text:
    STATE of Louisiana IN the INTEREST OF G.H.
    NO. 18-CA-465
    Court of Appeal of Louisiana, Fifth Circuit.
    January 30, 2019
    COUNSEL FOR PLAINTIFF/APPELLEE, STATE OF LOUISIANA, DEPARTMENT OF CHILDREN AND FAMILY SERVICES, Elizabeth G. Lincoln
    COUNSEL FOR DEFENDANT/APPELLEE, C.V., GRANDMOTHER, Kristine K. Sims, Frances M. Olivier
    COUNSEL FOR DEFENDANT/APPELLANT, F. M. M. AND E. D., FORMER FOSTER PARENTS, John B. Donnes, III, Lawrence L. Lagarde, Jr.
    Panel composed of Judges Jude G. Gravois, Stephen J. Windhorst, and Hans J. Liljeberg
   WINDHORST, J.

The former foster parents of G.H., F.M. and E.D. ("appellants"), appeal the juvenile court's May 22, 2018 denial of their "Motion to Intervene Due to Major Change of Status and Circumstances" (the "third motion to intervene") in the matter entitled, State of Louisiana In The Interest Of G.H., Case No. 16-CC-62. The paternal grandmother, C.V. ("appellee"), filed a motion to dismiss this appeal. For the following reasons, we deny the motion to dismiss and affirm the denial of appellants' third motion to intervene.

FACTS AND PROCEDURAL HISTORY

G.H. was born on June 30, 2016 testing positive for methadone and opiates in his meconium and experiencing withdrawal symptoms. Appellants became G.H.'s foster parents on July 25, 2016. On July 26, 2016, G.H. was placed in the temporary custody of the Department of Children & Family Services ("DCFS"). On August 15, 2016, DCFS filed a "Child In Need of Care Petition," seeking to have G.H. adjudicated as a child in need of care. On September 20, 2016, G.H.'s parents, through their attorneys, stipulated that G.H. is in need of care without admitting the allegations of the petition. On July 25, 2017, the court approved a DCFS recommended plan of adoption for G.H.

On October 4, 2017, the paternal biological grandmother filed a motion to intervene and requested custody of G.H. At an October 24, 2017 hearing, the court granted the grandmother's motion to intervene and authorized her to have visitation with G.H.

On February 14, 2018, appellants filed their first motion to intervene in G.H.'s case as his foster parents who intend to adopt him. On February 22, 2018, appellee filed an exception and opposition to appellants' motion to intervene. On February 27, 2018, the juvenile court granted C.V.'s Exception and gave appellants time to cure the defects in their pleadings.

On March 6, 2018, appellants amended their first motion to intervene, and on April 10, 2018, the juvenile court denied it. Appellants did not appeal or seek supervisory review of this ruling.

On April 23, 2018, appellants filed their second motion to intervene, asserting that it was in G.H.'s best interest to allow their intervention as they have consistently provided love and care for G.H. for all his life, and that there has been no "substantial parental compliance" with or any "reasonable expectation of significant improvement" with the parents' case plan. Appellants also alleged that some of the paternal grandmother's behavior demonstrated a lack of appropriate parental discretion and discipline.

At a May 1, 2018 hearing, the court considered multiple issues, including appellants' second motion to intervene. It also DCFS's plan sought to change G.H.'s placement to the grandmother. On May 1, 2018, the court denied appellants' second motion to intervene, and found that a change in placement was in G.H.'s best interests and changed G.H.'s placement from foster care at appellants' home to his paternal grandmother's home, with the stipulation that the foster parents have continued visitation with G.H. Therefore, as of May 1, 2018, appellants were no longer G.H.'s foster parents. Although they verbally gave notice of intent to file a writ application and/or appeal, appellants did not seek any appellate review of the May 1, 2018 ruling. While the minute entry/judgments show that appellants were present in court when the juvenile court denied their request for intervention on May 1, 2018, the first mailed notice of that judgment was dated May 15, 2018.

A May 17, 2018 Court Appointed Special Advocates report indicates that G.H. was living with his paternal grandmother, her husband and his three brothers at this time. According to the report, the grandmother had reported that G.H. was doing well with the transition from living with his foster parents to living with her, and that he enjoyed being around his brothers. This report also states that he is playful and affectionate with his brothers.

On May 15, 2018, G.H.'s biological mother and father filed a motion for permission of court to execute a surrender for adoption to C.V. wife of/and M.V. A hearing was set for May 22, 2018 for the DCFS to show cause why G.H.'s biological parents should not be given permission to execute a surrender directly to C.V. and M.V., the paternal grandparents.

On May 21, 2018, appellants filed their third motion to intervene in G.H.'s placement proceedings. In this pleading, appellants acknowledged that because they were no longer G.H.'s foster parents, they lacked the rights accorded them under La. Ch.C. art. 695. Appellants, however, asserted that they had the right to intervene as interested persons under La. Ch.C. art. 697, which allows any interested person to intervene in the case review procedure to facilitate the permanent placement of the child and to ensure that the best interests of the child are protected. Appellants also contended that there had been a disregard for their requests for their previously court-ordered meaningful visitation.

On May 22, 2018, the juvenile court denied appellants' third attempt to intervene, revoked DCFS's custody of G.H., and granted custody to G.H.'s paternal grandmother. This change of custody was clearly with the ongoing agreement of DCFS, which had previously on May 1, 2018 obtained the juvenile court's approval to place the child with the grandmother, and which waived a contradictory hearing with regard to the change in custody from itself (DCFS) to the grandmother. The court allowed appellants to state their reasons in support of their motion to intervene on the record. Appellants asserted that they were entitled to intervene because they were interested parties and there were problems with their court-ordered visitation. In denying appellants' intervention, the court reasoned that it was not in the child's best interest and that there was no good cause to allow the intervention because it would slow down the permanency plan in this case.

Notice of mailing of the May 22, 2018 judgment to the parties is dated May 25, 2018. On June 4, 2018, appellants appealed this judgment.

On August 28, 2018, appellee filed a motion to dismiss appellants' appeal, asserting it was untimely and that appellants lacked standing. On August 31, 2018, appellants filed an opposition to the motion to dismiss. On September 12, 2018, appellee filed a reply to appellants' opposition, and on September 19, 2018, appellants filed a supplemental opposition to the motion to dismiss.

LAW AND ANALYSIS

Motion to Dismiss

The Louisiana Children's Code was written with the intent that courts should resolve parental status and permanency of children issues in an expeditious manner. State ex rel. C.P., 2000-2703 (La. 1/17/01), 777 So.2d 470. Consistent with the statutory scheme of expediency, La. Ch.C. art. 332 provides that appeals shall be taken within fifteen days from the mailing of notice of judgment, or if a motion for new trial is filed, the delay for appeal commences to run from the date of the mailing of notice of denial of the new trial motion. The delay for filing a motion for new trial is three days from the mailing of the notice of judgment. La. Ch.C. art. 332.

In the motion to dismiss, appellee argues that appellants' appeal was untimely because appellants failed to timely seek review of the May 1, 2018 judgment, denying their second motion to intervene. Appellee asserts that because the notice of mailing of the May 1, 2018 judgment was dated May 15, 2018, under La. Ch.C. art. 332, appellants had until May 18, 2018 to file motion for new trial or May 30, 2018 to appeal this judgment. Appellee asserts that because appellants did not file either, this appeal is untimely. Appellee also argues that the third motion to intervene was, in fact, an untimely filed motion for new trial. Further, appellee asserts that this third motion was rendered moot because appellants no longer had custody of the minor child, and that appellants lacked standing to appeal the May 22, 2018 judgment because they were never parties to the case.

In opposition to the motion to dismiss, appellants assert that this appeal was taken from the juvenile court's May 22, 2018 ruling, denying their third motion to intervene. Appellants contend that their third motion to intervene was distinctive from their previous motions to intervene in that it addressed a major change in status and circumstance and other substantive issues, including problems with appellants' court-ordered visitation with G.H. In this regard, appellants claim that the juvenile court linked the question of best interest of the child with issues of visitation, custody, bonding, attachment and transition throughout the case proceedings. In response to appellee's assertion that the appeal is moot and that they lack standing, appellants argue that they are not required to have any family or custodial connection to the child to seek review of the juvenile court's ruling.

Our review of appellants' motions to intervene indicates that while these motions are quite similar, appellants addressed somewhat different substantive issues in each motion. In the third motion to intervene, appellants addressed issues regarding the problems with their court-ordered visitation with G.H., which was not an issue in the prior motions to intervene. Appellants were not seeking review of a previous ruling, but seeking intervention on a new basis and assistance with enforcement of the court-ordered visitation. Thus, we find that the third motion to intervene was not a motion for new trial, but a sufficiently distinctive motion to intervene. Consequently, for purposes of determining timeliness, appellants' appeal delay commenced from the May 25, 2018 notice of signing judgment as to their third motion to intervene. Appellants had until June 11, 2018 to file their notice of appeal. Appellants timely filed their notice of appeal on June 4, 2018. We therefore deny appellee's motion to dismiss.

Motion to Intervene

For the following reasons, we find no error in the juvenile court's denial of appellants' motion to intervene.

Prior to August 1, 2018, La. Ch.C. art. 672 A provided as follows:

A. Whenever custody of a child is assigned to the Department of Children and Family Services, the child shall be assigned to the custody of the department rather than to a particular placement setting . The department shall have sole authority over the placement within its resources and sole authority over the allocation of other available resources within the department for children judicially committed to its custody. (Emphasis added.)

Pursuant to this provision, a foster child is in the department's custody while in foster care, and is not in the custody of the foster parents. Nonetheless, foster parents do have certain rights to participate within the sound discretion of the court. State in the Interest of M.L., 611 So.2d 658 (La. App. 4 Cir. 12/15/92), writ denied, 613 So.2d 977 (La. 2/19/93). In particular, for case review hearings, La. Ch.C. art. 695 A provides that the department shall give notice of the right to appear to all foster parents providing care for the child, and La. Ch.C. art. 695 B specifies that the requisite notice shall inform the foster parent of the day, time, and place of the hearing as well as his right to attend the hearing and be heard.

Based on these provisions, foster parents are entitled to participate in case review proceedings and permanency proceedings, but only to the extent provided by these articles, and only while they remain foster parents. As is made clear by La. Ch.C. art. 672, a child judicially committed to DCFS is in the custody of DCFS, and not in the custody of the foster parents with whom the child is placed. In this case, on May 1, 2018 the juvenile court changed G.H.'s placement from appellants' foster care to C.V., the paternal grandmother. Therefore, as of May 1, 2018, appellants were no longer foster parents or had any right to participate in the case as foster parents. Accordingly, when appellants filed their third motion to intervene on May 21, 2018, we find appellants lacked standing to intervene in the case.

Although appellants ceased to be foster parents by the juvenile court's order of May 1, 2018, pursuant to La. Ch.C. art. 697 for good cause shown, the court may allow any interested person, agency, or organization to intervene in case review proceedings to facilitate the permanent placement of the child and to insure that the best interests of the child are protected. The trial court is vested with the discretion to allow an intervention as an "interested person." State in Interest of M.L., 611 So.2d 658, 661 (La. Ct. App. 1992), on reh'g (Dec. 16, 1992), writ denied, 613 So.2d 977 (La. 1993). The juvenile court has the ultimate authority over a child's placement. State in Interest of Jennifer W., 485 So.2d 504, 506 (La. 1986), citing State in Interest of Sapia, 397 So.2d 469 (La. 1981).

In denying appellants' third motion to intervene, the juvenile court concluded that intervention would slow down the permanency placement plan in this case. When the third motion to intervene was filed, G.H. was living with his grandmother and his brothers, was enjoying being around his brothers and was openly affectionate with them. Considering the foregoing and that permanency is one of the main goals, if not the primary goal, in child in need of care proceedings, we find no abuse of discretion in the juvenile court's denial of appellants' motion to intervene. We therefore affirm the juvenile court's judgment denying appellants' motion to intervene.

CONCLUSION

For the foregoing reasons, we affirm the juvenile court's judgment denying appellants' motion to intervene, and remand the matter to the trial court for further proceedings.

AFFIRMED; REMANDED

LILJEBERG J., CONCURS IN PART AND DISSENTS IN PART WITH REASONS

Appellants, F.M. and E.D., filed a notice of appeal seeking review of several rulings entered by the juvenile court on May 22, 2018. Before either party submitted their appellate brief, appellee, C.V., filed a motion to dismiss the appeal, which was referred to the merits. I concur with the majority's decision to deny the motion to dismiss the appeal with respect to the juvenile court's denial of appellants' third motion to intervene. I also concur with the majority's decision to affirm the juvenile court's decision to deny appellants' third motion to intervene. However, I dissent and believe this Court should grant C.V.'s motion to dismiss the appeal with respect to appellants' request for review of the juvenile court's decision to change custody from DCFS to the paternal grandparents. Furthermore, when they filed their appellate brief, appellants raised additional issues with respect to earlier rulings and conduct of the juvenile court, which the majority pretermitted. For the reasons stated more fully below, I believe this Court should dismiss the remaining issues raised by appellants, F.M. and E.D., rather than pretermitting discussion of these issues.

First, as stated above, I concur with the majority's decision to deny C.V.'s motion to dismiss the appeal with respect to issues arising from the denial of appellants' third motion to intervene on May 22, 2018. Appellants filed a timely appeal and the third motion to intervene raised new issues regarding appellants' visitation with the minor child, G.H. I also agree with the majority that the juvenile court did not abuse its discretion by finding appellants failed to establish good cause to intervene in the proceedings. However, prior to determining the juvenile court did not abuse its discretion, the majority opinion states that appellants did not possess "standing to intervene in the case." While I agree that appellants failed to establish "good cause," and as discussed below, that appellants lacked standing to appeal certain other issues raised in their brief after they were removed as foster parents, I disagree that they lacked standing to intervene. Both La. C.Ch. art. 697 (case review proceedings) and La. C.Ch. art. 707 (permanency review proceedings) allow "any interested person, agency or organization" to seek leave to intervene "to insure the best interests of the child are protected." I believe former foster parents seeking to adopt a child could qualify as "interested persons" who can seek leave to intervene upon a showing of good cause.

I also disagree with the majority's decision to deny C.V.'s motion to dismiss with respect to the second issue raised in appellants' notice of appeal. In addition to seeking review of the denial of their third motion to intervene, appellants noticed their intent to appeal the juvenile court's decision at the May 22, 2018 hearing to change custody from DCFS to the paternal grandparents. In conjunction with this decision, the trial court also granted the biological parents' "Motion for Permission of Court to execute a Surrender for Adoption to [C.V. wife of/ and M/V."] In their brief filed with this Court, appellants argue the juvenile court did not have the authority to allow the biological parents to surrender their parental rights and transfer custody to C.V. Appellants contend the surrender was prohibited pursuant to La. C.Ch. art. 1112, because they had a pending petition to terminate the biological parents' parental rights.

In her motion to dismiss, C.V. notes that La. C.Ch. art. 700 states that, with respect to actions taken following a case review hearing, "[a]ny person directly affected may appeal the findings or orders of the court rendered pursuant to this Article. [Emphasis added.]" C.V. argues that appellants were not "directly affected" by the decision to change custody and lack standing to appeal because appellants never received custody of the child as foster parents, were removed as foster parents on May 1, 2018, and failed to seek timely review of that decision. I agree with these arguments and believe this Court should grant C.V.'s motion to dismiss the appeal with respect to appellants' request for review of the May 22, 2018 rulings relating to the surrender and the change in custody due to appellants' lack of standing.

I also disagree with the majority's decision to pretermit discussion of the remaining assignments of error raised in appellants' brief based on their finding that "appellants lacked standing with regard to their motion to intervene." The additional assignments of error relate to rulings and hearings held prior to May 22, 2018. In their fourth assignment of error, appellants contest the juvenile court's May 1, 2018 finding that DCFS's decision to change foster placement from appellants to C.V. was in the minor child's best interest. As discussed in the majority opinion, notice of judgment with respect to the rulings rendered at the May 1, 2018 hearing was mailed to appellants' counsel on May 15, 2018. La. C.Ch. art. 332 only allows 15 days from the date of the mailing of the notice of judgment to file an appeal. Appellants did not indicate their intent to appeal the May 1, 2018 judgment in their June 4, 2018 notice of appeal. Furthermore, their attempt to now raise this issue in their appellate brief is untimely as more than 15 days have passed since the mailing of the notice of judgment. Therefore, I would dismiss this assignment of error as untimely.

In their third assignment of error, appellants argue in general that the juvenile court failed to comply with La. C.Ch. art. 695(D), which states "[t]he court shall solicit and consider information regarding the care and treatment of the child from any foster parent, pre-adoptive parent, or relative providing care for the child who appears for the hearing." Appellants contend the only date the foster mother was asked to testify was on December 5, 2017. For the reasons stated above with respect to the fourth assignment of error, I believe the appeal of this issue is untimely. Furthermore, the record does not contain any instances where appellants, while still foster parents, asked to be heard by the juvenile court and were refused. In fact, at the April 10, 2018 hearing where the juvenile court denied appellants' first motion to intervene, the juvenile court recognized that, despite denying their motion, appellants had a right to be present at the hearings and the right to be heard. The juvenile court further noted "that whatever needs to be said by foster parents, the agency brings it up." This is not a court of first impression. We only review issues submitted to the trial court, unless the interest of justice clearly requires otherwise. Uniform Rules, Courts of Appeal, Rule 1-3.

Finally, in their fifth assignment of error, appellants generally argue that the juvenile court interjected itself into the proceedings and advocated on behalf of C.V. For reasons stated above, the appeal of this assignment of error also is untimely. Furthermore, the record does not contain any objections from appellants regarding this issue. Therefore, it cannot be considered pursuant to Uniform Rule, Court of Appeal, Rule 1-3.

      This motion was entitled "Motion to Intervene by the Child's Foster Parents."

      This motion to intervene was titled "Motion for Reconsideration and for Hearing Relative to the Denial of Foster Parents Petition to Intervene," and on April 30, 2018, appellants filed a Memorandum in Support of the Foster Parents' Motion for Reconsideration.

      While most of the pleadings involving the paternal grandmother only refer to her or are filed by her, this pleading does refer to both her and her husband.

      This motion to intervene was titled "Motion to Intervene Due to Major Change of Status and Circumstances."

      The fifteenth day, June 9, 2018, fell on a Saturday.

      By Act 189 of the 2018 Ordinary Session, La. Ch.C. art. 672 A was amended to delete the "sole" authority of DCFS, and added paragraph 672 A(2) which now allows the court, after contradictory hearing, to disapprove placement by DCFS. This provision was not in effect, nor did the court disapprove.

      Because we find that appellants lacked standing with regard to their motion to intervene and no abuse of discretion in the court's denial of that motion, we do not address the remaining assignments of error.

      The only substantive issue raised in the third motion to intervene involved issues regarding the scope of appellants' visitation with G.H. and the trial court clarified on the record at the May 22, 2018 hearing that appellants should receive three hours of visitation a week. Appellants do not seek review of this decision on appeal.

      M.V. is the minor child's paternal grandfather.

      La. Ch.C. art. 710 contains an identical provision relating to appeals of a juvenile court's findings following a permanency plan hearing.

      As noted in the majority opinion above, La. C.Ch. 672(A) provides that DCFS retains custody of a child placed in foster care.

      As discussed, infra , I agree appellants did not seek timely review of the trial court's May 1, 2018 finding that it was in the best interest of G.H. to change foster placement from appellants to C.V.

      The juvenile court recognized during the hearing that DCFS possesses the authority to decide where the child will be placed when in foster care, and the juvenile court possesses the authority to approve or disapprove of the placement based on considerations such as the health and safety of the child, as well as the child's best interest. See State In Re LCB , 01-2441 (La. 1/15/02), 805 So.2d 159, 164-65.


source: Caselaw Access Project

author: JOHNSON, J.

license: Public Domain

text:
    Juan CAMPOS v. UNLIMITED MASTER CONTRACTORS, LLC, et al.
    NO. 18-CA-435
    Court of Appeal of Louisiana, Fifth Circuit.
    January 30, 2019
    COUNSEL FOR PLAINTIFF/APPELLANT, JUAN CAMPOS, Cristian P. Silva, William R. Penton, III
    COUNSEL FOR DEFENDANT/APPELLEE, EDDIE AND VANESSA SMITH, J. Douglas Sunseri, Richard J. Wolff
    Panel composed of Judges Susan M. Chehardy, Jude G. Gravois, Marc E. Johnson, Hans J. Liljeberg, and John J. Molaison, Jr.
   JOHNSON, J.

In this claim for workers' compensation benefits, Claimant appeals a judgment excluding all of his evidence on the basis he failed to file a pre-trial order pursuant to the court's scheduling order which resulted in the dismissal of his disputed claim for compensation for failing to carry his burden of proof. For the following reasons, we vacate the judgment and remand the matter for further proceedings.

FACTS & PROCEDURAL HISTORY

Claimant, Juan Campos, filed a Disputed Claim for Compensation - 1008 Form on August 31, 2015 against his employer, Unlimited Master Contractors, LLC ("UMC"), seeking workers' compensation benefits for back, ribs and shoulder injuries he allegedly sustained in a work-related accident on July 11, 2015. Claimant asserted that the accident occurred when he fell off the roof of a house located on Broad St. in New Orleans while he was installing plywood. Claimant amended his disputed claim in March 2016 to add Eddie Smith, Vanessa Smith and LL5 Enterprises, LLC ("LL5") as defendants/employers.

LL5 filed an answer denying all claims. UMC denied that they had any employer/employee relationship with Claimant and filed an exception of no cause of action. Claimant filed a motion to strike the answers of LL5 and UMC on the basis the pleadings were not filed by licensed attorneys. He further sought a default judgment against the two defendants. According to a minute entry dated September 23, 2016, the workers' compensation court granted Claimant's motion to strike LL5's and UMC's answers and entered a preliminary default judgment. There is nothing in the record indicating that Claimant confirmed the preliminary default judgment against either LL5 or UMC.

Meanwhile, Eddie and Vanessa Smith ("the Smiths") filed exceptions of no cause of action and no right of action, which were overruled after a hearing. Thereafter, in February 2017, the Smiths filed their answer. On September 26, 2017, the workers' compensation court signed a Scheduling Conference Order, ordering that all pre-trial statements be filed 30 days prior to trial. The order further noted that trial was scheduled for February 15, 2018.

Approximately one week prior to trial, on February 6, 2018, Claimant filed an ex parte motion seeking to perpetuate his testimony for trial through a telephone deposition in lieu of his live testimony. Claimant's counsel represented that Claimant had been deported to El Salvador in December 2017 and would be unable to be present for trial. The Smiths objected to the motion and a hearing was held. On March 13, 2018, the workers' compensation court denied Claimant's motion "based on the facts and information presented." However, the court ordered that upon receipt of documentation showing Claimant's unavailability for trial and the duration for which he would be unavailable, a video deposition could be taken pursuant to La. C.C.P. art. 1434, but did not order Claimant to submit to or provide a video deposition.

On May 4, 2018, Claimant submitted a letter from the U.S. Immigration and Customs Enforcement dated May 2, 2018, stating that Claimant had been removed from the United States on November 9, 2017. Claimant also submitted a copy of Section 212 of the Immigration and Nationality Act to show that because he has been removed from the United States, he is unable to return to the United States for a period of ten years. Claimant urged that based on these two documents, he had adequately demonstrated his unavailability for trial.

Thereafter, on May 21, 2108, Claimant filed a motion to admit his June 26, 2017 deposition at trial in lieu of live testimony. His motion was not ruled upon prior to trial, which was held on May 23, 2018. At the beginning of trial, the Smiths indicated that they had a motion to dismiss based on two grounds - Claimant's inability to be present at trial - arguing against the use of Claimant's June 2017 deposition on the basis it was a "discovery" deposition and not a "perpetuation" deposition - and the failure of Claimant to file a pre-trial statement.

Addressing Defendants' motion to dismiss, the workers' compensation judge noted that her prior February 2018 ruling regarding the use of deposition testimony in lieu of live testimony was not followed; specifically, Claimant failed to submit a deposition in compliance with La. C.C.P. art. 1434. Further, remarking that neither Claimant nor the Smiths had filed a pre-trial statement, the workers' compensation judge struck all the witnesses and exhibits Claimant indicated that he intended to offer into evidence during trial on the basis they were not listed in the pre-trial statement and granted the Smiths' motion to dismiss. Claimant proffered his evidence, which included various exhibits and a statement regarding the content of a witness' testimony.

The workers' compensation court subsequently signed a written judgment on June 8, 2018, denying Claimant's motion to use his June 2017 deposition in lieu of live testimony and excluding all of his evidence at trial on the basis he failed to file a pre-trial statement. The judgment concluded that Claimant failed to meet his burden of proving that he sustained a work-related accident and injuries and dismissed Claimant's disputed claim for compensation with prejudice.

ISSUE

The sole issue raised in this appeal is whether the workers' compensation court abused its discretion in excluding all of Claimant's witnesses and exhibits at trial on the basis his attorney failed to file a pre-trial statement pursuant to the scheduling order of the court.

DISCUSSION

Pursuant to its authority under 40 La. Admin. Code, Part I, Chapter 60, § 6005(A), the workers' compensation court issued a scheduling conference order on September 26, 2017, specifically stating, "PRE-TRIAL STATEMENTS/QUESTIONAIRES ARE TO BE FILED: 30 DAYS PRIOR TO TRIAL ." The scheduling order also set forth that trial was scheduled for February 15, 2018. The order further stated that if trial was continued, and that the parties agreed that additional discovery was necessary, the noted deadlines would also be continued. The record in this case shows that trial was continued from February 15, 2018 until May 23, 2018. It is undisputed that neither Claimant nor the Smiths filed a pre-trial statement as ordered by the trial court before either trial date.

The trial court has much discretion in imposing sanctions for a party's failure to comply with scheduling orders, and its ruling will not be reversed absent an abuse of that discretion. See Benware v. Means , 99-1410 (La. 1/19/00), 752 So.2d 841, 847. In reviewing an imposed sanction, each case must be decided upon its own facts and circumstances. Id.

In Benware , supra , the Louisiana Supreme Court recognized that La. C.C.P. art. 1551 authorizes the dismissal of a case for a party's disobedience of or disregard for court orders pertaining to pre-trial procedure. However, it cautioned that "this extreme penalty obviously should seldom be imposed and should be reserved for only the most flagrant case." Benware, supra at 846. It emphasized that a dismissal of a case for the violation of a pre-trial order is a "draconian penalt[y] which should be applied only in extreme cases." Id. , quoting Horton v. McCary , 93-2315 (La. 4/11/94), 635 So.2d 199, 203. The supreme court went on to discuss the factors that should be considered in determining the appropriateness of the penalty for a pre-trial order violation.

It noted that one important consideration is whether the misconduct was by the attorney or the client, or both. Benware , supra at 847. In discussing this factor, the supreme court referred to its earlier decision in Horton , supra , wherein it reversed a sanction that granted a default judgment against a defendant whose attorney failed to comply with discovery orders issued by the trial court. In its decision, the Horton court discussed the fact that the record contained no evidence that the client participated in violating the trial court's order. The Horton court also noted the four factors considered by the federal courts before granting a default as a sanction - (1) the willfulness of the offending party in refusing to comply; (2) whether less harsh penalties are effective; (3) whether the opposing party's trial preparation was prejudiced by the offense; and (4) whether the client participated in the offense. Horton , 635 So.2d at 203, citing Batson v. Neal Spelce Assoc., Inc. , 765 F.2d 511 (5th Cir. 1985).

In addition to considering the client's culpability in non-compliance, the supreme court in Benware also listed additional factors to consider in determining the appropriateness of the penalty for violating pre-trial orders - "the stage of the proceeding at which the violation occurred, the presence or absence of prejudice to the opposing party's preparation of the case, and the nature and persistency of the misconduct that constitutes the violation." Benware , 752 So.2d at 847. Additionally, courts have required that the record show that the sanctioned party was clearly aware that his noncompliance would result in the dismissal of his case. Prudhomme v. Todd , 10-1132 (La. App. 1 Cir. 12/22/10), 2010 WL 5480319, *2 (unpublished opinion).

Considering these factors, we find the workers' compensation court abused its discretion in imposing the harshest sanction against the Claimant - excluding all of his evidence - for his failure to file a pre-trial statement. First, there is nothing in the record indicating that Claimant had any part in or contributed in any way to his counsel's failure to file a pre-trial statement. For example, there is no indication that Claimant refused to provide the necessary information for counsel to prepare the pre-trial statement. When faced with the motion to dismiss for failing to file a pre-trial statement, counsel for Claimant offered absolutely no explanation.

Second, while his failure was inexcusable, the record shows that Claimant's counsel's failure to file a pre-trial statement did not prejudice the Smiths. In proffering his evidence, Claimant's counsel provided a statement to the court noting that all the evidence was known to the Smiths and had been previously provided to the Smiths well in advance of trial pursuant to discovery requests - which was not contradicted by Defendants.

Finally, there is no evidence of any gross disregard for the authority of the court and its efficient operation. See Benware , 752 So.2d at 847. This is not a case of repeated violations of pre-trial orders and/or requests ignored by the Claimant. We note that neither party complied with the trial court's pre-trial order to file a pre-trial statement. Compare Guste v. Lirette , 15-1284 (La. App. 1 Cir. 6/28/16), 2016 WL 3569840, *4 (unpublished opinion).

Considering these factors and based on the record before us, we find that the workers' compensation court's sanction of excluding all Claimant's evidence on the basis he failed to file a pre-trial statement was an abuse of its discretion. Although the court allowed Claimant to proffer his evidence, we find that justice requires the court's June 8, 2018 judgment be vacated and the matter be remanded for further proceedings consistent with this opinion. See Guste v. Lirette , supra . Specifically, we find the matter must be remanded for consideration of Claimant's evidence, including the admissibility of the evidence, and determination of whether he meets his burden of proof based on the admitted evidence.

DECREE

For the foregoing reasons, we find the workers' compensation court erred in excluding all of Claimant's exhibits and witnesses at trial on the basis he failed to file a pre-trial statement. Accordingly, we vacate the June 8, 2018 judgment and remand the matter for further proceedings.

JUDGMENT VACATED; MATTER REMANDED

MOLAISON, J., DISSENTS FOR THE REASONS ASSIGNED BY LILJEBERG, J.

LILJEBERG, J., DISSENTS WITH REASONS

I disagree with the majority's finding that the workers' compensation judge abused her discretion in this matter. I further disagree with the majority's finding that the workers' compensation judge excluded all of Claimant's evidence and dismissed this case solely due to Claimant's failure to file a pretrial statement. The Judgment and transcript indicate the judge based her decision to exclude Claimant's evidence, including his own testimony, exhibits and witnesses, on Claimant's failure to comply with two court rulings - 1) the March 13, 2018 Judgment permitting Claimant to submit his testimony via video deposition; and 2) the September 26, 2017 Scheduling Conference Order requiring the parties to file a pre-trial statement 30 days prior to trial. The June 8, 2018 Judgment specifically provided in relevant part, as follows:

IT IS HEREBY ORDERED, ADJUDGED AND DECREED that Claimant was not present at Trial because he was removed from the United States on November 9, 2017 and unable to return for a period of 10 years.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that on February 7, 2018, Claimant filed a Motion to Perpetuate his deposition and admit it at Trial in Lieu of his live testimony. By Order dated March 13, 2018, this Court ordered Claimant to prove his unavailability and allowed submission of a video deposition in compliance with LA CCP Article 1434. No video deposition was taken by either party.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that on May 21, 2018 (two days prior to Trial), Claimant's counsel filed a Motion to Admit his June 26, 2017 deposition in lieu of live testimony. After receiving opposition and hearing oral arguments, the Court denies the Motion and excludes claimant's June 26, 2017 deposition as a Trial exhibit.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the Court's Scheduling Order requires that Pre-Trial Statements (listing witnesses and exhibits ) be filed 30 days prior to Trial. Claimant did not field a Pre-Trial Statement. As such, Claimant's exhibits are excluded from evidence at Trial.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that Claimant, Juan Campos, did not meet his burden to show that he sustained an on the job accident.
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that Claimant, Juan Campos, did not meet his burden to show that he sustained injuries related to a work accident.

Based on the foregoing, the judge determined that Claimant failed to satisfy his burden to prove he sustained injuries related to a work accident and rendered judgment in favor of defendants, dismissing Claimant's claims with prejudice.

On the morning of the May 23, 2018 trial setting, the workers' compensation judge noted this matter was pending since August 31, 2015, and the trial date was continued on four prior occasions. As the majority opinion outlines above, nine days prior to the fourth trial setting on February 15, 2018, Claimant filed a motion to perpetuate his trial testimony by telephone deposition due to his deportation. In this motion, Claimant stated his testimony was "essential and critical" and the "[f]ailure to perpetuate Claimant's testimony through telephonic means would result in great injustice by essentially prohibiting the Claimant from proceeding with his case and granting the defendants a win based solely on circumstances that were not of the Claimant's choosing nor created by the claimant's fault." Claimant also noted that the deposition would serve the interests of justice by "allowing all parties the opportunity to cross-examine the Claimant."

Following a hearing on February 9, 2018, the judge denied Claimant's request to perpetuate his testimony by telephone deposition because it was "not convinced that a telephonic deposition would be reliable and meet the requirements as set forth in the Louisiana Code of Civil Procedure Article 1434," which requires a certified court reporter. Instead, the judge continued the trial date and permitted Claimant the opportunity to submit a video deposition, at his cost, once he provided evidence he was unavailable to attend trial. On May 4, 2018, Claimant submitted a letter from the U.S. Immigration and Customs Enforcement indicating Claimant was removed from the United States pursuant to a removal order issued on March 9, 2009. The removal order was issued after Claimant failed to appear for a hearing on the "merits relative to [Claimant's] request for relief from removal."

Instead of obtaining a video deposition as ordered by the workers' compensation judge, two days prior to trial, Claimant filed a motion stating that opposing counsel did not take the opportunity to depose Claimant via video deposition and asked for the first time to use his June 26, 2017 discovery deposition in lieu of live trial testimony. On the morning of trial, defense counsel argued it was not defendants' obligation to initiate the video deposition and assist Claimant in prosecuting his case. Defendants also objected to the use of the discovery deposition, because Claimant allegedly failed to provide basic information regarding the date and location of the accident and the identity of the doctors who treated him, prior to the deposition. Defendants argued they did not have access to medical records and other essential information to cross-examine Claimant during the discovery deposition. Defendants explained that if Claimant was able to present his case via the discovery deposition, defendants would be stripped of their rights to cross-examine and impeach Claimant's testimony. Defendants also argued the judge should strike Claimant's exhibits and witnesses based on his failure to file a pre-trial statement as ordered by the judge.

After hearing argument from both sides, the judge noted that on the eve of the prior trial setting, Claimant urged that his perpetuation deposition was essential in order to prosecute his case and satisfy the interests of justice. Consequently, the judge did not grant Claimant's request to use his discovery deposition instead of the video deposition and noted a video deposition was not submitted to the court. The judge further noted that neither party filed a pre-trial statement prior to the five trial settings. The judge recognized the discretion she possessed in determining whether to exclude evidence under these circumstances and further noted her practice to strike evidence not listed in the pre-trial statement.

Based on the foregoing, it is clear the workers' compensation judge's decision to exclude Claimant's evidence was based on far more than the failure to file a pre-trial statement. The judge noted the matter was set for trial five times and pending for almost three years. Furthermore, the judge continued the prior trial date to allow Claimant time to submit his video deposition, which he claimed was essential. When he failed to submit the deposition, Claimant then tried to blame defendants and waited until two days prior to trial to ask for leave to submit his discovery deposition into evidence.

Further, I disagree with the majority's determinations that that the record does not contain evidence that Claimant contributed to the failure to comply with the judge's orders and that defendants would suffer no prejudice if Claimant were permitted to present his evidence. The documents submitted by Claimant regarding his inability to attend trial indicate the removal order leading to his deportation was entered due to his failure to appear at the hearing scheduled before the immigration judge. Furthermore, defendants explained they were unable to cross-examine Claimant during the discovery deposition because Claimant failed to provide basic information regarding the accident and doctors who treated him, which Claimant's counsel did not contest.

Based on the foregoing, I do not believe the workers' compensation judge abused her discretion by excluding Claimant's evidence.

      Claimant amended his disputed claim a second time in August 2017 to add Impact Contractors, LLC and Impact Concrete Pumping, LLC (collectively "Impact") as employers/defendants. However, Claimant subsequently filed a motion to voluntarily dismiss his claims against these two parties, and a judgment dismissing them from the lawsuit with prejudice was signed by the workers' compensation court on May 21, 2018.
      Of note, also in August 2017, Eddie and Vanessa Smith filed a cross-claim against Impact asserting they were liable for any damages assessed against the Smiths. However, at trial, the Smiths admitted that Impact had never been served with the cross-claim.

      There is no written motion to dismiss in the record.

      Claimant does not challenge the workers' compensation court's ruling denying his motion to use his deposition in lieu of live testimony.

      Under the authority promulgated by La. R.S. 23:1310.1, the specific rules and regulations governing the Office of Workers' Compensation are set forth in Title 40 of the Louisiana Administrative Code. Under 40 La. Admin. Code, Part I, Chapter 60, § 6005(A), "[w]hen requested by the court, each party to the dispute shall file a pretrial statement with the appropriate district office within the time frame designated by the court." Further, 40 La. Admin. Code, Part I, Chapter 60, § 6007(A), specifies that the pretrial statement shall include all stipulations agreed to by the parties, the issues to be litigated, contentions, a list and brief description of all exhibits to be offered at trial, a list of all witnesses to be called at trial along with a short statement as to the nature of their testimony and designation of whether the testimony will be live or by deposition, and any outstanding discovery and depositions to be taken.

      The only party that filed a pre-trial statement was Impact, which filed its pre-trial statement prior to the February trial date and had the action against it dismissed prior to the May trial date.

      Because we are remanding the matter, we note that the workers' compensation ruling regarding the use of Claimant's deposition in lieu of live testimony relates to the admissibility of evidence and is interlocutory; thus, it may be reconsidered or revised upon proper motion at any time until the rendition of a final judgment. See Regions Bank v. Weber , 10-1169 (La. App. 4 Cir. 12/15/10), 53 So.3d 1284, 1286 ; Edmonds v. Boh Bros. Const. Co., Inc. , 516 So.2d 224, 225-26 (La. App. 4th Cir. 1987).


author: GRAVOIS, J.

text:
    MEMBERS OF the GRAND LODGE OF the STATE of Louisiana v. The ELECTED BOARD OF DIRECTORS OF the GRAND LODGE OF the STATE of Louisiana
    NO. 18-CA-443
    Court of Appeal of Louisiana, Fifth Circuit.
    February 6, 2019
    COUNSEL FOR PLAINTIFF/APPELLEE, MEMBERS OF THE GRAND LODGE OF THE STATE OF LOUISIANA, Jason C. Bruzik
    COUNSEL FOR DEFENDANT/APPELLANT, THE ELECTED BOARD OF DIRECTORS OF THE GRAND LODGE OF THE STATE OF LOUISIANA, J. Keith Gates, Winnfield, Lloyd E. Hennigan, Jr., Jena
    Panel composed of Judges Susan M. Chehardy, Jude G. Gravois, and Marc E. Johnson
   GRAVOIS, J.

Appellants/defendants, the Grand Lodge of the State of Louisiana (the "Grand Lodge"), its Grand Master, Guy Jenkins, and its Deputy Grand Master, Martin Reinschmidt, appeal a trial court's judgment that denied their dilatory exception of prematurity and granted the petition for injunctive relief and declaratory judgment filed by appellees/plaintiffs, three members of the Grand Lodge. For the reasons that follow, we reverse the trial court's denial of defendants' exception of prematurity, vacate the trial court's grant of plaintiffs' petition for injunctive relief and declaratory judgment, grant defendants' exception of prematurity, and dismiss plaintiffs' petition without prejudice.

FACTS AND PROCEDURAL HISTORY

On June 12, 2018, Frank Du Treil, Jason C. Bruzik, and Wesley Cognevich, members of the Grand Lodge, filed a petition for injunctive relief and declaratory judgment against Guy Jenkins, the Grand Master of the Grand Lodge; Martin Reinschmidt, the Deputy Grand Master of the Grand Lodge; and the Grand Lodge. According to the petition, by letters dated May 9, 2018, the Grand Lodge "threatened" plaintiffs' memberships in the organization. Thereafter, Mr. Du Treil and Mr. Bruzik were allegedly suspended by act of the Grand Master without adherence to the procedures set out in Article VII of the General Regulations entitled "Trials, Punishments and Appeals" found in the "Handbook of Masonic Law" ("HOML"), which breached an alleged contract between the parties. Plaintiffs sought a temporary restraining order and preliminary and permanent injunctions: 1) requiring that their memberships be returned and/or preserved until the procedures of Article VII of the HOML could be followed; 2) ensuring they could speak at the upcoming annual Grand Lodge Communication; and 3) ensuring that all resolutions submitted to the Membership would be considered. On June 12, 2018, the temporary restraining order as requested by plaintiffs was granted.

On June 15, 2018, defendants filed a dilatory exception of prematurity, asserting that a member of a corporation or association must exhaust all internal remedies available to members before an action can be filed in a court of law. In their exception, defendants contended that there are two ways that a member/mason can be suspended from the association: by trial brought in the subject mason's local lodge, pursuant to Article VII of the HOML, or by suspension by the Grand Master pursuant to Article IV of the HOML. Defendants asserted that plaintiffs were properly suspended by the Grand Master pursuant to Section 2 of Article IV of the HOML. Defendants argued that under that Section, plaintiffs still had the right to present evidence and testimony as to their innocence before the Grand Lodge's Appeals and Grievances Committee. Then, if necessary, the voting delegates at the next Grand Lodge Communication would determine by a two-thirds vote as to whether or not plaintiffs should remain suspended.

A hearing on plaintiffs' request for a preliminary injunction and a declaratory judgment and defendants' exception of prematurity was conducted before the trial court on June 26, 2018. Following the hearing, the trial court denied the exception of prematurity, finding that defendants breached their contract with plaintiffs when defendants suspended plaintiffs without following proper procedures, and therefore, the case was ripe for presentation to the court. The trial court then granted plaintiffs' petition for injunctive relief and declaratory judgment insofar as defendants "shall not prohibit [Mr.] Bruzik and [Mr.] Du Treil's full and complete participation and unrestricted access to the annual Grand Lodge meeting of June 28, 2018, in accordance with the rules of order and procedures of the Grand Lodge." As to Mr. Cognevich, the trial court found that since he was not suspended, he would be allowed the same complete and unrestricted participation in the upcoming Grand Lodge meeting. Finally, the trial court found that any further action against Mr. Bruzik and Mr. Du Treil must be taken under the provisions of Article VII (rather than Article IV) of the HOML. This suspensive appeal followed.

On appeal, defendants assert the following assignments of error:

1. The trial court erred as a matter of law in denying defendants' dilatory exception of prematurity.
2. The trial court erred as a matter of law by not interpreting and applying provisions of the HOML as written and consistently construed by the Grand Lodge according to Masonic custom and usage.
3. The trial court erred as a matter of law in granting a declaratory judgment because that judgment was predicated upon the trial court's erroneous construction of the HOML.
4. The trial court erred as a matter of law in granting injunctive relief because plaintiffs did not prove any judicially cognizable harm, injury, or damage warranted such relief.

ANALYSIS

In their first assignment of error, defendants argue that the trial court erred in denying their dilatory exception of prematurity.

An action is premature when it is brought before the right to enforce it has accrued. Williamson v. Hosp. Serv. Dist. No. 1 , 04-0451 (La. 12/1/04), 888 So.2d 782, 785, citing La. C.C.P. art. 423. The dilatory exception of prematurity questions whether a cause of action has matured to the point where it is ripe for judicial determination. LaCoste v. Pendleton Methodist Hosp., L.L.C. , 07-0008 (La. 9/5/07), 966 So.2d 519, 523 ; Williamson , supra ; Spradlin v. Acadia-St. Landry Med. Found. , 98-1977 (La. 2/29/00), 758 So.2d 116, 119.

Where membership in an organization is involved, and an administrative remedy is afforded to give the affected party a hearing consistent with due process of law, exhaustion of administrative remedies is a precondition to resort to the courts. Brickman v. Bd. of Dirs. of W. Jefferson Gen. Hosp. , 372 So.2d 701, 704 (La. App. 4th Cir. 1979), writ denied , 374 So.2d 659 (La. 1979).

Prematurity is determined by the facts existing at the time a suit is filed. Sevier v. U.S. Fidelity & Guar. Co. , 497 So.2d 1380, 1382 (La. 1986). The defendant pleading the exception of prematurity has the initial burden of showing that an administrative remedy is available, by reason of which the judicial action is premature. Steeg v. Lawyers Title Ins. Corp. , 329 So.2d 719, 720 (La. 1976). Upon such showing, the burden then shifts to the plaintiff to show or prove that the present action is one of the exceptional situations where the plaintiff is entitled to judicial relief because any administrative remedy is irreparably inadequate. Id. On the trial of the dilatory exception, evidence may be introduced to support or controvert any of the objections pleaded when the grounds thereof do not appear from the petition. La. C.C.P. art. 930.

When the determination of whether an exception of prematurity should have been granted involves a question of law, then the appellate court must determine whether the trial court was legally correct or incorrect. Crooks v. Louisiana Pac. Corp. , 14-724 (La. App. 3 Cir. 12/10/14), 155 So.3d 686, 688. Because this ruling is based upon the interpretation of an administrative rule, it will be subject to a de novo standard of review on appeal. See Bossier v. Garber , 17-349, 2018 WL 6816975, *2 (La. App. 3 Cir. 12/28/18), 263 So.3d 576, 579-80.

Defendants argue that Mr. Du Treil and Mr. Bruzik were suspended pursuant to Section 2 of Article IV of the HOML. Defendants contend that plaintiffs had not exhausted all available remedies pursuant to this Article when they filed their suit on June 12, 2018. At the time plaintiffs filed their suit, plaintiffs' trial in the Grand Lodge was scheduled and pending to be heard before the Committee on Appeals and Grievances' meeting and the Grand Lodge's Annual Communication on June 28-30, 2018. Further, even after adjudication, defendants argue that plaintiffs still had the opportunity to petition the Grand Lodge for reinstatement under the Edict on Reinstatement.

In response, plaintiffs argue that pursuant to Article VII of the HOML, members of the Grand Lodge must be tried in their own lodge, and thus plaintiffs were denied this due process.

Article IV of the HOML, entitled "Trials and Punishments in Grand Lodge" provides in its entirety:

Section 1.
a. Should any brother, whose trial for offenses exclusively belongs to the Grand Lodge (Article VII Section 1, b, ( 4) of the General Regulations) have charges preferred against him, the Grand Master shall, if in his opinion the charges are of grave character, suspend the brother from the exercise of the duties of his office until the next annual Grand Communication when, on proof of the act for which the order of suspension was made, the Grand Lodge may inflict such Masonic punishment, or make such decree as two-thirds of those present shall deem the case to require.
b. In every instance in which the Grand Master has seen fit to suspend a brother, the Grand Master and/or his designee(s) may serve as Trial Commission, with full authority to issue summons, conduct hearings, and perpetuate evidence for consideration and/or review by the Committee and Appeals and Grievances for recommendation to the Grand Lodge for action in due course.
Section 2.
Should any Lodge of this jurisdiction, or brother, or number of brethren at any time renounce their allegiance to this Grand Lodge, or openly resist the Constitution, Regulations or Edicts of this Grand Lodge, the Grand Master shall, during the recess of the Grand Lodge, suspend such Lodge, brother or brethren from all their Masonic rights and privileges until the next Annual Grand Communication when, on proof of the act for which the order of suspension was made, the Grand Lodge may inflict such Masonic punishment, or make such decree as two-thirds of those present shall deem the case to require.
If proper evidence and proof of the act for which the order of suspension was made is not presented to the Grand Lodge in open session or if some definite degree of punishment is not decreed by two-thirds majority vote of those present, the suspension shall be lifted immediately upon the closing of the Grand Communication which reviewed or failed to review the case, and the Lodge, brother or brethren shall be restored to membership as of the date of such suspension.
Section 3.
All acts of the Grand Master under Article IV are automatically referred to the committee on Appeals and Grievances for their review and recommendation to the Grand Lodge for final action.

Under Section 1 of Article IV, the Grand Master can suspend certain parties-"any brother, whose trial for offenses exclusively belongs to the Grand Lodge (Article VII, Section 1, b, (4) of the General Regulations.)" -who have charges preferred against them. Separately and unrelated to Section 1, under Section 2 of Article IV, "the Grand Master shall, during the recess of the Grand Lodge, suspend such ... brother ... from all [his] Masonic rights and privileges until the next Annual Grand Communication" if he "at any time renounce[s] [his] allegiance to th[e] Grand Lodge, or openly resist[s] the Constitution, Regulations or Edicts of th[e] Grand Lodge."

Section 2 of Article IV further provides that the party shall be suspended "until the next Annual Grand Communication when, on proof of the act for which the order of suspension was made, the Grand Lodge may inflict such Masonic punishment, or make such decree as two-thirds of those present shall deem the case to require." Also, Section 2 provides that "[i]f proper evidence and proof of the act for which the order of suspension was made is not presented to the Grand Lodge in open session or if some definite degree of punishment is not decreed by two-thirds majority vote of those present, the suspension shall be lifted immediately upon the closing of the Grand Communication which reviewed or failed to review the case, and the ... brother ... shall be restored to membership as of the date of such suspension." Finally, Section 3 of Article IV provides that all acts of the Grand Master under Article IV are automatically referred to the Committee on Appeals and Grievances for their review and recommendation to the Grand Lodge for final action.

Upon de novo review, we find that by the clear authority granted in Section 2 of Article IV of the HOML, the Grand Master could validly suspend Mr. Bruzik and Mr. Du Treil until the Grand Lodge acted "upon proof of the act on which the suspension was made" at the next annual Grand Lodge Communication. Plaintiffs filed suit on June 12, 2018, after they were suspended but prior to the meeting of the annual Grand Lodge Communication. We thus find that defendants have met their burden of proving that administrative remedies still existed at the time plaintiffs' suit was filed. Plaintiffs, however, failed to provide proof that they are entitled to judicial relief because the available administrative remedies are inadequate. See Steeg , supra. Because plaintiffs failed to exhaust all administrative remedies prior to filing their petition, the trial court erred in denying defendants' dilatory exception of prematurity.

CONCLUSION

For the foregoing reasons, we reverse the judgment of the trial court that denied defendants' exception of prematurity, vacate the judgment of the trial court that granted plaintiffs' petition for injunctive relief and declaratory judgment, grant defendants' exception of prematurity, and dismiss plaintiffs' petition without prejudice.

JUDGMENT DENYING EXCEPTION OF PREMATURITY REVERSED; JUDGMENT GRANTING INJUNCTIVE RELIEF AND DECLARATORY JUDGMENT VACATED; JUDGMENT RENDERED GRANTING EXCEPTION OF PREMATURITY AND DISMISSING SUIT WITHOUT PREJUDICE

      The Grand Lodge of the State of Louisiana is a domestic corporation created by act of the Louisiana Legislature in 1816. See 1816 La. Acts No. 38, approved March 18, 1816, pp. 99 and 100.

      An additional plaintiff, Jeff Webb, was named in the original petition, but was later dismissed from the case without prejudice.

      On June 18, 2018, defendants filed a rule to strike allegations from the petition that was also heard at this hearing. Defendants argued that a number of paragraphs in plaintiffs' petition were redundant, immaterial, impertinent, or scandalous. Specifically, defendants argued that the words "Members of the Grand Lodge of the State of Louisiana" used by plaintiffs in their caption were immaterial and/or impertinent because plaintiffs were not prosecuting a direct or derivative shareholders action or a certified class action. Following the hearing, the trial court granted the motion to strike insofar as the words "Members of the Grand Lodge of the State of Louisiana" were stricken from the caption, and ordered that the caption should only include plaintiffs' names. The trial court denied the remainder of the motion to strike.

      The initial judgment signed by the trial court on June 27, 2018 did not contain the required decretal language in order to render the judgment final because it failed to identify the specific relief granted on the petition for injunctive relief and declaratory judgment. See City of Gretna v. Morice , 13-85 (La. App. 5 Cir. 10/30/13), 128 So.3d 468, 470. As such, on October 15, 2018, this Court issued an order instructing the trial court to amend the judgment to include the necessary decretal language to properly invoke this Court's jurisdiction. The trial court signed an amended judgment on October 17, 2018. The amended judgment corrected the deficiency in the original judgment. Accordingly, a final judgment has been rendered and the matter is properly before us on appeal.

      Article VII, Section 1, b, (4) of the HOML provides:
      The following cannot be tried by a constituent Lodge: A member of a Lodge under a Foreign Jurisdiction if the offense was committed outside the vicinity of the constituent Lodge. An interdict or insane member, even if suspended or demitted or in jail for a crime. The Master, Past Master or Warden of a Lodge, for acts performed while acting as Master thereof, and any officer of the Grand Lodge, for acts performed while acting as an officer thereof, who can be tried only by the Grand Lodge.

      In light of this ruling, we pretermit review and discussion of defendants' remaining assignments of error.


author: MOLAISON, J.

text:
    Cardell ELLIS v. Heath C. MCDONALD, Water Works Industrial Services, LLC and State National Insurance Company
    Tramissian Davis v. Heath C. McDonald, Water Works Industrial Services, LLC, State National Insurance, Inc., and State Farm Mutual Automobile Insurance Company
    Nos. 18-CA-480 18-CA-482
    Court of Appeal of Louisiana, Fifth Circuit.
    February 06, 2019
    COUNSEL FOR PLAINTIFF/APPELLANT, CARDELL ELLIS, George R. Tucker, Hammond
    COUNSEL FOR PLAINTIFF/APPELLEE-2ND APPELLANT, TRANSMISSIAN DAVIS, W. Paul WilkinsDavid H. Hanchey, Lake Charles
    COUNSEL FOR DEFENDANT/APPELLEE, ASPEN SPECIALITY INSURANCE COMPANY, James M. Garner, Debra J. Fischman, New Orleans, Stuart D. Kottle
    Panel composed of Judges Jude G. Gravois, Marc E. Johnson, and John J. Molaison, Jr.
   MOLAISON, J.

In consolidated personal injury actions brought by the driver and a guest passenger in a vehicle that was struck by a truck owned by Water Works Industrial Services, LLC ("Water Works"), plaintiffs appeal a judgment dismissing their claims against Aspen Specialty Insurance Company ("Aspen") after a pre-trial evidentiary hearing to determine whether the policy limits of the policy underlying Aspen's excess coverage were exhausted, a condition precedent to Aspen's liability. The trial court found that coverage under the excess policy was not triggered because Water Works' automobile liability policy was not listed as an underlying policy in the excess policy. For the following reasons, we reverse the trial court judgment and remand the matter for further proceedings.

Facts and Procedural History

The background facts are undisputed. The accident occurred in St. John the Baptist Parish on January 16, 2015, when a vehicle being driven by plaintiff Tramissian Davis, in which plaintiff Cardell Ellis and another person were guest passengers, was struck by a truck being driven by Heath McDonald, a Water Works employee in the course and scope of his employment. Davis, Ellis and the other guest passenger were injured in the accident.

Later in 2015, Davis and Ellis filed separate lawsuits against McDonald, Water Works, and State National Insurance Company ("State National"), Water Works' automobile liability insurer, for damages resulting from the accident. Davis also sued his uninsured motorist carrier, State Farm. The suits were consolidated.

In late 2016, Aspen was named as a defendant by both plaintiffs, who alleged that Aspen provided excess automobile liability coverage to Water Works for the accident. Aspen filed answers with affirmative defenses and exceptions in both cases. Aspen averred that its insurance policy contained the best evidence of its terms, conditions, coverages and exclusions. Aspen did not assert that the State National policy was not a valid underlying policy despite the fact that Peerless Indemnity Insurance Company ("Peerless"), the underlying automobile liability insurer listed in Aspen's policy, was not named as a defendant in either lawsuit.

In May 2017, plaintiffs dismissed their claims against State National with prejudice after State National paid its policy limits of $ 1,000,000 to settle the claims of Davis, Ellis and the other guest passenger. In the motion and order to dismiss, plaintiffs reserved their rights against McDonald, Water Works and Aspen, with the stipulation that the reservation of rights as to McDonald and Water Works was "only to the extent that those parties have valid and collectible insurance with Aspen Specialty Insurance Company or any other insurer except State National Insurance Company, Inc."

A jury trial was set for October 2017. Shortly after the trial date was set, Aspen sought leave to file a motion for summary judgment on the issue of whether the underlying liability coverage was exhausted in light of the fact that the excess policy listed Peerless, and not State National, as the underlying carrier. The trial court found the motion to be untimely under La. C.C.P. art. 966(B)(1) because it was filed less than 65 days before trial, but held an evidentiary hearing on the substance of the motion in advance of the jury trial.

For reasons discussed in more detail below, the trial court found that the underlying automobile liability coverage was not exhausted, and that Aspen was not liable to plaintiffs, because State National's policy was not listed as an underlying policy in Aspen's excess policy and the Peerless policy that was listed as an underlying policy was cancelled by Water Works before the date of the accident. With respect to each plaintiff, the trial court dismissed the claims against Aspen and also dismissed "this case."

Davis filed a motion for new trial, which the trial court denied. Both plaintiffs appealed the judgment, assigning as error the trial court's ruling on the excess coverage issue and its dismissal of the entire case when the only issue before the court concerned the liability of one defendant, Aspen. The trial court stayed the proceedings pending appellate review of the judgment of dismissal.

Insurance Policies

Water Works purchased the Aspen excess insurance policy with an initial policy period of 1/1/14 to 1/1/15. The policy provided additional coverage to Water Works if an underlying policy listed in the Aspen policy paid its policy limits. The schedule of underlying policies in the Aspen policy included an Aspen General Liability and Environmental Exposure policy, a LUBA worker's compensation policy, and the Peerless automobile liability policy. The required underlying coverage limit for the Peerless policy was a combined single limit of $ 1,000,000. The maximum coverage available under the excess policy was $ 5,000,000.

Water Works purchased a Peerless automobile liability policy with an initial policy period of 1/1/14 to 1/1/15 and a combined single loss limit of $ 1,000,000. The policy remained in effect for all of 2014 and was automatically renewed for the following year, 1/1/15 to 1/1/16. However, Water Works did not pay the renewal premium. Water Works asked Peerless to cancel the policy "flat," effective January 1, 2015, which Peerless did on January 15, 2015.

Water Works purchased an automobile liability policy from State National for the policy period 1/1/15 to 1/1/16, with a combined single loss limit of $ 1,000,000, but did not notify Aspen of this or ask Aspen to list the State National policy in place of the Peerless policy in Aspen's schedule of underlying policies. There was no lapse in coverage because the State National policy took effect on January 1, 2015, the same date upon which the cancellation of the Peerless policy took effect.

The accident occurred on January 16, 2015. All three insurance policies in question-the Peerless policy, the State National policy and the Aspen policy-were introduced in evidence at the hearing on the coverage issue.

Policy Provisions in Excess Policy

The insuring agreement in Aspen's policy stated:

CLAUSE I. INSURING AGREEMENT
The Insurer will pay on the Insured's behalf ultimate net loss (resulting from bodily injury, property damage, personal injury, advertising injury, environmental damage, emergency response costs, clean-up costs or loss) in excess of, and not in contribution with, the underlying policies . Except as otherwise provided in this Policy, this Policy shall follow all provisions, exclusions, limitations, and all other terms and conditions of the followed policy . In the event of a conflict between this Policy and the followed policy , this Policy shall govern and control. Notwithstanding any other provision of this Policy, in no event shall this Policy grant broader coverage than that provided to the Insured under any of the underlying policies .

Terms appearing in boldface are defined in the policy. The term "followed policy" is defined as the policy identified in Item 8 of the Declarations and the term "underlying policies" is defined as the followed policy and all policies set forth in Item 9 of the Declarations. The Peerless policy appears only in Item 9 of the Declarations. It is not the followed policy, but it is an underlying policy.

The Aspen policy further provides:

CLAUSE IV. EXCLUSIONS
.....
Notwithstanding anything herein to the contrary, this Policy shall not apply to any coverage provided in any of the underlying policies to which this Policy would otherwise respond that has a sub-limit of less than $ 1,000,000.
CLAUSE V. CONDITIONS
.....
Cancellation
Except as set forth below, this Policy shall follow the cancellation terms of the followed policy ; provided that notwithstanding any other provision of this Policy, in the event of cancellation of the followed policy or of this Policy for non-payment of premium or material fraud or misrepresentation in the application, this Policy shall be void as of the inception date of this policy period and no coverage shall be provided by this Policy.
.....
Underlying Policies
It is a condition precedent to coverage under this Policy that the Insured maintain the underlying policies in full effect during this policy period except for any reduction or exhaustion of the limits thereof solely for payment of claims or expenses to which the underlying policies and this Policy apply. Failure of the Insured to maintain the underlying policies shall not invalidate this Policy, provided, however, in the event of such failure, the Insurer shall only be liable to the same extent as it would have been had the Insured maintained such underlying policies. [Underscoring added.]
Further, if any terms of the underlying policies are changed in any manner from those in effect as of the date of inception of this policy period, the Insured shall give the Insurer written notice as soon as practicable. Such changes made to the followed policy during this policy period are not automatically included in this Policy but may be incorporated herein only if and when: (i) the Insurer agrees to follow such changes by written endorsement issued by the Insurer and made part of this Policy; and (ii) the Insured pays any additional premium when due as required by the Insurer to cover such changes.
This insurance is excess over, and shall not contribute with the underlying policies ....

As noted above, the Peerless policy was an underlying policy but was not the followed policy.

The underscored language in the first paragraph of the policy provisions on Underlying Policies is critical to the analysis of the issues presented on appeal. For simplicity, we refer to this language as the "failure to maintain" clause.

Other Evidence

At the hearing in October 2017, Water Works' owner, Mark Blanchard, testified that he thought Water Works had $ 5,000,000 of insurance coverage to go with the $ 1,000,000 that was paid by State National. His understanding was based on what his insurance agent had told him. Mr. Blanchard testified that he had only recently learned that Aspen was denying coverage for this accident. He said Water Works had not received anything in writing from Aspen advising them of this.

The affidavit of Lou Fey, Water Works' insurance broker, was introduced at the hearing without objection. Among other things, Mr. Fey stated that the Peerless policy "was never actually issued and was not in effect on the date of the collision at issue January 16, 2015, as it had been cancelled flat with no premium charged or paid.... The Peerless policy and the State National policy ... provided essentially identical automobile liability coverage in the amount of $ 1,000,000.00 with a single combined limit."

Aspen's vice president of underwriting, Arthur Erickson, testified at the hearing that Aspen did not agree to insure in excess of any policy issued by State National for the policy period in question; that Aspen's policy requires the insured to notify Aspen of any changes to the underlying policies, which Water Works did not do; and that the clause in Aspen's policy describing what would happen if the insured did not maintain an underlying policy was not applicable because the Peerless policy for 2015 was cancelled flat, as of the first day of the policy period, and thus was not implemented for the year 2015.

Mr. Erickson acknowledged that the excess policy does not define or differentiate between implementing and maintaining a policy and does not negate coverage if the insured fails to notify Aspen of a change in the underlying insurer.

Mr. Erickson testified that Aspen evaluates its underlying carriers on an annual basis by reviewing information about the terms and conditions of the proposed underlying coverage for the upcoming policy period and the premium to be charged for it, as well as information about the financial wherewithal and the claims handling capabilities of the underlying carrier, which can change over time.

Mr. Erickson acknowledged that Aspen had approved State National as an underlying carrier for other accounts "for quite some time," both before and after 2015. During his tenure with Aspen, which began in 2012, Mr. Erickson was not aware of any instances in which Aspen had rejected State National as an underlying insurer. He testified that Aspen approved State National as the underlying automobile liability carrier in the Water Works excess policy for 2016, the year following the year in which this accident occurred, and that the underwriting staff did not realize that the underlying auto policy for 2015 was with an insurer other than the insurer listed in the Aspen policy for that year when they approved State National as the underlying carrier in 2016.

Mr. Erickson acknowledged that the policy limits of the Peerless and State National policies for 2015 were the same and that State National paid its policy limits to settle the personal injury and property damage claims arising from this accident and defended Water Works and McDonald until State National was dismissed from the lawsuits following the settlement.

Mr. Erickson did not review the State National policy for 2015 or compare its provisions to those of the Peerless policy after learning of the change in carriers, despite having access to a copy of the State National policy through Aspen's attorney, because "the proper channel for me to get it would be from the broker," and the broker did not provide him with a copy of it. Mr. Erickson confirmed that as of the hearing date, Aspen was "still denying coverage for a State National policy that we were never provided nor told about."

Trial Court Ruling

The trial court found that the Aspen policy clearly and unambiguously provided that the underlying policies must be maintained for Aspen's excess policy to be triggered. The court concluded that Aspen did not provide coverage for this accident because the State National policy was not listed in the schedule of underlying policies in Aspen's excess policy for 2015 and Aspen was not notified that Water Works had chosen State National over Peerless in 2015.

The trial court found inapplicable the "failure to maintain" clause, which states that the insured's failure to maintain an underlying policy does not invalidate the excess policy but limits Aspen's liability to the same extent as it would have been liable had the insured maintained the underlying policy. The basis for the court's conclusion that this clause did not apply was as follows: Water Works' retroactive cancellation of the Peerless policy for the year 2015 without paying a premium for that year meant that the Peerless policy "was never implemented.... This court deems that it is as if the Peerless policy never existed, and something that never existed cannot be maintained.... [B]ecause the Peerless policy was never purchased, it could not be maintained and Aspen's excess coverage policy is not triggered." In support of this distinction between implementing and maintaining an underlying insurance policy, the court quoted from the dissenting opinion in Futch v. Commercial Union Ins. Co. , 625 So.2d 1019 (La. 1993), discussed below.

Assignments of Error

Plaintiffs contend the trial court erred, both factually and legally, in finding that the Peerless policy listed in the schedule of underlying insurance in Aspen's policy was never "implemented" because it was not purchased, and therefore it could not be "maintained" for purposes of the "failure to maintain" clause. They note that the Aspen policy does not contain or define the term "implement," nor does it distinguish between implementing and maintaining an underlying policy. Plaintiffs assert the trial court erred in relying on the dissenting opinion rather than the majority opinion in Futch , supra . Because the State National policy had the same policy limits as the Peerless policy and those limits were paid in full, plaintiffs contend the trial court erred in finding that the underlying automobile liability coverage was not exhausted.

Additionally, plaintiffs seek to have the trial court's dismissal of their entire case reversed because Aspen was one of three defendants in the case and only Aspen was the subject of the evidentiary hearing to determine insurance coverage.

Standard of Review

The trial court's factual findings relating to the insurance coverage issue are subject to the manifest error standard of review and may not be set aside on appeal unless they are clearly wrong. Yount v. Maisano , 627 So.2d 148, 152 (La. 1993) ; Sauer v. National Car Rental System, Inc. , 07-844 (La. App. 5 Cir. 4/15/08), 980 So.2d 898, 903, writ denied , 08-1235 (La. 9/19/08), 992 So.2d 935. Issues of law relating to insurance coverage are reviewed de novo, without deference to the trial court's legal conclusions. Power v. State Farm Fire and Cas. Co. , 15-796 (La. App. 5 Cir. 5/26/16), 193 So.3d 471, 473.

Law on Policy Interpretation

An insurance policy is a contract between the parties and should be construed by using the general rules of contract interpretation set forth in the Louisiana Civil Code. If the policy wording at issue is clear and it unambiguously expresses the parties' intent, courts must enforce the insurance contract as written and may not alter its terms under the guise of contractual interpretation. Green ex rel. Peterson v. Johnson , 14-0292 (La. 10/15/14), 149 So.3d 766, 776 ; Sandoz v. Bourgeois , 10-859 (La. App. 5 Cir. 4/12/11), 64 So.3d 322, 325, writ denied , 11-0973 (La. 6/17/11), 63 So.3d 1043.

Like any other contracting party, insurers are entitled to contractually limit coverage in any manner they desire so long as the limitations do not conflict with statutory provisions or public policy. Moreno v. Entergy Corporation , 17-182, 17-183 (La. 11/15/17), 233 So.3d 176, 182.

An insurance policy is to be construed as a whole and each provision must be interpreted in light of the other provisions. One provision of the contract should not be construed separately at the expense of disregarding other provisions. Green , 149 So.3d at 775.

The reasonable intention of the parties to a contract is to be sought by examining the words of the contract itself and should not be assumed. Common intent is determined in accordance with the general, ordinary, plain and popular meaning of the words used in the contract. When a contractual provision is clear and unambiguous and does not lead to absurd consequences, the letter of it should not be disregarded under the pretext of pursuing its spirit. Courts should not bend the meaning of the words of a contract into harmony with a supposed reasonable intention of the parties. Moreno , 233 So.3d at 181-182.

Most importantly, a contract must be interpreted in a common-sense fashion, according to the words of the contract in their common and usual meaning or significance. Id. at 182. The rules of contractual interpretation do not authorize a perversion of the words or the exercise of inventive powers to create an ambiguity where none exists or the making of a new contract when the terms express with sufficient clarity the parties' intent. Green , 149 So.3d at 776.

A contract provision that is susceptible to different meanings must be interpreted with a meaning that renders the provision effective and not with one that renders it ineffective. Each provision in a contract must be interpreted in light of the other provisions so that each is given the meaning suggested by the contract as a whole. Moreno , 233 So.3d at 182.

Analysis

The trial court's ruling that the automobile liability coverage underlying Aspen's excess coverage was not exhausted is based on a combination of factual findings and legal conclusions. As noted above, we review the former under the manifest error standard of review and the latter de novo.

The parties do not dispute that Water Works did not comply with the policy provision in the excess policy requiring it to "maintain the underlying policies," defined in the policy as those set forth in Item 9 of the Declarations, "in full effect during this policy period" as a condition precedent to coverage. The dispute centers on whether or not the language immediately following that provision applies in this case, specifically:

Failure of the Insured to maintain the underlying policies shall not invalidate this Policy, provided, however, in the event of such failure, the Insurer shall only be liable to the same extent as it would have been had the Insured maintained such underlying policies.

The trial court found that the Peerless policy was never implemented for the year 2015, having been retroactively cancelled as of the first day of the policy period without any premium payment for that year. The court equated this with a finding that the Peerless policy "never existed," and stated, "something that never existed cannot be maintained." The term "maintain" is not defined in the Aspen policy. The court referenced Merriam-Webster's definition of the term "maintain" as meaning "to keep in an existing state; preserve from failure or decline." Based on those factual findings, the court determined that the "failure to maintain" clause in the excess policy did not apply and that the excess coverage was not triggered because the State National policy was not an underlying policy listed in Aspen's policy.

In support of the distinction between "implementing" and "maintaining" a policy, the trial court cited with approval the reasoning in the dissenting opinion in Futch v. Commercial Union Ins. Co. , supra . While we agree that there are some factual differences between that case and this case, the majority in Futch implicitly rejected the rationale of the dissenting justice, who took the position that there was no automobile liability coverage under an umbrella policy, notwithstanding a similar "failure to maintain" clause, because the insured never obtained any type of underlying automobile coverage. The majority found that the umbrella policy provided coverage for non-owned automobiles above the excess insurer's threshold of $ 500,000, despite the lack of underlying automobile coverage, stating:

Under Condition P [the "failure to maintain" clause], absence of the requisite underlying insurance limited coverage to the excess over $ 500,000 up to $ 1.5 million in recoverable damages. See Washam v. Chancellor , 507 So.2d 806 (La. 1987), and Thibodeaux v. Burton , 538 So.2d 1001 (La. 1989). Condition P also preserved the umbrella coverage if the underlying insurance was with an unnamed company or was nonexistent.

625 So.2d at 1021. (Bracketed material added.)

The cases mentioned by the trial court in which dictum in the Futch case was cited with disapproval involved an unrelated issue, that of whether a waiver of uninsured motorist coverage is valid if it is made after a policy's issuance.

Aspen notes that the policy at issue in Futch was an umbrella policy and that its policy is an excess policy, meaning that it "sits on top of, rather than supplementing, other policies," as Mr. Erickson testified. We do not find the distinction between an excess policy and an umbrella policy to be relevant here because plaintiffs are not seeking coverage from Aspen below the $ 1,000,000 threshold for excess coverage.

In the Washam and Thibodeaux cases cited in the majority opinion in Futch , the insured violated a condition in an umbrella or excess insurance policy by reducing uninsured motorist coverage to an amount below the amount required by the excess policy. Each policy contained a "failure to maintain" clause similar to the clause at issue here. In each case, the Supreme Court found that the excess carrier could only be liable to the extent that it would have been liable if the insured had maintained the required amount of underlying coverage.

The trial court's rationale that the Peerless policy for 2015 was never implemented because the policy was cancelled retroactively to the first day of the policy period would result in the "failure to maintain" clause being inapplicable if the underlying policy is cancelled as of the first day of the policy period, but applicable if the underlying policy is in effect on the first day and is cancelled on any subsequent day during the policy period. There is no indication in the policy language that this is what the parties intended. See and compare Gabriel v. Mount Vernon Fire Ins. Co. , 2016 WL 7443959 (Conn. Super. Ct. 2016), affirmed , 186 Conn. App. 163, 199 A.3d 79 (11/20/18), in which the trial and appellate courts rejected a similar rationale concerning the meaning of the word "maintain" in a "failure to maintain" clause as being too narrow.

Based on the evidence in this record, we conclude that the trial court was clearly wrong in finding that the Peerless policy was "never implemented." The Peerless policy was in effect for all of 2014, in accordance with the requirements of the Aspen policy, and was renewed by Peerless before it was cancelled by the insured, Water Works, when the State National policy was obtained. The 2015 Peerless policy bears the same policy number as the 2014 policy. The Peerless policy was in effect for approximately two weeks in 2015 until it was cancelled on January 15, 2015. The fact that Water Works cancelled the policy retroactively to January 1, 2015 does not mean that the policy "never existed" in 2015, as found by the trial court. Water Works implemented the policy in 2014 but failed to maintain it in 2015. Under these circumstances, and in the absence of any other policy provisions negating coverage, we find that the "failure to maintain" clause applies in this case.

As noted above, the Aspen policy states that it does not apply to "any coverage provided in any of the underlying policies to which this Policy would otherwise respond that has a sub-limit of less than $ 1,000,000." (Clause IV, Exclusions.) There is no evidence of any inadequate sub-limits here. The Aspen policy further states that it "shall be void as of the inception date of this policy period and no coverage shall be provided by this Policy ... in the event of cancellation of the followed policy or of this Policy for non-payment of premium or material fraud or misrepresentation in the application[.]" (Clause V, Conditions.) This provision does not apply because none of the specified events occurred, and the Peerless policy was an underlying policy but was not the "followed policy."

Construing the Aspen policy as a whole, we do not find any factual or legal basis for disregarding the policy provision stating that the insured's failure to maintain a policy listed in the schedule of underlying policies does not invalidate the policy but limits Aspen's liability to the same extent as it would have been liable had the insured maintained the underlying policy.

See and compare Watts v. Aetna Cas. and Sur. Co. , 574 So.2d 364 (La. App. 1st Cir. 1990), writ denied , 568 So.2d 1089 (La. 1990). The excess policy there required the insured to maintain underlying coverage with either split limits ($ 250,000 per person/$ 500,000 per occurrence) or with a combined single limit of $ 300,000. The amount of the required underlying coverage had increased over the years. From the inception of the excess policy, the insured never had the required amount of underlying coverage. The excess policy contained a "failure to maintain" clause similar to the clause at issue here.

The trial court found that the policy provisions concerning the required amount of underlying coverage were ambiguous and held that the excess policy dropped down to provide coverage below the minimum underlying coverage limits. Based on a reading of the entire policy, the appellate court reversed, finding that Aetna's coverage did not drop down because its liability under the excess policy was not dependent on whether the insured met the minimum coverage limits. In interpreting the "failure to maintain" clause, the court stated that the insured's "failure to comply with the [minimum underlying coverage] requirements ... does not invalidate the Aetna policy. ... Aetna's liability under the policy will be the same whether or not the primary coverage is properly maintained by the insured." 574 So.2d at 371. (Bracketed material added.)

Plaintiffs here are not asserting a claim for drop down coverage. They are seeking to hold Aspen liable for excess coverage to the same extent that it would have been liable had the Peerless policy been in effect at the time of the accident. The Aspen policy recognizes that the insured may not maintain the underlying policies as they existed at the inception of the excess policy, despite the fact that the insured is required to do so as a condition precedent to coverage, and directs that in such circumstances, Aspen "shall only be liable to the same extent as it would have been had the Insured maintained such underlying policies." The interpretation of the policy advanced by Aspen and accepted by the trial court renders this policy provision ineffective, contrary to the rules of policy interpretation discussed above.

In two cases cited by Aspen, the courts' interpretation of the "failure to maintain" clause in the respective umbrella policies appears to have rendered it ineffective as well: Evins v. Louisiana Farm Bureau Mut. Ins. Co. , 04-0282 (La. App. 1st Cir. 2/11/05), 907 So.2d 733, and R. W. Beck & Assoc. v. City and Borough of Sitka , 27 F.3d 1475 (9th Cir. 1994) (applying Alaska law). Those cases are not controlling authority in this circuit and appear to be contrary to the reasoning of the Louisiana Supreme Court in Futch v. Commercial Union Ins. Co. , discussed above. Accordingly, we decline to follow them.

Each case turns on its own facts and policy provisions. Many of the cases in which courts have interpreted a "failure to maintain" clause similar to the clause at issue here have involved the insured's failure to maintain the required amount of underlying coverage. While that is not the situation here, the "failure to maintain" clause in Aspen's policy is not limited to a failure to maintain the required amount of underlying coverage but refers to the insured's failure to maintain "the underlying policies" listed in Item 9 of the Declarations. Although Water Works clearly should have notified Aspen of its intention to change the underlying carrier, Aspen's policy does not negate coverage for failure to give notice. Under these circumstances, the change in underlying carriers did not absolve Aspen of potential liability for this accident under the terms of its policy.

It is undisputed that the State National policy for 2015 covered the vehicle involved in this accident and provided the same amount of underlying coverage required by Aspen's excess policy as the Peerless policy provided. State National was solvent, provided its insured with a defense and paid its policy limits in settlement of the claims of plaintiffs and the other guest passenger in Davis's vehicle. Aspen approved State National as the underlying carrier in Water Works' excess policy for 2016 and approved State National as an underlying carrier for other insureds both before and after 2015. Based on the evidence in this record, it appears that Aspen is in the same position it bargained for as an excess carrier and would have been in if Peerless had remained the underlying carrier in 2015.

Conclusion

We conclude that the policy limits underlying Aspen's automobile liability coverage were exhausted and that Aspen should not have been dismissed from these lawsuits. If State National's underlying coverage for this accident is less favorable to Aspen than Peerless's coverage would have been, Aspen's liability, if any, will be limited to what it would have been under the Peerless policy.

Decree

The trial court judgment is reversed and the matter is remanded for further proceedings.

REVERSED AND REMANDED

      State National paid $ 258,617 to Davis, $ 700,000 to Ellis, $ 32,500 to the other guest passenger and $ 8,883 for property damage.

      Based on the evidence presented at the hearing, it appears that a "flat" cancellation is a cancellation that coincides with the expiration date of an existing policy.