George v. Home Indemnity Company, 27655.
| Decision Date | 10 December 1969 |
| Docket Number | No. 27655.,27655. |
| Citation | 420 F.2d 782 |
| Parties | Clifford J. GEORGE, Plaintiff-Appellant, v. HOME INDEMNITY COMPANY and National Tank Company, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Charles J. Hanemann, Jr., of O'Neal, Waitz & Henderson, Houma, La., for appellant.
Philip J. McMahon, Borowski & McMahon, Houma, La., for appellees.
Before GOLDBERG, DYER and CARSWELL, Circuit Judges.
In this diversity action, plaintiff-appellant sought to recover an award of damages for injuries received in the course of his employment. Appellant brought this action in tort, alleging that his injury was the result of the negligence of National Tank Company in the manufacture and distribution of its product. The District Court, holding that appellant's exclusive remedy lay under the provisions of the Louisiana Workmen's Compensation Act, granted appellee's Motion for Summary Judgment pursuant to Rule 56, F.R.Civ.P. We affirm.
The equipment was manufactured by National Tank at its Tulsa plant and shipped unassembled to Louisiana. In furtherance of its contract with Gulf, National Tank entered into an oral agreement with Berry Brothers General Contractors, Inc., of Berwick, Louisiana, under which Berry Brothers agreed to assemble the production unit at the McDermott yard in Bayou Beouf, Louisiana.
Appellant was employed by Berry Brothers as a general roustabout on a crew which was assembling the unit. During the assembly part of the boiler stack came loose and fell on the appellant which, according to the complaint, inflicted severe injuries on the appellant resulting in permanent-partial disability.
As in its contract with Gulf, ninety percent of National Tank's sales agreements are for assembled units. Because of the obvious difficulties in shipping preassembled large units such as the one in the present case, National Tank customarily subcontracts the assembly at or near the ultimate point of delivery. All small units are assembled by National Tank at its Tulsa plant prior to shipment.
Under its contract with National Tank, Berry Brothers supplied all labor and materials necessary for the job with the exception of a crane, crane operator and swamper. Berry Brothers billed National Tank on a per hour basis for the work performed.
The basic issue in this case is whether National Tank is to be considered the Statutory Employer of the appellant under the Louisiana Workmen's Compensation Act, La.R.S. § 23:1021-1182, particularly § 23:1061:
Louisiana R.S. § 23:1032 provides:
"The rights and remedies herein granted to an employee or his dependent on account of a personal injury for which he is entitled to compensation under this Chapter shall be exclusive of all other rights and remedies of such employee, his personal representatives, dependents or relations."
Appellant contends that in any contracting arrangement under § 23:1061, it is necessary that the employee perform services in the course of his employer's (principal's) trade, business or occupation, and that the work appellant was engaged in was not of that character.
Appellant argues that since § 23:1061 only imposes liability on a principal for "* * * compensation under this Chapter which he would have been liable to pay if the employee had been immediately employed by him * * *," it does not grant or deny compensation as such, but is effective only when read in pari materia with the other provisions of the Act and in particular § 23:1035 which governs direct employees and provides:
"The provisions of this Chapter shall also apply to every person performing services arising out of and incidental to his employment in the course of his employer\'s trade, business, or occupation in the following hazardous trades, businesses and occupations: * * *."
Appellant would apply the same "tests" for determining the trade, business or occupation of a principal that are applied in cases involving a direct employer-employee relationship.
Appellee, on the other hand, contends that the Louisiana Legislature intended that when an employer undertakes work on a contract basis, such work should be considered, a priori, a part of his trade, business or occupation, and it should not matter that he is not regularly engaged in that particular work. Thus the basis of National Tank's argument is that § 23:1061 should be construed to govern two mutually exclusive contracting situations: (1) direct contracts and (2) subcontracts. It would therefore extend liability to a principal who contracts out work which is EITHER (1) part of the management or operation of his normal, day to day trade, business or occupation OR (2) work which he has contracted to perform.
There is no authority from the Supreme Court of Louisiana squarely in point on this problem. Cases from the lower appellate courts of Louisiana which have considered the problem, either directly or in passing, appear to be scarce and equally divided.1
The construction offered by the appellee would appear to be in accordance with the liberal construction the Act demands. Spanja v. Thibodaux Boiler Works, 2 So.2d 668 (Ct.App.Orl.1941); Thibodaux v. Sun Oil Co., 40 So.2d 761 (1st Cir.Ct.App.La.1949); Isthmian S. S. Co., v. Olivieri, 202 F.2d 492 (5th Cir. 1953). Provisions governing contractors and subcontractors are well known in workmen's compensation acts. Their purpose is to prevent an employer from avoiding his compensation responsibility by interposing an independent and often impecunious contractor or subcontractor between himself and his "employees." Shird v. Maricle, 156 So.2d 476 (3rd Cir.Ct.App.La.1963).
The construction advanced by the appellee would further the purpose of the Act by imposing limited but certain liability upon employers the nature of whose work is subject to change with each new contract.2 In regard to such employments, a determination of the extent of the employer's "trade, business, or occupation" would be difficult if not impossible in many cases. Nor is it illogical to say that the nature of one's business is that which he voluntarily contracts to perform. Under appellant's proffered construction, such employers could receive the benefits of their "employees'" labor while, through technical arguments that the work is "special or separate,"3 escape most if not all danger of liability for accidents incidental to such work. Such a result would also appear to be at variance with the legal, social and economic compromise underlying the compensation principle.4 The "either-or" construction eliminates these problems without saddling an employer, whose "trade, business or occupation" is "static" and therefore more easily discernible, with unnecessary liability.5
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...Corporation, 200 So. 513 (2d Cir., La.App., 1940). 6 This test articulated in Arnold repeatedly has been approved. George v. Home Indemnity Co., 420 F.2d 782 (5th Cir. 1969); Cole v. Chevron Chemical Company, 427 F.2d 390 (5th Cir. 1970); Whittington v. Gulf Oil Corp., 337 F.Supp. 952 (W.D.......
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