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APPEAL FROM CIVIL DISTRICT COURT, ORLEANS PARISH. NO. 2001-20605, DIVISION " H-12" . HONORABLE VAL P. EXNICIOS, JUDGE PRO TEMPORE.
WILLIAM L. PRATT, AYNSLEY B. BOURNE, New Orleans, Louisiana, Counsel for Plaintiffs/Appellees.
THOMAS E. LOEHN, BOGGS LOEHN & RODRIGUE, Metairie, Louisiana -and- WARREN A. FORSTALL, JR., LAW OFFICES OF WARREN A. FORSTALL, JR., New Orleans, Louisiana -and- DARLEEN M. JACOBS, JACOBS SARRAT & LOVELACE, New Orleans, Louisiana -and- ROBERT G. HARVEY, SR., LAW OFFICE OF ROBERT G. HARVEY, SR., APLC, New Orleans, Louisiana -and- CHET G. BOUDREAUX, McKERNAN LAW FIRM, Baton Rouge, Louisiana -and- NEIL D. SWEENEY, Baton Rouge, Louisiana -and- T. CAREY WICKER, CAPETELLI & WICKER, New Orleans, LA -and- GARY M. ZWAIN, PAUL J. VERLANDER, DUPLASS ZWAIN BOURGEOIS PFISTER & WEINSTOCK, Metairie, Louisiana, Counsel for Defendant/Appellant, Odyssey Re (London) Limited f/k/a Sphere Drake Insurance, P.L.C.
KIM M. BOYLE, BRANDON E. DAVIS, ALEX H. GLASER, PHELPS DUNBAR LLP, New Orleans, Louisiana -and- WARREN HORN, HELLER DRAPER PATRICK & HORN, L.L.C., New Orleans, Louisiana, Counsel for Defendant/Appellant, Guste Homes Resident Management Corporation.
WAYNE J. LEE, LESLI D. HARRIS, STONE PIGMAN WALTHER WITTMANN L.L.C., New Orleans, Louisiana, Counsel for Defendant/Appellant, Housing Authority of New Orleans.
GLENN B. ADAMS, LEANDRO R. ANEA, PORTEOUS HAINKEL & JOHNSON, L.L.P., New Orleans, Louisiana -and- MARK L. HANOVER Pro Hoc Vice, ANDERS C. WICK Pro Hoc Vice, DENTONS U.S. LLP, Chicago, Illinois, Counsel for Defendant/Appellant, Scottsdale Insurance Company.
MICHAEL S. FUTRELL, WILLIAM P. CONNICK, ELIZABETH O. CLINTON, CONNICK AND CONNICK, L.L.C., Metairie, Louisiana, Attorneys for Defendant/Appellant, Canal Indemnity Company.
DENNIS J. PHAYER, BURGLASS & TANKERSLEY, L.L.C., Metairie, Louisiana, Attorney for Defendants/Appellants, BW Cooper Resident Management Corporation, Guste Homes Resident Management Corporation.
MATTHEW J. UNGARINO, EMILE A. BAGNERIS III, UNGARINO & ECKERT LLC, Metairie, Louisiana, Counsel for Defendant/Appellant, Penn-American Insurance Company.
BEN L. MAYEAUX, NEUNER PATE, Lafayette, Louisiana, Counsel for Defendant/Appellant, Jefferson Insurance Company of New York.
Court composed of Chief Judge James F. McKay III, Judge Daniel L. Dysart, Judge Sandra Cabrina Jenkins.
JAMES F. MCKAY III, J.
[2014-1050 La.App. 4 Cir. 1] Defendants, the Housing Authority of New Orleans (" HANO" ), Guste Homes Resident Management Corporation (" Guste" ), B.W. Cooper Resident Management Corporation (" Cooper" ), Scottsdale Insurance Company (" Scottsdale" ), Jefferson Insurance Company of New York (" Jefferson" ), Canal Indemnity Company (" Canal" ), Penn-American Insurance Company (" Penn- American" ), and Odyssey Re (London) Limited, f/k/a Sphere Drake Insurance P.L.C. (" Odyssey" ), appeal the trial court's June 30, 2014 judgment, granting plaintiffs' motion for class certification. In a separate writ application, consolidated herein with this appeal, defendants also seek supervisory review of the trial court's July 30, 2014 judgment, denying their exception of prescription. For the reasons set forth below, we affirm the granting of plaintiffs' motion for class certification. Further, we grant the writ, vacate the judgment denying defendants' exception of prescription and remand the matter to the trial court with instructions.
FACTS AND PROCEDURAL HISTORY
On December 17, 2001, plaintiffs, Janice Claiborne and Sheryl Jones, filed a " Class Action Petition for Certification and Damages" on behalf of themselves and [2014-1050 La.App. 4 Cir. 2] others similarly situated, for damages related to their alleged exposure to mold while living in housing developments operated by HANO. Shortly thereafter, the plaintiffs timely filed a motion to certify their claims as a class action. On January 6, 2003, plaintiffs filed a master supplemental complaint, adding fourteen named plaintiff representatives. On March 11, 2003, a first supplemental and amending master complaint was filed, wherein plaintiffs proposed the following class definition:
All residents of THE HOUSING AUTHORITY OF NEW ORLEANS who occupied apartments on December 1, 1980 through the present date and whose apartments were managed by THE HOUSING AUTHORITY OF NEW ORLEANS, B.W. COOPER RESIDENT CORPORATION, GUSTE HOMES RESIDENT MANAGEMENT CORPORATION and the HANO TENANT
RESIDENT COUNCIL, and whose apartments contain indoor fungal substances such as mold and mold spores which were growing on building materials and the by-products of the mold and the mold spores that were released into the air of said apartments.
Defendants raised a peremptory exception of prescription, arguing that plaintiffs' tort claims were prescribed on the face of the petition. Plaintiffs opposed the exception, arguing that the doctrines of contra non valentem and continuing tort applied to their claims to defeat prescription. Plaintiffs have also asserted breach of contract claims based on their leases with HANO, thus arguing that a ten year liberative prescription period applied. Defendants objected to the late assertion of breach of contract claims.
In March 2007, the Hon. Michael G. Bagneris presided over class certification hearings, but did not render judgment. After several hearing dates on the exception of prescription, spanning several years, judgment was rendered on January 17, 2012, granting defendants' exception of prescription.
[2014-1050 La.App. 4 Cir. 3] Plaintiffs appealed the granting of the exception of prescription to this Court. While expressing no opinion as to the correctness of the ruling on the merits, we concluded that the trial court improvidently ruled on the exception of prescription without first ruling on the motion for class certification. As a result, we vacated the judgment and remanded the matter for further proceedings. Claborne v. Hous. Auth. of New Orleans. 2012-0808, (La.App. 4 Cir. 5/29/13), 116 So.3d 983, writ denied, 2013- 1520 (La. 10/4/13), 122 So.3d 1022.
On remand to the trial court, due to Judge Bagneris' retirement from the bench, the Hon. Val P. Exnicios, Judge Pro Tempore, was appointed to preside over the case. On April 22, 2014, the court heard oral arguments on the issue of class certification; no new evidence was presented. After taking the matter under advisement, and considering the evidence contained in the prior appellate record, Judge Pro Tempore Exnicios rendered judgment on June 30, 2014, granting plaintiffs' motion to certify the class.
The trial court's judgment granting certification does not contain the class definition. However, lengthy written reasons for judgment were issued, indicating that the trial court considered plaintiffs' proposed class definition to be overbroad. A more restrictive definition was provided by the court in its reasons for judgment, as follows:
First, this court restricts the definition by refining its earliest temporal boundary as the year HUD regulation 24 CFR Part 5, § 5.703(f) contractually bound HANO to keep the housing development units and common areas free of mold: 1998. Second, the parties' testing of the representative units after the lawsuit was filed extends the evidentiary basis through at least 2004. Third, the court believes that pursuant to Watters v. Dept. of Social Serv., the class definition must include something that causally links the breach of the defendants' duty to the alleged personal injuries, property damage, and nuisance claims.
[2014-1050 La.App. 4 Cir. 4] Thus, the new class definition is " all leaseholders and other permanent residents of THE HOUSING AUTHORITY OF NEW ORLEANS, from 1998 who were adversely affected by the presence of toxic mold in their apartments as a result of HANO, Guste or B.W. Cooper Resident Management Corporations' (" RMC" ) breach of their contractual duty with HUD pursuant to 24 CFR Part 5, § 5.703(f) to maintain said apartments and common areas " free of mold' for the benefit of HANO, Guste RMC or
Cooper RMC's leaseholders and their permanent residents."
On July 30, 2014, one month after ruling on class certification, Judge Pro Tempore Exnicios overruled defendants' exception of prescription. The record reflects that this ruling was made without a hearing or notice to the parties. Defendants now appeal the judgment granting class certification and seek supervisory review from the judgment overruling the exception of prescription.
ASSIGNMENTS OF ERROR
Defendants (HANO, Guste, Cooper, Scottsdale, Jefferson, Canal, and Penn- American) raise the following assignments of error:
1) The trial court erred in granting certification where plaintiffs failed to meet the requirements for class certification pursuant to La. C.C.P. art. 591;
2) The trial court erred in not only certifying a class but also attempting to cure that error by ordering a two phase trial;
3) The trial court erred as a matter of law in holding that 24 CFR § 5.703(f) provides plaintiffs a private contract cause of action;
4) The trial court erred as a matter of law in certifying a class based on a novel and untested theory of law that would require a new interpretation of 24 CFR § 5.703(f), never before litigated in any Louisiana state or federal court; and
5) The trial court's judgment, which is devoid of any class definition or limits on class certification, is vague and ambiguous and violates Louisiana law.
[2014-1050 La.App. 4 Cir. 5] LAW AND ANALYSIS
" A class action is a nontraditional litigation procedure which permits a representative with typical claims to sue or defend on behalf of, and stand in judgment for, a class of similarly situated persons when the question is one of common interest to persons so numerous as to make it impracticable to bring them all before the court." Brooks v. Union Pac. R.R., 2008-2035, pp. 9-10 (La. 05/22/09), 13 So.3d 546, 554 ( citing Ford v. Murphy Oil U.S.A., Inc., 96-2913, p. 4 (La. 9/9/97), 703 So.2d 542, 544). " The purpose and intent of class action procedure is to adjudicate and obtain res judicata effect on all common issues applicable not only to persons who bring the action, but to all others who are 'similarly situated.'" Id.
The appellate standard of review in class certification cases was reiterated in Doe v. Southern Gyms, LLC, 2012-1566, p. 9 (La. 3/19/13), 112 So.3d 822, 830, as follows:
In reviewing a class certification, the trial court's factual findings are subject to the manifest error standard; however, the ultimate decision of whether or not to certify the class is reviewed under an abuse of discretion standard. " Implicit in this deferential standard is recognition of the essentially factual basis of the certification inquiry and of the district court's inherent power to manage and control pending litigation." Whether the district court applied the correct legal standard in determining whether to certify the class is reviewed de novo (internal citations omitted).
The trial court has vast discretion in deciding whether or not to certify a
class. Chiarella v. Sprint Spectrum LP, 2004-1433, p. 16 (La.App. 4 Cir. 11/17/05), 921 So.2d 106, 118. " When reviewing the trial court's ruling regarding class certification, we do not consider whether plaintiffs' claims state a cause of action or have substantive merit, or whether plaintiffs will ultimately prevail on the [2014-1050 La.App. 4 Cir. 6] merits." Oubre v. La. Citizens Fair Plan, 2007-0066, p. 7 (La.App. 5 Cir. 5/29/07), 961 So.2d 504, 509. (citation omitted). " Rather, our task is to examine plaintiffs' legal claims and to determine only whether a class action is the appropriate procedural device in light of established Louisiana criteria." Id. (citation omitted).
Under Louisiana law, the requirements for class certification are set forth in La. C.C.P. art. 591. Article 591(A) provides five ...