Articles Posted in Louisiana Supreme Court

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This action for nullity was brought by a judgment creditor against a judgment debtor and his wife. At issue was whether the couple’s failure to file a codally-required joint petition to commence the termination of their community property regime resulted in an absolute nullity or a relative nullity. Because the failure to file a joint petition results in a relative nullity as defined by La. C.C. art. 2031, the Supreme Court reversed the trial court’s judgment holding to the contrary. Judgment was rendered in favor of the couple. View "Radcliffe 10, LLC v. Burger" on Justia Law

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Customers of an indoor trampoline park, of Sky Zone Lafayette, must complete a “Participant Agreement, Release and Assumption of Risk” document (“Agreement”) prior to entering the facility. The Agreement contains a clause waiving the participant’s right to trial and compelling arbitration. Plaintiff, James Duhon, was such a customer, and was injured in the course of participating in the park’s activities. After plaintiff filed suit seeking damages, Sky Zone moved to compel arbitration pursuant to the Agreement. The district court overruled Sky Zone’s exception, but the court of appeal reversed, finding the arbitration provision should be enforced. After review, the Supreme Court found that the arbitration clause in the Sky Zone agreement was adhesionary and therefore unenforceable. View "Duhon v. Activelaf, LLC" on Justia Law

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Customers of an indoor trampoline park, of Sky Zone Lafayette, must complete a “Participant Agreement, Release and Assumption of Risk” document (“Agreement”) prior to entering the facility. The Agreement contains a clause waiving the participant’s right to trial and compelling arbitration. Plaintiff Theresa Alicea executed the Agreement prior to her husband, Roger Alicea, taking their minor sons to Sky Zone. The Aliceas’ son, Logan, was injured while jumping on a trampoline. The Aliceas filed suit against Sky Zone, individually and on behalf of Logan. Sky Zone moved to compel arbitration pursuant to the Agreement. The district court overruled Sky Zone’s exception and the court of appeal denied Sky Zone’s writ application. After review, the Supreme Court held the arbitration clause in the Sky Zone agreement was adhesionary and therefore unenforceable. Accordingly, the Court affirmed the rulings of the lower courts. View "Alicea v. Activelaf, LLC" on Justia Law

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This matter involved the interpretation and application of the Uniform Local Sales Tax Code (ULSTC). Yesterdays of Lake Charles, Inc. (Yesterdays) and Cowboy’s Nightlife, Inc. (Cowboy’s) were cash-based bars or nightclubs located adjacent to each other in Calcasieu Parish. The clubs were audited in 2009, by the Calcasieu Parish School System Sales and Use Tax Department ("Collector) for years 2005 through 2008, on the basis that the clubs had violated their duties as tax collection agents for the Calcasieu Parish School System. The trial court found ambiguity in the language of the ULSTC requiring the plaintiff nightclubs to “keep and preserve suitable records” of all sales and expenditures. The trial court then found the tax collector had failed to show that the records actually kept by the clubs, in this case, bank statements and deposit slips, were not "suitable records" within the meaning of the ULSTC. The trial court further found the tax collector’s assessment was arbitrary and that the tax collector had failed to establish that its methodology for auditing the taxpayer was proper. Accordingly, the trial court: (1) ordered the tax collector to refund amounts paid under protest by the clubs; (2) determined that prescription had run on the sales taxes for the years 2005 and 2006 for one of the clubs, aside from those taxes admittedly withheld by the clubs; and (3) denied the tax collector’s motion for new trial and awarded attorney fees to the clubs. After its review, the Supreme Court reversed the trial court’s judgment ordering a refund of the taxes and interest paid under protest by the clubs. Furthermore, the Court reversed the trial court’s award of attorney fees. In all other respects, the judgment of the trial court was affirmed, and the matter was remanded to the trial court for further proceedings. View "Yesterdays of Lake Charles, Inc. v. Calcasieu Parish Sales & Use Tax Dept." on Justia Law

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Nelson Industrial Steam Company (“NISCO”) was in the business of generating electric power in Lake Charles. In order to comply with state and federal environmental regulations, NISCO introduces limestone into its power generation process; the limestone acts as a “scrubbing agent.” The limestone chemically reacts with sulfur to make ash, which NISCO then sells to LA Ash, for a profit of roughly $6.8 million annually. LA Ash sells the ash to its customers for varying commercial purposes, including roads, construction projects, environmental remediation, etc. NISCO appealed when taxes were collected on its purchase of limestone over four tax periods. NISCO claimed its purchase of limestone was subject to the “further processing exclusion” of La. R.S. 47:301(10)(c)(i)(aa), which narrowed the scope of taxable sales. The Louisiana Supreme Court granted NISCO’s writ application to determine the taxability of the limestone. The trial court ruled in the Tax Collectors' favor. After its review, the Supreme Court found that NISCO’s by-product of ash was the appropriate end product to analyze for purposes of determining the “further processing exclusion’s” applicability to the purchase of limestone. Moreover, under a proper “purpose” test, the third prong of the three-part inquiry enunciated in "International Paper v. Bridges," (972 So.2d 1121(2008)) was satisfied, "as evidenced by NISCO’s choice of manufacturing process and technology, its contractual language utilized in its purchasing of the limestone, and its subsequent marketing and sale of the ash." Therefore the Court reversed the trial court and ruled in favor of NISCO. View "Bridges v. Nelson Industrial Steam Co." on Justia Law

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The Supreme Court granted the defendants’ writ application in this case to determine whether the lower courts erred by imposing personal liability on the sole member and manager of a limited liability company (“L.L.C.”). The issue presented centered on the scope of the narrow professional duty exception to the general rule of limited liability for members, managers, employees, and agents of an L.L.C. set forth in La. Rev. Stat. 12:1320. After review, the Court found the plaintiff failed to show the defendant member of the L.L.C. owed her a professional duty outside the confines of the contract. Furthermore, the Court found the defendant was not personally liable to the plaintiff for his negligent or wrongful acts. The Court reversed the rulings of the lower courts. View "Nunez v. Pinnacle Homes, LLC" on Justia Law

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The issue before the Supreme Court in this case centered on the limitation of liability afforded to a member of a limited liability company (LLC). In 2007, Mary Ogea signed a contract entitled "Custom Home Building Agreement" for Merritt Construction, LLC, to build a home on an undeveloped parcel of land she owned. On behalf of the LLC, its sole member, Travis Merritt, signed the contract. The contract did not specifically describe the type of foundation to be provided for the home. After the construction work had advanced well past the point of building the foundation and framing the home, Ogea hired another concrete contractor to pour a driveway and patio. This concrete contractor informed Ogea that he believed there were problems with the concrete work for the home's foundation. Ogea then hired a licensed engineer, Charles Norman, to inspect the structure. Norman conducted several inspections and concluded there were indeed significant problems with the slab foundation. Ogea notified the LLC of the problems with the foundation. Based on her consultations with Norman, Ogea requested a refund of all monies she paid to the LLC (approximately $94,000) and sought demolition of the unfinished home. The LLC did not reply to the refund request. Ogea did not make the final installment payment called for in the contract, and the LLC ceased all work on the home. Ogea then sued the LLC and Merritt individually. Ogea sought to recover the money she had expended for the home, plus other damages under the New Home Warranty Act. The district court rendered judgment against both Merritt and the LLC "in solido" for various items of damages. Both Merritt and the LLC appealed. The court of appeal reduced the amount of the general damage award, but affirmed the imposition of personal liability on Merritt. After reviewing the record and the controlling legal principles, the Supreme Court reversed the lower courts' judgment of personal liability against Merritt and dismissed the claims against him. View "Ogea v. Merritt" on Justia Law

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Through a series of assignments, Clovelly Oil Company and Midstates Petroleum Company, LLC, were parties to a 1972 joint operating agreement (JOA). The issue before the Supreme Court was whether a lease acquired by Midstates in 2008 was subject to the provisions of the JOA. Upon review, the Court found that the lease in question was not subject to the JOA, and reversed the appellate court and reinstated the trial court's ruling. View "Clovelly Oil Co. v. Midstates Petroleum Co., LLC" on Justia Law

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The taxpayer in this case, a paper mill, requested a refund on taxes it paid on purchases of caustic soda, arguing that the chemical was used in the production of a product for resale and excluded from local and state taxation. An attorney for the tax collector denied the request, and gave no reason for the denial. The taxpayer made a second request for taxes inadvertently paid on caustic soda and sodium hydrosulfide, chemicals they argued, qualified for the tax exemption. The tax collector did not respond to the second request. The taxpayer then sent a third and fourth refund request, again for the purchase of raw materials. Again, the requests were denied with no grounds for the denial. The taxpayer then filed suit seeking the refunds it felt were due back from the tax collector. The district court found that the claims were untimely filed, and the court of appeal affirmed. The Supreme Court granted the taxpayer's writ application to clarify the proper procedure and time period for appeals when the tax collector has failed to act on a refund claim for overpayment of taxes after one year, and to determine whether the taxpayer was required to use a "payment under protest" procedure in this case in order to obtain a refund. After reviewing the record and the applicable law, the Court reversed the judgments of the lower courts dismissing the tax refund claims, and remanded the case to the district court for further proceedings. View "Tin, Inc. v. Washington Parish Sheriff's Office" on Justia Law

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The issue presented in this case arose in connection with a motion to rank creditors in a suit for executory process. DDS Construction, LLC developed a subdivision in Reserve. To fund that development, DDS obtained various loans from First National Bank. To secure its repayment of those loans, DDS granted First National a "Multiple Indebtedness Mortgage" over individual lots located in the subdivision. One property, Lot 8 Square A, was at the center of this controversy. The district court held a notarial act which cancelled the lot's mortgage could be corrected by an act of correction under La. R.S. 35:2.1 and First National, the lender which erroneously cancelled the mortgage, maintained its rank relative to a subsequent mortgage under the statute's provisions. The court of appeal disagreed, holding that under these facts the subsequent mortgage primed the mortgage by the First National, which must be ranked as of the time of the act of correction. After review, the Supreme Court held that the court of appeal erred and reversed, reinstating the ruling of the district court.