Lee v. Sapp

• Citation: 234 So.3d 122
• Decision Date: 06 December 2017
• Docket Number: NO. 2017–CA–0490,2017–CA–0490
• Parties: Roderick F. LEE v. Thomas D. SAPP, State Farm Mutual Automobile Insurance Company, BMW Financial Services, N.A., L.L.C. and Financial Services Vehicle Trust, Inc.
• Court: Court of Appeal of Louisiana — District of US

234 So.3d 122

Roderick F. LEE

v.Thomas D. SAPP, State Farm Mutual Automobile Insurance Company, BMW Financial Services, N.A., L.L.C. and Financial Services Vehicle Trust, Inc.

NO. 2017–CA–0490

Court of Appeal of Louisiana, Fourth Circuit.

DECEMBER 6, 2017

Roderick F. Lee, Pro Se, 3113 Independence Street, Suite I, Metairie, LA 70006, COUNSEL FOR PLAINTIFF/APPELLANT

Charles R. Rumbley, LOBMAN, CARNAHAN, BATT, ANGELLE & NADER, 400 Poydras Street, Suite 2300, New Orleans, LA 70130, COUNSEL FOR DEFENDANT/APPELLEE

(Court composed of Judge Rosemary Ledet, Judge Paula A. Brown, Judge Marion F. Edwards, Pro Tempore)

Judge Rosemary Ledet

This is a personal injury case. The plaintiff, Roderick Lee, appeals the trial court's March 6, 2017 judgment, granting a partial peremptory exception (the "Exception"). The Exception was filed by the defendant, State Farm Mutual Automobile Insurance Company ("State Farm"), in its capacity as the liability insurer of the alleged tortfeasor, Thomas Sapp. The judgment, which sustained the Exception, dismissed a portion of the insurance "bad faith" claims that Mr. Lee asserted against State Farm. For the reasons that follow, we convert the appeal to an application for supervisory writs, grant the writ application, and deny relief.

FACTUAL AND PROCEDURAL BACKGROUND

In August 2009, Mr. Lee was involved in an automobile accident with Mr. Sapp. The accident occurred on Prytania Street in New Orleans, Louisiana; the vehicle that Mr. Sapp was driving collided with the vehicle that Mr. Lee was driving. In July 2010, Mr. Lee filed suit, naming as defendants, among others, Mr. Sapp and his alleged automobile liability insurer, State Farm. In his petition, Mr. Lee prayed for damages for his personal injuries incurred in the accident as the result of Mr. Sapp's alleged negligence; he asserted no property damage claim. In its capacity as Mr. Sapp's alleged insurer, State Farm answered the suit, averring that Mr. Sapp's policy was not in effect on the date of the accident and, therefore, denying coverage for the accident. In March 2012, Mr. Lee filed a First Amended and Supplemental Petition, asserting a negligent entrustment claim against the lessor of the vehicle that Mr. Sapp was driving.¹

On a prior appeal, this court held that coverage existed at the time of the accident. Lee v. Sapp , 14-1047 (La. App. 4 Cir. 3/4/15), 163 So.3d 60 (" Sapp I "). In July 2016, Mr. Lee filed a Second Amended and Supplemental Petition, asserting insurance "bad faith" claims against State Farm. For the first time, Mr. Lee averred that State Farm was not only Mr. Sapp's insurer, but also his insurer. He also averred that State Farm was his uninsured or underinsured motorist ("UM") insurer.

In August 2016, Mr. Lee entered into a settlement agreement with Mr. Sapp and State Farm (the "Release"). In the Release, Mr. Lee settled all his claims against Mr. Sapp and State Farm, in its capacity as Mr. Sapp's insurer, arising out of the August 2009 accident with the exception of certain "Reserved Claims." The Release defined the term "Reserved Claims" to mean "all bad faith claims asserted by Plaintiff against State Farm Mutual Automobile Insurance Company in the Second Supplemental and Amended Petition for Damages."

In September 2016, State Farm filed the Exception, seeking dismissal of all the Reserved Claims, except for Mr. Lee's claims for misrepresentation under La. R.S. 22:1973(B)(1), which were expressly carved out of the Exception.² Following a hearing, the trial court sustained the Exception. This appeal followed.

JURISDICTIONAL ISSUE

Before reaching the merits of this appeal, we must first address the jurisdictional issue that State Farm raises regarding whether the March 6, 2017 judgment is an appealable, final judgment.³ State Farm contends that because the judgment is only a partial final judgment and because the trial court did not designate the judgment as appealable under La. C.C.P. art. 1915 (" Article 1915"), the judgment is non-appealable and, thus, the appeal should be dismissed. Mr. Lee counters that "[t]he judgment was designated a final judgment on that Peremptory Exception alone" and, thus, the appeal should not be dismissed.

"[A] judgment that only partially determines the merits of the action is a valid partial final judgment (and therefore appealable) only if authorized by Article 1915." Rhodes v. Lewis , 01-1989, p. 3 (La. 5/14/02), 817 So.2d 64, 66 (quoting Douglass v. Alton Ochsner Med. Found. , 96-2825 (La. 6/13/97), 695 So.2d 953 ). Article 1915 has two subparts—Subparts A and B. See Quality Envtl. Processes, Inc. v. Energy Dev. Corp. , 16–0171, 16-0172, p. 6 (La. App. 1 Cir. 4/12/17), 218 So.3d 1045, 1053. The judgment granting State Farm's Exception—a partial peremptory exception—falls under Subpart B,⁴ which "provides that when a court renders a partial judgment, partial motion for summary judgment, or exception in part, it may designate the judgment as final when there is no just reason for delay." Id. ; see also Favrot v. Favrot , 10-0986, pp. 2-3 (La. App. 4 Cir. 2/9/11), 68 So.3d 1099, 1102.

Subpart B of Article 1915 has two subparts. The first subpart provides that "the judgment shall not constitute a final judgment unless it is designated as a final judgment by the court after an express determination that there is no just reason for delay." La. C.C.P. art. 1915(B)(1). The second subpart provides that "[i]n the absence of such a determination and designation, any such order or decision shall not constitute a final judgment for the purpose of an immediate appeal and may be revised at any time prior to rendition of the judgment adjudicating all the claims and the rights and liabilities of all the parties." La. C.C.P. art. 1915(B)(2) ; see also La. C.C.P. art. 1911(B) (providing, in part, that "[n]o appeal may be taken from a partial final judgment under Article 1915(B) until the judgment has been designated a final judgment under Article 1915(B)").

The record reflects that the trial court did not designate the judgment as "final" and immediately appealable pursuant to La. C.C.P. art. 1915(B).⁵ Because the trial court did not designate the judgment as final and immediately appealable, it is a non-appealable judgment. Nonetheless, this court has exercised its discretion to convert an appeal of a non-appealable judgment into an application for supervisory writs when the following two conditions are met:

(i) The motion for appeal has been filed within the thirty-day time period allowed for the filing of an application for supervisory writs under Rule 4–3 of the Uniform Rules, Courts of Appeal.

(ii) When the circumstances indicate that an immediate decision of the issue sought to be appealed is necessary to ensure fundamental fairness and judicial efficiency, such as where reversal of the trial court's decision would terminate the litigation.⁶

Mandina, Inc. v. O'Brien, 13-0085, pp. 7-8 (La. App. 4 Cir. 7/31/13), 156 So.3d 99, 104 (quoting Delahoussaye v. Tulane Univ. Hosp. and Clinic , 12–0906, 12-0907, pp. 4-5 (La. App. 4 Cir. 2/20/13), 155 So.3d 560, 563 ).⁷

In the current case, both conditions are met. Mr. Lee's motion for appeal was filed within thirty days of the date of the notice of judgment and fundamental fairness and judicial efficiency warrant the exercise of our discretion. Accordingly, we convert the appeal to an application for supervisory writs. See Stelluto v. Stelluto , 05-0074, p. 7 (La. 6/29/05), 914 So.2d 34, 39 (noting that "the decision to convert an appeal to an application for supervisory writs is within the discretion of the appellate courts").

DISCUSSION

The sole issue presented is whether the trial court erred in granting the Exception, which State Farm entitled a "Peremptory Exception of No Cause of Action and No Right of Action." As one commentator has noted, "[b]ecause the distinction between no cause of action and no right of action is elusive, attorneys frequently plead an 'exception of no cause or right of action.' There is no such procedural device." 1 Frank L. Maraist, LA. CIV. L. TREATISE, CIVIL PROCEDURE § 6:7 (2d ed. 2017). No cause of action and no right of action are separate peremptory exceptions; each of these exceptions serves a different purpose, and each is governed by different procedural rules. Badeaux v. Southwest Computer Bureau, Inc. , 05-0612, 05-719, p. 6 (La. 3/17/06), 929 So.2d 1211, 1216.

"[O]ne of the primary differences between the exception of no right of action and no cause of action lies in the fact that the focus in an exception of no right of action is on whether the particular plaintiff has a right to bring the suit, while the focus in an exception of no cause of action is on whether the law provides a remedy against the particular defendant." Badeaux , 05–0612, 05–719, at p. 6, 929 So.2d at 1216–17. An important procedural distinction between the two exceptions is that evidence may be introduced on an exception of no right of action; whereas, "[n]o evidence may be introduced at any time to support or controvert the objection that the petition fails to state a cause of action." La. C.C.P. art. 931.

Peremptory exceptions of no cause of action and no right of action present legal questions; hence, appellate courts review trial court judgments granting such exceptions under a de novo standard. Zeigler v. Housing Auth. of New Orleans , 12-1168, p. 6 (La. App. 4 Cir. 4/24/13), 118 So.3d 442, 449 (citing St. Pierre v. Northrop Grumman Shipbuilding, Inc. , 12-545, p. 7 (La. App. 4 Cir. 10/24/12), 102 So.3d 1003, 1009 ); B–G & G Investors VI, L.L.C. v. Thibaut HG Corp., 08-0093, p. 2 (La. App. 4 Cir. 5/21/08), 985 So.2d 837, 840.

To place the issue presented here in context, we begin by briefly outlining the well-settled principles governing insurance "bad faith" claims in Louisiana. "Insurance 'bad faith' law is codified in La. R.S. 22:1892 (formerly La. R.S. 22:658 ) and La. R.S. 22:1973 (formerly La. R.S. 22:1220 )."⁸ Dean A. Sutherland, Insurance ...