Marquette Cas. Co. v. Brown

• Decision Date: 26 May 1958
• Docket Number: No. 43811,43811
• Citation: 235 La. 245,103 So.2d 269
• Parties: MARQUETTE CASUALTY COMPANY v. Chester BROWN.
• Court: Louisiana Supreme Court

Page 269

103 So.2d 269

235 La. 245

MARQUETTE CASUALTY COMPANY v. Chester BROWN.

No. 43811.

Supreme Court of Louisiana.

May 26, 1958.

Herman & Herman, Harry Herman, New Orleans, for defendant-applicant.

Morrison & Newell, James J. Morrison, New Orleans, for defendant-respondent.

McCALEB, Justice.

Cleotha Thomas, an employee of Paretti Pontiac Co. Inc., was injured on July 15, 1954, when the motorcycle driven by him in the course of his employment collided with an automobile operated by the defendant, Brown, on the streets of the City of New Orleans. Having paid Thomas workmen's compensation and incurred medical expense for his treatment, plaintiff, the compensation insurer of his employer, brought this suit for reimbursement of the amounts expended, claiming that the accident was attributable solely to the fault of Brown.

The suit was filed on November 15, 1955, or more than one year after the accident, and defendant pleaded the prescription provided by Articles 3536 and 3537 of the Civil Code.¹ The district judge sustained the plea but the Court of Appeal for the Parish of Orleans reversed this ruling and remanded the case for a trial on its merits. See 97 So.2d 92. We granted certiorari.

The Court of Appeal resolved that, under the jurisprudence established by this Court in Appalachian Corporation v. Brooklyn Cooperage Co., 151 La. 41, 91 So. 539 and Foster & Glassell Co. v. Knight Bros., 152 La. 596, 93 So. 913, plaintiff had at least one year from the time its liability for compensation became fixed to bring its action against the alleged tortfeasor for indemnification and that, since plaintiff had alleged that it did not know the full extent of its liability until November 21, 1954, the action was timely as it was instituted on November 15, 1955, or within one year from that date.

To determine the applicable prescription in a case of this sort and when the prescription commences to run, it is essential first to ascertain the nature of the claim plaintiff seeks to enforce which is derived from the Employers' Liability Act (R.S. 23:1031--1351). Plaintiff, being the insurance carrier of the employer of the injured workman and having paid compensation and medical expenses under its contract, has become legally subrogated under R.S. 23:1162 to all rights and actions to which the employer is entitled.

The right of the employer to seek redress from a third person causing injury to an employee, for which the employee is entitled to compensation, is established by R.S. 23:1101, 1102 and 1103. The first paragraph of R.S. 23:1101 provides, in substance, that, when a compensable injury has been sustained as the result of the negligence of a third person, the acceptance of compensation by the injured employee or his dependent shall not 'affect' his right to claim damages from the tortfeasor and the second paragraph declares:

'Any employer having paid or having become obligated to pay compensation under the provisions of this Chapter may bring suit against such third person to recover any amount which he has paid or become obligated to pay as compensation to any injured employee or his dependent.'

R.S. 23:1102 provides that, if either the employee or the employer exercises the right accorded by R.S. 23:1101, he shall forthwith notify the other in writing of such fact '* * * and such other may intervene as party plaintiff in the suit'.

R.S. 23:1103 sets forth that, in the event the party who has been thus notified becomes party plaintiff in the suit against a third person and damages are recovered, such damages shall be so apportioned in the judgment that the claim of the employer for compensation actually paid shall take precedence over that of the employee or his dependent '* * * and if the damages are not sufficient or are sufficient only to reimburse the employer * * *' for the compensation he has paid, plus attorney's fees and costs '* * * such damages shall be assessed solely in his favor; but if the damages are more than sufficient to so reimburse the employer, the excess shall be assessed in favor of the injured employee or his dependent, * * *'.

The question, then, is whether these provisions confer upon the employer a separate and independent cause of action, as distinguished from a right of action, against the third person tortfeasor or whether there is but one cause of action, ex delicto, which the compensation paying employer or the injured employee is accorded the right to assert separately or jointly.

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, the 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.² 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.

In addition, whenever a suit is brought against the tortfeasor by either the employer or the injured employee, the statute requires that the plaintiff give notice to the other interested party. Accordingly, should the injured employee institute suit, the compensation paying employer, upon notification thereof, no longer has the right to bring an independent action; he must intervene in the employee's suit or his right to reimbursement for compensation will be lost.

The Court of Appeal for the Parish of Orleans properly interpreted the applicable provisions of the compensation law thusly in Todd-Johnson Dry Docks v. City of New Orleans, La.App., 55 So.2d 650. In that matter, the injured employee filed suit against the alleged tortfeasor after he had compromised his claim for compensation with his employer and, conformably with R.S. 23:1102, notified the employer of the fact that the suit had been filed. The employer did not intervene in that suit but thereafter, within the prescriptive period of one year from the date of the accident, filed a separate suit against the alleged tortfeasor seeking to be indemnified for the compensation it had paid the injured employee. In a well considered opinion,³ the Court, however, ruled that the right of action granted to the employer had abated when it failed to intervene in the employee's action for damages. It was reasoned that since, undoubtedly, '* * * the third party tortfeasor is liable only for damages and that this liability is not increased by the fact that the employer is liable to the employee for compensation', it was incumbent on the employer to intervene in the suit, when notified, as it was never the legislative aim to require the third person to respond to more than one action, ex delicto, at which time his liability should be fully determined. In support of its ruling, the Court relied in the main on Chauvin v. Louisiana Power & Light Co., 177 La. 193, 148 So. 23, 28, wherein we said:

'Coming now to the contention made by counsel for defendant that the amending act changes or affects the rights and obligations of third persons, our conclusion is that it does not. The duties and obligations of persons who through their fault injure others to respond to the injured person in damages is fixed by article 2315 of the Civil Code. The fact that the injured person is an employee of another does not affect these obligations. Whether the response is to be made through an action brought by the employee or by his employer as subrogee affects neither his rights nor his obligations'.

To the same effect as the Chauvin case is Metropolitan Casualty Ins. Co. of New York v. Bowdon, 181 La. 295, 159 So. 394, where it was held that an insurance carrier, seeking reimbursement from a third person for compensation paid to the widow and...