Wooley v. Lucksinger

14 So.3d 311

J. Robert WOOLEY, As Commissioner of Insurance for the State of Louisiana v. Thomas S. LUCKSINGER, Michael D. Nadler, Stephen J. Nazarenus, Scott Westbrook, Michael K. Jhin, William F. Galtney, John P. Mudd, Executive Risk Indemnity, Inc., Executive Risk Management Associates, Executive Risk Specialty Insurance Co., Executive Liability Underwriters and Greenwich Insurance Co., AmCareco, Inc., AmCare Management, Inc.

J. Robert Wooley, Commissioner of Insurance for the State of Louisiana, In his Capacity as Liquidator of AmCare Health Plans of Louisiana v. Foundation Health Corporation, Foundation Health Systems, Inc., and Health Net, Inc.

J. Robert Wooley, Commissioner of Insurance for the State of Louisiana, As Liquidator for AmCare Health Plans of Louisiana, Inc., In Receivership v. PriceWaterhouseCoopers, LLP.

No. 2006 CA 1140.

No. 2006 CA 1141.

No. 2006 CA 1142.

No. 2006 CA 1143.

No. 2006 CA 1144.

No. 2006 CA 1145.

No. 2006 CA 1158.

No. 2006 CA 1159.

No. 2006 CA 1160.

No. 2006 CA 1161.

No. 2006 CA 1162.

No. 2006 CA 1163.

Court of Appeal of Louisiana, First Circuit.

December 30, 2008.

Opinion on Rehearing February 13, 2009.

Joseph E. Cullens, Jr., Baton Rouge, LA, Guy M. Hohmann, Austin, TX, Kimberly S. Morgan, Edward J. Walters, Jr., Baton Rouge, Sue Buser, Gonzales, LA, Jonathan C. Augustine, Baton Rouge, LA, for Plaintiff-Appellee, J. Robert Wooley, as Acting Commissioner of Insurance and Liquidator of AmCare Health Plans of Louisiana, Inc.

James C. Percy, David M. Kerth, Baton Rouge, LA, Robert B. Bieck, Jr., New Orleans, LA, for Defendant-Appellant, Health Net, Inc.

Joseph J. McKernan, Baton Rouge, LA, for Plaintiff-Appellee, Jean Johnson as Texas Special Deputy Receiver.

David M. Latham, Keary L. Everitt, New Orleans, LA, for Plaintiff-Appellee, Louisiana Department of Insurance.

Gary P. Koederitz, Baton Rouge, LA, for Defendant-Appellee, BestCare, Inc.

Wendell Clark, Baton Rouge, LA, for Defendant-Appellee, Thomas S. Lucksinger, Michael D. Nadler and Stephen J. Nazarenus.

Claude F. Reynaud, Jr., Baton Rouge, LA, for Defendant-Appellee, Proskauer Rose, L.L.P. and Stuart L. Rosow.

Harry J. Philips, Jr., Baton Rouge, LA, for Defendant-Appellee, William Galtney, Jr. and Michael K. Jhin.

Mary Olive Pierson, V. Thomas Clark, Jr., Baton Rouge, LA, for Defendant-Appellee, PriceWaterhouseCoopers, L.L.C.

Robert J. Burns, Jr., Baton Rouge, LA, David H. Topol, Washington, D.C., for Defendant-Appellee, Greenwich Insurance Company.

George B. Hall, Jr., New Orleans, LA, Merril Hirsh, Washington, D.C., Kelsey Kornick Funes, Baton Rouge, LA, for Defendant-Appellee, Executive Risk Management

and Executive Risk Specialty Ins. Co.

David L. Guerry, Baton Rouge, LA, for Defendant-Appellee, Scott Westbrook.

William C. Kaufman, III, Baton Rouge, LA, for Defendant-Appellee, M. Lee Pearce.

Dominique J. Sam, Michael Charles Guy, Baton Rouge, LA, for Amicus Curiae, Charles C. Foti, Jr., Atty. Gen., On Behalf of the Commissioner of Insurance-Liquidator of AmCare Health Plans of Louisiana, Inc.

Before CIACCIO, LANIER and CLAIBORNE, JJ.¹

Table of Contents

I. GENERAL FACTS

 ............................................................................... 

338

II. PROCEDURAL HISTORY

 .......................................................................... 

346

III. INTERPRETATION OF LAWS

 ...................................................................... 

350

IV. STANDARDS FOR APPELLATE REVIEW OF FACTS AND LAW

 ............................................. 

351

V. CONFLICT OF LAWS

 ............................................................................ 

353

A. Conflict of Laws Facts

 ................................................................... 

354

B. The Ruling of the Trial Court on the Issue of Choice-of-Law

 .............................. 

354

C. Applicable Conflict of Laws Rules

 ........................................................ 

356

1. Law Applicable to the Texas Case

 ...................................................... 

362

2. Law Applicable in the Louisiana Case

 .................................................. 

363

3. Law Applicable in the Oklahoma Case

 ................................................... 

369

D. Conclusion

 ............................................................................... 

372

VI. STANDARD OF REVIEW OF FACTS IN THE TEXAS CASE

A. The Trial Court's Duty to Instruct a Jury

 ................................................ 

373

B. The Trial Court's Duties to Rule on Requests for Jury Instructions and to Inform

the Parties of Proposed Jury Instructions Prior to Arguments to the Jury

 ............... 

374

1. Right to Submit Jury Instructions

 ..................................................... 

375

2. Trial Court Duty to Inform Parties of Proposed Jury Instructions and Interrogatories

 ..................................................................... 

378

3. Right of a Party to Object to Proposed Jury Instructions

 .............................. 

379

C. Patent Jury Instruction Error

 ............................................................ 

383

D. Jury Instruction and Interrogatory Errors

 ................................................ 

384

1. Failure to Give Instruction

 ........................................................... 

384

2. Erroneous Instructions

 ................................................................ 

401

E. Inconsistencies Between the Texas Jury Verdicts and JNOV and the Judgments

and Reasons for Judgment in the Louisiana and Oklahoma Cases

 ........................... 

428

1. Negligent Misrepresentation

 ........................................................... 

428

2. Proximate Cause

 ....................................................................... 

429

3. Fraud

 ................................................................................. 

429

4. Allocation of Fault

 ................................................................... 

430

5. Existence of Pledged Capital for an HMO by Health Net

 ................................. 

434

6. Conclusion

 ............................................................................ 

434

F. Recapitulation of Errors Affecting the Texas Jury Verdict

 ................................ 

434

G. Conclusion

 ............................................................................... 

435

VII. STANDARD OF REVIEW OF FACTS IN THE LOUISIANA AND OKLAHOMA

JUDGE TRIAL CASES

 ......................................................................... 

435

A. Proximate Cause in the Louisiana Case

 .................................................... 

435

B. The Tort of Conspiracy in the Louisiana Case

 ............................................. 

435

C. Unfair or Deceptive Acts or Practices in Violation of the Texas Insurance Code

 ........... 

436

D. Allocation of Fault

 ...................................................................... 

436

E. Refusal to Provide Adequate Written Findings of Fact and Reasons for Judgment

 ............ 

438

1. Facts

 ................................................................................. 

438

2. Supplemental Assignments of Error

 ..................................................... 

442

3. Applicable Law

 ........................................................................ 

442

4. The Trial Court's Reasons for the Nineteen (19) Month Delay

 ........................... 

446

5. The Trial Court's Failures to Comply with the Order to Provide Written Findings of Fact and Reasons for Judgment

 ........................................... 

447

6. Conclusion

 ............................................................................ 

448

F. Application of Erroneous Texas Law in the Louisiana and Oklahoma Cases

 ................... 

448

G. Conclusion

 ............................................................................... 

449

VIII. PRESCRIPTION/PEREMPTION: STATUTES OF LIMITATIONS AND REPOSE

 ................................. 

449

A. The Proper Procedure to Assert Prescription/Peremption

 ................................... 

450

1. Affirmative Defense

 ................................................................... 

451

2. Objection of No Cause of Action

 ....................................................... 

452

3. Summary Judgment

 ...................................................................... 

453

4. Prescription/Peremption

 ............................................................... 

454

B. Choice-of-Law

 ............................................................................ 

457

1. Liberative Prescription or Peremption in the Louisiana Case

 ........................... 

458

2. The Texas and Oklahoma Exceptions

 ..................................................... 

467

C. Conclusion

 ............................................................................... 

468

IX. SHAM SALE

 ................................................................................... 

468

X. PIERCING THE CORPORATE VEIL—SINGLE BUSINESS ENTERPRISE

 .................................. 

482

A. The Trial Court's Reasons

 ................................................................ 

482

B. The Law

 .................................................................................. 

483

1. Texas Law

 ............................................................................. 

483

2. Louisiana Law

 ......................................................................... 

484

3. Oklahoma Law

 .......................................................................... 

487

C. Burden of Proof and Persuasion

 ........................................................... 

488

D. Common SBE Circumstances Pre- and Post-Sale

 .............................................. 

489

1. Pre-Sale Health Net/AmCareco SBE Issue

 ................................................ 

489

2. Post-Sale Health Net/AmCareco SBE Issue

 ............................................... 

490

XI. LIABILITY FOR FRAUD

 ......................................................................... 

492

A. Fraud in Obtaining Regulator Approval of the Sale

 ................

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