Summary
submitting that considerations for the bad faith determination should include the amount of time and effort plaintiff/plaintiff's counsel used to investigate the claim and the tortfeasor's ability to respond in damages before filing in plaintiff's parish of domicile that but for the UM policy would not be a proper venue
Summary of this case from Jackson v. Greenwich Ins. Co.Opinion
No. 2007-C-1606.
January 23, 2008. Writ Denied April 4, 2008.
Appeal from the Civil District Court, Orleans Parish, No. 05-13306, Division "L", Kern A. Reese, J.
Leon A. Aucoin, Law Office of Leon A. Aucoin, Covington, LA, for Defendants/Appellants.
(Court composed of Judge PATRICIA RIVET MURRAY, Judge MAX N. TOBIAS JR., Judge DAVID S. GORBATY).
Relators, the Gray Insurance Company ("GIC"), Brent Trauth ("Mr. Trauth"), and Preheat, Inc., seek supervisory review of the trial court's judgment denying their exceptions of improper venue and prescription, and a motion for summary judgment filed by co-defendant, Progressive Security Insurance Company ("Progressive"). For the reasons set forth below, we grant the writ as to the exception of improper venue, and remand for further proceedings.
Progressive has not taken a writ from the trial court's judgment, and relators do not have standing to seek review of a judgment rendered against a co-defendant. We find Michelet v. Scheuring Security Services, Inc., 95-2196 (La.App. 4 Cir. 9/4/96), 680 So.2d 140, to be inapposite. However, because the issues are related, we will discuss the motion for summary judgment.
FACTS AND PROCEDURAL HISTORY:
Plaintiff, Jennifer Gray ("Ms. Gray"), filed suit in the Civil District Court for the Parish of Orleans for injuries allegedly sustained in an automobile accident, which occurred in Jefferson Parish on January 7, 2005. The petition alleges the joint and solidary liability of Mr. Trauth, the driver of the other vehicle, Preheat, Inc., Mr. Trauth's employer and owner of the vehicle, GIC, the liability insurer of the vehicle, and Progressive, Ms. Gray's uninsured motorist ("UM") carrier.
Progressive filed a motion for summary judgment arguing that there were no genuine issues of material fact that the value of Ms. Gray's damages would not exceed the $4,000,000.00 liability coverage provided by GIC, which the trial court denied.
Relators filed, simultaneously with their answer, an exception of venue alleging that Ms. Gray named her UM carrier in bad faith for the purpose of creating venue in Orleans Parish, Ms. Gray's domicile. The exception maintains that the accident occurred in Jefferson Parish, Mr. Trauth was domiciled in Plaquemines Parish, Preheat, Inc. was a Louisiana corporation with its registered office in Lafayette Parish, and GIC was a domestic insurer domiciled in Jefferson Parish.
Additionally, relators filed an exception of prescription pursuant to La. Civ. Code art. 3462, which provides, in part, that "[i]f action is commenced in an incompetent court, or in an improper venue, prescription is interrupted only as to a defendant served by process within the prescriptive period." The record reflects that the accident occurred on January 7, 2005, and the defendants were served on or after January 26, 2007.
All matters were heard on September 21, 2007. In a judgment rendered November 15, 2007, the trial court denied Progressive's motion for summary judgment finding that the amount of damages had not been sufficiently established, making it premature to grant summary judgment at that time. The trial court also denied relators' exception of prescription, stating that the issue was moot in light of the denial of summary judgment. The judgment and reasons for judgment do not address the exception of venue. Relators note in their brief to this Court that they have contacted the trial court regarding a ruling on the exception of venue, but have not yet received a response.
DISCUSSION:
In the present case, the trial court determined that summary judgment was premature. As stated previously, a review of that judgment has not been sought by Progressive. Therefore, the judgment stands.
Exceptions of Prescription and Improper Venue :
Louisiana Code of Civil Procedure art. 76 provides, in pertinent part, "An action on a health and accident insurance policy may be brought in the parish where the insured is domiciled, or in the parish where the accident or illness occurred." The relevant portion of La. Code Civ. Proc. art. 73(A) states, "An action against joint or solidary obligors may be brought . . . in the parish where the plaintiff is domiciled if the parish of plaintiff's domicile would be a parish of proper venue against any defendant under . . . Article 76. . . ."
Clearly, when Ms. Gray filed her petition for damages, alleging solidary liability among her UM carrier and the other defendants, venue was proper in Orleans, the parish of her domicile, pursuant to articles 73 and 76. However, the exception of prescription in this case is based on La.C.C. art. 3462, and the assertion that venue is improper is based on the allegation that Ms. Gray named her UM carrier in bad faith in order to create proper venue in Orleans Parish. A problem arises here because the trial court determined that the denial of summary judgment rendered the exception of prescription moot, but did not make a factual determination regarding bad faith, and did not specifically rule on the exception of venue that was before the court.
It can be argued that implicit in the trial court's denial of summary judgment, is the finding that Ms. Gray was not in bad faith in naming her UM carrier. From a review of the record, it does not appear that such a finding would be clearly wrong. The record reflects that Ms. Gray named her UM carrier as a defendant in the original petition (not in response to the exception of improper venue) at a time when, as she claims, GIC had not disclosed its policy limits. There is nothing in the record showing bad faith on the part of Ms. Gray.
However, before the trial court can make a determination on the issue of prescription it must rule on the exception of improper venue. Therefore, the trial court's declaration that the exception of prescription was rendered moot by its ruling on the motion for summary judgment was improper. A judgment must be rendered on the exception of venue, after a contradictory hearing, before the court rules on the exception of prescription.
In Haines v. Millet, 2006-0289, p. 1 (La. 5/26/06), 950 So.2d 678, the Louisiana Supreme Court remanded under similar circumstances, stating: "we cannot determine whether the trial court made a specific finding on whether plaintiff named his uninsured motorist carrier in bad faith solely for the purpose of obtaining venue in Orleans Parish. Accordingly, the case is remanded to the trial court to conduct a contradictory hearing on this issue and rule anew on the exception of improper venue. See Farrar v. Haedicke, 97-2923 (La. 12/2/97), 702 So.2d 690."
In Farrar, at the hearing on the venue exception, defendants contended that plaintiffs joined their uninsured motorist carrier solely for the purpose of making venue proper in the parish of plaintiffs' domicile. Defendants argued that the tortfeasor's liability insurer had policy limits of $1,500,000.00 and that plaintiffs acted in bad faith in joining the uninsured carrier. The trial court overruled the exception of venue. The Second Circuit Court reversed, finding that Union Parish (plaintiffs' domicile) was a parish of proper venue under La.C.C.P. articles 73 and 76. The Louisiana Supreme Court remanded to the trial court to conduct a contradictory hearing on whether plaintiffs joined their uninsured motorist carrier in bad faith solely for the purpose of obtaining venue in Union Parish, and to rule anew on the exception of improper venue. The Court determined that the question of whether plaintiffs were in bad faith in joining their uninsured motorist carrier is one that should be decided, prior to trial, at the time of the contradictory hearing on the exception of improper venue.
CONCLUSION:
Thus, we grant relators' writ and remand to the trial court for it to make a factual determination regarding bad faith as it relates to the issue of venue, and render a judgment on the exception of improper venue; only then can the exception of prescription be considered.
WRIT GRANTED; REMANDED.
TOBIAS, J., concurs and assigns reasons.
I respectfully concur.
Following the remand of Haines v. Millet, 06-0289 (La. 5/26/06), 950 So.2d 678, the district court once again ruled as it had before. This court affirmed with one judge dissenting. The Louisiana Supreme Court once again reversed this court stating:
The judgment of the trial court is reversed, and the exception of improper venue is granted for the reasons assigned by the dissenting judge in the court of appeal. The matter is remanded to the trial court which is instructed to transfer the case to an appropriate venue.
Haines v. Millet, 07-1267 (La. 10/5/07), 964 So.2d 375.
That which is missing from the history of Haines is what the dissenting judge on this court stated:
This matter comes before this court a second time on the issue of whether the plaintiff filed his suit in a proper venue. In writ number 2005-C-1412 in this court, a majority of the court found no error in the trial court's ruling that venue was proper in Orleans Parish. The dissent in that writ stated in pertinent part:
. . . [T]he plaintiff/respondent has failed to demonstrate that his claims will exceed the $2,000,000.00 policy limits of the defendants/relators, Millet and Hilton Hotels Corporation. The plaintiff/respondent's insurer, State Farm, provides plaintiff only $10,000.00 of uninsured/underinsured coverage. Since the accident did not occur in Orleans Parish, but rather Jefferson Parish, and the individual defendant (Millet) is domiciled in St. Charles Parish [sic], venue is proper in Jefferson, St. Charles [sic] or East Baton Rouge Parish. Farrar v. Haedicke, 97-2923 (La. 12/2/97), 702 So.2d 690.
The Louisiana Supreme Court granted supervisory writs and in a per curiam remanded the matter to the trial court to determine whether the plaintiff had filed his suit in bad faith by naming his uninsured/underinsured automobile liability carrier in order to obtain venue in Orleans Parish. Haines v. Millet, 06-0289 (La. 5/26/06), 950 So.2d 678.
The subject accident occurred in Jefferson Parish. The defendant, Hilton Hotels Corporation ("Hilton"), is a foreign corporation with its registered office in East Baton Rouge Parish and its principle business office in Jefferson Parish. Hilton's insurer, the relator herein, is domiciled in East Baton Rouge Parish. The plaintiff is domiciled in Orleans Parish. Alen Millet, the driver of the Hilton vehicle, is domiciled in St. John the Baptist Parish.
From the record before us, the ultimate question is whether a plaintiff (plaintiff's counsel) must make a reasonable effort to determine whether the tortfeasor has adequate insurance or is adequately solvent before naming the plaintiff's uninsured/ underinsured liability insurer that results in the suit being filed in a venue that would not ordinarily be a proper venue under law but for the uninsured/underinsured liability policy of the plaintiff.
Plaintiff's uninsured/underinsured policy limits were $10,000.00.
Plaintiffs' counsel testified that it is the policy of his office to always name his client's uninsured/underinsured liability carrier when the plaintiff's injuries are significant. In the case at bar, the plaintiff, prior to the subject accident, was one hundred percent disabled primarily due to being Hepatitis C positive, having a hepatoma, having undergone a liver transplant, and having undergone knee surgery; he had previous back pain and post the subject accident was experiencing back and cervical pain. At the time the plaintiff filed suit some nine months post initial medical information, plaintiff's counsel was aware that his client might have disc problems that ultimately would require surgery.
Ultimately, the gravamen of the dispute before the court is whether plaintiffs counsel had a duty to investigate whether Hilton could respond in damages to his client and ergo the extent of the solvency of Hilton before filing suit and to a lesser, but equally important, extent determine the policy limits of Hilton's liability carrier. Plaintiffs counsel had been in contact with Hilton's insurance adjuster regarding the property damage claim, which was paid. Plaintiffs counsel never broached with the insurer's adjuster the subject of the quantum of the plaintiffs injuries or inquired about the policy limits of Hilton's policy. Plaintiffs counsel counters that it was his experience that no defendant's insurer will disclose policy limits until suit is actually filed, and/or alternatively, that an adjuster may only be assigned to deal with property damage and another adjuster is assigned to handle the personal injury claim.
As I understand the remand of the Supreme Court to the trial court, the trial court was to determine whether the plaintiff was in "bad faith" when he filed suit in Orleans Parish. I am aware that there exists many definitions of the phrase "bad faith" in our jurisprudence. Black's Law Dictionary (8th Ed. 2004) defines "bad faith" as "[d]ishonesty of belief or purpose the lawyer filed the pleading in bad faith." Citing Restatement (Second) of Contracts § 205 cmt. d (1979), Black's notes that one cannot list all types of bad faith, but it includes "evasion of the spirit of the bargain, lack of diligence and slacking off, willful rendering of imperfect performance, abuse of a power to specify terms, and interference with or failure to cooperate in the other party's performance."
La.C.C.P. art. 863, relative to the signing of pleadings, in pertinent part, states:
B. Pleadings need not be verified or accompanied by affidavit or certificate, except as otherwise provided by law, but the signature of an attorney or party shall constitute a certification by him that he has read the pleading; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact; that it is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law; and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.
* * *
D. If, upon motion of any party or upon its own motion, the court determines that a certification has been made in violation of the provisions of this Article, the court shall impose upon the person who made the certification or the represented party, or both, an appropriate sanction which may include an order to pay to the other party or parties the amount of the reasonable expenses incurred because of the filing of the pleading, including a reasonable attorney's fee.
Thus, the question becomes whether a lawyer who after nine months (approximately eleven months post-accident/injury) fails to investigate adequately whether a defendant can respond in damages without naming a defendant who is contingently liable (i.e., liable only if the underlying tortfeasor and his/her/its insurer cannot respond in damages) violates the letter if not the spirit of article 863 as read in the context of what constitute "bad faith." Here, the trier of fact must make a credibility call that may only be reversed if manifestly erroneous or clearly wrong. But also, a corollary question is whether a lawyer is ethically permitted to fail to reasonably and fully investigate a matter within a reasonable amount of time, and thereby appropriately file suit in a venue that would not ordinarily, under the facts of the case, be a proper venue. Considerations include, inter alia, the amount of time counsel has to investigate the claim and whether counsel can adopt a policy that he/she will always name his/her client's uninsured/underinsured liability insurer in a lawsuit and file the suit at the plaintiff's domicile that but for the uninsured/underinsured liability insurance policy would not be a proper venue.
The trial judge apparently believed the plaintiff's counsel when he stated that he almost always named the plaintiff's uninsured/underinsured liability carrier as party when he filed suit because, among other reasons, it reduced court costs. Certainly such could be viewed as a form of "good faith" which out of necessity precludes a finding of "bad faith."
Weigh against this whether plaintiff's counsel knew or should have known as a matter of common sense and ordinary knowledge that Hilton was a major company with substantial assets whose financial well being could be easily ascertained by resorting to the internet or a stockbroker.
In view of Black's Law Dictionary and the Restatement (Second) of Contracts, quoted above, I conclude that the trial court was manifestly erroneous, clearly wrong, and abused his discretion in the case at bar in holding that Orleans Parish was a proper venue given what plaintiff's counsel should have known and given the length of time he had to investigate the claim before he filed, and actually filed suit. The nature of counsel's client's injuries when weighed against the maximum recovery that a judge or jury could award that would be neither manifestly erroneous nor clearly wrong as a matter of law or would not subject the plaintiff to a reduction in a quantum award on a judgment notwithstanding the verdict must weigh in an attorney's decision where to file suit. To view this case in any other manner would proverbially be said to be straining at a gnat and swallowing a camel. McNeeley[McNeely] v. Town of Vidalia, 157 La. 338, 343, 102 So. 422, 423 (La. 1924); State v. Carter, 107 La. 792, 793, 32 So. 183, 184 (1902); World Trade Center Taxing District v. All Taxpayers Property Owners, and Citizens of World Trade Center Taxing District and Nonresidents Owning Property or Subject to Taxation therein, 05-0048, p. 17 [(]La.App. 4 Cir. 2/1/05), 894 So.2d 1185, 1196, aff'd 05-0374 (La. 6/29/05), 908 So.2d 623.
Accordingly, I would grant the relator's application for supervisory writ, reverse the judgment of the trial court, and remand this matter to the trial court for transfer of the suit to a proper venue: Jefferson Parish, St. John the Baptist Parish, or East Baton Rouge Parish.
This court is bound by Haines.
The trial court erred in not following the Louisiana Supreme Court's instructions to transfer this case to a court of proper venue. The trial court should only have rendered a judgment transferring this case to another venue and should not have ruled on anything else. Thus, I interpret this court's decree as nothing more than a vacating of the trial court's ruling on the exception of prescription; any ruling by the trial court on the summary judgment is similarly null and void. The prescription issue and summary judgment may only be ruled upon by a court of proper venue, which the Supreme Court has said is not Orleans Parish.