Continental Ins. Co. v. Fireman's Fund Ins. Co.

• Decision Date: 05 August 1977
• Docket Number: No. 7839,7839
• Citation: 350 So.2d 183
• Parties: CONTINENTAL INSURANCE COMPANY and National Corporation Service, Inc. v. FIREMAN'S FUND INSURANCE COMPANY and Plywood Panels, Inc.
• Court: Court of Appeal of Louisiana — District of US

Page 183

350 So.2d 183

CONTINENTAL INSURANCE COMPANY and National Corporation Service, Inc. v. FIREMAN'S FUND INSURANCE COMPANY and Plywood Panels, Inc.

No. 7839.

Court of Appeal of Louisiana, Fourth Circuit.

Aug. 5, 1977.

Rehearing Denied Oct. 12, 1977.

Drury, Lozes & Curry, Robert H. Wood, Jr., New Orleans, for plaintiffs-appellants.

Porteous, Toledano, Hainkel & Johnson, James L. Donovan, New Orleans, for defendants-appellants.

Before LEMMON, STOULIG and BOUTALL, JJ.

LEMMON, Judge.

This is a contest between two insurers over liability for workmen's compensation benefits being paid to Alphonse White, a Pendleton Detectives' employee who was injured on the job while working undercover as a plant employee of Plywood Panels, Inc. Pendleton's insurer instituted payment of benefits and then filed this suit to recover all or part of the payments from Plywood's insurer. The trial court ruled that Plywood's insurer was liable for 50% of the benefits due and paid or to be paid, and both insurers appealed.

In August, 1973 Plywood, who had been experiencing employee dissension and losses through employee theft, contacted Pendleton to furnish an agent to work in Plywood's plant and covertly observe employee activities. Pendleton hired White for this assignment and sent him to Plywood, who placed him on the payroll as a laborer. As in the case of other undercover agents furnished by Pendleton for similar purposes, White was required to join the union and to pay the union initiation fee and monthly dues, to perform all of the employment duties required of other employees in the same job classification, and additionally to submit reports to Pendleton of each work shift as to unusual incidents or suspicious activities.

White worked a regular 40-hour week on shift work, plus overtime. His undercover operation was known only to a few Plywood officials, and even his production foreman was not aware of his dual status. In fact several other Pendleton agents were working undercover for Plywood at the same time.

In October, 1973 Plywood posted notice of a job opening for a printer operator, and through normal union bidding procedures White signed for and secured the higher paying position. As an operator White worked regular shift hours and performed all duties of an operator in addition to his undercover work and daily reports thereof.

While he was working as a laborer, White was paid weekly by Plywood at the union contract rate of $2.10 per hour for regular time. Pendleton also paid White 40 cents per hour (for regular time only) in order to bring his salary to $2.50 per hour, Pendleton's standard rate for undercover agents and $3.00 per daily report. Each employer handled social security and F.I.C.A. contributions as to these salary payments.

In addition to the $2.10 per hour paid to White, Plywood paid $3.90 per hour to Pendleton, who supervised the overall operation and furnished daily coordination and instruction to White. Thus, the total cost to Plywood was $6.00 per hour, and Pendleton received $3.50 per hour in excess of the 40-cent salary supplement it paid to White.

After his promotion to operator White was paid by Plywood at the union contract rate of.$2.80 per hour. Pendleton continued paying him $3.00 per daily report, but discontinued the 40-cent salary supplement, since White's salary with Plywood was then over the $2.50 minimum for Pendleton's undercover agents. Moreover, Pendleton continued to receive $3.50 per hour net from Plywood, thus increasing the total cost to Plywood to $6.30 per hour.¹

White was injured on the job in April, 1974, when while cleaning the cylinder his hand slipped between two moving rollers. Prior to the injury Plywood and Pendleton had neither agreed to nor discussed workmen's compensation liability.

As to the employee, both employers are solidarily liable for workmen's compensation benefits. Each employer had an employment contract with the employee, each exercised some degree of control over the employee, and at the time of the injury the employee was simultaneously performing services for both...