JES INC v. CERTAIN UNDERWRITERS AT LLOYDS OF LONDON PRP003061 2000 (2025)

Plaintiff-appellant, JES, Inc., seeks review of the district court's February 24, 2025 judgment, which vacated a previous judgment denying defendant's exception of no right of action, and granted the exception in favor of defendant-appellee, Certain Underwriters at Lloyd's of London Subscribing to Policy No. PRP003061/2000 Becnel Professional Buildings, LLC (“Lloyd's”). For the reasons that follow, we reverse the district court's judgment and overrule Lloyd's exception of no right of action.

Background and Procedural History

JES is a remediation contractor that filed suit against Lloyd's alleging Lloyd's owes JES monies for repairs that JES performed after Becnel Professional Building, L.L.C. allegedly sustained damages to its buildings in LaPlace during Hurricane Ida. Becnel contractually assigned certain of its rights against Lloyd's to JES in a September 1, 2021 agreement. JES's August 17, 2023 Petition for Damages claims that Lloyd's is liable for unpaid and outstanding invoices; attorney's fees, interest, and costs; and statutory penalties under La. R.S. 22:1892 and/or 22:1973. Due to the nature of the claims, the case was subject to the “Case Management Order Regarding Certain Property Damage Suits Arising from Hurricane Ida,” including a Streamline Settlement Process. On August 28, 2024, Lloyd's filed a Motion to Opt Out of the Streamlined Settlement Process. Lloyd's also filed a Motion to Set Bond for Security for Costs and a Peremptory Exception of No Right of Action.

On December 6, 2024, the district court held a hearing, and on December 20, 2024, signed a judgment overruling Lloyd's exception of no right of action and denying its motion to set bond for security for costs. The December 20, 2024 judgment also indicated that the court would provide written reasons within 30 days of ruling.

In a January 6, 2025 Judgment with Reasons, however, the district court granted Lloyd's exception of no right of action, further declaring Lloyd's motion to set bond for security as moot.¹ On February 19, 2025, JES filed a Motion to Vacate the January 6, 2025 judgment that granted the exception of no right of action. On February 24, 2025, rather than vacate the January 6, 2025 judgment, the district court signed an Order vacating its December 20, 2024 judgment that originally overruled the exception of no right of action.²

JES filed a motion and order for a suspensive appeal. On May 13, 2025, after the appeal lodged, this Court remanded the matter to the district court to amend its February 24, 2025 judgment to include the decretal language necessary to render the judgment ripe for appeal. See La. C.C.P. art. 1918(A). On May 13, 2025, the district court entered an amended judgment that again (1) vacated the December 20, 2024 judgment, (2) granted Lloyd's exception of no right of action, and (3) denied as moot the motion to set bond for security for costs.³

We now consider JES's arguments on appeal.

Discussion

JES first contends that the trial court's January 6, 2025 judgment granting Lloyd's exception of no right of action is an absolute nullity, because it substantively changes the December 20, 2024 judgment overruling the exception of no right of action without notice or a hearing. Plaintiff argues that under La. C.C.P. art. 2002 A(2), a final judgment shall be annulled if it is rendered against a defendant who had not been served with process, as required by law. Moreover, citing Matter of Succession of Buhler, 17-0049 (La. App. 1 Cir. 2/22/18), 243 So.3d 39, 44, JES contends that when a trial court signs a judgment and then signs another judgment addressing the same issue, the second judgment has no legal effect. JES claims the trial court had no legal authority to substantively amend the first judgment, and that it should have complied with La. C.C.P. art. 1951. Because the trial court did not comply with La. C.C.P. art. 1951, JES argues this Court must annul the January 6, 2025 judgment and reinstate the December 20, 2024 judgment, citing Pitre v. Louisiana Thoroughbred Breeders Ass'n, 21-195 (La. App. 5 Cir. 7/5/22), 2022 WL 2437560, and Oreman v. Oreman, 05-955 (La. App. 5 Cir. 3/31/06), 926 So.2d 709, 712, writ denied, 06-1130, 936 So.2d 206, 06-1160 (La. 09/01/06).

We disagree. A judgment denying the peremptory exception of no right of action is an interlocutory judgment, not a final judgment. La. C.C.P. art. 1841; LaPlace Sand Co., Inc. v. Troxler, 98-36 (La. App. 5 Cir. 5/27/98), 712 So.2d 1077, 1078.⁴ Under La. C.C.P. art. 1841, a final judgment is a judgment that “determines the merits in whole or in part,” and an interlocutory judgment is one that “does not determine the merits but only preliminary matters in the course of the action.” Bianchini v. Muggivan, 09-924 (La. App. 5 Cir. 4/13/10), 40 So.3d 157, 158. The December 20, 2024 judgment denying the exception of no right of action was interlocutory, not final. La. C.C.P. art. 1951 applies to final judgments only. The Louisiana Supreme Court states that a district court may, on its own motion, revise an interlocutory judgment any time before a final judgment is rendered. See VaSalle v. Wal-Mart Stores, Inc., 01-462 (La. 11/28/01), 801 So.2d 331, 334 (“It is well-settled that prior to final judgment a district court may, at its discretion and on its own motion, change the result of interlocutory rulings it finds to be erroneous.”); Koerner v. Certain Underwriters at Lloyd's London, 24-134 (La. 3/19/24), 381 So.3d 702, 703 (reaffirming VaSalle).

Having already held a hearing on the issues, the district court in this instance was free to reverse its decision overruling Lloyd's peremptory exception of no right of action without giving notice to the parties and without providing the parties an additional opportunity to be heard. VaSalle, 801 So.2d at 334. The parties briefed the issues and participated in the December 6, 2024 hearing and, due to the interlocutory nature of the judgment, were not legally entitled to additional notice and an opportunity to be heard. As such, we find no merit in JES's first assignment of error.

We next address JES's second assignment of error regarding the merits of the district court's January 6, 2025 (and February 24, 2025, and May 13, 2025) ruling(s) granting Lloyd's exception of no right of action. We review a trial court's ruling sustaining an exception of no right of action de novo. La. C.C.P. art. 927; O'Dwyer v. Metairie Towers Condo. Assoc. Bd. President, 24-277 (La. App. 5 Cir. 1/29/25), 404 So.3d 1059, 1065, writ denied, 25-282 (La. 5/20/25), 409 So.3d 216.

An exception of no right of action assumes that the petition states a cause of action for some person and questions whether the plaintiff in the particular case is a member of the class that has a legal interest in the subject matter of the litigation. Louisiana Health Serv. & Indem. Co. v. Gupta, 24-264 (La. App. 5 Cir. 2/12/25), 407 So.3d 851, 866, writ denied, 25-411 (La. 6/3/25), 410 So.3d 788. A party has an actionable right, and consequently has standing, if it can be said that the party has a legally protectable and tangible stake in the litigation. Id. at 867 (citing First Bank and Trust v. Duwell, 10-481 (La. App. 5 Cir. 12/14/10), 57 So.3d 1076, 1078). The exception of no right of action tests whether the plaintiff has a “real and actual interest” in the action but does raise questions of the plaintiff's ability to prevail on the merits or whether the defendant may have a valid defense. Roubion Shoring Co., LLC v. Crescent Shoring, L.L.C., 16-540 (La. App. 5 Cir. 5/17/17), 222 So.3d 921, 926; Gupta, 407 So.3d at 867.

The party raising the exception has the burden of proving the exception. Gupta, 407 So.3d at 867. Evidence is admissible in support of an exception of no right of action. O'Dwyer, 404 So.3d at 1066; La. C.C.P. art. 931. When a party raises an exception or motion that must be proven, it is that party's burden to present evidence establishing the claims made therein. Draughn v. Thacker, 14-216 (La. App. 5 Cir. 11/25/14), 165 So.3d 1010, 1012. The exceptions to that rule are the peremptory exception of no cause of action and the motion for summary judgment. Id. (citing La. C.C.P. arts. 931 and 966).

Exhibits and attachments not properly and officially offered and admitted into evidence cannot be considered, even if it is physically filed into the trial court record. Draughn, 165 So.3d at 1012; Roubion Shoring, 222 So.3d at 926. The Supreme Court and this Court have routinely held that appellate courts may not consider evidence not properly admitted into evidence, whether or not the lack of admission into evidence was raised as an error. Draughn at 1012-13; see also Ford Motor Credit Co., LLC v. Davis, 20-271 (La. App. 5 Cir. 10/13/21), 329 So.3d 1047, 1055-56.

Because there is no evidence properly before this Court on Lloyd's exception of no right of action, the allegations of JES's petition are accepted as true.⁵ See Industrial Companies, Inc. v. Durbin, 02-665 (La. 1/28/03), 837 So.2d 1207, 1216 (relying on allegations of plaintiff's petition where the exceptor failed to present any evidence in support of its exception). JES asserts in its petition that Becnel contracted with JES to perform emergency services on Becnel's properties, and “[p]ursuant to the contract, [Becnel] assigned their rights, benefits, and proceeds [against the insurer] to J.E.S. for the portions of the claim J.E.S. completes.” JES further alleges it has a substantive right of action against Lloyd's for statutory penalties, and that Lloyd's “has refused to tender the entirety of the insurance proceeds needed to pay” Becnel and JES. JES also alleges: “To date, LLOYDS has not paid all of the damages sustained to the properties owned by [Becnel] and [JES] is entitled to all penalties and attorneys fees provided under Louisiana law.”

Lloyd's contends JES has no right of action against it because the contract in which Becnel assigned certain rights to JES does not specifically assign the right to seek penalties under La. R.S. 1892 and La. R.S. 1973. However, Lloyd's did not introduce the contract into evidence at the hearing and thus cannot meet its burden of proof. Even if Lloyd's had introduced the contract into evidence, however, the contractual language plainly establishes that JES acquired from Becnel the right to pursue some claims against Lloyd's, including “any and all insurance rights, benefits, and proceeds which pertain to services rendered in relation to the above loss․” An exception of no right of action tests whether the plaintiff has a “real and actual interest” in the action but does raise questions of the plaintiff's ability to prevail on the merits or whether the defendant may have a valid defense. Roubion Shoring, 222 So.3d at 926.

Whether JES's claims for statutory penalties and attorney's fees are subsumed within the rights that Becnel assigned to JES in the contract are issues beyond the scope of the exception of no right of action, which addresses only the plaintiff's standing, and which is not to be confused with an exception of no cause of action or a motion for summary judgment. While Lloyd's may well have a defense to JES's claims, pursuant to the allegations in the petition, we cannot say JES lacks a right of action.

DECREE

After de novo review, we find the district court erred in granting the exception of no right of action in favor of Lloyd's and against JES. We reverse the district court's judgment granting the exception, overrule Lloyd's exception of no right of action, and remand for further proceedings.

REVERSED AND REMANDED

FOOTNOTES

1.   Also on January 6, 2025, the district court signed an Order granting Becnel Professional Building, L.L.C.’s Motion for Leave to File Petition to Intervene, finding that Becnel “has an interest in this matter pursuant to LSA-C.C.P. art. 1091.”

2.   There is no indication in the record that the district court acted on JES's motion to vacate the January 6, 2025 judgment.

3.   On May 15, 2025, the district court issued an “Amended Judgment with Reasons,” in which the court noted that the “assignment of rights, benefits and proceeds” between JES and Becnel “is limited to the amount of Contractor's invoice for services rendered in relation to the above claim and the right and ability to collect same directly from [the] insurer, including the right to file suit and seek attorney's fees and court costs.” The district court's Reasons further state:Under Louisiana law, it is well-settled that a bad faith failure-to-settle claim arises not from the contract of insurance itself but rather from an insurer's violation of its statutory duties under La. R.S. § 22:1973. See Johno v. Doe, 2015-0737 (La. App. 4 Cir. (3/9/16), 187 So.3d 581, 584, writ denied, 2016-0777 (La. 6/17/16), 192 So.3d 769. The contract between BPB and Plaintiff does not provide an explicit assignment of rights for bad faith failure-to-settle claims pursuant to La. R.S. 22:1973(A) or 22:1892. The assignment clearly limits the assignment of rights, benefits, and proceeds to “the amount of Contractor's invoice for services rendered.” The assignment does not expressly assign bad faith claims, which are extra-contractual. Thus, it is clear that the assignment of rights between Plaintiff and BPB did not expressly include language pertaining to bad faith penalty statutes. Accordingly, Plaintiff has not satisfied the pleading standard sufficient to establish a right of action against Defendant under either LSA R.S.22:1892 or LSA R.S. 22:1972.

4.   A judgment granting an exception of no right of action, thereby dismissing the plaintiff's claims against a defendant, is a final, appealable judgment. La. C.C.P. art. 1915; La. C.C.P. art. 2083.

5.   Although Lloyd's did not introduce a copy of the contract at the hearing on its exception of no right of action, the contract was attached to JES's petition. The relevant portion of the contract provides:Owner [Becnel] hereby assigns to JES any and all insurance rights, benefits, and proceeds which pertain to services rendered in relation to the above loss, under any applicable policy of insurance, whether listed on this contract or not. This assignment of rights, benefits, and proceeds is limited to the amount of Contractor's invoice for services rendered in relation to the above claim and the right and ability to collect same directly from my insurer, including the right to file suit and seek attorney's fees and court costs.

CHEHARDY, C.J.