Degruise v. Houma Courier Newspaper Corp.

694 So. 2d 273, 1995 WL 588303
Louisiana Court of Appeal·Decided December 15, 1995·No. 95 CA 0013·Published·Cited by 5 cases

Opinion

694 So.2d 273 (1995)

Floyd F. DEGRUISE and Della Chiasson Degruise, Individually and on Behalf of Their Children, Trent Degruise and Trevor Degruise
v.
HOUMA COURIER NEWSPAPER CORPORATION, A New York Times Company, ABC Insurance Company, Diane B. Scott, American National Agents Insurance Company, Federated Rural Electric Insurance Corporation and Louisiana Farm Bureau Mutual Insurance Company.

No. 95 CA 0013.

Court of Appeal of Louisiana, First Circuit.

October 6, 1995.
Writ Granted December 15, 1995.

*274 Kentley R. Fairchild, Houma, for Plaintiffs/Appellants-Floyd Degruise, et al.

Robert R. McBride, Lafayette, for Defendant Federated, et al.

James E. Diaz, Jr. Lafayette, for Intervenors Federated, et al.

William P. Golden, LaPlace, for Houma Courier.

Before CARTER and PITCHER, JJ., and CRAIN[1], J. Pro Tem.

CARTER, Judge.

This is an appeal from a trial court judgment, denying a motion for attorney's fees and expenses in an action for damages.

BACKGROUND

Floyd Degruise was involved in an automobile accident during the course and scope of his employment with South Louisiana Electric Cooperative (SLECA) while occupying a vehicle owned by SLECA. Degruise filed an action for damages arising out this automobile accident against the tortfeasor, the tortfeasor's liability insurer, and SLECA's uninsured motorist (UM) insurer, which was Federated Rural Electric Insurance Corporation (Federated).[2] SLECA and Federated, as SLECA's worker's compensation insurer, paid Degruise worker's compensation and medical benefits totalling $58,902.59. Thereafter, SLECA and Federated, as the worker's compensation insurer, intervened in the action for damages.

After a jury trial, the trial court rendered judgment on July 19, 1994, in favor of Degruise and against Federated for $1,202,000.00. The trial court also rendered judgment in favor of other members of the Degruise family for damages for loss of consortium. The trial court judgment also awarded Degruise and members of his family penalties and attorney's fees pursuant to LSA-R.S. 22:658 for Federated's arbitrary and capricious failure to tender funds under its UM policy. The trial court judgment was amended, pursuant to a motion for new trial, rendering judgment on the intervention in favor of Federated, as worker's compensation carrier for SLECA, and against Degruise and Federated, as the UM insurer, for $58,902.59 to be satisfied out of the $1,202,000.00 judgment rendered in favor of Degruise on the main demand. The amended judgment also decreed that Federated, as the worker's compensation carrier, and SLECA were entitled to a credit of $1,202,000.00, less attorney's fees and costs, against future compensation and medical benefits.

Federated appealed this adverse judgment, and this court disposed of those issues in Floyd F. Degruise, et al. v. Houma Courier Newspaper Corporation, et al., 94-2386 *275 (La.App. 1st Cir. 6/23/95), 657 So.2d 580. The factual background of the instant case is more fully set forth in this court's earlier opinion.

FACTS

On August 15, 1994, Degruise filed a motion for attorney's fees and expenses under Moody v. Arabie, 498 So.2d 1081 (La.1986). In his motion, Degruise requested that the intervenor, Federated, as the worker's compensation insurer, be held liable for a proportionate share of the costs, including attorney's fees, incurred by him in his action against Federated, as the UM insurer. After hearing the arguments of counsel, the trial court denied Degruise's motion for attorney's fees and costs.[3]

From this adverse ruling, Degruise appeals, assigning as error the trial court's failure to grant his motion for attorney's fees and expenses pursuant to LSA-R.S. 23:1103 and the principles set forth in Moody v. Arabie.

ENTITLEMENT TO ATTORNEY'S FEES AND EXPENSES

Degruise contends that the trial court erred in failing to grant his motion for attorney's fees and expenses. Degruise reasons he and the intervenors (SLECA and Federated, in its capacity as worker's compensation insurer) were co-owners of the right to recover from the negligent tortfeasor, for whom Federated, as the UM insurer, must respond. As such, under LSA-R.S. 23:1103 and the Louisiana Supreme Court's opinion in Moody v. Arabie, he is entitled to be reimbursed a portion of the attorney's fees and costs from the worker's compensation insurer.

Federated contends that, when the worker's compensation insurer and the UM insurer are the same, there is no common interest between the plaintiff and the worker's compensation insurer. As a result, Federated reasons that the doctrine established in Moody v. Arabie has no application. Federated also reasons that there can be no action against a third party because there is no third party; the only parties involved are Degruise and Federated, in its capacities as UM and worker's compensation insurer.

In Moody v. Arabie, 498 So.2d at 1081, the Louisiana Supreme Court held that the plaintiff and the intervenor compensation insurer were co-owners of the right to recover damages from the third party and that the co-owners were obligated to bear their proportionate share of the reasonable and necessary litigation expenses, including attorney's fees, according to their interests in the recovery. The intervenor's proportionate share was determined by the ratio that the intervenor's recovery, including the present value of the credit for future compensation payments, had to the total recovery from the tortfeasor. The essence of this rationale was that (1) the worker's compensation law was silent as to the payment of litigation costs by the employer and the worker against a third party tortfeasor, (2) the employer and the worker were co-owners of the tort cause of action against a third party tortfeasor and the general law pertaining to co-ownership controlled their legal relations on the issue of payment of litigation costs, (3) the employer and the worker, as co-owners, cannot exercise any legal acts involving the direct ownership of the cause of action without the consent of the other, and (4) either co-owner can force the other to contribute to the costs of preserving the tort cause of action. See Durham Life Insurance Company v. Lee, 625 So.2d 706, 710-11 n. 6 (La.App. 1st Cir. 1993). Implicit in the holding in Moody v. Arabie is the concept that the intervenor, who reaps the benefits of the plaintiff's attorney's efforts, should bear its proportionate part of a reasonable attorney's fee for those efforts. Taylor v. Production Services, Inc. Mississippi, 600 So.2d 63, 67 (La.1992).

However, LSA-R.S. 23:1103C, which was added by Acts 1989, No. 454, effective January 1, 1990, now regulates the apportionment of legal fees and costs between the employer and the employee in a suit against a third party. See Taylor v. Production Services, Inc. Mississippi, 600 So.2d at 65 n. 1.

*276 At all times pertinent hereto, LSA-R.S. 23:1103 provided as follows:

A. (1) In the event that the employer or the employee or his dependent becomes party plaintiff in a suit against a third person, as provided in R.S.

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Degruise v. Houma Courier Newspaper Corp., 694 So. 2d 273, 1995 WL 588303 (La. Ct. App. 1995).

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