Legal Talk

What a Parent with Child Custody Needs to Do Before Relocating

Fri, 11 May 2012 15:28:00 GMT

If you have primary or equal custody of your child and you plan to move – and bring the child with you – you must notify the child’s other parent. The law provides for how and when notice must be given, and what must be included in the notice. You must give notice at least 60 days before you intend to move. Failure to give notice may be a factor in whether the move is allowed. The parent that fails to give notice may be ordered to pay the other parent’s expenses and attorney fees in objecting to the relocation.

A parent who relocates the child without giving notice risks the court modifying custody of the child.

If the child’s other parent does not give written consent to the move, then the court will hold a hearing to determine whether it allows the child to move. In making its determination, the court may appoint an independent mental health expert to determine whether the proposed relocation is in the best interest of the child.

A parent is subject to sanctions and penalties if the court determines that a proposal to relocate the child is based on harassing the other parent or on causing unnecessary delay or needless increase in the cost of litigation.

We advise you to speak to an attorney about these issues and about issues you may not have considered. Click here to learn more about attorneys practicing family law within the Stockwell Sievert law firm.

By Paul P. Marks

Choosing the Business Entity that Best Fits Your Business

Fri, 11 May 2012 15:21:00 GMT

One of the first (and most important) decisions a start-up business owner must make is deciding the type of business entity that best fits his or her business. This article provides a brief summary describing the most prevalent forms of business entities in Louisiana, as well as their advantages and disadvantages.

Sole Proprietorships and Partnerships

Sole proprietorships and partnerships are the default forms of business entities. A sole proprietorship is a business owned and run by an individual. Sole proprietorships are easy and inexpensive to form, as the owner does not have to file any formation or organizational documents with any government entities. Another advantage is the business and the owner do not pay income taxes separately; indeed, all income taxes are handled on the owner’s personal tax returns. The biggest disadvantage with a sole proprietorship is that the owner will be held personally liable for all of the business’s activities, including its debts and liabilities.

A partnership is a business entity, distinct from its partners, that can be created by written or oral agreement between two or more persons to conduct a business as co-owners. Because the partnership agreement may be oral or inadvertent, there is no filing requirement. Indeed, a partnership may be inferred even if the parties did not consciously consider or intend the business to be a partnership.

The major disadvantage of the partnership form is that partners must share the risk as well as the profits. While partners are individually liable for partnership debts, the partnership itself remains primarily liable for its debts. This means that, when a partner is sued individually for a partnership debt, the partner can require the creditor to seize specifically identified partnership assets to satisfy the debt before seizing the partner’s personal assets. However, a partner who is sued in his or her capacity as a partner is generally not entitled to any indemnification or reimbursement of litigation expenses, whether successful in the defenses of the claim or not.

Another disadvantage of the partnership form is that, unless otherwise agreed by the partners, unanimity is required to admit new partners or to terminate the partnership. Unless otherwise agreed, decisions affecting the management of a partnership require a majority vote.

Limited Liability Entities

Corporations

The most well known advantage of incorporation is that, generally, shareholders are only liable for the debts of the corporation up to the limit of their investment. In other words, unlike an owner of a sole proprietorship or partners in a partnership, shareholders’ are not personally liable for the corporation’s debts. The major disadvantage of the corporate form is double taxation. That is, shareholders are individually taxed on disbursements received from the corporation, and the corporation is also taxed at the corporate entity level.

Another disadvantage of the corporate form is that corporations are subject to strict filing requirements and operational formalities. To incorporate in Louisiana, an incorporator must file Articles of Incorporation, along with an initial report, with the Secretary of State. A corporation is also required to file an annual report every year with the Secretary of State on or before the anniversary date of incorporation. Additionally, corporations are required to hold annual regular shareholders’ meetings wherein directors are elected and other business conducted (although no meeting is required to be held if no directors are up for election).

Limited Liability Companies (LLC’s)

The Limited Liability Company (more commonly referred to as “LLC”) is a relatively new type of business entity. A 1992 statute created the LLC as a new type of business form combining attributes of both corporations and partnerships. The LLC has two primary attributes. By law neither its owners (called “members”) nor its managers are liable for any of its debts – the major advantage of the corporate form. Additionally, its income will not be subject to federal or Louisiana income tax at the entity level – the major advantage of the partnership form.

Two other types of business entities combine these two attributes as well, but are subject to additional limitations. Subchapter S corporations protect shareholders from liability for corporate debts while also providing tax benefits, but there are limits on what corporations can qualify for S tax status. Commendam (or limited) partnerships also combine these two attributes, but in a commendam partnership the general partner is still liable for the entity’s debts and there are limitations on the authority of the commendam (limited) partners to be involved in management of the business.

Generally an LLC looks like a partnership with some corporate and commendam partnership concepts added. Like a corporation, an LLC is a legal “entity,” capable of suing and being sued, as well as owning property. Unlike a corporation, there are virtually no operational “formalities” required – e.g., no member meeting requirements. However, an LLC, like a corporation, is subject to mandatory filing requirements. Louisiana law requires the LLC to file its Articles of Organization, the analogue to corporate Articles of Incorporation, with the Secretary of State. An Initial Report must also be filed with the Secretary of State.

We advise you to speak to an attorney to ensure your business is formed in accordance with Louisiana law. Click here to learn more about attorneys practicing business law within the Stockwell Sievert law firm who can assist you in taking the next steps in forming your business.

By Ross M. Raley

Church’s Claim Against Bank for Funds Embezzled by Church’s Employee Dismissed on Procedural Grounds

Tue, 28 Feb 2012 05:29:00 GMT

Employee embezzlement of any kind reeks of moral bankruptcy. But when that employer is a church, our heads shake with disapproval and our opinions of the perpetrators drop to a whole new level. Despite the stigma associated with this crime, religious institutions are not immune from this threat and are often victimized by the employees they trust the most. From 2004 to 2007, a local church experienced this first hand when one of its employees and her husband embezzled over $380,000 before moving out of state.

Seeking reimbursement and damages for its losses, the church filed suit against the employee and her husband alleging that they used church funds by various means, including check forgery and unauthorized use of credit cards. The suit was filed in the 14th Judicial District Court in Lake Charles, Louisiana. When the defendants failed to answer the allegations of the church’s petition, the church confirmed a default judgment against these defendants finding them 100% at fault.

On the same day as the confirmation of default, the church amended its original petition naming two banks as defendants and contending that the banks’ alleged negligent conduct enabled the misappropriation of funds. The fact that the banks were added to this lawsuit was not surprising, given that a judgment against the original defendants would be virtually worthless and not result in any actual recovery for the church. What was surprising, not to mention procedurally improper, was the church’s attempt to add banks after the default judgment had been entered.

In response to this tactic, both banks filed motions for summary judgments seeking dismissal of the church’s claims. The banks pointed out to the trial court the procedural deficiencies of the church’s filings as well as its obvious attempt to get a second bite at the apple against defendants with deeper pockets. After a hearing, Judge Kent Savoie granted the banks’ motions, dismissing the plaintiff’s suit against the banks. The church appealed.

In a well-reasoned opinion written by Judge Marc T. Amy, the 3rd Circuit Court of Appeal held that summary judgment was proper dismissing the claims against the banks. This decision withstood subsequent attacks by the church seeking a rehearing by the 3rd Circuit as well as an application for Writ of Certiorari to the Louisiana Supreme Court.

While the church can hardly be blamed for looking to additional parties for relief considering the amount of the loss and the way it was sustained, the courts were clearly correct in denying its claims against the banks. Although the banks are generally at risk in lawsuits involving embezzlement, this case proves that the courts will not allow improper procedural tactics by an employer-plaintiff which could give it an undue advantage and deny a bank-defendant a fair opportunity to defend itself.

The Stockwell Sievert attorneys involved in obtaining this decision from the Third Circuit were Stephen C. Polito, H. Alan McCall, and Stephen D. Polito. See First Baptist Church of Westlake v. Leppo, 26 So.3d 917 (La.App. 3 Cir. 12/9/09) for the court’s opinion.

by: Stephen D. Polito

Divorce Law FAQ’s

Thu, 09 Feb 2012 05:27:00 GMT

Under what circumstances will a divorce be granted?

Divorce in Louisiana may be granted at different times for different circumstances.

Couples with no minor children of the marriage may be granted a divorce after living separate and apart for six months. To better understand these terms, including the legal meaning of living "separate and apart", we advise you to speak to an attorney.

If there are children of the marriage who are of minority age, then a married couple may have to live separate and apart for a year before a divorce may be granted.

There are exceptions to these rules. Divorce may be granted immediately upon the other spouse committing either adultery or a felony accompanied by a sentence to death of imprisonment at hard labor. To better understand what constitutes sufficient proof of adultery, we advise you to speak to an attorney.

What are the primary other issues related to a divorce?
There are other circumstances that may surround a divorce that you may need to consider:

-Custody of the minor children. Who will be the domiciliary parent? What will visitation arrangements be?

-Child support.

-Spousal support.

-Community property. How will the couple’s assets be divided? How will the couple’s debts be handled?

If the spouses choose to begin living "separate and apart", when should the petition for a divorce be filed?

File the petition for divorce at the beginning of the separation.

Louisiana Medical Malpractice Litigation: The Impact of Oliver v. Magnolia Clinic

Wed, 01 Feb 2012 20:47:00 GMT

The Louisiana Supreme Court recently heard oral arguments in the matter of Oliver v. Magnolia Clinic regarding the Third Circuit Court of Appeal's holding that "to the extent it includes nurse practitioners within its ambit, the medical malpractice cap violates the equal protection and adequate remedy of the Louisiana constitution." 71 So.3d 1170 (2011).

The Third Circuit Court of Appeal's original holding was appealed to the Supreme Court in March of 2010. The Louisiana Supreme Court remanded the case to the Third Circuit Court of Appeal for an en banc consideration (requiring a majority opinion of the entire court). On remand, the Third Circuit Court of Appeal adopted its original March of 2010 opinion with a majority concurring. Two of the justices, however, dissented. Following its August 2011 holding, the Supreme Court granted a writ to review the decision. While oral arguments have been heard in this matter, to date, the Court has yet to render its opinion.

The Louisiana medical malpractice act was adopted by the Louisiana Legislature in 1975 in an attempt to stabilize the medical malpractice insurance market. Legislators stated reasons for the act's adoption as a means to entice doctors to remain within or move to the state of Louisiana and to ensure that doctors had access to affordable malpractice insurance such that Louisiana citizens would access to necessary health care services. Since its enactment, the medical malpractice act has been challenged before on constitutional grounds and has been upheld as constitutional. In the case at bar, the Louisiana Supreme Court will determine if the medical malpractice act, as it applies to nurse practitioners (and essentially any other entity not expressly covered by the 1975 act), is a violation of the equal protection clause of the Louisiana constitution.

The Third Circuit Court of Appeal's holding in Oliver was grounded in the reasoning, as articulated by the court, that the medical malpractice act creates a suspect classification under the equal protection clause. The court reasoned that the act creates and distinguishes between two types of tort victims--those who can receive full compensation under the act and those who cannot receive full compensation under the act because of the severity of their injuries. After concluding that a suspect classification had been created under the act, the court looked to determine if the State had an important governmental interest in enforcing the medical malpractice act. The Third Circuit Court of Appeal could find no important governmental interest to justify that a specific class of individuals (those with severe/catastrophic injuries) would be precluded from receiving full compensation for their injuries. Thus, the Louisiana Third Circuit Court of Appeal held that the act was unconstitutional as it applied to nurse practitioners.

Those justices dissenting in the Oliver case cited the Louisiana Supreme Court's holding in Butler to argue that the constitutionality of the medical malpractice act has already been challenged and the LA SC has already determined its validity. In Butler, the Louisiana Supreme Court noted that those individuals who suffered the most serious injuries received three important benefits from the medical malpractice cap. Specifically, "(1) greater likelihood that the offending physicians or other health care provider has malpractice insurance; (2) greater assurance of collection from a solvent fund; and (3) payment of the medical care and related benefits." Butler v. Flint Goodrich Hosp. of Dillard Univ., 607 So. 2d 517, 521 (La. 1992).

Additionally, the dissenters pointed out that it is not the position of the judiciary to make changes to the laws of the state, but instead within the purview of the legislature to make amendments to this act.

Ultimately, if the Louisiana Supreme Court adopts the reasoning of the Louisiana Third Circuit Court of Appeal, the following professions would potentially be limited from coverage under the medical malpractice act: ambulance services, nurse midwives, and certified registered nurse anesthetists (1986 addition); community blood centers and tissue banks (1987 addition); occupational therapists (1990 addition); licensed midwives (1992 addition); social workers (1999 addition); nursing homes, licensed professional counselors, and certified nurse assistants (2001 addition); licensed perfusionists and offshore health service providers (2003 addition); EMS students (2004 addition); clinical nurse specialists (added the same time as nurse practitioners in 2009); radiologic technologists, clinical laboratory scientists, and licensed respiratory therapists (2010 addition).

As evidenced by the number of potential professions that, following the reasoning of the Third Circuit Court of Appeal, could be excluded from coverage under the medical malpractice act, the Oliver case will greatly impact the future of medical malpractice litigation in Louisiana.

by: Megan L Callahan

The H-2B Temporary Visa Program for Employees

Mon, 19 Dec 2011 18:39:00 GMT

For any employer familiar with the H-2B temporary visa program for employees – or for any employer interested in it, a major starting point to consider are the extremely strict and unforgiving timelines of the Labor Certification process. The H-2B program encompasses temporary labor needs that fall into one of the following categories: seasonal, peak load, intermittent or a one-time occurrence.

A major concern of employers is what is known as the Prevailing Wage. The wage for any position, in which an H-2B employee is sought, is set by the National Processing Center. Because the Immigration and Nationality Act requires that a foreign worker’s wages will not adversely affect the wages and conditions of other U.S. workers employed in the position, setting a “Prevailing Wage” for said occupation is vested in the Department of Labor, specifically, the Office of Foreign Labor Certification, National Processing Center.

Step one in the H-2B process is therefore filing a Request for a Prevailing Wage on Form ETA 9141. The request includes the employer information, job title, job duties and any employment or educational requirements for the position. Under 20 C.F.R. §655.10(b)(6), the National Processing Center is to make a determination within 30 days. Upon receipt of the set wage, employer may begin advertising for the position and then, must file the application for certification for a certain number of foreign workers at least 60 days before the start date of need.

This year, many employers faced serious delays with their prevailing wage requests. Employers cannot start their season or even begin to process their foreign labor certifications or visas without the Prevailing Wage Determination. For employers in any business surrounding a seasonal need, such as crawfish trap making for crawfish season and alligator, shrimp, crab or other seafood processing, the seasons wait for no one. What were employers to do? The delays were caused by the onset and then delays of a new wage rule (Wage Methodology for the Temporary Non-Agricultural Employment H-2B Program, Final Rule, 76 Fed. Reg. 45667 [Aug. 1, 2011]; Wage Methodology for the Temporary Non-Agricultural Employment H-2B Program, Notice of Proposed Rulemaking, 76 Fed. Reg. 37686 [June 28, 2011]; Wage Methodology for the Temporary Non-Agricultural Employment H-2B Program, Final Rule, 76 Fed. Reg. 3452 [Jan. 19, 2011]; Wage Methodology for the Temporary Non-Agricultural Employment H-2B Program, Notice of Proposed Rulemaking 75 Fed. Reg. 61578 [Oct. 5, 2010]). The implementation of the these new regulations was followed by many separate lawsuits by employers and associations against the Department of Labor.

In a nutshell, the “New Wage Rule,” as it is casually called, would create an average wage for H-2B job positions, as opposed to the previous system, where each occupation was broken into levels depending on experience and other factors. In reality, and the basis of many lawsuits, the New Wage Rule would set H-2B wages in the $12.oo -$15.oo per hour category for unskilled positions that previously held a $7.oo to $9.oo wage. The new wage would be required to be paid to all H-2B employees and any U.S. worker recruited into that occupation. The Department of Labor, by its own admissions, was extremely backlogged in the fall of 2011, as it had to re-issue new, higher wages to thousands of employers under the new wage system.

Understandably, the Department of Labor was delayed in issuing prevailing wages. But, for an employer who requested a prevailing wage in July, and had not received his wage by the end of September, how long can an employer wait? Employers who are experiencing extended delays waiting on their Prevailing Wage Determinations to be issued can seek some solace in Matter of GULF COAST CRAWFISHING SUPPLY, LLC, 2012-TLN-00003, Dec. 1, 2011.

Due to the extreme delays with Prevailing Wage Determinations, employer’s Labor Certification was ultimately certified, even though employer had to begin advertising for the position before the actual Prevailing Wage Determination was issued. Employer simply could not wait indefinitely for a determination to be issued, as the crawfish season was imminent. Employer made every attempt to comply with the regulations, including alerting U.S. applicants of the fact that the wage rate was likely to change upon receipt of the prevailing wage and under the new wage rules. Ultimately, BALCA recognized that when the Department of Labor failed to follow the 30-day guideline for issuing wage determinations, employer was left with no option but to continue with the labor certification process as best it could, given the circumstances and the extreme delays in getting the actual required wage for the position.

(See:http://www.oalj.dol.gov/Decisions/ALJ/TLN/2012/EMPLOYMENT_and_TRAIN_v_GULF_COAST_CRAWFISHI_2012TLN00003_%28DEC_01_2011%29_094633_CADEC_SD.PDF. "[I]t is clear that the Employer in this case made every effort to comply with Section 655.10(a)(2), but was simply unable to comply with the regulation and file its application in time for its season as a result of the NPWC’s delay in issuing the PWD. ... Employer’s noncompliance with Section 655.10(a)(2) was justifiable and excusable. ... Accordingly, the CO’s denial of certification is vacated and remanded for further processing.")

by: Ashley N. Foret

Defendant payors must take Medicare’s interest into account

Tue, 12 Jul 2011 13:55:00 GMT

If you make payments under liability insurance or self-insurance, don’t rely solely on the claimant or his attorney to take Medicare’s interest into account. If the government is not repaid the medical bills fronted by Medicare, then the feds can pursue the Medicare beneficiary, his attorney and the liability payer for repayment. That is a message reiterated in a recent federal court opinion from Arizona, Haro v Sebelius (D. Arizona May 5, 2011), No. 4:09-cv-00134-DCB:

“If the beneficiary or other party receives a third party payment and does not

reimburse Medicare, the third party payer must reimburse Medicare even though it has already reimbursed the beneficiary. See 42 C.F.R. § 411.24(h) and (i)(1). Congress expressly allocated this burden to the third-party liability payer that makes its payment to a party other than Medicare when it is, or should be, aware that Medicare has made a conditional payment. Id. at § 411.24(i)(2).” Id. (Emphasis part of the opinion.)

Double damages are recoverable from liability payers who do not take into account Medicare’s interest. 42 U.S.C. § 1395y(b)(3)(A).

“(The Haro opinion) underscores the defendant’s interest, and indeed obligation, to make sure that Medicare gets properly and timely reimbursed,” writes Victoria Vance, an Ohio attorney who specializes in Medicare law. “When negotiating settlements with plaintiffs, defendants can use this opinion to insist on a protocol that provides prompt and direct repayment to Medicare of amounts that are not in dispute.”

by: Paul "Sonny" Marks

$150 MILLION CLASS ACTION SETTLEMENT IN FAVOR OF LOUISIANA HEALTHCARE PROVIDERS

Tue, 14 Jun 2011 15:39:00 GMT

$150 MILLION CLASS ACTION SETTLEMENT IN FAVOR OF LOUISIANA HEALTHCARE PROVIDERS APPROVED BY LOUISIANA FOURTEENTH JUDICIAL DISTRICT COURT

Following a fairness hearing held on May 27, 2011, the Louisiana Fourteenth Judicial District Court gave final approval of a settlement agreement reached between a class of Louisiana healthcare providers and First Health Group Corp. (and its affiliates) in the case of Gunderson v. F.A. Richard & Associates, et. al, docket number 2004-2417. The lawsuit involved whether First Health provided appropriate advanced notice required by the Louisiana PPO Act (La. R.S. 40:2203.1) before PPO discounts were applied to bills for medical services rendered by Louisiana healthcare providers to occupationally ill or injured workers pursuant to Louisiana workers’ compensation law. First Health maintains the denial of the Plaintiff Class’s allegations that it caused the Class of healthcare providers to be paid less than the amount required by the Louisiana Workers’ Compensation Act’s reimbursement schedule without providing advanced notice required by the Louisiana PPO Act (La. R.S. 40:2203.1).

The settlement provides the class of Louisiana healthcare providers with benefits including a $150 million Class Settlement Fund established by First Health from which payments to eligible class members, lawyers’ fees, and court costs related to the litigation will be paid. First Health also provided an additional $500,000 to the settlement fund to pay actual costs and expenses incurred in connection with the administration of the settlement. In addition, First Health has agreed to follow certain procedures for providing notice of PPO discounts to healthcare providers, and has also assigned to the Class its rights to any proceeds that may be available pursuant to First Health’s insurance policies.

This settlement was finalized following nearly seven years of intense litigation in both state and federal court, as well as a ruling from the Louisiana Third Circuit Court of Appeal in favor of the Plaintiff Class of healthcare providers. Gunderson v. F.A. Richard & Associates, 44 So.3d 779 (La. App. 3 Cir. 6/30/10). First Health applied to the Louisiana Supreme Court for review of that decision, and the parties settled the matter prior to a decision from the Louisiana Supreme Court on whether to grant or reject First Health’s application to review the merits or correctness of the lower court decisions.

A PPO (or Preferred Provider Organization) generally refers to the contracts or agreements made between a “group purchaser”, or “group purchasers”, and healthcare providers to provide discounted rates of medical services. The Louisiana PPO Act (La. R.S. 40:2203.1) provides that the discounted rates are not enforceable or binding “unless such organization is clearly identified on the benefit card issued by the group purchaser or other entity accessing a group purchaser's contractual agreement or agreements and presented to the participating provider when medical care is provided.” The statute further states that “when no benefit card is issued or utilized by a group purchaser or other entity, written notification shall be required of any entity accessing an existing group purchaser's contractual agreement or agreements at least thirty days prior to accessing services through a participating provider under such agreement or agreements.” The statute also provides for a specific amount of damages awardable to medical providers in the event of a “group purchaser’s” noncompliance with the statute.

More information regarding the details of the settlement is available at www.gundersonfirsthealthsettlement.com.

by: Lynsay M. Fontenot

Louisiana Last Wills and Testaments

Fri, 21 Oct 2011 14:35:00 GMT

This article provides a short summary of current Louisiana law on wills and testaments, reflecting a few changes that have occurred over the last several years. Louisiana does not recognize oral or verbal testaments. As such, there are only two (2) valid forms of Louisiana last wills and testaments, both of which must be in writing. One form is an olographic testament and the other is a notarial testament. The author must intend for the writing to be his or her last will and testament.

An olographic testament is one entirely written, dated, and signed in the handwriting of the testator. Although the date may appear anywhere in the testament, the testator must sign the testament at the end of the testament. If anything is written by the testator after his or her signature, the testament is not invalid as that portion of the testament may be considered by the court, in its discretion, as part of the testament. The date is sufficiently indicated if the day, month, and year are reasonably ascertainable from information in the testament, as clarified by extrinsic evidence, if necessary. Additions and deletions on the testament may be given effect only if made by the hand of the testator.

A notarial testament is one prepared in writing, usually typed, where the testator signifies before a notary and two (2) subscribing witnesses that the written document is indeed his or her testament. The capacity of the testator controls the method by which the testament must be executed. Generally, the testator signs at the bottom of each page and at the end of the testament in the presence of the notary and two (2) subscribing witnesses. The notarial testament must also contain the appropriate attestation clause, which your attorney will prepare in drafting the testament. There are additional requirements depending on the condition of the testator. The additional requirements arise when the testator is literate, but is physically unable to sign his or her name, or if the testator is unable to read, or if the testator is deaf or deaf and blind.

The witnesses to the notarial testament must also be competent witnesses. A person may not be a witness to a testament if he or she is insane, blind, deaf, illiterate, under the age of sixteen, a spouse of the testator, or unable to sign his name. The notary and witnesses may not receive a bequest under the testament; as such a bequest is invalid. However, should the testator bequeath a legacy to either the notary or a witness, such bequest does not invalidate the entire testament. There are specific provisions of law which give guidance in such a situation.

Testaments are revocable during the lifetime of the testator and any provision to the contrary is null. To revoke a testament, the testator may physically destroy the testament or have the testament destroyed at his direction. The testator may also revoke the testament by such a declaration contained in a subsequently executed testament. A revocation may also be made by authentic act, which act is done by signifying this intention in writing before a notary and two (2) witnesses. A handwritten revocation may be made by the testator so long as the revocation is signed by the testator. There are also means by which the testator may revoke specific provisions of the testament without revoking the whole testament.

There are exceptions to most general rules, so please consult an attorney to ensure your last will and testament is drafted in accordance with Louisiana law.

By: Dallas K. Kingham

Workers’ Compensation: Supreme Court rules on Coverage for Post-Termination Injuries

Tue, 15 Mar 2011 18:12:00 GMT

Until recently, the Louisiana Supreme Court was silent as to the applicability of workers’ compensation in post-termination employee injury scenarios. Clearly, such a determination is of the utmost importance to self-insured employers and workers’ compensation insurers who could face liability for injuries sustained by employees after they are terminated or quit.

In Ardoin v. Cleco Power, L.L.C., 2010-815 (La. 7/2/10), 38 So.3d 264, Ardoin, a Cleco employee, was terminated on Friday, October 24, 2008 at Cleco's Work Center in Opelousas, Louisiana. Ardoin's office was located in Eunice, Louisiana. Despite his prior termination, Ardoin requested that he be allowed to go to his office in Eunice on Monday, October 27, 2008, to collect his personal belongings. Cleco agreed to Ardoin's request and allowed Ardoin to go to his office on Monday, October 27, 2008. While clearing out his office, Ardoin sustained serious physical injuries in a slip and fall accident.

Ardoin filed a claim for workers compensation seeking wage benefits, medical treatment, penalties and attorney fees, despite the fact that he had been terminated by Cleco prior to sustaining his injuries, and, thus, appeared unable to prove that his injuries occurred in the course and scope of his employment. The Office of Workers’ Compensation granted, and the Louisiana Third Circuit affirmed, Cleco’s motion for summary judgment, rejecting Ardoin's argument that the accident occurred during the reasonable period of time permitted a discharged employee to wind up his affairs.
The Supreme Court reversed and held that, given that the terminated employee was permitted by his employer to clean out his Eunice office and retrieve his personal belongings on the Monday following the discharge that occurred on Friday in Opelousas, the injury occurred during a reasonable period of time for winding up the employee’s affairs and thus was considered to be within the course and scope of employment. In so holding, the Supreme Court cited Larson’s Workers’ Compensation Law, § 26.01 for the proposition that:

Compensation coverage is not automatically and instantaneously terminated by the firing or quitting of the employee. The employee is deemed to be within the course of employment for a reasonable period while winding up his or her affairs and leaving the premises. The difficult question is: What is a reasonable period?

The Supreme Court’s decision in Ardoin establishes a clear precedent for employer exposure under the Louisiana Workers’ Compensation Act for lost wages and medical expenses when discharged employees return to work premises in winding up their affairs. Employers must be aware of this potential exposure and establish protocols for carefully handling situations involving recently discharged employees.

By Ross M. Raley

3rd Circuit Confirms Lack of Liability of Depositary Bank

Tue, 15 Mar 2011 18:11:00 GMT

From classic employee embezzlement to outright theft and forgery, the number of incidents of dishonest and illegal activity related to checks and other negotiable instruments has increased in recent years in southwest Louisiana. Generally, the perpetrators of these activities are eventually identified and prosecuted in some fashion. While these individuals may pay a debt to society through the criminal system, they frequently contribute little or nothing to the civil damages which resulted from their willful acts. The money acquired from the fraud was usually eaten, drunkor gambled away. Regardless of the cause, the money simply disappears over a very short time and tangible property worthy of seizure almost never remains.

Consequently, the cause of damage is treated like an accident and the loss is almost universally borne by the bank customer (drawer), the payor bank (drawee), or the bank where the items were taken for collection (depositary bank). The respective liabilities of these parties, are established by Article 3 of the Uniform Commercial Code (UCC) which was adopted by Louisiana and effectively displaces all other Louisiana claims and causes of actions with respect to negotiable instruments.

According to the UCC, in a typical situation where someone steals or has access to the drawer’s checkbook and writes himself a check, the bank customer (drawer) has a claim against his own bank (drawee) for paying the unauthorized instrument. This claim is, however, subject to defenses. Specifically, the payor bank (drawee) can avoid or reduce its liability by proving that the bank customer (drawer) failed to exercise ordinary care with respect to the checks and/or failed to timely review his bank statements.

The payor bank (drawee) could also potentially have a breach of warranty claim against the depositary bank if certain conditions existed at the time of transfer or presentment to the payor bank (drawee). The UCC does not recognize a drawer’s claim against the depositary bank.

Despite this relatively simplistic liability setup, widespread confusion exists in Louisiana, even among lawyers, regarding actionable claims and appropriate causes of action. Lawyers often file scattergun lawsuits on behalf of the drawer. Non-UCC claims and even UCC claims against the wrong parties are not uncommon. Perhaps this is due to a general lack of understanding, or it could be merely over aggressive litigation tactics. Whatever the cause, the fact that there are relatively few Louisiana Court of Appeals or Supreme Court decisions interpreting the liability provisions in check fraud cases certainly allows this situation to persist. Recently, the 3rd Circuit Court of Appeals has taken a positive step in correcting this issue with its decision in Innovative Hospitality Systems, LLC vs. ABE’s Inc., etc. (La. App. 3rd Cir. 12/8/10) __ So. 3d __, 73 UCC Rep. Serv. 2d 251, 2010 WL 4961809.

In this case, the checking account owner (drawer) at payor bank (drawee) filed suit against the depositary bank seeking recovery of funds paid out in 108 fraudulent checks written on the drawer’s account at the payor bank. The depositary bank filed exception of no cause of action. The 14th Judicial District Court, Calcasieu Parish, No. 2008-1677, Judge Wilford D. Carter, granted exception and dismissed the suit. The drawer appealed.

Writing the opinion of the Court, Judge David Painter held that: 1) the depositary bank that accepted deposit of fraudulent checks owed no duty to account owner, i.e., the drawer, in form of a statutory presentment warranty; 2) account owner’s remedy for amount of fraudulent (and altered) checks charged against owner’s account was against its own bank, i.e., the drawee bank; and 3) the UCC displaces the Louisiana law applicable to negligent acceptance, payment or presentment of a forged check by a depositary bank prior to its enactment. Therefore any negligence-based action asserted by drawer in its petition has been displaced by the UCC and therefore does not support a cause of action against the depositary bank.

With this case available, Louisiana trial courts no longer have to accept the statutory interpretations of the UCC from other jurisdictions with respect to the depositary banks’ liability to the drawer. Hopefully, attorneys will eventually recognize this principle and omit these erroneous claims against depositary banks from their original petitions. . This would produce less overall litigation for banks and swifter resolution of contested matters through trial or settlement.

The Stockwell Sievert attorneys involved in obtaining this decision from the Third Circuit were Stephen C. Polito, H. Alan McCall, and Stephen D. Polito.

by: Stephen D. Polito

Getting Connected – the Future of Networking

Tue, 15 Mar 2011 17:12:00 GMT

As we the attorneys and staff at the Stockwell Sievert Law Firm unveilour new and improved website, we also found it appropriate to discuss the business and legal uses of some of the new technology we are employing. As evidenced by the fact that, according to statistics, the number of social networking users has doubled since 2007 and now exceeds 55.6 million in the United States alone (or almost 1/3 of the US population), businesses must either get connected or get left behind. We chose the former.

At the time of publication of this article, our Firm’s 27 lawyers will each have activated Facebook and LinkedIn accounts and our Firm’s newly revamped website will host blogging capabilities where different lawyers will contribute relevant legal articles each month. In this age these changes are not merely technological indulgences, but have become marketing necessities. The vast majority of our client representatives and colleagues in the legal and business communities have profiles on one or both of these sites (not to mention the numerous other sites we have chosen, for now, not to join). While the days of meeting clients at a cocktail reception are not totally a thing of the past, they are certainly not the sole means for people to “network” anymore, nor are they most effective.

This is not to suggest that traditional marketing tools like lunches, dinners, and cocktails are being replaced by social networking. Instead social networks are enhancing traditional networking. What is a thing of the past is talking shop at these events for a lack of anything else to discuss. Now, having seen the latest “status update” of a client’s HR representative, the attorney is prepared to inquire about the client’s vacation to Tahoe or her son’s baseball game. Unlike in decades past, people are spending less time at work – work ethics have simply changed as people have become more mobile and more connected. With those changes has come an increase in the number of individuals who are both hardworking professionals and involved parents or passionate hobbyists of one sort or the other. As suggested by its name, “social” networking allows the professional to learn more about the non-work life of his or her clients and connect with them on a much more personal level. People want to do business with someone with whom they have a personal relationship – business isn’t just business anymore.

In addition to utilizing social media as a means of getting or staying connected with clientson a personal level, it is also a means of advertising upcoming events or recent accomplishments. Employers can utilize social networking tools to advertise services, recruit potential employees, and even monitor existing workers. The uses of social media in business cross industry lines and, while they do present some unique and mostly yet uncharted legal and ethical issues, the benefits far outweigh the negative.

As with any networking, you get out of it what you put in. If you go to the black tie event of the year and stand in a corner by yourself, you are unlikely to make a lasting impression on anyone or form any new (potential client) relationships. The same is true with social media. It is not enough to simply set up a profile and log on occasionally. You must use the tools at your disposal – link your blog to your profile, update your status to invite people to an event you are hosting, or brag on yourself a little about the recent appellate court decision you got for your client. The possibilities are endless – just log on! We certainly hope you will stop by each of our profiles and continue to follow our blog at www.ssvcs.com.

by Somer G. Brown

Welcome to our new website!

Tue, 08 Mar 2011 22:32:00 GMT

The attorneys at Stockwell, Sievert, Viccellio, Clements and Shaddock would like to welcome you to our new website. Please check back on a consistent basis to see what is happening at our firm and in the legal community.