Smith v. Transp. Serv. Co.

67 So.3d 487

Tenesha SMITH, Melvin Porter, Sr. and Wallace Dixon

v.TRANSPORT SERVICES COMPANY, Protective Insurance Company and Dan Davis.

No. 2010–CA–1238.

Court of Appeal of Louisiana, Fourth Circuit.

May 4, 2011.

Vernon P. Thomas, Judith A. DeFraites, New Orleans, LA, for Plaintiffs/Appellees Tenesha Smith, Melvin Porter, Sr. and Wallace Dixon, et al.J. Warren Gardner, Jr., Gregory S. LaCour, Christovich & Kearney, L.L.P., New Orleans, LA, for Transport Service Co. of Illinois and Dan Davis.John E. Galloway, Andrea Albert, Galloway, Johnson, Thompkins, Burr & Smith, New Orleans, LA, for Protective Insurance Company.(Court composed of Judge DENNIS R. BAGNERIS, SR., Judge TERRI F. LOVE, and Judge MAX N. TOBIAS, JR.).DENNIS R. BAGNERIS, SR., Judge.

[4 Cir. 1] Transport Service Co. of Illinois, Dan Davis, and Protective Insurance Company (hereinafter collectively referred to as “Transport”), defendants/appellants herein, appeal from a district court judgment, which denied its peremptory exception of prescription and made a determination of liability and causation in favor of plaintiffs who claimed to be injured by an alleged chemical spill in August 2002. After reviewing the record and applicable law, we hereby affirm the denial of Transport's peremptory exception of prescription, we reverse the district court's determination of causation by applying the Housley presumption, and we remand the matter to the district court for further proceedings.

On August 7, 2002, Transport Service Co. of Illinois' driver, Don Davis, hauled a load of spent caustic in a tank on a tractor/trailer from a Marathon Oil Company refinery in Illinois to Harvey, Louisiana. The entire product was pressure off-loaded at Delta Terminal, which had purchased the spent caustic from Marathon. Only residue remained in the tank. Mr. Davis then drove the tractor/trailer to Leonidas Street in New Orleans so that he could eat dinner with his parents. While Mr. Davis was eating dinner, a hissing sound was emitted from [4 Cir. 2] the top of the tractor/trailer's dome area. Neighbors who heard the hissing sound called the police. The police arrived and did not deem an evacuation necessary.

The first lawsuit was filed on August 7, 2003, by Shirley Fulford et al. in the Civil District Court for the Parish of Orleans as a class action; a second lawsuit, also a class action, was also filed on August 7, 2003, in Civil District Court by Yolanda Abram (collectively referred to the “Fulford/Abram plaintiffs”).

Transport timely removed the Fulford and Abram lawsuits to the United States District Court for the Eastern District of Louisiana; the two suits were consolidated. Following a hearing, the plaintiffs' motion for class certification was denied on June 1, 2004, with the order entered into the record on the same day. The Fulford/Abram plaintiffs filed a motion for reconsideration that was denied. The Fulford/Abram plaintiffs appealed to the United States Fifth Circuit, but subsequently dismissed their appeal.

Ms. Smith, Mr. Porter, and Mr. Dixon filed this current lawsuit on June 8, 2004, making the same class action allegations as contained in the Fulford/Abram lawsuits. On September 20, 2004, the trial court granted the defendants' declinatory exception of lis pendens and, pursuant to La. C.C.P. art. 532, stayed the class action claims pending resolution of the federal actions. The trial court also ruled that Ms. Smith, Mr. Porter, and Mr. Dixon could proceed forward with their individual actions against Transport. As to other individuals not named in the lawsuit, the trial court ruled that they had thirty days from the judgment to file their individual actions but that the judgment did not affect any prescriptive periods that had already accrued.

[4 Cir. 3] On October 4, 2004, plaintiffs filed an “Amended Petition” seeking to add five hundred new plaintiffs to the case. The trial court signed an order allowing them to become parties-plaintiffs in the lawsuit of Ms. Smith, Mr. Porter, and Mr. Dixon.

Transport filed a peremptory exception of prescription on December 1, 2004, contending that the claims of the five hundred new plaintiffs had prescribed. On February 11, 2005, the trial court denied the exception of prescription. In the written reasons for judgment, the trial court stated that the earlier filed class actions interrupted prescription for the five hundred new plaintiffs. ¹ After these rulings, the parties agreed to bifurcate the issues of liability and damages, agreeing to first try only the issues of liability and general causation. In early December 2009, the trial court tried the limited issues of liability and general causation, at which eleven plaintiffs testified. In a March 12, 2010 judgment, the trial court relied on the Housley presumption ² and found that: “(1) Defendants were at fault in causing the August 7, 2002 chemical release; (2) Plaintiffs suffered damages as a result of defendants' fault; (3) the chemicals released were capable of causing, and did cause, damage to the plaintiffs; and (4) Defendants are liable for all proved [4 Cir. 4] damages caused by the August 7, 2002 chemical release.” Based on the wording of the judgment, it appears that the trial court did not limit its findings to just general causation, as had been previously agreed to, but also ruled on specific causation for all plaintiffs, even though the vast majority of the plaintiffs did not testify at trial or submit any evidence to support their individual claims.

Transport filed a motion for new trial, which was denied. It then filed a timely petition for a devolutive appeal, which was granted. The plaintiffs sought to have the March 12, 2010 judgment designated as final pursuant to La. C.C.P. art. 1915, which motion was also granted.

Transport has assigned five errors for review:

1. The trial court erred by applying the old class action laws to this case when the newer class action laws govern this action;

2. The trial court erred by not applying the last enacted statute when determining whether the exception of prescription should be granted or denied; 3. The trial court erred when it did not find that the thirty days afforded by La. C.C.P. art. 596 began to run when the federal court order denying class certification was entered into the record;

4. The trial court erred in holding that the Housley v. Cerise, 579 So.2d 973 (La.1991) applied to this case to satisfy each plaintiff's burden of proof on causation;

5. The trial court erred in finding that causation was proven as to all plaintiffs when only eleven of the over five hundred plaintiffs actually testified at trial.

PRESCRIPTION IN THE CONTEXT OF LA. C.C.P. ART. 596

The first issue we address is prescription, which encompasses the first three errors assigned above. Appellate courts review the peremptory exception of prescription using the manifestly erroneous standard of review. Boykins v. Boykins, 07–0542, p. 3 (La.App. 4 Cir. 4/30/08), 984 So.2d 181, 184. If a review [4 Cir. 5] of the entire record demonstrates that the trial court's factual findings were reasonable, the appellate court must affirm. Hammell v. GICILI, 07–0867, p. 2 (La.App. 4 Cir. 2/13/08), 978 So.2d 1022, 1024; Brumfield v. McElwee, 07–0548, p. 4 (La.App. 4 Cir. 1/16/08), 976 So.2d 234, 238.

Prescription statutes require strict construction in favor of upholding the obligation sought to be extinguished. Boykins, 07–0542, p. 4, 984 So.2d at 184. The burden of proving prescription remains with the mover. Brumfield, 07–0548, p. 4, 976 So.2d at 238. However, when the plaintiff's claim appears prescribed, the plaintiff must prove suspension or interruption of prescription. Hammell, 07–0867, p. 2, 978 So.2d at 1024.

In its written reasons for judgment, the trial court stated:

Pursuant to La. C.C.P. art. 596, the prescriptive period of Class Action Suits is as follows:

... Prescription which has been suspended ... begins to run:

* * *

(3) As to all members, thirty days after mailing or other delivery or publication of a notice to the class ... or that the court has denied a motion to certify the class or has vacated a previous order certifying the class.

Pursuant to the Louisiana Civil Code, prescription runs against all persons, unless an exception is established by legislation. La. C.C. art. 3467. The class actions in this matter were filed on August 7, 2003. An interruption of prescription from the filing of a suit in a competent court and in the proper venue or from service of process within the prescriptive period continues as long as the suit is pending. La. C.C. art. 3463.

Both the Fulford and Abram lawsuits are still pending in District Court. Thus, there has been a continuous interruption of prescription, which remained [4 Cir. 6] suspended following the order of Judge Berrigan's denial of the class certification. La. C.C.P. art. 596(3) provides that prescription remains suspended upon the filing of a class action until thirty (30) days after the putative class members are notified that a court has denied class certification. Therefore, the amended petition adding new plaintiffs was timely filed.

Transport argues that the trial court erred by failing to apply La. C.C.P. art. 596 to the issue of prescription; instead the court applied La. C.C. art. 3462, the earlier and more general statute. It argues that in this case, prescription was suspended and not interrupted. Transport contends that prescription began to run again on June 1, 2004, when the United States District Court entered the order denying class certification to the Fulford/Abram plaintiffs. Because the lawsuits were filed on the last day before prescription had run, all members had to be joined within the thirty-day window provided by subsection (3) of article 596. Thus, Transport argues that the claims of the five hundred plaintiffs added to the lawsuit on October 4, 2004 have prescribed.

Conversely, the plaintiffs assert that the...