Canter v. Koehring Co.

• Decision Date: 24 September 1973
• Docket Number: No. 52870,52870
• Citation: 283 So.2d 716
• Parties: Mrs. Evelyn CANTER, Individually and as Tutrix, etc., et al., Plaintiffs-Appellees-Relators, v. KOEHRING COMPANY et al., Defendants-Appellants-Respondents.
• Court: Louisiana Supreme Court

Page 716

283 So.2d 716

Mrs. Evelyn CANTER, Individually and as Tutrix, etc., et

al., Plaintiffs-Appellees-Relators, v. KOEHRING COMPANY et al., Defendants-Appellants-Respondents.

No. 52870.

Supreme Court of Louisiana.

Sept. 24, 1973.

Rehearing Denied Oct. 26, 1973.

William B. Baggett, Baggett & Hawsey, McClain & Morgan, Lake Charles, for plaintiffs-appellees-relators.

Edmund E. Woodley, Holt & Woodley, Lake Charles, for defendants-appellants-respondents.

TATE, Justice.

This is a wrongful death action. The court of appeal, one judge dissenting, reversed a judgment in favor of the plaintiff widow and children and against certain corporate employees and their insurer. 267 So.2d 270 (La.App.3d Cir. 1972). We granted certiorari, 263 La. 233, 267 So.2d 726 (1972), primarily to resolve a conflict between the circuits and to speak authoritatively on the following issue:

When and under what circumstances is the officer, agent, or employee of an employer or principal liable to a third person (including a co-employee), when injuries caused to such third person result from the breach of a duty imposed by his employer or principal upon the officer, agent or employee?

In essence, the conflict between the circuits is:

(a) When a duty is imposed on an officer, agent, or employee Solely by reason of the employment or agency relationship, is this duty owed exclusively to the principal-employer; so that a third person has no cause of action in tort against the officer, agent or employee individually, even if the latter's breach in the performance of the duty causes reasonably foreseeable harm to the third person? Maxey v. Aetna Casualty & Surety Co., 255 So.2d 120 (La.App.3d Cir. 1971), and its progeny in the Second and Third Circuits.

Or, instead, (b) may such breach of the employment-agency duty give rise to a cause of action against such individuals by a third person injured as a result of the breach? Adams v. Fidelity & Casualty Co. of New York, 107 So.2d 496 (La.App.1st Cir. 1958) and its progeny in the First, Third, and Fourth Circuits, including Johnson v. Schneider, 271 So.2d 579 (La.App.1st Cir. 1972).

We shall resolve this conflict between the circuits before addressing ourselves to the facts of the present case.

I.

The conflicts between the circuits arose in the following jurisprudential context:

The early decision of Delaney v. A. Rochereau & Co., 34 La.Ann. 1123 (1882) held that, where a third person is injured due to an agent's breach of a duty owed to his principal, the agent could not be held individually liable in tort when such breach was 'non-feasance', i.e., not doing something he should have done or 'mere neglect in the performance of duty' (p. 1128). The agent could be held individually liable only when the breach constituted doing something he should not have done, i.e., a malfeasance or a misfeasance.

Louisiana's great tort scholars have criticized Delaney as artificially and unrealistically basing liability of the agent to the injured person upon whether his negligence was an affirmative commission, as contrasted with an omission to do what he ought to have done. Seavy¹, Liability of an Agent in Tort, 1 So.L.Q. (Tul.L.Rev.) 16 (1916); Malone, 26 La.L.Rev. 526--527 (1966). As Seavey corrected noted, after reviewing the jurisprudence, 'Wherever the courts have protected interests against neglectful acts, the liability of the agent should depend upon whether he saw or should have foreseen that by his negligent failure to perform his duties he would cause the general kind of damage which in fact followed his fault, to the class of persons of whom the plaintiff was one.' 1 So.L.Q. (Tul.L.Rev.) 43--44.

Although lip-service was sometimes paid the Delaney dichotomy of omission-commission as the basis of the agent's liability or not², the jurisprudence of recent decades with virtual unanimity has implicitly or explicitly abandoned it, and is in accord with the majority American view as enunciated above by Seavey. Malone, 26 La.L.Rev. 526--27 (1966); Cummings, Adams Revisited 20 La.Bar J. 139 (1972); 33 La.L.Rev. 325 (1973); Comment, 19 Loyola L.Rev. 473 (1973); Note, 46 Tul.L.Rev. 352 (1971). See the excellent summary in Johnson v. Schneider, 271 So.2d 579 (La.App.1st Cir. 1972).

Perhaps the fullest discussion of the intervening jurisprudence and the most explicit rejection of the omission-commission dichotomy are set forth in Adams v. Fidelity and Casualty Co. of New York, 107 So.2d 496 (La.App.1st Cir. 1958), certiorari denied, with the late and distinguished Judge Robert Ellis as organ of the court.³

There the court held that corporate officers and supervisors could be held individually liable for the death of a co-employee caused by their personal fault in failing to correct a dangerous condition of the work-premises personally known to them and within the ambit of their work responsibilities.⁴

In doing so, the court correctly held that 'an injury suffered by a third party which is due to the breach of a legal obligation which the corporate officer or officers owed to a third party, whether it also involved the breach of a duty due to the corporation, would give rise to a cause of action against the corporate officers for the breach of such legal obligation. It would matter not whether the breach of a legal obligation due and owing by a corporate officer to a third party (which would include a co-employee) was the result of misfeasance, malfeasance or nonfeasance.' 107 So.2d 501--502.

As Professor Malone noted, in commenting favorably upon the Adams decision, it incorporates the principle enunciated by Article 354 of the Restatement of Agency Second⁵: the agent or employee has a duty of care towards third persons, whenever his failure to act in accordance with his agency or employment duty would serve to deprive the third person of a protection owed him by the principal or employer. 26 La.L.Rev. 526.

This court inferentially, if not explicitly, applied this principle in Day v. National U.S. Radiator Corp., 241 La. 288, 128 So.2d 660 (1961). There, architects were sought to be held liable for the death of a construction employee due to a boiler explosion in the course of a construction project. Other workmen on the job had installed the boiler without a safety valve, the lack of which caused its subsequent explosion.

This court noted that the architects would have been liable if there had been defective specifications for the boiler, or negligent inspection and approval by them of the installation without the safety valve, or actual personal failure to observe the lack of a proper safety device on the boiler. 128 So.2d 666. We noted that, under such circumstances, 'we should not hesitate to say they (the architects) breached a duty (i.e., to the construction employee who was killed, as well as to their employer-principal) and that they reasonably should have foreseen that this breach would cause damage.' 128 So.2d 666.

However, the architects were exculpated under our factual finding that the principal-employer had not delegated to the architects any duty to supervise the installation of the boiler during the performance of the construction contract. We further, factually, found no personal fault of the architects by way of misleading or insufficient instruction as to specifications for installation of the boiler.

Likewise, in Eschmann v. Moyer, 258 La. 818, 220 So.2d 86 (1969), we accepted without discussion that a corporate officer could be held individually liable to a third person (a co-employee) injured through a premise defect. We, however, absolved the corporate officer from liability upon our finding that he had properly discharged his own corporate duties with regard to maintaining safe premises and was not guilty of any personal negligence which contributed to the injury.

II.

It is in this jurisprudential context that the conflict between the circuits arose which we are to resolve. Most of the decisions concern situations where the employer's duty to furnish a safe place to work, La.R.S. 23:13, is alleged to have been breached, and an employee seeks to hold individually liable for damages thereby sustained some corporate officer, agent, supervisor, or co-employee alleged to be at fault. The generic issue is the same, however, as to the breach of Any duty imposed by the employer upon its officer, agent, or employee:

Under what circumstances is the latter individually liable to a third person damaged solely by reason of the individual's breach of the employment-imposed duty?

Adams and its progeny have established the following criteria for imposing individual liability, which are generally applied by the First and Fourth Circuits and by some panels of the Second and Third:

1. The principal or employer owes a duty of care to the third person (which in this sense includes a co-employee), breach of which has caused the damage for which recovery is sought.

2. This duty is delegated by the principal or employer to the defendant.

3. The defendant officer, agent, or employee has breached this duty through personal (as contrasted with technical or vicarious) fault. The breach occurs when the defendant has failed to discharge the obligation with the degree of care required by ordinary prudence under the same or similar circumstances--whether such failure be due to malfeasance, misfeasance, or nonfeasance, including when the failure results from not acting upon actual knowledge of the risk to others as well as from a lack of ordinary care in discovering and avoiding such risk of harm which has resulted from the breach of the duty.

4. With regard to the personal (as contrasted with technical or vicarious) fault, personal liability cannot be imposed upon the officer, agent, or employee simply because of his general administrative responsibility for performance of some function of the employment. He must have a personal duty towards the injured plaintiff, breach of which...