Articles Posted in Contracts

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Customers of an indoor trampoline park, of Sky Zone Lafayette, must complete a “Participant Agreement, Release and Assumption of Risk” document (“Agreement”) prior to entering the facility. The Agreement contains a clause waiving the participant’s right to trial and compelling arbitration. Plaintiff, James Duhon, was such a customer, and was injured in the course of participating in the park’s activities. After plaintiff filed suit seeking damages, Sky Zone moved to compel arbitration pursuant to the Agreement. The district court overruled Sky Zone’s exception, but the court of appeal reversed, finding the arbitration provision should be enforced. After review, the Supreme Court found that the arbitration clause in the Sky Zone agreement was adhesionary and therefore unenforceable. View "Duhon v. Activelaf, LLC" on Justia Law

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Customers of an indoor trampoline park, of Sky Zone Lafayette, must complete a “Participant Agreement, Release and Assumption of Risk” document (“Agreement”) prior to entering the facility. The Agreement contains a clause waiving the participant’s right to trial and compelling arbitration. Plaintiff Theresa Alicea executed the Agreement prior to her husband, Roger Alicea, taking their minor sons to Sky Zone. The Aliceas’ son, Logan, was injured while jumping on a trampoline. The Aliceas filed suit against Sky Zone, individually and on behalf of Logan. Sky Zone moved to compel arbitration pursuant to the Agreement. The district court overruled Sky Zone’s exception and the court of appeal denied Sky Zone’s writ application. After review, the Supreme Court held the arbitration clause in the Sky Zone agreement was adhesionary and therefore unenforceable. Accordingly, the Court affirmed the rulings of the lower courts. View "Alicea v. Activelaf, LLC" on Justia Law

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The issue this case presented for the Louisiana Supreme Court's review was whether the duty to defend in long latency disease cases could be prorated between an insurer and its insured when occurrence-based policies provide coverage for only a portion of the time during which exposure occurred. In the underlying Arceneaux suit, plaintiffs alleged that they suffered hearing loss from exposure to unreasonably loud noise in the course of their work at American Sugar’s refinery in Arabi, Louisiana. Two sets of plaintiffs, the Barbe plaintiffs and the Waguespack plaintiffs, filed suit against American Sugar in 2006. These suits were consolidated with the Arceneaux action, which was filed in 1999 against American Sugar’s predecessor, Tate & Lyle North American Sugars, Inc. This opinion concerned only the Barbe and Waguespack plaintiffs, and not the Arceneaux plaintiffs whose claims had been litigated extensively in the trial court, the court of appeal, and the Louisiana Supreme Court. Continental Casualty Company argued that defense costs should have been prorated among insurers and the insured if there were periods of non-coverage. American Sugar Refining, Inc. claimed that the duty to defend as agreed upon in the policy provided for a complete defense so long as the duty to defend attached, even if some claims fell outside of coverage. The Supreme Court held that the duty to defend should have been prorated in this case based upon policy language. View "Arceneaux v Amstar Corp." on Justia Law

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Lamar Contractors, Inc. was general contractor on a construction project, and entered into a subcontract with Kacco, Inc. to provide metal framing and drywall work on the project. The subcontract included a “pay-if-paid” payment provision, which afforded Lamar ten days to remit payment to its subcontractors after receipt of payment from the owner. Kacco began work on the project but experienced recurring problems with providing manpower and paying for supplies. Kacco submitted an invoice for work that reflected that forty-five percent of the work had been performed. Lamar paid the invoice prior to receiving payment from the owner. Lamar sent Kacco an email noting its concerns with whether Kacco would be able to perform under the subcontract. Kacco notified Lamar that Kacco was waiting on another payment so that it could order and pay for supplies to finish the project. Lamar had received payment from the owner on January 26; however, pursuant to the subcontract, Lamar was not required to make payment to Kacco until February 9, ten business days later. Lamar officially terminated Kacco’s subcontract in a letter dated February 5. After termination of the subcontract with Kacco, Lamar hired another contractor to complete the work. Lamar then sued Kacco for breach of the subcontract. Kacco countersued Lamar for allegedly failing to pay for work performed under the contract, and that failure to pay caused it to breach. After a bench trial, the district court entered judgment on the main demand for Lamar for $24,116.67 with interest, $7,681.75 for attorney’s fees, and $3,105.81 in costs. Additionally, the district court entered a judgment in the amount of $60,020.00 plus interest in favor of Kacco on its countersuit. Lamar appealed but the court of appeal affirmed. Under the circumstances of this case, it was clear to the Supreme Court that Lamar did not violate any obligation owed under the contract to make payment to Kacco and could not have negligently contributed to Lamar’s breach of its obligations under the contract. Accordingly, the district court erred in reducing Lamar’s award of damages. The case was remanded for further proceedings. View "Lamar Contractors, Inc. v. Kacco, Inc." on Justia Law

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This matter stemmed from a public works project for the construction of a gymnasium in Terrytown. JaRoy Construction Inc. served as the general contractor, and pursuant to statute, furnished a surety bond to Jefferson Parish. Ohio Casualty Insurance Company was the surety. JaRoy entered into a written subcontract with Pierce Foundations, Inc. to provide and install pilings for the project. Once finished, Pierce alleged JaRoy failed to pay certain funds due under the subcontract. Pierce sued both JaRoy and Ohio Casualty Insurance, alleging they were jointly and severally liable to Pierce. JaRoy filed for bankruptcy, leaving only Ohio Casualty Insurance as party to the suit. When the project was substantially completed, the Jefferson Parish government filed a notice of acceptance of work with the Jefferson Parish mortgage records office. This occurred over a year after Pierce amended its lawsuit to add Ohio Casualty as a defendant. Pierce never filed a sworn statement of claim in the mortgage records. Ohio Casualty filed a motion for summary judgment, contending that Pierce was required to comply with statutory notice and recordation, and because it failed to do so within 45 days of Jefferson Parish’s acceptance of the project, Pierce could not recover from Ohio Casualty. Pierce argued that the statute did not affect its right to proceed in contract. After a bench trial, the trial court rendered judgment in favor of Pierce for sums owed under the contract plus judicial interest from the date of the original judgment. Ohio Casualty appealed, arguing that the trial court erred in not dismissing Pierce's claims. The court of appeal reversed and ruled in Ohio Casualty's favor. The Supreme Court, however, disagreed and affirmed the trial court judgment. View "Pierce Foundations, Inc. v. JaRoy Construction, Inc." on Justia Law

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The issue this case presented to the Supreme Court centered on the lower courts’ interpretation of portions of a written mineral agreement. The agreement was prepared by a mineral leaseholder and ostensibly conveyed to an exploration company an “exclusive option to sublease” at least 15 percent of the leaseholder’s mineral rights. The lower courts interpreted the agreement as imposing an obligation on the exploration company to execute the sublease rather than simply allowing the exploration company the right to execute the sublease. Because the exploration company did not execute such a sublease, the lower courts awarded damages to the leaseholder for breach of contract. When the Court granted certiorari review, the lower courts had awarded to the leaseholder other damages, related to the exploration company’s obligation to execute a mineral sublease. The Supreme Court determined that the lower courts erred in ruling that the exploration company was obligated by the agreement to sublease mineral rights. Instead, the Court found the agreement afforded the exploration company a non-binding option to sublease (for which the exploration company paid $1.4 million), but that if the exploration company exercised the non-binding option, it was then obligated to sublease at least 15 percent of the leaseholder’s rights described in the agreement. Accordingly, the damage award on the breach of contract claim for failing to sublease at least 15 percent of the leaseholder’s mineral rights was reversed. However, the Court also found the exploration company breached its obligation to complete a seismic survey, and the Court affirmed the corresponding award of damage. Because the record did not support a finding that the exploration company acted in bad faith, we examine the effects of a contractual prohibition against consequential damages that the lower courts refused to apply based on those courts’ findings of bad faith. Because of the court of appeal's error, any meaningful review of the merits of the exploration company’s argument that its reconventional demand for improper use and sharing of its seismic data was improperly dismissed. The case was therefore remanded to the court of appeal the question of the propriety of that dismissal and, as that court then deems necessary, the question of whether the record supports the exploration company’s request for relief, or whether remanding to the district court for the taking of additional evidence is required. View "Olympia Minerals, LLC v. HS Resources, Inc." on Justia Law

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In 1998, Jerry Lee Baldwin entered into a written agreement with the Board of Supervisors for the University of Louisiana System to serve as the head football coach at the University of Southwestern Louisiana, now University of Louisiana at Lafayette (UL). The contract provided that Baldwin’s employment with UL would last until January 31, 2003. By letter dated November 27, 2001, Baldwin was “relieved of [his] duties” as UL’s head coach effective November 26, 2001, after winning only six of twenty-seven games (an 18% win record). Baldwin continued to receive his full monthly salary and other employee benefits from UL including health insurance, accrual of leave time, and accrual of retirement credits for the remainder of the contract term. Baldwin sued the Board over the contract. Defendants sought review of the court of appeal’s determination that the coach’s contract had been terminated, which triggered a contractual obligation to provide notice. Interpreting the contract in its entirety, the Supreme Court found that the appellate court erred in finding that the failure of notice constituted a breach of contract under the facts of this case. Accordingly, the Court reversed the appellate court’s decision and reinstated the summary judgment rendered by the trial court, which dismissed the coach’s breach of contract claim against defendants. View "Baldwin v. Board of Supervisors for the University of Louisiana System" on Justia Law

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The Louisiana Supreme Court granted this writ application to determine whether a plaintiff had a private right of action for damages against a health care provider under the Health Care and Consumer Billing and Disclosure Protection Act. Plaintiff Yana Anderson alleged that she was injured in an automobile accident caused by a third party. She received medical treatment at an Ochsner facility. Anderson was insured by UnitedHealthcare. Pursuant to her insurance contract, Anderson paid premiums to UnitedHealthcare in exchange for discounted health care rates. These reduced rates were available pursuant to a member provider agreement, wherein UnitedHealthcare contracted with Ochsner to secure discounted charges for its insureds. Anderson presented proof of insurance to Ochsner in order for her claims to be submitted to UnitedHealthcare for payment on the agreed upon reduced rate. However, Ochsner refused to file a claim with her insurer. Instead, Ochsner sent a letter to Anderson’s attorney, asserting a medical lien for the full amount of undiscounted charges on any tort recovery Anderson received for the underlying automobile accident. Anderson filed a putative class action against Ochsner, seeking, among other things, damages arising from Ochsner’s billing practices. Upon review of the matter, the Supreme Court found the legislature intended to allow a private right of action under the statute. Additionally, the Court found an express right of action was available under La. R.S. 22:1874(B) based on the assertion of a medical lien. View "Anderson v. Ochsner Health System" on Justia Law

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Shelter Mutual Property Insurance Company retained Rimkus Consulting Group, Inc. to provide an engineering evaluation and expert witness services in connection with its defense of litigation resulting from a claim for hurricane damages brought by a corporation insured by Shelter. Rimkus sent Shelter a letter confirming the engagement and indicating Rimkus' services were subject to “Terms and Conditions” attached to the letter. The “Terms and Conditions” included a forum selection clause which required venue for any suits arising out of the contract to be in Harris County, Texas. When a dispute arose, Shelter filed suit against Rimkus in the 15th Judicial District Court for the Parish of Lafayette. Rimkus filed an exception of improper venue, arguing the forum selection clause included in its “Terms and Conditions” required suit to be brought in Texas. Shelter opposed the exception, arguing it never agreed to the unilateral “Terms and Conditions” and thus they were not part of the agreement between the parties.The Louisiana Supreme Court granted this writ application to resolve a split in the circuit courts of appeal regarding whether forum selection clauses were per se violative of public policy in Louisiana. Answering that question in the negative, it reversed the rulings of the lower courts. View "Shelter Mutual Insurance Co. v. Rimkus Consulting Group, Inc." on Justia Law

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An insurance company appealed a decision on the issue of coverage under a claims-made-and-reported policy. The appellate court found that, under the Direct Action Statute, an insurer could not use the policy’s claim-reporting requirement to deprive an injured third party of a right that vests at the time of injury. After considering the applicable law, the Supreme Court found that the reporting provision in a claims-made-and-reported policy was a permissible limitation on the insurer’s liability as to third parties and did not violate the Direct Action Statute. Accordingly, the Court reversed that portion of the court of appeal’s decision relating to the claim of the injured third party, and reinstated the trial court’s judgment, finding no coverage. View "Gorman v. City of Opelousas" on Justia Law