author: HOLDRIDGE, J.

text:
    Frederick E. LIND, Jr. and Mary E. Lind v. UNITED SERVICES AUTOMOBILE ASSOCIATION, et al.
    2017 CA 0217
    Court of Appeal of Louisiana, First Circuit.
    Judgment rendered JANUARY 30, 2018
    David D. Lind, Alexandria, LA, Attorney for Plaintiffs/Appellees, Frederick Lind, Jr. and Mary E. Lind
    Keith L. Richardson, Baton Rouge, LA, Attorney for Defendant/Appellant, United Services Automobile Association
    BEFORE: HIGGINBOTHAM, HOLDRIDGE, AND PENZATO, JJ.
   HOLDRIDGE, J.

Defendant, United States Services Automobile Association (USAA), appeals a judgment rendered in favor of plaintiffs, Dr. Fredrick Lind, Jr. and Mary Elizabeth Lind, awarding actual damages and penalties. We reverse both awards, conduct a de novo review of the record, and render a damage award and a penalty award based on that review.

PROCEDURAL AND FACTUAL BACKGROUND

In the early 1980's, the Linds purchased a 1972 Maserati Ghibli SS, a very rare vehicle, from Edmond Waterman for approximately $20,000.00. In 1995, the Linds hired Wedge Kyes Import Specialties, Inc. to repair the vehicle's engine and retained Pierre Mabile to do restoration body work on the vehicle. Later, the Linds hired Alex Peters to complete the engine repair. In 2006 or 2007, Wedge Kyes transferred the vehicle to Mr. Peters, who operated out of a shop in New Orleans. Sometime thereafter, Dr. Lind inspected his vehicle inside Mr. Peters' shop. On July 19, 2012, Dr. Lind made a trip to Mr. Peters' shop and discovered that Mr. Peters and the vehicle were nowhere to be found. Dr. Lind reported the vehicle stolen to police a few days later and made a claim with USAA, which issued a policy providing comprehensive coverage on the Maserati to the Linds, reporting the vehicle as stolen. On July 31, 2012, USAA notified Dr. Lind that it opened a claim and was investigating the matter.

The Linds eventually found the vehicle on a rooftop of another mechanic shop in New Orleans owned by Milton F. "Chip" Hilbert. It is undisputed that the vehicle was badly deteriorated when it was found and that it was missing various component parts, including its engine, transmission, radiator, and exhaust system.

By letter dated November 29, 2012, USAA informed Dr. Lind that it was denying coverage of the vehicle because there was no evidence that a theft of the vehicle had occurred. By letter dated January 30, 2013, Dr. Lind was notified that USAA could not cover the claim on the basis of vandalism because its appraiser had found no evidence of vandalism.

On June 27, 2013, the Linds filed this lawsuit for "negligent repair" and other damages against USAA, Mr. Peters, Wedge Kyes, and Mr. Hilbert. In the petition, the Linds alleged that Mr. Peters removed the engine, transmission, and other component parts of the vehicle from the State of Louisiana, requiring that they expend at least $70,000.00 to replace the stolen or lost component parts. As to USAA, the Linds specifically alleged that it breached its contractual obligation to compensate them and sought to recover all replacement and repair costs. Additionally, the Lind's sought to recover penalties in the amount of two times the actual damages and attorney's fees for USAA's alleged arbitrary and capricious failure to abide by its contractual obligations.

On August 21, 2014, the Linds voluntarily dismissed Wedge Kyes from the litigation. On August 21, 2015, the trial court granted Mr. Hilbert's motion for summary judgment, dismissing all of the Linds' claims against him with prejudice. On April 16, 2016, a preliminary default judgment was rendered against Mr. Peters, who failed to answer the lawsuit.

On February 2, 2015, USAA made an unconditional tender in the amount of $19,800.00 to the Linds, which was refused. A bench trial against USAA was held on July 14, 2016. The disputed issues in the case were the date on which the loss occurred, the value of the Maserati on the date of the loss, and whether USAA was arbitrary and capricious in denying the claim and waiting over two and a half years from the date USAA opened a file on the Linds' claim to make a tender of any type.

At the outset of the trial, the court addressed the Linds' motion in limine to prevent USAA's adjuster to testify regarding a Maserati valuation. USAA stipulated that its adjuster, Bruce White, was not an expert in Maserati valuation and the Linds withdrew their motion in limine. During the one-day bench trial, the Linds presented the testimony of Dr. Lind, Mr. Mabile, Wedge Kyes, the owner of Wedge Kyes Import Specialties, Inc., and Mr. Waterman, an expert in Maserati valuations. USAA presented the testimony of its insurance adjuster, Mr. White, and the testimony of Mr. Kyes. Documentary evidence, including the USAA policy, photographs of the vehicle, various repair invoices, USAA's correspondence with the Linds, the police report, and a Hagerty Guide Vehicle Valuation report for 1972 Maserati Ghiblis was introduced at trial.

During closing argument, USAA acknowledged that the vehicle's component parts probably had been stolen and that USAA did owe the Linds the value of the missing parts. By judgment signed on July 18, 2016, the trial court entered judgment in favor of the Linds, awarding actual damages in the amount of $125,000.00, damages pursuant to La. R.S. 22:1973 et. seq. in the amount of $62,500.00, expert witness fees, legal interest, and all costs of the proceedings. In written reasons for judgment, the court noted that while the exact date of the loss was speculative, the loss did not occur before July of 2012. Apparently using the date of July 2012 as the date of the loss, the court observed that there was testimony establishing that if the vehicle had been completely restored on the date of the loss, the value of a Maserati would have been between $100,000.00 and $125,000.00. The court also found that a penalty award against USAA was proper pursuant to La. R.S. 22:1973 on the basis that USAA failed to fulfill its contractual obligations to compensate the Linds for their loss within a reasonable amount of time. The court further found that although USAA took over two and a half years to attempt to compensate the Linds, USAA did not act in bad faith, nor was it arbitrary or capricious under La. R.S. 22:1892, by failing to pay the Linds for the loss of the automobile. Instead, the court found that USAA was reasonable in continuing with its investigation to determine the actual date of loss and the value of the vehicle.

USAA filed a motion for a new trial attacking the trial court's damage award and the award of penalties. The motion was denied on October 3, 2016. USAA filed a suspensive appeal of the trial court's July 18, 2016 judgment awarding damages and penalties and the October 3, 2016 denial of its motion for a new trial. On November 4, 2016, the trial signed a written judgment denying USAA's motion for a new trial.

In this appeal, USAA contends that the trial court erred in these respects: (1) casting USAA in judgment for bad faith under La. R.S. 22:1973 while at the same time making an affirmative ruling that USAA was reasonable under La. R.S. 22:1892 ; (2) casting USAA in judgment for bad faith under La. R.S. 22:1973, when no reasonable factual basis existed for the finding at trial; (3) awarding damages in the amount of $125,000.00; (4) failing to allocate fault to Mr. Peters for his negligence in the storage of the vehicle; and (5) failing to take into account the salvage value of the vehicle in awarding damages, resulting in a windfall to the Linds.

STANDARD OF REVIEW

Factual findings may not be set aside by this court unless we determine there is no reasonable basis for the findings and the findings are clearly wrong. Stobart v. State, Department of Transportation and Development, 617 So.2d 880, 882 (La. 1993). If the findings are reasonable in light of the record viewed in its entirety, this court may not reverse even if convinced that had it been the trier of fact, it would have weighed the evidence differently. Rosell v. ESCO, 549 So.2d 840, 844 (La. 1989). However, where one or more trial court legal errors interdict the fact-finding process, the "manifest error" or "clearly wrong" standard no longer applies, and if the record is otherwise complete, an appellate court should make its own independent de novo review of the record and render a judgment in accordance with a preponderance of the evidence. Ferrell v. Fireman's Fund Insurance Company, 94-1252 (La. 2/20/95), 650 So.2d 742, 747 ; Burdette v. Drushell, 2001-2494 (La. App. 1 Cir. 12/20/02), 837 So.2d 54, 59, writ denied, 2003-0682 (La. 5/16/03), 843 So.2d 1132.

DAMAGES

USAA issued a policy to the Linds providing comprehensive coverage on the Maserati. Pursuant to the terms of such coverage, USAA is obligated to "pay for loss caused other than by collision" to the covered auto, and equipment and accessories that are not permanently installed in your covered auto," minus the $200.00 deductible shown in the declarations. A "loss" is defined in the policy as "direct and accidental damage to the operational, safety, function, or appearance of, or theft of, your covered auto or equipment and accessories that are not permanently installed in your covered auto." The policy further provides that the term "loss" includes "a total loss," but does not include "any damage other than the cost to repair or replace" and does not include "any loss of use, or diminution in value that would remain after repair or replacement of the damaged or stolen property." Under the section entitled "LIMIT OF LIABILITY," the policy provides that with respect to a "total loss," the limit of USAA's comprehensive coverage is the "actual cash value" of the covered auto. USAA can declare the vehicle to be a total loss if, in its judgment, the cost of repair would exceed 75% of the actual cash value immediately before the loss or would be greater than its actual cash value minus the salvage value after the loss. For other than a total loss to the covered auto, USAA's limit of liability under its comprehensive coverage is the amount necessary to repair the loss based on its estimate or an approved estimate.

The USAA policy defines the term "actual cash value" (ACV) to mean "the amount that it would cost, at the time of loss, to buy a comparable vehicle." It further states that a comparable vehicle is one which is of the same make, model, model year, body type, and options with substantially similar mileage and physical condition." The policy contains an exclusion for damages due and confined to mechanical or electrical breakdown or failure, including such damage resulting from negligent servicing or repair of the covered auto or its equipment.

USAA acknowledged from the outset of this dispute that comprehensive coverage included "partial theft," and later admitted that comprehensive coverage included the theft of the vehicle's component parts.

Furthermore, while the date of the loss of the vehicle was disputed at trial, neither party has appealed the trial court's factual determination that the loss of the vehicle did not occur before July of 2012. Therefore, in addressing the issues associated with the damage award, we shall assume that the covered loss occurred during July of 2012.

The record reflects that Dr. Lind purchased the subject vehicle in 1983 from Mr. Waterman, who owned a vehicle dealership in Arlington, Virginia. The vehicle was driven to Baton Rouge by Dr. Lind's son. At some point, Dr. Lind noticed an engine problem with the vehicle, and sometime in 1995, he brought it to Wedge Kyes, a Baton Rouge automobile repair business. According to its owner, Mr. Kyes, the vehicle had an engine problem and was not running; the engine and transmission were removed from the vehicle. The vehicle was then sent to Pierre's Restoration Garage for body work. Mr. Mabile, the owner of the shop, testified at length regarding the exterior restoration work he did to the vehicle. The vehicle stayed at Mr. Mabile's shop until sometime around late 1996. At the time the vehicle left Mr. Mabile's shop, there was additional body work that needed to be done after the engine had been reinstalled, which Mr. Mabile estimated to cost $3,500.00. Mr. Mabile stated that the only interior work remaining to be done was the installation of new carpets, which would cost $600.00 to $1,000.00. According to Mr. Mabile, the vehicle was "90% complete" when it left his shop and had he been able to complete the restoration job, the vehicle would have been in "show-car condition," which he believed would qualify the vehicle as a "Hagerty's Condition # 2".

After leaving Mr. Mabile's shop, the vehicle was returned to Mr. Kyes for the reinstallation of the engine. Mr. Kyes had disassembled the engine, purchased parts to complete the engine rebuild, and did machine work to put the engine back together. However, he was having difficulty completing the engine rebuild, and needed a specialist who could reassemble the engine. Mr. Kyes put Mr. Lind in touch with Mr. Peters, and Mr. Peters was engaged to complete the engine work. The vehicle left Mr. Kyes custody around the end of 2006 or early 2007. Mr. Kyes testified that when the vehicle left his shop, the engine, transmission, and exhaust system were shipped with it, and that no component parts of the vehicle remained in his shop after the vehicle was sent to Mr. Peters' shop in New Orleans. Mr. Kyes was fairly certain that the radiator was in the vehicle when it left his shop. Earlier, Mr. Mabile had testified that when the vehicle left his shop, the radiator was in it. Mr. Kyes acknowledged that when it left his shop, the vehicle was not a complete vehicle, estimating it was only 60% of being fully and completely running. He estimated that it would have cost approximately $6,000.00 to $8,000.00 to get the engine back into excellent running condition.

Dr. Lind testified that he went to Mr. Peters' shop in New Orleans at some point and saw the vehicle parked inside of the shop; it appeared to be in "excellent" condition, the same as when it was restored by Mr. Mabile. On July 19, 2012, Dr. Lind went to the shop to see his vehicle and Mr. Peters was not present. The vehicle had been removed from the shop; Dr. Lind called the police several days later and filed an incident claim, reporting the vehicle as stolen. In August 2012, Dr. Lind found the vehicle on the rooftop of a mechanic shop in New Orleans. He took pictures of the vehicle at that time, which depict significant damage to the interior and exterior of the vehicle. According to Dr. Lind, the vehicle was "unrecognizable".

The record reflects that the Hagerty Vehicle Valuation Guide, which is published three times a year, is a guide listing all collectable post-war automobiles and is relied upon by damage estimators in determining vehicle valuations. A vehicle is classified based on its condition. A Condition # 1 vehicle is the highest rating and is a vehicle in concourse condition, which very few vehicles actually achieve. A Condition # 2 vehicle is a one that is excellent condition; it is a vehicle that is typically restored, extremely well maintained, and is in a condition one would find few flaws with. A Condition # 3 vehicle is one that is starting to show signs of wear and a professional could find very many flaws with it. The lowest classification, a Condition # 4, is a nice car that is a "daily driver" vehicle, one the owner would perhaps drive occasionally.

Mr. Waterman, who was accepted by the court as an expert in the appraisal of exotic vehicles including the Maserati, testified that there were less than 1200 Maserati Ghiblis ever made, and that he had participated in the buying or selling of 35-50 of those models. Mr. Waterman is a contributor to the Hagerty's Guide. He testified that on July 31, 2012, if all of the restorations that were contemplated had in fact been completed on the vehicle, Dr. Lind's Maserati would have qualified as a Hagerty Condition # 2 vehicle with a value of $100,000.00 to $125,000.00. He further offered his opinion that the market value of the vehicle, if all of the restorations had been complete, would be between $125,000.00 and $150,000.00, independent of its Hagerty valuation. Mr. Waterman acknowledged that if one went solely by the Hagerty guide in evaluating the Maserati in the condition it was in 2012, it would apparently have no value because it was not in running condition and the Hagerty values always assume a vehicle is in running condition. After looking at photographs of the vehicle as it existed in 2012 when Dr. Lind found it on the rooftop, Mr. Waterman testified that the vehicle would still have some commercial value, estimating the value of the remains of the vehicle to be $15,000.00 to $20,000.00.

Mr. Waterman also testified as to the value of the component parts of the Maserati that were missing. He estimate it would cost $30,000.00 to $50,000.00 to replace an engine for the vehicle with one that was rebuilt and in excellent running condition. He also estimated that a transmission with 22,000 miles on it would cost $10,000.00 to $15,000.00, a radiator would cost $2,000.00 to $3,000.00, and it would cost approximately $2,200.00 to $2,500.00 to replace the exhaust system with a new system. Mr. Waterman's estimates were based on what it would cost at the present time to replace the component parts. He also noted it would be easy to find a used exhaust system, for which a discount would have to be given. Mr. Waterman testified that a vehicle with matching serial numbers for the vehicle and its parts are more valuable and sell more quickly than a vehicle without matching numbers. According to Mr. Waterman, even if Dr. Lind bought replacement parts, they would not be the same as they were before the theft, and the value of the car would be decreased by about 20%. On cross-examination, Mr. Waterman was asked what the value of the missing engine would have been in 2012. He testified that an engine would have cost at least $25,000.00 in 2012 and admitted that if parts still had to be located for the engine, it would not necessarily be worth $25,000.00 to $30,000.00. Mr. Waterman acknowledged that the vehicle's component parts become more valuable over time, and the date of the evaluation would make a difference for valuation purposes.

Mr. White, USAA's claims manager, admittedly is not an expert in Maserati valuation, but had 35 years of experience in restoring vehicles. He did not disagree with the numbers offered by Mr. Waterman regarding valuation. Mr. White testified that when he inspected the vehicle, everything in the interior of the car, including the seats, carpet, and dash were cracked and badly deteriorated. He found that paint had deteriorated from the car and that considerable rust was present on the car, primarily on the top surfaces, and that several tires were flat. He also noted that the engine, primary drivetrain, and transmission were missing from the vehicle. According to Mr. White, the Maserati presently is below a Condition # 4 vehicle because it is not drivable. He stated that even if the engine and transmission were with the vehicle, it would not be in running condition.

Mr. White testified that the very rare Maserati still had intrinsic value; however, he was not allowed to offer testimony as to the value of the vehicle in its present condition. Mr. White discussed the term "actual cash value," stating that is the amount an owner should expect to get from the car as it sits at the time of the loss, or the amount it would cost at the time of the loss to buy a comparable vehicle. He testified that from USAA's standpoint, the Maserati was a project car that had never been a complete vehicle and thus did not have the true high end value it could have if the repairs and restorations been completed.

The trial court's $125,000.00 damage award is a factual question that ordinarily would be reviewed by the manifest error standard of review. However, in this case, we are unable to accord the factual finding the great deference to which it would ordinarily be entitled. The trial court improperly considered evidence indicating what the value of the vehicle could have been had contemplated repairs and restorations actually been performed on the vehicle. However, the USAA policy plainly defines the term "actual cash value" to mean "the amount that it would cost, at the time of loss, to buy a comparable vehicle." A comparable vehicle is one which is "of the same make, model, model year, body type, and options with substantially similar mileage and physical condition." It is undisputed that on the date of the loss, the Maserati was not running and was in a very poor, deteriorated condition. Mr. Waterman estimated the actual value of the remains of the Maserati as it appeared in photographs taken in 2012 (the date of the loss) to be between $15,000.00 and $20,000.00. We conclude that the trial court committed legal and factual error in finding that the ACV of the Maserati on the date of the loss was $125,000.00. Because a legal error implicit in the fact-finding process occurred in this case, and the record regarding USAA's liability to the Linds is otherwise complete, we shall review the record de novo and determine the amount the Linds are entitled to recover for their loss under the USAA policy. See Lachico v. First National Bank Shares, Inc., 95-2124 (La. App. 1 Cir. 4/30/96), 673 So.2d 305, 308.

The Linds and USAA are bound by the terms of their contract. The burden is on the Linds to prove the facts necessary for recovery. Kikendall v. American Progressive Insurance Company, 457 So.2d 53, 58 (La. App. 1 Cir. 1984). The evidence demonstrated that the ACV of the Maserati on the date of the loss was at most $20,000.00. Because the Linds retained the Maserati, USAA is not bound to compensate them for the remains of the vehicle.

However, we find that USAA is obligated to compensate the Linds for the value of the vehicle's stolen component parts. The USAA policy admittedly covered a "partial theft", which USAA acknowledges includes the value of the stolen component parts of the vehicle. We believe the proper measure of damages in this case is to award the Linds the replacement value of the missing component parts of the vehicle on the date of the loss, which was not before July 2012. Mr. Waterman estimated the present-day cost of a rebuilt engine in excellent running condition to be between $30,000.00 and $50,000.00. On cross examination, he testified that the value of a Maserati engine in 2012 was at least $25,000.00. He explained the difficulty of finding an engine for a Maserati Ghibli, noting that one would have to search for an engine with other restorers, enthusiasts, and parts dealers, and hope to find the right engine and the price can vary anywhere from $25,000.00 to $50,000.00. We award the Linds $30,000.00 for the loss of the vehicle's engine. We further award the Linds $15,000.00 for the loss of the transmission, $3,000.00 for the loss of the radiator, and $2,500.00 for the exhaust system. Accordingly, the trial court's damage award of $125,000.00 is hereby reversed, and judgment is entered in favor of the Linds in the amount of $50,500.00 on their damage claim.

PENALTIES

An insurer owes its insured a duty of good faith and fair dealing. As such, an insurer has an affirmative duty to adjust claims fairly and promptly and make a reasonable effort to settle claims. Louisiana law provides for the imposition of penalties against insurance companies who act in bad faith under two statutes, La. R.S. 22:1892 and La. R.S. 22:1973. Both La. R.S. 22:1892(B)(1) and La. R.S. 22:1973(B)(5) and (C) provide for penalties, including attorney's fees, against an insurer whose failure to pay a claim after receiving satisfactory proof of loss is found to be arbitrary, capricious, or without probable cause. These penalty provisions are penal in nature and must be strictly construed. Henderson v. State Farm Mutual, 51,567 (La. App. 2 Cir. 8/9/17), --- So.3d ----, 2017 WL 3400616 ; Jones v. Government Employees Insurance Company, 2016-1168 (La. App. 4 Cir. 6/14/17), 220 So.3d 915, 921-922, writ denied, 2017-1339 (La. 11/6/17), 229 So.3d 473.

It is well settled that a plaintiff seeking to recover penalties and attorney's fees against an insurer must prove that the insurer knowingly committed actions which were completely unjustified, without reasonable or probable cause or excuse. Lastrapes v. Progressive Security Insurance Company, 2010-0051 (La. 11/30/10), 51 So.3d 659, 663. Our courts have held that bad faith should not be inferred from an insured's failure to make a timely tender when there is a reasonable and legitimate question regarding coverage. Id. In order to establish a cause of action for penalties and attorney fees, the Linds were required to show that: (1) USAA received satisfactory proof of loss; (2) USAA failed to tender payment within thirty days ( La. R.S. 22:1892 ) or sixty days ( La. R.S. 22:1973 ) of receipt thereof, and (3) USAA's failure to pay is arbitrary, capricious, or without probable cause. Jones, 220 So.3d at 922.

Our Supreme Court has held that the phrase "arbitrary, capricious or without probable cause" is synonymous with "vexatious." Guillory v. Lee, 09-0075 (La. 6/26/09), 16 So.3d 1104, 1127. A vexatious refusal to pay means one that is unjustified, without reasonable cause or excuse. Both phrases describe an insurer whose willful refusal of a claim is not based on a good faith defense. Id. Thus, an insurer who does not tender unconditionally a reasonable payment, a figure over which reasonable minds could not differ, will be subject to penalties and attorney's fees. Id . ; McDill v. Utica Mutual Insurance Company, 475 So.2d 1085 (La. 1985).

The question of arbitrary and capricious behavior is generally a factual issue, and the trial court's finding should not be disturbed on appeal absent manifest error. Guillory, 16 So.3d at 1127. In this case, the trial court found that USAA did not act arbitrarily and capriciously in failing to make a tender of any type for over two and a half years after it had notice of the claim. The court specifically found that USAA was reasonable in continuing with the investigation to determine the actual date of the loss and the value of the vehicle. However, the court awarded the Linds damages pursuant to La. R.S. 22:1973 in the amount of $62,500.00, representing one-half of the damage award. The finding that USAA did not act arbitrarily and capriciously or without probable cause, and an award of penalties under La. R.S. 22:1973, simply cannot be reconciled.

Because the trial court committed legal error in awarding penalties under La. R.S. 22:1973 without a finding of arbitrary and capricious action on USAA's part, we must reverse the $62,500.00 award. We shall conduct a second de novo review of the record to determine whether the Linds are entitled to recovery under La. R.S. 22:1973 or La. R.S. 22:1892.

While USAA was justified in refusing to compensate the Linds for the value of a Hagerty Guide Condition # 2 vehicle on the date of the loss, we find that USAA did act arbitrarily, capriciously, and without probable cause in refusing to compensate the Linds for the loss of the component parts of the vehicle. USAA was aware that the vehicle was missing component parts and never made an offer of any type to compensate the Linds for the loss thereof, although USAA candidly admitted that the policy provided coverage for the theft of the component parts. Under these circumstances, we award the Linds damages under La. R.S. 22:1892 in the amount of 50% of the damages owed to the Linds for the loss of the vehicle's component parts, for a total award of $25,250.00.

DECREE

The judgment awarding actual damages in the amount of $125,000.00 and $62,500.00 in damages pursuant to La. R.S. 22:1973 et. seq. is hereby reversed. Judgment is rendered in favor of plaintiffs Frederick E. Lind, Jr. and Mary Elizabeth Lind and against defendant United States Automobile Association for damages in the amount of $75,750.00, representing an actual damage award of $50,500.00 and an additional award pursuant to La. R.S. 22:1892 in the amount of $25,250.00. All other aspects of the judgment appealed from are affirmed.

REVERSED IN PART AND RENDERED; AFFIRMED IN PART.

      On January 30, 2013, USAA wrote a letter to Dr. Lind stating that "[a]s requested, the covered perils under Comprehensive" coverage included "partial theft." During closing argument at trial and during oral argument before this court, USAA acknowledged that the policy would provide coverage for the theft of the vehicle's component parts.


source: Caselaw Access Project

author: PENZATO, J.

license: Public Domain

text:
    NEEB SERVICE, LLC f/k/a Neeb Service, Inc. v. Norman S. FOSTER, Chief Financial Officer and Director of Finance of the City of New Orleans, Department of Finance; Erroll G. Williams, Assessor, Orleans Parish Assessor; Louisiana Tax Commission
    2017 CA 0860
    Court of Appeal of Louisiana, First Circuit.
    Judgment Rendered: JANUARY 29, 2018
    Douglas L. Salzer, Brian T. Leftwich, Bradley M. Driscoll, New Orleans, Louisiana, Counsel for Plaintiff/Appellant, Neeb Service, LLC
    John J. Weiler, Christian N. Weiler, Reese F. Williamson, New Orleans, Louisiana, Counsel for Defendant/Appellee, Erroll G Williams, Orleans Parish Assessor
    BEFORE: HIGGINBOTHAM, HOLDRIDGE, AND PENZATO, JJ.
   PENZATO, J.

Plaintiff, Neeb Service, LLC (Neeb), appeals two judgments: the first granting summary judgment and dismissing Neeb's petition for refund of ad valorem taxes paid under protest, and the second denying Neeb's motion for new trial and taxing it with all costs. For the reasons that follow, we affirm.

FACTS AND PROCEDURAL HISTORY

Neeb is the owner of the Captain Jim, a floating crane barge used to transfer cargo between river barges and oceangoing vessels. In December of 2014, Neeb received a 2015 Business Personal Property Tax Bill, numbered 614100097, relating to the Captain Jim, from the City of New Orleans, Bureau of the Treasury. Neeb remitted full payment of the assessed tax, $48,945.14, together with a letter informing the City of New Orleans that it was paying the tax bill under protest pursuant to La. R.S. 47:2134, claiming that the vessel is exempt from ad valorem taxation under La. Const. Art. 7, Sec. 21 (C)(16). Thereafter, Neeb filed this suit against Erroll G. Williams, in his official capacity as the Orleans Parish Assessor (Assessor), to recover the amount paid under protest, plus interest.

Assessor filed a motion for summary judgment, asserting that the Captain Jim does not qualify for the ad valorem tax exemption afforded under La. Const. Art. 7, Sec. 21 (C)(16), as it is not an "oceangoing barge." Neeb opposed the motion. Following a hearing, the trial court signed a judgment on December 21, 2016, granting Assessor's motion for summary judgment and dismissing Neeb's suit with prejudice, with each party to bear its own costs. Neeb filed a request for written reasons and a motion for new trial. Assessor opposed the motion for new trial and filed a motion to impose court costs pursuant to La. R.S. 13:4521. Following a hearing, the trial court signed a judgment on April 10, 2017, denying Neeb's motion for new trial and ordering that Neeb be taxed with the defendants' deferred costs. Neeb appealed both judgments.

ASSIGNMENT OF ERROR

Neeb contends that the trial court erred as a matter of law in ruling that a barge must be "oceangoing" to be exempt from ad valorem taxes under La. Const. Art. 7, Sec. 21 (C)(16). Neeb further contends that this error led the trial court to erroneously grant summary judgment in favor of Assessor, resulting in an illegal tax assessment on Neeb's barge.

LAW AND DISCUSSION

After an opportunity for adequate discovery, 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 and that the mover is entitled to judgment as a matter of law. La. Code Civ. Pro. art. 966A(3). The summary judgment procedure is favored and is designed to secure the just, speedy, and inexpensive determination of every action. La. Code Civ. Pro. art. 966A(2).

The burden of proof is on the mover. La. Code Civ. Pro. art. 966D(1). Nevertheless, if the mover will not bear the burden of proof at trial on the issue that is before the court on the motion for summary judgment, the mover's burden does not require that all essential elements of the adverse party's claim, action, or defense be negated. Rather, the mover must 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. Thereafter, the adverse party must produce factual support sufficient to establish the existence of a genuine issue of material fact or that the mover is not entitled to judgment as a matter of law. La. Code Civ. Pro. art. 966D(1). If, however, the mover fails in his burden to show an absence of factual support for one or more of the elements of the adverse party's claim, the burden never shifts to the adverse party, and the mover is not entitled to summary judgment. Succession of Hickman v. State Through Bd. of Supervisors of Louisiana State Univ. Agric. & Mech. Coll., 2016-1069 (La. App. 1 Cir. 4/12/17), 217 So.3d 1240, 1244.

In determining whether summary judgment is appropriate, appellate courts review evidence de novo under the same criteria that govern the trial court's determination of whether summary judgment is appropriate. Reynolds v. Bordelon, 2014-2371 (La. 6/30/15), 172 So.3d 607, 610. 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 the substantive law applicable to the case. Succession of Hickman, 217 So.3d at 1244.

The central issue in this appeal is the proper interpretation of La. Const. Art. 7, Sec. 21 (C)(16), which provides, in pertinent part, as follows:

In addition to the homestead exemption provided for in Section 20 of this Article, the following property and no other shall be exempt from ad valorem taxation:
* * *
(C) * * *
(16) ships and oceangoing tugs, towboats, and barges engaged in international trade and domiciled in Louisiana ports. However, this exemption shall not apply to harbor, wharf, shed, and other port dues or to any vessel operated in the coastal trade of the states of the United States.

We will first address Neeb's assertion that the trial court erred in ruling that a barge must be "oceangoing" to be exempt from ad valorem taxes. Neeb contends that the adjective "oceangoing" applies only to its adjacent noun "tugs" and does not also modify "barges". In support of this argument, Neeb relies upon La. Att'y Gen. Op. No. 98-65 (Apr. 9, 1998), 1998 WL 232993, which interpreted La. Const. Art. 7, Sec. 21 (C)(16), as allowing floating crane barges to qualify for ad valorem tax exemption, provided that the following requirements were met:

(1) The vessel at issue must be either (1) a ship (ii) an oceangoing tug, (iii) a towboat or (iv) a barge;
(2). The vessel must be domiciled in a Louisiana port;
(3). The vessel must be engaged in international trade; and
(4). The vessel must not be operated in the coastal trade of the states of the United States.
Id. at *2.'

The Attorney General opinion focused on the third and fourth requirements, i.e., whether the cargo was destined for international or domestic trade. It did not directly address the issue of whether a barge must be oceangoing, other than to list "barge" without the modifier "oceangoing." Moreover, opinions of the Attorney General are not law; they are not controlling on the courts; at most they are persuasive. Kidd v. Bd. of Trustees of Teachers' Ret. Sys. of Louisiana, 294 So.2d 265, 269 (La. App. 1 Cir.), writ denied, 301 So.2d 46 (La. 1974). Thus, we rely on our own interpretation of the language contained in La. Const. Art. 7, Sec. 21 (C)(16).

As a general rule, articles of the constitution are to be construed and interpreted using the same canons of interpretation applicable to statutes and written instruments. Sherwood Forest Country Club v. Litchfield, 2008-0194 (La. 12/19/08), 998 So.2d 56, 61, modified in part on rehearing, 2008-0194 (La. 2/13/09), 6 So.3d 141. The starting point in interpreting any statute is the language of the statute itself. Exxon Pipeline Co. v. Louisiana Public Service Commission, 98-1737, 98-1738 (La. 3/2/99), 728 So.2d 855, 860. In resolving any ambiguity, text is to be interpreted according to the generally prevailing meaning of the words employed. In many cases, the legislative history of an act and contemporaneous circumstances may be helpful guides in ascertaining legislative intent. Id. Exemption provisions are strictly construed against the taxpayer claiming the benefit of an exemption and must be unequivocally and affirmatively established by the taxpayer. The taxpayer's stringent burden is to overcome the judicial maxim that "to doubt is to deny the exemption." Sherwood Forest Country Club, 998 So.2d at 61.

Under generally accepted rules of syntax, an initial modifier "will tend to govern all elements in the series unless it is repeated for each element." The American Heritage Guide to Contemporary Usage and Style p. 343 (Houghton Mifflin Company 2005). In other words, the first adjective in a series of nouns or phrases modifies each noun or phrase in the following series unless another adjective appears. See Lewis v. Jackson Energy Co-op. Corp., 189 S.W.3d 87, 92 (Ky. 2005). As explained by the court in Ward Gen. Ins. Servs., Inc. v. Employers Fire Ins. Co., 114 Cal. App. 4th 548, 554, 7 Cal.Rptr.3d 844, 849 (2003) :

Most readers expect the first adjective in a series of nouns or phrases to modify each noun or phrase in the following series unless-another adjective appears. For example, if a writer were to say, "The orphanage relies on donors in the community to supply the children with used shirts, pants, dresses, and shoes," the reader expects the adjective "used" to modify each element in the series of nouns, "shirts," "pants," "dresses," and "shoes." The reader does not expect the writer to have meant that donors supply "used shirts," but supply "new" articles of the other types of clothing.

However, "there is no hard and fast grammatical rule that states that an adjective preceding a series of nouns modifies all the nouns in the series[.]" Palmer v. Martinez, 45,318 (La. App. 2 Cir. 7/21/10), 42 So.3d 1147, 1152, writs denied, 2010-1952, 2010-1953, and 20101955 (La. 11/5/10), 50 So.3d 804, 805. As there are two linguistically conceivable readings of the constitutional provision at issue, this Court has reviewed the records of the Louisiana Constitutional Convention of 1973 to ascertain legislative intent.

The exemption set forth in La. Const. Art. 7, Sec. 21 (C)(16) is carried over from the exemption contained in Article 10, Section 4 of the Louisiana Constitution of 1921. See La. Const. Disp Table. Article 10, Section 4 of the Constitution of 1921, read, in pertinent part, as follows:

The following property, and no other, shall be exempt from
taxation:
* * *
... ships and ocean-going tugs, tow-boats and barges, engaged in over-seas trade and commerce and domiciled in Louisiana ports...

In drafting the Louisiana Constitution of 1974, the committee sought to change the language "ships and ocean-going tugs, tow-boats and barges" to "all oceangoing vessels." During the Louisiana Constitutional Convention of 1973, Mr. Moise Dennery proposed an amendment to revert back to the language contained in the 1921 Constitution. He was questioned as follows:

Mr. Rayburn: Mr. Dennery, is it not so that the committee merely, when they reduced the language that is in the present proposal, that they were just trying to eliminate a few words, and there has been some question? The present language says "all oceangoing vessels," and the committee members felt that that took care of it. But there has been some discussion; so all this amendment does is place back the exact language that's now in the present constitution, word for word, comma for comma, and period for period.

Mr. Dennery: That's exactly my understanding of it, Senator.

Thus it appears that the redactors of the current constitution intended that the phrases "all oceangoing vessels" and "ships and ocean-going tugs, tow-boats and barges" be synonymous. The Louisiana Fourth Circuit Court of Appeal likewise found that the framers of the Louisiana Constitution of 1973 had in mind that the barges affected by the exemption would be oceangoing barges. Stevedoring Services of America, Inc./Logistic Services, Inc. v. Kahn , 98-0926 (La. App. 4 Cir. 12/9/98), 726 So.2d 53, 56.

Accordingly, based upon the language of the statute, as well as the legislative history, we construe the word "oceangoing" to modify all three nouns that follow, namely, "tugs, towboats, and barges." Thus, we find that a barge must be oceangoing to be exempt from ad valorem taxes under La. Const. Art. 7, Sec. 21 (C)(16). This is the same conclusion reached in Kahn , 726 So.2d at 56.

We now address Neeb's assertion that the trial court erroneously granted summary judgment in favor of Assessor. In support of his motion, Assessor submitted Neeb's responses to discovery propounded by Assessor. Neeb admitted that the Captain Jim did not leave the Mississippi River during the 2015 calendar year. Thus, we find that Assessor met his initial burden of pointing out to the court the absence of factual support for an element essential to Neeb's claim, namely that the Captain Jim was an oceangoing barge. Thus, the burden shifted to Neeb to produce factual support sufficient to establish the existence of a genuine issue of material fact or that Assessor was not entitled to summary judgment as a matter of law.

In opposition to the motion for summary judgment, Neeb presented no evidence of the oceangoing status of the Captain Jim.

Rather, Neeb argued that the Captain Jim was not required to be oceangoing in order to be eligible for the ad valorem tax exemption. We have previously determined that a barge must be oceangoing in order to be exempt from ad valorem taxes. Accordingly, following our de novo review of the record, we find that Assessor was entitled to summary judgment dismissing Neeb's petition for refund of ad valorem taxes paid under protest.

CONCLUSION

Since the record demonstrates that there are no genuine issues of material fact and that Assessor is entitled to judgment as a matter of law, the summary judgment was properly granted. Therefore, we affirm the December 21, 2016 judgment of the trial court. All costs of this appeal are to be borne by plaintiff/appellant, Neeb Service, LLC.

AFFIRMED.

HOLDRIDGE, J., concurs.

I respectfully concur. While I agree with the majority's opinion that the constitution exempts "... ocean-going tugs, tow-boats and barges ..." I do not agree that the vessel had to have been physically present in the ocean for some period of time (a second, a minute, a day, a week, a month) for it to be exempt from taxation for the taxable year. To be exempt, the tugs, tow-boats, and barges only have to be capable of being "ocean-going" like a ship. However, in this case, I agree that the plaintiff failed to produce evidence to create a genuine issue of fact that the Captain Jim was an "ocean-going barge" that is, a barge capable of being used in the ocean.

      Norman S. Foster, in his official capacity as Chief Financial Officer and Director of Finance of the City of New Orleans, Department of Finance, and the Louisiana Tax Commission, were also named as defendants in the petition but are not involved in the present appeal.

      Neeb did not address or brief any alleged error regarding the motion for new trial and/or the imposition of costs. The court may consider as abandoned any assignment of error or issue for review which has not been briefed. See Uniform Rules-Courts of Appeal, Rule 2-12.4(B)(4). We find any appeal pertaining to the denial of the motion for new trial and the imposition of costs abandoned.


author: GUIDRY, J.

text:
    Albert A. GRAYER v. LOUISIANA DEPARTMENT OF PUBLIC SAFETY AND CORRECTIONS
    NUMBER 2017 CA 0497
    Court of Appeal of Louisiana, First Circuit.
    Judgment Rendered: JANUARY 30, 2018
    Albert Grayer, Angola, LA, Plaintiff/Appellant, In Proper person
    William L. Kline, Baton Rouge, LA, Counsel for Defendant/Appellee, Louisiana Department of Public, Safety and Corrections
    BEFORE: GUIDRY, PETTIGREW, AND CRAIN, JJ.
   GUIDRY, J.

Appellant, Albert Grayer, an inmate in the custody of the Department of Public Safety and Corrections (Department) and housed at Angola State Penitentiary, appeals from a judgment of the district court dismissing his appeal with prejudice. For the reasons that follow, we affirm.

FACTS AND PROCEDURAL HISTORY

Following the issuance by the Department of a disciplinary report against Grayer for several rule violations on July 26, 2013, and a hearing before the disciplinary board at Elayn Hunt Correctional Center (Hunt Correctional Center) on July 29, 2013, the Department imposed a penalty against Grayer of forfeiture of thirty days of good time and loss of twelve weeks of canteen privileges. Grayer appealed this disciplinary decision to the Warden of Hunt Correctional Center, who remanded the matter to the disciplinary board for a rehearing after a mental health evaluation of Grayer was performed. On September 13, 2013, the disciplinary board conducted a rehearing and upheld the original penalty of forfeiture of thirty days of good time and loss of twelve weeks of canteen privileges.

Thereafter, on February 25, 2014, Grayer filed a Request for Administrative Remedy (ARP), challenging the forfeiture of all his good time credits and asserting that sixty days of good time credit was reinstated on June 14, 2013, due to his mental health capacity, but that the Department had not yet restored this credit. In its first step response, the Department stated that following an investigation, it was determined that following a re-hearing on September 13, 2013, the original penalty that was imposed on July 29, 2013 was upheld and that there was no record of good time being reinstated on June 14, 2013. Thereafter, in a second step response, the Department stated that Grayer's concerns were adequately addressed by the first step response.

Grayer subsequently filed a supplement to his ARP, wherein he asserted that the Department had failed to give him all of his jail credits that he is entitled to under docket number 17845. Thereafter, the Department issued an amended second step response, clarifying the issues raised by Grayer in his original ARP and finding with regard to his supplemental ARP, that Grayer is entitled to good time credits from February 3, 2010, until the date of sentence on docket numbers 18988, 19099, 19177, and 19718. However, the Department found that no jail credit was due on docket number 17845 because it was a consecutive sentence. The Department noted that Grayer's jail credit had been corrected as stated.

Thereafter, on October 23, 2014, Grayer filed a petition for judicial review in the Nineteenth Judicial District Court (Nineteenth JDC) contesting the Department's decision refusing to reinstate his good time credits. A Commissioner in the Nineteenth JDC subsequently issued a report finding that Grayer had failed to timely and directly appeal to the district court the forfeiture of his good time following exhaustion of the disciplinary appellate process. Furthermore, the Commissioner noted that failure to appeal the decision to the district court for review in compliance with the statutory exclusive remedy rule promulgated by the Department does not allow Grayer the luxury of later initiating a claim under an ARP for additional relief on the same disciplinary decision. Accordingly, the Commissioner found that the Department's decision to deny relief was not arbitrary or capricious or in any way violative of Grayer's rights and recommended that the decision be affirmed, as a rejection of the ARP would have been proper. Additionally, with regard to Grayer's supplement to his ARP, the Commissioner noted that the Department improperly allowed the issue contained therein to be part of the ARP proceeding, as it created a multi-issue claim, which is procedurally not allowed. However, because the issue was considered by the Department in the final step, the Commissioner reviewed the matter and noted that the issue was moot, as Grayer had received all jail credits owed to him pursuant to this complaint. As such, the Commissioner recommended that the Department's decision be affirmed and that the appeal be dismissed with prejudice.

Grayer traversed the Commissioner's recommendation. Following a de novo consideration of the record, the district court signed a judgment affirming the Department's decision and ordering that the appeal be dismissed with prejudice.

Grayer now appeals from the district court's judgment.

DISCUSSION

Louisiana Revised Statutes 15:1177(A)(9) sets forth the appropriate standard of review by the district court, which functions as an appellate court when reviewing the Department's administrative decisions. Specifically, the court may reverse or modify the administrative decision only if substantial rights of the appellant have been prejudiced because the administrative findings are: (1) in violation of constitutional or statutory law; (2) in excess of the statutory authority of the agency; (3) made upon unlawful procedure; (4) affected by other error of law; (5) arbitrary, capricious, or characterized by an abuse of discretion; or (6) manifestly erroneous in view of the reliable, probative, and substantial evidence on the whole record. La. R.S. 15:1177(A)(9) ; Lightfoot v. Stalder, 00-1120, p. 6 (La. App. 1st Cir. 6/22/01), 808 So.2d 710, 715-716, writ denied, 01-2295 (La. 8/30/02), 823 So.2d 957.

On review of the district court's judgment under La. R.S. 15:1177, no deference is owed by the court of appeal to the factual findings or legal conclusions of the district court, just as no deference is owed by the Louisiana Supreme Court to factual findings or legal conclusions of the court of appeal. McCoy v. Stalder, 99-1747, p. 6 (La. App. 1st Cir. 9/22/00), 770 So.2d 447, 450-451.

At issue in the instant appeal is whether the district court erred in affirming the Department's decision to deny Grayer relief pursuant to his complaint that the Department failed to reinstate his good time. From our review of the entire record, we find no error in the district court's judgment. As detailed above, a penalty of forfeiture of thirty days of good time was imposed and subsequently upheld by the disciplinary board following a rehearing. There is no evidence in the record that any good time was re-instated by the disciplinary board, nor that Grayer appealed, timely or otherwise, the disciplinary board's decision following the re-hearing.

Furthermore, with regard to Grayer's amended request for relief seeking jail credits for time served under docket number 17845, we likewise find no error in the district court's judgment. The Department acknowledged in its amended second step response that Grayer was entitled to jail credit from February 3, 2010, until his date of sentence on docket numbers 18988, 19099, 19177, and 19718, but that he was not due jail credit on docket number 17845 due to that sentence being consecutive. See La. C.Cr.P. art. 880(E). The Department also stated and the record evidences that Grayer's jail credit has been corrected, allowing the credit as stated. Accordingly, because Grayer received the jail credit to which he was legally entitled, this complaint is moot and we find no error in the district court's judgment.

CONCLUSION

For the foregoing reasons, we affirm the judgment of the district court. All costs of this appeal are assessed to Albert Grayer.

AFFIRMED.

Crain, J. concurs

      At the time of the disciplinary report and hearing, Grayer was housed at Hunt Correctional Center.

      We note that the Department would have been correct to reject the ARP filed by Grayer pursuant to the LAC Title 22:1:3251(a)(ii), which allows the Department to reject an ARP when a specialized administrative remedy procedure is in place for the specific type of complaint, such as in this case, disciplinary matters. See Walker v. Louisiana Department of Corrections, 10-0057, pp. 5-6 (La. App. 1st Cir. 6/11/10), 40 So.3d 1238, 1241.

      Again, we note that the Department would have been correct to reject the supplement to the ARP filed by Grayer as it raised multiple complaints in a single ARP. See Gibbs v. LeBlanc, 13-0454, p. 2 (La. App. 1st Cir. 11/1/13) (unpublished), 2013 WL 5916718, writ denied, 14-0376 (La. 10/24/14), 151 So.3d 596.


text:
    STATE of Louisiana, BY AND THROUGH its Attorney General James D. CALDWELL v. TEVA PHARMACEUTICALS INDUSTRIES, LTD., Teva Pharmaceuticals USA, Inc., Mylan Laboratories, Inc., Mylan Pharmaceuticals, Inc., Ranbaxy Laboratories, Ltd., Ranbaxy Pharmaceuticals, Inc., Cephalon, Inc.
    2017 CA 0449
    Court of Appeal of Louisiana, First Circuit.
    Judgment Rendered: FEBRUARY 08, 2018
    Jeff Landry, Attorney General, Keetsie T. Gunnels, Nicholas J. Diez, Stacie Deblieux, Assistant Attorneys General, Baton Rouge, Louisiana, John Alden Meade, Adam G. Young, New Orleans, Louisiana, Attorneys for Plaintiff/Appellant State of Louisiana
    T. MacDougall Womack, Lauren Rivera, Baton Rouge, Louisiana, Jay P. Lefkowitz, Devora W. Allon, Elliot Harvey Schatmeier, New York, New York, Attorneys for Defendant/Appellee Teva Pharmaceuticals USA, Inc.
    Glen R. Petersen, Baton Rouge, Louisiana, J. Douglas Baldridge, Danielle R. Foley, Vincent Verrocchio, Washington, D.C., Attorneys for Defendants/Appellees Ranbaxy Laboratories, Ltd. and Ranbaxy Pharmaceuticals, Inc.
    James R. Swanson, Alysson L. Mills, New Orleans, Louisiana, Dane S. Ciolino, Metairie, Louisiana, Evan R. Chesler, David Marriott, New York, New York, Attorneys for Defendants/Appellees Mylan Pharmaceuticals, Inc. and Mylan Laboratories, Inc. (now known as Mylan, Inc.)
    BEFORE: HIGGINBOTHAM, HOLDRIDGE, AND PENZATO, JJ.
   PENZATO, J.

Appellant, State of Louisiana, by and through its Attorney General Jeff Landry (State), appeals two judgments of the trial court, which this court assigned two different appellate numbers, sustaining exceptions of no right of action and no cause of action and granting a motion to strike on behalf of defendants, Teva Pharmaceutical Industries, Ltd., Teva Pharmaceuticals USA, Inc., Mylan Laboratories, Inc., Mylan Pharmaceuticals, Inc., Ranbaxy Laboratories, Ltd., Ranbaxy Pharmaceuticals, Inc., and Cephalon, Inc., who was subsequently purchased by Teva in 2011 (collectively referred to as defendants). In this matter, and in the companion case to this appeal, State of Louisiana, by and through its Attorney General James D. "Buddy" Caldwell v. Teva Pharmaceuticals Industries, Ltd., et al, 2017-0448 (La. App. 1 Cir. 2/8/18), 242 So.3d 597, also handed down this date, defendants also filed a motion for partial dismissal with this court.

A show cause order was issued by this court as to the appealability of the December 8, 2016 judgment and is addressed in the companion case, which dismissed the appeal. The issues raised by the State in the instant identical appeal of both judgments are also addressed and resolved in the companion case. Because all matters were previously addressed and determined, nothing remains for our review herein. Accordingly, the instant appeal is dismissed. Costs are assessed one-half to the State of Louisiana, by and through its Attorney General Jeff Landry, in the amount of $654.25, and one-half to defendants, Teva Pharmaceuticals USA, Inc., Ranbaxy Pharmaceuticals, Inc., Mylan Laboratories, Inc., and Mylan Pharmaceuticals, Inc.

APPEAL DISMISSED. MOTION FOR PARTIAL DISMISSAL DISMISSED.

      After the filing of this lawsuit, on January 11, 2016, James D. "Buddy" Caldwell was succeeded in office as the Attorney General by Jeff Landry.

      Teva Pharmaceuticals USA, Inc. and Ranbaxy Pharmaceuticals, Inc. later filed exceptions in those names only and indicated that Teva Pharmaceuticals Industries, Ltd., Ranbaxy Laboratories, Ltd. and Cephalon, Inc. had either never been served or were never properly served. The latter three companies did not make a general appearance.


text:
    STATE of Louisiana, BY AND THROUGH its Attorney General James D. CALDWELL v. TEVA PHARMACEUTICALS INDUSTRIES, LTD., Teva Pharmaceuticals USA, Inc., Mylan Laboratories, Inc., Mylan Pharmaceuticals, Inc., Ranbaxy Laboratories, Ltd., Ranbaxy Pharmaceuticals, Inc., Cephalon, Inc.
    2017 CA 0448
    Court of Appeal of Louisiana, First Circuit.
    Judgment Rendered: FEBRUARY 08, 2018
    Jeff Landry, Attorney General, Keetsie T. Gunnels, Nicholas J. Diez, Stacie Deblieux, Assistant Attorneys General, Baton Rouge, Louisiana, John Alden Meade, Adam G. Young, New Orleans, Louisiana, Attorneys for Plaintiff/Appellant, State of Louisiana
    T. MacDougall Womack, Lauren Rivera, Baton Rouge, Louisiana, Jay P. Lefkowitz, Devora W. Allon, Elliot Harvey Schatmeier, New York, New York, Attorneys for Defendant/Appellee, Teva Pharmaceuticals USA, Inc.
    Glen R. Petersen, Baton Rouge, Louisiana, J. Douglas Baldridge, Danielle R. Foley, Vincent Verrocchio, Washington, D.C., Attorneys for Defendants/Appellees, Ranbaxy Laboratories, Ltd. and Ranbaxy Pharmaceuticals, Inc.
    James R. Swanson, Alysson L. Mills, New Orleans, Louisiana, Dane S. Ciolino, Metairie, Louisiana, Evan R. Chesler, David Marriott, New York, New York, Attorneys for Defendants/Appellees, Mylan Pharmaceuticals, Inc. and Mylan Laboratories, Inc. (now known as Mylan, Inc.)
    BEFORE: HIGGINBOTHAM, HOLDRIDGE, AND PENZATO, JJ.
   PENZATO, J.

Appellant, State of Louisiana, by and through its Attorney General Jeff Landry (State), appeals two judgments of the trial court, which this court assigned two different appellate numbers, sustaining the defendants' exceptions of no right of action and no cause of action and granting a motion to strike. In this matter, and in the companion case to this appeal, State of Louisiana, by and through its Attorney General James D. "Buddy" Caldwell v. Teva Pharmaceuticals Industries, Ltd., et al, 2017-0449 (La. App. 1 Cir. 2/8/18), 242 So.3d 595, also handed down this date, defendants filed a motion for partial dismissal with this court. For the reasons that follow, we dismiss the appeal and deny the motion for partial dismissal as moot.

FACTS AND PROCEDURAL HISTORY

This matter arises out of a petition filed by the State on July 10, 2015, against numerous defendants, Teva Pharmaceutical Industries, Ltd., Teva Pharmaceuticals, USA Inc. (Teva), Mylan Laboratories, Inc., Mylan Pharmaceuticals, Inc. (collectively Mylan), Ranbaxy Laboratories, Ltd., Ranbaxy Pharmaceuticals, Inc. (Ranbaxy), and Cephalon, Inc., who was subsequently purchased by Teva in 2011 (collectively all referred to as defendants). The State claims that the defendants intentionally delayed entry of a generic equivalent to the brand-name drug Provigil into the Louisiana market, in violation of state antitrust and consumer protection laws. The petition alleges that defendants maintained monopoly power in the market for Provigil for six years. Further, the petition alleges that the defendants sold more than $4 billion of Provigil during that period of time, while maintaining the price of the drug at supra-competitive levels, causing the State to overpay millions of dollars by depriving it of the benefits of unrestricted competition and access to less expensive generic versions.

The petition further maintains that after the Federal Drug Administration (FDA) approved the New Drug Application for Provigil, defendants filed a patent infringement suit against other companies that manufacture the generic drugs in New Jersey federal court, despite knowledge that the suit was frivolous as a result of intentional concealment of material facts to the U.S. Patent and Trademark Office during the application process. Later, when facing the imminent loss of exclusivity granted by the FDA, the defendants settled with each of the generic manufacturers in the New Jersey federal court case in return for agreements to delay marketing the generic drug until 2011 or 2012. The State claims that the profit from the defendants' monopoly and deceptive practice came at a cost of millions of dollars to the State, which was forced to purchase a brand name drug instead of a less expensive generic drug, but for the defendants' wrongful conduct.

The State sought damages and injunctive relief for injuries allegedly sustained by the Louisiana Medicaid Program as a result of an alleged unlawful conspiracy to prevent or delay the generic, less expensive drug from entering the Louisiana market for a six-year period. The State alleged that the conspiracy violated the Louisiana Monopolies Act (LMA), La. R.S. 51:121, et seq. (Count I), the Louisiana Unfair Trade Practices Act (LUTPA), La. R.S. 51:1401, et seq. (Count II), and alternatively, violated the law of unjust enrichment (Count III). LMA prohibits parties from monopolizing, or attempting to monopolize, or combine, or conspire with any other party to monopolize any part of the trade or commerce within Louisiana. La. R.S. 51:123. LUTPA outlaws unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. La. R.S. 51:1405. Louisiana Revised Statute 51:1407(A) provides that whenever the attorney general has reason to believe that any person is using, has used, or is about to use any method, act, or practice declared to be unlawful under La. R.S. 51:1405, he may bring any action for injunctive relief in the name of the state against such person to restrain and enjoin the use of such method, act, or practice. Louisiana Revised Statute 51:1407(B) provides that the attorney general may also request, and the trial court may impose, a civil penalty against any person found by the trial court to have engaged in any method, act, or practice declared to be unlawful under La. R.S. 51:1405. Louisiana Revised Statute 51:1409 provides that any person who suffers any ascertainable loss of money or movable property, corporeal or incorporeal, as a result of the use or employment by another person of an unfair or deceptive method, act, or practice declared unlawful by La. R.S. 51:1405 may bring an action individually, but not in a representative capacity, to recover actual damages.

On September 14, 2015, Ranbaxy filed declinatory exceptions of insufficient service of process and lack of personal jurisdiction. Teva and Ranbaxy filed joint peremptory exceptions of no right of action and no cause of action on the same date. On September 16, 2015, Mylan filed peremptory exceptions of no cause of action, no right of action, and prescription, as well as a declinatory exception of no personal jurisdiction.

All the exceptions were tried by the trial court on May 16, 2016. On June 1, 2016, the trial court signed a judgment granting in part in favor of the defendants the exception of no right of action with respect to the LUTPA claims brought pursuant to La. R.S. 51:1409, a private right of action, and denying in part defendants' exceptions with respect to the LUTPA claims brought pursuant to La. R.S. 51:1407, for injunctive relief. The trial court granted the defendants' exceptions of no cause of action with respect to the LUTPA claims, "with the exception of any claim for injunctive relief under [La. R.S. 51:] 1407." The trial court granted the defendants' exceptions of no cause of action with respect to the LMA, "subject to the State being given thirty (30) days ... to amend its Petition to state a cause of action under the [LMA]." The exception of prescription was deferred pending the State's thirty days to replead. Mylan's exception of lack of personal jurisdiction was also deferred. The trial court granted the Defendants' exception of no cause of action with respect to the unjust enrichment claims. The only claims dismissed by the June 1, 2016 judgment were the claims for unjust enrichment.

After the trial court denied the State's motion for new trial, on June 30, 2016, the State filed a first supplemental and amending petition (amended petition), reasserting all of its claims, including additional factual allegations and expressly retaining the prayer in the original petition. In response to the amended petition, the defendants filed joint peremptory exceptions of no right of action, prescription, no cause of action, and lack of subject matter jurisdiction. On the same date, the defendants filed a joint motion to strike the State's amended petition. In the motion to strike, the defendants claimed that all of the State's claims were dismissed by the June 1, 2016 judgment and the State was only permitted to amend the LMA claims within the thirty (30) days permitted by the trial court.

The trial court held a hearing on the exceptions and motion to strike on November 14, 2016. On December 8, 2016, the trial court issued a judgment granting the motion to strike "with respect to all paragraphs in the [amended petition] except paragraphs 143(A), 153(A), and 166(A)." The trial court granted the defendants' exception of no cause of action with regard to the State's LUPTA claim for injunctive relief pursuant to La. R.S. 51:1407. The trial court granted the defendants' exception of no cause of action with respect to the State's LMA and unjust enrichment claims. The trial court further dismissed the State's amended petition in its entirety with prejudice. The defendants appealed both the June 1, 2016 judgment and the December 8, 2016 judgment on the same date.

FINALITY OF JUDGMENTS

On April 5, 2017 this court's Clerk issued separate show cause orders addressing apparent deficiencies in both judgments. As to the June 1, 2016 judgment, the Clerk observed that the appeal taken February 17, 2017, appeared to be untimely pursuant to La. C.C.P. art. 2087(A)(2). Furthermore, that judgment appeared to be a partial judgment that had not been certified under La. C.C.P. art. 1915(B). As to the December 8, 2016 judgment, the Clerk observed that the judgment appeared to be a partial judgment that had not been certified under La. C.C.P. art. 1915(B).

The State and the defendants responded to the rule to show cause, claiming that the appeal should not be dismissed. Both the State and the defendants maintain that the June 1, 2016 judgment is interlocutory, but that the December 8, 2016 judgment is a final appealable judgment that disposes of the entire lawsuit. The State asserts that when an appeal is taken from a final judgment, "the appellant is entitled to seek review of all adverse interlocutory judgments prejudicial to him, in addition to the review of the final judgment," quoting Judson v. Davis, 2004-1699 (La. App. 1 Cir. 6/29/05), 916 So.2d 1106, 1112, writ denied, 2005-1998 (La. 2/10/06), 924 So.2d 167. The State and the defendants argue that in addition to review of the December 8, 2016 judgment, it is entitled to seek review of the June 1, 2016 judgment.

The June 1, 2016 judgment is a partial final judgment, as it dismissed the unjust enrichment claims but not the LMA or LUTPA claims. This court's appellate jurisdiction extends to "final judgments," which are those that determine the merits in whole or in part. La. C.C.P. arts. 1841 and 2083 ; See Van ex rel. White v. Davis, 2000-0206 (La. App. 1 Cir. 2/16/01), 808 So.2d 478, 483. A judgment must be precise, definite, and certain. Laird v. St. Tammany Parish Safe Harbor, 2002-0045 (La. App. 1 Cir. 12/20/02), 836 So.2d 364, 365. Moreover, a final appealable judgment must name the party in favor of whom the ruling is ordered, the party against whom the ruling is ordered, and the relief that is granted or denied. See Carter v. Williamson Eye Center, 2001-2016 (La. App. 1 Cir. 11/27/02), 837 So.2d 43, 44. These determinations should be evident from the language of the judgment without reference to other documents in the record. Laird, 836 So.2d at 366. In relevant part, a final appealable judgment "must contain appropriate decretal language disposing of or dismissing claims in the case." State in Interest of J.C., 2016-0138 (La. App. 1 Cir. 6/3/16), 196 So.3d 102, 107. The specific relief granted should be determinable from the judgment without reference to an extrinsic source such as pleadings or reasons for judgment. Input/Output Marine Systems, Inc. v. Wilson Greatbatch, Technologies, Inc., 2010-477 (La. App. 5 Cir. 10/29/10), 52 So.3d 909, 916. A judgment that only partially determines the merits of an action is a partial final judgment and, as such, is immediately appealable only if authorized by La. C.C.P. art. 1915. Rhodes v. Lewis, 2001-1989 (La. 5/14/02), 817 So.2d 64, 66. A judgment maintaining an exception of no cause of action and dismissing the action completely is a final judgment which is appealable. However, a judgment partially maintaining an exception of no cause of action is a valid partial final judgment (and therefore appealable) only if authorized by La. C.C.P. art. 1915. Everything on Wheels Subaru, Inc. v. Subaru South, Inc., 616 So.2d 1234, 1239 (La. 1993).

The parties are correct that when an unrestricted appeal is taken from a final judgment, the appellant is entitled to review of all adverse interlocutory rulings prejudicial to him, in addition to the review of the final judgment. City of Baton Rouge v. Douglas, 2016-0655 (La. App. 1 Cir. 4/12/17), 218 So.3d 158, 162. Accordingly, we must determine if the December 8, 2016 judgment is an unrestricted final judgment and whether review of the June 1, 2016 judgment is appropriate.

We must first determine what claims, if any, were disposed of by each of the judgments. The basic issues before the trial court were Count I, the LMA claim; Count II, the LUTPA claims pursuant to La. R.S. 51:1407, for injunctive relief and penalties, and La. R.S. 51:1409, a private right of action; and Count III, an unjust enrichment claim. The defendants have provided a chart in their response to the rule to show cause and argue that the LMA claim, the LUTPA claim pursuant to La. 51:1407 for injunctive relief, and the unjust enrichment claim were dismissed without prejudice by the June 1, 2016 judgment. They further claim that the June 1, 2016 judgment dismissed the LUTPA claims pursuant to La. 51:1407 for penalties and La. 51:1409 for a private right of action with prejudice. Defendants also assert that the December 8, 2016 judgment dismissed the LMA claim, the LUTPA claim pursuant to La. 51:1407 for injunctive relief, and the unjust enrichment claim with prejudice (all purportedly had been dismissed without prejudice by the June 1, 2016 judgment) and reaffirmed the dismissal of the LUTPA claims pursuant to La. 51:1407 for penalties and La. 51:1409 for a private right of action (which purportedly had been dismissed with prejudice by the June 1, 2016 judgment).

Although the defendants argue that the LUTPA claims brought pursuant to La. R.S. 51:1407 for penalties and La. R.S. 51:1409 were dismissed with prejudice in the June 1, 2016 judgment, that judgment grants the exception (except for the claims brought pursuant to La. R.S. 51:1407 for injunctive relief) but does not dismiss any LUTPA claims. Furthermore, the LMA claim and the LUTPA claim pursuant to La. R.S. 51:1407 for injunctive relief were not dismissed by the June 1, 2016 judgment. The June 1, 2016 judgment afforded the State thirty (30) days to amend its petition with regard to the LMA claims. The only claim dismissed by the June 1, 2016 judgment is the claim for unjust enrichment. There is no decretal language dismissing any other claim. A judgment that "grants" a peremptory exception, but fails to dismiss a party and further fails to set forth decretal language disposing of or dismissing the plaintiff's claims against the defendants is defective and cannot be considered a final judgment for the purposes of an immediate appeal. Espinoza-Peraza v. Alexander , 2016-0137 (La. App. 1 Cir. 3/6/17), 2017 WL 899919, *2 (unpublished opinion), citing Costanza v. Snap-On Tools , 2013-0332 (La. App. 1 Cir. 3/5/14), 2014 WL 886021 (unpublished opinion); Johnson v. Mount Pilgrim Baptist Church, 2005-0337 (La. App. 1 Cir. 3/24/06), 934 So.2d 66, 67.

From the oral reasons at both hearings in the trial court, it appears the trial court was of the opinion that all claims were dismissed after the May 16, 2016 hearing, except for the LMA claim contingent upon the State amending the petition. However, reasons for judgment form no part of the official judgment, and appeals are taken from judgments, not reasons for judgment. Doe v. Breedlove, 2004-0006 (La. App. 1 Cir. 2/11/05), 906 So.2d 565, 571. Furthermore, the defendants also erroneously stated in their motion to strike the amended petition that the June 1, 2016 judgment dismissed all claims except the LMA claims. While that may have been the intent of all the parties, the June 1, 2016 judgment dismissed only one claim, the unjust enrichment claim, without prejudice.

After the State filed an amended petition, the trial court conducted a hearing on numerous exceptions filed by the defendants. Following the hearing, the trial court signed the December 8, 2016 judgment granting the motion to strike with respect to all paragraphs in the amended petition except paragraphs 143(A) (concerning market power of the defendants), 153(A) (concerning supra-competitive prices of the defendants in violation of the LMA, and 166(A) (concerning class actions and the tolling of prescription). Thereafter, the trial court granted the exceptions of no cause of action as to the LMA, the unjust enrichment claims, and the LUTPA claims brought pursuant to La. R.S. 51:1407 for injunctive relief. The December 8, 2016 judgment further dismissed the amended petition "in its entirety with prejudice at [the State's] cost." No other claims were dismissed by the December 8, 2016 judgment. As stated previously, this court's appellate jurisdiction extends to final judgments, which are those that determine the merits in whole or in part. La. C.C.P. arts. 1841 and 2083. The question, then, is whether any causes of action remain under the original petition. We find that there are causes of action which remain.

At the time of oral arguments, all parties maintained that the amended petition superseded the original petition. Louisiana courts have long acknowledged that the wording used in an amended petition may have the effect of superseding and replacing the allegations in an original petition. For instance, in Bologna Bros. v. Stephens, 23 So.2d 645, 646-647 (La. App. 2 Cir. 1945), a Louisiana appellate court relied on the language, " 'Plaintiffs supplement and amend their original and supplemental petitions ... to read as follows, ' " to conclude that the plaintiffs abandoned their original claim. In Coleman's Heirs v. Holmes' Heirs, 147 So.2d 752 (La. App. 3 Cir. 1962), the Court held that where plaintiffs filed a supplemental petition seeking relief pursuant to a cause of action that conflicted with the cause of action originally filed, and where the supplemental petition did not expressly retain or abandon the prayers in the previous petition, it was presumed that the previous petition was abandoned. Id. at 753. In so ruling, the Court relied on a general rule of law set forth in 71 C.J.S. Verbo, Pleadings § 321, pp. 716-717, which stated:

An amendment which is complete in itself and does not refer to, or adopt, the prior pleadings, ordinarily supersedes it and the prior pleading ceases to be a part of the record for most purposes, and has been held to be in effect abandoned and, likewise, has been held to be in effect withdrawn as to all matters not restated, and to become functus officio.
On the other hand, an amended pleading does not supersede the original pleading where it is evident that it is not designed as a substitute therefor or intended to take its place, as where it refers to its allegations, or expressly reaffirms them, or merely elaborates certain of them, or merely augments the original pleading by additional allegations, and in such cases the original pleading and the amendment are to be construed together.

Id. at 753-54.

In Thomas v. Lusk, 13 La. Ann. 277, p. 3 (La. 1858), the Supreme Court, in dealing with an amendment seeking an inconsistent demand, stated:

We are of the opinion that the filing of the amended petition was not such an absolute waiver of plaintiffs' original demand as to put his cause of action out of court, even if it be conceded that the demands were inconsistent. The plaintiffs certainly could not be in a worse condition after they filed their amendment than they would have been if they had embraced both demands in their original petition. In that case they would have had the right to elect which cause of action they would prosecute.

(See Montgomery v. American Motorists Insurance Co., 242 So.2d 45, 48 (La. App. 2 Cir.1970) ).

In Santiago v. Tulane Univ. Hosp. & Clinic , 2012-1095 (La. App. 4 Cir. 4/24/13), 115 So.3d 675, 685-87, the plaintiff, in her original patient compensation fund complaint and petition for damages, alleged only fall-related claims against a doctor. She amended her petition, however, to delete all references to the doctor's responsibility for the fall. The Fourth Circuit held that without more, the trial court's dismissal of the plaintiff's original claims against the doctor would have been proper as superseded by the plain language of the amended petition. However, the amended language must necessarily be read in conjunction with the "catch-all" language of the plaintiff's amended petition, which stated:

The plaintiffs [sic] hereby adopt and incorporate by reference all allegations contained in the original and First Supplemental and Amending Petition for Damages as if copied here in extenso.

Santiago, 115 So.3d at 686. The court found that this language constituted a pronouncement of the plaintiff's intent to preserve the allegations made against the doctor in her original petition. Santiago , 115 So.3d at 686-87, citing Coleman's Heirs, 147 So.2d at 753.

Once the petition has been validly amended, the principal action or main demand encompasses the claim as amended or supplemented and not just the demand as set forth in the original petition. Best Fishing, Inc. v. Rancatore, 96-2254 (La. App. 1 Cir. 12/29/97), 706 So.2d 161, 166, citing Moore v. Gencorp, Inc., 93-0814 (La. 3/22/94), 633 So.2d 1268, 1271. Thus, the principal demand encompasses the various claims asserted by plaintiff in the original petition and the amended petition. The judgment of the trial court, which only addresses the claims asserted in the amended petition, does not fit within any of the categories of allowable partial final judgments listed in La C.C.P. art. 1915. As such, it is not appealable in the absence of irreparable injury. Best Fishing, 706 So.2d at 166.

Citing Best Fishing, this court in Boutte v. Meadows , 2013-1189 (La. App. 1 Cir. 2/18/14), 2014 WL 651754, *3 (unpublished), stated, "[w]hile the judgment adjudicated the claims contained in the petition for declaratory judgment, that petition set forth only a portion of the claims at issue in this matter. The judgment did not determine the merits of all of the claims pending in the case and, therefore, constitutes a partial judgment that is appealable only if authorized by Article 1915." See Best Fishing, 706 So.2d at 165 (judgment in the nature of a declaratory judgment was partial judgment where it resolved the issues presented by an amended petition but did not resolve the issues presented by the original petitory action petition).

In the present case, the amended petition re-urges and re-alleges the original petition and then seeks to add additional paragraphs to the original petition. Furthermore, the prayer for relief requests that judgment be rendered in favor of the State "in amounts reasonable in the premises as prayed for in the original Petition." Therefore, the language of the amended petition preserves the original petition. There is nothing in the amended petition which indicates that it was to supersede the original petition or that the original petition was abandoned. The exact opposite is true. The amended petition refers to and reaffirms the original petition, elaborates and augments the claims of the original petition, and retains the prayer of the original petition, such that they are to be construed together.

The original petition contained the LMA claim, the LUPTA claims pursuant to La. R.S. 51:1407, for injunctive relief and penalties, and La. R.S. 51:1409, a private right of action, and an unjust enrichment claim. Only the unjust enrichment claim was dismissed by the June 1, 2016 judgment. The December 8, 2016 judgment granted the motion to strike the majority of the claims contained therein, and thereafter, dismissed the amended petition, but did not specifically dismiss any claims that remained from the original petition, even though it granted the exceptions of no cause of action as to the LUTPA claim pursuant to La. R.S. 51:1407 for injunctive relief and the LMA claim. As the December 8, 2016 judgment only dismissed the amended petition, it is a partial judgment that does not fit within any of the categories of allowable partial final judgments listed in La C.C.P. art. 1915.

The original petition has never been dismissed. The LUTPA claims under La. R.S. 51:1409, a private right of action, and La. R.S. 51:1407, for injunctive relief and civil penalties contained therein, have never been dismissed. Although the June 1, 2016 judgment granted the exception of no cause of action as to the LMA claims, subject to thirty (30) days to amend, those claims were not ultimately dismissed. The only decretal language resulting in dismissal in both judgments refers to the amended petition and the unjust enrichment claim.

While the June 1, 2016 judgment dismissed the unjust enrichment claim, this is a partial final judgment. As stated previously, a judgment that only partially determines the merit of an action is a partial final judgment, and, as such, is appealable only if authorized by La. C.C.P. art. 1915. Rhodes, 817 So.2d at 66-67. The June 1, 2016 judgment dismissing the exception of no cause of action as to the unjust enrichment claim does not fit within any of the enumerated categories of La. C.C.P. art. 1915(A) for immediate appeal. A partial judgment that is not included in one of the enumerated categories of La. C.C.P. art. 1915(A) is not a final judgment for purposes of immediate appeal unless it is designated as "final" by the trial court after an express determination that there is no just reason for delay. La. C.C.P. arts. 1911(B) and 1915(B)(1). Louisiana Code of Civil Procedure article 1915 attempts to strike a balance between the undesirability of piecemeal appeals and the need for making review available at a time that best serves the needs of the parties. R.J. Messinger, Inc. v. Rosenblum, 2004-1664 (La. 3/2/05), 894 So.2d 1113, 1122. The June 1, 2016 judgment contains no such designation as to finality. As such, the partial judgment dismissing the unjust enrichment claims is not appealable, and this court lacks jurisdiction to review it. See La. C.C.P. art. 1915(B)(2) ; Richardson v. Tessier, 2007-0374 (La. App. 1 Cir. 11/2/07), 977 So.2d 55, 56. Additionally, we decline to convert this matter to an application for supervisory writs, since the application would have been dismissed as untimely pursuant to Uniform Rules-Courts of Appeal, Rule 4-3, and the granting of a writ application will not terminate the litigation at this time. The parties have an adequate remedy by review on appeal after a final judgment is rendered. See Best Fishing, 706 So.2d at 166-67.

The parties also argued that the granting of the motion to strike in the December 8, 2016 judgment dismissed all claims except for three paragraphs before dismissing the amended petition. A motion to strike is provided for in La. C.C.P. art. 964, which states, "[t]he court on motion of a party or on its own motion may at any time and after a hearing order stricken from any pleading any insufficient demand or defense or any redundant, immaterial, impertinent, or scandalous matter." A motion to strike is not an authorized or proper way to procure the dismissal of a complaint or cause of action. Carr v. Abel, 2010-835 (La. App. 5 Cir. 3/29/11), 64 So.3d 292, 296, writ denied, 2011-0860 (La. 6/3/11), 63 So.3d 1016. "A motion to strike is a means of cleaning up the pleadings, not a means of eliminating causes of actions or substantive allegations." Hazelwood Farm, Inc. v. Liberty Oil and Gas Corp., 2001-345 (La. App. 3 Cir. 6/20/01), 790 So.2d 93, 98, writ denied, 2001-2115 (La. 7/26/01), 794 So.2d 834. Furthermore, the trial court's ruling on a motion to strike is interlocutory in nature and, generally, is not appealable. See La. C.C.P. arts. 1841 and 2083 ; Louisiana Safety Ass'n of Timbermen v. Carlton, 2012-0775 (La. App. 1 Cir. 12/21/12), 111 So.3d 1076, 1081 n.3. An appellant is entitled to seek review of all adverse interlocutory judgments prejudicial to him in addition to the review of the final judgment. Id. ; See also Judson, 916 So.2d at 1112-1113. However, in the present case we have determined that there is no final judgment, so we have no jurisdiction to review an interlocutory ruling.

Under these facts, neither the December 8, 2016 judgment nor the June 1, 2016 judgment is a final appealable judgment, and therefore, this court dismisses the appeal.

MOTION FOR PARTIAL DISMISSAL

Defendants have filed a motion for partial dismissal of this appeal insofar as it addresses the LMA claims. Defendants argue that La. R.S. 51:134 gives a potential appellant only five days to appeal the trial court's ruling on an exception or it has the effect of res judicata. We have determined that the December 8, 2016 judgment is a partial judgment. Even though the amended petition was dismissed by the December 8, 2016 judgment, the monopoly claims in the original petition have never been dismissed and there remain other claims. As previously stated, this court's appellate jurisdiction extends to "final judgments," which are those that determine the merits in whole or in part. La. C.C.P. arts. 1841 and 2083 ; see Van ex rel. White, 808 So.2d at 483. However, a judgment that only partially determines the merits of an action is a partial final judgment and, as such, is immediately appealable only if authorized by La. C.C.P. art. 1915. Rhodes, 817 So.2d at 66-67. The December 8, 2016 judgment was not certified as final by the trial court either before the appeal or after we issued a rule to show cause for each judgment. Absent a designation of a judgment as final under La. C.C.P. art. 1915(B)(1), a partial judgment may be revised at any time prior to the rendition of the judgment adjudicating all the claims and the rights and liabilities of all the parties. La. C.C.P. art. 1915(B)(2) ; See MAPP Const., LLC v. Chenevert Architects, 2014-0653, (La. App. 1 Cir. 12/23/14), 2014 WL 7332109, at *2(unpublished opinion), writ denied, 2015-0164 (La. 4/17/15), 168 So.3d 397. In order to have subject matter jurisdiction, there must be either a final judgment or a final partial judgment. Louisiana Revised Statutes 51:134 does not eliminate the need to have an appealable judgment for jurisdiction of this court to attach. Therefore, the motion for partial dismissal is denied as moot based upon the dismissal of the underlying appeal.

CONCLUSION

For the above and foregoing reasons, we dismiss the appeal filed by the State of Louisiana, by and through its Attorney General Jeff Landry, and deny the motion for partial dismissal of the Louisiana Monopolies Act claims. Costs are assessed one-half to the State of Louisiana, by and through its Attorney General Jeff Landry, in the amount of $2,653.25 and one-half to defendants, Teva Pharmaceuticals USA, Inc., Ranbaxy Pharmaceuticals, Inc., Mylan Laboratories, Inc., and Mylan Pharmaceuticals, Inc.

APPEAL DISMISSED; MOTION FOR PARTIAL DISMISSAL DENIED AS MOOT.

      After the filing of this lawsuit, on January 11, 2016, Janies D. "Buddy" Caldwell was succeeded in office as the Attorney General by Jeff Landry.

      Teva Pharmaceuticals USA, Inc. and Ranbaxy Pharmaceuticals, Inc. later filed exceptions in those names only and indicated that Teva Pharmaceuticals Industries, Ltd., Ranbaxy Laboratories, Ltd. and Cephalon, Inc. had either never been served or were never properly served. The later three companies did not make a general appearance.

      The paragraphs that were stricken from the amended petition by the trial court were never dismissed.

      Louisiana Code of Civil Procedure article 1915(A) provides as follows:
      A final judgment may be rendered and signed by the court, even though it may not grant the successful party or parties all of the relief prayed for, or may not adjudicate all of the issues in the case, when the court:
      (1) Dismisses the suit as to less than all of the parties, defendants, third party plaintiffs, third party defendants, or intervenors.
      (2) Grants a motion for judgment on the pleadings, as provided by Articles 965, 968, and 969.
      (3) Grants a motion for summary judgment, as provided by Articles 966 through 969, but not including a summary judgment granted pursuant to Article 966(E).
      (4) Signs a judgment on either the principal or incidental demand, when the two have been tried separately, as provided by Article 1038.
      (5) Signs a judgment on the issue of liability when that issue has been tried separately by the court, or when, in a jury trial, the issue of liability has been tried before a jury and the issue of damages is to be tried before a different jury.
      (6) Imposes sanctions or disciplinary action pursuant to Article 191, 863, or 864 or Code of Evidence Article 510(G).