Ratcliff Recovery Services, Llc v. City Place Investors, Llc

Supreme Court of Louisiana
April 23, 2025
Chief Deputy Clerk of Court
For the Court
The Supreme Court of the State of Louisiana
RATCLIFF RECOVERY SERVICES, LLC
VS.
CITY PLACE INVESTORS, LLC
No. 2025-C-00115
_ _
_ _ _ _
IN
RE: City Place Investors, LLC - Applicant Defendant; Applying For Writ Of
Certiorari, Parish of Lafourche, 17th Judicial District Court Number(s) C- 146073,
Court of Appeal, First Circuit, Number(s) 2024 CA 0679;
_ _ _ _ _ _
April 23, 2025
Writ application granted. See per curiam.
Griffin, J., concurs in the result.
Guidry, J., recused.
JLW
JDH
WJC
JBM
04/23/2025 "See News Release 019 for any Concurrences and/or Dissents."

S
UPREME COURT OF LOUISIANA
No.
2025-C-00115
R
ATCLIFF RECOVERY SERVICES, LLC
VS.
CITY PLACE INVESTORS, LLC
O
n Writ of Certiorari to the Court of Appeal, First Circuit, Lafourche Parish
P
ER CURIAM∗
Hurricane Ida damaged a townhome complex owned by City Place Investor,
LLC d/b/a Turnberry Townhomes), which was insured under a subscription policy
with a group of insurers (“Insurers”).1 City Place hired Ratcliff Recovery Services,
LLC to perform mitigation services related to Hurricane damage but was unable to
pay the contracted amount. Ratcliff sued City Place for breach of contract, and City
Place filed a third-party demand against Insurers for unpaid benefits for Hurricane
damage under its property insurance policy, including the costs associated with
Ratcliff’s unpaid invoice.
After the deadline for responsive pleadings, City Place obtained a default
judgment against Insurers for amounts owed under the policy, plus statutory bad
faith penalties and attorney fees. Insurers later filed a peremptory exception of no
cause of action and an action to annul and/or motion for new trial. The trial court
largely denied Insurers’ motions but granted limited relief to clarify attorney fees
and apportion damages.2 The court of appeal found the trial court erred by denying
Insurers’ exception of no cause of action and dismissed City Place’s third- party
∗ Guidry, J., recused.
1 Lloyd’s Syndicate 2357 (20%); Lloyd’s Syndicate 1458 (11.25%); Interstate Fire (27%); and
Independent Specialty (30.5%)
2 The judgment contains no written reasons and is silent on its disposition of Insurers’ exception
of no cause of action.

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demand.
First, despite being styled as a peremptory exception of no cause of action,
Insurers’ exception is more properly characterized as a dilatory exception of
improper joinder or cumulation of actions under Louisiana Code of Civil Procedure
article 926(A)(7). A dilatory exception seeks to retard the progress of an action but
not stop it, while a peremptory exception declares the action legally nonexistent or
barred by effect of law. La. C.C.P. art. 923. Dilatory exceptions are subject to waiver,
while peremptory exceptions are not. La. C.C.P. arts. 926 – 28. It is well established
that an exception’s “true import,” rather than its title, controls its classification, and
that a court errs by treating a peremptory exception as a “trojan horse” for an
otherwise waived dilatory exception. Moreno v. Entergy Corp. , 2010 -2268 (La.
2/18/11), 64 So. 3d 761. Here, Insurers’ exception sought to prevent the forward
progress of the action rather than truly end the action. If Insurers disagreed with City
Place bringing its cause of action within Ratcliff’s suit, they should have raised an
exception of improper cumulation. Because Insurers failed to timely raise this
dilatory exception, it was waived.
Second, City Place’s allegations in the third-party demand were sufficient to
state a cause of action in accordance with La. C.C.P. art. 1111. Moreno, 2010-2268,
p.3, 64 So. 3d at 762 (the purpose of the exception of no cause of action is to test the
legal sufficiency of the petition by “determining whether the law affords a remedy
on the facts alleged in the petition”). For a third-party demand, Article 1111 requires
alleging facts that the third -party defendant is either the third -party plaintiff’s
warrantor or is liable for all or part of the principal demand. Here, the court of
appeal’s interpretation of the connexity requirement was too narrow. City Place
alleged a clear connection between Insurers’ alleged breach under the insurance
policy for the Hurricane Ida damage and City Place’s breach of the mitigation
contract due to a lack of recovery from Insurers for the cost of repair of those same

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damages. City Place’s claim is based on the allegation it would not have had the
funds it was owed to pay Ratcliff without Insurers first paying City Place under the
policy. That is precisely the reason property owners usually buy insurance. This
connection satisfies the requirements of La. C.C.P. article 1111 sufficient to defeat
the exception and is in accordance with the purpose of the article. See Bennett v.
DEMCO Energy Servs., LLC , 2023-01358, pp. 6-7 (La. 5/10/24), 386 So. 3d 270,
275 (“[T]he very purpose of these articles is to promote judicial economy and
efficiency . . . [;] to avoid multiple lawsuits; to facilitate and expedite the trial of
litigation; and, wherever possible, consistent with orderly procedure and due regard
for the rights of all litigants, to dispose of all phases of an action in a single
proceeding.”) (citation omitted).
Finally, Insurers timely challenged the validity of the default judgment
pursuant to Louisiana Code of Civil Procedure article 2002(A)(2). Insurers aver that
City Place obtained the default judgment without service or citation on the Lloyd’s
third-party defendants and without notice of the default hearing to any Insurers. City
Place relies on service upon the Secretary of State even if the record establishes the
Secretary of State did not actually forward the notice to the underlying insurer. The
underlying dispute and lack of clarity concerning service on the various parties in
the submissions before this Court establish that this matter should be remanded to
the trial court. The default should be vacated as to any party for whom there was not
proper service and notice of the proceedings. See e.g. Clark v. Clark, 10-1281 (La.
App. 3 Cir. 3/9/11), 58 So. 3d 1081.
Accordingly, the court of appeal’s grant of the exception of no cause of action
is reversed. This matter is remanded to the trial court for further proceedings. On
remand, the trial court shall reconsider the motions to vacate the default judgment.
REVERSED AND REMANDED