Arias v. Stolthaven New Orleans, L.L.C.

• Decision Date: 19 March 2008
• Docket Number: No. 2007-CA-0650.,2007-CA-0650.
• Citation: 980 So.2d 791
• Parties: Ansenio ARIAS and Lorena Arias v. STOLTHAVEN NEW ORLEANS, L.L.C., ABC Insurance Company, Stolt-Nielsen Transportation Group, Inc. a/k/a Stolt-Neilsen S.A., DEF Insurance Company, Certified Coating Inc., GHI Insurance Company, Kenneth R. Hebert, et al.
• Court: Court of Appeal of Louisiana — District of US

980 So.2d 791

Ansenio ARIAS and Lorena Arias v. STOLTHAVEN NEW ORLEANS, L.L.C., ABC Insurance Company, Stolt-Nielsen Transportation Group, Inc. a/k/a Stolt-Neilsen S.A., DEF Insurance Company, Certified Coating Inc., GHI Insurance Company, Kenneth R. Hebert, et al.

No. 2007-CA-0650.

Court of Appeal of Louisiana, Fourth Circuit.

March 19, 2008.

Rehearing Denied April 23, 2008.

Dennis D. Spurling, Dennis Spurling PLLC, Houston, TX, and Deborah A. Pearce, New Orleans, LA, for Plaintiff/Appellees, Arsenio Arias and Family.

Robert I. Siegel, Andrew A. Braun, David B. Wilson, Gieger, Laborde & Laperouse, LLC, New Orleans, LA, for Defendant-Appellant, American Home Assurance Company.

(Court composed of Chief Judge JOAN BERNARD ARMSTRONG, Judge, CHARLES R. JONES and Judge EDWIN A. LOMBARD).

JOAN BERNARD ARMSTRONG, Chief Judge.

The defendant-appellant, American Home Assurance Company ("American"), appeals a default judgment confirmed on January 31, 2007, and signed on March 22, 2007, in favor of the plaintiffs-appellees, Arsenio and Lorena Arias and their minor children, Joseph Arias, Jeremy Arias, Natalie Arias, Mayra Arias, and David Arias, condemning American to pay to Arsenio Arias $2,338,140.10 in general damages, $439,512.07 in medical expenses, and $858,427.00 for lost wages; $50,000 to Lorena Arias; and $5,000.00 each to the minor children of Arsenio Arias — Joseph Arias, Jeremy Arias, Natalie Arias, Mayra Arias and David Arias.

This is a personal injury claim based upon allegations that the plaintiff, Arsenio Arias, an employee of Certified Coating, Inc., was injured when exposed to acrylonitrile, a dangerous and potentially fatal chemical, while doing a painting job for American's insured, Stolthaven New Orleans, L.L.C.

Plaintiffs' original petition was filed on January 12, 2004, naming a number of defendants, among whom were the aforementioned Stolthaven New Orleans, L.L.C. and its, at the time, unknown insurer.

On August 22, 2005, the plaintiffs filed a "First Amending and Supplemental Petition for Damages," adding American as a named defendant.

On October 26, 2005, service of process was made on American through the Secretary of State.

On June 26, 2006, an order of preliminary default was signed by the trial court which was not confirmed by the plaintiff until January 31, 2007, over six months later.

American does not raise any objections as to notice, service of process or timing of the default.

The primary issue raised by American is its contention that the default is defective because the evidence offered at the default did not include a copy of the policy of insurance upon which the claim against American is based, i.e., American argues that the only way to establish a prima facie case for coverage against an insurance company, in the absence of an admission of coverage by that company, is with a copy of a policy upon which the claim is based.

The plaintiffs' default partakes of the natures of both a conventional obligation, in that it is based upon an alleged contract of insurance, and a delictual obligation in that the plaintiffs' claim under the alleged policy arises out of personal injury. La. C.C.P. art. 1702, which sets forth the requirements for confirming a default, states in pertinent part:

A. A judgment of default must be confirmed by proof of the demand sufficient to establish a prima facie case....

B. (1) When a demand is based upon a conventional obligation, affidavits and exhibits annexed thereto which contain facts sufficient to establish a prima facie case shall be admissible, self-authenticating, and sufficient proof of such demand. The court may, under the circumstances of the case, require additional evidence in the form of oral testimony before entering judgment.

(2) When a demand is based upon a delictual obligation, the testimony of the plaintiff with corroborating evidence, which may be by affidavits and exhibits annexed thereto which contain facts sufficient to establish a prima facie case, shall be admissible, self-authenticating, and sufficient proof of such demand. The court may, under the circumstances of the case, require additional evidence in the form of oral testimony before entering judgment.

The determination of whether there is sufficient proof to support a default judgment is a question of fact and should not be disturbed on appeal unless it is manifestly erroneous. Ledet v. Moe, 03-745 (La.App. 5 Cir. 12/9/03), 864 So.2d 643, 644. Where, as in the instant case, it is uncontested that entry of the default judgment was procedurally proper, appellate review is limited to determining whether there was sufficient evidence introduced at the default confirmation hearing to support the default judgment. Akerman v. Dawes, 94-0757 (La.App. 4 Cir. 1/19/95), 658 So.2d 1270, 1271-1272.

In reviewing a default judgment, an appellate court is restricted to determining whether the record contains sufficient evidence to prove a prima facie case. Rhodes v. All Star Ford, Inc., 599 So.2d 812, 813 (La.App. 1 Cir.1992). Although there is a presumption that the judgment confirming a default is supported by competent evidence, it does not apply when, as in this case, there is a transcript of the confirmation proceeding. Hickman v. Wm. Wrigley, Jr. Co., Inc., 33,896 (La. App. 2 Cir. 10/4/00), 768 So.2d 812, 815. A prima facie case is established as required for confirmation of a default judgment, when the plaintiff proves the essential allegations of the petition, with competent evidence, to the same extent as if the allegations had been specifically denied. Power Marketing Direct, Inc. v. Foster, 05-2023, pp. 11-12 (La.9/6/06), 938 So.2d 662, 670. A prima facie case is one that will entitle a party to recover if no evidence to the contrary is offered by the opposing party. Thibodeaux v. Burton, 538 So.2d 1001, 1004 (La.1989). In other words, the plaintiff must present competent evidence that convinces the court that it is probable that he would prevail on a trial on the merits. Thibodeaux, 538 So.2d at 1004.

The plaintiff is confined to the facts and the theories pled in his petition; he may not expand his pleadings by introducing evidence at the confirmation hearing. Thus, the plaintiff is precluded from obtaining a default judgment "different in kind from that demanded in the petition." La. C.C.P. art. 1703; See Spear v. Tran, 96-1490 (La.App. 4 Cir. 9/18/96), 682 So.2d 267. However, the Louisiana Supreme Court has held that "the pleadings which lead up to the demand, or prayer, upon which a default judgment is based are to be construed no more restrictively than pleadings suggestive of other judgments." Royal Furniture Co. of Baton Rouge, Inc. v. Benton, 260 La. 527, 532, 256 So.2d 614, 616 (1972).

At the confirmation hearing, the plaintiff offered a copy of the Memorandum of Insurance dated May 10, 2005, allegedly executed by a placement agent for American, Jardine Lloyd Thompson LLC, naming Stolthaven New Orleans LLC as the insured under American Home Assurance Company Commercial General Liabilities Policy No. ARS-3054. The policy period is shown as December 1, 2001, to September 1, 2003; the limits of liability are described as $1,000,000 per occurrence and $2,000,000 general aggregate and excess of U.S. $250,000 per occurrence. The policy period spans the period relevant to this litigation. The Memorandum of Insurance is annexed to a cover letter dated May 24, 2005, on the letterhead of the attorney for Stolthaven directed to the plaintiffs' attorneys, stating that:

Please find enclosed the Memorandum of Insurance received from insurance broker Jardine Lloyd Thompson LLC which shows Stolthaven New Orleans LLC is insured with American Home Assurance Company. This Memorandum of Insurance should answer your additional discovery requests.

We find this to be sufficient to establish a prima facie case even in the absence of the original policy.

Galland v. Nat'l Union Fire Ins. Co. of Pittsburgh, 452 So.2d 397, 398 (La. App. 3 Cir.1984) states that the best evidence rule does not apply at default judgment hearings; only competent evidence is required.

The only case with facts truly analogous to those of the instant case is that of Manuel v. Peninsular Life Ins. Co., 248 So.2d 871, 872 (La.App. 3 Cir.1971). In Manuel the plaintiff was required to purchase credit disability and credit life insurance in connection with the credit purchase of an automobile, he was issued a "Franchise Certificate" setting forth the terms of coverage. The Court held that that certificate was sufficient to constitute prima facie proof of coverage for default purposes.

All of the other cases cited by both parties are distinguishable.

In Burks v. Cambeck & Partners, 02-0324, p. 4 (La.10/15/02), 834 So.2d 968, 970, because the insurer was found to have admitted the existence of the policy in its motion for summary judgment it could not later assert that the policy had been cancelled. Burks is distinguishable from the instant case because the admission of the existence of the policy came directly from the insurer in the course of the litigation. Likewise, in Pendleton v. Spartan Building Construction, 432 So.2d 298, 301 (La. App. 5 Cir.1983), the court found coverage in the absence of a policy where the insurer admitted in its answer that it had issued a policy. (American has made no such direct admission in the instant case.) As a result of this admission, the Pendleton court held the burden shifted to the insurer to show that no liability existed under the acknowledged policy.

While the direct admission by the insurer in Pendleton distinguishes it factually from the instant case, Pendleton is, nevertheless, relevant to the instant case to the extent that it expresses the rule of law that once coverage was determined to exist, the burden shifted to the insurer to show no liability — a burden that American cannot bear under the record we have before us.

This is consistent with ...