Strickland v. Transamerica Insurance Company

• Decision Date: 09 August 1973
• Docket Number: No. 72-2612.,72-2612.
• Citation: 481 F.2d 138
• Parties: Donald Bryan STRICKLAND, Jr., a minor through Mrs. Joyce Ann Lockridge Strickland, Guardian ad Litem, et al., Plaintiffs-Appellees, v. TRANSAMERICA INSURANCE COMPANY et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

481 F.2d 138 (1973)

Donald Bryan STRICKLAND, Jr., a minor through Mrs. Joyce Ann Lockridge Strickland, Guardian ad Litem, et al., Plaintiffs-Appellees, v. TRANSAMERICA INSURANCE COMPANY et al., Defendants-Appellants.

No. 72-2612.

United States Court of Appeals, Fifth Circuit.

July 3, 1973.

Rehearing and Rehearing Denied August 9, 1973.

COPYRIGHT MATERIAL OMITTED

Boris F. Navratil, Baton Rouge, La., for Transamerica Ins. Co. and others.

David W. Robinson, Baton Rouge, La., for Carner and others.

John L. Avant, Baton Rouge, La., for Strickland.

Paul H. Due, Baton Rouge, La., for Sibley and Brabham.

Walter G. Monsour, Baton Rouge, La., for Hall.

Robert J. Vandaworker, Baton Rouge, La., for Liberty Mutual Ins. Co.

Before TUTTLE, THORNBERRY and DYER, Circuit Judges.

Rehearing and Rehearing En Banc Denied August 9, 1973.

TUTTLE, Circuit Judge.

This appeal involves five consolidated lawsuits resulting from the collapse of a crane used in the erection of a large office building by Henry C. Beck Company, a building contractor. Four of the cases were brought by employees or survivors of employees of Henry C. Beck Company, the fifth being a claim by an employee of a subcontractor. The principle issue is whether these five plaintiffs are entitled to recover damages from the building superintendent employed by the Henry C. Beck Company on the building project.

The accident, which forms the subject matter of this lawsuit, occurred on October 6, 1967, during the construction of a twenty-four story office building in Baton Rouge, Louisiana. The contractor, Henry C. Beck Company, was at that time utilizing on the building site, a large tower crane capable of being elevated as construction of the building progressed. On the day of the accident the crane was being raised from the 20th to the 21st floor when it fell suddenly, killing two and injuring three workers. Killed were Donald Strickland and Ronnie Brabham, both employees of the Henry C. Beck Company. Ferd Sibley and J. Y. Hall, Beck employees, and John G. McKellar, an employee of an electrical subcontractor, were seriously injured.

The survivors of the two decedents and the three injured workers filed these actions in the United States District Court for the Middle District of Louisiana against several defendants, all but three of which were dismissed from the suit.¹ The three defendants remaining were William Edward Carner, who was employed by the Henry C. Beck Company as the building superintendent on the project, Transamerica Insurance Company, the alleged liability insurer of William Carner,² and 451 Florida Corporation, owner of the building.

Following a trial limited to the issue of liability, by its answers to special interrogatories, the jury found that Carner had been guilty of negligence and further that he was an executive officer of Henry C. Beck Company and therefore an insured under Transamerica's liability policy issued in behalf of the company.³ Thereafter, a trial was held on the issue of damages resulting in judgments in favor of the various plaintiffs against William Carner and Transamerica in amounts totaling $715,000. Carner and Transamerica now appeal, both contending that as a matter of law Carner, as an officer of the corporation, could not be held personally liable in tort to the various plaintiffs. Transamerica contends separately (and adversely to Carner) that Carner is not, for a variety of reasons, within the coverage of the liability policy issued to the Beck Company. We affirm the judgments of the trial court.

The evidence in the case shows that the crane involved in the accident was a large construction crane variously referred to as a climbing crane, tower crane, or hammer crane. During the course of the construction the tower of the crane would project through several floors of the building with a hole left in each floor just large enough to accommodate it. Prior to the accident the crane was resting on the 17th floor with the tower projecting up through the 18th, 19th and 20th floors. After the concrete on the 20th floor had been fully poured, it became necessary to "jump" the crane to its next higher position, where its base would rest on the 18th floor. In order to make the jump a special climbing ladder was attached to the 20th floor which, upon engagement of the climbing mechanism, would bear the entire weight of the crane during the jumping operation. Just prior to the accident the jumping crew had successfully maneuvered the crane through one climbing cycle. However, in attempting to engage the next higher gusset of the climbing ladder, there was a sudden loud crack and the entire crane dropped straight downward, being stopped in its downward progress only when the top cross-boom hit the 20th floor. The boom struck Strickland, Brabham, and Sibley, killing Strickland and Brabham and injuring Sibley. Hall and McKellar, who were at the base of the tower, were injured.

At trial plaintiffs proceeded on two separate theories in support of their claims that Carner should be held personally liable to them for their injuries. First they contended that Carner was negligent in making the decision to elevate the crane just one day after the concrete on the 20th floor had been poured, thus exposing this "green" concrete to excessive stress, and second, in permitting the crane to be elevated by workers who were unfamiliar with it and whom he failed to instruct or train in the proper procedures for raising the crane.

There is no dispute in this case that it was Carner who made the decision to jump the crane one day after the concrete had been poured.⁴ This appears to have been the usual procedure. However, plaintiffs' expert witness, a Mr. Morcom, testified that in his opinion the concrete on the 20th floor would have been over-stressed by the load applied to it in the process of elevating the crane and that good engineering practices had not been followed in allowing the green concrete to be subjected to such a stress. As he said:

". . . This is a very large load and you are concentrating it at one point. It\'s just too large a load to put on green concrete is what it amounts to."

Although defendants' expert witness, a Dr. Carver, was of the view that the particular concrete would have obtained in one day compressive strength more than adequate to support the weight of the crane there was, we think, sufficient evidence, provided by Mr. Morcom, from which the jury could have concluded that concrete failure was the cause of the accident. Moreover, Mr. Morcom had noted that while the concrete might have obtained sufficient compressive strength to support the crane, the concrete nonetheless would not be good enough in its other characteristics to carry down into the shoring system and not be overstressed when the crane was jumped.

Plaintiffs further established, through the testimony of Ferd Sibley, that during a prior jump the supporting concrete had developed cracks around the area of the crane shaft and that Carner had been made aware of that fact but nonetheless ordered the jump to be completed. Finally, plaintiffs showed that Carner was familiar with certain specifications in the building contract which required that during a three to seven day curing period (depending on the type of concrete used):

"The concrete shall be protected from damaging mechanical disturbance particularly load stresses, heavy shocks, and excessive vibration. All finished concrete surfaces shall be protected from damage caused by construction equipment, materials, or by rain or running water. Self-supporting structures shall not be loaded in such a way as to over-stress the concrete." (emphasis added).

With respect to their second theory plaintiffs introduced the testimony of a Mr. Steele, who qualified as an expert witness with respect to the crane in question and who stated that the procedure for jumping the crane followed at this particular job site was incorrect and unsafe. It was further established that Carner was familiar with the method which the jump crew used in elevating the crane and although he himself had been fully instructed in the proper procedures for doing so, he failed so to instruct the crew.

It is appellants' contention that even if the foregoing facts affirmatively establish a breach of a legal duty on Carner's part, it was the breach of a duty owed exclusively to the Henry C. Beck Company and not personally to the individual plaintiffs, and that as a consequence Carner cannot, as a matter of Louisiana law, be held liable to the plaintiffs.⁵ This contention is based on the well-settled principle of Louisiana jurisprudence that:

"the breach of a legal obligation by a corporate officer due and owing only to the corporation, whether it be misfeasance, malfeasance or nonfeasance, is no concern of a third party and does not give rise to any cause of action by the latter, against corporate officers." Adams v. Fidelity and Casualty Company of New York, supra, at 501.

However, it is equally well-settled, as the court in the Adams case said,

"An injury suffered by a third party which is due to the breach of a legal obligation which the corporate officer or officers owed to the third party, whether it also involved the breach of a duty due to the corporation, would give rise to a cause of action against the corporate officers for the breach of such legal obligation. It would matter not whether the breach of a legal obligation due and owing by a corporate officer to a third party . . . was the result of misfeasance, malfeasance, or nonfeasance." Id.

The difficulty, of course, in cases such as this one lies in ascertaining under what circumstances a particular duty will be deemed to be owed exclusively to the corporation, thus absolving a corporate officer of personal liability to an injured employee. The dividing line, at best, is a thin one. However, having carefully examined the case law of Louisiana we conclude that plaintif...