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Logansport Gaming, L.L.C. v. Ark La Tex Fire Systems, LLC

Court of Appeals of Louisiana, Second Circuit

August 9, 2017

LOGANSPORT GAMING, L.L.C., LOGANSPORT TRUCKSTOP, L.L.C. and LOGANSPORT GAMING, L.L.C., d/b/a SABINE RIVER RESTAURANT Plaintiffs-Appellants
v.
ARK LA TEX FIRE SYSTEMS, LLC and ABC INSURANCE COMPANY Defendants-Appellees

         Appealed from the Forty-Second Judicial District Court for the Parish of DeSoto, Louisiana Trial Court No. 75399, Honorable Charles B. Adams, Judge

          KENNETH R. ANTEE, JR. Counsel for Appellants

          LUNN, IRION, SALLEY, CARLISLE & GARDNER, APLC, Ronald E. Raney Counsel for Appellees

          Before WILLIAMS, PITMAN, and STONE, JJ.

          PITMAN, J.

         Plaintiffs-Appellants Logansport Gaming, L.L.C., Logansport Truckstop, L.L.C., and Logansport Gaming, L.L.C., d/b/a Sabine River Restaurant (collectively, "Logansport"), appeal the trial court's judgments in favor of Defendants-Appellees Ark La Tex Fire Systems, LLC ("Ark La Tex") and Hallmark Specialty Insurance Company ("Hallmark").[1] For the following reasons, we affirm the judgments of the trial court.

         FACTS

         On March 6, 2015, Logansport filed a petition for breach of contract and damages against Ark La Tex and its liability insurer. Logansport stated that, on February 10, 2000, it contracted with Ark La Tex to purchase, install, maintain and inspect a fire suppression system (the "System") to be installed in the restaurant located in Logansport's truck stop. It explained that the System is required to be inspected by a licensed individual or company on a bi-annual basis and that Ark La Tex is licensed by the State of Louisiana to perform this inspection and maintenance. It stated that Ark La Tex agreed to maintain the System in a manner in which it was intended to operate so that, in the event of a stove/cooktop fire, it would activate to suppress the fire and minimize damage to Logansport's property; to perform the required inspections and any work or maintenance on the System to ensure that Logansport was in compliance with any state or federal regulations or requirements; and to perform inspections and maintenance in accordance with the National Fire Prevention Association code (the "NFPA") and guidelines. It noted that, on July 12, 2010, Ark La Tex performed an inspection of the System and placed a sticker on it designating that it had been inspected, and then, in August 2010, Ark La Tex performed maintenance on the System and placed a sticker on it certifying that it was in working order. Logansport stated that, on January 31, 2011, a gas fire ignited at the stove protected by the System, which caused severe property damage. It alleged that, due to Ark La Tex's breach of contract or negligent performance of its contractual duties, the System did not activate to terminate the fire, and this failure of the System to operate caused damage to Logansport's property. It alleged that Ark La Tex breached the contract by failing to properly inspect, maintain and repair the System with the agreed-upon terms and requirements as set forth by the NFPA. Logansport's insurer, Scottsdale Insurance Company ("Scottsdale"), denied coverage, rendering Logansport uninsured for the damage resulting from the fire.[2]Logansport alleged that, as a result of Ark La Tex's breach of contract, it suffered the following non-exclusive damages: property damage; loss of profits; loss of business reputation; penalties from the Gaming Division of the Louisiana State Police; cost of reconstruction; cost of litigation with Scottsdale; other general and special damages; mental anguish, humiliation and embarrassment; expert witness fees; and interest and costs of the proceedings.

          On July 18, 2014, Ark La Tex filed an answer. It denied Logansport's allegations for lack of sufficient information, requested a jury trial and requested judgment in its favor and against Logansport.

         On September 2, 2015, Ark La Tex filed a supplemental and amending answer. It alleged the fault of unknown third persons shown in a surveillance video of the fire in which they failed to act timely and used an accelerant on the fire. It also alleged the fault of Scottsdale in failing to timely adjust and/or pay for reconstruction of the premises. It pled the doctrine of spoliation of evidence on the basis that Logansport discarded, or allowed to be discarded, the remnants of the cooktop, along with its related assemblies, as well as various portions of the System. It asserted that these allegations and pleas should result in a complete bar to all claims for damages asserted by Logansport, or, alternatively, that such constitutes comparative fault and/or fault of third persons that should reduce Logansport's damages.

         A jury trial began on March 21, 2016. Wayne Yates testified that he is the nephew of Leon Miletello, who owns the truck stop. He stated that the truck stop consists of a convenience store, a restaurant and a video poker gaming room and that he worked at the truck stop as the operations manager from 1998 to 2006 and then became the owner of the convenience store. He noted that he was the manager of the restaurant when David Scoggin of Ark La Tex installed the System in 2000. Mr. Yates testified that it was his understanding that, if there was a stove/cooktop fire, the System would operate automatically to extinguish the fire and there was nothing a person needed to do. He stated that Mr. Scoggin did not explain to him how the System worked, but did tell him that, if there was a fire that did not extinguish, the System had a manual pull bar that would need to be pulled. He noted that Mr. Scoggin did not teach him how to inspect the System and did not train any employees about what to do in case of a fire. He stated that Mr. Scoggin did not tell him that he needed to perform monthly inspections of the System and did not give him an owner's manual. He testified that Mr. Scoggin told him that the System needed to be periodically inspected in accordance with the State code and that it was his understanding that Mr. Scoggin would perform these inspections. He stated that the System was inspected, as demonstrated by dated stickers on the System, but that he did not observe the inspections. He testified that he did not clean the System, but did clean the filters, which were metal baffles on the cooktop's vent hood, on a monthly basis. No one cleaned the exhaust hood or the ducts, but the cooktop was cleaned every day. He stated that he was not present for either of the System's fireless activations in 2010. He testified that, when the fire occurred on the morning of January 31, 2011, he was not present at the truck stop and did not know if the System had activated. As a result of the fire, there was some damage to the convenience store. He stated that the restaurant brought customers into the gaming room and the convenience store and that, after the fire, he observed a decrease in the number of people visiting the truck stop and in fuel sales. After the fire, he acted as a point person while rebuilding the restaurant. He stated that Scottsdale denied Mr. Miletello's insurance claim, so Mr. Miletello instructed him to save as much money on the rebuild as possible. The layout of the building changed when it was rebuilt, and they had to do certain things to comply with the Health Department's code. He stated that they did not add any special "bells and whistles" and only did what was necessary. He testified that he never did anything to deactivate the System, that no one related to Logansport ever discussed such a notion and that he would not know how to deactivate the System. He also testified that he had no knowledge of a CO2 cartridge prior to the fire.

         On cross-examination, Mr. Yates testified that there were manual fire extinguishers located in the kitchen. He further testified that, when the restaurant reopened in March 2012, fuel sales increased. When asked about the fireless activations that occurred in 2010, he stated that no one told him that the System was inoperable. He testified that he had no recollection of Mr. Scoggin not coming when called or of him being uncooperative.

         Sheila King testified that she began working at the truck stop in 2003 and became the manager of the restaurant in 2006. She described procedures in place for cleaning appliances in the kitchen-the cook cleaned the cooktop every night; the dishwasher cleaned the baffles in the vent hood once a week; and a third party cleaned the inside of the vent hood every three months. She testified that she did not know anything about the System until after the fire and that she was not responsible for cleaning the System. She stated that she was aware of the first fireless activation that occurred in July or August 2010. She was not present when this happened, but it was her understanding that Mr. Scoggin fixed the System. She noted that the System had a second fireless activation in August 2010. She received a call from the cook notifying her of the activation, so she went to the restaurant to help clean up oil off the floor. An employee notified Ark La Tex of the fireless activation, and Mr. Scoggin acted like he was angry to be there. She stated that she did not know what he did while there and that he did not say anything to her about the operation of the System, about not using the cooktop, about the cooktop being inoperable or about the System being inoperable. She admitted that some employees were aggravated that they had to clean up again after the second fireless activation; and one employee, Jennifer Braxton, threatened to quit if she had to clean up again. Ms. King stated that she did not deactivate the System, did not show any employee how to do so and did not know how to do so herself. She further testified that, on January 31, 2011, she received a call from an employee that there was a fire at the restaurant. She arrived at the truck stop and watched the restaurant burn. She noted that the cook was responsible for turning on the cooktop in the morning; but, on the day of the fire, the cook was not at work. She stated that an employee in the convenience store who previously worked in the kitchen turned on the cooktop and then returned to the convenience store believing a cook was on the way to work.

         On cross-examination, Ms. King testified that, when the System activates, it creates a mess, including foam that comes out of the System and oil that boils out of the cooking appliances. She noted that she was concerned the System would activate again. She stated that, after the August 2010 activation, she was not aware of any parts being removed from the System, but heard that a part had been ordered for it. Between August 2010 and January 2011, she did not call Mr. Scoggin to work on the System and, to her knowledge, no employee called him. She discussed the cleaning process of the kitchen and noted that the majority of the time she was not present when the kitchen was cleaned at night but that it was clean when she arrived in the morning. She stated that she inspected the cooktop once or twice a week. She also stated that, on the morning of the fire, her mother opened the restaurant, but did not know how to turn on the cooktop, so another employee did so.

         Jennifer Braxton testified that she first became employed at the truck stop in August 2009 as a dishwasher, became a cook in December 2009 and left in August 2010 for a job that paid more money. She stated that she did not quit working at the truck stop because she had to clean up after the two fireless activations. She worked the night shift and one of her duties was to clean the kitchen after closing. The staff cleaned the grill, swept and mopped, cleaned up dishes, and made sure there was no grease in the kitchen and no food residue on the floor. She stated that they cleaned the metal baffles above the vent hood twice a month. She saw Mr. Scoggin in July 2010 when he came to perform an inspection of the System and next saw him a few weeks later when the first fireless activation occurred. When that activation occurred, foam sprayed into the fryers and on the grill, and they had to close the kitchen to clean up the mess. She stated that, after Mr. Scoggin left, it was her understanding that the System was operational and that they could use the cooktop. The next time she saw Mr. Scoggin was when the second fireless activation occurred in August 2010. She was cooking in the kitchen when the System activated, and another employee notified Ark La Tex. She stated that Mr. Scoggin arrived and told her that he had to order a part for the System and would return the next day. He told her that they should not leave the kitchen unattended, but that they could resume cooking. She described him as being in a bad mood and seemed aggravated and in a hurry. She noted that she was not aggravated with needing to clean up the mess for a second time, but was not excited about it. She testified that she did not know how the System worked and that she never did anything to deactivate it. On cross-examination and after reviewing her deposition, she stated that Mr. Scoggin told her that he was going to turn off the System until the part he ordered came in and that she told Ms. King that the System had been turned off. She did not know if Mr. Scoggin returned to replace the part.

         Brenda Stephens testified that she is currently employed at the truck stop and that, in July and August 2010, she worked in the restaurant as a waitress during the day shift. She met Mr. Scoggin when he came in to check the System. She recalled the System activating twice in the summer of 2010 and that she helped with the clean up each time. She noted that, when Mr. Scoggin arrived after the second activation, he was not happy to be called to the truck stop at 9:00 p.m.. She admitted that she was aggravated she had to clean up again because of the fireless activation. She testified that she had no knowledge of how the System operates and that she never did anything to deactivate it.

         Buford Wright testified that he repaired things at the truck stop when needed, but had no experience with the System. He stated that, after the August 2010 fireless activation, he observed Mr. Scoggin work on the System so he might have an understanding of how it works. They did not discuss what Mr. Scoggin was doing to the System, but, when he was finished, Mr. Scoggin stated that it was working. He later testified that he could not remember if an employee or Mr. Scoggin told him that they were "up and running" and could resume cooking. He recalled that Mr. Scoggin told him that he did not have a cylinder for the System, but would return the next day to install one. He testified that he never did anything to deactivate the System and would not have known how to do so.

          The jury viewed a video of the fire. The depositions of three witnesses taken during litigation between Logansport and Scottsdale were read to the jury.

         In his deposition, Ted Kaplon testified that he is a professional engineer hired by Scottsdale to determine the cause and origin of the fire. He performed a physical inspection of the truck stop on February 11, 2011, and noted that it did not appear that the System above the cooktop had activated. A tag on the System stated that it was last inspected by Ark La Tex in July 2010. His inspection of the System revealed that a fused link inside the exhaust hood had melted. He stated that, under normal circumstances of a properly operating System, the melting of the fuse link would have detected the fire, causing the System to activate and suppress the fire. His inspection of the area below the cooktop revealed some direct fire damage consistent with grease buildup, but he had no way of knowing how much grease buildup would have been there because it would have been consumed by the fire. He saw no evidence to indicate that the fire was intentionally set, ...


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