehicle’s owner. The statute is designed to provide coverage for non-owned vehicles that are provided to the insured on a temporary basis, so the statute does not require coverage for vehicles that are provided, furnished or available to the insured on a regular basis. The bill was unanimously passed in the House, and now moves to the Senate for passage. If the bill is passed, Louisiana insurers would be required to provide coverage when its insureds are temporarily driving someone else’s vehicle with permission.

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Louisiana Supreme Court Defines “Good Cause” Required for Defendant to Obtain AME https://mblb.com/admiralty-maritime/louisiana-supreme-court-defines-good-cause-required-for-defendant-to-obtain-ame/#utm_source=rss&utm_medium=rss&utm_campaign=louisiana-supreme-court-defines-good-cause-required-for-defendant-to-obtain-ame Fri, 08 Apr 2022 17:10:04 +0000 https://mblb.com/?p=13741 The Louisiana Supreme Court recently issued a very significant ruling in a personal injury lawsuit regarding what a Defendant is required to show in order to obtain an “Additional Medical Examination” or “AME” (what used to be called an “Independent Medical Examination” or “IME”). In Ronald Hicks v. USAA General Indemnity Company, et al, no. … More»

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The Louisiana Supreme Court recently issued a very significant ruling in a personal injury lawsuit regarding what a Defendant is required to show in order to obtain an “Additional Medical Examination” or “AME” (what used to be called an “Independent Medical Examination” or “IME”). In Ronald Hicks v. USAA General Indemnity Company, et al, no. 2021-C-00840, _So.3d_ (LA. 3/25/22), the Supreme Court held that under Article 1464 of the Louisiana Code of Civil Procedure, the moving party is required to “establish a reasonable nexus between the requested examination and of the condition in controversy.” Prior to the Hicks decision, there were no clear parameters as to what would constitute “good cause” for an AME.

Ronald Hicks v. USAA General Indemnity Company, et al – Background

The facts in Hicks, and the way that the trial played out, are quite interesting. Ronald Hicks alleged injuries to his neck, back and arm after his truck was rear-ended at 60 mph by the defendant driver who failed to brake. The Defendants stipulated that their driver was 100% negligent, so the focus of the trial was on Mr. Hicks’ injuries and damages.

Following the accident, Hicks had seventy-nine medical visits and a total of 13 procedures with his chosen orthopedists, pain management specialists, and surgeons. His worker’s compensation insurer allowed him to choose Dr. Jason Smith as his orthopedic spine surgeon. Dr. Smith did not find any evidence of obvious trauma and he opined that Hicks’ pre-existing degenerative disc disease had been aggravated in the accident. Dr. Smith felt that Hicks was not a candidate for any surgery, but he also did not believe that Hicks was exaggerating his pain. Plaintiff ceased treatment with Dr. Smith on January 6, 2017, approximately fifteen months post-accident. Hicks thereafter began treating with Dr. Jorge Isaza, spinal orthopedic surgeon. In his discovery deposition in 2017, Dr. Isaza testified that he had recommended that Hicks have cervical surgery, but he could not definitively suggest that Hicks needed lumbar surgery because he had not been able to identify the source of Hicks’ lumbar pain.

In November of 2017, Defendants moved for an AME under Article 1464 and sought an examination by board-certified orthopedic surgeon, Dr. Chambliss Harrod. Defendant argued that plaintiff was seeking damages for injury, disability, lost wages, loss of earning capacity and loss of enjoyment of life and therefore, Hicks had put his physical condition and future ability to work into controversy. Defendants argued that these issues satisfied the requirement for “good cause” for an AME under Article 1464.

Defendants’ Motion to Compel and AME DENIED

Plaintiff argued that plaintiff had already been examined by Dr. Smith and Dr. Isaza, two orthopedic specialists, and that a third opinion by the defendants’ chosen orthopedic surgeon was unnecessary. Judge Kevin Kimble of the 18th Judicial District Court denied the defendants’ Motion to Compel and AME on the grounds that there was no “good cause” for the AME by Dr. Harrod shown by the Defendants. Judge Kimble ruled that Dr. Harrod could review plaintiff’s medical records and the depositions of the treating physicians and he could base his testimony on that information without actually having to lay hands on the Plaintiff.

In April 2018, just three weeks prior to trial, Dr. Isaza performed a lumbar nerve block procedure and from Hicks’ response, Dr. Isaza determined for the first time that the L5-S1 disc was the source of Hicks’ pain. Dr. Isaza did a “180” and completely changed his sworn deposition testimony by recommending that Hicks undergo L5-S1 anterior lumbar discectomy and fusion surgery. Defendants moved to continue the trial, arguing that the change in Dr. Isaza’s opinion required that Dr. Harrod be allowed to perform an in-person examination of plaintiff, but Judge Kimball denied the motion. Defendants sought a writ application to the Louisiana First Circuit Court of Appeal in an effort to get the trial continued, but the writ was denied.

The case proceeded to trial by jury, during which Hicks’ counsel repeatedly emphasized that Dr. Harrod had not personally examined Mr. Hicks. The Supreme Court reviewed the trial record and noted that “Dr. Harrod’s failure to personally examine plaintiff permeated the trial.” Plaintiff’s counsel came out of the box in his opening statement saying that Dr. Chambliss Harrod had merely “reviewed medical records cold…” In his video deposition, Dr. Harrod had to concede that it would have been more helpful had he personally examined Hicks, and that an in-person exam was his preference. Dr. Harrod agreed that plaintiff was a candidate for neck surgery but disagreed that further back surgery was necessary.

In his closing argument to the jury, plaintiff’s counsel hammered the fact that Dr. Harrod had not personally examined plaintiff:

“[T]he context in which he is presented in this case is diabolical… you know, [Dr. Harrod] came into this case and he never saw the patient.  He said multiple times in order to make a decision, to make an opinion, he’d have to see him, and he didn’t see him… but when [Dr. Harrod’s] wearing a Defense hired gun hat, he changes all of this, critical of everything they say and do.  He cannot be believed, he’s just not credible.  He’s not seen this patient.”

Incredibly, after the jury had retired to deliberate, they sent the trial Court a written question of whether Dr. Harrod had been “allowed to see” plaintiff, but the Court declined to answer the question. The jury rendered a very favorable award of $1,298,410 in damages which included $285,000 for future medical expenses.

Defendants appealed the jury’s verdict to the First Circuit without success. The First Circuit rejected Defendants’ argument that they had made a showing of “good cause” to compel the AME with Dr. Harrod. The First Circuit noted that just before the trial, when the Defendants were trying to convince the trial judge to allow them the AME, the Defendants had offered that Dr. Harrod would examine Mr. Hicks for only about 20 minutes. The First Circuit seized on that “offer” and reasoned that the short duration for the AME actually diminished the validity of Defendants’ argument that the AME was necessary; they felt that Dr. Harrod could adequately give his opinions with only reading the depositions of Drs. Smith and Isaza and Hicks’ medical records.

Defeandants Appeal to Louisiana Supreme Court

The Defendants then appealed to the Louisiana Supreme Court, which reversed and remanded the case back to the trial court for a new trial. The Supreme Court noted:

“A basic premise of our system of justice is that both sides to a dispute stand on equal footing in gathering evidence and preparing for trial.”  La. C.C.P. art. 1422.  The supreme court had previously summarized the Louisiana discovery process as a means to “afford all parties a fair opportunity to obtain facts pertinent to the litigation,” and to “discover the true facts and compel disclosure of these facts wherever they may be found,” and to “assist litigants in preparing their cases for trial.”  (citations omitted).

The Louisiana Supreme Court considered Rule 35(a) of the Federal Rules of Civil Procedure given that Article 1464 was modeled on the federal rule. The Court also cast its eye towards Texas in determining that under Article 1464, a showing of “good cause” “requires that the moving party establish a reasonable nexus between the requested examination and the condition in controversy,” citing Coates v. Whittington, 758 S.W. 2d. 749, 753 (Tex. 1988).

The Supreme Court in Hicks noted that the moving party must establish good cause for an examination by demonstrating a reasonable nexus between the requested examination and condition in controversy; however, the moving party does not necessarily establish good cause for any examination. The Court left it up to the trial court to balance out the competing interests and rights of the parties with consideration of the plaintiff’s right to privacy versus the fairness to the defendant.

Mr. Hicks clearly put his final condition “in controversy” by alleging injuries to his neck, back, and arm as a result of the accident. The Supreme Court also found that there was good cause to compel the AME of Hicks because there was a reasonable nexus between the condition in controversy and examination sought. “Because Defendants did not have the opportunity for an expert not chosen by plaintiff to conduct an examination, the jury was inhibited from arriving at the truth, which upset the careful balancing act that Article 1464 seeks to justify.” The Court also rejected First Circuit’s view that in order to establish “good cause,” the proposed defense AME doctor had to review plaintiff’s experts’ depositions and his medical records, and then the proposed AME doctor had to “specifically explain” how her examination “was still necessary.” The Supreme Court rejected that approach because it conflicted with the delicate balancing act required behind the intent of Article 1464.

The Upshot for Defendants

This is an important case for Defendants who seek to have a personal injury plaintiff examined by a doctor of their choosing. It prevents a Defendant from having to go to trial with their medical expert being limited to testifying based solely on a review of medical records and deposition testimony.

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Cases of Interest from the U.S. Fifth Circuit https://mblb.com/insurance-defense/cases-of-interest-from-the-u-s-fifth-circuit/#utm_source=rss&utm_medium=rss&utm_campaign=cases-of-interest-from-the-u-s-fifth-circuit Wed, 06 Apr 2022 15:49:33 +0000 https://mblb.com/?p=13728 Lefebure v. D’Aquilla, 15 F.4th 650, (5th Cir. Oct. 5, 2021) petition for certiorari pending The Fifth Circuit recently stood by a nearly-50-year-old Supreme Court Equal Protection decision—despite expressing serious concerns about allowing prosecutors to implement discriminatory policies of not investigating certain crimes when committed by or against certain groups of people. The plaintiff in … More»

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Lefebure v. D’Aquilla, 15 F.4th 650, (5th Cir. Oct. 5, 2021) petition for certiorari pending

The Fifth Circuit recently stood by a nearly-50-year-old Supreme Court Equal Protection decision—despite expressing serious concerns about allowing prosecutors to implement discriminatory policies of not investigating certain crimes when committed by or against certain groups of people.

The plaintiff in this case alleges that her cousin’s husband, a Louisiana state prison warden, brutally and serially raped her while she was living at her cousin’s home. The plaintiff sought to bring criminal charges, and the warden was initially arrested for rape. However, the plaintiff alleges that the warden and his defense attorney conspired with the local district attorney and sheriff to protect the warden from investigation or prosecution.

The plaintiff sued the warden, district attorney, and others, alleging a violation of her rights to equal protection and due process under the Fourteenth Amendment. The defendants sought to dismiss the case for lack of standing. The district court partially granted the motion and certified the order for interlocutory appeal.

The Fifth Circuit affirmed the partial dismissal for lack of standing, relying almost exclusively on the 1973 Supreme Court decision Linda R.S. v. Richard D. (410 U.S. 614). In Linda, a case involving similar facts, the Court held that individuals have no legal interest in how other people are treated by law enforcement. While anyone accused of a crime has an interest in being treated fairly by prosecutors, and victims have an interest in ensuring their own protection from harm, victims do not have a legal right (and therefore have no standing) to see their perpetrators investigated or prosecuted.

The Court emphasized that prosecutorial decisions are generally given wide discretion under the separation of powers doctrine. The Court distinguished between a situation in which a law enforcement entity or prosecutor wrongfully refuses to protect someone from a crime, versus a situation in which the police or prosecutor simply fail to investigate or prosecute a crime that already occurred. In the first situation, the plaintiff has standing because the crime could have been prevented. In the second, the prosecutor’s investigation could not change the fact that the crime occurred. Even in a case such as this—where the plaintiff alleges an unlawful conspiracy to avoid prosecution—the law does not grant a cause of action based on discriminatory non-enforcement of the law.

Nonetheless, the Court….

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Football Team Not Liable for Accident Caused by Off-Duty Sheriff Deputy During Police Escort https://mblb.com/insurance-defense/football-team-not-liable-for-accident-caused-by-off-duty-sheriff-deputy-during-police-escort/#utm_source=rss&utm_medium=rss&utm_campaign=football-team-not-liable-for-accident-caused-by-off-duty-sheriff-deputy-during-police-escort Wed, 16 Feb 2022 17:04:39 +0000 https://mblb.com/?p=13627 The Tampa Bay Buccaneers played the New Orleans Saints at the Mercedes-Benz Superdome on September 20, 2015. Despite being down nine points at the end of the third quarter, the Buccaneers leapfrogged up twelve points in the fourth quarter while holding the Saints to only a field goal. The Buccaneers won the game 26 – … More»

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The Tampa Bay Buccaneers played the New Orleans Saints at the Mercedes-Benz Superdome on September 20, 2015. Despite being down nine points at the end of the third quarter, the Buccaneers leapfrogged up twelve points in the fourth quarter while holding the Saints to only a field goal. The Buccaneers won the game 26 – 19.

In another come-from-behind victory, the Buccaneers recently triumphed at the Louisiana Supreme Court. The Court dismissed the Buccaneers from a lawsuit, Bolden v. Tisdale, arising out of an accident that happened on the night of the September 20, 2015 game.

Bolden v. Tisdale – Background

The Buccaneers hired the New Orleans Police Department and Jefferson Parish Sheriff Office (“JPSO”) to provide motorcade escorts from the Superdome to New Orleans Louis Armstrong International Airport after the game was over.

JPSO deputy Michael Tisdale, riding a JPSO-owned motorcycle, took up the rear position in the motorcade. Following the last team bus out of the Superdome, he turned right from Girod St. on to Loyola St. While executing his turn, he struck and injured JPSO Deputy Terrence Bolden—who was on foot to provide pedestrian control at the intersection. Deputy Bolden was not a part of the Buccaneers’ motorcycle escort; rather, he was working a separate off-duty detail for the Superdome management company.

Deputy Bolden subsequently sued the Buccaneers for personal injury, alleging that the Buccaneers were vicariously liable for Deputy Tisdale’s conduct. The core of this argument was the claim that Deputy Tisdale was an employee of the Buccaneers, and that he was acting in the course and scope of his employment.

Trial Court’s Decision

The Buccaneers moved for summary judgment to dismiss Deputy Bolden’s claims. The Buccaneers argued that they could not have possibly exercised the requisite level of control over Deputy Tisdale because they had no authority to handle public safety and traffic control issues. That authority lies solely within the purview of law enforcement. Thus, they argued that Deputy Tisdale could not have possibly been acting as a Buccaneers employee at the time of the accident.

Deputy Bolden, on the other hand, relied on an affidavit from a JPSO traffic division commander who stated that the JPSO does not consider off-duty deputies to be JPSO employees. The commander also stated that off-duty deputies are required to adhere to the instructions provided by the entity that hires them for the off-duty work.

The trial court denied summary judgment for the Buccaneers due to a factual dispute as to whether the JPSO deputies were Buccaneers employees. The Fourth Circuit Court of Appeals denied the Buccaneers’ request for appellate review of that denial. On their proverbial fourth-and-ten, the Buccaneers refused to punt. Instead, they threw a Hail Mary to the next eligible receiver: the Louisiana Supreme Court.

The Buccaneers completed the pass, and the Louisiana Supreme Court agreed to review the case.

Louisiana Supreme Court Reversal

The Supreme Court ultimately reversed the trial court’s decision and granted summary judgment for the Buccaneers. The Supreme Court emphasized that the “single most important factor” in deciding whether an employer-employee relationship exists is whether the master has the right to control the servant’s work. An employee is tightly controlled by her employer, and is subject to the employer’s whims as to how, where, and when her work is performed. An independent contractor, on the other hand, has greater freedom of action and choice as to how he performs his duties. So long as an independent contractor delivers the contracted-for product, the means by which he arrived at the product are immaterial.

Here, the Court determined that the Buccaneers did not exercise enough control over how Deputy Tisdale and the other off-duty police escorts did their job to create an employer-employee relationship. While the Buccaneers requested a specific route and use of lights and sirens, the police escorts used their own discretion to determine the safest and most efficient way to transport the team to the airport. While the Buccaneers set the date and time of the escort, they were not consulted as to how the escort would be conducted. Thus, Deputy Tisdale and his fellow officers were required to only deliver a product (the successful escort), and not to use a specific means to arrive at that product. This is the hallmark of an independent contractor.

The Supreme Court also differentiated this situation from another common fact pattern involving off-duty officers. Many off-duty officers are hired to provide security guard services at a specific premises or location. The Court acknowledged that off-duty officers providing premises security can often be employees of the entities that hire them. However, providing a motorcade demands a more advanced set of skills, specific training, and more exercise of judgment and discretion than being a premises security guard does.

Thus, the Buccaneers prevailed on their motion for summary judgment and were dismissed from the case.

The Upshot

This decision serves to insulate entities that hire police officers for off-duty details from liability for accidents that those officers cause. Whether the hiring entity is a football team or a Mardi Gras krewe, it is entitled to rely on police officers to use their own judgment and discretion when arranging for a police escort—and will not be held vicariously liable when something goes wrong.

Case cite: Bolden v. Tisdale, 2021-00224 (La. 01/28/22); 2022 La. LEXIS 285

Opinion at: https://www.lasc.org/opinions/2022/21-0224.CC.OPN.pdf

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