The Louisiana Civil Code provides an implied warranty for all things sold.  Specifically, a seller warrants the buyer against all redhibitory vices and defects.  A defect is “redhibitory” if it renders the item so useless or inconvenient that a buyer would not have purchased it or would have purchased it for a lesser price.   Louisiana does not have warranty statutes which are specific to marine products.  The following outline is an overview of Louisiana's warranty statutes in connection with marine products such as boats, personal watercraft, and outboard motors.

Louisiana does not have warranty statutes which are specific to marine products.

B. General Warranty Statutes

The Louisiana Civil Code provides an implied warranty, “redhibition”, for all things sold. Specifically, a seller warrants the buyer against all redhibitory vices and defects. A defect is “redhibitory” if it renders the item so useless or inconvenient that a buyer would not have purchased it or would have purchased it for a lesser price. (La. C.C. art. 2520). The defect is not redhibitory, if it was disclosed to the buyer or should have been discovered by reasonably prudent buyer. (La. C.C. art. 2521). The defect must exist at the time of delivery of the thing, but is presumed to have existed if the defect appears within three days of delivery. (La. C.C. art. 2530). Additionally, a thing must be reasonably fit for its intended use; and it must be of the particular kind or quality if such was specified in the sale. (La. C.C. arts. 2524 and 2529).

Typically, a buyer is required to give notice to a seller of a discovered defect, and permit the seller an opportunity to repair the defect; however, this notice is not required when the seller had actual notice of the defect. (La. C.C. art. 2522). Unfortunately, by law, a manufacture is deemed to have known of the defect. (La. C.C. art. 2545).

The buyer has a choice of remedies which includes full rescission of the sale or merely a reduction in the purchase price. (La. C.C. art. 2541). A manufacturer—a seller deemed by law to know of the defect—is liable for the return of the purchase price with interest from the date paid, reimbursement of the reasonable expenses of the sale and preservation of the thing, damages and attorney fees, minus a credit for any value the buyer received from use of the thing. (La. C.C. art. 2545).

The implied warranty of redhibition may be excluded or limited by agreement, but it must be clear and unambiguous and brought to the attention of the buyer. (La. C.C. art. 2548). The exclusion will not apply if the claim is that the thing was not of the quality declared in the sale. Moreover, despite a valid exclusion with the seller, the buyer may step into the warranty rights his/her seller may have against others.

A seller who is held liable for a defect has an action against the manufacturer of the defective thing, if the defect existed at the time the thing was delivered by the manufacturer to the seller. (La. C.C. art. 2531). The manufacturer cannot eliminate this obligation by contract. (Id.; see also La. R.S. 32:1621.1, providing that a manufacturer must hold harmless and indemnify its franchised dealers).

Statute of Limitations: The statute of limitations is called “prescription” under Louisiana’s Civil Code. The prescriptive period against a manufacturer—a seller deemed by law to know of the defect—is one year from the date the defect is discovered. The prescriptive period against good faith sellers is four years from delivery of the thing or one year from the date the defect is discovered, whichever occurs first.

Recoverable Attorneys’ Fees: A manufacturer—a seller deemed by law to know of the defect—is liable for reasonable attorney fees. (La. C.C. art. 2545).

C. Lemon Law

For the most part, Louisiana’s “Lemon Law,” La. R.S. 51:1941, et seq., does not apply to boats or marine products. However, the Lemon Law does apply to a “personal watercraft” which is sold in Louisiana which is used exclusively for personal and not commercial purposes. “Personal watercraft” means a vessel which uses an inboard motor powering a water jet pump as its primary source of motive power and which is designed to be operated by a person sitting, standing, or kneeling on the vessel, rather than the conventional manner of sitting or standing inside the vessel (La. R.S. 34:855.2).

If a manufacturer has established an informal dispute settlement procedure which substantially complies with the provisions of Magnuson-Moss Warranty Act, the provisions of the Lemon Law concerning refunds or replacement will not apply to any consumer who has not first resorted to such procedure. (La. R.S. 51:1944(D)).

Statute of Limitations: The consumer has no more than three years from the date he purchased the personal watercraft or until one year from the end of the warranty period, whichever is longer, in which to file suit against the manufacturer. (La. R.S. 51:1944(E)).

Recoverable Attorneys’ Fees: If the consumer has complied with the requirements of the Lemon Law, the consumer shall be entitled to reasonable attorney fees actually incurred if a judgment is rendered in part or whole in his favor. (La. R.S. 51:1947).

D. Warranty Reimbursement Rate Statute

Unless provided otherwise in the contract between the manufacturer and the dealer, “in no event shall any manufacturer or distributor pay its dealers at a price or rate for warranty work that is less than that charged by the dealer to the retail customers of the dealer for nonwarranty work of like kind.” La. R.S. 32:1262.

E. Louisiana Consumer Protection Act

Louisiana’s Unfair Trade Practices and Consumer Protection Law, La. R.S. 51:1401, et seq., creates a cause of action for unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce. If the court finds practices were knowingly used, after being put on notice by the attorney general, the court shall award three times the actual damages sustained. (La. R.S. 51:1409(A)).

Statute of Limitations: The private action prescribes one year from the time of the transaction or act which gave rise to the action. (La. R.S. 51:1409(E)).

Recoverable Attorneys’ Fees: The person bringing a private action is entitled to reasonable attorney fees and costs. However, if the court finds that an action under this section was groundless and brought in bad faith or for purposes of harassment, the court may award to the defendant reasonable attorney fees and costs. (La. R.S. 51:1409(A)).

Mr. Jalenak’s practice includes products liability defense, products warranty defense, and the representation of recreational product manufacturers in dealer disputes.
 

The Fifth Circuit Court of Appeals recently addressed the standard for a declaratory judgment action in the context of trademark rights. In Vantage Trailers, Inc. v. Beall Corporation, 567 F.3d 745 (5th Cir. 2009), Vantage filed civil action seeking declaratory judgment finding that its designed for a new aluminum bottom dump trailer would not infringe on any valid trademark rights of Beall Corporation.  Beall manufacturers and sells an aluminum bottom dump trailer which is protected by a registered trademark.  In early 2006, Vantage began designing its own aluminum bottom dump trailer.  In July 2006, Beall’s vice president sent a letter to Vantage stating that if your company places any trailers into service that violate any of Beall’s trademarks we will pursue legal action to stop the infringement. In response to the letter, Vantage filed a civil action seeking a declaratory judgment that Beall’s trademark is invalid and that the design of Vantage’s trailer did not infringe on any intellectual property rights of Beall’s.

Vantage argued that its activities related to the design and attempted sale of an aluminum bottom dump trailer demonstrated the immediacy and reality of the controversy between itself and Beall.  Vantage had worked with an engineer on private development and began construction of a new manufacturing facility, purchased specialized equipment, built a sub-frame and offered to sell its new model trailers.  Although it was undisputed that Vantage had begun to manufacture a type of trailer, Vantage’s design was not substantially fixed and definite when it filed the action.  Even during the litigation, Vantage had made modifications to the external configuration or appearance of the trailers it was working to build.  Thus, the court could not compare the potentially infringing characteristics of Vantage’s trailer against those of the Beall trailers.

This ruling highlights that although a threatening letter had been sent, this threat alone cannot create an actual controversy under the Declaratory Judgment Act.  In order for a case to exist, a person must use a trademark or service mark.  A word, slogan, design or product configuration can only function as a trademark or service mark if used in commerce to identify and distinguish certain goods/services from those of others.  A mark is used in commerce when it is affixed to a good or service which is sold or transported in commerce. In this instance, the potentially infringing elements, i.e., the appearance of the trailers, were not substantially fixed, so as to constitute a distinctive shape that functioned to identify a source.  Therefore, no true controversy existed. Vantage was not yet using a mark in commerce so as to give rise to a controversy.  The ruling shows that the “cart must be before the horse” – a controversy must in fact exist as a matter of law before one can seek a declaration as to rights and obligations involving such controversy, regardless of the “warning shot” letter.
 

Read the entire article from Around the Bar by Katie D. Bell and reprinted with permission from the Baton Rouge Bar Association. 

Since that time, a number of lawsuits related to Chinese drywall have been filed in various State and Federal Courts. 

In an effort to organize the numerous lawsuits that have been filed in Federal Courts, the Judicial Panel on Multidistrict Litigation recently issued a Transfer Order that class action suits filed around the country against Chinese drywall manufacturers would be docketed in the Eastern District of Louisiana.

The United States Judicial Panel on Multidistrict Litigation is an entity of the United States Federal Court System.  It was created by Congress in 1968 under 28 U.S.C. §1407.  The Panel has the responsibility of determining whether civil actions pending in two or more federal judicial districts should be transferred to a single federal district court for pretrial proceedings.  When asked to consider a transfer, the Panel will:

1. determine whether civil actions pending in different Federal district courts involve one or more common questions of fact such that the actions should be transferred to one federal district for coordinated or consolidated pretrial proceedings; and

2. Select the judge or judges and court assigned to conduct such proceedings.

[United States Judicial Panel on Multidistrict Litigation]

The rationale behind combining the lawsuits in this way for pretrial proceedings is to avoid discovery duplication, to prevent inconsistent pretrial rulings; and to conserve the resources of the parties, their counsel, and the judiciary.  Generally, the court will set standing orders or pretrial orders informing the lawyers involved of the ground rules, deadlines and procedures the court expects the litigants to follow.  After discovery and completion of pretrial matters, the case will be remanded back to the transferor court for trial.

While the Transfer Order for the Chinese drywall cases listed only ten cases, it is likely that the many other cases filed will be considered tag – along cases.  A case may only be characterized as a "tag-along action" if it involves "common questions of fact with actions previously transferred" under 28 U.S.C. § 1407.  See, Rule 1.1 of the General Rules for Judicial Panel on Multidistrict Litigation for the definition.  Upon learning of the pendency of a potential “tag-along action,” as defined in Rule 1.1, an order may be entered by the Clerk of the Panel transferring that action on the basis of the prior hearings and for the previously expressed reasons of the Panel.  The Panel then issues a Conditional Transfer Order transferring to the court tag-along actions that the Panel determined has “questions of fact common to the actions previously transferred”.  The order does not become effective until it is filed with the transferee district court.  The transmittal of the order to the transferee district court shall be stayed fifteen days from the entry thereof and if any party files a notice of opposition with the clerk of the Panel with in this fifteen day period, a stay will be continued until further order of the Panel. [See Rule 7.4 of the General Rules for Judicial Panel on Multidistrict Litigation]
 

The Louisiana Legislature has adopted House Concurrent Resolution No. 185, authored by Representative Tim Burns.  The resolution urges and requests that the Department of Health and Hospitals and the Deptartment of Insurance, in consultation with the Louisiana State Licensing Board for Contractors, investigate the health risks associated with living in homes that contain drywall imported from China, study the potential homeowners insurance coverage issues, including triggers, endorsements, and exclusions to policies that are related to drywall imported from China, and determine whether such material should be identified as a substandard, unsafe building material.  The resolution goes on to request a report of the findings and recommendations of this study to the legislature prior to the convening of the 2010 regular session.

A copy of the enrolled version of the resolution can be seen here: Download file

Facebook is taking certain steps to prevent infringement of intellectual property through “name-squatting.” In connection with this, Facebook is allowing Federally registered trademark holders to prevent the registration of usernames that would infringe their intellectual property rights.

There is a link to the form on Facebook’s Web site if you want to complete the form yourself. You will need the trademark registration number and the exact wording of the trademark as registered.

For more information, or to protect your trademark, please contact Pamela Baxter at pamela.baxter@keanmiller.com (225.389.3761) or Russel Primeaux at russel.primeaux@keanmiller.com (225.382.3454).

In today's difficult economic climate, franchisors are often faced with a decision to consolidate, not renew or terminate unprofitable franchises.  Generally, franchise agreements have been entered into in better economic times and contain provisions that attempt to minimize adverse economic consequences to the franchisor arising from a non-renewal or termination.  The termination decision often leads to legal challenges involving the validity of such provisions.  These challenges include a determination of whether the termination is permitted by the contract, termination procedures, buy back issues and any damages that flow from the termination or non-renewal.

La. R.S. 26:805, et seq, with regard to wholesalers and suppliers of beer, imposes certain mandatory conditions on amendments, modifications, cancellations, failure to renewals or termination with regard to the distribution agreements.  The statute also contains provisions for reasonable compensation to the franchisee upon a violation of the statutory provisions.

La. R.S. 32:812 et seq. contains general provisions applicable to all recreational product dealers and manufacturers.  These provisions also include specific provisions regarding manufacturer mandatory repurchase requirements dealing with motorcycles, ATV’s, marine products, recreational vehicles, travel trailers and utility trailers.

Issues related to motor vehicle franchises are addressed in both federal and state law.  The federal Automobile Dealers Suits Against Manufacturers Act provides in part that an automobile dealer may bring suit against any automobile manufacturer engaged in commerce, in any district court of the United States in the district in which said manufacturer resides, or is found, or has an agent, without respect to the amount in controversy, and shall recover the damages sustained and the cost of suit by reason of the failure of said automobile manufacturer to act in good faith in performing or complying with any of the terms or provisions of the franchise, or in terminating, canceling, or not renewing the franchise with said dealer, provided that in any such suit the manufacturer shall not be barred from asserting in defense of any such action the failure of the dealer to act in good faith.

The federal Automotive Dealers Suit statute also, however, provides that its provisions shall not invalidate any provision of the laws of any State except insofar as there is a direct conflict between an express provision and an express provision of State law which can not be reconciled.  Thus, it is important to also consider the provisions of La. R.S. 32:1251 et seq. as they pertain to the cancellation of motor vehicle franchises.  The statute defines a “Franchise” as any written contract or agreement between a motor vehicle dealer, a motor vehicle lessor, or a specialty vehicle dealer and a manufacturer, motor vehicle lessor franchisor, or converter of a new motor vehicle or specialty vehicle or its distributor or factory branch by which the motor vehicle dealer, motor vehicle lessor, or specialty vehicle dealer is authorized to engage in the business of selling or leasing the specific makes, models, or classifications of new motor vehicles or specialty vehicles marketed or leased by the manufacturer, motor vehicle lessor franchisor, or converter and designated in the franchise agreement or any addendum thereto.  It applies to, any written modification, amendment, or addendum to the original franchise agreement, which changes the rights and obligations of the parties to the original franchise agreement, shall constitute a new franchise agreement, effective as of the date of the modification, amendment, or addendum.  These provisions include instances where there is a death or incapacity of the dealer and sets forth rights and obligations that are applicable to the termination of certain agreements. L ouisiana law also provides that any provision in a franchise agreement requiring arbitration or litigation conducted outside of Louisiana or which seeks to apply other than Louisiana law in connection with disputes is null and unenforceable; however, there is little reported case law interpreting the validity of such a provision.

The repurchase of farm, industrial, lawn and garden equipment by a wholesaler is governed by La. R.S. 51:481 et seq.  Those statutes contain provisions that govern the death of a dealer, as well as a failure to renew, termination or cancellation of written contracts where by the dealer has agreed to maintain a stock of parts or equipment. T he provisions govern repurchase obligations for equipment and repair parts. With regard to these provisions, however, a federal court has found that a contractual choice of law provision other than Louisiana will govern.

La. R.S. 51:1451 et seq. – Service Stations Dealers Day in Court Act purportedly apply to a refiner/franchisor who cancels, terminates, or who refuses to renew a franchise agreement.  However, it is important to note that Louisiana Service Station Dealer's Day in Court Act, which imposes good faith standards upon franchisors and franchisees with regard to termination and non renewal of franchises, is preempted by the federal Petroleum Marketing Practices Act insofar as the Service Station Dealers Act imposes a greater duty of good faith than required by the federal Act.

Thus, whether franchisee or franchisor, it is important to remember that Louisiana law does contain both protections and obligations relative to the termination, non-renewal or cancellation of certain types of distributorship and franchise agreements.

* This article is limited to Louisiana law provisions and does not include federal law or regulation provisions, exceptas to preemption issues.

Hurricane Gustav recently wreaked havoc and felled trees throughout the heavily wooded areas of Southeast Louisiana.  As such, many property owners may be concerned who bears the responsibility for a fallen tree. Obviously, if a tree in a homeowner’s yard falls on his house, then that homeowner should contact his insurance agent for assistance in repairing the tree damage. The remainder of this article addresses the issue of tree-owner responsibility when a tree located on the property of one person (the “tree owner”) falls on the property of his neighbor (the “property owner”) damaging the house, car, fence or other property.

Louisiana Civil Code article 2317.1 states:  The owner or custodian of the thing is answerable for damage occasioned by its ruin, vice, or defect, only upon a showing that he knew or, in the exercise of reasonable care, should have known of the ruin, vice or defect which caused the damage, that the damage could have been prevented by the exercise of reasonable care, and that he failed to exercise such reasonable care. 

Thus, to establish liability for damage caused by a defective thing (ie—a fallen tree), the property owner must demonstrate that the tree owner should have known, in the exercise of reasonable care, of the defective tree that caused the damage, that the damage could have been prevented by the exercise of reasonable care, and that the tree owner failed to exercise such reasonable care. Caples v. USSA Ins. Co., 806 So.2d 148, 150 (La. App. 1 Cir. 2001).

In Hoerner v. Beulah Title, 968 So.2d 217 (La. App. 4 Cir. 2007), the Louisiana Fourth Circuit addressed damage caused to one homeowner’s property by the trees of another. The Hoerner’s yard was damaged by trees in the yard of their neighbor, Ms. Title. The Hoerners filed suit alleging that the Ms. Title was liable under Louisiana Civil Code article 2317.1. Ms. Title, argued in her defense that the trees were not defective. She also argued that she was entitled to the defense of force majeure because the trees were felled by Hurricane Katrina.

The Hoerners testified that they had problems with Ms. Title’s pine trees and her foliage since 1991. However, there were no allegations that the trees in question were defective through disease or otherwise. Indeed, photographic evidence demonstrated that the trunks of the trees were blown over by Hurricane Katrina. There was no independent evidence that the trees fell due to the lack of maintenance or improper trimming. Nevertheless, the Hoerners argued that the trees were defective because they were neglected, overgrown, and placed too close to their backyard brick wall.

In support of their argument, the Hoerners argued that Brown v. Williams, 850 So 2d 1116 (La. App. 2 Cir. 2003) applied. In Brown, the tree which caused the damage had not been maintained in over 25 years. The branches had not been pruned, and the health of the tree had never been assessed. The Brown defendants were ultimately found liable because they should have known of the trees’ defective condition, and, in the exercise of reasonable care, the Brown defendants could have prevented the damage caused by their tree with ordinary maintenance.  However, as the Hoerner tree did not involve a total lack of maintenance and/or disease, Brown did not apply. As such, the Hoerners’s claims were dismissed. Moreover, the Fourth Circuit held that Ms. Title was entitled to the defense of force majeure because the winds of Hurricane Katrina caused trees to fall and damage property regardless of maintenance and/or location. 

Responsibility of removing a fallen tree from one’s own or one’s neighbor’s property rests squarely upon the issue of ownership of the tree. The owner of the ground out of which a tree grows is legally presumed to also own that tree. La. C.C. art. 491 (West 2008). This maxim holds true unless the owner of the ground has been divested of ownership of the tree and there is evidentiary support of separate ownership. Allen v. Simon, 888 So.2d 1140, 1144 (La. App. 3rd Cir. 2004). The Simon Court held that the obligation to remove one’s property off one’s neighbor’s property has long been recognized by Louisiana law.

The Simon case involved claims by a neighbor for reimbursement of tree-removal expenses against the neighboring tree owner. The tree owner asserted the Act of God defense, the common law equivalent to the Louisiana civil law doctrine of force majeure, declining liability for the tree removal because it was felled by an unforeseen force of nature, or other irresistible force. The appellate court overruled the trial judge’s application of the Act of God defense and found that the defendant’s decision not to remove the tree was not caused by any act of God. The court concluded that the Act of God defense did not relieve the defendant from his responsibility to remove his fallen tree from his neighbor’s property. Although an Act of God or force majeure may have caused the tree to fall, it did not serve to divest the tree owner of his ownership of the tree. Hence, responsibility to remove a fallen tree from neighboring property rests with the owner of the tree.
 

According to the Louisiana Supreme Court, a commercial general liability policy unambiguously excluded coverage for a contractor’s faulty workmanship. Supreme Services & Specialty Co. Inc. v. Sonny Greer, 958 So.2d 634 (La. 2007). The homeowner instituted legal action claiming that cracks in the slab were the result of faulty and defective design and construction, alleging causes of action based on breach of contract and breach of warranty. Relying on the "work product" exclusion in the policy, the court recognized that it reflected the insurance company’s intent to "avoid the possibility that coverage under a CGL policy will be used to repair and replace the insured’s defective products and faulty workmanship."

The court further concluded that the work product exclusion and the products completed operations hazard are not inherently ambiguous. While the work product exclusion precludes coverage to the insured’s work or product caused by faulty workmanship, the products completed operations hazard provides coverage for damages other than the faulty product or work itself arising out of the faulty workmanship. In other words, the products completed operations provision applies to damages and injuries that might occur as a result of the damaged product.

On March 23, 2007, the Louisiana First Circuit addressed the validity of an arbitration agreement in Lafleur v. Law Offices of Anthony G. Buzbee, 2007 WL 858859 (La. App. 1^st Cir. 2007). The opinion has not been released in permanent law reports and is still subject to revision or withdrawal.

The case arises out of a contract between Mr. Lafleur, a Louisiana resident, and his Texas attorneys, Jeffrey M. Stern and the firm of Stern, Miller, and Higdon. Mr. Lafleur retained the Stern defendants to pursue his maritime claim for personal injuries he sustained while traveling on a vessel in navigable waters off the coast of Louisiana. He executed an agreement with the Stern defendants which stated, "Any and all disputes, controversies, claims or demands arising out of or relating to this Agreement or any provisions hereof, the providing of services by the Stern defendants to Mr. Lafleur, or in any way relating to the relationship between the Stern defendants and Mr. Lafleur, whether in contract, tort or otherwise, at law or in equity, for damages or any other relief, made by or on behalf of Mr. Lafleur shall be resolved by binding arbitration pursuant to the Federal Arbitration Act in accordance with the Commercial Arbitration Rules then in effect with the American Arbitration Association." It also provided "the expense of any arbitration shall be a Case Advance pursuing the claims" and that "Mr. Lafleur understands and acknowledges that Mr. Lafleur is waiving all rights to a trial by jury or a judge."

The First Circuit affirmed that Louisiana law applied to the matter since it has the most significant relationship to the parties and subject matter. More importantly, the First Circuit agreed with the trial court’s determination that the arbitration clause was unduly burdensome. Although the Court recognized that under federal and state law the weight of the presumption in favor of arbitration is heavy, there was no error in the trial court’s conclusion that this provision was adhesionary due to the lack of mutuality and unconscionability. The contract attempted to solely bind Mr. Lafleur while allowing the attorneys to avail themselves of procedural and substantive law remedies. It also imposed the expense of any arbitration exclusively on Mr. Lafleur as a case advance repayable and reimbursable to the attorneys under paragraph 7 of the agreement regardless of the outcome of the arbitration proceedings.

The First Circuit concluded that it is unconscionable for an attorney to be allowed to draft a contract with an arbitration provision that unilaterally takes away the client’s right to a trial while allowing the attorney to pursue any and all remedies. The Court stated, "the lack of mutuality in the arbitration requirement, along with the obligation that the client alone is to bear the expense of the arbitration proceedings accentuated the burdensome and unconscionable elements in this arbitration provision that was drafted by the attorneys without any input from the client." The Court affirmed the trial court's judgment denying the Stern defendants' dilatory exception of prematurity and alternative motions to stay the proceedings and compel arbitration.

Most commercial leases for multi-tenant properties contain clauses which regulate the tenants' use of the leased premises. Many tenants will require a landlord to grant the tenant the exclusive right to operate a certain business or sell a certain product to avoid competing with other tenants. These provisions are appropriately referred to as exclusive use clauses. For the landlord to satisfy its obligations under an exclusive use clause of one lease, the landlord is required to incorporate provisions in its other leases prohibiting the other tenants from using the leased premises for the restricted purpose. These clauses are commonly referred to as prohibited use clauses. 

A tenant being able to negotiate an exclusive use provision in the lease can have a significant impact on the financial success of the business. However, landlords will be hesitant to grant an exclusive use if it will limit the landlord's ability to rent the other locations on the property. If a landlord does grant an exclusive use, the landlord must be prepared to incorporate corresponding prohibited use clauses in the leases of all of the other tenants. 

Much of the time of a construction lawyer is spent assisting clients in finding solutions to the many problems that befall the typical construction project. These problems range from simple contract preparation and negotiation to the more fact-intensive work of constructive defect litigation, surety claims, liens, and payment issues. Each construction project, no matter how complex or simple, involves the same basic issues:

• What is the scope of work that the parties agreed to?

• What documents or plans define the scope of work?

• How is the contractor to be paid for his work?

• How can the owner be assured that the contractor is doing the work properly?

• What is to be done when there are issues or problems with respect to any of the above?

The job of the construction attorney is to help chart a course through this minefield and ideally resolve issues without judicial intervention.

See the rest of the article here. It is an article of some heft, so give it a few seconds to open.  

The second key definition is misappropriation. This term is defined as the acquisition of a trade secret of another person who knows or has reason to know that it was acquired by improper means or disclosure or use of a trade secret of another without express or implied consent by a person who used improper means to acquire knowledge of the trade secret, or at the time of disclosure knew or had reason to know that his knowledge was derived from a person who had utilized improper means to acquire it. In any action, a plaintiff will have to prove that the party receiving the information wrongfully breached a duty of trust or confidence by disclosing or using the information to the injury of the plaintiff.

Thus, how any supposed trade secret is handled is very important. Evidence regarding use of confidentiality agreements, where the secret information is retained, the process whereby the supposed defendant acquired it, will all be subject to scrutiny by any Court in determining whether a claim is actionable. Businesses should consider whether their efforts to maintain secrecy are reasonable before any supposed misappropriation occurs so as to be covered by this Act.

For more information, contact Sonny Chastain at 225.389.3706 or sonny.chastain@keanmiller.com

"We are very excited to welcome these distinguished attorneys to our law firm. They are an outstanding resource for our clients. Our offices are located in Louisiana's major port cities --- New Orleans, Baton Rouge and Lake Charles -- and this esteemed group brings over 150 years of combined experience in maritime issues, admiralty law, marine insurance, oil & gas, drilling and exploration, pipelines, construction, and energy law to our clients." said Gary A. Bezet, managing partner of the 121-lawyer firm.

Michael A. McGlone, Charles R. Talley, Glenn P. Orgeron, Lisa A. Easterling, Bradley J. Schlotterer, and Lawrence J. Hand, Jr. join the firm as partners in the New Orleans office. The firm also welcomes Karen Waters Shipman, Stephen C. Hanemann, Jamie Domilise Henry, Kelly B. Green, and Michael J. O'Brien as associates. Heather Ashman Johnson joins the firm as of counsel. All were formerly with Lemle & Kelleher, LLP of New Orleans.

About the New Partners:

Michael A. "Mike" McGlone joins the firm as a partner in the New Orleans office. He is the senior-most Admiralty and Maritime lawyer in the firm. He has extensive experience in admiralty and maritime law, maritime litigation, marine insurance, personal injury defense, allisions, collisions, and appeals. Mr. McGlone, a native of New Orleans, received his J.D. from Loyola University Law School in 1975 where he was a member of the Loyola Law Review. He earned his B.A. in Business Administration, cum laude, from Loyola University in 1972. Upon graduation from law school, he served as a law clerk to the Hon. Herbert W. Christenberry of the United States District Court for the Eastern District of Louisiana.

Charles R. "Chuck" Talley joins the firm as a partner in the New Orleans office. He practices in the Admiralty and Maritime and Oil & Gas practice groups. He has particular experience in admiralty and maritime law, personal injury defense, property damage claims, appeals, Corbello litigation, and oil & gas law. Mr. Talley received his J.D. from Florida State University in 1981 where he was a member of the Florida State University Law Review and served as Articles and Notes Editor. He earned B.A., magna cum laude, from Vanderbilt University in 1978.

Glenn P. Orgeron joins the firm as a partner in the New Orleans office. A native of New Orleans, he practices in the Admiralty and Maritime and Construction practice groups. He has particular experience in construction law, consumer credit issues, and product liability litigation. Mr. Orgeron is a Lieutenant Colonel (Retired) in the United States Marine Corps. He has served in a variety of legal positions for the United States Marine Corps, including assignments as Deputy General Counsel, Assistant General Counsel, and General Counsel in wide range of jurisdictions including Hawaii, Japan, the Indian Ocean, Washington, D.C., California, and Panama. During his military career, Mr. Orgeron handled all aspects of felony criminal trials and administrative law litigation matters and advised the staffs of the Chief of Naval Operations, Joint Chiefs of Staff, and major operational commanders on worldwide international and operational law. Prior to his 20-year military career, he served as an electrical engineer with the NASA Manned Spacecraft Center in Houston on the Apollo XI Lunar mission and on the Apollo Lunar Rover development team. Mr. Orgeron received his J.D. from the Tulane University Law School in 1978 and his Master of Legal Letters in International Law from The George Washington University in 1983. He earned his Master of Science in Electrical Engineering from Louisiana State University in 1970 and his Masters of Science in Administration from The George Washington University in 1975. Mr. Orgeron earned his B.S. in Electrical Engineering from Tulane University in 1968.

Lisa A. Easterling joins the firm as a partner in the New Orleans office. She practices in Construction and Litigation groups. Ms. Easterling has extensive experience in complex commercial construction matters, construction defect cases, mold litigation, and Fair Credit Reporting Act litigation. Ms. Easterling received her J.D. from the University of Mississippi Law School in 1992 where she was a member of the Mississippi Law Review. After law school, she served as a judicial law clerk to the Hon. George Arceneaux, Jr. , the Hon. Henry A. Mentz, Jr. and the Hon. Veronica D. Wicker, all of the United States District Court for the Eastern District of Louisiana. She earned her B.S. in Journalism, with honors, from the University of Southern Mississippi in 1988.

Bradley J. Schlotterer, a native of New Orleans, joins the firm as a partner in the New Orleans office. He practices in the Admiralty and Maritime practice group. Following law school, Mr. Schlotterer served as a federal law clerk to the Hon. G. Thomas Porteous, Jr. at the United States District Court for the Eastern District of Louisiana. Mr. Schlotterer received his J.D. from the LSU Law Center in 1995. He earned his B.S. in Finance from Louisiana State University in 1991.

Lawrence J. Hand, Jr. joins the firm as a partner in the New Orleans office. He practices in the Energy, Pipeline and Toxic Tort practice groups. Mr. Hand has extensive experience in energy law, regulation and litigation, insurance coverage and litigation, toxic tort litigation, contract litigation, and complex commercial disputes. He has particular experience in complex legal representation of interstate and intrastate natural gas pipelines, natural gas gathering companies, crude pipelines, natural gas processors, power generators, marketers and distributors, oil and gas producers, chemical manufacturers, and aluminum manufacturers. Mr. Hand also represents life insurers, regional banks, malpractice insurers, and general liability insurers. Mr. Hand received his J.D., cum laude, from the Loyola University School of Law in 1995 where he was a member of the Loyola Law Review. He earned his B.A. in Secondary Speech and Communication Education from the University of New Orleans in 1991.

About the New Attorneys:

Karen W. Shipman joins the firm as an associate in the New Orleans office. She practices in the Admiralty and Maritime practice group. She has particular experience in admiralty issues involving a wide variety of admiralty and oil & gas issues, including Jones Act, personal injury, oil and gas exploration, well blowouts, cargo damage, vessel collisions, and barge damage. She also has experience in construction law, consumer credit reporting, and general personal injury litigation. Following law school, Ms. Shipman served as a contact attorney in New York City. Upon her return to New Orleans, she served as a judicial law clerk to the Hon. Fredericka H. Wicker of the Twenty-Fourth Judicial District Court for the Parish of Jefferson. Karen received her J.D., cum laude, from the Tulane University School of Law in 1998 with a Certificate of Specialization in Admiralty Law. She earned her B.A. in Anthropology and Human and Natural Ecology from Emory University in 1993.

Stephen C. Hanemann joins the New Orleans office as an associate attorney. He practices in the Admiralty and Maritime practice group. He has extensive experience in a wide variety of admiralty issues, including Jones Act, personal injury, oil and gas exploration, pipeline spills, drilling accidents, well blowouts, cargo damage, ship collisions, ship allisions, vessel groundings, lift boat and jack-up rig accidents, vessel liens, sunken barges, vessel mortgage filings, product liability, redhibition, commercial lease agreements, and other commercial litigation issues. Mr. Hanemann received his J.D. from the Loyola University School of Law in 2002. He earned his B.A. in French from the University of Texas at Austin in 1999.

Jamie Domilise Henry joins the New Orleans office as an associate attorney. She is a native of New Orleans and practices in the Admiralty and Maritime practice group. Ms. Henry received her J.D. and her Bachelor's Degree in Civil Law from the LSU Law Center in 2002. She earned her B.A. in Biology (1998) and English (1999) from the University of Mississippi.

Kelly B. Green joins the New Orleans office as an associate attorney. She practices in the Admiralty and Maritime practice group. Ms. Green received her J.D. from the Tulane University School of Law in 2003. She earned her B.A. in Political Science from Mary Baldwin College in 2000.

Michael J. O'Brien joins the New Orleans office as an associate attorney. A native of New Orleans, he practices in the Admiralty and Maritime practice group. He has extensive experience in a wide variety of admiralty issues, including Jones Act and personal injury defense, maritime litigation, oil and gas exploration, drilling accidents, well blowouts, cargo damage, ship collisions, ship allisions, vessel groundings, lift boat and jack-up rig accidents, vessel mortgage filings, product liability, redhibition, as well as premesis liability, construction defect litigation and appeals. Michael received his J.D. from Loyola University in 2001 where he received the Joseph Rault Award for excellence in Admiralty and Maritime Law. He earned his B.A. in Political Science from Iowa State University in 1998. He attended Iowa State on a NCAA football scholarship.

Heather Ashman Johnson joins the New Orleans office as of counsel. A native of New Orleans, Ms. Johnson practices in the Admiralty and Maritime practice group. She has served as Counsel for Brown & Root, Inc. in Houston, Texas and as a General Attorney with the Saudi Arabian Oil Company in Saudi Arabia. She has particular experience in complex commercial maritime issues including all aspects of international sales contract negotiations, chartering activities, downstream joint ventures, and in the negotiation of multi-million dollar cargo damage claims. Ms. Johnson received her J.D. from the University of Pennsylvania Law School in 1981 and a Master of Laws, with distinction, from the Tulane University School of Law in 1983. She earned her B.A. in Political Science, summa cum laude, from Newcomb College in New Orleans in 1977.

About the Admiralty and Maritime, Construction and Energy Law Groups:

Kean Miller represents a wide range of clients in admiralty and maritime issues in Louisiana. Our lawyers have extensive experience in the shipping, marine insurance, tugs and towage, drilling rigs, and oil & gas exploration. Our offices are located in major port cities throughout Louisiana, including New Orleans, Baton Rouge, and Lake Charles, Louisiana. Our Admiralty and Maritime team has significant experience in personal injury defense, property damage claims, appeals, and oil & gas law. We offer clients detailed admiralty experience with regard to activities in the "oil patch" involving the exploration, development, production and transportation of oil and gas. We represent numerous clients in "brownwater" and deepwater (or "bluewater") matters throughout the Gulf Coast region. Many members of the team are involved at a leadership level in the Maritime Law Association, the Greater New Orleans Barge Fleeting Association, the Marine Index Bureau, Mariners Club Port of New Orleans, and the maritime and admiralty sections of the Louisiana State Bar Association and the American Bar Association. We represent our clients before all state and federal courts, governmental regulatory and administrative bodies, and in complex litigation. We serve as counsel to local, national and international oil and gas producers, vessel owners and operators, shipyards, drilling contractors, service companies, brokers, barge lines, and underwriters.

Kean Miller represents many of Louisiana's most successful construction businesses and Fortune 500 companies in construction law matters. We handle legal issues in connection with contract interpretation, including drawings, specifications, change orders and back charges, lien rights and remedies, contract disputes and litigation. In addition, we have substantial experience in the Private Works Act, the Public Works Act and the Miller Act. Our lawyers assist industry clients with issues involving performance and payment, bid and retainage bond rights, liability and responsibility. On behalf of our clients, we have negotiated with owners, general contractors, subcontractors, architects, laborers, material men, bond companies, suppliers, architects, attorneys, bankruptcy trustees, bankers, and public officials.

We also represent clients in lawsuits, arbitration, mediation and alternative dispute resolution proceedings. Recently, we have represented clients in lawsuits involving insurers of engineers and building owners, and suits for and against sub-contractors and architects.

Kean Miller has represented the Louisiana energy industry since its earliest presence in the state. Many of the firm's national and international chemical and refining clients came to our predecessor firm in the 1920s for assistance in the acquisition of land for their first Louisiana sites. As these companies expanded in Louisiana, so did the variety and complexity of their legal needs. Today, these energy clients continue to rely on Kean Miller for their legal services based on our understanding of the complex needs of their industry, our knowledge of their business, and our Louisiana know-how.

Kean Miller has extensive experience in energy law, regulation and litigation. We have particular experience in complex legal representation of interstate and intrastate natural gas pipelines, natural gas gathering companies, crude pipelines, natural gas processors, power generators, marketers and distributors, oil and gas producers, chemical manufacturers, and aluminum manufacturers.

About Kean Miller:

With more than 120 lawyers, Kean Miller serves the legal needs of Louisiana businesses and Fortune 500 companies. The firm maintains two offices in Baton Rouge, and full service offices in New Orleans, Lake Charles and Plaquemine, Louisiana. Kean Miller is the largest law firm in the Greater Baton Rouge region. The firm serves clients in numerous industries including energy, petrochemical and chemical, technology and telecommunications, shipping and transportation, drilling and exploration, pipelines, media and advertising, financial services, insurance, gaming, government and education, health care, manufacturing, real estate, retail, construction and leasing. The firm combines the talent and expertise of its lawyers into multi-disciplinary client and industry teams. These teams are comprised of seasoned legal professionals from a variety of disciplines who are equipped to identify legal and business needs and to develop superior service strategies that provide unmatched support to the client.

For more information, contact Steve Boutwell at 225.389.3736, or steve.boutwell@keanmiller.com

In the case of Dishon v Ponthie, Third Circuit, No. 05-659 (12/30/05), the court found that an enterprising individual (Ponthie) owned and operated two companies as a single business enterprise and therefore one company (Rentals) owned entirely by Ponthie and his wife was liable for the debts of another company (Development) owned entirely by Ponthie and his wife. Rentals bought land and entered into leases with the US Postal Service under which Rentals had to finance and construct the building and other improvements to be used by the USPS. Developments' sole function was to build the buildings pursuant to an oral contract with Rentals under which Rentals paid Development a set price which did not yield Development a profit. Instead, in some cases, Development's costs exceeded the set price. Development was sued because it failed to pay one of its subcontractors. When it became clear that Development had no money because it never made a profit, the plaintiff had to find deeper pockets. Following the holdings of Green v. Champion Insurance Co., 577 So. 2d 249 (La. App. 1 Cir.), writ denied, 580 So. 2d 668 (La. 1991), and its progeny, the appellate court found that because (a) Ponthie owned and operated both companies, (b) Development performed no work for any other company, (c) Development earned no other funds and made no profit, and (d) Ponthie operated both companies out of the same office and used the same phone numbers, the two companies should be treated as a single business enterprise even though Ponthie complied with corporate formalities and kept separate books for the companies, and as such, Rentals was found liable for the obligation of Development to the subcontractor even though Rentals never agreed to pay the subcontractor. In the long line of Single Business Enterprise Theory cases, one often fatal failure is for a company's sole "customer" to be an affiliate. In those cases, it is much more likely for a single business enterprise to be found.

For more information, contact G. Blane Clark, Jr. at 225.382.3414 or blane.clark@keanmiller.com

Mr. Aguillard filed suit to enforce the sales agreement and in response a joint motion to stay pending arbitration was submitted. The district court denied the motion to stay. The Third Circuit Court of Appeals affirmed finding the entire contract, including the arbitration clause was adhesionary and lacked mutuality because the document was printed in small type; defendant reserved methods of disputed resolution not available to the consumer and defendants had unilateral power to change the contract by verbal announcement.

In addressing the issues, the Supreme court stated, "we note the positive law of Louisiana favors arbitration", citing La. R.S. 9:4201, and that such treatment echos the Federal Arbitration Act ("FAA"). Whether a claim is based on state or federal law, courts must enforce arbitration agreements covered by the FAA. Although the FAA preempts state law in cases involving transactions which affect commerce, states may regulate contracts involving arbitration agreements under general contract law. They may invalidate arbitration clauses on grounds as exists at law or equity per the revocation of any contract.

However, the states may not decide that a contract is fair enough to enforce its basic terms, but not fair enough to its arbitration clause. Any such state policy is unlawful for it would place arbitration clauses on an unequal footing and contrary to the FAA's language and Congress' intent.

The Court stated that it is not willing to declare all standard form contracts as adhesionary. Contracts of adhesion are defined in broad terms as standard contracts usually in printed form prepared by a party of superior bargaining power for adherence or rejection by a weaker party. Standard form contracts merely serve as a possible indication of adhesion. The issue regarding adhesion is whether the party truly consented to all of the printed terms. The Court noted that although the print in the arbitration agreement was small, it did not differ in any way from the other clauses in the contract.

The Court disagreed with the Third Circuit regarding mutuality. The Third Circuit had concluded the defendant reserved to themselves methods of dispute resolution other than arbitration which was not available to the auction customer. For example, the seller had the option to retain the earnest money to deposit as liquidated damages and re-offer and resale the property in situations of buyer default. However, nowhere in the document did the defendants reserve the right to litigate any issue arising from the contract. Further, the reservation of rights contained with the default provision to which the Third Circuit took exception could only be invoked when the purchaser failed to comply with the Auction Terms & Conditions, which must be determined through arbitration.

The Court concluded the Third Circuit erred in declaring the whole contract adhesionary and lacking in mutuality. It noted that it is well settled that a party who signs a written instrument is presumed to know its contents. Mr. Aguillard signed the contract acknowledging that he read it. The Court stated that it could find nothing sufficient to establish that the defendants were in a superior bargaining position or that anything in the document itself would call into question the validity of Mr Aguillard's consent as indicated by his signature. The Court found the doctrine of contract of adhesion was inapplicable and stayed the matter pending arbitration.

Meanwhile, on January 4, 2006, the Louisiana Supreme Court granted a writ application and remanded the case of Vishal Hospitality, L.L.C. v. Choice Hotels International, Inc. to the Louisiana First Circuit Court of Appeals to be handled in accordance with its decision in Aguillard. In Vishal, the First Circuit held the arbitration clause was adhesionary because the franchisor reserved for itself the right to litigate claims for indemnification, collection of monies owed under the agreement or to enjoin the use of trademarks. The First Circuit acknowledged the presumption in favor of arbitration, but held the arbitration clause to be adhesionary where it binds the non-drafting party to arbitration, but reserves to the drafter of the document other remedies. As instructed, the First Circuit will be addressing these issues again in light of the Aguillard decision.

For more information, please contact Sonny Chastain.

This analysis seemed somewhat simple while businesses were carrying on from its four walls - a "bricks and mortar" method of operation. However, with advancing communication technology, especially the internet, the question must be asked, what does it mean to carry on a business in a parish? How has the information superhighway expanded the meaning of this term?

In Moores Pump and Supply, Inc. v. Laneaux, 727 So.2d 695 (La. App. 3d Cir. 1999), the court addressed this issue in connection with a preliminary injunction and a former employee's argument that the non-compete agreement was invalid because it was geographically too broad. The court said Moores had at least established a prima facia case that it solicited business in all parishes listed in the agreement. The fact that it did not have a project in a particular parish during Mr. Laneaux's tenure and/or did not have specific projects ongoing in all forty-three parishes did not require a finding that it was not doing business. According to the Third Circuit, solicitation of business was enough to constitute "carrying on a like business."

What about the Internet? Does the fact an employer operates a website that extends into a specified parish constitute carrying on a like business? The answer is not known in the context of a non-compete agreement. However, the courts have been looking at on-line conduct to determine personal jurisdiction. If a business is operating over the internet through a highly interactive website, it may be deemed to be transacting business in a foreign state and subject to personal jurisdiction, without leaving the four walls of its building. The question is whether the answer will be the same when addressing the enforceability of a non-compete agreement. It is easy to see a situation whereby the business is physically located in a specific parish, and maybe even servicing some customers in an immediate outer lying parish, but otherwise simply soliciting business on the internet. The question will be is the employer carrying on business in more parishes and municipalities because it has an interactive website.

Our legislature has given some guidance as to what is a reasonable non-competition agreement as a matter of law. However, the question must be raised as to whether our methods of operation have outgrown the statute from a practical standpoint. Only time and a few rulings from courts will tell this tale.

For more information, contact Sonny Chastain at 225.389.3706 or sonny.chastain@keanmiller.com

Someone once observed that most car accidents occur within 10 blocks of the driver's home. We see a analogous trend in Intellectual Property "crimes" - i.e. infringement of patents, trademarks, or copyrights; or misappropriation of a trade secret. Intellectual Property (IP) disputes between two parties that are strangers to one another are the exception, not the rule.

The licenses can be for trademarks, trade secrets, or patents. In a trademark license, the licensor (the trademark owner who is granting the license) should ensure that the agreement covers good will generated by the licensee. The license agreement should clearly state that good will generated by the licensee in the trademark inures to the benefit of the licensor, not the licensee. Additionally, the agreement should state that any registrations that the licensee seeks to obtain in its name either (1) will be deemed to be obtained for the benefit of the licensor or (2) can be voided by the licensor. Licensees who elect to part ways with the licensor should be careful not to infringe the licensor's trademarks going forward. Former licensees should discard or return to the licensor (check the agreement) all old parts lists, brochures, and marketing materials and start fresh with new materials.

In patent licenses, as well in joint ventures (JVs), the most common dispute is over improvements to technology. The license or venture agreement should spell out exactly what happens in the various scenarios of inventorship. The three possibilities are: (1) the licensor (or JV partner #1) creates the new technology; (2) the licensee (or JV partner #2) creates the new technology; or (3) the invention is truly jointly created by the licensor and licensee (or both JV partners). The license or JV agreement should state how the parties will handle inventions arising under each of these three categories. An important provision is that each party should be under a duty to report all inventions to the other party, even if the reporting party believes it is the sole owner of the invention. Such an obligation ensures that the parties are fully disclosing their activities, and provides an additional legal claim (breach of contract) in addition to the IP infringement claims which might be available.

When dealers or distributors sever their relationship with a manufacturer; it is often because the dealer has decided to make its own products. The dealer must be careful to fully assess the manufacturer's IP rights. The dealer should consult with IP counsel to steer around those IP rights and avoid any infringement claims. From the manufacturer's perspective, the manufacturer should be careful to follow the procedures outlined in the dealer agreement. A court will not look favorably upon a manufacturer who failed to follow the procedures outlined in the dealer agreement; especially if the agreement is a form agreement drafted by the manufacturer.

A final consideration in disputes with former partners is that these disputes are often very emotional situations, and the scenario tends to be driven by personalities. It is important to remember that the dispute is simply another part of one's business and should be treated with sound business judgment. When possible to do so, the person making decisions about the dispute should be a person who was not directly involved in the earlier relationship. When cooler heads prevail, the terms of the "divorce" can be settled in a manner that allows everyone to get back to business.

Very often, contracts prohibit assignment without the other party's consent. If you think you might ever want to assign a contract (bearing in mind that a merger or sale of the business can trigger assignment), then this kind of provision should generally be modified by adding that the other party's consent cannot be unreasonably withheld, conditioned or delayed.

Adding the language recommended above will require the other party to demonstrate some legitimate reason for denying consent, such as the proposed assignee is financially inferior to the assignor; the assignor is in default; or the proposed assignee cannot comply with the existing terms of the subject agreement.

In a recent case, the court found that a landlord withholding consent for competitive reasons was not reasonable (i.e. the proposed assignee would be operating a business competitive with the landlord's nearby business). Tenet HealthSystem Surgical, L.L.C. v. Jefferson Parish Hosp. Service Dist. No. 1, 426 F.3d 738 (5th Cir. 2005). The court noted that the landlord's objection must be based on ownership and operation of the leased property, not the landlord's "general economic interest." The court held that the competitive concerns did not relate in any way to an objective evaluation of the proposed assignee as a tenant and were not a reasonable basis for denying consent. This is the first time Louisiana contract law has been interpreted in this fashion. Historically, economic reasons were a permitted basis for refusing consent to assignment.

Avoid becoming trapped into contracts, including leases, by making sure the other party must act reasonably if you need to request consent to assignment. On the flip side, be aware that if your consent to assignment is requested, refusing to grant it for competitive reasons may trigger a claim that you've breached the contract. Whether you can successfully defend such a claim will depend largely on the wording of the assignment provision and whether it expressly permits withholding consent for competitive reasons.

Reproduced with permission from Class Action Action Litigation Report, Vol. 6, No. 21, pp. 795-797 (Nov 11, 2005). Copyright 2005 by The Bureau of National Affairs, Inc. (800-372-1033). http://www.bna.com

The damages caused by Hurricane Katrina in Louisiana, Mississippi, and Alabama constitute the largest natural disaster in U.S. history. Hurricane Katrina's impact on insurers and their policyholders have already set in motion what will probably be one of the largest legal and public policy storms to hit the United States in modern times. Nowhere will the storm be more evident than in disputes involving wind and water damage coverage.

The eye of the coverage storm is already manifesting itself in coastal areas of Louisiana, Mississippi, and Alabama.

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