Roberts v. Sewerage and Water Bd. of New Orleans

CourtSupreme Court of Louisiana
Citation634 So.2d 341
Parties92-2048 La
Decision Date21 March 1994

Page 341

634 So.2d 341
92-2048 La. 3/21/94
No. 92-C-2048.
Supreme Court of Louisiana.
March 21, 1994.

Page 342

Frank B. Hayne, III, New Orleans, for applicant.

Jacob Taranto, III, Metairie, John D. Lambert, Jr., New Orleans, for respondent.

Elmer G. Gibbons, III, Brett J. Prendergast, William D. Aaron, Jr., Bruce E. Naccari, New Orleans, for amicus curiae.

[92-2048 La. 1] DENNIS, Justice. *

The issue in this case is whether the Sewerage and Water Board of New Orleans (SWB) is immune from liability in tort to a police officer (Roberts) employed by the City of New Orleans (City) who was injured when his patrol car hit an open sewer manhole while he was in the course and scope of his police-related duties. The trial court sustained the SWB's exception of no cause of action on the basis that the SWB is not a "third person" against which the employee is entitled to seek tort damages but instead is one of those persons that the Workers' Compensation Act treats as the employer in making the compensation remedy exclusive as between it and the employee. The Court of appeal affirmed, in an unpublished opinion, holding that, although the City and the SWB are separate entities and political subdivisions, La.R.S. 23:1034 provides that workers' compensation is the exclusive remedy in cases involving employees of any political subdivision, 599 So.2d 1104. We granted certiorari, 605 So.2d 1354 (La.1992), and now reverse.

The purpose of an exception of no cause of action is to determine the sufficiency in law of the petition. The exception is triable on the face of the papers and for the purposes of determining the issues raised by

Page 343

the exception, the well pleaded facts in the petition must be accepted as true. La.C.C.P. Art. 927; Owens v. Martin, 449 So.2d 448 (La.1984); Darville v. Texaco, [92-2048 La. 2] Inc. 447 So.2d 473 (La.1984); Mayer v. Valentine Sugars, Inc. 444 So.2d 618 (La.1984); Haskins v. Clary, 346 So.2d 193 (La.1977). The general rule applicable to a trial of such exception is that an exception of no cause of action must be overruled unless the allegations of the petition exclude every reasonable hypothesis other than the premise upon which the defense is based; that is, unless the plaintiff has no cause of action under any evidence admissible under the pleadings. Haskins, supra, at 195; West v. Ray, 210 La. 25, 26 So.2d 221 (1946).

Plaintiff's petition alleged in substance: Joe J. Roberts, a resident of the Parish of Orleans, on or about April 2, 1988, was driving North on Toledano Street toward South Claiborne Avenue in New Orleans. The street was flooded, and there was a submerged open manhole, which he could not see in his lane of travel. The right front of the vehicle entered the hole, causing it to stop instantly. Roberts' head struck the steering wheel and he was thrown about inside the car, causing severe injuries, pain and suffering and related damages. The missing manhole cover was the responsibility of the Sewerage and Water Board; alternatively, the cover was missing because of improper design, construction and maintenance of the manhole structure and related appurtenances by the Sewerage & Water Board. According to the record presented for our review, the parties do not dispute the fact that at the time of the accident Roberts was in the scope and course of his employment as a New Orleans City police officer driving a patrol car on the city streets.

The Sewerage and Water Board filed an exception of no cause of action alleging that, because Roberts was a City of New Orleans police officer in the course and scope of his employment at the time of the accident, his exclusive remedy is for benefits under the Workers' Compensation Act. After considering the pleadings and some evidence by consent of the parties, the trial court sustained the SWB's exception and dismissed the petition with prejudice. [92-2048 La. 3] Roberts appealed. The court of appeal affirmed, concluding, in an opinion not designated for publication, that:

[T]he instant case concerns an employee of one entity, the City of New Orleans who has sued in tort another entity, the Sewerage and Water Board. That is prohibited by the workers' compensation law of the State of Louisiana.

The two entities are without doubt political subdivisions of the State of Louisiana albeit separate entities, and the provisions of LSA-R.S. 23:1034 provide that workers' compensation is the exclusive compulsory and obligatory remedy in cases involving employees of any political subdivision. The statute specifically spells out that policemen shall be covered by this chapter.

Workers' Compensation rests on the sound economic principle that those persons who enjoy the goods or services of a business or other systematic purposeful activity should ultimately bear the cost of the injuries or deaths of its employees that are incident to the production and distribution of its goods and services. See 13 Malone & Johnson, La.Civil Law Treatise, Workers' Compensation Law and Practice § 32 (1980) (hereinafter "Malone & Johnson"). Just as in the case of capital structures, machinery and equipment, the expected cost of injury or death to workers can and should be anticipated and provided for in advance through the medium of workers' compensation insurance, and the premiums for such insurance can be considered an item of production cost in fixing the prices or fees charged for the commodity or service. Id. To operate fairly to all parties, the compensation principle requires predictability and affordability, entailing a compromise between the employer and its employees in which each party surrenders certain advantages under the tort law in order to gain others which are of more importance to each and to society. Id. The employer gives up the immunity it otherwise would enjoy in cases where it is not at fault, and the employee surrenders his or her former right to full damages and accepts instead a more modest claim for bare essentials, payable, however, regardless of the employee's or [92-2048 La. 4] employer's fault and with a minimum

Page 344

of dispute or delay. Id. In other words, the compensation principle essentially ignores the element of blameworthiness and seeks to allocate the accident costs of an industry or undertaking to users of the product or services of the employer. 13 Malone & Johnson § 33.

Obviously, this compromise, in which the employer and employee each surrender valuable rights, could not be effectuated if either party were free to ignore the Act whenever it would be to his advantage to do so. 14 Malone & Johnson § 361. Consequently, Section 1032 of the Act provides that proceedings for compensation afford the employee his or her exclusive remedy against the employer as the result of a work-related injury. While this exclusive remedy provision does not affect liability for "an intentional act" of the employer, nor liability for a "fine or penalty under any other statute", La.R.S. 23:1032(B), as neither of these are applicable in the present case, we neither consider nor discuss them. Originally, Section 1032 accomplished its object very simply by stating that "[t]he rights and remedies herein granted to an employee ... on account of personal injury for which he is entitled to compensation ... shall be exclusive of all other rights and remedies of such employee...." Applying this principle, our courts consistently held whenever the Compensation Act is applicable, the employee could not pursue any tort remedy for damages against his employer. Later, however, a combination of forces--not the least of which were the very low level of compensation benefits and the ingenuity of Louisiana counsel--produced modifications and limitations that evoked a legislative amendment in 1976. 14 Malone & Johnson § 361. At the time of the accident in the present case, the statement of the basic element of the exclusive remedy provision read as follows:

The rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights and remedies of such employee ... against his employer, or any principal or any officer, [92-2048 La. 5] director, stockholder, partner, or employee of such employer or principal, for said injury, or compensable sickness or disease.

La.R.S. 23:1032, as amended by 1976 La.Acts No. 147 (emphasis added). The primary purpose of the 1976 amendment to Section 1032 was to extend specifically to executive officers of corporate employers and other management insiders the immunity previously enjoyed by the corporate employer alone under the section. 14 Malone & Johnson § 361. This legislation closed the "executive officer suit" loophole which exposed officers in the upper echelons of management to the prospect of tort liability for large numbers of employee accidents, impelling them to exact liability insurance from the corporate employer and thereby denying it much of the practical advantage of the exclusive remedy provision and the compromise envisioned by the compensation principle. 14 Malone & Johnson § 365, quoting W. Malone, Louisiana Workmen's Compensation Law and Practice (1st Ed.), Supp., § 366.

Because it is clear that compensation is the exclusive remedy between the employee and the employer, it is important to know precisely who is an employee. Obviously, the same principles which decide the question of whether compensation is payable, also are used to decide the question of whether a tort remedy must be denied. 14 Malone & Johnson § 363. The existence of the employment relationship is crucial, and injuries occurring either before its beginning or after its termination will by definition have been incurred by someone other than an employee, thus making the Act inapplicable. 14 Malone & Johnson § 363....

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