Court: Louisiana Court of Appeal; November 29, 2016; Louisiana; State Appellate Court
Judge Dennis R. Bagneris, Sr. addressed a writ application filed by defendants Eddie Lohmann, Lohmann Fencing, and AG Security Insurance Company on December 4, 2015, seeking relief from the denial of exceptions of prescription in favor of plaintiff Doris Palmer. Palmer subsequently appealed on April 18, 2016, asserting that the trial court wrongly granted a motion for summary judgment to Hamp’s Construction, LLC and denied her motion for a new trial. On April 22, 2016, the Court consolidated the writ application with the appeal.
The Court found that there were genuine issues of material fact regarding Hamp’s degree of control over its subcontractor, Lohmann Fencing, and the work performed under its contract with the Board of Commissioners of the Port of New Orleans, thus concluding that the trial court erred in granting summary judgment. Conversely, the Court granted review of the defendants' writ application but denied relief, affirming the trial court's judgment that denied their exceptions of prescription.
The procedural history reveals that Hamp’s entered into a contract with the Board of Commissioners on September 20, 2007, for fence replacement. Palmer alleged she fell into a hole left by the construction while working on September 1, 2009, and filed a petition for damages on July 15, 2010, against Hamp’s and its insurer, claiming a breach of duty to fill the holes. Hamp’s then initiated a third-party demand against Lohmann Fencing, citing a subcontract agreement that included indemnification and additional insured provisions. Subsequent motions to amend and substitute counsel took place, culminating in a partial reversal by the Court, which mandated the inclusion of Eddie Lohmann as a defendant. Hamp’s motion for summary judgment claimed no genuine issues existed regarding liability for Lohmann Fencing's negligence.
Hamp’s submitted several exhibits in support of its motion for summary judgment, including an affidavit from its owner, a contract with the Port of New Orleans, and a subcontract with Lohmann Fencing. On December 8, 2014, Ms. Palmer amended her petition to add Eddie Lohmann as a defendant, claiming that Hamp’s, Lohmann, and Lohmann Fencing shared responsibility for removing a fence post, which created a hazardous condition. The defendants filed exceptions of prescription, contending that Palmer’s amendment was filed over three years after the prescriptive period, as her claims against them were based on an accident from September 1, 2009, and they were not served until well after the incident. They argued that because they are not solidarily liable with Hamp’s, the timely suit against Hamp’s does not extend the prescription period for the other defendants.
On August 17, 2015, the defendants submitted a supplemental memorandum supporting their exceptions, asserting that Hamp’s did not perform or supervise any fencing work, nor did it use its equipment for that purpose. Consequently, Hamp’s argued that it should not be held liable for Lohmann Fencing's negligence due to a lack of operational control. In opposition to this, Ms. Palmer claimed that Hamp’s was indeed the contractor for the Port of New Orleans, and the subcontract with Lohmann Fencing was invalid due to various legal violations. She contended that Hamp’s retained operational control over Lohmann Fencing’s work and, therefore, was liable for any negligence on the part of the subcontractor.
Ms. Palmer submitted several exhibits in opposition to the motion for summary judgment, including a contract between the Port of New Orleans and Hamp’s, depositions from Eddie Lohmann and John Bonomo, an affidavit from William James Meliet, and the minutes from two construction meetings. Following a hearing on November 6, 2015, the trial court denied the exceptions of prescription filed by Eddie Lohmann, Lohmann Fencing, and AG Security, but granted summary judgment in favor of Hamp’s, dismissing it from the case with prejudice. On December 4, 2015, Lohmann and others sought supervisory review of the trial court's denial of their exceptions. The trial court subsequently denied Ms. Palmer’s motion for a new trial on February 2, 2016. In light of the dismissal of Hamp’s, this Court consolidated the supervisory review with Ms. Palmer's appeal.
The Court's first issue for consideration is whether the trial court correctly found no culpability on Hamp’s part in granting summary judgment. Appellate review of such motions is de novo, assessing whether material facts are genuinely disputed and if the mover is entitled to judgment as a matter of law. Summary judgment is warranted when the submitted evidence shows no genuine issue of material fact, meaning a fact that could affect the outcome of the case. The moving party does not need to disprove all elements of the opposing party's claim but must demonstrate a lack of factual support for essential elements. In this instance, it is acknowledged that a contract existed between Hamp’s and the Port regarding fence work, which included provisions for worker and public safety.
Contractors are required to maintain a competent superintendent on-site during the project, with full authority to execute orders from the Engineer and oversee all work, including that of subcontractors. Any transfer of the superintendent requires the Engineer's approval. Contractors cannot assign or subcontract the contract without the Board's prior written consent, which is contingent upon the Engineer determining it benefits the Board.
Contractors must notify the Engineer of proposed subcontractors, who can object to any deemed incompetent based solely on unsatisfactory past performance. Subcontractors performing work valued at $50,000 or more must be licensed. Contractors are responsible for the acts and omissions of their subcontractors and their employees.
Contractors must perform at least 60% of the work using their own resources unless a reduction is approved by the Director of Construction. A specific subcontract between Hamp’s and Lohmann Fencing outlines that Lohmann must manage all aspects of fencing work, including timely execution and coordination with other subcontractors. Lohmann must also maintain a qualified job site supervisor and is bound to the conditions of the contract between the Owner and Contractor.
The legal issue at hand is whether Lohmann Fencing operates as an independent contractor or merely as an employee of Hamp’s, with Louisiana law generally holding employers liable for the actions of their employees in the scope of employment.
To establish employer liability under Article 2320, plaintiffs must demonstrate the existence of an employer-employee relationship and that the tortious act occurred within the scope of employment. Louisiana law generally holds that employers are not liable for torts committed by independent contractors; however, an exception applies if the employer retains the right to supervise or control the contractor's activities. The distinction between employees and independent contractors is determined on a case-by-case basis, considering factors such as the contractor's freedom of action, contractual obligations, and the nature of the relationship. The principal test for this determination focuses on the employer's reserved control over the work, rather than the actual supervision exercised. The designation of a contractor as "independent" does not affect the rights of third parties; those rights depend on the actual nature of the relationship rather than its title.
Genuine issues of material fact exist regarding whether Eddie Lohmann/Lohmann Fencing is classified as an employee or independent contractor of Hamp’s. Mr. Meliet, the Manager of Construction Services for the Port of Orleans, indicated in his affidavit that the subcontract between Hamp’s and Lohmann Fencing was invalid due to several reasons: Hamp’s did not notify the Board of its intention to hire Lohmann, did not allow the Board or Mr. Meliet to object to this hiring, did not receive permission from the Board, and Lohmann Fencing lacked the necessary state licensing and performance bond to undertake the work. Furthermore, Meliet asserted that even if a subcontract existed, Hamp’s retained operational control over the work, necessitating their active supervision regardless of whether the work was performed by their employees or a subcontractor.
Eddie Lohmann also testified that he was unlicensed in Louisiana at the time of the subcontract and had no prior experience working in the state. He stated that he was bound by the contract terms between Hamp’s and the Port of Orleans, which mandated that Hamp’s supervise all work, including that done by subcontractors, and prohibited any transfer of work without the Engineer's approval.
The trial court’s granting of summary judgment in favor of Hamp’s, dismissing all claims against it, was deemed erroneous due to unresolved factual questions about Hamp’s supervisory rights over Lohmann Fencing's work.
Regarding prescription, the court evaluated whether the trial court erred in denying exceptions raised by Eddie Lohmann/Lohmann Fencing and AG Security, who contended that Ms. Palmer added them as defendants beyond the prescriptive period and lacked sufficient notice of her claim. Ms. Palmer argued that the prescriptive period was interrupted by her timely suit against Hamp’s, asserting that all involved parties were joint tortfeasors. The appellate court will not overturn the trial court’s findings unless clearly erroneous, focusing on the reasonableness of the fact finder’s conclusions. The Louisiana Supreme Court has emphasized that prescriptive statutes are to be interpreted in favor of plaintiffs, particularly when multiple reasonable interpretations exist.
A personal injury lawsuit in Louisiana is subject to a one-year liberative prescription period, as stated in La. C.C. art. 3492. Ms. Palmer's injury occurred on September 1, 2009, but she did not name Eddie Lohmann, Lohmann Fencing, and AG Security as defendants until January 27, 2014, exceeding the one-year limit. Therefore, her supplemental petition indicated that prescription had run, placing the burden on her to show why her claims remained viable.
Ms. Palmer argued that her claims were interrupted by the filing of a lawsuit against Hamp's on July 15, 2010, within the prescriptive period. Under La. C.C. art. 3462, filing suit in a competent jurisdiction interrupts prescription, which applies to all joint tortfeasors under La. C.C. art. 2324(C) and solidary obligors under La. C.C. art. 1799. This interruption continues as long as the suit is pending (La. C.C. art. 3463) but can be negated by abandonment or failure to prosecute.
The trial court denied the defendants’ exceptions of prescription, and the appellate court agreed, finding that Ms. Palmer's timely filing against Hamp's effectively interrupted prescription for the other joint tortfeasors. The appellate court reversed the trial court's decision that granted summary judgment in favor of Hamp’s Construction, LLC, and remanded the matter for further proceedings. The writ application by Lohmann, Lohmann Fencing, and AG Security was granted, but relief was denied, affirming the lower court's denial of the exceptions of prescription. The appeal resulted in a reversal and remand, while the writ application resulted in a grant with no relief.
Additionally, the excerpt references the application of La. C.C.P. art. 966 as it existed prior to its amendment on January 1, 2016, and discusses the role of the 'Engineer' in the contract between the Port of Orleans and Hamp's, with Mr. Meliet also identified as the 'Engineer' during the contract's duration.
