Saucier v. U.S. Fidelity & Guaranty Co., 5572

• Decision Date: 03 July 1973
• Docket Number: No. 5572,5572
• Parties: John SAUCIER v. U.S. FIDELITY AND GUARANTY COMPANY et al.
• Court: Court of Appeal of Louisiana — District of US

Page 584

280 So.2d 584

John SAUCIER v. U.S. FIDELITY AND GUARANTY COMPANY et al.

No. 5572.

Court of Appeal of Louisiana, Fourth Circuit.

July 3, 1973.

Roy M. Maughan, Baton Rouge, for plaintiff-appellant.

Montgomery, Barnett, Brown & Read, Wood Brown ,III, New Orleans, for defendants-appellees.

Before GULOTTA, STOULIG and BOUTALL, JJ.

GULOTTA, Judge.

This is an appeal from a judgment maintaining an exception of no cause of action dismissing plaintiff's suit ex delicto against corporate officers and their liability insurer.

The petition alleges that the executive officers of Circle, Inc., plaintiff's employer, while in the course and scope of their employment removed, caused or allowed to be removed, or knew, or should have known, about the removal of a protective wire screen from the engine fan of a dragline. Plaintiff's hand was injured when it came in contact with the fan.

Exceptions of no cause of action were filed by M. J. Wolfe, Arnold Wolfe, and their liability insurer, U.S. Fidelity & Guaranty Company . The trial judge maintained defendants' exception ¹ on the grounds that the duties alleged to have been violated were duties owed by the individual defendants to the corporation as opposed to duties owed by them in their individual capacity personally to the plaintiff.

We are faced with the question of the duty imposed on corporate officers to third-party employees and whether the petition alleges a breach of that duty.

Our jurisprudence has recognized a distinction between the duty owed by a corporate officer to the corporation and that owed individually to third person coemployees.

The court in the case of Maxey v. Aetna Casualty & Surety Company, 255 So.2d 120 (La.App.3rd Cir. 1971), in holding that a petition alleging defendant failed to install safeguards in sawmill machinery failed to state a cause of action against the corporate officers personally, clearly sets out the distinction on page 122 of its opinion as follows:

'We think an officer or director of a corporation owes a duty to the corporation which is separate and independent of any duty which he may owe to an employee or to a third person. The duty which he owes to the corporation may include, among other things, a duty to provide safe working conditions for employees and to exercise reasonable care in protecting the corporation from legal liability. If he fails to perform a duty owed to the corporation, he may be answerable to that corporation for the damages which it sustained because of his failure or neglect. The breach of a legal duty which a corporate officer owes Exclusively to the corporation, however, whether his conduct is classified as nonfeasance, misfeasance or malfeasance, is of no concern to a third party, and it does not give rise to any cause of action in tort by the latter against the corporate officer individually. * * *'

The court went on to say:

'The only duty which an executive officer of a corporation owes to a third person, whether he be an employee of the corporation or a complete stranger, is the same duty to exercise due care not to injure him which any person owes to another. If an injury is sustained by a third party as the result of the independent negligence of the corporate officer, or as the result of a breach of the duty which that officer, as an individual, owes to the third party, then the injured third party may have a cause of action for damages against the officer personally. See LSA-C.C. Arts. 2315 et seq.'

We held in the case of Dever v. Employers Liability Assurance Corp ., Ltd., 266 So.2d 455 (La.App.4th Cir. 1972), that failure to provide periodic inspections of an air system did not violate the duty corporate officers personally owed to an employee, i.e., to use due care not to injure him, citing Louisiana Civil Code 2315 et seq. See also Berry v. Aetna Casualty & Surety Company, 240 So.2d 243 (La.App.2nd 1970).

In Dulaney v. Fruge , 257 So.2d 827 (La.App.3rd Cir. 1972), plaintiff sustained injuries in an oil well fire and sought to recover from the executive officers of his corporate employer for the officers' failure to provide proper safety procedures and safe equipment on a diesel engine. The court, in finding for defendant, reasoned that even if defendant failed to provide proper safety procedures and safe equipment, such Failure constituted a breach of duties owed exclusively to the corporation and not to plaintiff.

It is significant in the foregoing cases relief was denied when sought against the corporate officers personally based on the defendant's failure to provide safety devices or safety procedures.

However, in Adams v. Fidelity and Casualty Co. of New York, 107 So .2d 496 (1958) the Court of Appeal, First Circuit, held that a cause of action is alleged by a coemployee against corporate officers individually where the officers saw or should have seen an iron reel in a perilous or dangerous position and failed to remove the hazard resulting in the coemployee's death. In rejecting the corporate officer's defense that the allegations state only a breach of duty owed to the corporation and not to third-party employees because the petition alleges a failure to perform a duty or 'non-feasance' and did not allege an active and affirmative negligent act or willful and deliberate act, the court stated on page 508:

'We believe that the better rule is stated in American Jurisprudence supra, in which it is stated therein that 'the more direct and fundamental rule, accepted in principle at least by all the authorities, is that a director, officer, or agent of the corporation is liable to third persons for injuries proximately resulting from his breach of duty to use care not to injure such...