Travelers Insurance Company v. Brown

• Decision Date: 04 January 1965
• Docket Number: No. 21239.,21239.
• Parties: The TRAVELERS INSURANCE COMPANY, Appellant, v. Mrs. Ada Z. BROWN, Individually, and as Natural Tutrix of Ambrose Floyd Brown, Jr., Thomas Harry Brown, Sandra LaVerne Brown and Vickie Helen Brown, Appellee. v. John W. SCOTT, Appellant, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

338 F.2d 229 (1964)

The TRAVELERS INSURANCE COMPANY, Appellant, v. Mrs. Ada Z. BROWN, Individually, and as Natural Tutrix of Ambrose Floyd Brown, Jr., Thomas Harry Brown, Sandra LaVerne Brown and Vickie Helen Brown, Appellee. v. John W. SCOTT, Appellant, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellee.

No. 21239.

United States Court of Appeals Fifth Circuit.

October 16, 1964.

Rehearing Denied January 4, 1965.

COPYRIGHT MATERIAL OMITTED

C. W. Phillips, Taylor, Porter, Brooks, Fuller & Phillips, Baton Rouge, La., for The Travelers Ins. Co., defendant-appellant.

Calvin E. Hardin, Jr., Wallace A. Hunter, Baton Rouge, La., for plaintiffs-appellees-cross-appellants, David E. Cooley, Slidell, La., of counsel.

Before TUTTLE, Chief Judge, WISDOM, Circuit Judge, and McRAE, District Judge.

WISDOM, Circuit Judge.

This industrial accident tort case, a diversity action arising in Louisiana, raises issues of pleading, the interpretation of an insurance policy, and the sufficiency of evidence supporting the judgment. The district court held that the amendment of the complaints was only "clarifying" in nature and was thus not prescribed by limitation. It held that the plaintiffs were not barred by the "cross-employee" exclusion in the defendant's public liability insurance policy. Finally, in a trial without a jury, the court found that the insured was negligent and the plaintiffs were free from contributory negligence. The court awarded judgments for the plaintiffs in the total amount of $91,761.83. We affirm.

I.

Ethyl Corporation produces chlorine, a deadly gas two or three times heavier than air, at its plant in Baton Rouge, Louisiana. Ethyl uses various processes to purify its chlorine. In one of the processes the chlorine is drawn through "acid towers", steel cylinders twenty-five feet high and three feet in inside diameter. In order to dehydrate the chlorine, the gas is drawn through trays in the tower of concentrated sulphuric acid.

The acid resistant bricks that line the "acid towers" are eventually corroded away and periodically must be replaced. May 7, 1959, Ambrose Floyd Brown, a brickmason, and John Scott, a brickmason's helper, were engaged in rebricking the interior wall of Ethyl "Acid Tower A-11". The only means of entering an acid tower is from the top; Brown was lowered into the tower by a hoisting device operated by Scott, who remained at the top of the tower.

During the repair time, "Acid Tower A-11" of course was not in use for chlorine purification. Nevertheless, while Brown and Scott were at work some chlorine gas escaped into the tower at a point around fifteen feet from the top of the tower. The gas formed a cloud and, being heavier than air, descended in the tower. Both Brown and Scott inhaled some chlorine gas and began to choke; neither was able to make use of the small carbon respirator mask that had been provided. Instead of attempting to rescue Brown, Scott ran for help. In a matter of seconds two Ethyl workmen, wearing their gas masks, managed to pull Brown from the tower. Both Brown and Scott were immediately hospitalized. Brown subsequently died.

Scott filed suit September 18, 1959. Mrs. Brown, individually and as the natural tutrix of the children for Ambrose Brown, filed her complaint three days later. The complaints alleged negligence on the part of the Ethyl Corporation and were filed under the Louisiana Direct Action Statute, LSA-R.S. 22:655, against Ethyl and The Travelers Insurance Company as "the public liability insurer of Ethyl Corporation".

November 6, 1959, both the defendants moved to have the complaints dismissed on the ground that the plaintiffs' sole remedy was in workmen's compensation under the provisions of LSA-R.S. 23:1032¹ and LSA-R.S. 23:1061.² Both Brown and Scott were on the payroll of George A. Caldwell, a large industrial building contractor. Caldwell was engaged to perform brick maintenance work for the Ethyl Corporation.

May 2, 1960, Hartford Accident & Indemnity Company, the workmen's compensation insurer of George A. Caldwell, moved to intervene to recover compensation paid to the plaintiffs according to the provisions of LSA-R.S. 23:1101.³ The amounts paid were stipulated and the intervention was allowed.

August 16, 1960, the plaintiffs moved for leave to amend their complaints. The original complaints cited Travelers as the public liability insurer of Ethyl; the amended complaint alleged that Travelers was "the public liability insurer of Ethyl Corporation, and its executive officers, and directors and stockholders and its other agents, servants and employees". The injuries to the plaintiffs allegedly resulted from the negligence of the above named group. The plaintiffs filed their amended complaints without opposition on October 17, 1960.

November 18, 1960, the defendants moved again for dismissal. Again they urged that the remedy against Ethyl and its insurer through workmen's compensation was exclusive. The motion further contended that a suit against Travelers as the insurer of anyone other than the Ethyl Corporation itself was prescribed by the Louisiana one year statute of limitations, LSA-C.C. art. 3536.

January 24, 1961, the district court granted summary judgment dismissing the claims against Ethyl and Travelers as the insurer of the Ethyl Corporation. The court held that Brown and Scott, although on Caldwell's payroll, were performing work that was a part of Ethyl's trade, business, or occupation as those words are used in LSA-R.S. 23:1061. This holding would limit the plaintiffs' remedy against Ethyl to a claim under the workmen's compensation law.

At the same time, the district court refused Travelers' motion to dismiss based upon prescription. The court construed the amended complaint to be clarifying in nature; it rejected the notion that Travelers as the insurer of Ethyl's management and employees was a party different from Travelers as insurer for the Ethyl Corporation. As embodying only a clarifying change, the amended complaint related back to the date of original filing, which was well within the allotted time.

January 9, 1963, defendant moved for summary judgment on the ground that its policy afforded no recovery for Ethyl employees when injured by the negligent acts of fellow employees. January 29, plaintiffs moved for a jury trial.

February 12, 1963, the court denied both motions; the case was tried without a jury in May of 1963. The District Judge found negligence on the part of Ethyl employees and a freedom from negligence on the part of the plaintiffs. Of the $91,761.83 that was awarded in judgments, $11,577.25 was awarded to Hartford as intervenor. The defendants appealed these judgments. The plaintiffs appealed from the summary judgment dismissing the claim against Ethyl and against Travelers as the insurer of Ethyl.

II.

In this appeal, Travelers first attacks the denial of the motion to dismiss based on prescription. It urges that the question of "relation back" should be controlled by Louisiana law according to the rationale of Guaranty Trust Co. v. York, 1945, 326 U.S. 99, 65 S.Ct. 1464, 89 L. Ed. 2079, and Ragan v. Merchants Transfer & Warehouse Co., 1949, 337 U.S. 530, 69 S.Ct. 1233, 93 L.Ed. 1520.

The Federal rule on the "relation back" of amendments to pleadings, as embodied in Federal Rule 15(c), is permissive. As long as the amended complaint refers to the same transaction or occurrence that formed the basis for the original complaint and the defendant was put on notice of the claim by the first complaint, there will be no bar to amendment; even new defendants and new theories of recovery will be allowed. See Tiller v. Atlantic Coast Line R. Co., 1945, 323 U.S. 574, 65 S.Ct. 421, 89 L.Ed. 465; Hirsch v. Bruchhausen, 2 Cir. 1960, 284 F.2d 783; Bowles v. Tankar Gas, D.C. Minn.1946, 5 F.R.D. 230; 1A Barron and Holtzoff, Federal Practice and Procedure § 448.

It is unnecessary for us to decide whether the state or federal rule should apply. It is possible to accept the more restrictive rule of Louisiana, set forth as defendants contend in Martin v. Mud Supply Co., 1960, 239 La. 616, 119 So.2d 484, and still allow the amendment in question to relate back to the time of original filing.

In Martin v. Mud Supply Co., the plaintiff instituted suit against the Mud Supply Co. after an automobile that it owned was involved in a collision. The complaint alleged that the automobile was being used in the course and furtherance of the defendant's business. After the prescriptive period had expired, the plaintiff attempted to amend his complaint to include the public liability insurer for Mud Supply Co., as a party defendant. When the court determined that the automobile was not being used in the scope of Mud Supply Co.'s business, the plaintiff attempted to hold the insurer on the omnibus clause in its policy.⁴ The plaintiff asserted that the insurer's close connection with Mud Supply and its actual knowledge of the claim should act to interrupt prescription. The Supreme Court of Louisiana rejected this argument. It read LSA-R.S. 9:5801:

"The filing of a suit in a court of competent jurisdiction shall interrupt all prescriptions affecting the cause of action therein sued upon, against all defendants, including minors and interdicts."

to apply only to defendants named as party defendants. To support the conclusion that even a close connection with a party defendant and actual notice of the proceedings cannot satisfy this requirement, the Court quoted from Hill v. Barlow, 6 Rob., La., 142:

"One of the well known rules relative to prescription is, that it becomes interrupted when the party in favor of whom the time necessary to acquire it is running, has been cited to appear before a court of justice, on account of the right or claim to which the prescription would apply. This is called a `legal interruption\', and it matters not whether the suit has been brought before a court of competent jurisdiction or

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