author: EZELL, Judge. AMY, J.,

text:
    MARGARET FISK MUNRO, et al. v. BRITISH AMERICAN OIL PRODUCING COMPANY, et al.
    16-1057
    Court of Appeal of Louisiana, Third Circuit.
    11/08/2017
    Rehearing Denied' January 10, 2018

      Leonard L. Kilgore, III, Esteban Herrera, Jr., Victor J. Suane, Jr., Sam 0. Lumpkin, Richard D. McConnell, Jr., Kean Miller, LLP, Post Office Box 3513, Baton Rouge, LA 70821, (225) 387-0999, COUNSEL FOR DEFENDANTS/RELATORS: Devon Energy Production LP as successor to Pennzoil Petroleum Company, Pennzoil Exploration and Production Company, PennzEnergy Exploration & Production Company
    Alan.J. Berteau, Charles S. MeCowan, III, L. Victor Gregoire, Jr., Kean Miller, LLP, Post Office Box 3513, Baton Rouge, LA 70821, (225) 387-0999, COUNSEL FOR DEFENDANTS/RELATORS: Chevron U.S.A., Inc. Gulf Oil Corporation .Chevron USA as successor in interest of British American Oil Producing Company
    Michael R. Phillips, Kean Miller, LLP, 909 Poydras Street, Suite 1400, New Orleans, LA' 70115, (504) 585-3050, COUNSEL FOR DEFENDANTS/RELATORS: Chevron U.S.A., Inc., Gulf Oil Corporation, Chevron USA as successor in interest of British American Oil Producing Company
    John E. W. Baay, II, J. Michael DiGig-lia, Eric S. Charleston, Gieger, Laborde. & Laperouse, L.L.C., 701 Poydras Street, Suite 4800, New Orleans, LA 70139-4800, (504) 561-0400, COUNSEL FOR DEFENDANT/RELATOR: Nippon Oil Exploration USA Limited
    Seth B. Hopkins, Tanya E. Dugas, Raley & Bowick, LLP, 1800 Augusta Drive, Suite 300, Houston, TX 77057, (713) 429-8050, COUNSEL FOR DEFENDANT/RESPONDENT: Black Elk Energy Offshore Operations, LLC
    J. Michael Veron, Alonzo P. Wilson, J. Rock Palermo,- Ill, Turner D. Brumby, Veron, Bice, Palermo & Wilson; L.L.C., Post Office Box 2125, Lake Charles, LA 70602-2125, (337) 310-1600, COUNSEL FOR PLAINTIFFS/RESPONDENTS: Margaret Fisk " Munro, Barton Fisk, Dianne Marie Fisk, Audra Dawn Cabral, Deena Greenhaw
    Michael H. Sehwartzberg, Shane Hinch, Vamvoras' • Sehwartzberg & -Associates, LLC, 1111 Ryan Street, Lake Charles, LA 70601, (337) 433-1621, COUNSEL FOR PLAINTIFFS/RESPONDENTS: Margaret Fisk Munro, Barton Fisk, Dianne Marie Fisk, Audra Dawn Cabral, Deena Greenhaw
    Court composed of Sylvia R. Cooks, Marc T. Amy, and Billy Howard Ezell, Judges.
   EZELL, Judge.

| Multiple defendants in an oilfield contamination lawsuit filed a joint motion to dismiss the Plaintiffs’ suit against them due to abandonment under La.Code Civ.P. art. 561. The Plaintiffs opposed the motion to dismiss, asserting that a bankruptcy filing against one of the Defendants automatically stayed all state court claims against, not only the bankrupt Defendant, but the other Defendants as well. After the trial court denied the motion to dismiss, the Defendants, who moved for dismissal, filed an application for supervisory writs with this court. A panel of this court denied the application. The matter returns to this court upon remand by the Louisiana Supreme Court for briefing, argument, and a full opinion. Following that consideration, the Defendants’ application for supervisory writs is denied.

Factual and Procedural Background

The Plaintiffs filed the petition instituting this claim in June 2012, alleging that the Defendant energy companies damaged their Calcasieu Parish property in the course of conducting oil and gas exploration activities on the property pursuant to a lease that was repeatedly amended and assigned. The petition alleged that the Defendants were solidarily liable for the damages occasioned by alleged trespass and contamination of the property. Due to these purported actions, the Plaintiffs sought cancellation of the lease, compensatory damages, and exemplary damages. The Plaintiffs also advanced a cause of action pursuant to La.R.S. 30:29.

|2The matter progressed initially with the trial court resolving exceptions filed by a number of the Defendants in December 2012. Thereafter, in September 2013, the Defendants answered the petition, doing so jointly. However, on August 19, 2015, attorneys for the present-day lessee, Black Elk Energy Offshore Operations, LLC, filed a “Notice of Bankruptcy Stay” (citation omitted) indicating that:

[O]n August 11, 2015, an involuntary petition of bankruptcy was filed against Black Elk Energy Offshore Operations, LLC in the United States Bankruptcy Court, Southern District of Texas. ... Pursuant to U.S.C. § 362(a), all creditors of the debtor(s) are stayed from any act, the commencement or continuation of any act, enforcement of any lien or judgment obtained against the debtor(s) or the property of their estate, or any court proceeding with respect to the enforcement of a lien or judgment against the debtor(s) or the property of their estate from and after the filing date of the bankruptcy petition, except as otherwise provided for by U.S.C. § 362(b).
All claims asserted against Black Elk Energy Offshore Operations, LLC, including all claims for fraudulent transfer and to pierce the corporate veil, are assets of the bankruptcy estate and can only be' prosecuted by the bankruptcy trustee.

The issue now under review was instituted on October 17, 2016, when the Defendants, other than Black Elk, (hereinafter “Movants”) filed a “Joint Ex Parte Motion and Incorporated Memorandum To Dismiss With Prejudice on Grounds of Abandonment.” Therein, the Movants observed that more than three years had passed since September 23, 2013, the time that all Defendants filed their joint answer and affirmative defenses. The Movants asserted that “[n]o further step by t&e parties in the prosecution or defense of this action, including discovery, has occurred since” the filing of that answer. Notably, the Movants suggested that “the filing of notice of Black Elk’s bankruptcy is not an action taken in the state district court and does not toll the prescriptive period for abandonment as to Movants.” | ¡¡They contended that, although abandonment operates without order, a formal order of dismissal should be entered by the trial court upon ex parte motion of a party.

However, the trial court did not enter such a formal order, but instead denied the ex parte motion 'to dismiss, noting on the judgment, that it did so after considering both the motion and “Plaintiffs’ Opposition[J” Afterwards, the Movants filed a motion for new trial, which was set for hearing. At the hearing, the Movants first challenged the trial court’s denial of the formal order upon filing of the ex parte motion pursuant to the procedure of La. Code Civ.P. art. 561. On the merits, the Movants pointed out the passage of three years since the filing of their answer and also argued that, although the matter was stayed as to Black Elk, it was not stayed as to them. In opposition, the Plaintiffs argued that the trial court must consider the matter stayed as to all Defendants, noting that Black Elk had assumed the defense for all of the Defendants and that all Defendants shared common counsel. The trial court denied the motion for new trial, finding that the parties were-sufficiently intertwined so as to require the application of the bankruptcy stay to the entire proceeding.

The Movants re-urged the motion to dismiss in an application for supervisory writs filed with this court. That application was denied by a panel of this court. See Munro v. British American Oil Producing Co., 16-1057 (La.App. 3 Cir. 12/28/16) (an unpublished writ ruling wherein the majority of the panel ruled: “WRIT DENIED. We find no error in the.trial court’s ruling.”). Subsequently, |4on June 16, 2017, the Louisiana Supreme Court granted the Movants’. application for -supervisory writ filed before that court, ruling: “Granted. Remanded to the court of appeal for briefing, argument, and full opinion.” See Munro v. British American Oil Producing Co., 17-655 (La. 6/16/17), 219 So.3d 1112.

Upon return to this court, the Movants assign the following as error in their brief to this court:

1. The district court erred by failing to recognize that the case had in fact been abandoned by operation of law pursuant to La. CCP art. 561.
2. The district court erred in denying the Joint Ex Parte Motion to Dismiss With Prejudice on Grounds of Abandonment (hereinafter “Joint Motion to Dismiss”) when such a motion was filed pursuant to -La. CCP art. 561 demonstrating that no parties had taken any steps in the prosecution or defense of the case over the prior three year period.
3. The district court erred by failing to enter a formal order of dismissal in response to the Joint Motion to Dismiss as required by La. CCP art. 561.
4. The district court also erred' when it considered the Appellees’ “Opposition” as a basis for the Denial of the Joint Motion to Dismiss (hereinafter “Denial”) and failed to either ignore or strike the Appellees’ “Opposition.”
5. The district court erred when it ruled that the bankruptcy of defendant Black Elk Energy Offshore Operations, LLC (“Black Elk”) stayed the entire case and served to interrupt the abandonment period with respect to Appellees’ claims against the applicants.

Discussion

Abandonment

Louisiana Code of Civil Procedure Article 561 provides, in pertinent part, for the abandonment óf a civil action in the trial court as follows:

A. (1) An action ... is abandoned when the parties fail to take any step in its prosecution or defense’ in the trial court for a period of three years, unless it is a succession proceeding:
|R(a) Which has been opened;
(b) In which an administrator or executor has been appointed; or
(c) In which a testament has been probated.
(3) This provision shall be operative without formal order, but, on ex parte motion of any party or other interested person by affidavit which provides that no step has been timely taken in the prosecution or defense of the action, the trial court shall enter a formal order of dismissal as of the date of its abandonment. The sheriff shall serve the order in the manner provided in Article 1314, and shall execute a return pursuant to Article 1292.
(4) A motion to set aside a dismissal may be made only within thirty days of the date of the sheriffs service of the order of dismissal. If the trial court denies a timely motion to set aside the dismissal, the clerk of court shall give notice of the order of denial pursuant to Article 1913(A) and shall file a certificate pursuant to Article 1913(D).
(5) An appeal of an order of dismissal may be taken only within sixty days of the date of the sheriffs service of the order of dismissal. An appeal of an order of denial may be taken only within sixty days of the date of the clerk’s mailing of the order of denial.
B. Any formal discovery as authorized by this Code and served on all parties whether or not filed of record, including the taking of a deposition with or without formal notice, shall be deemed to be a step in the prosecution or defense of an action;

See also Clark v. State Farm Mut. Auto. Ins.. Co., 00-3010 (La. 5/15/01), 785 So.2d 779, (wherein the supreme court explained that Article 561 requires that: 1) a party-takes some step in the prosecution or defense of the litigation; .2) the step, other than formal discovery, must appear in the record; and that 3) .the. step must have been taken place within three years of the last step taken by a party.).

On review, we are mindful that La.Code Civ.P. art. 561 “is to be liberally construed in favor of maintaining a plaintiffs suit.” Clark, 785 So.2d at 785. Additionally, an appellate court considers.a trial court’s findings of fact as to |fiwhether a step in the prosecution or defense of a case has been taken pursuant to the manifest error standard. Gueldner v. Allstate Ins. Co., 09-720 (La.App. 3 Cir. 2/10/10), 30 So.3d 1143. However, the question of whether a particular, proven fact precludes abandonment is a question of law that is reviewed by considering whether the trial court’s decision wás legally correct.’ Id.

Procedure

We first address the Movants’ assertion that the trial court erred in failing to enter the formal order of dismissal upon review of their ex parte motion to dismiss per La.Code Civ.P. art. 561(A)(3). Specifically, the Movants contend that the trial court erred in denying that motion after “considering Plaintiffs’ Opposition” as inscribed by the trial court on the order denying the motion. Tracking La.Code Civ.P. article 561, the Movants suggest that the trial court was required to order the dismissal and, only upon a motion to set aside the dismissal as authorized by La.Code Civ.P. art. 561(4), could the trial court have considered the Plaintiffs’ opposition.

On this point, we, note that the record is unclear as to the sequence of events. The Movants’ ex parte motion to dismiss was filed into the record on October 17, 2016, whereas the Plaintiffs’- opposition thereto was filed into the record on October 6, 2016. At the hearing on the motion for new trial, the trial court explained that:

In the past wheii someone has filed an ex parte order of dismissal under 561 and- the other party has an objection to it, the Court has set that for a contradictory hearing at the request of the parties. By the- plaintiffs submitting their opposition, I felt like the parties were agreeing to the Court deciding it based on the briefs because the defendants had filed a memorandum with their ex parte order. And given the law in Louisiana that courts do not grant ex parte orders unless the mover is clearly entitled to it by law, the Court felt that I could review all of the briefing by the parties and make a decision, and that’s what the Court did.
|7So that’s the reason I denied the ex parte order in—maybe in violation of how Code of Civil Procedure 561 is actually written.

Despite the lack of procedural clarity in the preliminary stages of this matter, it is clear-that the trial court differed in its legal interpretation as to the significance of the Notice of Bankruptcy. In this regard, the affidavit attached to the motion to dismiss represented that:

[A] Notice of Bankruptcy Stay was filed on or about August 19, 2015 on behalf of Black Elk Energy Offshore Operations, LLC. However, the filing of a bankruptcy is not an action taken in the state district court and the filing of such bankruptcy notice does not toll the prescriptive period for abandonment as to the non-bankrupt defendants who are the Movants in the accompanying Joint Ex Parte Motion.

In any event, and whether the matter was resolved by the trial court at the time of the motion for new trial or whether it did so at the time of the motion to dismiss, it is clear that the trial court ultimately deter: mined that the Movants’ affidavit failed to demonstrate that no step in the prosecution or defense of the action had been taken in three years. Thus, we turn to consideration of the correctness of the trial court’s legal conclusion that the federal bankruptcy stay issued as, to the case against. Black Elk tolled the prescriptive period for abandonment against the remaining, non-bankrupt Defendants as well.

Merits

On the merits, we note that the Movants’ reference the filing of the Defendants’ answer on September 23, 2013, as the date of the last step in the prosecution or defense of the case for abandonment purposes. Their motion to dismiss was filed October 17, 2016. In contrast, the Plaintiffs contend that upon receipt of the notice of the automatic stay order issued in favor of Black Elk pursuant to 11 U.S.C. § 362, they were unable to take further action in the present state cqurt case until resolution of the bankruptcy proceedings in federal court. To |sdo otherwise, the Plaintiffs contend, required them to choose between abandonment or the chance of violating the federal bankruptcy stay.

There are two exceptions to the abandonment rule as set forth in La.Code Civ.P. art. 561. One of the exceptions applies when a defendant waives his right to assert abandonment by taking actions inconsistent with an intent to treat the case as abandoned. Clark, 785 So.2d 779. The second exception, which is relevant to the present case, is based on the concept of contra non valentem and applies when the failure to prosecute is caused by circumstances which are beyond the plaintiffs’ control. Id.

With regard to the federal bankruptcy stay, 11 U.S.C. § 362 states, in pertinent part:

(a) Except as provided in subsection
(b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970, operates as a stay,- applicable to all entities, of—
(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other action or proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title[.]

Significantly, in this case, the bankruptcy proceedings relate only to Black Elk, the bankrupt debtor, whereas the remaining Defendants, the Movants, are not parties to those federal proceedings. Thus, as posed by the parties, the question presented by this motion to dismiss is whether the stay issued in favor of Black Elk can be viewed as extending to the proceeding against the Movants for abandonment purposes.

This court has held that “[t]he filing of a federal bankruptcy petition operates as an automatic stay under 11 U.S.C. § 362 that prevents creditors from commencing or continuing judicial or administrative proceedings against the |9debtor.” Ring Const., LLC v. Chateau Des Lions, LLC, 05-568, p. 6 (La.App. 3 Cir. 12/30/05), 918 So.2d 1172, 1176, writ denied, 06-584 (La. 5/5/06), 927 So.2d 325. Although the automatic stay imposed by Section 362 normally applies to a party or parties filing bankruptcy, federal jurisprudence has held that an automatic stay in bankruptcy court may be extended to non-bankrupt codefendants in exceptional situations, explaining as follows:

This “unusual situation,” it would seem, arises when there is such identity between the debtor and the third-party defendant that the debtor may be said to be the real party defendant and that judgment against the third-party defendant will in effect be a judgment or finding against the debtor. An illustration of such a situation would be a suit against a third-party who is entitled to absolute indemnity by the debtor on account of any .judgment that might result against them in the case. To refuse application of the statutory stay in that case would defeat the very purpose and intent of the statute.

A.H. Robins Co., Inc., v. Piccinin, 788 F.2d 994, 999 (4th Cir. 1986), cert. denied, 479 U.S. 876, 107 S.Ct. 251, 93 L.Ed.2d 177 (1986).

Plaintiffs contend that Black Elk was obligated to defend and is providing a defense for its Codefendants in the instant case. Furthermore, pursuant to an agreement between the parties, Black Elk undertook the representation of all parties and has agreed to indemnify the other Defendants if an adverse judgment is rendered against them. Thus, Plaintiffs maintain any efforts that they would have taken to advance the case against Black Elk’s Codefendants, i.e. Movants, would have resulted in a violation of the automatic stay because the assets of the bankruptcy estate would have'been depleted either by the payment of attorney fees or other litigation costs or the payment of an adverse judgment.

The claims against Black Elk and its Codefendants are so intertwined that the trial court properly concluded that the bankruptcy stay applied to Movants as well. The bankruptcy proceedings filed by Black Elk combined with its agreement to defend and indemnify its non-bankrupt Co-defendants provided justification for |! pPlaintiffs’ failure to take steps in the prosecution of the case against the’ non-bankrupt Codefendants. •

On that basis, we conclude that the trial court did not err in rejecting the Movants’ claim of abandonment.

DECREE

For the foregoing reasons, the application fo.r supervisory writs filed by the Mov-ants/Relators, Nippon Oil Exploration USA Limited, British American Oil Producing Company, Gulf Oil Corporation, Chevron USA, Inc., Pennzoil Petroleum Company, Pennzoil Exploration and Production Company, PennzEnergy. Exploration and Production, LLC and Devon Energy Production, LP, is denied. The trial court’s Judgment of October 14, 2016, and its Judgment on Defendants’ Motion for New Trial of December 15, 2016, are affirmed.

Costs of this proceeding are assessed to the Defendants/Relators, Nippon Oil Exploration USA Limited, British American Oil Producing Company, Gulf Oil Corporation, Chevron USA, Inc., Pennzoil Petroleum Company, Pennzoil Exploration and Production Company, PennzEnergy Exploration and Production, LLC and Devon Energy Production, LP. ■

WRIT DENIED.

AMY, J., dissents and assigns reasons.

AMY, J.,

dissenting.

hi respectfully dissent from the majority opinion as I would grant the instant writ application.

I first note that a panel of this court recently addressed the issue now before the court in Rideau v. Louisiana Farm Bureau Cas. Ins. Co., 16-225 (La.App. 3 Cir. 9/28/16), 201 So.3d 410-and .concluded that the automatic stay - of proceedings against a bankrupt debtor- provided in 11 U.S.C. § 362 does -not automatically extend to a bankrupt defendant’s non-bankrupt co-defendants. In Rideau, the plaintiff settled his personal injury claims as, to the tortfeasor and his insurer, but had outstanding claims against the plaintiffs employer and its insurer, American Home. The employer thereafter filed a “Suggestion of Bankruptcy” in January 2012. In June 2015, American Home filed an ex parte motion to dismiss oh grounds of abandonmént, which the trial court granted. Id. While the plaintiff alleged that he was prevented from moving forward'with his claim against American Home as “ ‘the case had been stayed’ by virtue of Coach’s bankruptcy in January 2012[,]” the panel rejected 'that argument. Id. at 413. Instead, the Rideau panel affirmed the dismissal, noting.its agreement with American Home’s contention that “there was nothing preventing Mr, Rideau from either accepting its settlement offer or taking a step in the prosecution of his action against American Home, which was not subject to thé stay or a party in bankruptcy.” Id.

|2In doing so, the Rideau panel referenced the first circuit’s decision in Jackson v. BASF Corp., 04-2777 (La.App. 1 Cir. 11/4/05), 927 So.2d 412, writ denied, 04-2444 (La. 3/24/06), 925 So.2d 1231, a decision again factually similar to this matter. In Jackson, the plaintiffs filed a class action suit in December 1999, in which Borden Chemical, Inc. was name as a defendant. In April 2001, Borden Ghemical filed for bankruptcy, and in October 2004, the remaining, non-bankrupt co-defendants filed an ex parte motion to dismiss due to abandonment. Although the trial court initially dismissed the plaintiffs’ claims, the trial court subsequently vacated its ruling and reinstated the plaintiffs’ claims as to the non-bankrupt co-defendants. Id. The first circuit initially denied the non-bankrupt co-defendants’ writ application; however, the supreme court granted the writ application in that court and remanded the matter to the first circuit for briefing, argument, and opinion. Id.

On remand in Jackson, 927 So.2d 412, the first circuit granted the writ application and reinstated the trial court’s initial order of dismissal. The first circuit pointed out that the case involved no questions of fact as all parties agreed that the last step in the prosecution took place over three years prior to the filing of the motion to dismiss. Id. Similar to the plaintiffs’ contention in this case, the plaintiffs in Jackson argued that they were “excused from taking action” against both the bankrupt defendant and non-bankrupt co-défendants as a result of the automatic stay. Id. at 416. However, the first circuit explained that:

The[re] [are] only two categories of causes outside the record [that] satisfy the jurisprudential exceptions to the abandonment rule: (1) a plaintiff-oriented exception, based upon contra non valentem, that applies,when failure to prosecute is caused by circumstances beyond the plaintiffs control; and (2) a defense-oriented exception based, upon acknowledgement that applies when the defendant waives his right to assert abandonment by taking actions inconsistent with intent to treat the case as abandoned. Clark, 00-3010 at p. 7, 785 So.2d at 784-85.
Plaintiffs contend that they fall within the ambit of these exceptions due to the automatic stay issued in the bankruptcy case of other co-defendants in Delaware, pursuant to XI USC § 362. Pursuant to RLa.Code Civ. P. art. 561, it is the plaintiffs burden to prove the applicability of one of these exceptions. .
Federal law provides that the automatic stay authorized by XI USC § 362 applies only to the bankrupt party and does not apply to nonbankrupt co-defendants. Wedgeworth v. Fibreboard Corp., 706 F.2d 541, 544 (5th Cir.1983). It is well settled in this circuit that the bankruptcy of a co-defendant does not relieve a plaintiff from taking steps in the prosecution of his case against the remaining defendants within the time period prescribed by La.Code Civ. P. art. 561. See Sassau v. Louisiana Workover Service, Inc., 607 So.2d 809, 812 (La.App. 1 Cir. 1992), writ denied, 609 So.2d 259 (La. 1992). Plaintiffs did not introduce any evidence to suggest that the automatic stay issued by the Delaware bankruptcy court extended protection to the non-bankrupt co-defendants in the instant case, BASF and Phil C. Greeson. Plaintiffs further failed to introduce any evidence that defendants, BASF and/or Phil Greeson, waived their rights to assert abandonment or took actions inconsistent with an intent to treat the case as abandoned. Therefore, we conclude that plaintiffs, failed to carry-their burden and prove an exception to the abandonment rule pursuant to La.Code Civ. P. art. 561, and set forth in Clark, 00-3010 at p. 7, 785 So.2d at 784-85. We further .conclude that the trial court committed legal error by issuing its Order of December 14, 2004, that set aside its Order of October 6, 2004, and reinstated plaintiffs’ cause of action against the defendants, BASF and Phil C. Greeson.

Id. at 416-17.

In my opinion, the reasoning of both Rideau and Jackson is compelling iri the present matter. The Notice of Bankruptcy in this ease specifically applied only to Black Elk. I also point out that, in addition to the fact that 11 U.S.C. § 362(a)(1) (emphasis added) specifically stays “a judicial ... proceeding against the debtor[,]” federal jurisprudence further indicates that the stay does not extend to non-bankrupt defendants. See, e.g., GATX Aircraft Corp. v. M/V Courtney Leigh, 768 F.2d 711 (5th Cir. 1985); Wedgeworth, 706 F.2d 541.

Additionally, in Martin v. David, 95-1411 (La.App. 3 Cir. 12/7/95), 666 So.2d 1136, a panel of this court referenced such federal jurisprudence regarding the extension of the federal bankruptcy stay in its refusal to extend the stay to the codefen-dants before it. In Martin, the trial 'court rendered a judgment in favor of an inter-venor and against the'defendants, further holding that two of the three defendants were liable for “full and complete indemnity” to the other defendant, Scottsdale |4Insurance Company, for any amount it was obligated to' pay to the intervenor. Id. at 1137. Scottsdale and one other defendant appealed. Id. While the appeal was pending, one of the defendants responsible for indemnifying Scottsdale filed for bankruptcy, and Scottsdale sought a stay of the proceedings On that basis'. Id. A panel of this court granted thé motion to stay only as to proceedings against the bankrupt defendant: “In Pitts v. Unarco Industries, Inc., 698 F.2d 313 (7th Cir.1983), the court stated, ‘The’ clear language of Section 362(a)(1) thus extends the automatic stay provision only to the debtor filing bankruptcy proceedings and not to nonbank-rupt codefendants.’. In the instant case, the stay relates only to [the bankrupt defendant.]” Id. at 1137. See also Capitol House Pres. Co., L.L.C. v. Perryman Consultants, Inc., 08-0367 (La.App. 1 Cir. 8/28/09), 47 So.3d 408, writ denied, 09-2638 (La. 2/12/10), 27 So.3d 856, cert. denied, 562 U.S. 831, 131 S.Ct. 104, 178 L.Ed.2d 30 (2010).

Although federal jurisprudence has found that the automatic stay may be extended to co-defendants in “unusual situations,” I do not conclude that the present matter presents such a situation. See A.H. Robins Co., Inc., v. Piccinin, 788 F.2d 994 (4th Cir. 1986), cert. denied, 479 U.S. 876, 107 S.Ct. 251, 93 L.Ed.2d 177 (1986). In A.H. Robins, the Fourth Circuit explained:

This “unusual situation,” it would seem, arises when there is such identity between the debtor and the third-party defendant that the debtor may be said to be the real party defendant and that a judgment against the third-party defendant will in effect be a judgment or finding against the debtor. An illustration of such a situation would be a suit against a third-party who is entitled to absolute indemnity by the debtor on account of any judgment that might result against them in the case. To refuse application of the statutory stay in that case would defeat the very purpose and intent of the statute.

Id. at 999. Further, regarding jurisdiction, “even though a nonbankruptcy court cannot terminate, annul, modify, or condition the automatic stay, it can determine that the automatic stay does not apply, or the extent to which it does apply, to a matter before that court.” In re Franklin, 179 B.R. 913, 925 (U.S. Bankruptcy Court, E.D. California 1995). In In re Coho Resources, Inc., 345 F.3d 338, 345 (5th Cir. 2003) (footnotes omitted), the Fifth Circuit explained that:

State courts ... routinely rule on the applicability of a bankruptcy stay or permanent injunction to state judicial proceedings. In Overbey v. Murray [569 So.2d 303 (Miss.1990) ], the Mississippi Supreme Court explained that ‘courts of this state have jurisdiction to determine whether a pending action is stayed by a ruling of the bankruptcy court,’ yet cautioned that state courts should ‘consider deferring close questions involving the applicability of exceptions to the automatic sta^ to the bankruptcy court.

Yet, Coho did not involve a state court’s extension of a stay to a co-defendant.

As far as the application of the theory contra non valentem, I note that the plaintiffs rely on Wolf Plumbing, Inc. v. Matthews, 47,822, 47,825 (La.App. 2 Cir. 9/25/13), 124 So.3d 494, unit denied, 13-2510, 13-2516 (La. 1/17/14), 130 So.3d 949, 950. In that case, and applying the theory of contra non valentem, the second circuit found that the abandonment period was suspended while a bankruptcy stay had been in effect against the principal defendant/third party plaintiff. However, Wolf Plumbing was not one involving extension of a bankruptcy stay to co-defendants. Moreover, the principal defendant/third party plaintiff filed a motion to lift the stay with the bankruptcy court and did so prior to the conclusion of the abandonment period as it applied to the defendants in her own third party proceeding. Id.

Regarding the bankruptcy court’s lift of the stay in Wolf Plumbing, 124 So.8d at 500, the second circuit explained:

The bankruptcy judge clearly considered the entire state court case to be under his control. He was reluctant initially to ■lift the stay, but did lift the stay for plaintiff, Wolf Plumbing, to proceed, as well as for the debtor to proceed with her reconventional and third party demands. The bankruptcy judge further required that Matthews is to give half of the net proceeds she recovers to the trustee for the benefit of her creditors.
The bankruptcy court’s inherent power to exercise control over all assets of a bankrupt debtor in order to maximize the recovery available to his or her creditors requires the finding in this case. The trial court correctly recognized that judicial efficiency as well as equity principles, together with applicable federal precepts and policy considerations underlying Louisiana’s abandonment rule, dictated the implication of the contra non valentem exception to abandonment under these facts and circumstances. Accordingly, we find the claims in this case were stayed |fluntil the appropriate motion for relief from the stay was granted by the bankruptcy court.

Yet, in this case, I see no indication that the plaintiffs pursued available avenues to safeguard their claim against the non-bankrupt defendants during the period pri- or to abandonment. Notably, they did not pursue an extension of the bankruptcy matter in the federal proceeding. Nor did they seek a stay as to Black Elk’s co-defendants in the underlying state matter. Thus, at no time prior to the expiration of the period of abandonment set -forth by La.Code Civ.P. art. 561 did the plaintiffs seek relief in this regard. Accordingly, I do not find that circumstances outside of the plaintiffs’ control precluded them from prosecuting their claim against the mov-ants, so as to warrant application of the contra non valentem exception to abandonment. See Clark, 785 So.2d 779.

For these reasons, I conclude that the trial court erred in rejecting the movants’ claim of abandonment as more than three years expired following the final step in the prosecution or defense of this matter. I would, therefore, grant the writ application, entering a judgment of dismissal pursuant to La.Code Civ.P. art. 561.

      . The petition lists the plaintiffs as Margaret Fisk Munro (appearing through her court-appointed curator, Barton L. Munro), Dianne Marie Fisk, Barton Fisk, Deena Greenhaw, and Audra Dawn Cabral.

      . The petition names the defendants in the action as: British-American Oil Producing Company; Gulf Oil Corporation; Chevron USA, Inc.; Pennzoil Petroleum Company; Pennzoil Exploration and Production Company; PennzEnergy Exploration and Production LLC; Devon Energy Production, LP; Nippon Oil Exploration USA Limited; and Black Elk Energy Offshore Operations, LLC.

      . The motion was filed by Nippon Oil Exploration USA Limited, British American Oil Producing Company, Gulf Oil Corporation, Chevron USA, Inc., Pennzoil Petroleum Company, Pennzoil Exploration and Production Company, PennzEnergy Exploration and Production, LLC and Devon Energy Production, LP.

      . In ruling, the trial court cited jurisprudence on the issue of whether a bankruptcy stay interrupts the abandonment period against non-bankrupt defendants, before explaining:
      [T]he reason the Court denied the ex parte order originally is because of how the parties were intertwined, that one law firm represented all the defendants. So ‘ that’s still the Court’s thought that because of its experience with bankruptcy and the stay applying to the whole state proceeding normally generally [sic] agreed by the parties and because all the defendants were represented by Black Elk’s counsel, the Court is going to stay with its original decision and deny the motion for a new trial.


source: Caselaw Access Project

author: COOKS, Judge.

license: Public Domain

text:
    DIRECT TECH DRILLING, LLC v. DANRIK CONSTRUCTION, INC., et al
    17-324
    Court of Appeal of Louisiana, Third Circuit.
    11/22/2017
    Rehearing Denied February 21, 2018

      Teresa D. Cop, Raster & Cop, LLC, P.O. Box 815, Zachary, LA 70791, -(225) 658-5450, COUNSEL FOR PLAINTIFF/APPELLEE, Direct Tech Drilling, LLC
    Richard Mary, Richard Mary and Associates, 10641 Pecue Lane, Baton Rouge, LA 70810, (225) 926-1451, COUNSEL FOR DEFENDANT/APPELLANT: Dan-rik Construction, Inc.
    Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks and Shannon J. Gremillion, Judges.
   COOKS, Judge.

12Panrik Construction, Inc. entered into an agreement with BellSouth in December of 2012 to install approximately 27,000 feet of cable. This endeavor involved laying cable and innerduct underneath the Calca-sieu River, which necessitated boring under the river to lay a polyvinyl pipé through which the cable and innerduct would be fitted.

After one unsuccessful attempt with a different subcontractor, Danrik subcón-tracted with- Direct Tech Drilling, LLC, to install pipe for the purpose of running communications cable across the Calcasieu River. The original quote for the job was $23,000.00. However, after beginning the project, .Direct Tech determined it would have to use a more expensive process to complete the job. Thus, the parties agreed that Direct Tech was to receive $46,000.00 as the contract price. These facts were undisputed.

.Direct Tech eventually bored and placed a pipe under the Calcasieu River. This process occurred on August 22 and 23, 2014. The pipe installed was not purchased by Direct Tech, but was provided to them by Danrik. Direct Tech did not “proof’ the pipe to determine if the pipe was open and could be used’ to run cable under the river. Dahrik eventually determined that cable could not be pulled through the pipe; thus, the pipe, after installation, was unusable for its intended purpose.

Danrik attempted to resolve the matter themselves, trying to blow air-and water through the pipe to clear any possible obstruction. These attempts were unsuccessful. They also attempted to drill another bore on two occasions. During these attempts, Danrik also contacted K-Jon Sewer and Septic to clear the pipe. Using a waterjet and ordering hose to insert, into the pipe, K-Jon was partially able to clear the pipe. However, testimony established the diameter within the cleared ^portion of the pipe was only sufficient to get the cable through, but would not fit the inner-duct.

Danrik acknowledged despite the fact the pipe would only be able to accommodate the cable and not the innerduct, it was paid in full by BellSouth. Rick Judice, one of the owners of Danrik, testified they likely “were going to get caught with that one day.” Because of the fact the pipe was not usable after Direct Tech finished laying it, Danrik refused to pay the invoice it received from Direct Tech. In response, Direct Tech proceeded to file a Material-man’s Lien against Danrik and notice letters were sent to all parties, putting them on notice of Direct Tech’s claim.

After suit was filed by Direct Tech, Dan-rik filed a reconventional demand claiming it had incurred expenses in order to make the pipe usable. Direct Tech claimed this was the first time it was given notice or had knowledge of such a claim by Danrik.

The matter came to trial on June 27, 2016. After trial, judgment was rendered in favor of Direct Tech and against Danrik in the amount of $46,000.00, the: full amount of the contract. In its oral reasons for judgment, the trial court focused on the fact that the pipe eventually was able to be used by Danrik and that Danrik was paid in full by BellSouth. The trial court stated, because there was no specific provision in the contract requiring Direct Tech to proof the pipe, Danrik “can’t hold them responsible for something the parties never agreed to, that there never was a meeting of the minds.” Attorney fees weré also awarded to Direct Tech in the amount of $6,500.00 and $350.00 was awarded for the cost of filing suit and recording the lien. The trial court denied Direct Tech’s request' for penalties, finding Danrik had “genuine concerns, and they thought that was a valid defense to paying,” thus their actions were not malicious. The trial court denied UDanrik’s reconventional demand against Direct Tech. A motion for new trial was filed by Danrik and denied.

This appeal followed, wherein Danrik asserts the following issues with the trial courts judgment:

1.Was Direct Tech’s lien timely filed?

2. Did the trial court err when it determined that Direct Tech had fulfilled its contract?

3. Assuming that Direct Tech substantially performed its obligations under the contract, which is denied, did the trial court err when it failed to allow Danrik credit for the cost of completing the contract?

Direct Tech answered the appeal and requested this court raise the amount of attorney fees awarded by the trial court.

ANALYSIS

The facts are undisputed that Danrik entered into a contract with BellSouth to install fiber optic cable and innerduct under the Calcasieu River. Danrik then subcontracted a portion of the work to Direct Tech, whose job it was to bore a polyvinyl pipe underneath the river to house the cable and innerduct. Testimony established Direct Tech was aware of the intended use of the polyvinyl pipe.

Direct Tech completed its boring of the pipe. Several days after completion of its work, Danrik determined the pipe was not usable as it was blocked for some undetermined reason. Therefore, Danrik could not place the fiber optic cable through the pipe as required by the contract with BellSouth. Danrik was then forced, at its expense, to bring in another subcontractor to open the pipe enough to run the fiber optic cable through. All testimony established the pipe would not have sufficient diameter to later install the innerduct. Danrik was paid in full by BellSouth as set forth in the contract between those two parties.

■ Much ado was made about the issue of “proofing” the pipe and whether it was provided for in the contract. We find this issue irrelevant in resolving the | .^ultimate issue presented in this case. A construction contract at the very least contains an implied understanding between the parties that the thing so constructed can be used for its intended purpose unless expressly stated otherwise. As an example, Danrik notes if a party were to contract for the installation of a water line, it would be implicit in any such installation that the line be capable of carrying water, and there would be no compliance with the contract if the line was not capable of carrying water. The same situation, Danrik insists, applies here. Fitness for the purpose intended requires that the pipe installed by Direct Tech must be capable of housing cable. While the contract may well have been silent as to the necessity or any obligation to “proof’ the pipe, there still remained the implicit obligation on Direct Tech’s part to provide a pipe fit for its intended use. The testimony established Direct Tech was aware that the intended purpose of the pipe, which- it had been contracted to bore under the river, was the housing of fiber optic cable and innerduct. Direct Tech acknowledged in its brief that “Austin Gautreaux was informed Danrik would be installing fiber and innerduct.” When the pipe was found to be incapable of accommodating the fiber optic cable and innerduct, it was not fit for its intended purpose. The pipe did not become partially fit for its intended purpose until Danrik brought in K-Jon to blow open the pipe sufficiently to accommodate the cable.

Under Louisiana law, a contractor is entitled to recover the contract price even though defects and omissions are present when he has substantially performed the duties set forth under the contract. Rice v. Mesa Gen. Contr., L.L.C., 08-115 (La.App. 5 Cir. 05/27/08), 986 So.2d 122; Mayeaux v. McInnis, 00-1540 (La. App. 1 Cir. 9/28/01), 809 So.2d 310, writ denied, 01-3286 (La. 3/8/02), 810 So.2d 1164. This court in Transier v. Barnes Bldg., LLC, 14-1256, p. 14 (La.App. 3 Cir. 6/10/15), 166 So.3d 1249, 1260, quoted the following language as to the meaning of “substantial performance:”

^Determination of substantial performance is a question of fact about whether the construction is fit’ for' its intended purpose despite deficiencies. Factors that may be considered in determining whether the contractor achieved substantial performance include the extent of the defects or non-performance, the degree to which the purpose of the contract has been impaired, the ease of correction, and the use or benefit to the owner of the work performed.
Cascio v. Carpet, 42,653, pp. 10-11 (La. App. 2 Cir. 10/24/07), 968 So.2d 844, 851 (citation omitted).

“Where the owner presents evidence of the cost of completion of the work or correction of the defective work, the contract price may be reduced by that amount.” Maxwell v. Cayse, 10-680, p. 4 (La.App. 3 Cir. 12/8/10), 54 So.3d 118, 122, (quoting Mount Mariah Baptist Church, Inc. v. Parnell’s Associated Elec., Inc., 36,361, p. 12 (La.App. 2 Cir. 12/20/02), 835 So.2d 880, 888, writ denied, 03-555 (La. 5/2/03), 842 So.2d 1101).

The controlling question here is whether the trial court manifestly erred in finding that Direct Tech “substantially performed” the duties set forth under the contract. It is true Danrik was able to sufficiently correct the defects ip the pipe to install the cable. These repairs, completed by K-Jon, amounted to slightly less than $5,000.00 and were achieved in a relatively short period of time, such that no penalty was assessed against Danrik by BellSouth. Further, as the trial court noted Danrik received the full negotiated contract price from BellSouth.

However, under the law 'set forth above, the trial court erred in not awarding 'Dan-rik a reduction in the contract price by the amount it paid to K-Jon to repair the pipe.

The evidence established Danrik received two invoices from K-Jon in regards to the work performed to open up the pipe. One invoice, which at the date of trial had been paid, amounted to $1,551.25. The second invoice, which had yet to be paid at the time of trial, was. for $3,250.00. Thus, the total amount owed to |7K-Jon by Dan-rik is $4,801.25. We find Danrik is entitled to reduce the contract amount owed to Direct Tech by that amount.

Danrik also argues it is entitled to recover expenses .for repair attempts it made to make the pipe fit for its intended purpose. For several reasons, we find Dan-rik is not entitled to. these claimed amounts. Danrik maintained it incurred expenses for attempting to drill a bore on two occasions after Direct Tech left the job. The testimony established that Danrik attempted to drill a bore even though it was aware it likely did not have the proper equipment to drill a bore of that length. Not surprisingly, the attempt by Danrik failed. Danrik’s second attempt'to drill a bore occurred after K-Jon was contacted, had been to the site, and was waiting on additional hosing which it believed (correctly so) would clear the pipe. We find these attempts were unlikely to succeed and not prudent decisions; and thus, were unlikely to “correct” or “complete” the job. Therefore, we decline to reduce the contract amount awarded to Direct Tech by these expenses. •

Direct Tech, on the other hand, was unable to sufficiently prove the problems with the pipe resulted from the pipe not being fused correctly, which it alleges allowed sediment to block the pipe. The evidence established that-the pipes were fused by a previous subcontractor prior to Direct Tech contracting with Danrik. There was no testimony in the record to indicate any problems existed with the fusing of the pipe. Certainly, personnel for Direct Tech had access to the pipe during the installation process, and voiced, no objections or reservations concerning the pipe’s fitness for the construction project it agreed to undertake. Further, there was testimony from Casey Crawford, the only expert called at trial, that problems with a fuse breaking typically occur prior to the pipe being placed in the hole. He also testified a waterjet, as was used in the repair process by K-Jon, would typically clear out a pipe that is blocked by debris to its full annular size. However, in this case, the waterjet was only able to clear out the pipe sufficient to fallow the cable to be inserted, but not to its full diameter. This to him would indicate the pipe was not blocked because of any accumulation of sediment from leaking at the fused areas. The assertions that the pipes were not usable because of improper fusing was entirely speculative and not proven,

Direct Tech also alleged the pipes (which were supplied by BellSouth) were left out in the open at the job site in excess of the twenty-two days the specifications called for to install underground. Counsel for Direct Tech argued ultra violet rays from the pipes being left out in the sun could cause the pipes to become brittle and more susceptible to malfunction. No evidence was presented to validate this argument, nor was there any testimony that the pipes appeared to be brittle during the installation process. Moreover, the evidence does not support the allegation that the pipes had been left outside for over twenty-two days. There was testimony the pipes were delivered to the job site on August 5, 2014. It is uncontroverted that the pipes were installed underground on August 23,2014. Thus, there is no basis for Direct Tech’s. allegations that any problems with the pipes may have been caused by being left outdoors in excess of twenty-two days.

The trial court awarded Direct Tech $6,500.00 in attorney fees for.the efforts it expended at trial. Direct Tech answered the appeal and requests additional attorney fees. Considering our findings on appeal, we reverse the trial court’s award of $6,500.00 to Direct Tech for attorney fees and deny its request for attorney fees on appeal. Direct Tech also, in brief, requests we reverse the portion of the trial court’s judgment denying its request for penalties. However, Direct Tech’s answer to the appeal only asked for additional attorney fees and did not reference the trial court’s denial of penalties; thus, that portion of the judgment is not before us on appeal.

Danrik requests attorney fees pursuant to La.R.S. 9:4833B, which allows for an award of attorney fees against Danrik for cancellation of the lien. However, the |9record indicates Danrik failed to send Direct Tech a written request to cancel the lien as required by statute. Therefore, we deny .Danrik’s request for attorney fees.

Danrik has noted, in brief, the fact that the fused pipe, in its repaired state does not have sufficient diameter to house in-nerduct. Rick Judice testified that Danrik could “get caught with that one day.” However, at this time any potential claim by BellSouth is wholly speculative, and not ripe for adjudication at this stage of the proceedings. Moreover, any potential third-party claim for contribution or reimbursement by Danrik against Direct Tech is also not ripe for adjudication at this stage.

DECREE

For the foregoing reasons, the’judgment of the trial court awarding Direct Tech the full contract price of $46,000.00 is amended to reduce that amount by $4801.25 for the amount paid by Danrik to K-Jon to partially clear the pipe. The award of attorney fees to Direct Tech is reversed and set aside. Direct Tech’s request for attorney fees on appeal is denied. The trial court’s denial-of penalties is affirmed. All costs of this appeal are assessed equally to. the parties.

AFFIRMED IN PART, AS AMENDED; REVERSED IN PART; AND RENDERED.

      . "Proofing” the pipe is done by blowing a mandrel from one end of the pipe to the other to determine if it is' clear and free from obstructions.


author: CONERY, Judge.

text:
    STATE of Louisiana IN the INTEREST OF L.F.B.
    JAC 17-429
    Court of Appeal of Louisiana, Third Circuit.
    Opinions rendered 12/28/2017

      Tara B. Hawkins, Attorney at Law, 716 Hodges Street, Post Office Box 3756 (70602), Lake Charles, Louisiana 70601, (337) 313-4090, COUNSEL FOR APPELLANTS: G.B and Ri.B. (Maternal Grandparents)
    Thomas W. Saunders, Jr., 1919 Kirkman Street, Lake Charles, Louisiana 70601, (337) 491-2067—Office, (337) 491-2654— Fax, COUNSEL FOR APPELLEE: State of Louisiana, Department of Children & Family Services
    Amy E. McGray, Mental Health Advocacy Service/Child Advocacy Program, 1 Lakeshore Drive, Suite 1585, Lake Charles, Louisiana 70601, (337) 491-2461— Office, (337) 491-2464—Fax, COUNSEL FOR OTHER APPELLEE: L.F.B. (child)
    Court composed of John D. Saunders, John E. Conery, and D. Kent Savoie, Judges.
   CONERY, Judge.

| ¶ Since rendering its decision on October 18, 2017, this court has been apprised, through counsel for the State of Louisiana through the Department of Children and Family Services (DCFS) and the child’s attorney in their rehearing requests, that the minor child, L.F.B., has been adopted by her putative paternal aunt and the aunt’s husband and this child in need of care case has now been concluded. Inasmuch as there is no longer any child in need of care case pending in the trial court in Docket No. 27496, we have no alternative but to recall our remand order and dismiss this appeal.

We addressed and denied the jurisdictional issue raised by counsel for DCFS and counsel for the minor child in our original opinion. As we discussed in our original opinion, the grandparents had filed a petition for custody of L.F.B., which was denied-by the juvenile court judge on the basis that the juvenile court had exclusive jurisdiction over the child’s custody as long as the CINC case was ongoing pursuant to La.Ch.Code art. 303. Without objection by the parties, the trial judge then converted the grandparents’ petition for custody to a petition tola intervene in the CINC proceeding, which it ultimately denied, and which is the subject of this appeal. Because that judgment was final as to the grandparents’ right to participate in the CINC proceeding in any way, we rejected DCFS’ jurisdictional argument and decided the case on original hearing in favor of the grandparents’ right to intervene. On rehearing, we again decide the case on the merits of DCFS and L.F.B.’s rehearing request, but are constrained to find that we no longer have jurisdiction in the CINC proceedings, which are now moot based on the adoption of L.F.B.

M.W., the sister of L.F.B.’s putative father, R.Y., and M.W.’s husband, J.W., had filed a motion to intervene in the CINC proceeding on August 10, 2016. After their home had been approved by DCFS, DCFS recommended and the court then placed L.F.B. in the custody of M.W. and J.W. as prospective adoptive parents on September 15, 2016. After the grandparents’ petition to intervene in this CINC proceeding was denied by the trial 'court, the grandparents then filed a motion for interim visitation in the CINC proceeding. While L.F.B. was still legally in the State’s custody and physically living with M.W. and J.W., the prospective adoptive parents, the trial court denied the grandparents’ visitation request on June 29, 2017. |HWe were not made aware of this ruling on original appeal, but as a result of the rehearing, we did order a supplemental record and finally became aware of what had happened since the appeal was originally lodged.

While the merits of the grandparents’ appeal was pending before this court in the CINC proceeding, without notice to this court or the grandparents’ attorney, the attorney for the adoptive parents, the putative paternal aunt, M.W. and her husband, J.W., filed a petition for final adoption of L.F.B. in a separate docket of the juvenile court. That record was also not part of this original appeal. However, pursuant to La.Ch.Code art. 303, we acknowledge that the trial court did have continuing jurisdiction over issues pertaining to the adoption of L.F.B.

The grandparents did not seek a stay of any of the rulings of the trial court, as DCFS pointed out in its reply brief on rehearing, nor did they file a request for a writ on the denial of temporary visitation. There was nothing in the record when we decided this case on original appeal to alert our court that the adoption was. being pursued by M.W. and her husband, J.W., during the appeal. In the meantime, the trial judge took up the issue of the final adoption of. the child at its first and only hearing on that issue on September 6, 2017, in a separate docket number and signed an adoption decree allowing M.W. and J.W. to adopt L.F.B. that same day, while the CINC case was pending on appeal and shortly before this court decided the merits of the appeal in favor of the grandparents’ right to intervene in the CINC proceeding.

DCFS and the child’s attorney now argue on rehearing that since, the trial judge maintained jurisdiction during the pen-dency of the CINC proceeding Lpursuant to La.Ch.Gode art. 336 and La.Ch.Code art. 303, the trial judge could lawfully exercise jurisdiction ⅛ the adoption case. DCFS and the child’s attorney argue that-the grandparents’ intervention is now moot. • ■

'Neither' the attorney for DCFS, "the child’s attorney, nor the trial judge made this court aware that the adoption judgment had been signed allowing M.W. and J.W. to adopt L.F.B. while the merits of the grandparents’ appeal in the CINC proceeding were being considered. However, the grandparents’ attorney did not request or file a stay of the CINC proceedings during the appeal. The brief by the grandparents’ attorney asserts that she orally requested a stay of proceedings in the trial court after visitation was denied,-but -that is not part of our record and no writ was taken from that ruling.

Briefs by DCFS and the child’s attorney were timely filed in this court in the CINC proceeding before the adoption was granted. Oral argument was 'waived. However, our court considers the matter to be submitted on the date of argument, September 5, 2017, assuming no further hearing is requested. We published our opinion in favor of the grandparents’ right to intervene in the CINC proceeding on' October 18, 2017, without being forewarned or' informed that the trial judge had already signed an adoption judgment of L.F.B. by M.W. and J.W.' on September 6, 2017, the day after the CINC case was submitted to our court for decision.

Rule 3.3 of the Louisiana Rules of Professional Conduct mandates that attorneys show candor toward the tribunal. The lack of candor by the attorney for RDCFS and child’s attorney resulted in this .court working. on and publishing an opinion when the judgment of adoption was already signed and the CINC case was arguably moot. We.were.not updated on this material change in this case, which in effect rendered our decision moot. No motion to dismiss the .appeal was filed after the adoption ■ had been approved and signed on September 6, 2017. A review of the supplemental record we ordered on rehearing shows that -the adoption judgment was filed, in the trial court on September 6, 2017. Additionally, an October 6, 2017’minute entry in the CINC proceeding that reads: “The Court states the child has been adopted.” shows that the trial judge effectively dismissed ■ the CINC case. We were not made aware of either order until rehearing was requested, whereupon we ordered the record supplemented. ■

As, a result of the rehearing request, we also, ordered the confidential adoption record without objection by any of the parties and, after review, find there is no pleading or appeal filed in that case that might affect the adoption judgment at this time. Under the current set of circumstances, and based on the record before us, we find that we have no alternative but to recall our decree rendered on October 18, 2017, in this case. We find -that a grave injustice may have been done to these grandparents who, at the very least, deserved to be notified of the hearings we discussed in our original opinion, as well as the pending, adoption. Our court certainly should have been notified. Nonetheless, we are constrained to dismiss this appeal as the issues in the CINC proceeding are now moot. We express no opinion as to the propriety of the adoption proceeding as that issue is not presently before us.

{¿CONCLUSION

We grant the rehearing and recall, our remand order to the trial court issued in our opinion dated October 18, 2017. On the record before us, we find that there is no longer a child in need of care case in which the grandparents can intervene. All costs of this appeal are assessed to the maternal grandparents, G.B. and Ri.B.

Rehearing Granted; Remand Order Rescinded; Appeal Dismissed.

      . See In Re: L.D.B., 17-373 (La.App. 5 Cir. 10/4/17), 228 So.3d 296 for a complete procedural history and discussion of the issues decided in this appeal.

      . Louisiana Children's Code Article 303 (footnotes omitted) states, in pertinent part:
      A court exercising juvenile jurisdiction shall have exclusive original jurisdiction over:

      (2) Child in need of care proceedings pursuant to Title VI.
      (3) Families in need of services proceedings pursuant to Title VII.
      (4) Traffic proceedings pursuant to Title IX.
      (5) Involuntary termination of parental rights proceedings pursuant to Title X.
      (6) Voluntary termination of parental rights proceedings pursuant to Title XI.
      (7) Adoption proceedings pursuant to Title XI or XII.

      . Assuming that the original appeal was from an interlocutory judgment, this court had the authority to review the trial court’s decision and convert the appeal to an application for supervisory writ. See Stelluto v. Stelluto, 05-74, p. 7 (La. 6/29/05), 914 So.2d 34, 39:
      The Louisiana Constitution confers appellate jurisdiction upon the courts of appeal over ‘‘all civil matters” and "all matters appealed from family and juvenile courts” and supervisory jurisdiction over "cases which arise within its circuit.” La. Const, art. V, § 10(A). Moreover, the jurisprudence indicates that the decision to convert an appeal to an application for supervisory writs is within the discretion of the appellate courts. See In re Medical Review Panel of Freed, 05-28 (La.App. 5 Cir. 4/26/05), 902 So.2d 472, at 473 '("[Cjonverting appeals to writs will be left to the discretion of the panel.”)'.

      . Louisiana Children’s Code Article 336 states, in pertinent part:
      A. Except as provided by Paragraphs'B and C of this Article, the effect of a judgment shall not be suspended by an ap- ■ peal, unless the trial court or a court of appeal directs otherwise.


author: PERRET, Judge.

text:
    JAMESTOWN FORESTLAND, L.L.C. v. Robbie Lee SETLIFF, et al.
    CA 17-637
    Court of Appeal of Louisiana, Third Circuit.
    Opinions rendered 12/28/2017

      Michael H. Davis, Attorney at Law, 2017 MacArthur Dr., Bldg 4, #A, Alexandria, LA 71301, (318) 445-3621, COUNSEL FOR DEFENDANTS/APPELLANTS: Robbie Lee Setliff, Lee Ray Setliff, Susan Stark
    Randall B. Reiser, Jeremy C. Cedars, Reiser Law Firm, P.L.C., P. 0. Box 12358, Alexandria, LA 71315, (318) 443-6168, COUNSEL FOR PLAINTIFF/APPEL-LEE: Jamestown Forestland, L.L.C.
    Court composed of Sylvia R.-Cooks, John D. Saunders, and Candyce G. Perret, Judges.
   PERRET, Judge.

11 This action was initially filed as an eviction action by plaintiff, Jamestown Forestland, L.L.C. (“Jamestown”), against defendants Robbie Lee Setliff, Lee Ray Setliff, and Susan Stark (collectively “Defendants”). Defendants responded to the eviction action by filing a reconventional demand seeking a judgment of ownership and/or possession of the 3.23 acre property that was the subject of the eviction proceeding. After a hearing, the trial court granted Jamestown’s peremptory exception of res judicata. For the following reasons, we vacate the judgment of the trial court and remand this matter to the trial court in order for the owner of the subject property, W.T. Burton Industries, Inc. (“Burton Industries”), to be joined as a necessary party to the litigation.

FACTS:

The following facts have been ascertained from the record pleadings and the exhibits to the pleadings. Jamestown is the leasehold tenant of property located in Rapides Parish, Louisiana, described as “[a] 3.23 acre more or less parcel of property lying and being situate in the Northwest Quarter (NW 1/4) of Section 29, Township 5 North, Range 5 West .... ” Jamestown’s lease is with Burton Industries, who is the owner of the subject property. On December 7, 2016, Jamestown filed a petition for eviction against Defendants, alleging that they have no ownership or possessory interest in the subject property and that Defendants refuse to vacate the premises despite receiving written notice on November 15, 2016.

On January 31, 2017, Defendants filed an answer and reconventional demand against Jamestown, alleging that they possess, as owner, the 3.23 acre property that was the subject of the eviction proceeding. In addition, Defendants sought ownership and/or possession of an “adjoining thirty (30) acres also in Section 29, Township 5 North, Range 5 West, Louisiana, Meridian, Northwest | ¡>Land District, Rapides Parish, Louisiana.” Defendants argue that they “had possession as owners of the above described property quietly and without interruption for more than thirty (30) years, immediately prior to the written notice to vacate said premises delivered on November 15,2016.”

On February 10, 2017, Jamestown filed peremptory exceptions of res judicata and non-joinder of a party and dilatory exceptions of improper cumulation of actions, unauthorized use of summary proceeding, and vagueness. In support of its exceptions, Jamestown attached the following exhibits: (1) a January 20, 1977 judgment [Civil Suit No. 91,760] that recognized “Wm. T. Burton Industries, Inc. [Burton Industries] ... as legal owner of the immovable property” and ordered Defendants’ grandfather, Leo George (“Mr. George”), to vacate the property, which is now the subject of the eviction action; (2) a July 13, 1977 judgment that denied Mr. George’s motion for a new trial; (3) the trial court’s reasons for judgment, dated December 22, 1976; and (4) discovery responses from Mr. George in Suit No. 91,-760.

In its memorandum in support of the exceptions, Jamestown argued that Defendants have pled the same cause of action that existed and was asserted by Mr. George in Civil Suit 91,760, and that the 1977 judgment is final and valid. Jamestown argued that the parties in this current action are “simply the successors of the 1977 litigation: Jamestown as a lessee of Burton [Industries] and the Plaintiffs-in-reconvention [Defendants] as direct descendants of Leo George.” Thus, Jamestown argued that Defendants’ reconven-tional demand is res judicata and should be dismissed with prejudice. Further, Jamestown argued that if the trial court did not dismiss on grounds of res judicata, its peremptory exception of non-joinder of a party should be granted because Jamestown’s lease is with Burton Industries, the owner of the subject property.

lain opposition to the exception of res judicata, Defendants argued that the parties are not the same because the 1975 litigation involved only their grandfather, Mr. George. Further, Defendants assert that the cause of action in the first suit was relying on claims of possession predating 1977 and that their current cause of action relies on thirty year possession following 1977. In regard to Jamestown’s exception of non-joinder of a party, Defendants submit that the owner of the property, Burton Industries, is not an indispensable party because Jamestown has a ninety-nine year lease on the subject property that terminates in 2065.

After a hearing, the trial court signed a judgment on April 24, 2017, that granted Jamestown’s peremptory exception of res judicata, “finding that the parties are in the same capacity, and, the claims regarding bad faith acquisitive prescription are the same as asserted in Civil Suit No. 91,760 (William Burton Industries, Inc., v. Leo George).” The trial court pretermitted the peremptory exception of non-joinder and dilatory exceptions of improper cumu-lation of actions, unauthorized use of summary proceeding and vagueness. Defendants now appeal this final judgment.

Jamestown answered the appeal requesting that the judgment of the trial court granting the exception of res judica-ta be affirmed at Defendants’ cost. Further, Jamestown alleges that if, and only if, this court reverses the judgment of the trial court, that this court address the pretermitted exceptions and issue a judgment on the pretermitted exceptions. While on appeal, Jamestown also filed a motion to dismiss Defendants’ appeal and an exception of no right of action arguing that even though it has the right to bring an eviction action, it is not a proper party defendant on the issue of ownership because its lease with Burton Industries does not confer any real rights to the property. However, because we are remanding this matter to the trial court in order for Defendants to amend their |4reconventional demand to add Burton Industries as a necessary party, we deny both the motion to dismiss the appeal and the exception of no right of action.

DISCUSSION:

In their sole assignment of error, Defendants allege that the trial judge erred in granting the exception of res judi-cata and dismissing their reconventional demand of acquisitive prescription against Jamestown.

The underlying issue herein concerns the ownership of the disputed property. In response to Jamestown’s petition for eviction, Defendants’ filed a reconventional demand alleging that they “possess as owner” the subject property based on thirty years acquisitive prescription. The record indicates that Burton Industries was recognized as the “legal owner of the immovable property” at issue on January 20, 1977: Because Defendants do not possess an actual title to the property in dispute, in order -to prove their claim of ownership, they must establish ownership through acquisitive prescription. Acquisitive prescription is the “acquiring [of] ownership or other real rights by possession for a period of time.” La,Civ.Code art. 3446. This “ownership and other real rights in immovables may. be acquired by the prescription of thirty years without the need of just title or possession in good faith.” La.Civ.Code art. 3486... In order to acquire ownership with thirty years of possession, there must be “continuous, uninterrupted, peaceable, public, and unequivocal” corporeal possession for thirty years. La.Civ.Code art. 3476.

After a review of the record and caselaw, we find it was error for the trial court to address Defendants’ acquisitive prescription argument, and grant an exception of .res judicata on'issues concerning the ownership of the immovable property, without the owner of the immovable property. Burton Industries, being a party to the suit. We also note that we are not convinced the 1977 judgment precluded ownership by thirty years acquisitive prescription when the time period | (¡arguably began anew after the judgment. Louisiana Code of Civil Procedure Article 641(em-■phasis supplied) provides for the joinder of parties as follows:

A person shall be joined as a party in the action when either:
(1) In his absence complete relief cannot be accorded among those already parties.
■(2) He claims an interest relating to the subject matter of the action and is so situated that the adjudication of the action in his absence may • either:
(a) As a practical matter, impair or impede his ability to protect that ■ interest.
(b) Leave any of the persons already parties subject to a substantial risk - of incurring multiple or inconsistent obligations.

“It is well settled that the lack of an indispensable party to a proceeding in the trial court is fatal to any adjudication of the dispute.” Shamieh v. Liquid Transp. Corp., 07-1282, p. 6 (La. App. 3 Cir. 1/30/08), 975 So.2d 161, 164 (citations omitted). Further, “[a] party shall be deemed necessary for just adjudication when that party’s presence is absolutely necessary to protect its substantial rights.” Id. at 165 (citation omitted). As stated in Stephenson v. Nations Credit Fin. Servs. Corp., 98-1688, 98-1689, p. 10 (La.App. 1 Cir. 9/24/99), 754 So.2d 1011, 1019, “an adjudication made without making a person described in Article 641 a party to the litigation is an absolute nullity.”

■The. trial judge erred when proceeding with this case when her ruling on the res judicata exception could not bind Burton Industries as the legal owner of the subject property. As such, we vacate the trial court judgment, signed on. April 24, 2017, and remand the matter for joinder of the absent party and retrial of the case.

For these reasons, we vacate the trial court’s judgment on the exception of |fires judicata and remand this matter to the trial court for further consideration after joinder of Burton Industries.

JUDGMENT VACATED; REMANDED


text:
    Kayla CARPENTER, ON BEHALF OF Alexis WALTERS v. STATE FARM MUTUAL AUTOMOBILE INS. CO., et al.
    CA 17-552
    Court of Appeal of Louisiana, Third Circuit.
    Opinions rendered 12/28/2017
    Jeffery F. Speer, George A. Wright, Doucet—Speer, APLC, P. O. Drawer 4303, Lafayette, LA 70502-4303, (337) 232-0405, COUNSEL FOR ^PLAINTIFF/APPELLANT: Kayla Carpenter, Alexis Walters
    Jackson B. Bolinger, Leah B. Guilbeau & Associates, 4023 Ambassador Caffery #100, Lafayette, LA 70503, (337) 988-7240, COUNSEL FOR DEFENDANT/APPELLEE: State Farm Mutual Auto. Ins. Co.
    Court composed of Sylvia R. Cooks, John D. Saunders, and Candyce G. Perret, Judges.
   PERRET, Judge.

11 This is an appeal from a summary judgment dismissing the suit of plaintiff-appellant, Kayla Carpenter, on behalf of her daughter, Alexis Walters, against the sole remaining defendant-appellee, State Farm Mutual Automobile Insurance Company (“State Farm”). For the following reasons, we affirm the judgment.

FACTS:

This litigation involves a claim for the alleged wrongful death of Sanchez J. Walters (“Mr. Walters”) .brought by Kayla Carpenter on behalf of her minor daughter, Alexis Walters (hereinafter, “Ms. Carpenter”). Ms. Carpenter alleged in her petition that on June 29, 2008, Mr. Walters was a passenger in a 2006 Toyota Scion when he was involved in a one-car accident and suffered fatal injuries. The other occupants in the vehicle at the time of the accident were Kylor, Broussard and Nicholas Ledet. Although the driver of the vehicle has yet to be determined, the petition alleged that the 2006 Toyota Scion was owned by Randall Leger (“Mr. Leger”) and that the accident was caused solely through the fault or negligent entrustment of Mr. Leger, Kylor Broussard, and/or Jon and Jane Ledet on behalf of their minor son, Nicholas Ledet (collectively, “the Ledets”).

. On June 8, 2016, Ms. Carpenter dismissed defendants Kylor Broussard and the Ledets, but reserved her right to proceed against State Farm for insurance coverage. Thereafter, on November 7, 2016, the trial court granted a summary judgment in favor of defendant Mr. Leger, dismissing all of Ms. Carpenter’s claims against him with prejudice. Ms. Carpenter did not appeal this partial final judgment.

On December 2, 2016, State Farm filed a Motion for Summary Judgment, arguing that there is no liability coverage under its policy because Ms. Carpenter is unable to prove which occupant of the car was driving and that, regardless of who was driving, neither Mr. or Mrs. Leger, nor their son, Nicholas Leger, gave permission, express or implied, to anyone to use the 2006 Toyota Scion on the night of the [ 2accident. In support of its Motion for Summary Judgment, State Farm attached: (1) the affidavit of Mr. Leger; (2) the affidavit of Shelley Leger; (3) the affidavit of Nicholas Leger; and (4) a copy of the State Farm policy at issue.

Although Ms. Carpenter did not offer or file any exhibits into the record in opposition to the Motion for Summary Judgment, she filed a memorandum arguing that the deposition of Kylor Broussard and the police statement of Regina Bell suggest that there are genuine issues of material fact regarding who was driving the vehicle and whether the driver had the implied permission to do so.

Following a hearing, the trial court rendered the February' 21, 2017 judgment in favor of State Farm. Ms. Carpenter now appeals this final judgment.

STANDARD OF REVIEW:

An appellate court reviews a trial court’s granting of a motion for summary judgment de novo. Duncan v. U.S.A.A. Ins. Co., 06-363 (La. 11/29/06), 950 So.2d 544. Under this standard of review, the appellate court uses the same criteria as the trial court in determining if summary judgment is appropriate: whether there is a genuine issue of material fact and whether .the mover is entitled to judgment as a matter of law. Id.

“[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.P. art. 966(A)(3). “[I]f 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 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 the absence of factual support for one or more elements essential to the adverse party’s claim, action, or defense.” La,Code Civ.P. art. 966 (D)(1). “The burden is on the adverse party to 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.” Id.

Here, State Farm is the mover who will not bear the burden of proof at trial. Accordingly, in its Motion for Summary Judgment, State Farm seeks to point out to the court the absence of factual support for one of the essential elements of Ms. Carpenter’s action to trigger coverage under its automobile liability policy.

DISCUSSION:

On appeal, Ms. Carpenter alleges the following assignments of error: (1) the trial court erred when it failed to apply the concepts of implied permission to the insurance contract at issue; (2) the trial court erred when it failed to view the facts in the light most favorable to the non-moving party; and (3) the trial court erred when it granted summary judgment because there are genuine issues of material fact.

Louisiana Revised Statutes 32:900(B)(2) requires an automobile liability insurer to provide coverage to the named insured and to “any other person ... using any such motor vehicle or motor vehicles with the express or implied permission of such named insured .... ” This insurance policy provision is referred to as an “omnibus clause” and expands insurance coverage to include persons who are using the insured’s vehicle with the insured’s permission. Manzella v. Doe, 94-2854, (La. 12/8/95), 664 So.2d 398. As the supreme court stated in Manzella, “[t]he plaintiff has the burden of proving the fact of initial use with express or implied permission of the insured to make coverage effective under the omnibus clause” and the “initial permission must be proved by a preponderance of the evidence without the aid of any presumptions.” Id. at 402 (citations omitted).

The three affidavits submitted by the Legers (Mr. Leger, Shelley Leger, and Nicholas Leger) indicate that the Toyota Scion was parked at their residence in Scott, Louisiana, on the night of the accident. The affidavits unanimously state that the vehicle was taken from their residence in the early hours of June 29, 2008, and that at |4no time did the Legers give permission, express or implied, to Kylor Broussard, Nicholas Ledet, or Mr. Walters to use their Toyota Scion.

After having completed a de novo review of the evidence submitted by State Farm in support of its Motion for Summary Judgment, we find that State Farm met its burden of proving “the absence of factual support” for Ms. Carpenter’s claim that the driver of the vehicle had the implied permission to be driving the Toyota Scion on June 29, 2008. Thereafter, the burden shifted to Ms. Carpenter “to 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.” See La.Code Civ.P. art. 966(D)(1). Although Ms. Carpenter argues the deposition testimony of Kylor Broussard and the police report of Regina Bell sustain her burden of proving who the driver was on the night of the accident, she' failed to attach these exhibits to her opposition. Because Ms. Carpenter presented no evidence to show that she will be able to prove which of the three occupants was driving the ear at the time of the accident and whether the driver had express or implied permission to drive the vehicle, we conclude that State Farm is entitled to summary judgment as a matter of law dismissing Ms. Carpenter’s claim against it.

DECREE:

For these reasons, the judgment of the trial court granting summary judgment in favor of State Farm is affirmed.

AFFIRMED.