Freeman v. Chevron Oil Co., 74-2445

• Citation: 517 F.2d 201
• Decision Date: 07 August 1975
• Docket Number: No. 74-2445,74-2445
• Parties: Carlton H. FREEMAN, Plaintiff-Appellant, v. CHEVRON OIL COMPANY, Defendant-Third Party Plaintiff-Appellee, Herb's Welding, Inc., et al., Intervenor, The North West Insurance Company, Third-Party Defendants.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 201

517 F.2d 201

Carlton H. FREEMAN, Plaintiff-Appellant, v. CHEVRON OIL COMPANY, Defendant-Third Party Plaintiff-Appellee Herb's Welding, Inc., et al., Intervenor The North West Insurance Company, Third-Party Defendants.

No. 74-2445.

United States Court of Appeals Fifth Circuit.

Aug. 7, 1975.

Joseph L. Waitz, Houma, La., for plaintiff-appellant.

William A. Porteous, III, New Orleans, La., for Chevron Oil Co., Herb's Welding and others.

Abraham Gerber, New Orleans, La., for intervenor.

H. Edward Weidlich, Jr., New Orleans, La., for Employers Surplus.

Appeal from the United States District Court for the Eastern District of Louisiana.

Before GIBSON ^*, THORNBERRY and AINSWORTH, Circuit Judges.

AINSWORTH, Circuit Judge:

The question for decision is whether the district court erred in granting defendant's motion for judgment n. o. v. by its ruling that defendant was the "statutory employer" of plaintiff under LSA-R.S. 23:1061 ¹ and consequently that plaintiff's exclusive remedy in his suit for damages for personal injuries, was under the Louisiana Workmen's Compensation Statute, thereby overturning a jury verdict of $26,700 in damages in favor of plaintiff.

This suit arises out of an accident which occurred on June 26, 1972, on a fixed drilling platform in the Gulf of Mexico, 2.9 miles from the Louisiana coastline. Herb's Welding, Inc., an independent contractor, was performing certain work for Chevron Oil Company on a drilling platform of the company, under a written contract. The contract is not in evidence but according to Chevron's third party complaint (para. 6), "Herb's agreed and contracted as an expert, professional independent contractor to furnish personnel, services and supplies to Chevroil (a trade name used by Chevron) . . . ." However, it is clear from the testimony that on this occasion Herb's employees were engaged in the installation of a sewerage plant or system for the bunkhouse on the platform for pollution control. Plaintiff Carlton H. Freeman, a welder employed by Herb's, was injured on the platform when an oxygen cylinder was dropped on his foot. At the time Freeman was injured he and his fellow employees were "putting in a septic tank" to take care of the sewerage from the bunkhouse, and Freeman was welding the septic tank. He filed a diversity tort action under LSA-C.C. Article 2315, the general tort statute of Louisiana, for damages for personal injuries, alleging causal negligence of Chevron. ²

By special written interrogatories the jury was asked first to decide whether plaintiff was engaged in "performing the trade, business, or occupation of the defendant Chevron Oil Company." An affirmative answer would have established Chevron as the "principal" or "statutory employer" of plaintiff under LSA-R.S. 23:1061, thereby relegating plaintiff to Louisiana workmen's compensation as his exclusive remedy. The jury answered, however, in the negative, that Freeman was not so engaged and rendered a verdict in his favor for damages in the sum of $26,700, finding that Chevron's negligence was the proximate cause of plaintiff's injury.

The district court entered a judgment on the verdict, ³ but subsequently on motion by Chevron granted a judgment n. o. v. in Chevron's favor, vacating and setting aside the former judgment, and dismissing plaintiff's suit. In his memorandum of reasons supporting the judgment n. o. v. the district judge held that the finding by the jury that plaintiff was not engaged in performing the trade, business or occupation of the defendant was erroneous and contrary to the law and evidence.

Plaintiff contends on appeal that the district court erred in overturning the jury verdict and that the "statutory employer" defense under LSA-R.S. 23:1061 was neither applicable nor properly before the court. We agree with appellant and therefore reverse and vacate the judgment n. o. v. Accordingly, we direct that the original judgment in the sum of $26,700 be reinstated.

Rule 8(c), Fed.R.Civ.P., requires that in pleading to a preceding pleading, a party shall set forth affirmatively certain enumerated defenses "and any other matter constituting an avoidance or affirmative defense." "Whether a particular matter is to be regarded as an affirmative defense is to be determined by state law." Seal v. Industrial Electric, Inc., 5 Cir., 1966, 362 F.2d 788, 789. In Seal, as here, the defense asserted was that plaintiff's exclusive remedy was workmen's compensation. Seal brought an action against his employer, Industrial Electric, Inc., alleging an assault and injury by employer's foreman. Industrial filed a motion to dismiss on the ground that the exclusive remedy of Seal was under the Mississippi Workmen's Compensation Act. The motion was granted and Seal appealed. We reversed and remanded, concluding, after examining Mississippi law, that "(T)he employer was required to assert as an affirmative defense that the assault upon the appellant was one which arose out of and in the course of employment within the coverage of the Mississippi Act." 362 F.2d at 789.

Under Louisiana law the plea of "statutory employer" under the provisions of LSA-R.S. 23:1061, whether it be the basis of a suit or a defense, is an affirmative plea, and the burden of proof is upon the party asserting it. James v. Lykes Bros. S. S. Co., La.App., 1965, 175 So.2d 444, 448; Duplechin v. Pittsburgh Plate Glass Company, La.App., 1972, 265 So.2d 787, 790. Cf. Seal v. Industrial Electric, Inc., supra, and Roelofs v. Lewals, Inc., W.D.La., 1972, 344 F.Supp. 1003, 1010 n.10.

In the present case, Chevron failed to plead the affirmative defense of "statutory employer," as required by Rule 8(c), Fed.R.Civ.P. The answer and the third party complaint of Chevron show that it relied instead on a general denial of negligence, on allegations that plaintiff's own negligence caused the accident, and that there was a breach by Herb's Welding, Inc. of its contractual warranty with Chevron. The record discloses that until the actual time of trial, Chevron did not regard itself as the employer of Freeman. As we have noted previously, Chevron alleged in its third party complaint that under its written contract Herb's agreed as an independent contractor to furnish personnel, and of course plaintiff Freeman was an employee of Herb's. Further indicative of Chevron's intention to disclaim Freeman as its employee is the following language in the pretrial order, para. 6b:

"Defendant, Chevron Oil Corporation will contend that on January 26, 1972 Carlton Freeman was an employee of Herb's Welding. . . ."

Listed as a pending motion in the pretrial order is the following: "Chevron Oil Corporation will bring a motion to dismiss and/or motion for summary judgment based upon the fact that the compensation act afforded plaintiff is (his) exclusive remedy." However, defendant failed to file either motion. Moreover, as already noted, plaintiff was at the time receiving Longshoremen and Harbor Workers' compensation from Herb's Welding, Inc. The asserted intention of Chevron to file these motions can hardly be presumed to place plaintiff on notice that the statutory-employer defense under the Louisiana Act was contemplated. On the morning of trial counsel for plaintiff was informed that Chevron would urge the defense. Timely objection was overruled by the district court, erroneously we believe, on the basis that plaintiff had ample notice of this defense in the pretrial order where it was stated that Chevron would bring a motion to dismiss based upon the fact that compensation was plaintiff's exclusive remedy. Such a motion, as we have noted, was never filed. While there is some indication in the record that the district judge believed that plaintiff desired to proceed with the trial regardless, instead of attempting to obtain a continuance, the transcript shows that counsel for plaintiff vigorously and repeatedly throughout the entire trial protested the introduction of evidence by Chevron pertaining to the statutory-employer defense. ⁴ But even if the defendant Chevron had pled an affirmative defense, as required by the Federal Rules of Civil Procedure and local law, it must also prove the defense as well. ⁵ This defendant failed to do.

The district court held in granting judgment n. o. v. that Chevron was in the business of drilling for offshore oil, that Freeman was assigned the job of installing pollution control equipment on the Chevron rig, and that "Clearly, the evidence presented at trial forces the conclusion that the activity being performed by the plaintiff was 'essential' to Chevron's 'trade, business, or occupation.' The defendant Chevron, therefore, was necessarily the plaintiff's statutory employer." The district judge cited as authority for his holding our decisions in Arnold v. Shell Oil Company, 5 Cir., 1969, 419 F.2d 43; Cole v. Chevron Chemical Company-Oronite Division, 5 Cir., 1973, 477 F.2d 361; and Duhon v. Texaco, Inc., 5 Cir., 1974, 490 F.2d 91. In our view, after careful consideration of the record, we find that defendant failed to meet the proper test and that the district judge was in error in concluding that it did.

We have pointed out that the evidence shows that plaintiff and his co-workers from Herb's were installing a pollution control sewerage system on the drilling platform. Defendant Chevron's burden was to submit by a preponderance of evidence proof that installation of the sewerage system was part of its regular trade, business or occupation, so closely related thereto as to become an integral part thereof, and that it was essential to Chevron's business. The only evidence which Chevron produced in this regard was the testimony of the witness, Waldo J. Baudouin, manager of the Property Tax and Insurance Division of Chevron and an attorney at law who had been employed by the company for 28 years. He testified that Chevron Oil Company is engaged in the exploration, production, transportation and...