PLAINTIFFS’ RESPONSE TO DEFENDANT THE HARTFORD STEAM
BOILER INSPECTION AND INSURANCE COMPANY’S DECLINATORY
EXCEPTION OF LIS PENDENS
Plaintiffs Alcee V. Curole and Vesta Curole (“Plaintiffs”) file this Response to Defendant The Hartford Steam Boiler Inspection & Insurance Company’s (“Defendant” or “HSB”) Declinatory Exception of Lis Pendens, and respectfully urge the Court to overrule this exception based on the following:
Table Of Contents
INTRODUCTION AND FACTUAL BACKGROUND
This case arises out of Plaintiff Alcee Curole’s occupational exposure to asbestos while working on the premises of Defendant Valentine Sugars, Inc. (“Valentine”) in Lockport, Louisiana. As a result of that asbestos exposure, Mr. Curole developed mesothelioma, a fatal asbestos-related cancer. Plaintiffs’ suit, originally filed on August 31, 2006, seeks damages against Defendant Valentine, as well as from various asbestos product manufacturers and contractors, for their wrongful conduct in exposing Mr. Curole to asbestos. See Petition for Damages, attached hereto as Exhibit 1.
As set forth in HSB’s Memorandum in Support of Its Declinatory Exception of Lis Pendens (“HSB’s Memorandum”), HSB was originally informed of this lawsuit against Valentine on September 28, 2006, when Valentine requested that HSB provide a defense pursuant to its commercial insurance policies. See Letter dated 9/28/06, attached as Exhibit A to HSB’s Memorandum. HSB ultimately rejected Valentine’s request. See Letter dated 1/19/07, attached as Exhibit C to HSB’s Memorandum.
Thereafter, Plaintiffs amended their petition to provide additional factual detail regarding their claims against Valentine. See Plaintiffs’ Second Supplement to the Original Petition for Damages, attached as Exhibit D to HSB’s Memorandum. The amendments alleged that Mr. Curole was exposed to asbestos while making repairs to boilers related to sudden and accidental breakdown of the boilers. See id. Based on those additional allegations, HSB informed Valentine that it would provide a defense under a reservation of rights. See Letter dated 4/11/07, attached as Exhibit E to HSB’s Memorandum.
On April 20, 2007, HSB filed suit in federal court seeking a declaration that it has no duty to defend or indemnify Valentine in the Curole state court action. See Complaint for Declaratory Relief, attached hereto as Exhibit 2. Valentine is the only defendant named in the federal suit and the suit only seeks declaratory relief. See id. On April 30, 2007, Defendant HSB was added as a party pursuant to Louisiana’s Direct Action Statute, Louisiana Revised Statutes Section 22:655, based on Plaintiffs’ allegation that HSB provided insurance coverage to Valentine during the years Mr. Curole was exposed to asbestos on Valentine’s premises. See Plaintiffs’ Third Supplement and Amendment to the Original Petition for Damages, (“Third Amended Petition”), attached hereto as Exhibit 3. Valentine subsequently brought a third party claim against HSB.
HSB now seeks to use its federal court case as a means of staying Plaintiffs’ suit against it in this Court, pursuant to the exception of lis pendens. This exception should be overruled because none of the requirements of lis pendens are met. Most significantly, the parties to the federal court action and to the instant action are not the same. Without complete identity of parties in both suits, the federal court action would not be res judicata in this case, making lis pendens inapplicable. In addition, HSB is not entitled to have Plaintiffs’ complaint dismissed, as it requests, because such relief is not authorized under Louisiana Code of Civil Procedure article 532. HSB’s exception of lis pendens should be overruled and Plaintiffs’ suit should proceed accordingly.
ARGUMENTS AND AUTHORITIES
The exception of lis pendens should not be sustained under the facts of this case. Louisiana Code of Civil Procedure article 532 sets forth the requirements for lis pendens when there is a suit pending in federal court:
When a suit is brought in a Louisiana court while another is pending in a court of another state or of the United States on the same transaction or occurrence, between the same parties in the same capacities, on motion of the defendant or on its own motion, the court may stay all proceedings in the second suit until the first has been discontinued or final judgment has been rendered.
La. Code Civ. Proc. Ann. art. 532 (emphasis added). An exception of lis pendens may only be granted when the defendant proves: (1) that a suit was brought in a Louisiana state court during the pendency of a suit in federal court; (2) that the two suits are based on the same transaction or occurrence; and (3) that the two suits are between the same parties in the same capacities. Brooks Well Servicing, Inc. v. Cudd Pressure Control, Inc., 36,723 (La. App. 2 Cir. 06/27/03); 850 So. 2d 1027, 1031, writ denied, 2003-2606 (La. 12/12/03); 860 So. 2d 1157.
If the defendant proves all three elements of lis pendens, the decision whether to stay the proceedings is left to the sound discretion of the trial court. Sw. Elec. Power Co. v. Amax, Inc. 621 So. 2d 615, 615 (La. 1993). Thus, even if all the predicate conditions of Article 532 are met, the trial court can choose not to stay the proceedings and that decision will not be overturned absent an abuse of discretion. See id.
Louisiana courts have widely recognized that the test for deciding whether an exception of lis pendens should be granted is whether a final judgment in the first suit would be res judicata in the subsequently filed suit. See Brooks Well Servicing, 850 So. 2d at 1031; Glass v. Alton Ochsner Med. Found., 2002-0412, p. 4 (La. App. 4 Cir. 11/13/02); 832 So. 2d 403, 406, writ denied, 2002-2927 (La. 03/14/03); 839 So. 2d 36, writ denied, 2002-3018 (La. 03/14/03); 839 So. 2d 37; Jensen Constr. Co. v. Dep’t of Transp. & Dev., 542 So. 2d 168, 171 (La. App. 1 Cir. 1989), writ denied, 544 So. 2d 408 (La. 1989); Houston v. Avondale’s Shipyards, Inc., 464 So. 2d 45, 45 (La. App. 4 Cir. 1985). Thus, the test for lis pendens is the same as that for res judicata. See Glass, 832 So. 2d at 406; Jensen Constr., 542 So. 2d at 171. Indeed, the “underlying basis for a stay under Article 532 is the supposition that a judgment in the first suit would be res judicata in the second suit.” Gauthier v. Benson, 95-1730, p. 8 (La. App. 4 Cir. 01/11/96); 667 So. 2d 1181, 1185, writ denied, 96-0275 (La. 02/09/96); 667 So. 2d 545. The two doctrines are so closely related that when the res judicata statute, Louisiana Revised Statutes Section 13:4231, was revised in 1990, the lis pendens article was amended to conform to those changes. See comments to La. Code Civ. Proc. Ann. art. 532.
The requirements for the application of res judicata and lis pendens are strictly construed such that “any doubt concerning the application of res judicata or lis pendens must be resolved against their application.” Jensen Constr., 542 So. 2d at 171. Here, there can be no doubt that the requirements for the application of lis pendens and res judicata are not satisfied and that HSB’s exception should be overruled.
Lis Pendens and Res Judicata Do Not Apply Because Plaintiffs Are Not Parties To HSB’s Federal Suit.
1. The Parties Are Not the Same In Both Suits.
An essential requirement for the application of lis pendens is that the parties in both suits must be the same. See La. Code Civ. Proc. Ann. art. 532; Brooks Well Servicing, 850 So. 2d at 1031. Similarly, res judicata only applies when the parties are the same. See Forum for Equality PAC v. McKeithen, 04-2551, p. 10 (La. 01/19/05); 893 So. 2d 738, 745; Burguieres v. Pollingue, 2002-1385, p. 8 (La. 02/25/03); 843 So. 2d 1049, 1053-54. For both doctrines, this requirement of “identity of parties” may be satisfied whenever “the same parties, their successors, or other appear so long as they share the same ‘quality’ as parties.” Welch v. Crown Zellerbach Corp., 359 So. 2d 154, 156 (La. 1978); Jensen Constr., 542 So. 2d at 171. The parties do not need to have the same physical identity, but must appear in the same capacities in both suits. See Burguieres, 843 So. 2d at 1054. In other words, the parties only need to be the same “‘in the legal sense of the word.’” Certified Finance, Inc. v. Cunard, 2001-0797 (La. App. 1 Cir. 04/17/02); 838 So. 2d 1, 4, writ denied, 2002-1802 (La. 10/14/02); 827 So. 2d 424 (quoting Berrigan v. Deutsch, Kerrigan & Stiles, LLP, 2001-0612 (La. App. 4 Cir. ½/02); 806 So. 2d 163, 167).
Identity of parties is the most important element of the doctrines of lis pendens and res judicata, as “[t]he principle purpose of La. Code of Civ. Proc. arts. 531 and 532 is to prevent a series of vexatious suits by the same plaintiff against the same defendant in the same transaction or occurrence in different forums.” Sw. Elec. Power, 621 So. 2d at 615 (Lemmon, J., concurring). Here, the instant suit and HSB’s federal case do not have an identity of parties and the purpose of Article 532 would not be served by the application of lis pendens. In this case the Curoles are Plaintiffs, and Valentine and HSB are defendants. In the federal case, HSB is the plaintiff and Valentine is the defendant. The Curoles are not parties to the federal lawsuit. Clearly, the parties are not the same in both suits and lis pendens does not apply.
HSB attempts to get around this fatal flaw by contending that both cases “essentially involve the same parties in the same capacities insofar as any alleged right to recovery by the Plaintiffs is entirely based upon the alleged insurance policy between HSB and Valentine.” HSB’s Memorandum at 6. Plaintiffs are not in any way “the same party in the same capacity” as Valentine, which it has sued for damages in this case. HSB misstates and misrepresents the law in claiming otherwise.
HSB discusses at length the Louisiana Supreme Court’s decision in Transamerica Insurance Co. v. Whitney National Bank of New Orleans, 206 So. 2d 500 (La. 1968), claiming that the Court “applied Art. 532 on facts analogous to the present matter.” HSB’s Memorandum at 6. In truth, the facts in Transamerica Insurance are nothing like those presented here, because in that case both suits involved the exact same parties. There, Whitney Bank suffered losses that it claimed were covered by a bond issued by several insurance companies, and it sued the insurers in federal court in New Jersey. See id. at 803. The insurers subsequently filed an action against Whitney in Louisiana state court, seeking a declaration that the bond did not cover Whitney’s losses. See id. at 804-05. The Court determined that lis pendens was applicable because “the action for relief in the New Jersey Court will necessarily settle the identical issue raised in the declaratory action, and the parties are the same parties.” Id. at 806 (emphasis added).
It is true that Louisiana courts have held that insureds and insurers often have the same quality as parties in order to establish an identity of parties for purpose of lis pendens or res judicata. See United Gen. Title Ins. Co. v. Casey Title, Ltd., 01-600, p. 12 (La. App. 5 Cir. 10/30/01); 800 So. 2d 1061, 1068; Arthur v. Zapata Haynie Corp., 95-956, p. 6 (La. App. 3 Cir. 01/22/97); 690 So. 2d 86, 90, writ denied, 97-1031 (La. 05/30/97); 694 So. 2d 252. However, that law does not help HSB, as it only shows that there is an identity of parties between HSB and Valentine with regard to Plaintiffs’ asbestos exposure claims. HSB tries to twist the law to fit the facts presented here, claiming that case law holds that Article 532 applies to a plaintiff’s direct action against an insurer when there is litigation pending between the insurer and the insured. The cases it cites hold no such thing. The first case HSB cites, Sims v. Cefolia, 2000-0030 (La. App. 4 Cir. 02/23/00); 755 So. 2d 358, never even addressed the merits of the defendant’s lis pendens motion. The issue in that case was an exception of improper venue, which the court simply held was not waived by the failure to include it in a motion to stay under Article 532. See id. at 359-60. Although the opinion does not state how the trial court ruled on the lis pendens motion, it is strongly suggested that the motion was denied, because if the proceedings had been stayed presumably the defendants could not then file an exception based on improper venue.
HSB is apparently arguing that Plaintiffs share the same “quality” as Valentine because Plaintiffs and Valentine have a similar interest in establishing the applicability of HSB’s insurance policy. However, identity of parties cannot be demonstrated “merely by showing that the party and the nonparty have common or parallel interest in the factual and legal issues presented in the respective actions.” Certified Finance,838 So. 2d at 4. For example, in Glass v. Alton Ochsner Medical Foundation, 2002-0412, p. 2 (La. App. 4 Cir. 11/13/02); 832 So. 2d 403, 405, the plaintiff sued her son’s school as a result of a drowning accident, and the school filed a third-party demand against the hospital that treated the boy. The plaintiff prevailed against the school. The plaintiff then directly sued the hospital in another lawsuit. See id. The hospital raised the exception of lis pendens against the plaintiff’s claims, claiming there was an identity of parties between the school and the plaintiff because the school sought contribution and indemnity against the hospital as a third-party plaintiff in the first action. See id. at 407-08. The court rejected that argument, finding that the school defendant/third-party plaintiff was not a plaintiff in the same capacity as the injured party, even though they both were trying to show the hospital’s negligence. See id. at 408-09; see also Latiolais v. State Farm Mut. Auto Ins. Co., 06-425 (La. App. 3 Cir. 11/22/06); 949 So. 2d 455 (holding that summary judgment for plaintiff’s employer on the basis that the plaintiff was not injured while acting in the course and scope of his employment did not bar the joinder of the employer’s insurance companies because the employer and its insurers did not have the same identity or same quality under those facts).
HSB cites no case, and Plaintiffs could find none, in which a plaintiff is found to share the same quality with either an insured or insurer that it has filed suit against. The case law indicates that in order to share the same quality as parties, there must to be a close or obvious relationship between the parties. Examples include a husband and wife, a corporation and its president, a party and his assignee, a corporation and its successor corporation, or different representatives of the same class in a class action. See Mandalay Oil & Gas, LLC v. Energy Dev. Corp., 2001-0993, p. 17 (La. App. 1 Cir. 08/04/04); 880 So. 2d 129, 140 n.9 (collecting cases). Plaintiffs have no such relationship with Valentine.
As in Certified Finance and Glass, even if an argument could be made that Plaintiffs and Valentine have similar interests in determining the applicability of HSB’s insurance policy, that is not enough to establish that they have the same quality as parties such that a judgment for or against Valentine in the federal action would have preclusive effect against Plaintiffs in this case. Certified Finance,838 So. 2d at 4; Glass, 832 So. 2d at 405. Because there is not an identity of parties in this action and in the federal case, HSB’s exception of lis pendens should be overruled.
2. A Judgment in HSB’s Federal Suit Would Not Be Res Judicata In This Case.
Louisiana Revised Statutes Section 13:4231 provides in relevant part that “a valid and final judgment is conclusive between the same parties” to the extent that “[a] judgment in favor of either the plaintiff or the defendant is conclusive, in any subsequent action between them, with respect to any issue actually litigated and determined if its determination was essential to that judgment.” La. Rev. Stat. Ann. § 13:4231(3) (1991). Thus, a second action is precluded when the following elements are satisfied: (1) the judgment is valid; (2) the judgment is final; (3) the parties are the same; (4) the cause of action asserted in the second suit existed at the time of final judgment in the first litigation; and (5) the cause of action asserted in the second suit arose out of the transaction or occurrence that was the subject matter of the first litigation. Forum for Equality, 893 So. 2d at 745.
In circumstances virtually identical to those presented here, it has been held that res judicata does not apply when a plaintiff in a tort action was not a party to the suit in which coverage was resolved between the insurer and the insured. In Churchman v. Ingram, 56 So. 2d 297 (La. App. 2d Cir. 1951), the court addressed this issue in the context of a case arising out of a car accident in Texas. Texas Lloyds, the insurer of the vehicle driven by Jack Ingram, Jr., filed an action in Texas state court against the partial owner of the vehicle and insured party, Jack Ingram, Sr., and was successful in obtaining a declaratory judgment that the insurance policy on the vehicle was null and void. See id. at 299. Thereafter, the driver of the other car, Charles Cunningham, sued Jack Ingram, Jr. and Texas Lloyds in Louisiana state court. See id. at 298. Texas Lloyds raised the Texas judgment, claiming that it had preclusive effect regarding the invalidity of the insurance policy and that it was not subject to suit in Louisiana. See id. at 299. The court disagreed, noting that “we find not the slightest difficulty in making disposition” of the res judicata argument. Id. The lack of identity of parties was dispositive, as the court explained that “[c]ertainly the suit by the insurer against the named assured, to which none of the plaintiffs in this action were parties, cannot serve to support the plea that is urged and it follows that the same was correctly overruled.” Id. at 301 (emphasis added). This holding in Churchman applies with equal force in this case.
An important aspect of res judicata is that a prior judgment is not generally given preclusive effect against parties that did not have a fair opportunity to litigate in the prior proceeding. Louisiana courts have consistently recognized that “[i]mplicit in the concept of res judicata is the principle that a party had the opportunity to raise a claim in the first adjudication, but failed to do so.” Certified Finance, 838 So. 2d at 4; Stroscher v. Stroscher, 2001-2769, p. 6 (La. App. 1 Cir. 02/14/03); 845 So. 2d 518, 525; accord Jackson v. Iberia Parish Gov’t, 98-1810, p. 9 (La. 4/16/99); 732 So. 2d 517, 524. Thus, an exception of res judicata generally cannot be sustained against a person or entity that was not a party to the prior litigation. See Thomas v. Janzen, 35,288, p. 15 (La. App. 2 Cir. 10/31/01); 800 So. 2d 81, 89-90; Butler v. Paciera, 559 So. 2d 36, 37 (La. App. 4 Cir. 1990).
Due process concerns govern the requirement that a person cannot be precluded by a prior judgment to which he or she was not a party:
The opportunity to be heard is an essential requisite of due process of law in judicial proceedings. Giving conclusive effect to a prior judgment against one who is neither a party nor in privity with the party therein contravenes due process. As a consequence, a judgment or decree among parties to a lawsuit resolves issues as among them, but it does not conclude the rights of strangers to those proceedings.
Thomas, 800 So. 2d at 89 (quoting Hudson v. City of Bossier, 33,620 (La. App. 2 Cir. 8/25/00); 766 So. 2d 738, 743) (emphasis added).
Here, any judgment obtained by HSB in federal court could not have res judicata effect against Plaintiffs consistent with Louisiana law and Plaintiffs’ due process rights.Plaintiffs will not have the opportunity to litigate the insurance coverage issue in the federal action, and their interests will not be fairly represented by Valentine. Pursuant to Louisiana statutory and case law, a judgment cannot have preclusive effect against Plaintiffs unless they are parties to the litigation. See La. Rev. Stat. Ann. § 13:4231(3) (1991); Thomas, 800 So. 2d at 89-90; Butler, 559 So. 2d at 37.Injured plaintiffs are not subject to judgments regarding insurance coverage to which they were not parties. See Churchman, 56 So. 2d at 301. Because a judgment in HSB’s federal court action would not have res judicata effect against Plaintiffs, the application of lis pendens is improper. See Brooks Well Servicing, 850 So. 2d at 1031; Glass, 832 So. 2d at 406; Jensen Constr., 542 So. 2d at 171; Avondale’s Shipyards, Inc., 464 So. 2d at 45.
HSB Has Not Demonstrated That The Other Requirements of Lis Pendens Are Satisfied.
The lack of identity of parties, and the fact that HSB’s federal suit would not have res judicata effect against Plaintiffs, are fatal to HSB’s exception of lis pendens. However, additional grounds for denial of HSB’s exception exist in that HSB has also failed to meet the other elements of lis pendens. In addition to the requirement that the parties must be the same, the other requirements of Article 532 are that a suit was brought in a Louisiana state court during the pendency of a suit in federal court and that the two suits are based on the same transaction or occurrence. See Brooks Well Servicing, 850 So. 2d at 1031.
First, it is arguable that HSB’s federal court action was not “pending” at the time of Plaintiffs’ suit. Plaintiffs originally filed this case on August 31, 2006, and HSB was notified of the suit shortly thereafter. See Letter dated 9/28/06, attached as Exhibit A to HSB’s Memorandum. When Plaintiffs amended their petition to add HSB as a party, that amendment related back to the original date of the filing of Plaintiffs’ complaint because the claim against HSB “arises out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading” and HSB had actual notice of that original petition. See La. Code Civ. Proc. Ann. art. 1153; Findley v. Baton, 570 So. 2d 1168,1170-72 (La. 1990); Rouge Allstate Ins. Co. v. Doyle Giddings, Inc., 40,496, p. 4-7 (La. App. 2 Cir. 01/25/06); 920 So.2d 404, 406-08, writ denied, 2006-0425 (La. 04/28/06); 927 So. 2d 294; Champion v. Panel Era Mfg. Co., 410 So. 2d 1230, 1235-36 (La. App. 3 Cir. 1982). Under the relation back rule, “the amended petition constitutes the plaintiff’s principal action or demand as fully as if it had been set forth in the original petition.” Moore v. Gencorp, Inc., 93-0814 (La. 03/22/94); 633 So. 2d 1268, 1271. Given the relation back of Plaintiffs’ claim against HSB, the federal action was not really pending when Plaintiffs filed this case. Thus, this element of lis pendens is not satisfied.
Second, this case and the federal suit do not necessarily arise out of the same transaction or occurrence within the meaning of Article 532. In Plaintiffs’ lawsuit, the primary issues are the negligence and strict liability of Valentine in failing to provide Mr. Curole with a safe place to work by exposing him to asbestos and causing his mesothelioma, and HSB’s solidary liability for Valentine’s actions. See Petition for Damages at ¶¶ 32-43 (Exhibit 1); Third Amended Petition (Exhibit 3). In HSB’s suit, the issues are HSB’s duty to defend and indemnify Valentine, and involve questions of whether an insurance policy exists, Valentine’s notice to HSB, and the scope of the coverage actually provided. See Complaint for Declaratory Relief (Exhibit 2). Moreover, Plaintiffs’ case seeks damages against Valentine and HSB, whereas the federal case seeks only a declaratory judgment. These type of differences have led courts to find that an exception of lis pendens should not be sustained. See Gauthier, 667 So. 2d at 1185 (holding that the trial court did not err in refusing to stay proceedings when the suit in another state sought a declaratory judgment and the suit in Louisiana state court sought damages); Avondale’s Shipyards, 464 So. 2d at 45 (holding that exception of lis pendens should not be sustained where the second suit involved an additional cause of action, an additional party and sought additional relief of real substance).
To the extent that there is overlap between the issues presented in this case and in the federal action, this Court is by far the more logical forum in which to resolve those common issues. The facts surrounding Mr. Curole’s exposure to asbestos will be at issue in both cases because they are essential to Plaintiffs’ tort claims and they also have bearing on the insurance coverage provided by HSB. See Letter dated 10/30/06, attached as Exhibit B to HSB’s Memorandum; Letter dated 1/19/07, attached as Exhibit C to HSB’s Memorandum. It would be preferable to resolve that issue in this suit, where it can be considered in the context of Plaintiffs’ entire case and where Plaintiffs will have the opportunity to participate in the development and presentation of the evidence regarding the nature of Mr. Curole’s injury. Article 532 grants this Court discretion to deny HSB’s exception regardless of the federal action. Sw. Elec. Power, 621 So. 2d at 615. This case presents the type of circumstances in which such discretion should be exercised to permit Plaintiffs’ case to proceed against HSB in their chosen forum and in the context of all other claims brought by Plaintiff related to Mr. Curole’s asbestos exposure.
HSB Is Not Entitled to Dismissal of Plaintiff’s Action.
As relief, HSB requests the dismissal of Plaintiffs’ amended petition. Even if the Court was to sustain the exception of lis pendens, dismissal is not authorized under Louisiana Code of Civil Procedure article 532. See Shirer v. Exxon Corp., 542 So. 2d 696, 698 (La. App. 4 Cir. 1989); Amoco Prod. Co. v. Texas Gas Transmission Corp., 487 So. 2d 575, 576-77 (La. App. 4 Cir. 1986). Article 532 only authorizes one form of relief, providing that when all elements are met, “the court may stay all proceedings in the second suit . . . .” La. Code Civ. Proc. Ann. art. 532 (2007). Moreover, the lis pendens provision governing suits in federal court is dilatory, not declinatory, meaning that it only retards the progress of the action. See Shirer, 542 So. 2d at 698; Reid, 134 So. 2d at 921. Therefore, “[u]nder Art. 532, when a prior filed suit is in federal court or another state court, only a stay is authorized.” Shirer, 542 So. 2d at 698. A trial court exceeds its authority if it dismisses, rather than stays, an action pursuant to Article 532. See Amoco Prod., 487 So. 2d 576-77.
HSB has erroneously styled its exception as “declinatory.” It is not entitled to decline the jurisdiction of the Court under Article 532. See Sims, 755 So. 2d at 360. Even if HSB proves all elements of lis pendens, which Plaintiffs contend it has not, at most HSB may only seek a stay of the proceedings. HSB is not entitled to a dismissal. In any event, this Court should not stay Plaintiffs’ underlying tort action.
For the foregoing reasons, HSB’s exception should be overruled, the stay should be denied, and Plaintiffs’ lawsuit should be allowed to proceed.
- ↑ HSB consistently and unjustifiably seeks to treat Plaintiffs and Valentine as the same parties. For example, it accuses Valentine of “an unseemly scramble” in filing its Third Party Demand in this case after HSB filed its federal court action against Valentine. But Valentine’s actions cannot be attributed to Plaintiffs and have no relevance to HSB’s lis pendens motion against Plaintiffs claims against HSB under the Direct Action Statute.
- ↑ The two other cases HSB cites are also inapposite to its claim that a plaintiff and an insured somehow have the same “quality” as parties. In Funai v. Air Center, Inc., 499 So. 2d 669 (La. App. 3d Cir. 1986), the survivors of the victim of an airplane crash sued the airline in Oklahoma state court, and then sued both the airline and its insurer in Louisiana state court. The court held that because the plaintiffs in both cases were the same, and the insured and the insurer merged for purposes of res judicata, there was an identity of parties in both suits. See id. at 673-74. Whereas Funai involved the same plaintiffs in both cases, here Plaintiffs have only brought suit in state court and are not even parties to HSB’s federal court action. The other case relied on by HSB, Reid v. Crain Brothers, 134 So. 2d 917 (La. App. 3d Cir. 1961), involved a maritime case in which the insured filed a federal court action against an injured party seeking to limit his liability to the value of his vessel. In those federal proceedings the court issued a restraining order preventing any other proceedings in any other court regarding injuries sustained on that vessel. See id. at 918-19. Thereafter, the injured party sued the vessel’s insurer in Louisiana state court. See id. at 919. The court followed United States Supreme Court precedent holding that limitations proceedings in federal court were an aspect of maritime law that should not be disturbed by state court proceedings against the insurer. See id. at 919-20. The decision was also obviously based on the fact that the plaintiff in the state court action was the defendant in the federal court action, and that the insurer and the insured were basically considered the same party for purposes of the two suits. See id. None of those factors is present here, where Plaintiffs have only brought state tort claims and are not parties in the federal case.