RAIN CII CARBON, L.L.C.
RECON ENGINEERING, INC. AND RECON MANAGEMENT SERVICES, INC.
FROM CIVIL DISTRICT COURT, ORLEANS PARISH NO. 2018-03980,
DIVISION "E" Honorable Melvin C. Zeno, Judge
M. GARNER PETER L. HILBERT, JR. THOMAS J. MADIGAN II STUART
D. KOTTLE JAMES EDWARD KUHN SHER GARNER CAHILL RICHTER KLEIN
& HILBERT, L.L.C. COUNSEL FOR PLAINTIFF/APPELLEE
I. SIEGEL ALISTAIR M. WARD GIEGER, LABORDE & LAPEROUSE
COUNSEL FOR INTERVERNOR-APPELLANT/CATLIN SPECIALITY INS. CO.
PATRICK J. MCSHANE DANICA BENBOW DENNY KATHLEEN P. RICE
LAUREN GUICHARD COUNSEL FOR INTERVENOR-APPELLANT/ALTERRA
AMERICA INS. CO.
W. DEGAN III KARL H. SCHMID CATHERINE N. THIGPEN COUNSEL FOR
INTERVENORS-APPELLANTS/ILLINOIS NATIONAL INS. CO. AND CHARTIS
SPECIALTY INS. COMPANY
KRISTOPHER T. WILSON HEATHER N. SHARP LUGENBUHL, WHEATON,
PECK, RANKIN & HUBBARDSP COUNSEL FOR
INTERVENOR-APPELLANT/FIRST FINANCIAL INS. CO .
composed of Chief Judge James F. McKay III, Judge Daniel L.
Dysart, Judge Sandra Cabrina Jenkins
F. MCKAY III CHIEF JUDGE
arbitration case, the intervenors, Catlin Specialty Insurance
Company, Alterra America Insurance Company, First Financial
Insurance Company, Chartis Specialty Insurance Company, and
Illinois National Insurance Company, in their capacities as
the alleged insurers of defendants, ReCon Engineering, Inc.
and ReCon Management Services, Inc. (sometimes hereafter
referred to collectively as ReCon), appeal the trial
court's granting of a dilatory exception of lack of
procedural capacity and its confirmation of an arbitration
award in favor of plaintiff, Rain CII Carbon, L.L.C. We
AND PROCEDURAL HISTORY
2010, Rain started a project to build a waste heat recovery
power generation unit at one of its facilities in southwest
Louisiana in order to capture heat exhausted from the
calcinating process and convert it to usable electricity. For
the project, Rain retained the services of Recon Engineering,
Inc., Turner Industries Group, L.L.C., and Victory Energy
March 15, 2013, Rain originally filed suit against ReCon,
Turner, and Victory in the 14th JDC for the Parish
of Calcasieu. Due to an arbitration agreement between Rain
and ReCon, ReCon compelled Rain to arbitration. Rain then
sought to file a direct action claims against ReCon's
insurers (Catlin Specialty, Alterra America, First Financial,
Chartis Specialty, Illinois National, and Imperium Insurance
Company). Like ReCon, the insurers successfully
argued that Rain could not litigate its claims against them
due to the pending arbitration. Rain then proceeded to
sought to join the insurers to the arbitration proceedings
but the insurers actively and successfully opposed joinder.
The R-7 Arbitrator found that the insurers were
non-signatory parties and, therefore, could not be compelled
to join the arbitration proceeding.
arbitrated its claims against ReCon at a final hearing on
September 28, 2017 in New Orleans. On October 26, 2017, the
Arbitrator rendered an arbitration award in favor of Rain and
against ReCon in the amount of $4, 430, 404.74, representing
a principal sum of $3, 388, 707.00; interest from the date of
the arbitration demand in the amount of $638, 933.74; and
attorney's fees in the amount of $402, 764.00.
April 24, 2018, Rain filed a motion to confirm arbitration
award in the Civil District Court for the Parish of Orleans.
On May 14, 2018, the insurers filed a petition for
intervention and attempted to oppose confirmation. The
insurers took a contrary position from what they had taken in
the previous proceeding. They claimed that they did not have
notice of the arbitration and the arbitration award should be
vacated. In addition to their petition for intervention, the
insurers filed an opposition to the motion to confirm
arbitration award, a motion to vacate the arbitration award,
a declinatory exception of lack of jurisdiction, and
peremptory exceptions of no cause of action and no right of
action. In response, on June 15, 2018, Rain filed exceptions
of no right of action, no cause of action, lack of procedural
capacity, and prescription, along with a motion for a
hearing took place on July 6, 2018. On August 10, 2018, the
trial court granted Rain's exception of lack of
procedural capacity, which it found rendered the
insurers' exceptions moot; granted the motion to confirm
arbitration award; found Rain's other exceptions to be
moot; and assessed all costs against the intervenors. It is
from this judgment that the insurers now appeal.
appeal, the insurers raise the following specifications of
error: 1) the district court erred in finding the
insurers-intervenors lacked the procedural capacity to oppose
the confirmation of an underlying, default arbitration award
against their insured; and 2) the district court erred in
confirming a default arbitration award entered by an
arbitrator who "manifestly disregarded the law" and
de novo standard of review . . . applies to our review of the
trial court's ruling on a dilatory exception of
procedural capacity." English Turn Prop. Owners
Ass'n v. Taranto, 16-0319, pp. 5-6 (La.App. 4 Cir.
4/19/17), 219 So.3d 381, 387, writ denied, 17-1100
(La. 10/16/17), 2017 WL 4891599, --- So.3d ___ (citing
Wells v. Fandal, 13-620, p. 7 (La.App. 5 Cir. 2/12/14),
136 So.2d 83, 87). See also Gunasekara v. City Of New
Orleans through Munster, 17-0914, p. 3 (La.App. 4 Cir.
3/28/18), 243 So.3d 623, 626 ("The standard of review of
a trial court's ruling on an exception of no right of
action is de novo." (citations omitted);
Woodard v. Upp, 13-0999, p. 5 (La.App. 1 Cir.
2/18/14), 142 So.3d 14, 18 ("[t]he determination of
whether a party has the procedural capacity to sue or be sued
involves questions of law which is reviewed under the de
novo standard of review to determine whether the ruling
of the trial court was legally correct.")
dilatory exception of lack of procedural capacity raises the
issue of want of capacity of the plaintiff to institute and
prosecute the action and stand in judgment, and/or challenges
the authority of a plaintiff who appears in a purely
representative capacity." English Turn., p. 6,
219 So.3d at 87. See also Harvey v. State, 14-0156,
p. 12 (La.App. 4 Cir. 12/16/15), 183 So.3d 684, 695, writ
denied, 16-0105 (La. 3/4/16), 188 So.3d 1060. The
exception "tests a party's legal capacity to bring
suit." Mt. Zion Baptist Ass'n v. Mt. Zion
Baptist Church #1 of Revilletown Park, 16-0151, p. 5
(La.App. 1 Cir.10/31/16), 207 So.3d 414, 417, writ
denied, 16-2109 (La. 2/3/17), 215 So.3d 697.
insurers took a contrary position as they had taken in the
previous proceeding. They claimed they did not have notice of
the arbitration and that the arbitration award should be
vacated, while ignoring the fact that Rain had sought to join
the insurers to the arbitration. In support of the exceptions
of lack of procedural capacity, no right of action, no cause
of action, and prescription, Rain's central argument was