Roadrunner Motor Rebuilders, Inc. v. Ryan

• Decision Date: 22 May 1992
• Docket Number: No. 91,91
• Citation: 603 So.2d 214
• Parties: ROADRUNNER MOTOR REBUILDERS, INC., and Louisiana Employers Safety Association (a Self-Insured Fund) v. Hattie RYAN, Champion Insurance Company and Fireman's Fund Insurance Company. CA 0619.
• Court: Court of Appeal of Louisiana — District of US

Page 214

603 So.2d 214

ROADRUNNER MOTOR REBUILDERS, INC., and Louisiana Employers

Safety Association (a Self-Insured Fund) v. Hattie RYAN, Champion Insurance Company and Fireman's Fund

Insurance Company.

No. 91 CA 0619.

Court of Appeal of Louisiana,

First Circuit.

May 22, 1992.

Rehearing Denied Aug. 12, 1992.

Daniel R. Atkinson, Jr., Baton Rouge, for plaintiffs-appellees Roadrunner Motor Rebuilders, Inc., et al.

Stephen E. Broyles, Baton Rouge, for intervenor-appellant Earl Brooks.

Before WATKINS, CARTER and FOIL, JJ.

CARTER, Judge.

This is an appeal from a trial court judgment, granting a motion for summary judgment filed by an employer and its compensation insurer, and denying a motion for summary judgment filed by the injured worker.

FACTS

On July 1, 1987, Hattie Ryan was driving a 1976 Cadillac Calais south on Scenic Highway in Baton Rouge when she was involved in an accident with a 1977 Ford pickup operated by Earl Brooks. At the time of the accident, Brooks was in the course and scope of his employment with Roadrunner Motor Rebuilders, Inc. (Roadrunner). Brooks sustained severe injuries as a result of the accident. Thereafter, Roadrunner's worker's compensation insurance carrier, Louisiana Employers Safety Association (LESA), paid weekly worker's compensation and medical benefits to Brooks.

On December 2, 1987, Roadrunner and LESA filed a suit to recover worker's compensation and medical benefits paid to Brooks. Named as defendants were Ryan; her automobile liability insurer, Champion Insurance Company; and Fireman's Fund Insurance Company (Fireman's Fund), the uninsured motorist carrier of the truck operated by Brooks. Thereafter, on January 26, 1988, Fireman's Fund invoked a concursus proceeding, naming Roadrunner, LESA, and Brooks as defendants. Fireman's Fund alleged that Brooks' damages exceeded the policy limits of the Champion policy, which was the only available liability insurance. Fireman's Fund deposited into the registry of the court $100,000.00, representing the policy limits of the underinsured motorist coverage provided by Fireman's Fund.

On April 27, 1988, Brooks intervened in the proceedings, seeking to recover the deposited funds in preference to the demands of Roadrunner and LESA. Brooks alleged that his damages exceeded any payments received from Roadrunner or LESA.

Subsequently, Roadrunner and LESA filed the instant motion for summary judgment, alleging that they were entitled to the $100,000.00 deposited by Fireman's Fund as reimbursement for compensation and medical benefits paid to Brooks. Brooks opposed Roadrunner's and LESA's motion for summary judgment and filed his own motion for summary judgment, seeking to recover the $100,000.00 deposited by Fireman's Fund.

After a hearing, the trial court denied both motions for summary judgment. Thereafter, on June 27, 1990, Brooks filed a motion for reconsideration of the motions for summary judgment. The parties also entered into a stipulation that Brooks would be entitled to a general damage award of $300,000.00 and that LESA had paid Brooks $16,503.08 in weekly compensation benefits as of May 31, 1990, and $96,020.67 in medical expenses. The parties further stipulated that Ryan's liability limits were $10,000.00 and that uninsured motorist coverage was $100,000.00.

Thereafter, the trial judge, interpreting the language of LSA-R.S. 23:1103, determined that the employer and the worker's compensation carrier were entitled to the funds deposited in the concursus proceeding. The trial court then rendered judgment, granting Roadrunner's and LESA's motion for summary judgment and denying Brooks' motion for summary judgment.

From this adverse judgment, Brooks appeals, raising the following issues:

1. On the date of this accident, July 1, 1987, did R.S. 23:1103 allow an employer or compensation self-insurer to receive insurance proceeds when those proceeds are insufficient to compensate the employee for his noneconomic losses for pain and suffering?

2. Is the amendment to R.S. 23:1103 providing the employer the right to first dollar recovery without regard to characterization of damages, effective January 1, 1990, retroactive in its application?

3. Does an exclusion in the Fireman's Fund policy, that the insurance does not apply to the direct or indirect benefit of any insurer or self-insurer, bar recovery by The Fund [LESA]?

RETROACTIVITY OF LSA-R.S. 23:1103(B)

Prior to its amendment in 1989, LSA-R.S. 23:1103 provided as follows:

In the event that the employer or the employee or his dependent becomes party plaintiff in a suit against a third person, as provided in R.S. 23:1102, and damages are recovered, such damages shall be so apportioned in the judgment that the claim of the employer for the compensation actually paid shall take precedence over that of the injured employee or his dependent; and if the damages are not sufficient or are sufficient only to reimburse the employer for the compensation which he has actually paid, such damages shall be assessed solely in his favor; but if the damages are more than sufficient to so reimburse the employer, the excess shall be assessed in favor of the injured employee or his dependent, and upon payment thereof to the employee or his dependent, the liability of the employer for compensation shall cease for such part of the compensation due, computed at six per cent per annum, and shall be satisfied by such payment.

No compromise with such third person by either the employer or the injured employee or his dependent shall be binding upon or affect the rights of the others unless assented to by him.

In Brooks v. Chicola, 514 So.2d 7, 13 (La.1987), the Louisiana Supreme Court determined that LSA-R.S. 23:1103 prevents employees from recovering for loss of earnings and medical expenses from both the tortfeasor and the compensation carrier. The court reasoned that, because worker's compensation benefits do not compensate an employee for his pain and suffering, reimbursement to compensation carriers under LSA-R.S. 23:1103 could only be made from the portion of an employee's damage award for loss of earnings or medical expenses. The court stated, "What was never paid cannot be reimbursed." Brooks v. Chicola, 514 So.2d at 13. According to the supreme court, an injured worker, as any other tort victim, is entitled to his full recovery for non-economic losses. There should be no reduction in the injured worker's award for pain and suffering simply to give a compensation insurer full reimbursement. Brooks v. Chicola, 514 So.2d at 13.

By Acts 1989, No. 454, the legislature amended LSA-R.S. 23:1103, effective January 1, 1990. The pertinent aspect of the amendment is the addition of section B, which provides as follows:

The claim of the employer shall be satisfied in the manner described above from the first dollar of the judgment without regard to how the damages have been itemized or classified by the judge or jury. Such first dollar satisfaction shall be paid from the entire judgment, regardless of whether the judgment includes compensation for losses other than medical expenses and lost wages.

The recent amendment of the statute has been described as legislatively overruling Brooks v. Chicola. In Harris v. Ballansaw, 576 So.2d 602, 604 (La.App. 4th Cir.1991), and Harrison v. Otis Elevator Company, 935 F.2d 714, 718-19 (5th Cir.1991), the courts gave the 1989 amendment to LSA-R.S. 23:1103 prospective effect only. In Harrison, 935 F.2d at 719, the U.S. Fifth Circuit Court of Appeals stated that "[t]he amendment at issue is substantive in nature, affecting vested rights," and as a consequence, the statute should not be applied retroactively.

In contrast, in St. Paul Fire & Marine Insurance Company v. E.R. Smith, Jr. d/b/a E.R. Smith Electrical Contractor, et al., 596 So.2d 272 (La.App. 3rd Cir.1992), decided on March 11, 1992, under docket number 90-954, our brethren of the Third Circuit Court held that the amendment to LSA-R.S. 23:1103 B is interpretive and that the "clear intent of the legislative amendment was to override the supreme court's interpretation" of that statute in Brooks v. Chicola, 514 So.2d 7 (La.1987) and "to reinstate the law to the interpretation which it had been given prior to the Brooks decision."

We have carefully reviewed this issue and find that the 1989 amendment to LSA-R.S. 23:1103, and specifically LSA-R.S. 23:1103 B, cannot be given retroactive effect. Interpretive, procedural, or remedial legislation may be applied retroactively, while substantive legislation applies prospectively only. LSA-C.C. art. 6; LSA-R.S. 1:2; Harrison v. Otis Elevator Company, 935 F.2d at 719; Hawn Tool Co. v. Crystal Oil Co., 514 So.2d 636, 639 (La.App. 2nd Cir.1987). Substantive acts are those acts which create, confer, define, or destroy rights, liabilities, causes of action, or legal duties. Harrison v. Otis Elevator Company, 935 F.2d at 719; Percle v. Oubre, 564 So.2d 352, 359-60 (La.App. 1st Cir.), writs denied, 567 So.2d 611, 613 (La.1990); Hawn Tool Company v. Crystal Oil Company, 514 So.2d at 639.

Brooks v. Chicola resolved a conflict among the Louisiana appellate courts and held that compensation carriers had no right to reimbursement from an employee's damage award for pain and suffering. Brooks v. Chicola, 514 So.2d at 10-14. Prior to the 1989 amendment of LSA-R.S. 23:1103, an employee's recovery for pain and suffering was not subject to the reimbursement claims of the employer. Robertson v. Employer's Casualty Company, 546 So.2d 263, 265-67 (La.App. 1st Cir.1989); Thompson v. Petrounited Terminals, Inc., 536 So.2d 504, 517 (La.App. 1st Cir.1988), writs denied, 537 So.2d 212, 213 (La.1989); Whitehead v. Fireman's Fund Insurance Company, 529 So.2d 82, 87-88 (La.App. 3rd Cir.), writ denied, 532 So.2d 119 (La.1988); Senez v. Grumman Flexible Corp., 518 So.2d 574, 578 (La.App. 4th Cir.1987), writ denied, 521 So.2d 1151 (La.1988). The amendment purports to give the...