Vidrine v. Michigan Millers Mutual Insurance Co.

268 So. 2d 233, 263 La. 300, 1972 La. LEXIS 5403

• Court: Supreme Court of Louisiana
• Decided: October 4, 1972
• Docket: 51135
• Status: Published

Opinions

TATE, Justice.

The only issue before us concerns the right of an employer, who has paid workmen’s compensation benefits to an injured employee, to be indemnified for such benefits by a third person whose negligence has caused or contributed to the employee’s injuries. La.R.S. 23:1101-03. The precise issue is whether the employer, if he is negligent himself, is entitled to recover such benefits from a joint tortfeasor.'

For reasons detailed by the court' of appeal opinion, 242 So.2d 249 (La.App.3d Cir. 1970), the only claim before us is that of the intervenor, Ashy Construction Company, for reimbursement of the workmen’s compensation benefits paid by it as. employer to the original .plaintiff, its employee Vidrine. Vidrine was injured , at. work while riding as a passenger in an Ashy company truck driven by a co-employee, Cormier. The Ashy, truck was involved with a Hardy automobile in an . accident caused by the negligence of both. drivers. The defendant is the liability insurer (Michigan Millers) of the Hardy automobile.

Despite the negligence of the Ashy 'driver, the court of appeal allowed Ashy recovery for' compensation benefits paid to Vidrine (who was himself free of negligence) up to the defendant’s policy limits of $5,000. In so doing, the court of appeal relied on an earlier decision of this court, which it (and some other intermediate court decisions) construed as holding that the negligence of the employer is immaterial to its claim for reimbursement.

We granted certiorari, 257 La. 855, 244 So.2d 608 (1971), because we wished to re-examine the holding in that early decision, City of Shreveport v. Southwestern Gas & Electric Co., 140 La. 1078, 74 So. 559 (1919).

Before doing so, it may be appropriate to discuss the nature of the employer’s right to reimbursement from a tortfeasor of compensation benefits paid to an employee injured through such third person’s negligence.

This right is provided by La.R.S. 23:1101-1103 (1950). The present enactment employs substantially the same language as set forth in a 1920 amendment of our workmen’s compensation act. See Act 247 of 1920, re-enacting section 7 of our workmen’s compensation act. Before this 1920 amendment, and as originally enacted, the employer was merely subrogated to the right, if any, of the injured employee to recover against the third person. See: Act 20 of 1914, Section 7; Act 38 of 1918, re-enacting Section 7.

However, by the 1920 amendment the-employer was granted a right independent of the employee’s to be indemnified fied for compensation benefits paid to an employee because of the third person’s tort; the employer’s right to recover does, not depend upon subrogation to the rights of the employee. Board of Commissioners, etc. v. City of New Orleans, 223 La. 199, 65 So.2d 313 (1953). In Marquette Casualty Co. v. Brown, 235 La. 245, 103 So.2d 269, 271 (1968), we summarized as follows the employer’s rights to indemnification by-reason of the statutory provisions here applicable :

“Considering the provisions of R.S. 23:1101, 1102 and 1103 together, it seems plain that there is but one cause of action recognized for the recovery of damages resulting from a single tort. However, thfe right of redress against the tortfeasor has been extended by the provisions to the injured workman’s employer, who is accorded a preferential right to recover, out of the judgment for damages which may be assessed against the tortfeasor, the amount of compensation he has paid or become obligated to pay to the injured employee. This right is, of course, conditioned upon the basic right of the employee to recover damages and, according to R.S. 23:1103, if the damages awarded are for an amount less than the total compensation paid, the employer’s recovery is accordingly limited to that amount. Thus, though the compensation paying employer is given the preferential right to reimbursement out of the judgment, recovery is necessarily restricted to the amount for which the tortfeasor is liable to the injured employee for the consequences of his wrongful act.”

This summary correctly describes the non-negligent employer’s right to indemnification arising out of tort injury to his •employee compensated therefor under ■workmen’s compensation law.

If this language were literally applied to the present facts, the employer Ashy, de•spite its own contributory negligence (imputed to it because of the fault of its driver-employee), can recover from the joinl ■tortfeasor insurer for the compensation benefits paid to its injured employee, Vi- ■ drine. For, Vidrine, himself being free of fault as a mere passenger, could have recovered (had he persisted with his suit) 'the damages caused him by the tortfeasor, isubject to the preferential indemnification ■ of his employer off the top of the plaintiff •employee’s award.¹

The quoted language, however, must be ■viewed in the context of the question there at issue. The limited question before the court was whether the indemnification suit by the employer’s compensation insur•er was prescribed as in the case of tort suits, since filed more than one year after the accident. Civil Code Article 3536. The primary determination of this court was that the cause of action sounded in tort, with the prescriptive period commencing at the date of the accident and not at some later date when a right to indemnification accrued.

The court was not there concerned with the question of whether an employer could recover from the joint tortfeasor for benefits paid, despite any negligence by such employer contributing to the accident. Neither was such issue involved in Board of Commissioners, etc. v. City of New Orleans, 223 La. 199, 65 So.2d 313 (1953), perhaps the leading case analyzing the employer’s right to indemnification as being independent of the employee’s right to recover — the issue there being whether the employer could recover for compensation paid to an illegitimate child of a worker killed through a third person’s negligence, although the illegitimate child himself was not entitled at that time to wrongful death benefits under Civil Code Article 315. See also Thomas v. Matthews Lumber Co., 253 La. 1, 215 So.2d 832 (1963).

The precise question before us, so far as we can find, has never been passed upon by an opinion of this court.

Characterized relevantly to the present issue, the cited jurisprudence holds that the employer’s right to indemnification is a statutorily created' right to tort recovery against a negligent tortfeasor independent of the employee’s.² The cited jurisprudence does not require us to hold that a negligent employer may nevertheless be indemnified by his joint tortfeasor for benefits paid to his employee.

Since the indemnification action by the employer i's in tort, we see no reason why we should 'not apply the usual rule in tort cases that a ■ claimant’s contributory negligence bars his recovery.

By reason of the workmen’s compensation act, the employer ‘ may have paid benefits to his injured employee. However, the employer is so liable for injuries at work whether or not the negligence of a third person caused them.

The legislature may have authorized! a non-negligent employer to be indemnified by the tortfeasor. Nevertheless, we-find no legislative intent to permit such indemnification to an employer whose negligence has itself contributed to the employee’s injuries, jn contravention of the-general tort principle that one himself at fault cannot recover damages caused in. whole or part by his own fault. To allow a windfall to a negligent employer does not seem to be within the intent of the compensation statute; if there is to be a windfall, it should be in favor of the employee,, for whose protection the compensation act was enacted and in whose protection such., statute should be liberally construed.

Such a conclusion is in accord with the-analysis by Proféssor Wex Malone in his. -authoritative work, Louisiana Workmen’s •Compensation, Section 367, at pp. 475-476 ■(1951):

“It would seem that if the employer him■self were guilty of negligence which, in -conjunction with that of the third party, brought on the accident, the employer : should be denied reimbursement for the •compensation he has paid the employee. • Since the principle underlying Section 7 [La.R.S. 23:1101-1103] is the notion of requiring the wrongdoer to indemnify the blameless employer, this principle would be •inapplicable where the employer were as •guilty as the party being sued. Many deci•sions in other jurisdictions have so held. It cannot be successfully contended that "the effect here would be to permit the employee to recover by indirection from the •employer contrary to Section 34 [La.R.S. 1032] of the Compensation Act, since the employee is insisting only that the faulty employer should not be allowed a bite out of the damages to which the employee is justly entitled from the third party. However, in the one Louisiana case [Footnote cites City of Shreveport v. Southwestern Gas & Elec. Co., 145 La. 670, 82 So. 785 (1919)] in which this problem was presented the court stated that the carelessness of the employer is immaterial in his claim for reimbursement of compensation, paid.”³

In holding that the employer’s contributory negligence was immaterial to its suit for indemnification against the tortfeasor, the intermediate court in the present case relied only upon the “one Louisiana case” to this effect cited by Professor Malone: City of Shreveport v. Southwestern Gas & Electric Co., 145 La. 680, 82 So. 785 (1919); see also earlier decision at 140 La. 1078, 74 So. 559 (1919).⁴

The actual holding of that case is considerably narrower. At the time, before the 1920 amendment, the Louisiana workmen’s compensation act provided that the employer’s suit for indemnification was as subrogee of the injured employee.⁵ In fact, in the City of Shreveport case the employer, the plaintiff city, had filed suit by virtue of a conventional subrogation from the widow of the accidentally-killed employee. The sole basis for allowing the employer to recover for compensation paid, despite its own negligence, was stated as follows, 145 La. 685, 82 So. 787:

“Other defenses are contributory negligence on the part of the plaintiff city, and estoppel because of the city’s electrician not having condemned the location of this wire, but having, on the contrary, impliedly approved it by not objecting to it. Suffice it to say of these defenses that the city is not suing in her own right, but is simply enforcing the rights of the widow and children of the decedent.” (Italics ours.) (The decedent employee had been held free of fault.)

By virtue of the 1920 amendment and the subsequent jurisprudence cited in the earlier part of this opinion, the right of the employer to recover compensation paid to an injured employee is an independent right; it no longer depends upon subrogation to the rights of the employee. Thus, the basis of our decision in the City of Shreveport case has since been repudiated by the legislative amendment and subsequent jurisdictional interpretations that the-employer proceeds for indemnification in his independent right and not as subrogee of the employee.

Therefore, as in the case of any other tort plaintiff, we see no reason why the-employer’s own contributory negligence-should not bar his recovery in his indemnification suit, and the City of Shreveport’ holding is not to the contrary.

In the present suit, the defendant tortfeasor’s insurer had filed a third-party demand against Ashy, seeking contribution-from Ashy as joint tortfeasor in the event the injured employee recovered damages as. plaintiff in the tort suit. The intermediate-court denied contribution under the jurisprudence developed by the courts of appeal that a tortfeasor cannot seek contribution from the claimant’s employer even though the employer is also concurrently negligent.

See: Bagwell v. South Louisiana Electric Co-Op. Assn., 228 So.2d 555 (La.App.3d Cir., 1969) and the cases cited therein; General Electric Co. v. Cuban American Nickel Co., 396 F.2d 89 (5th Cir. 1968). Contra; Moak v. Link-Belt Co., 229 So.2d 395, 414-416 (La.App. 4th Cir., 1969). See also Comment, The Right of a Third Party to Contribution or Indemnity from a Louisiana Workmen’s Compensation Employer, 38 Tul.L.Rev. 536 (1964).

This court has never spoken on this issue whether the provision of La.R.S. 23:1032, granting an employee a right to a compensation award exclusive of any tort remedy, likewise operates so as to bar a joint tortfeasor from securing contribution from the employer for the tort damages caused through the employer’s concurring negligence.⁶ This issue is not before us, however, under the present pleadings. The employee Vidrine’s own suit for damages was dismissed, as was the defendant insurer’s third-party demand against Ashy; these dismissals are final, as no review was sought of the trial court judgment which dismissed them. The issue of contribution is therefore not before us.

For the foregoing reasons, we hold that the contributory negligence of the intervenor, Ashy Construction Company, bars its recovery against the defendant(s) herein. Accordingly, the judgment of the court of appeal awarding recovery on the intervention is reversed, and the trial court judgment dismissing the intervention of Ashy Construction Company is affirmed. The costs in the trial court are assessed as provided by its decree; the costs of the appeal ancTof review by this court are assessed against the intervenor, Ashy Construction Company.

Reversed and dismissed.

1 . Yidrine withdrew from the suit, since the indemnification of the employer would exhaust the policy limits of the defendant, Michigan Millers, and thus Yidrine himself would receive nothing.

2 . The cited decisions of this court characterize the accident as giving rise to a single cause of action in tort, although the employer!? independent right of action 'to sec.ure indemnification is created by statute. For phrposes of prescription, our decisions specifically hold that the employer’s right to indemnification is not a separate' and distinct cause of action (see Marquette Casualty Co. v. Brown, cited in text), so that a suit by the employer or hjs insurer interrupts prescription on the cause of action and permits a past-year intervention by the employee for his own personal injuries, National Surety Corp. v. Standard Accident Ins. Co., 247 La. 905, 175 So.2d 263 (1965). The last cited case, however, specifically quotes the definition- in Hope v. Madison, 192 La. 593, 188 So. 711, 715 (1939) that a cause of action-is “the .situation or state of facts which- entitles, a party to sustain an action”, i. e., which gives him “a-right to judicial interference in his behalf”. In the writer’s personal view, the attempted distinction between the employ-, er’s “cause” and “right” of action is inconsistent with such an analysis and, moreover (see Malone, Louisiana Workmen’s Compensation, 1951, Section 367 at 1964 pocket supp.), is confusing. In the writer’s opinion, the better view is that the employer is granted an independent tort c-ause of action by the statute, with prescription commencing to run from the accident, and with intervention after the year permitted by either the employer or the employee in a timely filed suit by the other, see National Surety Corp, cited above. However, for present purposes, under either this analysis or that of the cited cases, the result would be the same (as it would in all eases cited herein).

3 . As Professor Malone notes, the other American jurisdictions are divided as to whether the employer’s contributory negligence, either actual or imputed, bars his recovery. See also 101 C.J.S. Workmen’s Compensation § 1010(c) ; 58 Am.Jur. '“Workmen’s Compensation”, Section 359. It is fair to state, however, that another national authority on workmen's compensation believes that, in the interest of avoiding double recovery (and since the “employer’s” negligence is really vicarious liability for the negligence of a eo•employee), the better view should be that ■the employer should not be barred by a •defense of concurring negligence when the negligence is that of a co-employee. 2 Larson, The Law of Workmen’s Compensation, Sections 71.20 and 75.23 (1970). In footnote 73 to the portion of his text quoted in our opinion, Professor Malone also admits that an employer not personally negligent — but only vicariously liable through the carelessness of Ms workers — should perhaps not be denied indemnity; but he adds that none of the cases dealing with the employer’s fault distinguish vicarious liability from personal fault. Actually only in the comparatively rare case of a small enterprise operated by an individual is the “employer’s” contributory negligence personal carelessness rather than vicarious liability. As here, where the “employer” is a corporation, most employers are liable only vicariously because of the fault of their agents and employees. ■

4 . In the intervening fifty years, this case-has been cited only -infrequently for the proposition in question. It has, • how- ’ ever, been characterized as holding to the effect noted in the few eases on the point: Andrus v. Security Ins. Co., 161 So.2d 113 (La.App.3d Cir., 1964); Day v. National—U. S. Radiator Corp., 117 So.2d 104 (La.App. 1st Cir., 1959), reversed on other grounds, 241 La. 288, 128 So.2d 660 (1961); United Gas Co. v. Guillory, 206 F.2d 49 (5th Cir., 1953). It has also once been cited as supporting analytically the proposition that the third-person tortfeasor is not entitled to contribution from the jointly negligent employer for damages owed to the latter’s employee because of the concurring negligence of the-third person and the employer. Hebert v. Blankenship, 187 So.2d 798, (La.App.3d Cir., 1906).

5 . See summary of statutory history im Chauvin v. Louisiana Power & Light Co., 177 La. 193, 148 So. 23 (1933).

6 . We granted certiorari to review this issue as decided by the court of appeal in Moalc, above cited, see 255 La. 549, 550, 551, 232 So.2d 75, 76 (1970), but the parties dismissed the countering claims when the appeal was heard in this court. 257 La. 281, 242 So.2d 515 (1970). See also City of Shreveport v. Southwestern Gas & Electric Co., 145 La. 680, 689-690, 82 So. 785, 789 (1919), which notes that the exclusive limiting provision of the workmen’s compensation act “is restricted to contracts between employers and employes and to compensation by employers to employes”, and that the exclusive remedy of the act is limited to bar an action “by an employe and his dependents . . . against his employer, or the insurer of the employer, or the employer of an employer.”