Coco v. Winston Industries, Inc.

• Decision Date: 24 December 1975
• Docket Number: No. 5186,5186
• Citation: 330 So.2d 649
• Parties: Gary James COCO, Plaintiff-Appellee, v. WINSTON INDUSTRIES, INC., et al., Defendants-Appellants.
• Court: Court of Appeal of Louisiana — District of US

Page 649

330 So.2d 649

Gary James COCO, Plaintiff-Appellee, v. WINSTON INDUSTRIES, INC., et al., Defendants-Appellants.

No. 5186.

Court of Appeal of Louisiana, Third Circuit.

Dec. 24, 1975.

On Rehearing March 10, 1976.

Dissenting Opinion March 17, 1976.

Rehearing Denied April 7, 1976.

Writ Granted June 9, 1976.

On Motion To Vacate and Recall Opinion On Rehearing

Sessions, Fishman, Rosenson, Snellings & Boisfontaine by Breard Snellings, New Orleans, Watson, Murchison, Crews & Arthur by William P. Crews, Jr., Natchitoches, for defendant-appellant.

G. F. Thomas, Jr., Natchitoches, Cook, Clark, Egan, Yancey & King, by Sidney E. Cook, Shreveport, for plaintiff-appellee.

Before CULPEPPER, DOMENGEAUX and PAVY, JJ.

PAVY, Judge.

Plaintiff brought this tort action for injuries sustained when a dado saw severed four of his fingers and a portion of his hand. At the time of the accident, plaintiff was employed by Sherwood Homes, Inc., (herein called 'Sherwood'), a corporation wholly owned and dominated by Winston Industries, Inc., (herein called 'Winston'). Both corporations were engaged in the business of manufacturing and selling mobile homes. Sherwood owned and operated one of the several regional plants in Winston's system.

The saw in question had been designed and installed at the Sherwood plant by an employee of Winston. Universal Underwriters Insurance Company (herein called 'Universal') had liability insurance on Winston and the executive officers of both Sherwood and Winston. Plaintiff sued Winston on the theory that it had designed and installed a negligently hazardous saw. It sued Universal on the theory that it insured executive officers of both Winston (whose executive officers were involved in the alleged negligent designing and installation of the saw) and Sherwood (whose executive officers were allegedly negligent in using and maintaining the defective saw and in putting plaintiff to work on it without proper training in its use and warning of its dangers).

The case was tried by a jury which returned a $350,000 verdict for plaintiff and against '. . . all defendants'. On this verdict, judgment was rendered against Winston Industries, Inc. and Universal Underwriters and they have appealed.

Appellants complain that certain procedural errors warrant reversal or remand. Those dealing with evidentiary problems will be dealt with in connection with treatment of the substantive issues to which they relate.

Winston argues that it has not been effectively cast by the jury. It argues that it was not expressly named in the verdict, that the case caption on the verdict sheet named as defendants, Universal Underwriters, Inc. and Sherwood Homes, Inc., and accordingly the verdict cannot be construed to include it as a party liable. We have decided that Winston Industries, Inc. has a good exclusive remedy defense and it will be released from liability so that the issue concerning the verdict is academic and we will bypass it.

Appellants further claim that the jury was not sufficiently charged for a general verdict and that they should have been given special interrogatories or guided more in the instructions. No specification is made in what respects the charges are deficient. We have examined the charge and think it sufficiently charges the jury. A judge need not give interrogatories except where he deems them necessary in the particular case. This is a matter mostly within his discretion. We are not inclined to interfere with it in this case.

Universal contends that the jury charges misled the jury into believing that the insurer was liable for negligence of anyone in the employ of Winston or Sherwood. In one part of the charge the jury was instructed that the insurer admitted coverage '. . . if one or more of the named individuals are guilty of negligence . . .'. The judge did not designate the individuals to whom he referred. Later in the charge, the following instruction was given to wit:

'Therefore, the first question for you to determine is whether or not any of the named executive officers, agents and employees or insured was within the above criteria guilty of negligence, in any of the respects claimed by plaintiff which was the proximate cause of plaintiff's accidental injury.'

Universal contends that under the above language, the jury could have cast it because of the negligence of any employee and that there was evidence tending to show negligence of employees who were obviously not executive officers. We think the factual basis of appellant's claim is sound but the procedural effect for which it contends is not proper under the circumstances.

It is true that there was much evidence tending to show negligence on part of simple employees. But there is also evidence of negligence by executive officers, and we might as well decide the matter here and now. A remand for new trial where inflammatory evidence may have prejudiced the jury or where there was exclusion of evidence crucial to a close issue are entirely different from this situation. The case has been thoroughly tried. A remand because of improper jury instructions would only result in a retrial on substantially the same evidence with different jury instructions. On the evidence in the record, we do not think there is any serious question but that there was negligence on the part of executive officers. Even if a jury in this case had held otherwise we would probably have to reverse such a jury verdict despite the restrictions under the 'manifest error' jurisprudence.

In Bienvenu v. Angelle, 254 La. 182, 223 So.2d 140 (1969), a leading case on the question of remand because of erroneous instructions, the court specifically reserved to the appellate forums the right to decide in each particular case whether a remand would serve the interests of justice. It stated:

'While we adhere to the principle that every error in instructing a jury does not require a remand, we are convinced that the instructions to the jury in this case were so erroneous that there was not proper judicial determination of the issues presented to it, and law and justice require us to remand.'

We are convinced that the ends of justice would be best served by deciding the case on the record as presented to us rather than a remand for a new trial, entailing substantial delays and a reconsideration of the issue of negligence of executive officers on substantially the same record.

WINSTON'S EXCLUSIVE REMEDY DEFENSE

Winston contends plaintiff has no claim against it because his exclusive remedy is in workmen's compensation under the provisions of Louisiana Revised Statutes 23:1032 because by Section 6 of the Workmen's Compensation Act (La.R.S. 23:1061), it is the statutory employee of plaintiff. That latter provision provides that a principal contracting out a portion of its business liable to an employee of the contractor as '. . . if the employee had been immediately employed by . . ..' the principal. We think the contention is correct.

There is no dispute but that the trade, business and occupation of Winston was the manufacture and sale of mobile homes and that it performed this trade through a number of separate corporations or operating divisions, one of which was Sherwood, wholly owned and controlled by Winston. As a matter of fact, Sherwood had no actual existence other than as an operating division of Winston Industries, Inc. and was its alter ego.

Winston Industries, Inc. was originally named Winston Mobile Homes, Inc. and was incorporated in Alabama. This corporation was completely run by Mr. Don Tidwell in whom all the directors and stockholders had complete confidence and to whom they delegated all authority. It did conform to legal requirements so as to maintain some corporate status.

The same individuals who formed that corporation formed several smaller corporations at strategic places throughout the south. One of these was Sherwood Homes, Inc. formed in Louisiana and which operated the Natchitoches plant at which plaintiff was injured. All the stock in Sherwood was originally owned by individuals but shortly thereafter transferred to Winston Industries, Inc. After the original directors' meeting, very little of the corporation amenities were maintained. Winston Industries, Inc. and the various other subsidiary corporations, including Sherwood, were run as a one-man company by Mr. Tidwell. Some of the personnel at the Sherwood's Natchitoches plant were actually paid with Winston Industries' checks. The checks by which plaintiff was paid indicated that the drawer was: 'Sherwood Homes Division of Winston Industries, Inc.'.

Winston Industries, Inc. had no trade, business or occupation other than that of manufacture and sale of mobile homes. Sherwood Homes, Inc. had no trade, business or occupation other than that of manufacture and sale of mobile homes. Winston Industries, Inc. controlled and owned Sherwood Homes, Inc.

In Brown v. Benton Creosoting Co., 147 So.2d 89 (La.App.2nd Cir. 1962), a creosoting company had a corporate existence but was totally controlled by Kennedy Sawmills, Inc., which effectively dominated a number of smaller entities including the creosoting corporation. Brown, an employee of the creosoting corporation, sought to recover workmen's compensation benefits against Kennedy Sawmills, Inc. The court held for recovery stating:

'The conclusion is, therefore, inescapable that Kennedy Sawmills, Inc., is the mere alter ego of Benton Creosoting Co., Inc. Keller v. Haas, 202 La. 486, 12 So.2d 238; Lindstrom v. Sauer, La.App. Orleans, 1936, 166 So. 636; Mayo v. Pioneer Bank & Trust Company, U.S.C.A.5th Cir., La., 1960, 274 F.2d 320. The effect of the arrangement was to place Kennedy Sawmills, Inc., in possession as owner and operator of the business purportedly conducted under the name of Benton Creosoting, Co., Inc. The result was that the business conducted was that of Kennedy Sawmills, Inc., over which it had full management and...