source: Caselaw Access Project

author: DOMENGEAUX, Judge. GUIDRY, Judge, SWIFT, Judge,

license: Public Domain

text:
    Danny Kent COTTONHAM, Plaintiff-Appellee, v. ROCKWOOD INSURANCE COMPANY OF ROCKWOOD, PENNSYLVANIA, Defendant-Appellant.
    No. 8262.
    Court of Appeal of Louisiana, Third Circuit.
    July 22, 1981.
    Rehearing Denied Sept. 22, 1981.

      Fruge & Vidrine, Jack C. Fruge, Ville Platte, for defendant-appellant.
    Andrus & Preis, Gary McGoffin, Lafayette, for plaintiff-appellee.
    Before DOMENGEAUX, GUIDRY and SWIFT, JJ.
   DOMENGEAUX, Judge.

In this workmen’s compensation case, the main issue is whether the “odd lot” doctrine, recently introduced into our jurisprudence by the Louisiana Supreme Court, should be applied to prevent an award of total disability to one, such as plaintiff herein, who is at all times in substantial disabling pain but who, due to a set of fortuitous circumstances, including the forbearance of his employers, was employed at the time of the trial, and was at that time earning more than he was before the accident.

On September 17, 1977, the plaintiff-ap-pellee, Danny K. Cottonham, then a 22 year old assistant dean of student personnel at the University of Southwestern Louisiana (U.S.L.), fell from a third story balcony on the U. S. L. campus. He fractured vertebrae in his back and injured his spinal cord, causing paralysis from his waist down. He is a paraplegic, and is permanently confined to a wheelchair.

U. S. L.’s compensation insurer, Rock-wood Insurance Company (Rockwood) paid plaintiff benefits at the rate of $130.00 per week until he resumed his same position at U. S. L. on April 1, 1978, at which time benefits were discontinued. Plaintiff sued Rockwood, and after trial the district judge concluded that plaintiff was working in substantial pain and was therefore totally and permanently disabled under the rationale of the Louisiana Supreme Court case of Whitaker v. Church’s Fried Chicken, Inc., 387 So.2d 1093 (La.1980). Accordingly, plaintiff was awarded compensation benefits at the weekly rate of $130.00. He was also awarded $4,443.95 for an emergency telephone device and the installation of a ramp and hand controls on plaintiffs van. Additionally, statutory penalties of 12% and an attorney’s fee of $2,500.00 were granted.

The defendant has appealed, claiming the trial judge committed error:

1 — In finding plaintiff totally and permanently disabled under the amended version of La.R.S. 23:1221;
2 — In awarding the sum of $4,443.95 representing cost of the phone device and wheelchair ramp as reasonable medical expenses.

SUBSTANTIAL PAIN

At the time of the September 17, 1977 accident, plaintiff’s duties as assistant dean of student personnel was to help supervise men’s housing on the campus. He supervised the dormitory staffs, coordinated activities in the dorms, worked with students, etc. His duties required him to move about considerably. He had office hours but was on 24-hour call most of the time because he had to be available to students who got into trouble on or off campus.

Since the accident and the resumption of his job, he has similar responsibilities, but he spends much more time in his office now because of his physical disabilities and lack of mobility. It is evident that his employers are very understanding and tolerant of his limitations and allow him working privileges not enjoyed before the accident.

The evidence clearly establishes that plaintiff suffers substantial pain both on and off duty as a consequence of his accident and resulting paraplegia. He will suffer substantial pain regardless of the type of job at which he is employed. The medical evidence shows that with an injury of this type, substantial pain can and usually does exist. The lay testimony, from plaintiff himself and from co-employees, including his supervisors, proves unquestionably that plaintiff lives in a constant state of substantial pain. Since he has returned to his employment he has had to leave his job early on many occasions because of pain. Likewise, on many occasions, he has been late coming to work because of pain. He takes numerous types of medication for pain and spasms.

We conclude that because plaintiff suffers substantial pain at all times, whether he is working or not, and would suffer such pain regardless of the type of work he would do, he is totally disabled under the rationale of Whitaker, supra. This case affirmed numerous appellate court decisions which held that a person is to be considered totally and permanently disabled if he worked in substantial pain. Among these cases are Phillips v. Dresser Engineering Co., 351 So.2d 304 (La.App.3rd Cir. 1977), writ denied, 353 So.2d 1048 (La.1978); and Rachal v. Highlands Insurance Company, 355 So.2d 1355 (La.App.3rd Cir. 1978), writ denied 358 So.2d 645 (La.1978).

ODD LOT DOCTRINE: DUSANG TO LATTIN

The defendant-appellant, Rockwood, contends that under the rationale of the recent Louisiana Supreme Court case of Dusang v. Henry C. Beck Builders, Inc., 389 So.2d 367 (La.1980), plaintiff is only partially disabled because he is able to perform and is actually engaged in gainful employment at the present time. We disagree.

The Court in Dusang agreed with the lower courts that plaintiff worked in substantial pain, but decided that he was not totally disabled. The Court observed that plaintiff worked steadily and that the pain was not so disabling as to require plaintiff to be hospitalized or to miss work. Further, no employee had been substituted for plaintiff because of his inability to do the work and there was no evidence that plaintiff would not be able to find work in the future. Also, the Court observed that plaintiff was earning more at the time of trial than before the accident. Finally, the Court observed that evidence of plaintiff’s pain in Dusang was not as strong as the evidence in Whitaker. Under these facts, the Court affirmed the Fourth Circuit’s judgment that plaintiff was partially disabled.

The Court in Dusang discussed Whitaker and the cases cited therein, including Phillips and Rachal, without indicating that those cases, which found plaintiffs totally and permanently disabled because they could not work at any job without experiencing substantial pain, were incorrect.

Dusang, also discussed the “odd lot” doctrine at length, but did not then adopt it. Under this doctrine, a claimant is considered totally disabled if his injury makes him an “odd lot” in the labor market — in other words, he can hold various jobs periodically, but the kind of work he can do is so limited that a reasonably stable market for it does not exist.

The Supreme Court subsequently adopted the odd lot doctrine as the guiding concept in determining permanent total disability in Oster v. Wetzel Printing, Inc., 390 So.2d 1318 (La.1980), and applied the doctrine in Turner v. American Mutual Insurance Company, 390 So.2d 1330 (La.1980); Calogero v. City of New Orleans, 397 So.2d 1252 (La.1980); Wilson v. Ebasco Services, Inc., 393 So.2d 1248 (La.1981); and Lattin v. Hica Corporation, 395 So.2d 690 (La.1981).

Citing Larson’s treatise, The Law of Workmen’s Compensation (1976), Oster recognized that the essence of the odd lot doctrine is:

“ ‘the probable dependability with which claimant can sell his services in a competitive labor market, undistorted by such factors as business booms, sympathy of a particular employer or friends, temporary good luck, or the super-human efforts of the claimant to rise about his crippling handicaps.’ Larson, supra § 57.51, pp. 10-109 and 10-119.” (390 So.2d at 1323).

and then Oster set forth the following guidelines to determine when the odd lot doctrine can be applied:

“In order to determine whether the plaintiff fits within this category of odd-lot workers, he must show that because of his physical impairment, mental capacity, education, training, age, availability of employment in his area, and any other relevant factor, that he ‘cannot perform the substantial and material parts of some gainful work or occupation with reasonable continuity.’ Reese v. Preston Marketing Assoc., 274 Minn. 150, 142 N.W.2d 721, 723 (1966). If the plaintiff is successful in showing a combination of factors indicating that the services which he is able to render are so limited in quality, quantity, or dependability that a market for his labor does not exist within which he can effectively compete, he has presented a prima facie case for classification in the odd-lot category. An offering of such proof by the plaintiff, therefore, satisfies his burden of proving that he should be awarded benefits for permanent and total disability. The defendant employer then has the onus of showing that there are jobs which are available to provide a steady income to the plaintiff or that will provide him with a ‘gainful occupation.’ ” (Emphasis added).

Calogero, Wilson, and Lattin all applied the odd lot doctrine to substantial pain cases. However, a close reading of those cases shows that none decided the issue presented at the outset of this opinion.

In Calogero, the trial court and Court of Appeal found the plaintiff totally disabled because he was working in substantial pain. The Supreme Court remanded the case because it:

“. . . was decided by both lower courts prior to the rendition of the Oster and Dusang decisions. Moreover, since the treating physician opined that plaintiff can do some sedentary work without substantial pain, and since the court of appeal found that the work plaintiff is presently doing ‘in substantial pain’ is not that sedentary, the case should be remanded to allow both sides the opportunity to present additional evidence in the light of the newly adopted standards.” (Emphasis added) 397 So.2d at 1254.

The Supreme Court found the plaintiff in Wilson totally disabled at the time of trial because “[s]he was unable to perform the simplest of physical tasks without incurring substantial pain.” Also, no showing was made that any employment would be suitable for plaintiff. The Court noted that plaintiff may not necessarily qualify as an odd lot worker “depending upon her ability to cope with pain . . . . ”

Finally, the Court in Lattin found that plaintiff established his prima facie case for classification as an odd lot worker due to the pain in his foot which appreciably limited the types of work available to him and greatly diminished his ability to compete in the labor market. However, the case was remanded to give the employer an opportunity to reduce the award from permanent total disability to permanent partial disability by presenting evidence that some form of gainful occupation is regularly and continuously available to the employee within reasonable proximity to his residence.

The following language from Lattin, which paraphrases language from Dusang, may be subject to misunderstanding:

“. . . if a worker cannot perform the same work that he did before his injury because it causes him substantial pain, but he has the mental capacity to perform other jobs which are available, he should be considered partially disabled.” (395 So.2d at 694).

This language seems to suggest that a worker whose pre-injury work causes him substantial pain should be considered only partially disabled if he has the mental capacity to perform other available jobs which do not cause him substantial pain. Such a suggestion ignores the very real possibility, which exists under the facts of this case, that a worker may be in a constant state of disabling pain as a result of the work-related injury, such pain not being caused by nor related to the character of work being done after his injury. In such an instance, the worker should be found totally disabled since the law does not require that the work cause the pain for a worker to be considered totally disabled.

It is a well-established principle that a worker who cannot return to any gainful employment without suffering substantial pain is entitled to compensation benefits for total disability. The Supreme Court so held in Whitaker, even though the plaintiff there was working as a janitor in a zoo at the time of trial. The Court reaffirmed this proposition in Wilson and Lattin. (In these two latter cases, the Court cited both Whitaker and Dusang for this principle.)

Under the Whitaker rationale, one who can demonstrate that he is and will be in substantial disabling pain at all times, regardless of the character of work he does or might do, should be found totally disabled. If the evidence supports that finding, it matters not what the defendants might show in terms of the availability of work.

If the Supreme Court has intended for Louisiana courts to analyze every total disability ease within the framework of the newly adopted odd-lot standards, it is submitted that when plaintiff has satisfactorily proven that he lives in a constant state of substantial disabling pain, he has conclusively proven his entitlement to benefits for permanent and total disability, regardless of the availability of a market for the type of services he can render, because an employee is not considered to be capable of working when he can do so only in substantial pain.

It is evident that the Supreme Court, in fashioning odd lot guidelines for Louisiana’s courts to follow in workmen’s compensation cases, borrowed heavily from Malone & Johnson, Worker’s Compensation, (2d ed. 1980), §§ 276-277, wherein the authors recommended that Louisiana courts adopt the odd lot doctrine in interpreting the new total disability provision of the Workmen’s Compensation Act. La.R.S. 23:1221 (1) and (2) as amended in 1975.

In discussing the first reported “substantial pain” or “working in pain” cases under the 1975 amendment, Malone & Johnson, § 277, at p. 628, say:

“. . . It has been held that a claimant who could return to a gainful occupation, but could do so only by working in substantial pain, is to be considered totally disabled. There is certainly nothing inconsistent with the new standard in such a conclusion. Nothing in the amended section states that the employee is not disabled if he can engage in any gainful occupation for wages, whether in pain or not. And the social policy carried out in the Act is such that we could not in good conscience conclude that an employee could be considered as capable of working when he could only do so in substantial pain. Under the circumstances, it seems fair to predict that the so-called ‘working in pain’ jurisprudence . . . will continue to be viable under the new definition.” (Emphasis added).

The authors do suggest that the courts require a more stringent standard of proof on the question of whether plaintiff can work only in substantial pain, since there is no limit on the number of weeks benefits may be paid for total disability and increased weekly benefits are now available. The Supreme Court apparently followed this advice in Dusang when it decided that plaintiff was not totally disabled even though he worked in substantial pain. As we observed earlier, the Court in Dusang was impressed with the fact that the evidence of Dusang’s pain was not as strong as the evidence in Whitaker. The Court took particular note of the fact that Dusang’s pain had not been so disabling as to require hospitalization or absenteeism. The circumstances of this case are clearly distinguishable. Unlike the evidence presented in Du-sang, the evidence here clearly establishes that plaintiff is in constant, substantial and disabling pain. His “super-human efforts ... to rise above his crippling handicaps”, coupled with the patience and forbearance of his employers in allowing him to remain at his job in spite of his limitations, should not be turned against plaintiff by depriving him of an award for total disability. Hence, the trial court judgment awarding plaintiff total disability benefits will be affirmed.

No purpose would be served by remanding the case to allow defendant to present evidence on the availability of employment since plaintiff will be in substantial pain regardless of the type of work being done.

OTHER MEDICAL EXPENSES

From our examination of the evidence as to the medical necessity for the emergency telephone unit and van equipment we find these were not only prescribed by the physicians, but were necessary for plaintiff’s rehabilitation and safety. Therefore, the employer was required to furnish them under La.R.S. 23:1203.

For the above and foregoing reasons the judgment of the district court is affirmed at defendant’s costs.

AFFIRMED.

GUIDRY, J., concurs and assigns reasons.

SWIFT, J., concurs in part and dissents in part and assigns reasons.

GUIDRY, Judge,

concurring.

I agree with the result reached by the opinion author, however, in my view, there is no need to discuss or consider the “odd lot” concept since such doctrine is clearly not applicable under the circumstances of this case.

As I understand the holdings in Dusang, Calogero, Wilson, Turner and Lattin, a case should be analysed under the “odd lot” concept, insofar as substantial pain cases are concerned, in instances where it is made to appear that the injured worker, although unable to perform the same work that he did before his injury except in substantial pain, he is able by reason of training, education, experience, etc., to perform other jobs which are available without substantial pain. If such analysis shows that work is available and the injured employee can effectively compete with the general labor force for these other jobs, then he is to be considered partially disabled. On the other hand if, as stated in Oster, “. the services which he is able to render are so limited in quality, quantity, or dependability that a market for his labor does not exist within which he can effectively compete, he has presented a prima facie case for classification in the odd-lot category”.

In the instant case the record makes clear that by reason of an on the job accident plaintiff lives in a constant state of substantial pain. He is unable to perform his former work or any type of work except in substantial pain. Under such circumstances the “odd-lot” concept has no application and plaintiff has clearly established his right to total and permanent disability benefits under LSA-R.S. 23:1221. As correctly stated by the opinion author, “. . an employee is not considered to be capable of working when he can do so only in substantial pain.

For these reasons I respectfully concur.

SWIFT, Judge,

concurring in part and dissenting in part.

I agree with the majority that the awards for the plaintiff’s emergency telephone unit and van attachments were proper under LSA-R.S. 23:1203, but otherwise I respectfully dissent.

Although I previously expressed an opinion to the contrary, our supreme court has now definitely ruled that the “odd-lot doctrine” is a part of Louisiana’s workmen’s compensation law. In addition, it has clearly held that such doctrine is applicable to substantial pain cases to determine the extent of the worker’s disability. Dusang v. Henry C. Beck Builders, 389 So.2d 367 (La.1980). Consequently, this court is obliged to follow and apply same where appropriate.

From my review of the record I am convinced the plaintiff has established a prima facie case for his classification as an odd-lot worker by reason of his physical impairment. However, like the plaintiff in Dusang, Mr. Cottonham is not a marginal employee. He is a college graduate and has been gainfully employed by the University of Southwestern Louisiana for over three years since the accident. His superiors testified that the university allows him great flexibility in adjusting his schedule when pain and medical problems cause him to miss work, arrive late or leave early and that he does so more frequently than other such employees. However, they also agreed he is capable of doing his job and he performs the work in a quite satisfactory manner. He has received merit increases in salary each year and there is no indication that he will not be able to continue in such employment. Also, in view of his education and experience there may be other jobs available to a person with such qualifications in spite of his disability and the pain he suffers.

Under the circumstances I cannot agree that this record reflects there is no form of gainful occupation regularly and continuously available to plaintiff within a reasonable proximity of his residence, which is essential to a final determination that an employee is an odd-lot worker and thus totally and permanently disabled.

Be that as it may, because this case was tried before the supreme court even suggested the odd-lot doctrine should be applied in substantial pain cases, we are convinced that justice requires a remand to the trial court so the employer’s insurer will have a full opportunity to develop any and all factors which relate to the probable continuity of his present job and any other jobs that may be available to him. See Justice Dennis’s concurring opinion in Lattin v. Hica Corp., 395 So.2d 690 (La.1981) and Calogero v. City of New Orleans, 397 So.2d 1252 (La.1981).

      . See approving references to Malone & Johnson, §§ 276-277 in Dusang, 389 So.2d at 371; Oster, 390 So.2d at 1323; Calogero, 397 So.2d at 1254; and Wilson, 393 So.2d at 1252.

      . See Oster, 390 So.2d at 1323.


author: GUIDRY, Judge.

text:
    Patricia C. EK, Plaintiff-Appellee v. NATIONWIDE CANDY DIVISION, LTD. and Rob L. Lammers, Defendants-Appellants.
    No. 8322.
    Court of Appeal of Louisiana, Third Circuit.
    July 22, 1981.

      Camp, Carmouche, Palmer, Barsh & Hunter, David R. Frohn, Lake Charles, for defendants-appellants.
    Cox & Cox, James J. Cox, Lake Charles, for plaintiff-appellee.
    Before DOMENGEAUX, GUIDRY and CUTRER, JJ.
   GUIDRY, Judge.

Plaintiff, Mrs. Patricia C. Ek, instituted this suit- against defendants, Nationwide Candy Division, Ltd. (hereafter Nationwide) and Rob L. Lammers, Nationwide’s Director of Operations, seeking the rescission of a contract entered into by Mrs. Ek and Nationwide dated February 22, 1979 and the return of all monies paid by plaintiff to defendant, Nationwide, pursuant to such contract. In addition, plaintiff seeks damages and attorney’s fees. In support of her demand, plaintiff alleges fraud, misrepresentation and the violation of LSA-R.S. 51:701-720 (Louisiana’s Blue Sky Law) in the negotiation and confection of such contract which pertained to the sale of candy vending machines coupled with a guaranteed income agreement. Prior to trial, defendant Lammers filed a declinatory exception of lack of in personam jurisdiction seeking his dismissal from the suit. In addition, Nationwide filed a motion to stay the proceedings contending that the matter in dispute was referable to arbitration in accordance with the provisions of the contract. Both motions were denied by the trial court and subsequently, a trial on the merits was held.

After hearing the evidence, the trial court concluded that portions of the disputed contract by which Nationwide sought to disavow any responsibility for the representations of its agents and which declared the transaction as not constituting a security offering were repugnant to the laws of Louisiana and contra bonos mores, thus, such provisions were to be considered as unwritten. In addition, the lower court found that Nationwide and. Rob L. Lam-mers made fraudulent misrepresentations to the plaintiff which induced her to confect the contract. The trial court additionally determined that the independent sales contract as modified by the guaranteed income refund policy constituted an investment contract, thus the transaction was governed by the provisions of Louisiana’s Blue Sky Law. The trial court then concluded that defendants violated the state’s securities law by offering non-exempt, unregistered securities for sale in Louisiana, and thus the contract was, voidable at the instance of the investor. Accordingly, pursuant to LSA-R.S. 51:701, et seq., the trial court ordered defendants to pay plaintiff $6,597.00 with interest of 6% per annum from the date of judicial demand until paid. Also, defendants were assessed with attorney’s fees in the sum of $2500.00 and costs of the proceedings. Defendants appeal from that judgment. Plaintiff answered the instant appeal praying for an increase in the lower court’s award of attorney’s fees as well as an award of attorney’s fees for legal services rendered in the course of the instant appeal.

FACTS

On Sunday, February 19, 1979, the following advertisement placed by Nationwide, appeared in the Lake Charles American Press:

“$32,614/Year
Guaranteed Income
No Selling * No Experience
Can Start Part-Time
Company furnishes all protected top quality locations, products, dispensers, displays, supplies, training and guaranteed earnings. We feature America’s top brands:
Snickers * Mars * 3 Musketeers * M & M’s Milky Way * Starburst * and many more.
ALL you do is service these rental outlets weekly. We insure your success in writing because of the high turn over in sales. You need to be service-oriented, desire your own business and have some operating funds. We do the rest if you qualify. In Beaumont, Call Mr. Barron (713) 892-2222
Sunday, Monday, Tuesday, (9-9) only
Nationwide Candy Division
6455 Almadén Expwy, San Jose Calif."

In response to the above, plaintiff contacted Nationwide’s representative, Mr. James Barron, to schedule a meeting with him to discuss the advertised business opportunity. Plaintiff, her husband, Steven Ek, and Barron met together on February 19, 1979, at the Holiday Inn in Beaumont, Texas. At that meeting, Mr. Barron made various representations concerning the sale of candy vending machines coupled with a guaranteed income refund policy. Barron explained that the program involved plaintiff’s purchase of eight candy vending machines and an initial order of candy supplied by the defendant company. According to the plaintiff, in return for her initial investment of $6,597.00, Nationwide would provide a professional locator who would secure the necessary locations for the vending machines; physically place the machines on the premises; arrange delivery of the machines by the manufacturer; train plaintiff in the repair and maintenance of the machines; supply candy for the machines at the lowest possible cost; conduct seminars to pool information and knowledge from over vending machine operators; and, train the plaintiff regarding the most efficient method of keeping business records. Additionally, Nationwide agreed to guarantee to plaintiff a stated income to be derived from the operation of the machines. Nationwide’s guaranteed income refund policy provides that if the plaintiff is not satisfied with her earnings after operating the machines for a one year period, Nationwide will refund 100% of plaintiff’s investment less any income derived from the venture. The defendant company guaranteed Mrs. Ek yearly earnings of $10,250.24. At the conclusion of her initial appointment with Barron, Mrs. Ek signed a document entitled, “Non-Disclosure Waiver” in which she agreed not to disclose to others the information she obtained via their meeting for a period of ninety days.

On February 22, 1979, Mr. and Mrs. Ek again met with Mr. Barron in Beaumont at a busy cafe where they concluded the business transaction. At that meeting, Barron presented several documents for the plaintiff’s signature including an Independent Sales Agreement, A Guaranteed Income Refund Policy, and a Location Guarantee. Plaintiff signed all of the aforesaid documents and gave Barron a cashier’s check for $750.00 as a deposit pending her acceptance as a distributor by Nationwide. Subsequently, Mrs. Ek was accepted by the defendant company and paid to Nationwide the balance due of $5,847.00. On or about May 10, 1979, Mrs. Ek received a “sample” monthly operating statement from Nationwide which prompted plaintiff to call Mr. Lammers at his California office. During their telephone conversation, Mrs. Ek inquired about the promised training seminars and meetings, the procedure for ordering candy, and the validity, in light of accepted accounting principles, of the “sample” monthly operating statement. Plaintiff testified that Lammers indicated that she was not bound to use the “sample” statement and that the training workshop and seminars had not been arranged.

Prior to the delivery of her Nationwide vending machines, plaintiff purchased ten additional vending machines from a woman in the Lake Charles area. Mrs. Ek stated that she operated the machines for several weeks, however, she soon realized that it was impossible to derive the amount of profit from the vending machine venture which was promised by Nationwide. Subsequently, the plaintiff sold the ten machines.

On May 2, 1979, Nationwide’s “professional locator”, Mr. Eric Kelley, contacted the plaintiff regarding the proposed locations for her machines. Plaintiff testified that contrary to the parties’ agreement, Mr. Kelley did not introduce her to the owners of the various locations, but rather, simply drove past the locations pointing them out to her. In addition, Kelley informed plaintiff that he was not responsible for placing the machines at these locations. Shortly thereafter, Mrs. Ek sought the advice of counsel who recommended that plaintiff refuse delivery of the machines. Plaintiff’s attorney then contacted Mr. Lammers via mail requesting that Nationwide refund all monies paid by plaintiff to that company in connection with the vending machine transaction. We observe that the record is unclear regarding whether or not plaintiff’s counsel sent this letter before or after plaintiff refused delivery of the subject vending machines. Mr. Lammers responded to plaintiff’s demands by stating that a refund was impossible and that all written agreements signed by the parties were valid. Thereafter, the instant suit was filed.

Appellants contend that the trial court erred in denying defendant Lammers’ exception of jurisdiction and Nationwide’s motion to stay the proceedings pending arbitration of the matter. Further, appellants contend that the record fails to substantiate plaintiff’s allegations of fraud and misrepresentation in the negotiation and confection of the subject agreements. Finally, appellants contend that plaintiff cannot avail herself of the remedies provided in LSA-R.S. 51:715 (Louisiana Blue Sky Law) because she is unable to tender back the “securities” to Nationwide as required by statute.

JURISDICTION

The trial court concluded that defendant, Rob L. Lammers, is subject to the jurisdiction of the Louisiana courts in accordance with Louisiana’s Long Arm Statute, LSA-R.S. 13:3201, and specifically, sections (a) and (b) thereof. LSA-R.S. 13:3201 provides in pertinent part as follows:

“A court may exercise personal jurisdiction over a nonresident who acts directly or by an agent, as to a cause of action arising from the nonresident’s
(a) transacting any business in this state;
(b) contracting to supply services or things in this state; ...”

Appellants contend that Lammers is not amenable to suit in Louisiana since he did not have “sufficient contacts” with the Louisiana forum to make the exercise of personal jurisdiction over him constitutional.

The legislative intent in enacting Louisiana’s Long Arm Statute was to extend personal jurisdiction of our state’s courts to the full extent of due process, specifically to any nonresident who has “minimum contacts” with the forum state. See Drilling Engineering, Inc. v. Independent Indonesian American Petroleum Co., 283 So.2d 687 (La.1973); Aucoin v. Hanson, 207 So.2d 834 (La.App.3rd Cir. 1968); and Soileau v. Evangeline Farmer’s Co-op., 386 So.2d 179 (La.App.3rd Cir. 1980). In Soileau v. Evangeline Farmer's Co-op., supra, this court in addressing the issue of in personam jurisdiction stated:

“The finding of jurisdiction over non-residents involves an evaluation of the factual circumstances of the case in light of federal constitutional principles. In order for the proper exercise of jurisdiction in personam over a non-resident there must be sufficient minimum contacts between the non-resident defendant and the forum state to satisfy due process and ‘traditional notions of fair play and substantial justice’ as required by Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977); International Shoe Company v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); and McGee v. International Life Insurance Company, 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). Whether or not a particular defendant has sufficient minimum contacts with a state is to be determined from the facts and circumstances peculiar to each case. Drilling Engineering, Inc. v. Independent Indonesian American Pet. Co., 283 So.2d 687 (La.1973).”

The evidence adduced at the hearing on the exception to jurisdiction indicates that Lammers is employed by the defendant company in the position of Director of Operations. Plaintiff testified that she spoke with Mr. Lammers by telephone on two occasions and in addition, received a letter from him in connection with plaintiff’s contractual agreement with Nationwide. The record reflects that Lammers was never physically present in the state of Louisiana, and that he has never met the plaintiff personally. Further, the record reveals that all payments made pursuant to the subject agreements were made to Nationwide not to Lammers individually and that all contracts and/or documents introduced into evidence at the hearing of the instant matter which were signed by Lam-mers were executed by him in California in his capacity as Nationwide’s Director of Operations. As previously noted, the record is clear that the only Louisiana contacts between defendant Lammers and the plaintiff were two telephone calls and a letter. We conclude that such marginal contacts by Lammers, in his individual capacity, with this state are not equivalent to those “certain minimum contacts with the forum such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice’ ”. Therefore, we determine that the trial court erred in exercising in personam jurisdiction over Rob L. Lam-mers. Accordingly, we will reverse the trial court judgment and order a dismissal of plaintiff’s suit against Rob L. Lammers.

BLUE SKY LAW

The trial court concluded that the contract in question constituted an investment contract within the purview of LSA-R.S. 51:701-720, hereafter referred to as Louisiana’s Blue Sky Law, and that Nationwide violated the provisions of such law by offering non-exempt, unregistered securities for sale in the state. Accordingly, the trial court ultimately concluded that the contract was voidable at the instance of plaintiff.

Nationwide does not seriously question the trial court’s determination that the subject contract comes within the purview of Louisiana’s Blue Sky Law. However, it asserts on appeal that plaintiff cannot avail herself of the remedies provided therein because of her failure to tender back the securities in accordance with LSA-R.S. 51:715.

Although, as aforestated, Nationwide does not seriously question the applicability of LSA-R.S. 51:701 et seq., we consider it necessary to discuss this issue because, in our view, such issue is basic to a proper resolution of the instant controversy.

The record contains an opinion issued by the Louisiana Commissioner of Securities which states that the sale of income producing property coupled with a buy back agreement, such as the transaction in dispute, constitutes a security under Louisiana law and is subject to the registration requirements of the state’s Blue Sky Law. We observe that the Commissioner’s opinions are merely persuasive and not controlling. See Caldwell v. Trans-Gulf Petroleum Corporation, 322 So.2d 171 (La.1975).

Jurisprudence in the area of Louisiana’s securities laws, specifically LSA-R.S. 51:701-720, is relatively undeveloped. Our state’s so-called Blue Sky Law was modeled after the federal system, specifically, the Securities Act of 1933 and the Securities Exchange Act of 1934. See Lyman, Securities Regulation in Louisiana—A Practical Introduction to the Blue Sky Law, 16 La. Bar Journal 327 (March, 1969); Caldwell v. Trans-Gulf Petroleum Corp., supra; Goldblum v. Boyd, 341 So.2d 436 (La.App.2d Cir. 1976). Finding a dearth of Louisiana case law pertaining to the issues presently before this court, we have consulted several leading federal decisions in this area for guidance.

The central purpose of regulations designed to govern securities transactions is to protect investors through the requirement of full disclosure by issuers of securities. See Goldblum v. Boyd, supra; Herpich v. Wallace, 430 F.2d 792 (U.S. Ct. of Appeals, Fifth Circuit, 1970). Louisiana’s Blue Sky Law seeks to accomplish this goal by requiring that all securities offered for sale in Louisiana must be registered with the Office of the Louisiana Commissioners of Securities unless exempted by statute. LSA-R.S. 51:701 provides in pertinent part:

“When used in this Part, unless the text otherwise indicates, the following terms shall have the meanings herein ascribed to each:
(1) “Security” shall include any note, stock, treasury stock, bond, debenture, evidence of indebtedness, warehouse receipt, certificate of interest or participation, or the right to subscribe to any of the foregoing, certificates of interest in a profit sharing agreement, certificate of deposit for a security, collateral trust certificate, pre-organization certificate, pre-organization subscription, voting trust certificate, any transferable share, investment contract, or beneficial interest in title to property, profits or earnings, or in general, any interest or instrument commonly known as a “security,” or any certificate of interest or participation in, temporary or interim bond, debenture, note, certificate, or receipt for, guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. “Security” does not include any insurance or endowment policy or annuity contract fixed or variable, which is authorized to be written pursuant to Title 22 of the Louisiana Revised Statutes of 1950, as amended.
(5) “Issuer” shall mean and include every person who proposes to issue, has issued or who shall hereafter issue any security. Any person who acts as a promoter for and on behalf of a corporation, trust or unincorporated association or partnership of any kind to be formed shall be deemed to be an issuer. With respect to interests in oil, gas or mineral leases, royalties, or servitudes, any person who shall divide any interest in any such security for the purpose of sale of fractional parts thereof to the public shall be deemed an issuer.” (Emphasis ours.)

A review of the federal jurisprudence reveals that the term, “investment contract” embraces within its definition a wide variety of business transactions. SEC v. W. J. Howey, 328 U.S. 293, 66 S.Ct. 1100, 90 L.Ed. 1244 (1946) is one of the leading federal decisions to discuss the securities law concept of an “investment contract”. In Howey, supra, the United States Supreme Court comprehensively defined an “investment contract” as a “contract, transaction, or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party, it being immaterial whether the shares in the enterprise are evidenced by formal certificates or by nominal interests in the physical assets employed in the enterprise. The critical factors in defining a financial arrangement as an “investment contract” and thus, a “security” have been traditionally designated by the courts and commentators as (1) an investment of money, (2) in a common enterprise, (3)with an expectation of a profit, and (4) reliance by the investor upon the efforts of others. See 3 Bloomenthal, Securities and Federal Corporate Law Section 2.04 (1980) and cases cited therein.

The record in the instant case clearly established that the plaintiff, Mrs. Ek, invested the sum of $6,597.00 in the subject vending machine transaction. Additionally, there is no question but that the plaintiff invested her money in the venture with the expectation of deriving a profit. Therefore, for the purpose of this opinion, we focus our inquiry upon whether or not the vending machine transaction was part of a common enterprise and whether the plaintiff relied upon the efforts of others in order to derive a profit from her investment.

We will begin our inquiry by examining whether or not the plaintiff expected to derive a profit via the efforts of others. In the case of United Housing Foundation, Inc. v. Forman, 421 U.S. 837, 95 S.Ct. 2051, 44 L.Ed.2d 621 (1975) the United States Supreme Court stated that “the touchstone (in defining a transaction as an investment contract) is the presence of an investment in a common venture premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others”. The U.S. Fifth Circuit Court of Appeals in SEC v. Koscot Interplanetary, Inc., 497 F.2d 473 (U.S. Ct. of App. 5th Cir. 1974) commented that in determining whether a promotional scheme constitutes an investment contract, “the critical inquiry is whether the efforts made by those other than the investors are the undeniably significant ones — those essential managerial efforts which affect the failure or success of the enterprise.” (Emphasis ours) See also SEC v. Glenn Turner Enterprises, Inc., 474 F.2d 476 (U.S. Ct. of App. 9th Cir. 1973). With the aforesaid standard in mind, the most expedient approach to the instant case is to compare and contrast the particular responsibilities and duties of the parties to the subject transaction and determine which party performed or was responsible for “. . . those essential managerial efforts which affect the failure or success of the enterprise.” SEC v. Koscot Interplanetary, Inc., supra. The record reflects that Nationwide agreed to provide the following services to the plaintiff in connection with her monetary investment in the vending machine transaction:

(1) Provide the vending machines;
(2) Arrange the machines delivery by the manufacturer;
(3) Supply the candy (product) for the machines to the plaintiff at the lowest possible price;
(4) Provide a “professional locator” to secure the locations for the machines;
(5) Arrange for the “locator” to introduce the plaintiff to the owners of the premises where the machines would be located.
(6) Present the proposed locations to plaintiff for her approval and acceptance;
(7) Physically place the machines at their proposed locations;
(8) Provide 'training seminars in the maintenance and repair of the candy vending machines;
(9)Conduct seminars wherein plaintiff and other distributors could pool their information on ways to improve their service and increase their profits;
(10) Provide training in the best methods to employ in keeping accurate business records;
(11) Provide “sample” accounting sheets to plaintiff;
(12) Refund 100% of plaintiff’s investment if after one year of operation she was dissatisfied with the profits derived from the transaction upon the return of the machines.

Plaintiff in return for the various services provided to her by the defendant company agreed to:

(1) Pay Nationwide $6,597.00 for the vending machines;
(2) Keep the machines supplied with candy;
(3) Maintain the machines in proper repair;
(4) Maintain the necessary business records;
(5) Approve and accept the proposed locations for the machines;
(6) Buy the candy to supply the machines (testimony at trial indicates that plaintiff was obligated to buy the candy from the defendant company, however, the contract does not contain such a restriction.);
(7) Pay the owner of the premises upon which the machine is located a particular percentage of the gross profits from the machines.

Admittedly, the plaintiff was not totally passive in regard to the arrangement, however, we conclude that Nationwide, not the plaintiff, was responsible for the “essential managerial efforts which would affect the failure or success of the enterprise.” SEC v. Koscot Interplanetary, Inc., supra.

Out of all the elements necessary to properly define a business transaction as an “investment contract,” perhaps the most elusive is the concept of a common enterprise. A rather concise explanation of this element is contained in 3 Bloomenthal, Securities and Federal Corporate Law (1980) which states:

“The constantly recurring situation that gives rise to an investment contract is the purported sale of specific property such as citrus groves, rental trailers, beavers, mink, breeding cattle, Christmas trees, silver foxes, chinchillas, diamonds, scotch whiskey, etc., accompanied by an arrangement under which the promoters (pursuant to a management contract or otherwise) manage the entire operation and allocate the profits, if any, on the basis of the individual’s relative participation. The common enterprise results from the fact that the ‘investors’ are associated in the business of raising and selling citrus fruit, etc., even though they own segregated portions of the assets of the enterprise and have the theoretical right to manage and exploit their own property interest.”

In SEC v. C. M. Joiner Leasing Corporation, 320 U.S. 344, 64 S.Ct. 120, 88 L.Ed. 88 (1943), the United States Supreme Court held that the sale of oil and gas leases accompanied by the representation that the promoter would drill a well in the general area which would enhance the value of the leases sold involved the sale of investment contracts. In Joiner, supra, the element of common enterprise must be viewed somewhat differently than described by the writer in Securities and Federal Corporate Law, supra, since the properties in Joiner were not collectively managed, but rather, the funds derived from the investors were pooled for the purpose of drilling a well which would enhance (if successful) the value of all interests sold. A strictly analytical approach to common enterprise cannot embrace all of the varied investment contract situations, however, some of the factual circumstances giving rise to such a finding as proposed in the Bloomenthal treatise, supra, include:

(1) A pooling of capital in the sense that the promoter uses funds received from several investors to undertake the activity which will directly or indirectly give value to the investment.
(2) The de facto operation of several investments as one entity — citrus groves, cattle operations, tree farms, animal breeding, mortgage portfolios, etc.
(3) The fact that the bringing together of several investors makes possible the enterprise in question. The Joiner situation, the trust deed case, equity funding and, perhaps, some franchise contracts.
(4) Cutting across several of the foregoing, the fact that the arrangement is essentially a substitute for a more conventional business organization.

The facts of the instant case are analogous to the Joiner-type situation. As evidenced by its widely circulated newspaper advertisement, the defendant company sought a number of persons to invest in the vending machine enterprise. Although each investor serviced his own machines, it is clear that all of the operators were associated to the extent that the money which they invested financed the essential managerial efforts undertaken in their behalf by Nationwide. As noted, Nationwide’s efforts, in' this regard, ultimately determined the success or failure of the subject business enterprise. Therefore, we conclude that the sale of the vending machines coupled with the guaranteed income policy constituted a common enterprise as defined by the relevant jurisprudence. Thus, after finding all of the requisites of an investment contract, we conclude that the subject business venture constitutes such a contract and is, therefore, a security which is governed by the provisions of LSA-R.S. 51:701-720.

LSA-R.S. 51:706 provides that no securities, unless exempt by statute or unless sold in any transaction which is exempt by statute, shall be sold in Louisiana unless registered with the Louisiana Commissioner of Securities. LSA-R.S. 51:704-705 delineate those securities and/or transactions which are exempt from registration by law. However, the law is clear that a party claiming an exemption under the state’s Blue Sky Law has the burden of proving that such securities were, in fact, exempt from the applicable statute’s registration requirements. Mr. Harry Stansbury, Deputy Commissioner of Securities for Louisiana testified that Nationwide’s securities offering was not registered in Louisiana. In addition, Mr. Stansbury stated that he had no knowledge that such securities were registered with any recognized stock exchange. The trial record reflects that the defendant company introduced no evidence to establish that the subject securities were registered in Louisiana or with any recognized securities exchange. Further, the record is devoid of any evidence establishing that the subject securities transaction was exempt from registration by law. Therefore, we conclude that Nationwide has violated the provisions of LSA-R.S. 51:701-720 by offering non-exempt, unregistered securities for sale in Louisiana.

LSA-R.S. 51:715, which provides civil penalties for violation of the state’s Blue Sky Law, states in pertinent part:

“A. Any person who:
(1) Offers or sells a security in violation of R.S. 51:710(A), 51:706 of any rule or order under R.S. 51:706 which requires the affirmative approval of sales literature before it is used, or of any conditions imposed under R.S. 51:707 or 51:708, not including sales of securities exempt under R.S. 51:704, and not including transactions exempt under R.S. 51:705, or,
(2) Offers or sells any security in violation of this part or offers or sells any security, the registration of which has been revoked or suspended by the commissioner under R.S. 51:709, or
(3) Offers or sells a security by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading (the buyer not knowing of the untruth or omission), and who does not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known of the untruth or omission, is liable to the person buying the security from him, who may sue at law to recover the consideration paid for the security, together with interest at six percent per year from the date of payment, cost and reasonable attorney’s fees, less the amount of any income received on the security, upon the tender of the security, or for damages if he no longer owns the security. Damages are the amount that would be recoverable upon a tender less the value of the security when the buyer disposed of it and interest at six percent per year from the date of disposition.
B. Every person who directly or indirectly controls a seller liable under Subsection (A), every partner, officer, or director or such a seller, every person occupying a similar status or performing similar functions, every employee of such a seller who materially aids in the sale, and every broker-dealer or agent who materially aids in the sale are also liable jointly and severally with and to the same extent as the seller, unless the non-seller who is so liable sustains the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There is contribution as in cases of contract among the several persons so liable.
C. Any tender specified in this section may be made at any time before entry of judgment . . . .”

Under the above statute, Louisiana declares a transaction in violation of its Blue Sky Law to be voidable at the instance of the person buying the securities upon tender of the securities. Defendant contends that plaintiff cannot avail herself of the statutory remedy because she is unable to tender the securities. In this regard, defendant argues that plaintiff refused delivery of the vending machines which were shipped to her and cannot now return the machines to the defendant. Plaintiff admits that she refused delivery of the machines. The record fails to conclusively establish the ultimate disposition of the subject machines after plaintiff refused to accept delivery.

Without question plaintiff was never placed in physical possession of the vending machines, thus, the only “securities” which she has ever had under her control were the documents signed by the parties in connection with the vending machine transaction. Therefore, the plaintiff’s formal tender of these documents at trial is full compliance with the provisions of LSA-R.S. 51:715.

In summary, we conclude that the sale of the candy vending machines coupled with the guaranteed income refund policy constitutes a security subject to the regulations set forth in LSA-R.S. 51:701-720. Further, we find that Nationwide having failed to register the subject security offering with the Louisiana Commissioner of Securities in accordance with the provisions of Louisiana’s Blue Sky Law such contract was voidable at the instance of the investor. We will affirm the trial court judgment rendered pursuant to LSA-R.S. 51:715.

Finally, defendant contends on appeal that the trial court erred in denying its motion to stay the proceedings until such time as the dispute could be submitted to arbitration in accordance with the provisions of the contract. In addition, defendant contends that the record fails to establish that Nationwide was guilty of any fraud or misrepresentation in the negotiation and confection of the contested contracts. Since we have determined that the transaction in controversy is voidable at the instance of the plaintiff due to the defendant’s failure to register the subject securities as required by law, we need not address these issues.

Plaintiff answered this appeal praying for an increase in the trial court’s award of attorney’s fees. Additionally, plaintiff prays for attorney’s fees for legal services rendered in the course of this appeal. We conclude that the trial court did not abuse its discretion in its award of attorney’s fees for services rendered at the trial level. However, we conclude that plaintiff is entitled to attorney’s fees in the sum of $500.00 for legal services rendered in the course of the instant appeal.

For the above and foregoing reasons the judgment of the trial court overruling the exception of jurisdiction filed by Rob L. Lammers is reversed and set aside and that exception is now ordered sustained and plaintiff’s suit against the said Rob Lam-mers is dismissed. In all other respects the judgment of the trial court is affirmed, except that the award of attorney’s fees to plaintiff is increased from the sum of $2500.00 to the sum of $3000.00. Defendant, Nationwide Candy Division, Ltd., is cast for all costs of this proceeding both at the trial level and on appeal.

REVERSED IN PART AND AFFIRMED IN PART AS AMENDED.

      . Subsequent to the signing of the trial court’s judgment, defendants moved for and were granted a suspensive appeal. The defendants filed a suspensive appeal bond on January 16, 1981. On January 27, 1981, defendants filed in the trial court a motion “to revoke order for suspensive appeal and petition for a devolutive appeal.” The trial court denied the defendants’ motion noting that under LSA-C.C.P. Article 2088, the trial court had been divested of jurisdiction over the case when the suspensive appeal bond was filed. Defendants appealed the ruling of the trial court to this court. This court affirmed the trial court judgment concluding that the suspensive appeal had been perfected and could not be converted into a devolutive appeal without the consent of the appellee.

      . See Miller v. Central Chinchilla Group, Inc., 494 F.2d 414 (8th Cir. 1974) (Chinchillas); Ferland v. Orange Groves of Florida, Inc., C.C.H. Fed.Sec.L.Rep. [’74-’75 Transfer Binder] ¶ 94,-821 (M.D.Fla.1974); SEC v. M.A. Lundy Associates, C.C.H. Fed.Sec.L.Rep. ¶ 94,040 (D.R.I.1973) (whiskey receipts); Continental Marketing Corp. v. SEC, 387 F.2d 466 (10th Cir. 1967) (beavers); “Applicability of Federal Securities Laws to Whiskey Warehouse Receipts.” Sec. Act Rel.No.5018 (Nov. 4, 1969), C.C.H. Fed.Sec.L.Rep. [’69-’70 Transfer Binder] ¶ 77,757; American Dairy Leasing Corp., SEC Div. Corp. Fin. No-Action Letter (Dec. 3, 1971), C.C.H. Fed.Sec.L.Rep. [’71-’72 Transfer Binder] ¶ 78,-584 (dairy cattle); Investment Diamonds, Inc., SEC Div. Corp. Fin. No-Action Letter, Sec. Reg. & L.Rep.No.111:C-3 (July 21, 1971) (diamonds).

      . “Where a state statutory definition of the term ‘security’ is identical in all relevant respects to the definition of that term in the Federal Securities Act, there is no reason to believe that the state court will give the term ‘investment contract’ a different construction than have the federal courts in cases involving the federal act.” 79 Corpus Juris Secundum Supplement Securities Regulation Section 203 (Footnote 1); also, Chapman v. Rudd Paint and Varnish Co., 409 F.2d 635 (U.S. Ct. of App., 9th Cir. 1969).


author: JASPER E. JONES, Judge.

text:
    Alfred Thomas EBEY, Plaintiff-Appellee, v. Margaret McMillian EBEY, Defendant-Appellant.
    No. 14576.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.
    Bethard & Davis by J. G. Davis, Coushat-ta, for plaintiff-appellee.
    Law Offices of Bobby Culpepper by Jimmy C. Teat, Jonesboro, for defendant-appellant.
    Before HALL, JASPER E. JONES and FRED W. JONES, JJ.
   JASPER E. JONES, Judge.

Margaret McMillian Ebey appeals a judgment sustaining an exception of no cause of action to her reconventional demand for permanent alimony from her former husband, Alfred Thomas Ebey.

On January 25, 1980, a judgment of separation between Margaret C. Ebey and Alfred Thomas Ebey was granted “on the grounds of mutual fault.” On July 8, 1980, the husband sued for divorce on the grounds that he and his wife had been living separate and apart since July 7,1979. The wife reconvened for permanent alimony. The husband filed an exception of no cause of action to the wife’s reconventional demand for permanent alimony. A judgment was rendered granting the divorce on August 25, 1980. The divorce was granted under the provisions of LSA-R.S. 9:301 which authorizes a judgment of divorce when the spouses have been living separate and apart for one year. The divorce judgment left undecided the wife’s reconven-tional demand for permanent alimony. On October 10th, a judgment was signed which sustained the exception of no cause of action to the wife’s claim for permanent alimony, and she has appealed this judgment. We affirm.

The wife’s claim to permanent alimony is based upon LSA-C.C. art. 160 which provides that a spouse who has not been at fault and has not sufficient means for her support is entitled to receive alimony after divorce.

Mutual fault, which provides a grounds for a separation under the provisions of LSA-C.C. art. 141, is conduct which would provide each of the parties with an independent ground for a separation under the provisions of LSA-C.C. art. 138. Adams v. Adams, 389 So.2d 381 (La.1980); Post v. Post, 376 So.2d 1275 (La.App.2d Cir. 1979); Saucier v. Saucier, 357 So.2d 1378 (La.App. 4th Cir. 1978); Douglas v. Douglas, 385 So.2d 402 (La.App. 1st Cir. 1980); Brocato v. Brocato, 369 So.2d 1083 (La.App. 1st Cir. 1979); Watson v. Watson, 372 So.2d 639 (La.App. 1st Cir. 1979); Miller v. Miller, 398 So.2d 1162 (La.App.2d Cir. 1981).

The appellant has been found at fault in the separation by the judgment awarding the separation based upon mutual fault. This judgment was not appealed, and is now final.

The determination of fault in a separation proceeding bars relitigation of pre-sep-aration fault for the purpose of determining the wife’s right to permanent alimony following divorce. Fulmer v. Fulmer, 301 So.2d 622 (La.1974); Nethken v. Nethken, 307 So.2d 563 (La.1975); Thomason v. Thomason, 355 So.2d 908 (La.1978); Schillaci v. Schillaci, 339 So.2d 532 (La.App. 4th Cir. 1976); Brannon v. Brannon, 362 So.2d 1164 (La.App.2d Cir. 1978).

In Fulmer, supra, the court made it clear that once the issue of fault is determined in the separation proceeding that it could not be relitigated in the divorce proceeding even if the divorce was sought on the grounds of living separate and apart for two years under LSA-R.S. 9:301, (this statute has been amended since Fulmer to reduce the period of required separation to one year) rather than based upon the grounds of no reconciliation for one year following the separation under LSA-R.S. 9:302. The court in Fulmer stated:

“A judgment of separation in favor of the wife is a judicial determination of the marital fault which caused the judicial separation. As to the pre-separation fault, it should constitute a conclusive determination which equally bars re-litigation of the issue of fault, when alimony is sought under Article 160, whether the divorce is based either on La.R.S. 9:301 or on 9:302. It should equally bar the husband or the wife from re-litigating such issue.” Id. at 629. [emphasis supplied]

The appellant could not state a cause of action for permanent alimony under LSA-C.C. art. 160 because she had earlier been adjudicated at fault in the separation judgment which was granted on mutual fault.

The cited jurisprudence constitutes overwhelming authority to support the trial judge’s action in sustaining the exception of no cause of action to the claim for permanent alimony in the husband’s suit for divorce based upon LSA-R.S. 9:301 following a separation granted on mutual fault.

We also note that the provisions of LSA-C.C. art. 141, which authorizes the mutual fault separation, specifically provide that no permanent alimony shall be awarded following divorce:

“A separation from bed and board shall be granted although both spouses are mutually at fault in causing the separation. In such instances, alimony pendente lite may be allowed but permanent alimony shall not be allowed thereafter following divorce.” [our emphasis.]

The judgment is AFFIRMED at appellant’s cost.

      . LSA-C.C. art. 138 — “Separation from bed and board may be claimed reciprocally for the following causes:

      3. On account of habitual intemperance of one of the married persons, or excesses, cruel treatment, or outrages of one of them toward the other, if such habitual intemperance, or such ill-treatment is of such a nature as to render their living together insupportable; ...”

      . LSA-R.S. 9:301 — “When the spouses have been living separate and apart continuously for a period of one year or more, either spouse may sue for and obtain a judgment of absolute divorce.”


author: HALL, Judge.

text:
    Joseph A. REEVES, Jr., Plaintiff-Appellee, v. DIXIE BRICK, INC., Defendant-Appellant.
    No. 14577.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.
    En Banc. Rehearing Denied Oct. 1, 1981.

      Law Offices of Bobby L. Culpepper by Jimmy C. Teat, Jonesboro, for defendant-appellant.
    Law Offices of Joseph A. Reeves, Jr. by Joseph A. Reeves, Jr., New Orleans, for plaintiff-appellee.
    Before HALL, JASPER E. JONES and FRED JONES, JJ.
   HALL, Judge.

Plaintiff, Joseph A. Reeves, Jr., brought this suit in the Second Judicial District Court for Jackson Parish against defendants, Hayward Smith, a brick mason, and Dixie Brick, Inc., a manufacturer and seller of bricks, for damages allegedly sustained by him resulting from the defective condition of a fireplace and chimney constructed in plaintiff’s home. Plaintiff alleged that the cause of the defective condition was defective workmanship and negligence on the part of Smith and defective bricks manufactured and furnished by defendant, Dixie Brick, Inc. Plaintiff prayed for recovery from Smith for the cost of hiring another bricklayer, recovery from defendants, Smith and Dixie Brick, in solido, for the cost of repairing and restoring the fireplace and chimney, and for attorney fees.

Defendant, Dixie Brick, filed a declinato-ry exception of improper venue contending that the proper venue for this action is its domicile in Natchitoches Parish and not in Jackson Parish where plaintiff’s home is located and where Smith is domiciled. The exception of improper venue was overruled. Defendant Smith answered the suit denying liability and reconvened for an amount allegedly owed him for work done. Dixie Brick also answered denying liability and asserted a reconventional demand against the plaintiff. Dixie Brick also filed peremptory exceptions of no right or cause of action and prescription, which exceptions were referred to the merits and were subsequently overruled.

Prior to trial plaintiff apparently settled his claim against Smith and the case went to trial against Dixie Brick only. After trial the district court found that the excessive cracking and breaking of the bricks was due to the defective manufacture of the bricks, that the bricks were not suitable for the purpose for which they were purchased, that the manufacturer knew or should have known of the defective nature of the bricks, and that plaintiff had suffered damages in the amount of $7,900.50, the estimated cost of repairing the fireplace and chimney. Judgment was rendered in favor of plaintiff against Dixie Brick in the amount of $7,900.50, together with attorney fees in the amount of $2,500. Defendant appealed and plaintiff answered the appeal, asking for an increase in attorney fees for the work done on appeal.

The errors asserted by defendant-appellant on appeal can be summarized as follows:

(1) The trial court erred in not sustaining defendant’s exception of improper venue;

(2) The trial court erred in not sustaining defendant’s exception of prescription;

(3) The trial court erred in finding that plaintiff carried his burden of proving that the defective condition of the fireplace and chimney was due to defective bricks manufactured and sold by the defendant;

(4) The trial court erred in not finding that plaintiff was contributorily negligent;

(5) The trial court erred in rendering judgment against defendant because the release of one solidary obligor, Smith, without reservation of rights against the other soli-dary obligor, defendant Dixie Brick, serves to also release the defendant from further liability; alternatively, if plaintiff did reserve his rights against defendant Dixie Brick, the judgment should nevertheless be reduced by one-half because of the release of one of the two solidary obligors; and

(6) The trial court erred in awarding attorney fees in an action of this nature. Venue

Defendant contends that the trial court should have sustained its exception of improper venue. Defendant argues that under the general rule of venue contained in LSA—C.C.P. Art. 42(1) the proper venue for this action is in Natchitoches Parish, the defendant corporation’s domicile. It is defendant’s position that the exception to the general rule of venue provided in LSA—C.C.P. Art. 73 permitting an action against joint or solidary obligors to be brought in the parish of the domicile of any obligor who is made a defendant is not applicable here because defendant Dixie Brick and the defendant brick mason are not joint or soli-dary obligors. Defendant further argues the inapplicability of the exception to the general rule of venue contained in LSA—C.C.P. Art. 74 which provides that an action for the recovery of damages for an offense or quasi offense may be brought in the parish where the wrongful conduct occurred or in the parish where the damages were sustained, because the instant action is an action ex contractu and not an action ex delicto.

The exception of improper venue was correctly overruled by the trial court because Jackson Parish, where the suit was brought, is a parish of proper venue under both Article 73 and Article 74 of the Code of Civil Procedure.

Plaintiff’s petition alleges that the defects in the fireplace and chimney were caused by the combined negligence and improper workmanship of the brick mason and the furnishing of defective bricks by the manufacturer who knew or should have known of the defective condition of the bricks. The petition contains sufficient allegations of the joint or solidary liability of the named defendants and no evidence was offered at the trial of the exception to disprove these allegations. Where the combined fault of a contractor and a manufacturer of materials results in a loss for which each defendant would be liable for the whole, the defendants’ liability may be solidary. See Town of Winnsboro v. Barnard & Burk, Inc., 294 So.2d 867 (La.App. 2d Cir. 1974), writ refused 295 So.2d 445 (La.1974); LSA—C.C. Arts. 2091 and 2324. It matters not that the respective defendants’ obligation to repair the loss arises separately from an offense or quasi offense, or from a contract, or both.

The fact that the contractor was subsequently dismissed from the suit and that the evidence at trial on the merits ultimately established lack of joint fault or solidary liability between defendant and the contractor does not serve to make venue improper. Once venue is determined to be proper on allegations or facts developed at trial of the exception of improper venue, venue does not become improper by reason of a later change of facts or establishment of different facts. See LSA—C.C.P. Art. 73.

Venue is also proper in Jackson Parish where the wrongful conduct occurred and where the damages were sustained. Plaintiff’s action for recovery of damages arising out of the sale of a defective product which the manufacturer knew or is presumed to have known was defective, although characterized by plaintiff primarily as a redhibitory action, smacks of both tort (offense or quasi offense) and contract. Recovery could be allowed under either or both theories. Where a plaintiff institutes an action on more than one claim or theory of recovery arising out of one factual circumstance and where venue is proper as to any claim or theory of recovery, the court has venue of the action to decide any or all claims. Albritton v. McDonald, 363 So.2d 925 (La.App. 2d Cir. 1978), writ refused 366 So.2d 561 (La.1979); Smith v. Baton Rouge Bank & Trust Company, 286 So.2d 394 (La.App. 4th Cir. 1973); Broussard v. Liberty Mutual Insurance Company, 210 So.2d 411 (La.App. 3d Cir. 1968). This result is consistent with the venue articles, the liberal construction or procedural rules and judicial efficiency and economy.

Support for our holding that plaintiff’s action is of a hybrid nature, sounding in both tort (offense or quasi offense) and in contract, is supported by several recent cases which, although not dealing with venue issues, recognize that a single set of facts and circumstances may give rise to an action grounded in either tort or contract or both. In Free v. Franklin Guest Home, Inc., 397 So.2d 47 (La.App. 2d Cir. 1981) we noted that the same acts or omissions may constitute breaches of both general and contractual duties and may give rise to both an action in tort and an action in contract. See also Harris v. Bardwell, 373 So.2d 777 (La.App. 2d Cir. 1979). In Philippe v. Browning Arms Company, 395 So.2d 310 (La.1981), the Supreme Court held that there is no compelling reason to require a person injured by a defective product to proceed either in tort or in contract because the seller-manufacturer’s act of delivering a defective thing, when he knows of the defect, gives rise to delictual as well as contractual liability.

The exception of improper venue was correctly overruled.

Prescription

Defendant-appellant urges that plaintiff’s claim has prescribed because the suit filed November 14, 1978 was filed over a year after the sale and delivery of the bricks in May 1977 and after breakage and cracking of the bricks was discovered in July, or at the latest, in October 1977.

Although there was a high rate of breakage during construction in the summer of 1977, the cracks in the completed fireplace and chimney did not appear until October, after a fire was built in the fireplace. Plaintiff, believing that the problem might be due to lack of air space or insulation between the fire wall and the outside brick wall, had some remedial work done by another brick mason, Hampton. It was only when fires were built in the fireplace in February 1978 and additional cracks developed that plaintiff had solid reason to believe the bricks themselves were defective. It was not until this time that it can be said that plaintiff discovered the vice, that is, the defective nature of the bricks. Suit was filed well within one year after that discovery. See LSA—C.C. Arts. 2534, 2545, and 2546.

The exception of prescription was correctly overruled.

The Merits

In May 1977 plaintiff purchased from the defendant approximately 35,000 bricks to be used in the construction of his new home. Plaintiff contracted with Smith to lay the brick for the new home in accordance with specifications given to Smith by the plaintiff. After a load of bricks had been delivered to the job site by defendant, Smith began construction of the fireplace and chimney. Upon breaking open the bundles of brick, Smith noticed that there was an unusually high amount of breakage among the bricks. Smith called this to the attention of plaintiff who contacted defendants’ representative, Jack King. King agreed to deliver another 9,200 bricks to the job site to replace those that had been broken during shipment or the unloading process. Defendant’s representative also indicated to plaintiff that the defendant had been having trouble with its kiln during the time the bricks which were delivered to plaintiff were manufactured. Smith continued construction of the chimney and fireplace and completed his work in the latter part of the summer.

Later, during October 1977, a small fire was built in the fireplace by plaintiff’s carpenters. Cracks immediately developed in and around the chimney area both inside and outside the house. Plaintiff contacted Smith who refused to return to inspect the problem. Plaintiff hired another bricklayer, Gene Hampton, to tear out the back of the chimney and portions of the front chimney around the mantel and to reconstruct these portions of the chimney.

In tearing out the back of the chimney, Hampton noticed that no air space had been left between the fire brick and the back wall of the chimney and that the damper had been improperly placed in the chimney. Hampton then rebuilt the chimney leaving proper air space filled with insulation behind the fire box and correcting the position of the damper.

After the reconstruction of the chimney and after allowing for the recommended delay prior to use, plaintiff built another fire in the fireplace and the chimney cracked again in the area of the mantel, the back and both sides of the chimney. Because the cracking occurred again in the same fashion as it had the first time, plaintiff determined that the cracking of the brick in the walls of his home could have been caused by defects in the brick. Therefore, plaintiff contacted Dixie Brick’s representative, Jack King, to complain of the cracking. Finally, because Dixie Brick had taken no action, plaintiff made written demand upon the defendant for repair or for damages in the way of cost of repair. At this point Dixie Brick sent a civil engineer to the premises to inspect and examine the cracking.

The civil engineer sent a report of his findings to Dixie Brick and this report was filed into evidence along with the civil engineer’s deposition. The report and the deposition clearly indicate that the civil engineer found that the cracking problem was not the result of soil settlement; nor was the problem caused by the manner in which the fireplace and chimney were constructed. The engineer concluded after inspecting the brick and the cracks in the bricks in plaintiff’s house, that the brick did not have the proper amount of tensile strength and that the bricks had probably not been properly fired.

The conclusions of the civil engineer were supported by the testimony of a local contractor who stated that during the time period involved, he had experienced the same problems with brick breaking and cracking in his use of bricks manufactured by Dixie Brick. Additionally, Jack King testified that during the time period in question defendant was having trouble with a large amount of breakage in the bricks they manufactured and, consequently, changed their procedures for manufacturing the bricks.

The trial court concluded, based on the deposition of the civil engineer and the corroborative testimony given by the local contractor, that the bricks delivered to plaintiff’s job site were defective and were not suitable for the purpose for which they were purchased and used. The defects in the bricks were found to be the cause of the cracking in the walls, chimney, and fireplace of plaintiff’s house. The record amply supports the facts as found by the trial court and we find no manifest error in his decision.

Contributory Negligence of the Plaintiff

Defendant contends that the plaintiff was contributorily negligent because he failed to halt construction once it was brought to his attention that there was an unusual amount of breakage in the bundles of bricks delivered to the job site by the defendant. Defendant contends that plaintiff should have been aware that the bricks were possibly defective because of the unusual amount of breakage. Assuming, but specifically without so holding, that contributory negligence might be an appropriate defense in a case of this nature, the evidence does not support defendant’s contentions and does not establish that plaintiff was negligent in any fashion. As noted above in the discussion of the prescription issue, plaintiff did not have good reason to believe the bricks were defective until the cracks developed after construction was complete.

Release of Smith

Defendant contends that the trial court should not have rendered judgment against it because plaintiff’s release of Smith, a solidary obligor, without reservation of rights against the defendant, serves also to release the defendant from further liability. The defendant argues in the alternative that if plaintiff did reserve his rights against it, the judgment should be reduced by one-half because of the release of one of the two solidary obligors. See LSA—C.C. Arts. 2103 and 2203. Our review of the record reveals that, although there is reference to plaintiff’s settlement with Smith in the testimony of Smith, the release itself was not filed into evidence and Smith was not formally dismissed from the suit. Even if plaintiff did release Smith without reserving his rights against the defendant, the defendant cannot prevail on this point because the evidence does not establish that Smith and the defendant are solidary obligors. The defendant attempted to establish that the cause of the cracking of the bricks was Smith’s poor workmanship and negligence rather than the defective nature of the bricks supplied by the defendant; therefore, the issue of Smith’s responsibility and, consequently, the solidary liability, vel non, of Smith and the defendant was fully litigated. See Wall v. American Employers Insurance Company, 386 So.2d 79 (La.1980). The evidence does not show the defective condition of the fireplace was caused by any fault on the part of Smith; hence, there is no solidary liability. Defendant’s argument that the release of Smith also served to release it from further liability, or that the judgment against the defendant should be reduced by one-half because of the release of Smith, is without merit.

Attorney Fees

Defendant argues that plaintiff is not entitled to attorney fees under LSA— C.C. Art. 2545 because the defendant was not aware of the vice or defect in the bricks sold to plaintiff. In this case, however, the defendant was not only the seller of a defective product but was also the manufacturer of that product. The courts have consistently held that manufacturers are presumed to know of the defects of their products. See Radalec, Incorporated v. Automatic Firing Corporation, 228 La. 116, 81 So.2d 830 (1955); Weber v. Fidelity & Casualty Insurance Co. of N. Y., 259 La. 599, 250 So.2d 754 (1971) and cases cited therein. Therefore, under LSA—C.C. Art. 2545 plaintiff is entitled to recover reasonable attorney fees from the defendant-manufacturer.

Defendant also draws our attention to the case of Martin v. AAA Brick Company, Inc., 386 So.2d 987 (La.App. 3d Cir. 1980), in which the court refused to award attorney fees to the plaintiff. In that case plaintiff filed suit against a brick contractor seeking damages for poor workmanship in the construction of a fireplace. That case is easily distinguishable from the case at hand because this suit is against a manufacturer for a defective product, not against a contractor for defective workmanship. Here, the plaintiff sued the defendant-manufacturer for damages resulting from the defects in the defendant’s product and attorney fees are clearly allowable under Article 2545.

Plaintiff answered this appeal seeking an increase in attorney fees for services performed on appeal. The trial court awarded plaintiff attorney fees in the amount of $2,500. We will increase this award to $3,000 to cover services rendered on appeal. Alexander v. Burroughs Corporation, 359 So.2d 607 (La.1978); Dunlap v. Chrysler Motor Corp., 299 So.2d 495 (La.App. 4th Cir. 1974), writs denied 302 So.2d 38 (La.1974).

For the reasons assigned in this opinion, the judgment of the trial court is amended to increase the award of attorney fees to $3,000 and is otherwise affirmed. Costs of this appeal are assessed to defendant-appellant, Dixie Brick, Inc.

Amended, and as amended, affirmed.


author: MARVIN, Judge.

text:
    Roosevelt GILBERT d/b/a Gilbert’s Trucking, Plaintiff-Appellant, v. INDUSTRIAL MECHANICAL AND MAINTENANCE, INC., Defendant-Appellee.
    No. 14588.
    Court of Appeal of Louisiana, Second Circuit.
    Aug. 25, 1981.

      Guerriero & Anzalone by Joe D. Guerrie-ro, Monroe, for plaintiff-appellant.
    Law Offices of Bobby L. Culpepper by Bobby L. Culpepper and Jimmy C. Teat, Jonesboro, for defendant-appellee.
    Before PRICE, HALL and MARVIN, JJ.
   MARVIN, Judge.

In this controversy between Gilbert, the owner of a diesel tractor, and Industrial, a mechanic, over the cost of repair of the tractor, Gilbert appeals a judgment which denied his demands for damages for loss of use of the tractor and which cast him to pay Industrial’s $181 repair bill. We affirm.

The tractor was used at a gravel pit to load trucks. In November 1979 the tractor would not run for more than a few minutes at a time and Gilbert took the tractor to Industrial for repair. At Industrial’s direction, Gilbert took the fuel pump to another business that rebuilt the pump at Gilbert’s cost. Gilbert returned the pump to Industrial who reinstalled it on the tractor. Industrial later either replaced the rebuilt pump or installed another pump in the fuel system when the tractor experienced further difficulty. Industrial’s charges to Gilbert totaled $181 for parts and labor, a portion of which was paid with Gilbert’s check for $75.60 on which Gilbert stopped payment after the tractor experienced further difficulty.

Gilbert then obtained the services of another mechanic who replaced a $2 screen or strainer in or near the fuel tank, after which the tractor resumed operating without difficulty. Gilbert sued Industrial for loss of income of $150 per day for 16 days ($2,400). Industrial reconvened for its repair bill of $181.

As in Wendelken Machine Shop, Inc. v. Dibert, etc., Co., Ltd. 279 So.2d 226 (La.App. 1st Cir. 1973), the issues here are factual. Gilbert contends that the “. . . only cause of the problem was [the $2] ... filter [screen] .. . [and] if the court accepts that as . . . the cause . . . then everything else [that was earlier done by Industrial] was unnecessary, [b]ecause that’s what solved the problem.” Gilbert did not produce evidence to support this contention and in effect asks that we make this inference solely on the basis of testimony by Gilbert and others that the tractor ran properly only after the screen was replaced. Gilbert’s last mechanic (Dailey) testified only that he observed that some parts of the fuel system had been replaced and that he replaced the fuel filter screen and afterward left the tractor in running condition. Dailey did not testify or conclude that Industrial’s earlier work was defective or not necessary, and indeed was not asked such questions.

On the other hand, Industrial’s witness (Carny) testified that the fuel injection pump was the “trouble” with the tractor, that after he installed the second pump, he blew out the fuel lines, blowing the trash away from the filter screen, “. . . but [the fuel tank] had so much foreign matter . . . it stopped back up more than likely [after Industrial did its last work].” Industrial replaced a $7.00 fuel filter during the course of its work but did not replace the $2 screen as did the last mechanic. Industrial’s witness testified as to the correctness of its invoices which detailed the labor and parts charged to Gilbert.

We have no facts or opinion evidence based on facts from which we can make the ultimate inference that it is more probable than not that the only thing wrong with Gilbert’s tractor was the clogged $2 fuel screen. Under these circumstances, Gilbert has simply not met his burden of proving what he has alleged as to cause and effect. See Hargis v. Travelers Indemnity Company, 248 So.2d 613, 615 (La.App. 3d Cir. 1971), Wendelken, supra.

Under these circumstances, the judgment is AFFIRMED at appellant’s cost.