Gustave J. Labarre, Jr. v. Occidental Chemical Company

STATE OF LOUISIANA

COURT OF APPEAL

FIRST CIRCUIT

NOS. 2021 CA 0158
2020 CW 0540

GUSTAVE J. LABARRE, JR., ET AL.

VERSUS

OCCIDENTAL CHEMICAL COMPANY, ET AL.

Judgment Rendered.
OCT 0 8 2021

Appealed from the
23rd Judicial District Court
In and for the Parish of Assumption
State of Louisiana
Case No. 33796

The Honorable Jason Verdigets, Judge Presiding

Judy Y. Barrasso Counsel for Defendant/Appellant
Steven W. Usdin Liberty Insurance Underwriters, Inc.
Stephen R. Klaffky
Steven L. Miles
Anna F. Cavner
David N. Luder
Kyle L. Wallace
New Orleans, Louisiana

Thomas M. Flanagan
New Orleans, LA

Donald T. Carmouche Counsel for Plaintiffs/Appellees
Victor L. Marcello Gustave J. Labarre, Jr., et al.
John H. Carmouche
William R. Coenen, III
Brian T. Carmouche
Todd J. Wimberley
Ross J. Donnes
D. Adele Owen

Leah C. Poole
Caroline H. Martin
Baton Rouge, Louisiana

Thomas Daniel Davis
Paincourtville, Louisiana

BEFORE: GUIDRY, WELCH, AND THERIOT, JJ.

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THERIOT, J.

Defendant -appellant, Liberty Insurance Underwriters, Inc. (" Liberty"), seeks

review of a district court judgment finding plaintiffs -appellees, Gustave J. Labarre,

Jr., et al.' s ( collectively, " plaintiffs"), claims against Liberty, as asserted in their

Thirteenth and Fourteenth Supplemental and Amending Petitions for Damages, are

moot based on a separate declaratory ruling made by the district court against

Liberty' s insured, Texas Brine Company, LLC (" Texas Brine"). Furthermore,

Liberty seeks review of an evidentiary ruling likewise made by the district court

purportedly in violation of this court' s prior stay order. For the following reasons,

we vacate the judgment in part, and remand for further proceedings. Additionally,

the accompanying writ application referred to this panel is denied.

FACTS AND PROCEDURAL HISTORY

This appeal is one of many arising from the Bayou Come sinkhole which

developed on August 3, 2012, following the collapse of a salt mine cavern

connected with Texas Brine' s operation of a brine production well. On August 6,

2012, plaintiffs, certain landowners in Assumption Parish, instituted this suit for

damages against Texas Brine, among others, arguing that because of its improper

brine mining operations and oil and gas exploration and production, their

properties have been contaminated or otherwise damaged. Liberty, as the insured

of Texas Brine, was later joined as a defendant, filing an Answer on October 21,

2014. In February 2017, plaintiffs reached a settlement ( the " Settlement

Agreement") with Liberty, whereby Liberty agreed to pay a sum of money to

plaintiffs in exchange for their dismissal of certain claims against Liberty and

Texas Brine. Further, the Settlement Agreement specifically reserved unto

plaintiffs all of their rights against Texas Brine to the extent there is collectible

insurance under Texas Brine' s pre -2012 policies. The Settlement Agreement is not

the subject of the current dispute, as on March 15, 2017, the district court signed a

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judgment stating: "[ the] plaintiffs' claims asserted against defendant [ Liberty] be

and hereby are DISMISSED with prejudice, each party to bear its own costs."

A second agreement, the Tripartite Agreement (" Tripartite Agreement"),

was also executed in February 2017, upon which the present dispute centers.

Therein, plaintiffs, Texas Brine, and Liberty, agreed that, among other issues,

Liberty would assign to plaintiffs its subrogation, contribution, and contractual

rights against Texas Brine' s pre -2012 insurers and further provided that, in

exchange for such transfer of rights, plaintiffs would remit a portion of amounts

received from Texas Brine' s pre -2012 insurers to Liberty within seven days of

receipt.

In the months that followed, plaintiffs continued pursuing their claims

against Texas Brine and its pre -2012 insurers for damage occurring to their

property prior to the sinkhole' s appearance, specifically mediating some of these

claims ahead of an October 2018 trial. However, in anticipation of potential

settlements, on August 3, 2018, Liberty sent a letter to plaintiffs' counsel claiming

the Tripartite Agreement " would preclude a settlement by your clients directly with

Zurich and AIG (that circumvented [ Liberty] and the Texas Brine Parties) where

your clients did not remit funds to [ Liberty] and the Texas Brine Parties as

required" by the Tripartite Agreement. Liberty continued, "[ s] uch a settlement

would violate the Tripartite Agreement, and subject your clients to a breach of

contract claim[.]" Liberty concluded its letter, encouraging plaintiffs to pursue

settlement with Texas Brine' s pre -2012 insurers, but noted, "[ i] f you decide,

however, to attempt to settle with [ Texas Brine' s pre -2012 insurers] without

remitting payment to [ Liberty], [ Liberty] will have no choice but to take actions to

enforce its rights under the Tripartite Agreement."

Thereafter, on August 9, 2018, plaintiffs filed a motion for leave to file a

Thirteenth Supplemental and Amending Petition for Damages (" Thirteenth

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Petition"), and which the district court set for hearing on November 28, 2018. The

Thirteenth Petition did not name any new defendants, but sought a judgment

declaring that: ( 1) plaintiffs have no obligation under the Tripartite Agreement to

pursue any of the subrogation or contribution claims assigned therein, ( 2) neither

the Tripartite Agreement nor any other agreement gives Liberty or Texas Brine the

right to collect any portion of the monies awarded or otherwise paid in satisfaction

of plaintiffs'
claims against Texas Brine for insurance liability for pre -2012

damages, and ( 3) the only money that Liberty and Texas Brine could potentially

claim a percentage of would be money paid in satisfaction of the Liberty

subrogation and contribution claims assigned under the Tripartite Agreement. On

October 25, 2018, plaintiffs filed a motion seeking leave to file the Fourteenth

Supplemental and Amending Petition (" Fourteenth Petition"), which was also set

for hearing on November 28, 2018. The Fourteenth Petition named Liberty as a

defendant and reiterated plaintiffs' claims for declaratory relief as asserted in the

Thirteenth Petition. On November 28, 2018, the district court granted both

motions, granting plaintiffs leave to file both the Thirteenth and Fourteenth

Petitions, and signed a judgment in conformity therewith on January 8, 2019.

Prior to leave being granted for the Thirteenth and Fourteenth Petitions, on

September 13, 2018, Liberty filed an action in federal district court against

plaintiffs likewise seeking declaratory and injunctive relief and damages, asserting

that plaintiffs were engaged in settlement discussions and have threatened to

breach their contractual and confidentiality obligations under the Tripartite

Agreement. Specifically, Liberty sought an " injunction mandating that [ plaintiffs]

remove their proposed [ Thirteenth Petition] from the public docket in the LaBarre

Case, and prohibiting [ plaintiffs] from any further disclosure or dissemination of

the terms of the Settlement Agreement and Tripartite Agreement[,]" and a

declaration that " the Tripartite Agreement requires [ plaintiffs] to pay Liberty as set
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forth therein in the event of any recovery from Texas Brine' s pre -2012 insurers[.]"

Additionally, Liberty requested that if the federal district court interpreted the

Tripartite Agreement to permit plaintiffs " to circumvent their payment obligations

to Liberty, [ to] reform the Tripartite Agreement to reflect the parties' mutual intent

that the [ plaintiffs] would pay Liberty in the event of any recovery from Texas

Brine' s pre -2012 insurers, regardless of the legal theories or causes of action

asserted or allegedly resolved against the pre -2012 insurers[,]" and, otherwise, to

rescind the Settlement Agreement as executed between plaintiffs and Liberty.

On February 27, 2019, while the state and federal court actions were

proceeding simultaneously, Liberty filed an exception of improper cumulation,

including improper joinder of parties, in the state court proceeding. Liberty argued

the claims advanced by plaintiffs in their Thirteenth and Fourteenth Petitions,

regarding the interpretation of the Tripartite Agreement, were improperly

cumulated with plaintiffs' main demand against other defendants, which involve

issues of causation, damages, and insurance coverage arising out of the 2012

sinkhole. Alternatively, Liberty filed an exception of lis pendens, arguing these

claims should be stayed because of Liberty' s earlier -filed federal action. On March

27, 2019, the district court denied both exceptions, as well as a request from

Liberty for a stay pending resolution of the federal action, and signed a judgment

in conformity therewith on April 22, 2019. Liberty then filed an application for

supervisory review with this court. On August 22, 2019, this court issued the

following stay order:

WRIT GRANTED WITH ORDER. The portion of the trial court' s
April 22, 2019 judgment which denied the exception of lis pendens
filed by Liberty Insurance Underwriters, Inc. is reversed. The
exception of lis pendens is granted[,] and the claims of plaintiffs

asserted against Liberty Insurance Underwriters, Inc. in the Thirteenth
and Fourteenth Petitions are hereby stayed until the action pending in
federal court between these parties has been discontinued or final
judgment has been rendered.

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Labarre v. Occidental Chemical Company, 2019- 0533 ( La. App. 1st Cir.

8/ 22/ 19), 2019 WL 3973996 ( unpublished).

With only the federal action proceeding, the state district court signed a
judgment on December 18, 2019, stating the " stay granted by the First Circuit

remains in effect until the final appeal process has been concluded in the federal

action[,]"
and further granted Liberty' s Motion to Continue Briefing Deadlines and

the hearing on the plaintiffs' Motion for Partial Summary Judgment and Motion to

Interpret the Tripartite Agreement, as to Liberty, without date.

On the same date, the district court heard arguments on two motions filed by

plaintiffs: a Motion to Interpret the Tripartite Agreement and Determine if the

Terms are Ambiguous (" Motion to Interpret") and a Motion for Partial Summary

Judgment, previously filed by plaintiffs on July 3, 2019 and August 20, 2019,

respectively. These motions, filed against Liberty and Texas Brine, sought a

judgment from the state district court as to whether the terms of the Tripartite

Agreement are ambiguous and, further, a declaration that " plaintiffs have no

obligation under the Tripartite Agreement to pursue any subrogation or

contribution claims assigned therein[,]" and that " the Tripartite Agreement

repayment provisions only pertain to [ Liberty' s] subrogation, contribution[,] and

contractual claims assigned therein." Although this court previously entered a stay

on its behalf, out of an abundance of caution, Liberty filed an opposition, along

with several exhibits, to plaintiffs' Motion for Partial Summary Judgment. Despite

this court' s stay order and its own acknowledgement of the stay as remaining in

effect as to Liberty, following a hearing on December 18, 2019, the district court

signed a judgment on February 19, 2020, as follows:

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that
the Motion to Determine Ambiguity is GRANTED in favor of
Plaintiffs and against Texas Brine. Specifically, the Court finds that
the Tripartite Agreement is unambiguous and that extrinsic evidence
is not admissible to determine the parties' intent.

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In light of the Court' s determination that the Tripartite Agreement is
unambiguous and that extrinsic evidence is not admissible to
determine the parties' intent, and on oral motion by the Plaintiffs to
strike extrinsic evidence attached as exhibits to the Opposition to
Plaintiffs' Motion for Partial Summary Judgment filed by Liberty
Insurance Underwriters, Inc. and adopted by Texas Brine;

IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that
the Plaintiffs' Motion to Strike is GRANTED.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that
the Plaintiffs' Motion for Partial Summary Judgment is GRANTED
in favor of Plaintiffs and against Texas Brine. The Court renders
summary judgment granting the claims of Plaintiffs asserted against
Texas Brine in the Thirteenth Supplemental and Amended Petition
and declaring that[:] ( 1) Plaintiffs have no obligation under the
Tripartite Agreement to pursue any subrogation or contribution claims
assigned therein, and ( 2) the Tripartite Agreement repayment

provisions only pertain to Liberty Insurance Underwriters, Inc.' s
subrogation, contribution[,] and contractual claims assigned therein.
The claims of Plaintiffs asserted against Liberty Insurance
Underwriters, Inc. in the Thirteenth and Fourteenth Supplemental and
Amending Petitions are moot.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that

the Court, finding no reason for delay, designates this Judgment as a
final judgment pursuant to the provisions of LSA -CCP art. 1915( B).

20201,
In response, on June 9, Liberty filed a Motion and Order for

Devolutive Appeal of the district court' s February 19, 2020 judgment.

Prior to Liberty' s appeal, on March 10, 2020, Liberty filed a Motion to

Enforce Stay and Partial Annulment of Judgment seeking to " enforce the stay

entered by the First Circuit Court of Appeal ..., by requesting the Court remove

any suggestion in its February 19, 2020 Judgment that Liberty' s rights have been

adjudicated and, similarly, to annul the Judgment to the extent it addresses

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Liberty' s motion is timely filed pursuant to La. Code Civ. P. art. 2087( A)( 1), which provides
that the delay for filing a devolutive appeal is sixty days from expiration of the delay for filing an
application for new trial under Article 1974. Here, the district court' s February 19, 2020
judgment was mailed on February 26, 2020, and the 60 -day appeal period began to run following
the delays for a new trial on March 7, 2020. Nine days later, Governor Edwards suspended all
legal deadlines arising under the Louisiana Code of Civil Procedure until April 13, 2020, due to
the COVID49 pandemic. See Proclamation No. JBE 2020- 30. The Governor subsequently
extended the suspension through additional emergency orders until June 15, 2020. See
Proclamation No. 52 JBE 2020; Proclamation No. 59 JBE 2020; Proclamation No. 75 JBE 2020.
Liberty filed its Motion for Devolutive Appeal while the suspension of these legal deadlines
remained in effect.

Liberty' s rights in violation of the First Circuit Stay." Stating clearly, " Liberty

seeks no relief here other than enforcement of the First Circuit Stay, annulment of

the Judgment as it relates to Liberty, and the attorneys fees it has incurred

responding to the Judgment during the First Circuit Stay — it does not ask the Court

to reconsider the Judgment to the extent it resolves plaintiffs' claims against Texas

Brine." The district court denied Liberty' s motion on " procedural grounds" in a

judgment signed on June 15, 2020. Liberty filed an application for supervisory

review, which this court referred to the panel to which the yet to be lodged appeal

is assigned. See Gustave J. Labarre, et al. v. Occidental Chemical Company, et

al.,
2020- 0540 ( La. App. 1 st Cir. 08/ 28/ 20).

ASSIGNMENTS OF ERROR

Liberty assigns the following as error:

1) The district court violated this court' s earlier order in that all
claims arising out of plaintiffs' Thirteenth and Fourteenth Petitions
were expressly stayed as to Liberty.

2) The district court entered an absolutely null judgment, committing
reversible error by issuing a judgment during the stay, declaring
plaintiffs' claims against Liberty to be moot, and striking exhibits

from Liberty' s previously -filed brief.

DISCUSSION

Despite the lengthy factual and procedural background presented above, the

analysis required by this court is straightforward. It is undisputed that this court

stayed plaintiffs' claims against Liberty arising out of the Thirteenth and

Fourteenth Petitions " until the action pending in the federal court between these

parties has been discontinued or final judgment has been rendered[,]" that the

district court continued all hearings as to Liberty without date, and that plaintiffs

prosecuted their underlying motions only against Texas Brine. Although plaintiffs

contend that the instant judgment is " very specific in that it pertains only to the

claims asserted against Texas Brine[,]" and that "[ i] n no way does the [ j]udgment

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limit or affect Liberty' s right to litigate the meaning of the Tripartite Agreement[,]"

we disagree. This court' s previous order stayed plaintiffs' claims against Liberty

arising out of the Thirteenth and Fourteenth Petitions; therefore, the district court' s

February 19, 2020 judgment which renders moot plaintiffs' claims against Liberty,

as well as strikes exhibits filed by Liberty in opposition to plaintiffs' Motion to

Interpret and Motion for Partial Summary Judgment, is in direct violation of this

court' s stay order. A trial judge is not at liberty to ignore the controlling

jurisprudence of superior courts. In re State ex rel. A.J., 2009- 0477 ( La. 12/ 1/ 09),

27 So. 3d 247, 256 n. 17. Moreover, this court recently granted supervisory writs in

another sinkhole -related case, holding the district court erred by asserting

jurisdiction over tort -related claims between Texas Brine and another party after

this court previously stayed "[ a] ll causes of action" between those parties pending

arbitration. Assumption Parish Police Jury v. Texas Brine Company, LLC,

2020- 1159 ( La. App. 1st Cir. 2/ 22/ 21), 2021 WL 673464, at * 1 ( unpublished), writ

denied, 2021- 00577 ( La. 6/ 29/ 21), 319 So. 3d 302 and Assumption Parish Police

Jury v. Texas Brine Company, LLC, 2018- 0364 ( La. App. 1st Cir. 3/ 19/ 19),

2019 WL 1306141, at * 2 ( unpublished), writ denied, 2019- 00958 ( La. 9/ 24/ 19),

279 So. 3d 936. See also Roberts v. Woodell, 290 So. 2d 463, 465 ( La. App. 2d

Cir. 1974) ( appellate court found that a writ or warrant of possession issued after

that court' s stay order, was in violation of the order, and therefore, null and void,

vacated, and set aside).

DECREE

Pursuant to this court' s prior action in Labarre v. Occidental Chemical

Company, 2019- 0533 ( La. App. 1st Cir. 8/ 22/ 19), 2019 WL 3973996

unpublished), the claims of plaintiffs asserted against Liberty in the Thirteenth

and Fourteenth Supplemental and Amending Petitions were stayed until the

parallel action in federal court between these parties has been discontinued or final

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judgment as been rendered. As this criteria has not been satisfied, the portions of

the district court' s February 19, 2020 judgment affecting Liberty, including any

evidentiary ruling as to exhibits submitted by it and the mootness of claims against

it, are vacated, as such rulings are in violation of this stay. The matter is remanded

to the district court for further proceedings consistent with this opinion. Costs of

this appeal are assessed to plaintiffs, Gustave J. Labarre, Jr., et al.

JUDGMENT VACATED IN PART AND REMANDED; WRIT

APPLICATION DENIED.

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