Bujol v. Entergy Services, Inc., 2000 CA 1621.

• Decision Date: 14 August 2002
• Docket Number: No. 2000 CA 1621.,2000 CA 1621.
• Citation: 833 So.2d 947
• Parties: Joseph BUJOL, III, et al. v. ENTERGY SERVICES, INC., et al. Don A. PERKINS, et al. v. Entergy Services, Inc., et al.
• Court: Court of Appeal of Louisiana — District of US

Page 947

833 So.2d 947

Joseph BUJOL, III, et al. v. ENTERGY SERVICES, INC., et al.

Don A. PERKINS, et al. v. Entergy Services, Inc., et al.

No. 2000 CA 1621.

Court of Appeal of Louisiana, First Circuit.

August 14, 2002.

Opinion on Rehearing January 16, 2003.

Opinion Concurring in Part and Dissenting in Part on Rehearing January 16, 2003.

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Donald W. Price, Paul H. Due, B. Scott Andrews, Baton Rouge, Patrick W. Pendley, Plaquemine, David W. Robertson, Dripping Springs, TX, Counsel for Appellees Joseph E. Bujol, III, et al.

Victor L. Marcello, Donald T. Carmouche, John H. Carmouche, Gonzales, Counsel for Appellees Don A. Perkins, et al.

Edward J. Walters, Jr., Darrel J. Papillion, Keith Richards, Baton Rouge, Counsel for Appellees Robert Hracek, et al.

Mark C. Surprenant, Louis C. LaCour, Jr., Robert N. Markle, New Orleans, Counsel for National Union Fire Insurance Company of Pittsburgh, PA.

Michael B. Satz, Chicago, IL, Robert E. Kerrigan, Jr., Joseph L. McReynolds, Marian Mayer Berkett, Thomas E. Schwab, New Orleans, Counsel for X.L. Insurance Company, Ltd.

Before: WHIPPLE, KUHN, GUIDRY, PETTIGREW, JJ., and LANIER,¹ J. Pro Tem.

PETTIGREW, J.

This appeal is from judgments rendered after a second trial arising from an explosion and flash fire. The plaintiffs are two individuals who were severely burned in an industrial accident, Don A. Perkins and Joseph E. "Jeb" Bujol, III, their families, and the survivors of Ray Hracek, who received fatal burns. The defendants in this second jury trial² were X.L. Insurance Company, Ltd. (X.L.) and National Union Fire Insurance Company of Pittsburgh, PA (National Union), insurers of Air Liquide, S.A.³ (ALSA) and Liquid Air Engineering Corporation (LAEC). Judgment was rendered in favor of plaintiffs awarding compensatory and exemplary damages against the insurers.⁴ X.L. and National Union perfected this appeal; the Hracek plaintiffs answered the appeal. For the following reasons, we reverse in part, amend in part, affirm in part, and remand to the trial court.

BACKGROUND

On April 6, 1994, three employees who were working at an air-separation plant near Plaquemine, Louisiana, owned and operated by Air Liquide America Corporation (ALAC), were severely injured in an oxygen flash fire. One of those employees, Ray Hracek, died of his injuries several days after the incident. The other two injured employees, Joseph Bujol and Don Perkins, sustained third degree burns over 90 percent of their bodies, but survived. The flash fire occurred approximately three hours after the Plaquemine plant unexpectedly shut down following an electrical disturbance and while the three employees were assisting in restarting the plant.

The workers at the Plaquemine plant were near the end of the task of restarting the plant when an operating problem developed in the "let-down station." An automatic control valve was regulating differential pressures between a 700-pound oxygen pipeline supplying its customer Exxon and a 400-pound pipeline supplying other customers. The plant manager, Mr. Hracek, asked Mr. Bujol and Mr. Perkins to accompany him to the let-down station to address the problem. Mr. Bujol and Mr. Perkins were closing an eight-inch manual isolation valve upstream from the automatic control valve when Mr. Hracek told them to stop. Mr. Hracek climbed inside the loop of piping that formed the let-down station while the other two men watched. They were close enough to the automatic control valve for Mr. Bujol to see it cycle open and then abruptly close. The flash fire immediately erupted.⁵

The record shows that ALSA is a multinational company headquartered in France. In the 1960s, ALSA was distributing pressurized oxygen by pipeline in France and Belgium. In the early 1970s, the company began expanding in Europe. By the time of trial, ALSA's corporate family operated in at least 60 countries, employing 27,600 people worldwide primarily in France and the Americas.

In 1986, Big Three Industries, Inc. (Big Three) was purchased for $1,000,500,000.00 and became part of the ALSA family of companies, adding approximately 15 plants in Louisiana, Mississippi, and Texas to the ALSA list of subsidiaries. A few of these, including the plant at Plaquemine, were air-separation "tonnage" plants. After the acquisition, the air-separation tonnage plants continued to be operated as a separate division of an ALSA subsidiary under the name of Big Three. On January 1, 1994, the Big Three division merged with a sister subsidiary into a new subsidiary, ALAC. Neither the original acquisition nor the subsequent merger affected the physical operation of the Plaquemine plant, which kept the same executives, plant manager, and workers who formerly operated under the Big Three ownership.

ALSA's vice-president for legal and corporate affairs described its structure as "cascading" ownership. ALSA owns Air Liquide International, S.A., which in turn owns American Air Liquide, Inc., which in turn owns AL American Holdings, which in turn owns ALAC. Thus, as the parties describe the relationship, ALSA is the corporate ancestor of ALAC, which is the owner of the Plaquemine plant and employer of the injured men at the time of the accident.

LAEC, an engineering company, was hired in 1990-1991 to build an addition to the Plaquemine plant. Plaintiffs alleged that LAEC failed to investigate the effect that increased capacity would have on the existing facility at Plaquemine. Specifically, plaintiffs averred LAEC failed to ascertain the effect of the plant modification on the automatic control valve that exploded in 1994.

After the accident, ALAC put together a special task force to investigate the accident that ultimately issued what became known as the "Schmidt Report." The report sets forth the following recommendation for the Plaquemine plant: the erection of "[b]arrier walls ... around all oxygen control valve stations in high velocity pressure reducing service. Such walls are to be designed and constructed to withstand the expected forces involved in an oxygen pipeline fire and resulting rupture .... Manual ... valves ... are to be within the barrier wall. Their operating hand wheels must project and be accessible outside the barrier wall."

The recommendation that a barrier wall be erected is consistent with a requirement previously issued by ALSA for its plants in France and for its subsidiaries worldwide. A history of a barrier-wall requirement was adduced at trial through the testimonial and documentary evidence: A series of accidents, beginning with a fatality at a Mons, Belgium plant in 1968, initiated efforts by ALSA, which culminated in the adoption by the European compressed gas industry of a standard calling for the erection of barrier walls for the protection of workers in the industry's plants. ALSA implemented a program of building barrier walls around distribution stations during the mid-1970s. Prior to the accident at the Plaquemine plant, barrier walls were used at ALSA subsidiary plants in Canada and Argentina.

ACTION OF THE TRIAL COURT

Following a jury trial, judgment was rendered in favor of plaintiffs and against the insurers for compensatory and exemplary damages. The jury answered, "Yes" to the following interrogatory: "Do you find that Air Liquide, S.A. [ALSA] assumed a duty for safety at ALAC's Plaquemine Air Separation Plant?" After answering other interrogatories concerning ALSA's liability, the jury found ALSA was 80 percent at fault for the accident, and ALSA's insurers were cast for a percentage of the compensatory damages ultimately awarded in the judgment. The jury also found ALSA liable for exemplary damages. The jury found LAEC to be 15 percent at fault.

The remaining percentage of fault was assessed by the jury against Entergy, which was not a party at the time of this trial. The parties stipulated that Entergy was at fault, but the jury was left to determine the percentage of fault.

National Union and X.L. also challenged coverage under their policies. These issues were decided against the insurers by the trial court.

Additionally, the trial court partially granted a motion for judgment notwithstanding the verdict (JNOV). The court reduced the compensatory damages awarded to Mr. Perkins by $1,000,000.00 and reduced the awards to the Hracek plaintiffs from a total of $8,049,484.00 to $2,999,484.00, which reduction is the subject of their answer to this appeal. The exemplary damage award was correspondingly reallocated.⁶

On appeal, the issues raised by the parties are: prescription, ALSA's liability for compensatory damages, ALSA's liability for exemplary damages, LAEC's liability for compensatory damages, insurance coverage, the JNOV, and set-off.

PRESCRIPTION OF COMPENSATORY DAMAGES

On appeal, National Union and X.L. filed a peremptory exception raising the objection of prescription in addition to challenges of the trial court's failure to grant previously filed exceptions as to prescription urged by both defendants. See La.Code Civ. P. art. 2163. They argue that plaintiffs' claim for compensatory damages has prescribed because National Union and X.L. were not made defendants to this suit until March of 1997, approximately three years after the accident, and there was no timely-sued solidary obligor who interrupted prescription against them. In so contending, they rely on the Louisiana Supreme Court's affirmance of this court's determination that Entergy was not liable to the plaintiffs in Perkins I. See Perkins, 98-2081 (La.App. 1 Cir. 12/28/99), 756 So.2d 388, aff'd, 2000-1372 (La.3/23/2001), 782 So.2d 606.

A timely filed suit against one defendant liable in solido with other parties interrupts the running of prescription as to all. Franks v. City of Alexandria, 128 So.2d 310, 314 (La.App. 3 Cir.1961).

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