Compton v. North River Insurance Company

281 So. 2d 848
CourtLouisiana Court of Appeal
DecidedOctober 26, 1973
Docket9419
StatusPublished
Cited by9 cases

This text of 281 So. 2d 848 (Compton v. North River Insurance Company) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Compton v. North River Insurance Company, 281 So. 2d 848 (La. Ct. App. 1973).

Opinion

281 So.2d 848 (1973)

Francis COMPTON
v.
NORTH RIVER INSURANCE COMPANY et al.

No. 9419.

Court of Appeal of Louisiana, First Circuit.

June 29, 1973.
Rehearing Denied August 23, 1973.
Writ Refused October 26, 1973.

Robert E. Barkley, Jr. and Curtis R. Boisfontaine, New Orleans, for North River Ins. Co. and Inter-Cities Ready-Mix.

Garic K. Barranger, Covington, for Francis Compton.

Iddo Pittman, Jr., Hammond, for Aetna Cas. & Sur. Co.

Before SARTAIN, BLANCHE and WATSON, JJ.

*849 BLANCHE, Judge.

Plaintiff, Francis Compton, sustained an accident resulting in total and permanent injuries while in the course and scope of his employment with Inter-Cities Ready Mix Concrete Company on August 17, 1964. Inter-Cities Ready Mix Concrete Company was afforded workmen's compensation insurance by North River Insurance Company, which insurer following the accident commenced paying to plaintiff compensation benefits at the rate of $35 per week and medical expense benefits, in accordance with the then-existing provisions of the Louisiana Workmen's Compensation Act.

Plaintiff filed a products liability suit in the United States District Court for the Northern District of Illinois, Eastern Division, on July 29, 1965, against, inter alia, the manufacturer of the piece of industrial machinery involved in plaintiff's accident, and against the manufacturer's liability insurer, The Aetna Casualty and Surety Company. Plaintiff, through his Louisiana attorney, gave the requisite notice to the workmen's compensation insurer of the filing of the tort suit against third parties alleged to be liable in damages to him, as required by LSA-R.S. 23:1102 (reproduced below). Thereafter, the record further demonstrates that plaintiff's Louisiana attorney on at least more than one occasion specifically suggested that the workmen's compensation insurer intervene in the pending tort suit in Illinois, and further sought cooperation from the workmen's compensation insurer in the pending litigation. The workmen's compensation insurer, however, chose not to intervene. In 1968 (the exact date is not shown in the record), or some three years after the filing of this tort suit, plaintiff effectuated a compromise thereof with the defendant manufacturer and its liability insurer, for a consideration of $11,000.

Thereafter, the New Orleans attorney for the workmen's compensation insurer wrote a letter to plaintiff's Louisiana attorney, dated October 28, 1969, inquiring as to the status of the products liability tort suit, in response to which plaintiff's Louisiana attorney advised North River's attorney by letter dated November 10, 1969, that the tort suit had been compromised.

Shortly thereafter North River terminated payment of weekly workmen's compensation benefits to plaintiff, whereupon following amicable demand for resumption thereof, and after plaintiff demanded that North River resume payment thereof to no avail, plaintiff filed this workmen's compensation suit on March 19, 1970, praying for judgment awarding plaintiff workmen's compensation benefits at the rate of $35 per week for a period not to exceed 400 weeks, commencing August 17, 1964, for future medical expenses, and for penalties and attorney's fees.

The defendant employer and its workmen's compensation insurer filed answer on May 7, 1970, in the form of a general denial, and on September 1, 1970, filed a supplemental and amending answer, averring that plaintiff had received as of the time of filing this pleading 340 weeks of compensation benefits totaling $11,900 and medical expenses in the sum of $1,798.79. In this pleading, which really represented a reconventional demand coupled with the supplemental and amending answer, defendant employer and its workmen's compensation insurer prayed for judgment against plaintiff in the full amount of the $11,000 which plaintiff received in compromise settlement of his previously filed tort suit in Illinois.

North River resumed compensation payments to plaintiff on May 27, 1970, and paid plaintiff for the entire period in which it had discontinued payments. North River continued making weekly compensation payments until July 30, 1971. Both plaintiff and defendants agree that North River paid plaintiff 362 weeks of compensation benefits, or the total sum of $12,670, for the period from the date of the accident through July 30, 1971.

*850 The parties further agree that a third party petition was filed against The Aetna Casualty and Surety Company by North River, seeking indemnification for compensation benefits and medical expenses paid by North River to plaintiff. (This third party petition is not contained in the record before us.) Plaintiff then filed a third party demand against Aetna to defend him and indemnify him pursuant to the indemnification provisions of the release agreement executed by the parties in connection with the compromise of the pending Chicago tort suit. (Again, the record does not contain a complete copy of this release agreement, although all parties apparently agreed that it did, in fact, contain such an indemnification agreement executed by Aetna in favor of plaintiff, representing additional consideration for plaintiff's compromising and settling his pending tort suit.)

Aetna filed a peremptory exception urging no cause of action and prescription in opposition to the third party petition filed against it by North River.

The trial court rendered judgment in favor of plaintiff for total and permanent disability workmen's compensation benefits at the rate of $35 per week for a period of 400 weeks, commencing from the 17th day of August, 1964, subject to a credit for compensation benefits theretofore paid in the sum of $8,590,[1] with legal interest at the rate of five percent per annum from the due date of each weekly compensation benefit until paid in full. The trial court further rendered judgment in favor of plaintiff and against defendants for attorney's fees in the sum of $1,000 and for a twelve percent penalty on the amounts due. The trial court further rendered judgment dismissing the third party demand of North River Insurance Company against the Aetna Casualty and Surety Company on the basis of the peremptory exception urging prescription. The trial court further rendered judgment dismissing the reconventional demand of North River against plaintiff. From this judgment, defendants perfected this suspensive appeal.

The pivotal issue presented in this appeal is whether North River, as the workmen's compensation insurer of plaintiff's employer, is entitled to receive dollar-for-dollar credit against compensation benefits paid to plaintiff or owed by North River to plaintiff in the $11,000 amount received by plaintiff in compromise settlement of his pending tort suit. We are of the opinion that North River is not entitled to such credit for the following reasons.

It is obvious at the outset that there exists no inherent right in favor of the workmen's compensation insurer to receive credit against compensation benefits owed by such insurer to an injured employee or his dependents for sums received by the employee or his dependents in compromise settlement of a third party tort suit except as provided by the applicable provisions of the Louisiana Workmen's Compensation Act, contained in LSA-R.S. 23:1101 through 1103. These statutes read in their entirety as follows:

R.S. 23:1101:

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281 So. 2d 848, Counsel Stack Legal Research, https://law.counselstack.com/opinion/compton-v-north-river-insurance-company-lactapp-1973.