Chalona v. Louisiana Cit. Prop. Ins. Corp.

• Decision Date: 11 June 2008
• Docket Number: No. 2008-CA-0257.,2008-CA-0257.
• Citation: 3 So.3d 494
• Parties: Adrian P. CHALONA, Sr., Husband of/ and Angelique M. Chalona, Albert Demma, Melanie J. Gervais, Emile L. Breaux, Jr., Elvis K. Hyde, Victoria Leonard, Leslie Marin, Wife Of/And Freishmann Marin, David P. Quinn, Husband of/and Sheila D. Quinn v. LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION.
• Court: Court of Appeal of Louisiana — District of US

3 So.3d 494

Adrian P. CHALONA, Sr., Husband of/ and Angelique M. Chalona, Albert Demma, Melanie J. Gervais, Emile L. Breaux, Jr., Elvis K. Hyde, Victoria Leonard, Leslie Marin, Wife Of/And Freishmann Marin, David P. Quinn, Husband of/and Sheila D. Quinn v. LOUISIANA CITIZENS PROPERTY INSURANCE CORPORATION.

No. 2008-CA-0257.

Court of Appeal of Louisiana, Fourth Circuit.

June 11, 2008.

Gregory P. DiLeo, Jennifer B. Eagan, New Orleans, LA, Jeffrey Berniard, Berniard Law Firm, New Orleans, LA, Madro Bandaries, Madro Bandaries, P.L.C., New Orleans, LA, for Plaintiffs/Appellees.

John W. Waters, Jr., Gregory J. McDonald, Bienvenu, Foster, Ryan & O'Bannon, LLC, New Orleans, LA, for Defendant/Appellant.

(Court composed of Judge PATRICIA RIVET MURRAY, Judge DENNIS R. BAGNERIS, SR., Judge MICHAEL E. KIRBY, Judge EDWIN A. LOMBARD, Judge ROLAND L. BELSOME).

LOMBARD, Judge.

Defendant, Louisiana LCPIC Property Insurance Corporation ("LCPIC"), also referred to as Louisiana LCPIC Fair Plan, appeals from a judgment of the district court granting Plaintiffs' Motion for Class Certification. For the following reasons, we affirm the decision of the trial court.

FACTS AND PROCEDURAL HISTORY

Plaintiffs, whose property was insured by LCPIC on August 29, 2005, when Hurricane Katrina hit the Gulf Coast and/or on September 24, 2005, when Hurricane Rita struck south Louisiana, filed suit against LCPIC alleging that they notified LCPIC of their losses but LCPIC failed to make a written offer to settle their property damage claims within thirty days, in violation of its statutory duty under LSA-R.S. 22:658(A)(4)¹ Plaintiffs are seeking statutory penalties against LCPIC pursuant to LSA-R.S. 22:658(B)(1).²

Plaintiffs filed a motion to certify this action as a class action, pursuant to Louisiana Code of Civil Procedure Article 592. A hearing on the class certification issue was begun on June 17, 2007 and continued to August 16, 2007. The matter was submitted for decision after receipt of all post-trial memoranda on November 12, 2007. On January 25, 2008, the trial court rendered a judgment granting Plaintiffs' motion for class certification. In its written reasons for judgment the trial court opined that the class definition sought by Plaintiffs contained elements that were overly broad and subjective, and thus, narrowed the class definition sought by Plaintiffs by defining the class as follows:

All present or past insureds of Louisiana LCPIC Property Insurance Corporation a/k/a LOUISIANA LCPIC FAIR PLAN, hereinafter referred to as "LCPIC", who, on or after August 29, 2005, provided notification of loss resulting from Hurricane Katrina and/or Rita to LCPIC, notwithstanding whether loss adjustment was initiated within thirty (30) days after notification of loss, whose claims were not followed by a written offer to settle within thirty (30) days after receipt of satisfactory proof of loss.

In its judgment, the trial court further ordered and decreed that Adrian P. Chalona, Sr., Angelique Chalona, Albert Demma, Melanie Gervais, Emile Breaux, Jr., Elvis K. Hyde, Victoria Leonard, David P. Quinn and Sheila D. Quinn shall serve as the class representatives of the class as defined. LCPIC appeals the trial court's judgment certifying this matter as a class action.

LAW AND DISCUSSION

The main issue to be decided in this appeal is whether the district court abused its discretion in certifying this case as a class action. The purpose and intent of the class action is to "adjudicate and obtain res judicata effect on all common issues applicable not only to the class representatives who bring the action, but to all others who are similarly situated." Chiarella v. Sprint Spectrum LP, 04-1433, p. 16 (La.App. 4 Cir. 11/17/05), 921 So.2d 106, 118, citing Ford v. Murphy Oil U.S.A., Inc., 96-2913, p. 4 (La.9/9/97), 703 So.2d 542, 544. In Louisiana, the class action certification procedure is governed by Louisiana Code of Civil Procedure articles 591-597. The prerequisites for maintaining a class action are found in article 591. Those requirements have generally been summarized as: numerosity, commonality, typicality, the adequacy of the representative parties to protect the interest of the class, an objectively definable class, the predominance of common issues, and the superiority of the class action procedure.³

In order to obtain class certification, the plaintiffs must meet all of the requirements of article 591(A) and also satisfy at least one of the subsections of article 591(B). Oubre v. Louisiana LCPIC Fair Plan (La.App. 5 Cir. 5/29/07), 961 So.2d 504, 508, writ denied, 07-1329 (La.9/28/07), 964 So.2d 363, citing, Daniels v. Witco Corp., 03-1478 (La.App. 5 Cir. 6/1/04), 877 So.2d 1011, 1014, writ denied, 04-2287 (La.11/19/04), 888 So.2d 205. The burden of establishing that the statutory criteria are met falls on the party seeking to maintain the action as a class action. Oubre, 961 So.2d 504, 508.

The standard of review for class action certifications is bifurcated. The factual findings are reviewed under the manifest error/clearly wrong standard, but the trial court's judgment on whether or not to certify the class is reviewed by the abuse of discretion standard. Etter v. Hibernia Corporation, 06-646 (La.App. 4 Cir. 2/14/07), 952 So.2d 782. A trial court has wide discretion in deciding whether or not to certify a class. Chiarella v. Sprint Spectrum LP, 04-1433, p. 16 (La.App. 4 Cir. 11/17/05), 921 So.2d 106, 118. Any error to be made in deciding class action issues should be in favor of and not against maintenance of the class action, because a class certification order is subject to modification if later developments during the course of trial so require. McCastle v. Rollins Environmental Services of Louisiana, Inc., 456 So.2d 612, 620 (La.1984).

When reviewing the trial court's ruling regarding class certification, we do not consider whether plaintiffs' claims state a cause of action or have substantive merit, or whether plaintiffs will ultimately prevail on the merits. Munsey v. Cox Communication of New Orleans, Inc., 01-0548, p. 5 (La.App. 4 Cir. 3/20/02), 814 So.2d 633, 636. Rather, our task is to examine Plaintiffs' legal claims and to determine only whether a class action is the appropriate procedural device in light of established Louisiana criteria. Id.

In the instant case, the trial judge found that Plaintiffs' claims meet all of the criteria set forth in Louisiana Code of Civil Procedure article 591(A), namely numerosity, commonality, typicality, adequacy of representation, and an objectively definable class. The trial judge also found that the elements of predominance and superiority set forth in Louisiana Code of Civil Procedure article 591(B)(3) have been satisfied.

On appeal, LCPIC contends that the trial judge abused his discretion and was manifestly erroneous in certifying this case as a class action, and it asserts six specifications of error in support of its position. LCPIC specifically argues that the trial court erred in:

1. finding that the class certification requirement of commonality (common questions of law and fact predominate over individual issues for purposes of class certification) has been met under La. C.C.P. art. 591(B)(3).

2. failing to identify specific issues that could be tried class-wide and in failing to consider the many individual issues not subject to common evidence.

3. adopting a class definition that is vague, indeterminate, and overly broad with regard to who will be in the class.

4. relying on La. C.C.P. 591(B)(1) as a ground for class certification;

5. finding that the class certification requirement of numerosity had been met, where the number of class members is highly speculative; and

6. finding that the class certification requirement of superiority has been met, and where judicial economy is not served by class certification.

Despite LCPIC's numerous specifications of error, in reviewing the verified petition, the briefs and the testimony at the certification hearing, we find that there was sufficient evidence for the trial court to certify this class.

Numerosity

The first requirement for certifying a class is numerosity. To satisfy this requirement, Plaintiffs must establish that the members of the class are so numerous that joinder of those members would be impracticable. No set number of putative plaintiffs has been established in order to fulfill the numerosity requirement for a class action. Davis v. Jazz Casino Co., LLC, 03-0005, p. 7 (La.App. 4 Cir. 1/14/04), 864 So.2d 880, 887. The determination of numerosity is based in part upon the number of putative class members, but is also based upon considerations of judicial economy in avoiding a multiplicity of lawsuits, financial resources of class members, and the size of the individual claims. Id., at 888.

At the certification hearing in the instant case, deposition testimony taken on December 1, 2005 of Terry Lisotta, Chief Executive Officer of LCPIC, was introduced. This testimony indicated that at the time of the deposition, there were 59,000 property damage claims filed with LCPIC and, of those, 20% had been concluded. The trial court held that this left a large number of potential claimants and that "the projected number of claimants along with the unfortunate financial position caused by these catastrophic events for most individuals combined with the time and money which could be saved satisfies the numerosity requirement." We find no manifest error in this finding. Therefore, this specification of error has no merit.

Commonality

A showing of commonality of questions of law and fact among the class is the second prerequisite in certifying the class. The test for commonality requires only that there be at least one issue the resolution of which will affect all or a significant number of putative class members. Watters v. Dept. of Social Serv., 05-0324, p. 15 (La.App. 4 Cir. 4/19/06), 929 So.2d 267, 278,...