Hanover Ins. Co. v. Allstate Ins. Co.

554 So. 2d 1261, 1989 WL 140791
CourtLouisiana Court of Appeal
DecidedNovember 15, 1989
DocketCA 88-1898, CA 89-0801
StatusPublished
Cited by17 cases

This text of 554 So. 2d 1261 (Hanover Ins. Co. v. Allstate Ins. Co.) 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
Hanover Ins. Co. v. Allstate Ins. Co., 554 So. 2d 1261, 1989 WL 140791 (La. Ct. App. 1989).

Opinion

554 So.2d 1261 (1989)

HANOVER INSURANCE COMPANY
v.
ALLSTATE INSURANCE COMPANY, et al.
Robert Scott WOODRUFF
v.
BAYOU STATE MOBILE HOMES, INC. and Hanover Insurance Company.

Nos. CA 88-1898, CA 89-0801.

Court of Appeal of Louisiana, First Circuit.

November 15, 1989.
Rehearing Denied December 15, 1989.

*1262 Joseph B. Guilbeau, New Orleans, for Hanover Ins. Co.

John W. Perry, Baton Rouge, for Allstate Ins. Co., et al.

James R. Coxe, III, Baton Rouge, for Robert Scott Woodruff.

Denis Paul Juge, New Orleans, for Bayou State Homes, Inc., et al.

Before EDWARDS, LANIER and FOIL, JJ.

FOIL, Judge.

In these worker's compensation cases, we are asked to review the rulings of the lower courts with respect to entitlement to compensation benefits, the right of the compensation insurer to obtain reimbursement from a third party tortfeasor, and the assessment of penalties and attorney's fees in the litigation.

FACTS

These appeals arose from two lawsuits, one filed in the 19th Judicial District and the other filed in the 21st Judicial District. In the first lawsuit, Hanover Insurance Company (Hanover) sought reimbursement from Allstate Insurance Company (Allstate) for worker's compensation benefits it paid to and on behalf of Robert Woodruff. Robert Woodruff filed the second lawsuit against his former employer, Bayou State Mobile Homes, Inc., (Bayou State) and Hanover, Bayou State's compensation carrier, seeking reinstatement of compensation benefits. Following adverse rulings in both lawsuits, Hanover appealed the decisions, and this court consolidated the appeals.

Most of the facts in these cases have been stipulated to by the parties, and thus are not in dispute. Robert Woodruff was employed by Bayou State as a service mechanic. On November 20, 1985, while Woodruff was cutting siding for placement on a mobile home, the tip of the knife broke and sliced into his knee. On February 4, 1986, Woodruff saw Dr. John Loupe, an orthopedic surgeon, complaining of intermittent catching and locking of his left knee, accompanied by fluid accumulation. The doctor diagnosed an incomplete tear of the medial meniscus and performed a medial menisectomy, removing the tear. Despite the doctor's advice to the contrary, Woodruff returned to full duties at work, and on March 26, 1986, twisted his left knee while carrying a heavy jack and reinjured the knee. Soon thereafter, Dr. Loupe found that Mr. Woodruff had torn a ligament in his left knee, and on April 1, 1986, performed a ligament reconstruction, stapling the ligament to the bone. Following this surgery, Woodruff did not return to work, and started receiving compensation benefits from Hanover.

The parties stipulated that these two knee injuries occurred in the course and scope of Woodruff's employment with Bayou State, and the second injury aggravated the initial knee injury. On June 26, 1986, when Woodruff was not at work, and thus was not in the course and scope of his employment with Bayou State, he was involved in an automobile collision. Woodruff was a passenger in a vehicle which collided with a vehicle driven by Roberta Berthelot. Woodruff slammed his left knee against the glove compartment during the impact. Allstate provided Berthelot with liability insurance.

The parties stipulated that Woodruff had not fully recovered from the April 1 surgery at the time of this accident, and he visited Dr. Loupe on numerous occasions thereafter. The doctor opined that Woodruff had pulled a tendon loose in his left knee, and a second ligament reconstruction was performed on June 22, 1987.

On July 8, 1987, while still in the cast from the third surgery, Woodruff was involved *1263 in a second vehicular accident which, again, did not occur in the course and scope of employment with Bayou State. In this accident, Woodruff reinjured his left knee, necessitating a fourth surgery, which was performed on January 26, 1988.

The parties also stipulated that Woodruff settled his claim arising out of the first vehicular accident with Allstate, releasing Allstate and its insured, Roberta Berthelot, by an act of release dated December 30, 1986, for the sum of $12,500.00. This settlement was entered into without the consent and approval of Bayou State or Hanover. Regarding the second vehicular accident, a lawsuit filed by Woodruff is currently pending in federal court, in which Woodruff has complied with the appropriate notice provisions with respect to Hanover.

Hanover terminated benefits on July 5, 1988, citing as justification the June 26, 1986, automobile accident and the December 30, 1986, settlement without its consent. Subsequently, Hanover filed a lawsuit against Allstate, seeking reimbursement for compensation benefits and medical expenses paid on behalf of Woodruff from June 26, 1986, the date of the first automobile accident, until July 8, 1987, the date of the second vehicular collision. The parties stipulated that Allstate's insured was at fault in causing the June 26 accident. They also stipulated that during the period from June 26, 1986, through July 8, 1987, Hanover paid $13,578.43 in compensation to Woodruff, and $22,706.80 in medical expenses on behalf of Woodruff. Thereafter, Woodruff filed a lawsuit against Hanover and Bayou State, seeking reinstatement of compensation benefits. The cases were tried in different judicial districts.

Regarding Hanover's suit, Judge William Brown ruled that Hanover was not entitled to reimbursement from the third party tortfeasor. In Woodruff's suit, however, Judge Kenneth Fogg ruled that the aggravation of the work-related injury in the automobile accident was compensable, for worker's compensation purposes, and therefore, Hanover was obligated to continue paying compensation benefits until the disability ended. The trial judge further found that Woodruff did not forfeit his right to future compensation by entering into the settlement with Allstate without notifying Hanover. The judge ruled Woodruff was temporarily totally disabled, and ordered Hanover to pay compensation benefits from the date of termination until the date the disability ended. Finally, the judge concluded Hanover acted arbitrarily in terminating compensation benefits, and awarded Woodruff penalties and attorney's fees. Hanover appealed the adverse judgments in both suits.

TERMINATION OF COMPENSATION BENEFITS

Hanover justifies the termination of benefits on two grounds. First, it argues that the aggravation of Woodruff's on-the-job knee injuries in the June 26, 1986, automobile accident was not compensable because the accident constituted an intervening, superceding event, releasing it from responsibility for the original work injuries. Secondly, Hanover contends that by entering into a settlement with the third party tortfeasor without its consent, on December 30, 1986, Woodruff forfeited his right to "future compensation" benefits. These arguments will be addressed in turn.

A. Compensability of the June 26, 1986 accident.

Woodruff and Hanover stipulated at trial that the off-the-job June 26, 1986, accident occurred before Woodruff had fully recovered from the second surgery necessitated by the second work injury. Our review of the testimony of Dr. Loupe, submitted through three depositions, reveals the following: After the second work accident, Dr. Loupe performed a ligament reconstruction on Woodruff's knee. The doctor explained that in this type of surgical procedure, the ligament is stapled to the bone.

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Bluebook (online)
554 So. 2d 1261, 1989 WL 140791, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hanover-ins-co-v-allstate-ins-co-lactapp-1989.