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Louisiana Tort Law Update – May 2015

Here are some recent Louisiana case law updates that may affect your personal injury case.

 

Negligence and Limited Liability Companies

Hodge v Strong Built International, LLC, Third (La.) Circuit, CA 14-1086 (3/4/15)

Plaintiff’s father fell from his ladder-style deer stand when its straps broke; he died due to the injuries from the fall.  The lawsuit was filed, naming multiple defendants, including the company that manufactured the deer stand, a limited liability company, as well as the sole member/manager of the limited liability company.

The member/manager, in his individual capacity, argued that as the member/manager of a Louisiana limited liability company he is shielded from individual liability pursuant to La.R.S. 12:1320.

Plaintiffs argued that the court should “pierce the corporate veil,” finding the member/manager personally liable for their damages.  Generally, Louisiana courts have allowed “piercing the corporate veil” in two exceptional circumstances: 1) when the company is the “alter ego” of the members and has been used to defraud third parties; and 2) when the members have failed to conduct business on a “corporate footing” such that it is not possible to distinguish the corporation from its managers.

The doctrine of piercing the corporate veil applies to corporations and limited liability companies. In determining whether a company is an “alter ego,” the court s consider factors such as commingling of corporate and member funds, failing to follow corporate formalities, failing to hold regular shareholder and director meetings, and undercapitalization.

But claimants “bear a heavy burden of proving that the shareholders disregarded the corporate entity to such an extent that it ceased to become distinguishable from themselves” if they are not alleging fraud on the part of the shareholder/members. Again, the burden lies on the plaintiffs, the party trying to pierce the veil.

Here, the plaintiffs offered no evidence to contradict the member/manager’s affidavit regarding his personal liability under the “breach of professional duty” exception to La.R.S. 12:1320(D). And there was insufficient evidence in the record to create a genuine issue of material fact with regard to the ‘other negligent or wrongful act’ exception to La. R.S. 12:1320(D).

The Supreme Court has listed four factors to determine whether the “other negligent or wrongful act” exception applies: 1) whether a member’s conduct could be fairly characterized as a traditionally recognized tort; 2) whether a member’s conduct could be fairly characterized as a crime, for which a natural person could be held culpable; 3) whether the conduct at issue was required by, or was in furtherance of, a contract between the claimant and the LLC; and 4) whether the conduct at issue was done outside the member’s capacity as a member.

Courts must use the four factors to evaluate each situation on a case-by-case basis.
In this case, the plaintiffs introduced nothing showing that the member/manager’s actions were “something more” than his duties as a member/manager of the LLC. There is nothing in the record suggesting that he undertook additional duties to the plaintiffs or that he failed to disclose that he was working on behalf of the LLC. Therefore, there is nothing that would suggest that the limitations of liability provided by La.R.S. 12:1320 would not apply to the member/manager.

 

 

Slip and Fall

Scott v Dillard’s, Inc., Fifth (La.) Circuit, No. 14-CA-755 (3/11/15)

In slip-and-fall cases, the plaintiff bears the initial burden of proving each element of her cause of action under La. R.S. 9:2800.6(B): “B. In a negligence claim brought against a merchant by a person lawfully on the merchant’s premises for damages as a result of an injury, death, or loss sustained because of a fall due to a condition existing in or on a merchant’s premises, the claimant shall have the burden of proving …(2) The merchant either created or had actual or constructive notice of the condition which caused the damage, prior to the occurrence.”

Constructive notice requires that the claimant prove the condition existed for some time period prior to the fall, though the time period need not be specified in minutes or hours. The evidence required to prove the temporal element may be either direct or circumstantial. Therefore, a claimant who simply shows that the condition existed without an additional showing that the condition existed for some time before the fall has not carried the burden of proving constructive notice as mandated by the statute.

 

 

Prescription

Turner v Hidden Lake, LLC of AL, Fourth (La.) Circuit, No. 2014-CA-0240 (3/4/15)

The court found no merit in plaintiff’s argument that prescription was interrupted under the continuing tort doctrine.

The prescriptive period for delictual actions is one year, which commences to run from the day injury or damage is sustained. La. C.C. art. 3492. The continuing tort doctrine, well recognized in Louisiana case law, is an exception to the general rules of prescription. The continuing tort exception, however, only applies when continuous conduct causes continuing damages.

Where the cause of the injury is a continuous one giving rise to successive damages, prescription does not begin to run until the conduct causing the damage is abated. In order to allege a continuing tort, a plaintiff must allege both continuous action AND continuous damage.

The trial court found that the claims of plaintiff’s original and first supplemental and amending petitions involved two separate and distinct events.  There were not sufficient facts pled in the original petition for the trial court to find that the original petition gave defendants notice of plaintiff’s amended claims.

 

Jean-Paul Guidry is a personal injury lawyer in Shreveport, LA.  If you have been injured, call JP at 318-865-4878.

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