author: Judge Regina Bartholomew Woods

text:
    Sybil ALEXANDER v. HANCOCK BANK d/b/a Whitney Bank, Chubb Insurance Company, A-1 Service and United Fire Group
    NO. 2016-CA-0662
    Court of Appeal of Louisiana, Fourth Circuit.
    February 8, 2017

      Bobby Ray T. Malbrough, R. Ray Orrill, Jr., William Christopher Beary, Alexandre L.M. Ducros, ORRILL CORDELL & BEARY, L.L.C., 330 Carondelet Street, New Orleans, LA 70130—3144, COUNSEL FOR PLAINTIFF/APPELLANT
    Alexander Richard Saunders, PELLET-ERI & WIEDORN, L.L.C., 636 Caronde-let Street, New Orleans, LA 70130, Evan J. Bergeron, DEUTSCH, KERRIGAN & STILES, L.L.P., 756 Magazine Street, New Orleans, LA 70130, James Walter Hailey, III, LEWIS BRISBOIS BIS-GAARD & SMITH, LLP, 400 Poydras Street, Suite 2000, New Orleans, LA 70130, COUNSEL FOR DEFENDANTS/APPELLEES
    (Court composed of Judge Terri F. Love, Judge Rosemary Ledet, Judge Regina Bartholomew Woods)
   Judge Regina Bartholomew Woods

FACTUAL AND PROCEDURAL BACKGROUND

| ¶ This is a personal injury suit arising out of a trip and fall on a mat in the lobby of a bank. On May 17, 2013, Plaintiff, Sybil Alexander (“Ms. Alexander”), made a routine visit to the Whitney Bank located at 228 St. Charles Avenue in New Orleans, Louisiana. Upon exiting the lobby of the bank, Ms. Alexander alleges that she tripped and fell over a “wave” or “lip” in the rubber edge of the floor mat. As a result, she fell forward, striking her head on the door resulting in a large gash. She also tore her lateral and medial meniscus in her left knee.

On May 16, 2014, Ms. Alexander filed this suit against Hancock Bank d/b/a Whitney Bank (‘Whitney”), and A-l Services, Inc. (“A-l”), as the supplier of the commercial floor mat to Whitney. On January 4, 2016, Whitney filed a motion for summary judgment on liability. A-l likewise filed a motion for summary judgment. On February 19, 2016, the trial court granted the motions for summary | judgment on liability in favor of Whitney and A-l. Ms. Alexander filed this appeal from the trial court’s rulings.

DISCUSSION

In her appellate brief, Ms. Alexander presents a number of assignments of error and issues for review. We frame the issues presented as two-fold:

1. Whether the trial court’s grant of summary judgment in favor of the defendants was appropriate.
2. Whether the trial court applied the appropriate substantive law in evaluating the defendants’ motion for summary judgment.

Here, we must determine whether the trial court’s grant of summary judgment in Whitney’s favor was appropriate. An appellate court conducts a de novo review, applying the same criteria that govern the trial court’s determination of whether summary judgment is appropriate. Brown v. Amar Oil Co., 2011-1631, p. 2 (La.App. 1 Cir. 11/8/12), 110 So.3d 1089, 1090 (citing Sanders v. Ashland Oil, Inc., 96-1751, p. 6 (La.App. 1 Cir. 6/20/97), 696 So.2d 1031, 1035), A motion for summary judgment should only be granted if the pleadings, depositions, answers to interrogatories, and admissions, together with any affidavits show that there is no genuine issue of material fact and that the mover is entitled to judgment as a matter of law. Collins v. Randall, 2002-0209, p. 3 (La.App. 1 Cir. 12/20/02), 836 So.2d 352, 354. The summary judgment procedure is designed to secure the just, speedy, and inexpensive determination of -actions. King v. Allen Court Apartments II, 2015-0858, p. 3 (La. App. 1 Cir. 12/23/15), 185 So.3d 835, 837, writ denied, 2016-0148 (La. 3/14/16), 189 So.3d 1069. This procedure is favored and shall be construed to accomplish these ends. Id.; see also La. C.C.P. Art. 966 A(2).

The initial burden of proof rests on the moving party. La. C.C.P. Art. 966 D(l). However, if the mover will not bear the burden of proof at trial on the matter that is before the court on the motion for summary judgment, the mover’s burden on the motion does not require him to negate all essential elements of the adverse party’s claim, action, or defense, but rather, to point out to the court that there is an absence of factual support for one or more elements essential to the adverse party’s claim, action or defense. King, 2015-0858 at p. 3,185 So.3d at 838. Thereafter, if the adverse party fails to provide factual evidence sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial, there is no genuine issue of material fact. Id. It is only after the motion has been made and properly supported that the burden shifts to the non-moving party. Brown, 2011-1631 at p. 3, 110 So.3d at 1090-91; Pugh v. St. Tammany Parish School Bd., 2007-1856, p. 3 (La. App. 1 Cir. 8/21/08), 994 So.2d 95, 98.

A genuine issue is a triable issue. Brown, 2011-1631, p. 3, 110 So.3d at 1090-91. Jones v. Stewart, 2016-0329, p. 7 (La. App. 4 Cir. 10/5/16), 203 So.3d 384, 389, writs denied, 2016-1962, 2016-1967 (La. 12/16/16) — So.3d.-,-, 211 So.3d 1169, - 2016 WL 7638451, 2016 WL 7638388. More precisely, an issue is genuine if reasonable' persons could disagree. Id. If on the state of the evidence, reasonable persons could reach only one conclusion, there is no need for a trial on that issue. Id. A fact is material when its existence or non-existence may be essential to the |4plaintiffs cause of action under the applicable theory of recovery. Id. Facts are material if they potentially insure or preclude recovery, affect a litigant’s ultimate success, or determine the outcome of the legal dispute. Id.; King v. Illinois Nat. Ins. Co., 08-149, p. 6 (La. 4/3/09), 9 So.3d 780, 784. Because it is the applicable substantive law that determines materiality, whether a particular fact in dispute is material can be seen only in light of substantive law applicable, to the case. Brown, 2011-1631 at p. 3, 110 So. 3d at 1091; Hall v. Our Lady of the Lake R.M.C., 2006-1425, p. 9 (La. App. 1 Cir. 6/20/07), 968 So.2d 179, 185.

In order to determine whether the trial court’s grant of summary judgment was proper, this court must look to the applicable substantive law. At the hearing on the motions for summary judgment, the trial judge stated that La. R.S. 9:2800.6, the Louisiana Merchant Liability Act, was the applicable law. In order for this | .^statute to apply, the defendant must fall within the statute’s definition of a merchant, which is set forth in La. R.S. 9:2800.6 C(2). Although a bank is a “fixed place of business,” a bank does not sell goods, foods, wares, or merchandise; therefore, a bank does not fall within the definition of a merchant as espoused in La. R.S. 9:2800,6. For the aforementioned reasons, La. R.S. 9:2800.6 is not applicable in this case.

The governing law in this case is La. C.C. art. 2317.1, which applies a negligence standard to things. La. C.C. art. 2317.1 states:

The owner or custodian of a thing is answerable for damage occasioned by its ruin, vice, or defect, only upon a showing that he knew or, in the exercise of reasonable care, should have known of the ruin, vice, or defect which caused the damage, that the damage could have been prevented by the exercise of reasonable care, and that he failed to exercise such reasonable care. Nothing in this Article shall preclude the court from the application of the doctrine of res ipsa loquitur in an appropriate case.

To prove premises liability pursuant to La. C.C. art. 2317. 1, an injured plaintiff must first establish the following elements: 1) that the thing was in the owner’s or custodian’s garde; 2) that the thing contained a vice or defect creating an unreasonable risk of harm; and 3) that the damage was caused by the vice or defect. Joseph S. Piacun, The Abolition of Strict Liability in Louisiana: A Return to \ ¡A Fairer Standard or an Impossible Burden for Plaintiffs?, 43 Loy. L. Rev. 215, 234 (1997). A defect, as anticipated by La. C.C. art. 2317.1, is a condition creating an “unreasonable risk of harm.” King, 2015-0858 at p. 7, 185 So.3d at 840. The existence of a defect, however, may not be inferred solely from the fact that an accident occurred. Rather, the plaintiff must prove that a defect existed and that the defect caused the plaintiffs damages. Id.

Once these elements are established, the plaintiff must show: 1) the owner of a thing either knew or should have known of the ruin, vice, or defect which caused the damage; 2) the owner could have prevented the damage by'the exercise of reasonable care; and 3) the owner failed to exercise such reasonable care. Garrison v. Old Man River Esplanade; L.L.C., 2013-0869, p. 5 (La. App. 4 Cir. 12/18/13), 133 So.3d 699, 701-02; Greenhouse v. C.F. Kenner Associates, Ltd. P’ship, 98-0496, p. 5 (La. App. 4 Cir. 11/10/98), 723 So.2d 1004, 1007.

In a case similar to the instant one, a patron entered the front of the bank using the ramp. Upon entering, the patron did not notice any foreign substances on the ramp and did not have any trouble traversing the ramp. Upon exiting the bank, the patron did not notice any problems "with the ramp. The patron fell, but the patron did not know what caused her to fall. The patron concluded that she had fallen because of the ranip. The trial court granted the bank’s motion for summary judgment. The appellate court affirmed, reasoning that the patron was “unable to testify as to the cause'of her fall.” Littlefield v. Iberia Bank, 2004-1334, p. 7 (La.App. 5 Cir. 3/15/05), 900 So. 2d 925, 929. The patron further stated' that “she is unclear what caused the fall.” Id.

In another case similar to the instant one, a patron entered a restaurant, made her way to her table, and then went back to the counter to place her order. Upon returning to her table, the patron fell. The patron did not notice any issues with the floor. The patron testified that she was looking down at the carpet when she fell. She further testified that she saw no unevenness to the carpet and that the carpet was not slippery or worn. The patron had dined at this restaurant six (6) times during the month since the restaurant opened and previously had no trouble traversing the floor. The trial court granted the restaurant’s motion for summary judgment. The appellate court affirmed. The court reasoned that the patron was unable to show that the carpet presented an unreasonable risk of harm. Henry v. NOHSC Houma # 1, L.L.C., 2011-0738, p. 9 (La. App. 1 Cir. 6/28/12), 97 So.3d 470, 476.

As noted at the outset of this opinion, Ms. Alexander alleges that she tripped and fell over a “wave” or “lip” in the rubber edge of the floor mat. Ms. Alexander, however, admits in her deposition that she did not notice the wave or lip in the mat until after she fell. Ms. Alexander traversed the same mat upon entering the bank and neither noticed the wave or lip nor had trouble entering the bank. During the brief time in which Ms. Alexander was present in the bank, no other patrons tripped or fell on the mat or had any issues with the mat. It was only after her fall that Ms. Alexander noticed the wave or lip and concluded that the wave or lip must | shave been the cause of her fall. Proof which establishes only possibility, speculation, or unsupported probability does not suffice to establish a claim. Todd v. State Through Social Services, Office of Community Services, 96-3090, p. 16 (La. 9/9/97), 699 So.2d 35, 43. Ms. Alexander is unable to produce any evidence other than conclusory allegations in her pleadings and her own self-serving statements regarding the mat. Therefore, Ms, Alexander is unable to meet her burden of showing that a defect existed. Ms. Alexander is further unable to show that the mat created an unreasonably dangerous condition and that an unreasonably dangerous condition was the cause in fact of her fall. Absence of corroborating evidence means that there is no genuine issue of material fact. King, 2015-0858 at p. 10, 185 So.3d at 842. Thus, the trial court’s grant of the defendants’ motions for summary judgment was appropriate.

DECREE

For these reasons, this court affirms the trial court’s judgment granting the defendants’ motions for summary judgment pursuant to La. C.C. art. 2317.1, not La. R.S. 9:2800.6.

AFFIRMED

      . Although Chubb Insurance Company was listed in the caption, it was not mentioned in the body of the petition. As Whitney pointed out in its responsive pleading, its insurer is Pacific Indemnity Company, not Chubb. For ease of discussion, we refer to Whitney and its insurer collectively as "Whitney.”

      . The Louisiana Merchant Liability Act, La, R.S. 9:2800.6, states that:
      A. A merchant owes a duty to persons who use his premises to exercise reasonable care to keep his aisles, passageways, and floors in a reasonably safe condition. This duty includes a reasonable effort to keep the premises free of any hazardous conditions which reasonably might give rise to damage.
      B. In a negligence claim brought against a merchant by a person lawfully on the merchant’s premises for damages as a result of an injury, death, or loss sustained because of a fall due to a condition existing in or on a merchant's premises, the claimant shall have the burden of proving, in addition to all other elements of his cause of action, all of the following:
      (1) The condition presented an unreasonable risk of harm to the claimant and that risk of harm was reasonably foreseeable,
      (2) The merchant either created or had actual or constructive notice of the condition which caused the damage, prior to the occurrence.
      (3) The merchant failed to exercise reasonable care. In determining reasonable care, the absence of a written or verbal uniform cleanup or safety procedure is insufficient, alone, to prove failure to exercise reasonable care.
      C. Definitions:
      (1) "Constructive notice” means the claimant has proven that the condition existed for such a period of time that it would have been discovered if the merchant had exercised reasonable care. The presence of an employee of the merchant in the vicinity in which the condition exists does not, alone, constitute constructive notice, unless it is shown that the employee knew, or in the exercise of reasonable care should have known, of the condition.
      (2) "Merchant” means one whose business is to sell goods, foods, wares, or merchandise at a fixed place of business. For purposes of this Section, a merchant includes an innkeeper with respect to those areas or aspects of the premises which are similar to those of a merchant, including but not limited to shops, restaurants, and lobby areas of or within the hotel, motel, or inn.
      D.Nothing herein shall affect any liability which a merchant may have under Civil Code Arts. 660, 667, 669, 2317, 2322, or 2695.

      . In a similar case, the court found that the bank was not classified as a merchant and therefore, was not subject to the heightened standard of care set forth in La. R.S. 9:2800.6. Lachico v. First Nat. Bank Shares, Inc., 95-2124, p.4 (La. App. 1 Cir. 4/30/96), 673 So. 2d 305, 307.


source: Caselaw Access Project

author: COX, J.

license: Public Domain

text:
    Letitia GREEN, Individually and on Behalf of Her Minor Child, Kyra Jones and Chad Hudson and Letitia Green on Behalf of Their Minor Children Cierra Hudson and Caleb Hudson, Plaintiffs-Appellees v. Larry BROWN and Safeway Insurance Co. of Louisiana, Defendants-Appellants
    No. 51,152-CA
    Court of Appeal of Louisiana, Second Circuit.
    Judgment rendered February 15, 2017.
    Rehearing Denied March 30, 2017

      TRACY L. OAKLEY, W. BRETT CAIN, Counsel for Appellant Safeway Insurance Company of Louisiana
    DAIGLE RAYBURN, LLC By: Gregory J. Laborde, Counsel for Appellant Larry Brown
    LAW OFFICES OF KIRBY D. KELLY By: Harold Dean Lucius Jr., Counsel for Appellees
    Before WILLIAMS, GARRETT and COX, JJ.
   COX, J.

11 Defendant, Safeway Insurance Company of Louisiana (“Safeway”), appeals from a judgment for the plaintiffs, Letitia Green, et al. (“Green”), finding that Safeway waived its affirmative defense of material misrepresentation and awarding money damages based on the stipulated liability of defendant Larry Brown (“Brown”) for an automobile accident. The trial court found that Safeway had waived the defense of material misrepresentation due to multiple renewals of the insurance policy occurring after the accident and after the alleged material misrepresentation became known. Based on this narrow set of facts and for the following reasons, we affirm.

Fads

On June .8, 2012, at approximately 6:28 p.m., a two-car accident occurred at the intersection of-8400 St. Vincent and West 84th Street in Shreveport. Brown was the operator of one of the vehicles, a 1998 Buick Park Avenue. The other car, a 2006 Pontiac Grand Prix, was operated by Green and contained the other plaintiffs. Green filed suit against Brown and Safeway Insurance Company-.of Louisiana on June 7, 2013, claiming damages for personal injuries. In its answer to the petition, filed on August 6, 2013, Safeway asserted the affirmative defense of material misrepresentation, arguing that the insurance policy was void ab initio based on misrepresentations and nondisclosures in the insurance application. On November 10, 2015, a bench trial was held at the First Judicial District Court for Caddo Parish.

|2At the outset of the trial, the parties entered a stipulation that Brown was at fault for the accident and liable for the plaintiffs’ injuries. The only question to be addressed at trial was whether the Safeway policy provided coverage. The entire record was admitted into evidence without objection at the outset of the trial.

At trial, Brown testified that the 1998 Buick he was driving was actually registered to Harvey E. Richardson (“Richardson”) and insured in his name through a policy issued by Safeway. Brown paid the purchase price for the vehicle on approximately March 9, 2012, and then picked up Richardson to get insurance and title the vehicle. Richardson, as a favor to Brown and in exchange for a payment of $50.00, agreed to register and insure the 1998 Buick in his name. Richardson testified that he knew that Brown did not have a driver’s license and that was why he could not insure and register the car himself.

Both Brown and Richardson testified that Brown paid all of the premium bills for the Safeway policy. In fact, Richardson testified that he had the mailing address on the policy changed to Brown’s address on July 9, 2012, so that all the bills would go to him for payment. Richardson also testified that he never paid for any portion of the car nor did he drive it. Brown was never added to the policy, and Richardson never garaged or kept the car at his residence. Brown and Richardson planned to keep the vehicle registered and insured by Richardson until Brown got his driver’s license, and then they would register the vehicle in Brown’s name or his girlfriend’s |sname. Richardson testified that Brown was not listed as a driver of the 1998 Buick in the Safeway policy, nor was it disclosed that he paid the purchase price of the vehicle.

Richardson testified that after the accident he told a Safeway representative that the car was not garaged at his address. He was not sure if that was documented. Rhonda Marshall (“Marshall”), a Safeway underwriting supervisor, testified that had Brown been listed on the application, Safeway would have required him to be listed as an “excluded person,” or the policy would not have been issued if the ownership of the vehicle was in question. Marshall also testified that if a material misrepresentation was discovered, it was Safeway’s policy to cancel or non-renew the insurance policy. Safeway did actually flag the policy for nonrenewal on February 18, 2014, but the policy was canceled by Richardson before the renewal date. Marshall testified that the policy was not null, nor was it canceled by Safeway; rather there was a policy that covered Richardson as a driver, but not Brown.

Gail Richard (“Richard”), a Safeway claims adjuster, testified that it was her responsibility to report any material misrepresentations she discovered in the course of investigating a claim by sending a task to the underwriting department, but she had not done so in this case because she was still in training at the time and did not know of the responsibility. She testified that she was assigned the claim submitted by Green on June 12, 2012. Shortly thereafter, she discovered Brown was an unlisted driver on 4the policy. She then contacted Richardson who clarified that Brown drove the vehicle, garaged it, and made the insurance payments.

On September 10, 2012, Safeway issued a letter to Brown denying coverage for the accident based on the statements made by Richardson. The letter clarified that Safeway would not cover the accident because the vehicle was purchased for Brown and garaged with him. It further stated, “Had we known that you were the primary operator of this vehicle, we would not have accepted the application.”

Although the claim was denied per the letter, Richard’s supervisors did not void the insurance policy in Richardson’s name. Richard testified that she did not know if her supervisors ever notified the underwriting department of the material misrepresentation. Following the accident and denial of coverage letter dated September 10, 2012, Safeway continued to renew and accept premiums on the policy through approximately February 10, 2014. The policy was canceled by the insured after the vehicle broke down and was no longer drivable.

The documents in this case reveal important differences between the language used in the insurance application and in the actual insurance policy. Specifically, Section 5 of the insurance application filled out by Richardson included the following language:

It is a special condition of this policy that the policy shall be NULL and VOID and of no benefit or effect whatsoever as to any claim arising thereunder in the event that there are any material misrepresentations made with an intent to deceive in this application. (Emphasis added).

|sThe insurance application also requires that potential drivers of the vehicle be listed in order to calculate premiums. Richardson listed only himself on the application. In reference to this list, the insurance application provides:

Applicant warrants there are no other persons, age 15 or older, living with applicant, including applicant’s children who attend college, other than those listed below. Applicant warrants that the vehicle(s) listed on this application are primarily driven by the drivers listed under this policy.

Aside from this declaration, the insurance application asks for an address and states that all vehicles listed on the application “must be garaged at the address on the policy.” Richardson testified that he had no intent for the vehicle to be garaged at his address, nor was the vehicle ever kept there after the commencement of the policy.

In contrast with the “null and void” language found in the application for insurance, Paragraph 16 of the Safeway insurance policy, entitled “Misrepresentation,” states,

This policy shall be voidable, at our option, if the named insured or any other insured has, with an intent to deceive, concealed or misrepresented any material fact concerning any matter regarding completion of the application. (Emphasis added).

On November 12, 2015, the trial court issued a ruling in favor of the plaintiffs on the basis of the stipulated liability and a finding that Safeway waived the right not to provide coverage for the accident. In reaching this conclusion regarding waiver, the court specifically noted that Safeway renewed the policy at least three times after the accident and misrepresentation had become known. On February 24, 2016, a judgment for the plaintiffs was signed in accordance with the oral reasons for judgment. Safeway timely filed a suspensive appeal from that judgment.

| JjCLW

The issue to be determined in this case is whether the doctrine of waiver may be applied to gateway's affirmative defense of material misrepresentation when Safeway took actions inconsistent with the asserted defense.

Waiver has been described by this court as the intentional relinquishment of a known right, power or privilege, which occurs when there is an existing right, a knowledge of its existence, and an actual intention to relinquish it or conduct so inconsistent with the intent to enforce the right as to induce a reasonable belief that it has been relinquished. Tate v. Charles Aguillard Ins. & Real Estate, Inc., 508 So.2d 1371 (La. 1987); Maddox v. Keen, 33,072 (La.App. 2 Cir. 4/7/00), 756 So.2d 1279; 1 William S. McKenzie & H. Alston Johnson, III, Insurance Law and Practice § 5, in 15 La. Civil Law Treatise (4th ed. 2016).

The Louisiana Supreme Court addressed the limits of waiver in Tate, supra, where an insured claimed that the insurer had tacitly waived a condition precedent to the policy by retaining an initial premium after it was certain that the condition precedent had failed. After examining the case law applying the doctrine of waiver, the court concluded:

Waiver may apply to any provision of an insurance contract under which the insurer knowingly and voluntarily elects to relinquish his right, power or privilege to avoid liability, even though the effect may bring within coverage risks originally excluded or not covered. Of course, reliable proof of such knowing and voluntary waiver is necessary and the burden of producing it, as in the proof of obligations, generally falls on the party who demands performance.

Tate, supra. This standard was applied to the facts adduced at trial, and the court found that the insured had failed to carry the burden of proving waiver. Rather, the evidence made clear that the failure- to return the premium and inform the insured of the voided policy was the result of a broker’s conduct, and not an action undertaken by the insurer. As a result, the court found that the insurer had not tacitly waived the condition precedent.

Analysis

After reviewing the evidence, we agree with the trial court that the facts peculiar to this case demonstrate a waiver of the affirmative defense of material misrepresentation. The evidence demonstrates that Safeway became aware of'the misrepresentation and, by mistake or otherwise, did not exercise its option to void the insurance policy, thereby waiving the defense.

As an initial matter, the specific provisions of the insurance agreement must be examined for language pertaining to material misrepresentations. The only language included in the insurance policy pertaining to material misrepresentations is the above-described Paragraph 16, which allows Safeway to void a policy because of a material misrepresentation at its discretion. Although Safeway now asserts that the policy is void ab initio because of a material misrepresentation, the policy itself states otherwise. In addition, Safeway refers to the insurance application documents for the proposition that the policy is null and void in the case of a material misrepresentation. However, the application documents do not merge into the actual insurance policy that constitutes the contract governing this case. The application documents are merely a contractual offer. As such, the terms that they specify are not determinative of the outcome of this case.

LEven if the terms of the application are considered, such language is clearly at odds with the language of the policy itself. The application attempts to render any contract “null and void,” while the policy creates an option to void the contract. It is well settled that ambiguities in insurance contracts are to be construed against the insurer and in favor of coverage. See Johnson v. Orleans Parish Sch. Bd., 2012-0190 (La. 5/31/12), 90 So.3d 386; Hudson v. Jager Bomb LLC, 47,501 (La. App. 2 Cir. 11/14/12), 107 So.3d 712. As a result, the contract must be construed as containing an option to void upon a demonstrated material misrepresentation.

Once it has been determined that the contract contains an option to void the contract upon discovery of a material misrepresentation, we must determine whether the record contains facts sufficient to support a finding that Safeway waived its option to void the contract and deny coverage. At trial, Marshall, a Safeway underwriting supervisor, testified that it was Safeway’s policy to cancel or non-renew policies in which material misrepresentations were discovered, effectively exercising the option contained in the contract. However, the testimony of Richard, a Safeway claims adjuster, indicates that in this case, after an alleged material misrepresentation was discovered, Safeway did not exercise its option. Although Safeway issued a letter denying coverage for the accident, Safeway continued to accept premiums and renewed the policy at least three times after the accident. Safeway produced no testimony to explain why the policy was not cancelled, but instead relied on the assertion that the renewals were mistakenly allowed.

|9The testimony of Safeway’s representatives clearly indicates that Safeway had knowledge of the alleged material misrepresentation and, therefore, knew that it had the option of seeking to void the insurance contract. The subsequent renewals of the insurance policy despite the knowledge that the car was being driven, garaged, and primarily kept by an individual other than the listed insured driver represents conduct that is manifestly inconsistent with any claim that Safeway wished to void the policy based on a material misrepresentation. Certainly this conduct represents an instance where the insurer has “knowingly and voluntarily elect[ed] to relinquish his right, power or privilege to avoid liability,” even though it brings within coverage risks that were originally excluded. Tate, supra.

Safeway also argues that La. R.S. 22:1266E (2) precludes a finding of waiver based on the renewal of the insurance policy. La. R.S. 22:1266E (2) states, “Renewal of a policy shall not constitute a waiver or estoppel with respect to grounds for cancellation which existed before the effective date of such renewal.” The language of the statute makes clear that it was directed to situations quite different than addressed in this case. The statute specifically allows for an insurance policy to be cancelled for reasons existing before a policy is renewed. It does not, however, provide that such a cancellation has a retroactive effect of cancelling prior coverage. If the insurance policy in question were still in place today, the insured would have no argument that the renewals constituted a waiver of Safeway’s right to cancel the insurance contract today. However, the effect of the renewals as to coverage in the past would still be the same. Safeway’s conduct | mmanifested an intent not to void the policy, and, in fact, Safeway never actually did cancel or void the policy. As such, the renewals constituted a waiver of the defense of material misrepresentation as to issues of coverage.

In this case, the language of Safeway’s insurance policy and application is at best conflicting and cannot be found to create anything more than an option to void the contract upon finding a material misrepresentation. Safeway’s course of conduct of accepting premiums and renewing the insurance policy after admitted knowledge of the alleged misrepresentation demonstrates conduct that is entirely inconsistent with an intent to void the policy and coverage. Although this court does not condone the type of fraud perpetrated by Brown and Richardson, Safeway was entirely aware that an unlicensed driver garaged and drove the car on a regular basis, and it continued to renew the policy after the accident. Accordingly, we agree with the finding by the trial court that Safeway waived its defense of material misrepresentation.

Conclusion

For the foregoing reasons, the trial court’s judgment and finding that Safeway waived its defense of material misrepresentation is affirmed. Costs of this appeal are assessed to the defendant, Safeway Insurance Company of Louisiana.

AFFIRMED.

APPLICATION FOR REHEARING

Before WILLIAMS, DREW, LOLLEY, GARRETT and COX, JJ.

Rehearing denied.

      . This address change occurred approximately 1 month after the subject accident.

      . Testimony also established that Brown’s girlfriend did not have a driver’s license.

      .Safeway’s underwriting department was, according to Marshall, made aware of the misrepresentation in the policy on February 12, 2014.


text:
    Ray David BRELAND and Karla Breland Plaintiffs-Appellants v. WILLIS KNIGHTON MEDICAL CENTER, Joseph Jones, M.D., and Lindsey Vierra, R.N. Defendants-Appellees
    No. 51,150-CA
    Court of Appeal of Louisiana, Second Circuit.
    Judgment rendered February 15, 2017
    Rehearing Denied March 30, 2017
    KITCHENS LAW FIRM, APLC By: J. Michael Johnson, Counsel for Appellants
    WATSON, BLANCHE, WILSON & POSNER By: Randall L. Champagne, Joseph G. Lassalle, Counsel for Appellees
    Before BROWN, LOLLEY, and COX, JJ.
   COX, J.

Lin this medical malpractice case, plaintiff, Karla Breland (“Mrs. Breland”), appeals a judgment from the First Judicial District Court, Parish of Caddo, State of Louisiana, wherein the trial court sustained a peremptory exception of prescription in favor of the defendants, Willis Knighton Medical Center, Joseph Jones, M.D., and Lindsey Vierra, R.N. (“Defendants”). Mrs. Breland prays that the trial court be reversed and the case remanded for further proceedings. Defendants request that this Court affirm the decisions of the trial court sustaining their exception of prescription and denying Mrs. Breland’s request for leave to amend her petition. Additionally, Defendants request that this Court hold Mrs. Breland liable for the payment of all costs associated with these proceedings. For the following reasons, we respectfully reverse the judgment of the trial court and remand the case to allow Mrs. Breland the opportunity to amend her petition to include the discovery date of the alleged malpractice.

Facts

Ray David Breland (“Mr. Breland”), Mrs. Breland’s now-deceased husband, suffered from a medical condition that caused the ammonia level in his body to rise. Due to his condition, he was prescribed a minimum of 30cc of Lactulose to be given three times per day to control his ammonia level. The Lactulose also prevented complications associated with his condition, which included mental confusion, agitation, and, if left untreated, toxemia.

Mr. Breland began to suffer from liver complications and was diagnosed with a recurrence of his hernia. He was admitted to Willis Knighton North, and, on June 19, 2014, surgery was performed by Dr. Gazi Zibari. On June 27, 2014, Mr. Breland was discharged to his home. One | ¿month later, on July 27, 2014, he began to experience severe abdominal pain and was taken back to Willis Knighton North.

According to Mrs. Breland’s verified petition, she informed the emergency room nurse and the emergency room physician of Mr. Breland’s need for Lactulose. At that time, Mr. Breland was given only nausea and pain medication. When Mr. Breland was admitted to a hospital room, Mrs. Breland provided the staff with a full list of necessary medications required by Mr. Breland, which included Lactulose.

Upon arrival in his hospital room, Mr. Breland was exhibiting signs of confusion. Mrs. Breland informed the floor nurse that Mr. Breland needed to be given his required Lactulose. Mr. Breland continued to receive only nausea and pain medication. He became restless, and Mrs. Bre-land was advised she should not leave him unattended.

On July 28, 2014, Dr. Zibari was able to fix Mr. Breland’s hernia without surgery. Dr. Zibari informed Mrs. Breland that Mr. Breland could return home the next day. Mrs. Breland requested food and Lactu-lose from Mr. Breland’s on-duty nurse at the time, Lindsey Vierra (“Nurse Vier-ra”). Mr. Breland received a liquid diet tray, but still no Lactulose.

Later that afternoon, Dr. Joseph Jones visited Mr. Breland’s room and Mrs. Bre-land again requested that Mr. Breland be given his Lactulose. Dr. Jones told Mrs. Breland that the Lactulose was on a list of medications they received. He also told her he would remind the nurses to give Mr. Breland the Lactulose. Dr. Jones then pushed the call button and told Nurse Vierra to |3be sure Mr. Breland received the Lactulose as required and as written on the ER admitting forms.

That evening, Mrs. Breland again asked Nurse Vierra about the Lactulose and reminded her of Mr. Breland’s need for the medication. Nurse Vierra told Mrs. Bre-land that she knew Dr, Jones had instructed her to give the medication, but that he had not written an order to do so. Again, Mrs. Breland informed Nurse Vierra that Mr. Breland required the Lactulose. Nurse Vierra told Mrs. Breland that she would be sure his current on-duty nurse, Sha’Caron Hayes, was informed.

On July 28, 2014, Mrs. Breland was told it was okay to leave Mr. Breland at the hospital so she could attend work the next day. Before Mrs. Breland left the hospital, she spoke to Nurse Hayes who told her there was no order for the Lactulose. Mrs. Breland told Nurse Hayes how important the medication was for Mr. Breland and offered to call Dr. Jones or Dr. Zibari to ensure Mr. Breland’s well-being. Nurse Hayes assured Mrs. Breland she would call the doctors right away. Records indicate 30cc of Lactulose was ordered at 9:10 p.m. on July 28, 2014, and one-half dose (15cc) was given at 3:00 a.m. on July 29, 2014.

On July 29, 2014, Mrs. Breland attempted to call Mr. Breland while she was at work, but there was no answer. Mrs. Bre-land then called the nurses’ station, but his on-duty nurse was unavailable. After one hour, Mrs. Breland called again and requested that someone check on Mr. Breland. Nurse Vierra returned Mrs. Bre-land’s call and informed her that Mr. Bre-land was confused and refusing his Lactu-lose. Nurse Vierra told Mrs. Breland there was an option for him to be given the medication rectally. Mrs. Breland gave Nurse |4Vierra permission to do whatever was necessary to get the medication to Mr. Breland.

Nurse Vierra told Mrs. Breland it was okay for her to wait to come to the hospital on her lunch break at noon. However, Nurse Vierra called Mrs. Breland back to inform her that Mr. Breland had begun to experience respiratory distress and had been placed on a ventilator.

Mrs. Breland left work at 10:00 a.m. When she arrived at the hospital, she was informed that Mr. Breland was in a coma. Dr. Randy D. Bryn informed Mrs. Breland that he had “never seen ammonia levels as high as Mr. Breland’s.” At 11:00 a.m., Mr. Breland’s ammonia level was at 1,036 umol/L. At this time, Mr. Breland was being given Lactulose rectally to bring down his ammonia level.

On July 30, 2014, Mr. Breland was suffering from nonstop seizures. Dr. Alexander, the head of the ICU, informed Mrs. Breland that every possible medication was being given to Mr. Breland but nothing was working. Mr. Breland was given a medication that would paralyze his muscles so his body would not seize, but the seizures continued to be active in his brain. On July 31, 2014, Mr. Breland passed away.

In. mid-fall 2014, approximately two months after Mr. Breland’s death, Mrs. Breland sought an attorney to request her husband’s medical records for review. On May 29, 2016, Mrs. Breland was advised by her counsel of the alleged acts of negligence by Defendants. On July 29, 2015, Mrs. Breland | afiled suit. On August 14, 2015, she requested a medical review panel. Defendants filed an exception of prescription, which the trial court granted on March 21, 2016. Mrs. Breland’s counsel requested leave to amend the petition, which the trial court denied.

The trial court believed that Mrs. Bre-land, a nurse, knew there would be a problem if the Lactulose was not administered to Mr. Breland and was therefore put on notice of her claim at that time. Additionally, the trial court stated that Mrs. Bre-land’s petition was very detailed, and the trial court did not see any amendment Mrs. Breland could make to her original petition that would overcome the defendant’s exception of prescription.

Mrs. Breland filed a devolutive appeal on April 21, 2016, appealing this judgment.

Law

Article 1161 of the Louisiana Code of Civil Procedure states, “A plaintiff may amend his petition without leave of court at any time before the answer thereto is served. Otherwise, the petition may be amended only by leave of court or by written consent of the adverse party.” Further expanding on this, Louisiana Code of Civil Procedure Article 1154 states the following:

When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated as if they had been raised by the pleading. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment. However, failure to so amend does not affect the result of the trial of these issues. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby, and the objecting party fails to satisfy the court that the admission of such evidence [¿would prejudice him in maintaining his action of defense on the merits.

The most pertinent article pertaining to the matter at hand, however, is Louisiana Code of Civil Procedure Article 934, which provides:

When the grounds of the objection pleaded by the peremptory exception may be removed' by amendment of the petition, the judgment sustaining the exception shall order such amendment within the delay allowed by the court. If the grounds of the objection cannot be so removed, or if the plaintiff fails to comply with the order to amend, the action shall be dismissed.

Louisiana Code of Civil Procedure Article 934' has been liberally applied by courts. In Whitnell v. Menville, 540 So.2d 304, 304 (La. 1989), the Louisiana Supreme Court noted that the courts of appeal have held that “where the plaintiff has raised allegations in argument which might be sufficient to overcome a peremptory exception of prescription, he should be allowed time to amend his petition to assert such allegations, even though the claim asserted in the original petition is prescribed on its face.”

In Whitnell, supra, the district court sustained the defendant’s peremptory exception of prescription in a-legal malpractice case. The court of appeal affirmed the judgment because the plaintiffs claim had prescribed on its face. However, the Louisiana Supreme Court reversed the district court and allowed the plaintiff to amend his petition to show that prescription had been interrupted. The Louisiana Supreme Court noted that it is not necessary for a court to allow a plaintiff time to amend if he cannot point out any possible grounds that are. sufficient to overcome the exception. Id. at 309. However, the Court went on to state that “a court may allow time to amend if the new allegations raise the possibility that the claim is not prescribed, even if the ultimate outcome of the prescription issue, once the petition is amended, |7is uncertain.” Id. The Court found that an opportunity to amend should be allowed unless it can be determined, in advance of the amendment, that the new allegations could have no effect on the prescription issue. Id.

Discussion

After reviewing the case, we respectfully reverse the trial court’s decision to grant Defendant’s exception of prescription and remand this case to allow Mrs. Breland the opportunity to amend her petition to include the discovery date of the alleged malpractice. Louisiana Code of Civil Procedure Article 934 has been liberally applied by courts to allow for the amendment of petitions in the interest of sustaining justice and for various policy reasons.

The inclusion of a discovery date in Mrs. Breland’s original petition may allow her to overcome the exception of prescription. Mrs. Breland’s discovery date, as stated in her memorandum in opposition to the exception of prescription, is May 29, 2015. She argues that this discovery date is well within the prescriptive period for medical malpractice claims, as the date was less than three months from the time she filed her medical malpractice complaint on August 14, 2015, and .within three years of the alleged negligent acts by the defendants.

Defendants have not raised any arguments to show that allowing the amendment would prejudice them in any way. Rather, their main argument against allowing Mrs. Breland to amend is that it would not remove the grounds for the exception of prescription. Defendants argue that the only way Mrs. Breland could amend her petition to overcome the exception would be to change her allegations. However, this is incoiTect as the discovery date was never mentioned in Mrs. Bre-land’s original petition. Allowing a discovery |sdate would not change any of the allegations or claims Mrs. Breland made in her original petition against the defendants.

It is clear that Mrs. Breland’s amendment to include a discovery date in her original petition would raise some possibility that the claim had not prescribed. The opportunity for Mrs. Breland to amend should thus be allowed since we have determined, in advance of the amendment, that this new information might have an effect on the exception of prescription. The amendment of the petition will give Mrs. Breland the opportunity to proceed with her case, and Defendants will maintain the opportunity to argue their case.

Additionally, the language of Article 934 of the Louisiana Code of Civil Procedure uses the mandatory word “shall.” Therefore, it is clear that, because Mrs. Bre-land’s amendment may remove the grounds for the defendant’s peremptory exception, the court is required to allow her the opportunity to amend her petition.

Conclusion

For the foregoing reasons, the trial court’s judgment granting the defendant’s exception of prescription is reversed. We remand the case to the trial court to allow Mrs. Breland the opportunity to amend her original petition within the time delays set by the trial court. Costs of this appeal are assessed to the defendants, Willis Knighton Medical Center, Joseph Jones, M.D., and Lindsey Vierra, R.N.

REVERSED AND REMANDED.

APPLICATION FOR REHEARING

Before BROWN, WILLIAMS, LOLLEY, STONE and COX, JJ.

Rehearing denied.

      . Incorrectly named in the medical malpractice complaint as Lindsey Viena, R.N.

      . According to Mrs. Breland’s verified petition, a normal ammonia level is <33 umol/L.

      . In their brief, Defendants state this is the first time Mrs, Breland has argued that she met with counsel “approximately 60 days after the acts.”


author: MURPHY, J. LILJEGERG, J.,

text:
    David DUCOTE, Avery Interests, L.L.C., Jebaco, Inc. and Iberville Designs, Inc. v. WHITNEY NATIONAL BANK and Michelle Freytag
    NO. 16-CA-574
    Court of Appeal of Louisiana, Fifth Circuit.
    February 22, 2017

      COUNSEL FOR PLAINTIFF/APPELLANT, DAVID DUCOTE, AVERY INTERESTS, L.L.C., JEBACO, INC. AND IBERVILLE DESIGNS, INC., Gladstone N. Jones, III, Harvey S. Bartlett, III, Catherine E. Lasky, Lindsay E. Reeves
    COUNSEL FOR DEFENDANT/AP-PELLEE, WHITNEY NATIONAL BANK, David F. Waguespack, Dominik J. Cvitanovic
    Panel composed of Robert M. Murphy, Stephen J. Windhorst, and Hans J. Liljeberg
   MURPHY, J.

| ] Plaintiffs, David Ducote, Avery Interests, L.L.C., Jebaco, Inc., and Iberville Designs, (hereinafter collectively referred to as plaintiffs), have appealed the grant of summary judgment in favor of Whitney National Bank (hereinafter referred to as Whitney). For the reasons that follow, we affirm the judgment of the trial court.

FACTS AND PROCEDURAL HISTORY

On July 25, 2014, plaintiffs filed suit against Whitney and Ducote’s former employee, Michelle Freytag, (hereinafter Freytag), alleging that Freytag, in her position as Dueote’s executive assistant, had obtained fraudulent credit cards from Whitney on plaintiffs’ accounts, made personal charges on the cards, and transferred funds from plaintiffs’ accounts to pay the balance on these credit cards. The petition alleged that plaintiffs were not responsible for the charges because the contract on the credit card agreements was null, or alternatively that the credit card agreements should be rescinded because of the fraud committed by Freytag. The petition further alleged that Freytag could not have accomplished this theft without the assistance of Whitney, which failed to follow established procedures and facilitated Freytag’s theft, and was liable in solido with Freytag. The plaintiffs prayed for rescission or nullification of all contracts on the credit cards and restoring the parties “to the situation that existed before the purported contract was made” including but not limited to the “return of all amounts paid” to Whitney for charges made by Freytag, including associated interest and fees, plus reasonable damages, attorney fees and judicial interest.

12Whitney denied the allegations in the petition and further alleged that plaintiffs’ claims are barred by La. R.S. 10:4 and 4A, and by the deposit account agreements between plaintiffs and Whitney. Whitney also claimed that plaintiffs’ actions and/or inactions gave Freytag express or implied authority to engage in the activities alleged in plaintiffs’ petition. Whitney filed a reconventional demand seeking payment for sums due from plaintiffs on these same credit cards.

On January 12, 2015, Whitney filed a Motion for Partial Summary Judgment seeking to dismiss plaintiffs’ claims of negligence, rescission, and fraud that seek recovery of funds transfers from Whitney. In this motion, Whitney argued that Chapter 4A of the Uniform Commercial Code (UCC), which was adopted by Louisiana, preempts plaintiffs’ non-UCC claims to recover these funds. The trial court denied the motion and Whitney sought review from this Court. This Court denied the writ application because Whitney did not include evidence to demonstrate that the accounts at issue were commercial accounts, stating that if the funds transfers were “consumer” funds, then the Electronic Funds Transfer Act (hereinafter EFTA) would apply rather than Chapter 4A. Whitney v. Ducote, 15-256 (La. App. 5 Cir. 4/24/15) (unpublished writ disposition).

On December 15, 2015, Whitney filed another Motion for Summary Judgment arguing that it was entitled to summary judgment because the UCC displaces plaintiffs’ claims, the claims are barred under the terms of the deposit account agreement and La. R.S. 10:4-406 due to plaintiffs’ failure to timely report the items as unauthorized, and that the claims are barred by apparent authority. Plaintiffs opposed this motion and in addition filed their own Motion for Partial Summary Judgment alleging that plaintiffs’ claims arise from fraud and negligence in the issuance of credit cards and subsequent concealment activity on the credit card accounts. Plaintiffs argued that the transfers of funds from the plaintiffs’ | ¡¡accounts are incidental to or subsequent to the fraudulent and negligent conduct, therefore the UCC is not applicable to these claims.

At the hearing on the competing motions for summary judgment, Whitney argued that according to the deposit account agreement, any claim is barred that relates to an unauthorized transfer of funds if it is not reported within 60 days of the bank statement reflecting the transfer. Whitney pointed out that each transfer was reflected on each monthly bank statement provided to plaintiffs. Whitney further argued that La. R.S. 10:4-406 bars any claim against a bank for unauthorized items that are on the bank statement that the customer does not timely report to the bank. Whitney also argued that plaintiffs remedy was solely under the UCC provisions which have been adopted by Louisiana and the credit card agreements could not be rescinded under other provisions of Louisiana law.

In response, plaintiffs argued that their action is not barred by the account agreements because credit card agreements are not subject to the deposit account agreements. Plaintiffs further argued that whether or not they were reasonable in not reporting the fraudulent transactions is a “fact question,” which should not be decided on summary judgment. Plaintiffs also contend that their remedy of rescission, which is unique to Louisiana, is not inconsistent with the UCC, and as such these claims are not barred by the UCC.

At the conclusion of the hearing, the trial judge took the matter under advisement. On January 27, 2016, the trial court denied Whitney’s Motion for Partial Summary Judgment with respect to apparent authority and granted the motion “in all other respects.” Pursuant to this Court’s order, the trial court ^amended the judgment to state that Whitney’s Motion for Summary Judgment regarding UCC displacing plaintiffs’ claims for rescission, negligence, and fraud against Whitney are dismissed with prejudice because plaintiffs’ claims are barred under the terms of their account agreement and La. R.S. 10:4-406. Plaintiffs’ Motion for Partial Summary Judgment was denied. On February 19, 2016, the trial court designated the judgment granting Whitney’s Motion for Partial Summary Judgment as a final appeal-able judgment pursuant to La. C.C.P. Art. 1915B. This timely appeal followed.

LAW AND DISCUSSION

A motion for summary judgment shall be granted if the motion, memorandum, and supporting documents show that there is no genuine issue as to material fact that that the mover is entitled to judgment as a matter of law. La. C.C.P. Art. 966(A)(3). Under La. C.C.P. Art. 966(D)(1), the initial burden is on the mover to show that no genuine issue of material fact exists. If the moving party will not bear the burden of proof at trial, the moving party must only point out that there is an absence of factual support for one or more elements essential to the adverse party’s claim, action, or defense. La. C.C.P. Art. 966(D)(1). The nonmoving party must then produce factual support to establish that he will be able to satisfy his evidentiary burden of proof at trial. If the nonmoving party fails to do so, there is no genuine issue of material fact, and summary judgment should be granted. Babino v. Jefferson Transit, 12-468 (La.App. 5 Cir. 2/21/13), 110 So.3d 1123, 1125.

Appellate courts review the ruling on a motion for summary judgment de novo applying the same criteria that govern the trial court’s determination of whether summary judgment is appropriate. Schultz v. Guoth, 10-343 (La. 1/19/11), 57 So.3d 1002, 1005.

IsThe decision as to the propriety of a grant of a motion for summary judgment must be made with reference to the substantive law applicable to the case. Muller v. Carrier Corp., 07-770 (La.App. 5 Cir. 4/15/08), 984 So.2d 883, 885.

Louisiana has enacted all of the Articles of the model Uniform Commercial Code, except Articles 2, pertaining to sales, and 2A pertaining to leases. The UCC is codified in La. R.S. 10:1-101 et seq. La. R.S. 10:1-103 states:

(a) This Title shall be liberally construed and applied to promote its underlying purposes and policies, which are:
(1) to simplify, clarify, and modernize the law governing commercial transactions;
(2) to permit the continued expansion of commercial practices through custom, usage, and agreement of the parties; and
(3) to promote uniformity of the law among the various jurisdictions.
(b) Unless displaced by the particular provisions of this Title, the other laws of Louisiana supplement its provisions.
The official comments under this statute state in pertinent part:
2. Applicability of supplemental principles of law. Subsection (b) states the basic relationship of the Uniform Commercial Code to supplemental bodies of law. The Uniform Commercial Code was drafted against the backdrop of existing bodies of law, including the common law and equity, and relies on those bodies of law to supplement it provisions in many important ways. At the same time, the Uniform Commercial Code is the primary source of commercial law rules in areas that it governs, and its rules represent choices made by its drafters and the enacting legislatures about the appropriate policies to be furthered in the transactions it covers. Therefore, while principles of common law and equity may supplement provisions of the Uniform Commercial Code, they may not be used to supplant its provisions, or the purposes and policies those provisions reflect, unless a specific provision of the Uniform Commercial Code provides otherwise. In the absence of such a provision, the Uniform Commercial Code preempts principles of common law and equity that are inconsistent with either its provisions or its purposes and policies. (Emphasis added.)
The language of subsection (b) is intended to reflect both the concept of supplementation and the concept of preemption. Some courts, however, had difficulty in applying the identical language of former Section 1-108 to determine when other law appropriately may |r,be applied to supplement the Uniform Commercial Code, and when that law has been displaced by the Code. Some decisions applied other law in situations in which that application, while not inconsistent with the text of any particular provision of the Uniform Commercial Code, clearly was inconsistent with the underlying purposes and policies reflected in the relevant provisions of the Code. See, e.g., Sheerbonnet, Ltd. v. American Express Bank, Ltd., 951 F.Supp. 403 (S.D.N.Y. 1995). In part, this difficulty arose from Comment 1 to former Section 1-103, which stated that this section indicates the continued applicability to commercial contracts of all supplemental bodies of law except insofar as they are explicitly displaced by this Act. The “explicitly displaced” language of that Comment did not accurately reflect the proper scope of Uniform Commercial Code preemption, which extends to displacement of other law that is inconsistent with the purposes and policies of the Uniform Commercial Code, as well as with its text. (Emphasis added.)

In its motion for summary judgment, Whitney argues that plaintiffs’ claims are barred under the terms of the account agreement and La. R.S. 10:4-406 due to plaintiffs’ failure to timely report the items as unauthorized, and that the UCC displaces plaintiffs’ claims for rescission, negligence and fraud.

Plaintiffs claim that Freytag fraudulently obtained a credit card from Whitney in the name of David Ducote and was issued a credit card in her name as an authorized user on this account. Plaintiffs further claim that Freytag fraudulently obtained a credit card fl’om Whitney in her name as an alleged authorized user on Avery Interests, L.L.C. credit card account. Plaintiffs also allege that Freytag made charges on credit card accounts belonging to Jebaco, Inc., and Iberville Designs. Freytag initially paid the charges on these credit cards with checks written on Ducote’s bank account that were signed by Ducote. Later payments on the credit card accounts were made with funds transferred from the bank account to the credit card account. This was accomplished by Freytag either calling or e-mailing Whitney employees to request the credit card balance be paid from the bank account. When this was done, Whitney would prepare a “debit memo” which indicated Freytag initiated this transaction and listed each credit card being paid by the credit card name, number, and amount paid on each card. Both 17parties agree that a copy of this debit memo was included with the monthly bank statements that were sent to plaintiffs by Whitney.

The monthly bank statements were reviewed by Ducote’s “CFO,” Yolande Bernard. Whitney produced documents obtained from plaintiffs in discovery which indicate that Ms. Bernard questioned Freytag regarding payment of the ci’edit card bills from the bank account on numerous occasions. These documents also indicate that Ms. Bernard marked certain charges on the credit card statements and questioned Freytag about those charges. However, Ms, Bernard, nor anyone on plaintiffs’ behalf, ever contacted Whitney regarding any of the charges on the credit cards or payments of the card balances from the bank account.

La. 10:4-401 (a)(9) defines item as (9) “an instrument or a promise or order to pay money handled by a bank for collection or payment. The term does not include a payment order governed by Chapter 4A or a credit or debit card slip.” The comments under this section state: “Item” is defined broadly to include an instrument, as defined in Section 3-104, as well as promises or orders that may not be within the definition of “instrument.” Thus, the funds that were transferred by Freytag via “debit memo” are items under the UCC. Accordingly, these funds transfers are governed by the UCC.

La. 10:4-406 places a duty on a bank customer to examine the bank statement and notify the bank of any unauthorized transactions. La. 10:4-406(c) provides:

If a bank sends or makes available a statement of account or items pursuant to Subsection (a), the customer must exercise reasonable promptness in examining the statement or the items to determine whether any payment was not authorized because of an alteration of an item or because a purported signature by or on behalf of the customer was not authorized. If, based on the statement or items provided, the customer should reasonably have discovered the unauthorized payment, the customer must promptly notify the bank of the relevant facts.

1RLa. R. S. 10:4-406(d)(2) embodies the defense known generally as the “same wrongdoer” rule. This rule “imposes on the customer the risk of loss on all subsequent forgeries by the same wrongdoer after the customer had a reasonable time to detect an initial forgery if the bank has honored subsequent forgeries prior to notice.” Marx v. Whitney Nat’l Bank, 97-3213 (La. 7/8/98), 713 So.2d 1142, 1145. In Marx, the Supreme Court found that because the plaintiff did not review and notify the defendant bank of the initial forgeries appearing in a bank statement within thirty days of receipt of that statement, he was “precluded” from asserting causes of action against the bank for all subsequent forgeries by the same unauthorized person. Id. at 1147.

La. R.S. 10:4-406(f) imposes an absolute bar to any customer claim based upon an unauthorized transfer not reported within one year after the bank statement has been made available. This period may be shortened by the bank account agreement—in this case it was shortened to sixty days. This provision applies “without regard to care or lack of care of either the customer or the bank.” Id.

Louisiana courts have strictly enforced the provision of La. R.S. 10:4-406. In Costello v. Citibank (S. Dakota), N.A., 45,518 (La.App. 2 Cir. 9/29/10), 48 So.3d 1108, 1113, the court barred all claims sounding in breach of contract that related to the payment of negotiable instruments stating that because plaintiffs “breached their duty to examine and reconcile bank statements” their claims have “prescribed under La. R.S. 10;4-406(f).” In ASP Enterprises, Inc. v. Guillory, 08-2235 (La.App. 1 Cir. 9/11/09), 22 So.3d 964, 979, the court held that all claims related to check forgeries were barred due to plaintiffs failure to provide timely notice of the forgeries.

There is no dispute that Freytag obtained a credit card in her name on the Avery Interests, L.L.C. credit card account on August 4, 2009. Payments on this | flCredit card accounts were initially made by checks signed by Ducote. In May of 2011, Freytag opened a credit card account in the name of Ducote and obtained a credit card in her name on that account. Payments on this credit card account were made by Freytag contacting Whitney and having funds transferred from the bank account to the credit card account to pay the balance. Freytag also made unauthorized charges on the credit card accounts of Jebaco, Inc., and Iberville Designs. Payments for these charges were made by Freytag contacting Whitney and having funds transferred from the bank account to the respective credit card account to pay the balance. Each time Freytag contacted Whitney to transfer funds from the bank account to pay the credit card balances, Whitney created a debit memo, which was included in the monthly bank statements that were sent to plaintiffs by Whitney. The deposit account agreement between plaintiffs and Whitney provides a 60 day time period for reviewing the statements and notifying Whitney of any unauthorized activities. There is no dispute that plaintiffs never contacted Whitney about unauthorized items. Freytag’s fraudulent scheme was not discovered until late December 2014, when Whitney contacted plaintiffs concerning certain charges on the credit cards.

The evidence presented by Whitney in the Motion for Summary judgment indicates that plaintiffs did not notify Whitney within sixty days of the first unauthorized activity appearing on its bank statement in 2009. Nor did plaintiffs notify Whitney of any unauthorized funds transfers in 2009, 2010, 2011, 2012, 2013, and 2014. It is likewise undisputed that the unauthorized activities were all made by the same alleged wrongdoer, Freytag. Once Whitney established the foregoing facts, it was incumbent upon plaintiffs to come forward with competent evidence that Whitney failed to exercise ordinary care in honoring the checks and funds transfers. Instead, plaintiffs argued that Whitney’s failed to follow its own policies and procedures prior to the funds transfers in the issuance of credit cards, [inPlaintiffs have not come forward with evidence that Whitney failed to exercise ordinary care in honoring the checks signed by Ducote or in transferring funds. Accordingly, we conclude that all of plaintiffs’ claims relating to Freytag’s activities are barred by La. R.S. 10:4-406.

Plaintiffs argue that because the UCC does not provide for rescission, that their cause of action related to rescission of the issuance of credit cards is not barred by the UCC. Plaintiffs contend that Whitney was negligent in its issuance of the credit cards, raising the limits on the credit cards when requested to do so by Freytag, and in changing the address where the credit card statements were sent. Plaintiffs want to rescind the credit card contracts in order to recover the funds transferred from the bank account by Freytag to pay the credit card charges. Plaintiffs have not cited, nor have we found, any cases from any jurisdiction in which a party has sought to rescind fraudulently obtained credit cards. From the record before us, it appears that plaintiffs have not sought any protection that may be available under the laws governing fraudulently obtained credit cards. Instead, plaintiffs attempt to circumvent the obligations placed on them as bank depositors by the UCC to recover funds taken from their bank account that were used to pay fraudulent credit card charges. We are not persuaded by plaintiffs’ arguments.

The UCC does provide a remedy if a customer can prove the bank was negligent in paying an item with funds from a customer’s bank account. La. R.S. 10:406(e) provides that if the customer proves that the bank failed to exercise ordinary care in paying the items and that the failure substantially contributed to the loss, the loss is allocated between the customer and the bank. Thus, the UCC allows a customer to recover in the event the customer proves the bank was negligent in paying an item. Because the UCC provides a remedy to plaintiffs for Whitney’s alleged failure to exercise ordinary care, plaintiffs’ claims against |t1 Whitney which they argue fall outside of the UCC are barred. Plaintiffs failed to prove that Whitney failed to exercise ordinary care in paying the checks that were signed by Ducote or in processing the funds transfers that were used to pay balances on credit cards. The debit memos list the number of the credit card and the amount of the funds transferred to pay each credit card balance. In most instances the name of the person in whose name the credit card was issued was also included on the debit memo. Plaintiffs argue that these credit cards should not have existed. The evidence in the record before us indicates that had plaintiffs examined the debit memos, which were included in every monthly bank statement provided to plaintiffs, plaintiffs would have not only seen that these credit cards existed, they would have seen the fraudulent activity in the bank account.

La. R.S. 10:1-103 instructs that the provisions of Title 10 shall be construed liberally to accomplish the purpose of this law. UCC Comment 2 which follows La. R.S. 10:1-103 explains that UCC preemption “extends to displacement of other law that is inconsistent with the purposes and policies” of the UCC. The rules promulgated by the UCC and adopted by Louisiana represent a delicate balance of interests between the banks and depositors. The comments indicate that the UCC is intended to be an exclusive means of determining the rights, duties, and liabilities of the affected parties in any situation covered by the applicable provisions of the UCC. Our holding that all of plaintiffs’ claims are governed by Title 10 of the Louisiana Revised Statutes in which Louisiana adopted the UCC, is in accordance with the dictates of Title 10 that are to be construed liberally to accomplish the purpose to “simplify, clarify, and modernize the law governing commercial transactions” and “to promote uniformity of the law among the various jurisdictions.”

112PIaintiffs argue that the causes of action related to Whitney’s conduct in issuing the credit cards, raising the limits on the credit cards, and allowing Freytag to change the address where the statements on the credit cards were mailed are separate from the remedy it seeks, which is to be restored to the same position as if the cards had not been issued. However, in order to restore plaintiffs to the position they had been in had the cards not been issued, we would have to ignore plaintiffs’ failure to comply with its own obligation to examine its bank statements and notify Whitney of unauthorized activity. This would be contrary to the stated purpose of the UCC. The comments following La. R.S. 10:1-103 instruct that other principles of law and equity “may not be used to supplant its provisions, or the purposes and policies those provisions reflect” and that UCC preemption “extends to displacement of other law that is inconsistent with the purposes and policies” of the UCC.

Plaintiffs urge this Court to follow the case of Voros v. Dorand, 08-667 (La.App. 6 Cir. 5/26/09), 15 So.3d 1083. In Voros, the plaintiff’s employee contacted the bank and had the bank transfer funds from plaintiffs personal money market account to plaintiffs corporate checking bank account. Plaintiff provided his employee with blank signed corporate checks, which the employee was to use to pay office expenses. Instead the employee used some of these checks to pay his personal bills. In affirming the trial court judgment finding the bank was solidarily liable with plaintiff and the employee, this Court rejected the bank’s argument that this action was governed by La. R.S. 10:3-406 stating that the transfers were not negotiable instruments. Voros can be distinguished from the facts in the instant case because the funds transfers in the instant case fall under the broad definition of “items” defined in La. R.S. 10:4-401. Further, in Voros the defendant argued 10:3-405 and 406 applied and did not assert any defenses under La. R.S. 10:4-406.11sThe facts in the case at bar fall squarely under 10:4-406. For these reasons we find that Voros is not controlling in this case.

Further, our holding is consistent with this Court’s writ disposition in Whitney v. Ducote, 15-256 (La. App. 5 Cir. 4/24/15) (unpublished writ disposition), in which this Court stated that the UCC displaces plaintiffs’ non-UCC claims. Relief was denied at that point in time, because the majority found that defendant had not proved that the bank accounts were covered under La. R.S. 10:4A.

CONCLUSION

For the foregoing reasons, the trial court’s judgment granting Whitney’s Motion for Summary Judgment regarding UCC displacement of plaintiffs’ claims and dismissing plaintiffs’ claims for rescission, negligence, and fraud is affirmed.

AFFIRMED

LILJEGERG, J.,

CONCURS IN PART AND DISSENTS IN PART

|UI agree with the majority’s decision to affirm the trial court’s judgment to the extent it dismissed plaintiffs’ claims against defendant, Whitney National Bank, for its conduct relating to the alleged unauthorized funds transfers from Mr. Du-cote’s account by means of checks and debit memos. These transactions are governed by the UCC and the claims arising from these transactions are barred by the terms of the deposit agreement and La. R.S. 10:4-406, due to plaintiffs’ failure to timely contest these transactions. However, I disagree with the majority’s decision to affirm the trial court’s judgment to the extent it determined the UCC and deposit agreement served as a basis to dismiss plaintiffs’ claims arising from Whitney’s alleged failure to follow proper procedures in issuing and handling the credit card accounts at issue. The UCC and deposit agreement do not govern this disputed conduct relating to the credit card accounts. Furthermore, I do not believe these claims .are barred by the UCC merely because plaintiffs seek the return of funds which are also happen to be the subject of the unauthorized funds transfer claims. These are separate transactions which must be analyzed independently under the laws applicable to each set of transactions.

The plain language of La. R.S 10:1-103(b) provides that, “[ujnless displaced by particular provisions of this Title, the other laws of Louisiana supplement its provisions.” [Emphasis added.] Official Comment 2 under this statute provides that the UCC preempts claims which are inconsistent with the UCC and its purpose and policies. However, precedent does not exist to interpret this provision in such a broad manner as to allow the preemption or displacement of claims arising from conduct or transactions which are not governed by the UCC merely because they seek the same remedy. Because the provisions of the UCC do not govern the issuance and handling of credit card accounts, La. R.S. 10:4-406 should not be applied to bar claims arising from these transactions.

In Voros v. Dorand, 08-667 (La.App. 5 Cir. 5/26/09), 15 So.3d 1088, this Court declined to apply similar provisions contained in Chapter 3 of the Louisiana UCC because it did not govern the transactions at issue. This Court determined that a plaintiffs claims for damages arising from his employee’s unauthorized withdrawals of funds from his bank account by means of telephone requests did not involve the use of negotiable instruments; therefore, the provisions set forth in La. R.S. 10:3-405 and 10:3-406 did not apply to bar the plaintiffs claims. Id. at 1087. The defendant bank argued that pursuant to these provisions, an employer who fails to exercise ordinary care in connection with the misappropriation of funds by an employee is barred from asserting claims against a financial institution handling the employer’s account. This Court rejected the bank’s argument on the following grounds:

Chapter 3 of Title 10 of the Louisiana Revised Statutes specifically refers to and is titled “Negotiable Instruments”. Further, the language of both statutes cited by Bank of Louisiana refers to defalcations made by “instrument”. Therefore, we agree with Dr. Voros and find these statutes apply only to acts by an employee dealing with negotiable instruments. Since this case does not deal with negotiable instruments, but instead involves unauthorized telephone transfers of funds from an account, we find these statutes inapplicable in this case.

Id.

Furthermore, La. R.S. 10:l-103(a)(3) provides that “[t]his Title shall be liberally construed and applied to promote its underlying purposes and policies, which are: ... (3) to promote uniformity of law among the various jurisdictions.” The Louisiana Supreme court encourages our courts to examine jurisprudence from other jurisdictions when analyzing the UCC. Specialized Loan Servicing, L.C.C. v. January, 12-2668 (La. 6/28/13), 119 So.3d 582, 588; Cromwell v. Commerce & Energy Bank of Lafayette, 464 So.2d 721, 730 (La. 1985) (“The U.C.C. was adopted in Louisiana in an effort to harmonize the commercial law of | ^Louisiana with that of the other states. We should, therefore, examine the jurisprudence of other states ....”).

In Gilson v. TD Bank, N.A., 10-20535, 2011 WL 294447, 2011 U.S. Dist. LEXIS 7805 (S.D. Fla. Jan. 27, 2011), the plaintiffs alleged the defendant bank was negligent in allowing their investment advisor to open three bank accounts in their names and then use wire transfers to move money into and out of those accounts without their authorization. The bank filed a motion for summary judgment arguing the transactions at issue were wire transfers governed by Article 4A of the UCC, which preempted plaintiffs’ negligence claim. However, the court found that Article 4A of the UCC, which governs only wire transfers, was not applicable to the plaintiffs’ claims arising from the negligent opening of the bank accounts:

Indeed, Plaintiffs’ negligence claim centers on the Bank’s allegedly negligent and reckless conduct with regard to opening the accounts. Plaintiffs’ Second Amended Complaint alleges that TD Bank acted 'with gross negligence and recklessness in numerous ways during the account openings, and the record shows a genuine issue of material fact on this issue. Plaintiffs have come forward with evidence that TD Bank deviated from its standard account opening procedures by not receiving a filing receipt or partnership agreement for G&C. Moreover, Plaintiffs evidence shows that TD Bank failed to notice inconsistencies on the account opening documentation for the G&C accounts, such as the discrepancy between the account address and phone number, which were Stein’s, and Stem’s professed limited role as investment adviser. Because the crux of Plaintiffs’ negligence claim is TD Bank’s lack of care during the account openings, not the wire transfers, the Court finds that the negligence claim does not create rights, duties and liabilities inconsistent with those stated in Article 4A, which governs only wire transfers.
Id. at p. 9, 2011 U.S. Dist. LEXIS 7805 at pp. 27-28.

Furthermore, in Eisenberg v. Wachovia Bank, N.A., 301 F.3d 220, 222 (4th Cir. 2002), the plaintiff alleged that the bank negligently allowed one of its customers to operate a fraudulent bank account, transfer funds into and out of the account, and negligently failed to train its employees to detect fraud. The court ultimately determined that the plaintiffs negligence claims relating to the wire transfers were preempted, but that the state law claims arising out of alleged 117negligence in allowing the defendant to open the account and failing to train employees to recognize and prevent fraud were not preempted.

The facts before this Court present an even stronger case against the application of the UCC, because this matter does not involve the unauthorized opening of bank accounts and the transfer of funds from those accounts, but rather the opening of credit card accounts and the subsequent transfer of funds from separate banking accounts. This case is unique in that Ms. Freytag both obtained the disputed credit cards from Whitney and then paid the amounts due on these cards with funds from a deposit account held with Whitney. Certainly, if Ms. Freytag had obtained the credit cards from an entity other than Whitney, that entity would not be able to use the terms of Whitney’s deposit agreement or La. R.S. 10:4-406 as a basis to bar plaintiffs’ claims. The UCC does not govern the credit card claims and therefore, allowing these claims to proceed is not inconsistent with the purposes and policies of the UCC. By reaching this conclusion, I do not intend to suggest that plaintiffs are necessarily entitled to the relief sought in their petition, but rather believe these claims must be separately analyzed under laws applicable to the credit card transactions.

I also disagree with the majority’s finding that its holding is consistent with this Court’s earlier writ disposition in this matter, Whitney v. Ducote, 15-526 (La. App. 5 Cir. 4/24/15) (unpublished writ decision). In that writ application, Whitney sought review of the trial court’s denial of its motion for partial summary judgment seeking the dismissal of plaintiffs’ claims arising out of the unauthorized fund transfers. In its decision to deny the writ application, this Court stated as follows:

Applying La. R.S. 10:1-103, the UCC’s general displacement provision, Louisiana courts have consistently held the UCC displaces other remedies where the UCC governs the transaction. See Innovative Hospitality Systems v. Jeff Davis Banchares, 10-509 (La.App. 3 Cir. 12/8/10), 52 So.3d 313, 316; Hardin Compounding Pharm., LLC v. Progressive Bank, 48,397 (La. App. 2 Cir. 9/25/13), 125 So.3d 493; 498; ASP Enters. Inc. v. Guillory and Parish National Bank, 082235 (La. App. 1 Cir. 9/11/09), 22 So.3d 964, 973. While these cases dealt with Chapter 3 of the UCC, the same principle should be applied to Chapter 4A.
Whitney Bank carried the burden of showing that there was no genuine issue of material fact as to whether Chapter 4A governs the unauthorized funds transfers.
Id. at p.l. [Emphasis added.]

The writ stemmed from a motion for partial summary judgment with respect to the alleged unauthorized fund transfers, and this Court did not address the preemptive effect of the UCC on plaintiffs’ claims relating to the credit card transactions. Whitney’s summary judgment motion currently before this Court was not a request for a partial judgment, but rather sought the dismissal of all of plaintiffs’ claims.

For these reasons, I respectfully concur in part and dissent in part from the majority’s decision to affirm the trial court’s judgment dismissing all of plaintiffs’ claims against Whitney Bank. I would reverse the trial court’s judgment to the extent it dismissed plaintiffs’ claims arising from the opening and handling of the disputed credit card accounts.

      . Avery Interests, L.L.C., Jebaco, Inc., and Iberville Designs are three of Ducote's numerous business entities.

      . A default judgment was entered against Freytag in this matter. Freytag pled guilty to wire fraud and was sentenced to federal prison and restitution ordered for her activities which form the basis of this lawsuit.

      . The deposit agreement states in pertinent part: “.. .you further agree that if you fail to provide us written notice of any unauthorized signatures, alterations, or any other problem in your account within 60 days of when we first send or make the statement available, you cannot assert a claim against us for any problem reflected in that statement (or in subsequent statements, if the problem is caused by the same wrongdoer), without regard to whether we exercised ordinary care and, as between you and us, the loss will be entirely yours.”

      . The parties have since determined that La. R.S. 10:4A is not applicable in this case.

      . The Voros court’s analysis was limited to the provisions contained in Chapter 3 of the UCC and did not consider the application of La. R.S. 10:4-406 to the facts in that matter.

      . Following discovery, the parties determined that all of the disputed funds transfers were governed by Chapters 3 and 4 of the UCC, rather than Chapter 4A.


author: CHEHARDY, C.J.

text:
    Louis T. D’ANGELO and Louis T. D’Angelo Insurance Agency, Inc. v. Joan TRAMUTA
    NO. 16-CA-667
    Court of Appeal of Louisiana, Fifth Circuit.
    February 22, 2017
    COUNSEL FOR PLAINTIFF/APPELLANT, LOUIS T. D’ANGELO AND LOUIS T. D’ANGELO INSURANCE AGENCY, INC., Michael G. Fanning
    COUNSEL FOR DEFENDANT/AP-PELLEE, JOAN TRAMUTA, Vincent J. Booth
    Panel composed of Susan M. Chehardy, Fredericka Homberg Wicker, and Hans J. Liljeberg
   CHEHARDY, C.J.

|, Plaintiffs, Louis T. D’Angelo and Louis T. D’Angelo Insurance Agency, Inc., appeal the 24th Judicial District Court’s May 2, 2016 judgment sustaining the dilatory exception of prematurity in favor of defendant, Joan Tramuta. After this appeal was lodged in this Court, it was determined that the district court’s judgment was deficient because it lacked the requisite decre-tal language. Particularly, the judgment failed to specify the relief that was granted by sustaining the exception of prematurity, ie., dismissal of claims.

Accordingly, on January 25, 2017, this Court, pursuant to its supervisory jurisdiction, ordered the district court to amend its judgment to specify the relief granted. On January 26, 2017, the district court amended its judgment, but declined to grant relief. The amended judgment provides in pertinent part:

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Exception of Prematurity filed by the Defendant, Joan Tramuta, and against the Plaintiffs, Louis T. D’Angelo and Louis T. D’Angelo Insurance Agency, Inc., is hereby GRANTED, and this Court will consider no further motions in this matter until a final judgment is rendered in Case # 748-614 in the Twenty-Fourth Judicial District Court for the Parish of Jefferson.

The district court’s decision to not specify the relief granted suggests that the court did not intend this judgment to be final and appealable. This interlocutory judgment is therefore subject to this Court’s supervisory jurisdiction. Accordingly, we dismiss this appeal and instruct plaintiffs that review of the district court’s judgment of May 2, 2016, as amended on January 26, 2017, may be sought pursuant to our supervisory jurisdiction. Should they so choose, plaintiffs may file a supervisory writ application within thirty days of this opinion.

_JjDECREE

For the foregoing reasons, we dismiss this appeal, remand the matter, and instruct plaintiffs that, should they so choose, they may file a supervisory writ application within thirty days of this opinion.

APPEAL DISMISSED; REMANDED WITH INSTRUCTIONS