Dunn v. Reg'l Transit Auth.

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KITTY DUNN, ET AL. v. REGIONAL TRANSIT AUTHORITY, ET AL.

No. 2022-CA-0506

Court of Appeals of Louisiana, Fourth Circuit

July 20, 2023

APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2019-02843 DIVISION "C" Honorable Sidney H. Cates, Judge

Roy A Raspanti ATTORNEY AT LAW COUNSEL FOR PLANTIFFS/APPELLANTS

Kriste T. Utley Ross A. Ledet BOYKIN & UTLEY -AND- N. Sundiata Haley HALEY LAW FIRM, LLC COUNSEL FOR DEFENDANTS/APPELLEES Court composed of Chief Judge Terri F. Love, Judge Joy Cossich Lobrano, Judge Karen K. Herman

KAREN K. HERMAN, JUDGE

Plaintiffs in this action are former employees and retirees of New Orleans Public Service Incorporated ("NOPSI") and/or Transit Management of Southeast Louisiana ("TMSEL"). On March 15, 2019, Plaintiffs sued the Regional Transit Authority ("RTA") and TMSEL (collectively "Defendants"), asserting that Defendants had denied them benefits owed to them under their employees' welfare benefits plan.

On January 8, 2021, Defendants filed an exception contending that Plaintiffs' claims had prescribed. On February 14 2022, the trial court sustained that exception. Plaintiffs filed a timely appeal from that judgment. After an initial review of the judgment of February 14, 2022 this Court remanded the matter to the trial court on January 18, 2023 with instructions to amend its February 14, 2022, judgment to make it final and appealable pursuant to La. C.C.P. art. 1918 by including the appropriate and necessary decretal language. On March 17, 2023, the trial court complied with those instructions, rendering a judgment sustaining the exception of prescription and dismissing all of Plaintiffs' claims. For the reasons discussed below, we affirm that judgment as to all Plaintiffs except Doris Lloyd, Allen Santee, and Wardell Williams. For these individuals, the judgment is reversed.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Plaintiffs' petitions and the parties' briefs set out the following pertinent facts. NOPSI was a privately held company which, prior to 1983, operated the public transit system in Orleans Parish. In June 1983, the RTA acquired the public transit system from NOPSI, and TMSEL began operating and managing the system. With that acquisition, NOPSI employees became TMSEL employees.

Prior to RTA's acquisition, in 1978, NOPSI, the Amalgamated Transit Union, and the City of New Orleans entered into an "Agreement Pursuant to Section 13(c) of the Urban Mass. Transportation Act of 1964" (the "13(c) Agreement"). The purpose of this agreement was to provide various "fair and equitable arrangements" for the workers of the New Orleans public transit system. On March 17, 1983, in the months before the acquisition was finalized, the RTA and TMSEL, as successors in interest to NOPSI, agreed to assume "the rights, duties and responsibilities" contained in the 13(c) Agreement. Section 2 of that agreement required that RTA and TMSEL preserve and continue the rights and benefits of those individuals formerly employed by NOPSI.

Contemporaneous with the acquisition of the transit system, RTA, TMSEL, and NOPSI entered into the "Employee and Retiree Pension and Welfare Agreement" ("Retiree Welfare Benefit Agreement"), whereby RTA and TMSEL agreed to provide future retirees the same coverage and benefit levels that NOPSI had provided. Furthermore, the Retiree Welfare Benefit Agreement required RTA and TMSEL to set up a funding structure in order to ensure the pension benefits would be paid.

From 1983 until March 2006, the Defendants administered the employee welfare benefit plan as it had been administered by NOPSI. That changed in the aftermath of Hurricane Katrina; because of the economic catastrophe wrought by that storm, RTA suffered a revenue crisis. As one of the results, the Defendants began charging medical insurance premiums to Plaintiffs (and their spouses and dependents) and also stopped providing quarterly Medicare premium and deductible reimbursements to Plaintiffs over the age of 65 years old.

This change in the administration of the benefits plan came to a head in early 2006. In a letter dated March 6, 2006, TMSEL General Manager William J. Deville explained to the employees and retirees that Hurricane Katrina had "decimated" their operation, and that TMSEL and the RTA did not have the financial resources to continue operating the public transit system and pay the benefits promised by the agreements. Mr. Deville closed his letter with the following language:

Please be assured that we are doing everything in our power to acquire resources, to rebuild, to restore systems and services and to reemploy as many people displaced by disaster as possible. We will not ease-up on this journey.

These are not usual times or usual decisions, but nonetheless, I wish you all the best for the days ahead.

Plaintiffs assert that in these communications RTA and TMSEL led them to believe that these changes were temporary and that full benefits would be restored in the future.

The reduction of benefits continued for more than five years through January of 2012, when Defendants further reduced the benefits by increasing the portion of the medical insurance premiums Plaintiffs would have to pay. In February 2012, three of the named Plaintiffs met with counsel for the RTA to discuss retiree welfare benefits. At that meeting, RTA and TMSEL were asked to reinstate the various welfare benefits promised by NOPSI. In response, Plaintiffs were told that RTA and TMSEL were unwilling to reinstate the various welfare benefits. Further, they were advised that if Plaintiffs were to initiate litigation against the RTA regarding the welfare benefits, RTA would require Plaintiffs to pay 100% of medical insurance premiums.

On October 8, 2012, a group of retirees made a formal written demand for the reinstatement of their welfare benefits, as well as payment of damages resulting from the violation of fiduciary duties by RTA and TMSEL. Defendants did not respond in writing to that demand.

On December 31, 2012, 39 retirees filed suit against the RTA and TMSEL in federal court, alleging federal claims under ERISA and state law claims. See Mary Smith, et al v. Regional Transit Authority, et al. No. 12-3059, United States District Court for the Eastern District of Louisiana ("Mary Smith").^[1] The complaint alleged various federal statutory violations as well as supplemental state law claims. In a judgment dated October 23, 2015, the court granted a motion for summary judgment filed by the Defendants and dismissed all claims with prejudice. That judgment was affirmed on appeal by the U.S. Fifth Circuit Court of Appeals. See Smith v. Regional Transit Authority, 827 F.3d 412 (5th Cir. 2016).

On March 15, 2019, Plaintiffs filed the instant suit. Plaintiffs filed several amended petitions to add plaintiffs and allegations. The initial group of 164 plaintiffs grew to a total of 183 plaintiffs with the "Fourth Supplemental and Amended Petition." In the various petitions, Plaintiffs alleged causes of action grounded in several theories, which will be discussed below.

The Defendants initially responded to the petitions with a Dilatory Exception of Vagueness in which they argued that Plaintiffs needed to include in their allegations the dates they each retired and suffered the complained of damages. That exception was granted on October 23, 2020. Plaintiffs were given 60 days to amend their petition and include all of the additional information. Plaintiffs filed their "Third Supplemental and Amending Petition" supplying the retirement dates on November 28, 2020.

On January 21, 2021, Defendants filed a Peremptory Exception of Prescription maintaining that the Petition was prescribed on its face. On August 4, 2021, Plaintiffs filed their Sixth Supplemental and Amending Petition to counter the assertion that their claims had prescribed. In that pleading, Plaintiffs cited the Mary Smith suit against these same Defendants in U.S. District Court referred to above. Plaintiffs claimed to be solidary co-obligees with the Mary Smith plaintiffs and alleged that the Defendants were co-obligors to Plaintiffs in both suits. Therefore, Plaintiffs alleged that pursuant to Louisiana law, the filing of the Mary Smith suit had interrupted prescription.

The Exception of Prescription was argued before the trial court on November 5, 2021, with no evidence offered by either side. As indicated above, the trial court sustained the exception and dismissed Plaintiffs' claims. In its Reasons for Judgment dated February 14, 2022, the trial court applied the three-year prescriptive period set out by La. C.C. art. 3494. The trial court also concluded that "[P]rescription began to run from either the date of direct notification benefit reduction on March 6, 2006, or the date of retirement when the Plaintiffs began actually receiving the reduced benefits from TMSEL."

DISCUSSION

Standard of Review

In Boulmay v. Heebe, 2017-0638, pp. 3-4 (La.App. 4 Cir. 12/27/17), 238 So.3d 459, 462, this Court reiterated the standard of review relative to peremptory exceptions of prescription as follows:

Ordinarily, a party asserting a peremptory exception of prescription bears the burden of proof. Trust for Melba Margaret Schwegmann v. Schwegmann, [20]09-968, p. 8 (La.App. 5 Cir. 9/14/10), 51 So.3d 737, 742. However, if prescription is evident from the face of the pleadings, the plaintiff will bear the burden of showing an action has not prescribed. Id. If evidence is introduced at the hearing on the peremptory exception of prescription, the district court's findings of fact are reviewed under the manifest error-clearly wrong standard of review. Rando v Anco Insulations, Inc.,[20]08-1163, p. 20 (La. 5/22/09) 16 So.3d 1065, 1082. If there is [ ] an

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