Varnado v. Sanders

• Decision Date: 08 October 1985
• Docket Number: Nos. 84CA0822,84CA0823,s. 84CA0822
• Citation: 477 So.2d 1205
• Parties: Harvel Wilson VARNADO, Individually and on Behalf of His Minor Child, Charles Arthur Varnado v. John SANDERS. Harvel Wilson VARNADO, Individually, and on Behalf of His Minor Child, Charles Arthur Varnado v. Danny SANDERS.
• Court: Court of Appeal of Louisiana — District of US

Page 1205

477 So.2d 1205

Harvel Wilson VARNADO, Individually and on Behalf of HisMinor Child, Charles Arthur Varnado v.John SANDERS.

Harvel Wilson VARNADO, Individually, and on Behalf of HisMinor Child, Charles Arthur Varnado v.Danny SANDERS.

Nos. 84CA0822, 84CA0823.

Court of Appeal of Louisiana First Circuit.

Oct. 8, 1985.

On Rehearing Nov. 8, 1985.

Reggie Simmons, Franklinton, for Harvel Varnado.

Bradley Lewis and John W. Anthony, Bogalusa, for Commercial Union Assur. Co.

Dale Branch, Bogalusa, for Danny Sanders and John Sanders.

Robert McDonald, Metairie, for Hartford Ins. Co.

Before CARTER, SAVOIE and ALFORD, JJ.

CARTER, Judge.

Charles Arthur Varnado, thirteen-year-old son of plaintiff, Harvel Wilson Varnado, suffered an eye injury while in the course and scope of his employment on a dairy farm owned by defendantJohn Sanders and operated by defendantDanny Sanders.¹While unwrapping a piece of barbed wire used to secure a gate on the premises of John Sanders, Charles was struck in the left eye by the tip of the piece of barbed wire.As a result of this accident, Charles suffered a corneal laceration with loss of his iris and lens, rendering him legally blind in his left eye.²

Plaintiff, as administrator of the estate of Charles Arthur Varnado, sued Danny Sanders for worker's compensation.Plaintiff, individually and on behalf of his minor son, sued John Sanders and his liability insurer, Commercial Union Assurance Company, for personal injuries.Defendants answered the suit claiming the dairy operation was a joint venture and that plaintiff's sole recovery was in worker's compensation.

Danny Sanders then filed a third-party demand against Hartford Accident and Indemnity Company(Hartford).Hartford had issued a worker's compensation insurance policy to John Sanders to cover farm and dairy hands.The policy had been renewed every year since it was originally taken out some time ago, even though John Sanders had ceased his own dairy operation around 1970.Danny had no worker's compensation insurance.In his third-party demand, Danny seeks to have Hartford assume his defense in the worker's compensation claim or pay his attorney's fees in lieu thereof.Danny claims that since he and his father are engaged in a joint venture, Hartford's coverage of his father enures to his benefit.All of the suits were consolidated.

In a bench trial, the trial judge found Danny Sanders and John Sanders were engaged in a joint venture and that plaintiff's only remedy was in worker's compensation.Danny and John were held solidarily liable to plaintiff for worker's compensation benefits.In his reasons for judgment, the trial judge set forth that plaintiff failed to prove there was an unreasonable risk of harm in the gate or barbed wire which injured Charles, that neither defendant was negligent or liable to plaintiff under any other theory of tort liability, and that the cause of the injury was Charles' own negligence.

Penalties of 12% on all past due worker's compensation, $3,500.00 in attorney's fees, and all expert fees were assessed against Danny and John in solido.Since the trial court found a joint venture existed, Hartford, by virtue of its policy with John Sanders, was held liable to pay all costs assessed against Danny Sanders.Hartford was also cast for an additional $3,500.00 in attorney's fees and costs on Danny Sanders' third party demand.

Hartford appealed the finding of a joint venture as well as all other findings against it.Plaintiff appeals the finding of a joint venture and the dismissal of its tort suit against John Sanders.³

ASSIGNMENTS OF ERROR

Hartford lists the following six assignments of error:

1.The trial court erred in finding that a joint venture existed between John Sanders and Danny Sanders;

2.The trial court erred in finding that Charles Varnado was an employee of John Sanders;

3.The trial court erred in allowing plaintiff to amend his pleadings to add John Sanders and Hartford as defendants after the trial on the merits, even without service on these defendants;

4.The trial court erred in awarding penalties, costs, and attorney's fees in favor of plaintiff against John Sanders and granting judgment over and against Hartford through the third party demand of Danny Sanders;

5.The trial court erred in awarding attorney's fees and costs in favor of Danny Sanders on the third party demand against Hartford for allegedly failing to defend Danny Sanders in this worker's compensation matter; and

6.The trial court erred in finding the Hartford's worker's compensation policy afforded coverage to an employee of Danny Sanders.

Plaintiff lists the following twelve assignments of error:

1.Whether a valid, legally recognizable joint venture existed between John Sanders and Danny Sanders on the date and at time of the accident complained of;

2.Whether the trial court erred in refusing plaintiff's motion to compel pre-trial discovery of pre-trial statements of Danny Sanders and John Sanders, and, further, in refusing to require defendants to introduce those statements in evidence on the trial of this cause;

3.If there be a valid joint venture in existence between John Sanders and Danny Sanders at the time of the accident complained of, whether the joint venture was effective as to Charles Arthur Varnado to preclude a successful tort action against John Sanders, and whether the employer-employee relationship between John Sanders and Charles Arthur Varnado precluded such a tort action;

4.Whether the doctrine of strict liability applies to the injury sustained by Charles Arthur Varnado;

5.Whether contributory negligence or comparative negligence is applicable in cases of strict liability;

6.Whether the trial court erred in finding that Charles Arthur Varnado was guilty of contributory or comparative negligence, or assumed the risk (victim fault);

7.Whether plaintiff is entitled to maximum statutory benefits, penalties and attorney's fees under the worker's compensation;

8.Whether the trial court erred in failing and refusing to grant plaintiff attorney's fees for answering the appeals of defendants and in the prosecution of plaintiff's own appeal;

9.Whether the trial court erred in refusing to recognize Professor Wiley Poole as an expert witness as a safety engineer, with experience in farm safety;

10.Whether the trial court erred in refusing to accept Chester Jenkins as an expert witness;

11.Whether the expert witness fees of Melville Wolfson and Professor Wiley Poole should be allowed; and,

12.Quantum in tort.

HARTFORD'S AND PLAINTIFF'S ASSIGNMENT OF ERRORNO. 1

In these assignments of error, plaintiff and Hartford contend that the trial court erred in finding that a joint venture existed between John and Danny Sanders.

In the recent case of Cajun Electric Power Co-Op, Inc. v. McNamara, 452 So.2d 212, 215 and 216(La.App. 1st Cir.1984), writ denied458 So.2d 123(La.1984), this court reviewed the elements of a joint venture:

(1) A contract between two or more persons;

(2) A juridical entity or person is established;

(3) Contribution by all parties of either efforts or resources;

(4) The contribution must be in determinate proportions;

(5) There must be joint effort;

(6) There must be a mutual risk vis-a-vis losses;

(7) There must be a sharing of profits.

We further set forth:

The existence or nonexistence of a joint venture is a question of fact, although what constitutes a joint venture is a question of law.Grand Isle Campsites, Inc. v. Cheek, 262 La. 5, 262 So.2d 350(La.1972).There are no hard and fast legal rules fixing the requisites for a joint adventure; each case must be considered sui generis and care must be exercised that consideration is given to the usages and practices characteristic of the particular commercial undertaking sought to be labeled a 'joint venture.'Hero & Company v. Farnsworth & Chambers Co., 236 La. 306, 107 So.2d 650(La.1958).

Our review of the trial court's reasons for judgment leads to the conclusion that the trial judge was manifestly erroneous in his application of his factual findings to the law.SeeArceneaux v. Domingue, 365 So.2d 1330(La.1978).In analyzing the trial court's findings, we quote the reasons for judgment, in pertinent part as follows:

A fair preponderance of the testimony reveals the following: John Sanders operated a dairy until sometime about 1970.Thereafter, and although he maintained his farm property upon which there was a dairy barn, fences, pastures and related equipment, his principal source of income was derived from hauling milk for one of the local dairy cooperatives.As early as 1978he and his son, Danny, began discussing the possibility of going into a dairy venture together whereby Danny would own one-half of the cows and John would own the other half.John's contribution to the operation would be in the form of furnishing land and equipment.The labor was to be furnished by Danny.They originally approached Mr. Robert Jones, the FHA County Supervisor, about borrowing money from the Farmers Home Administration.Due to administrative rule changes within the FHA a joint loan would not be considered.Even if the financially more affluent John Sanders would have met FHA's criteria to qualify for the loan, it would have been made at a rate of 12% interest, whereas an individual loan to Danny would be at a 6% interest rate.Knowing that John Sanders was an experienced dairyman and would be part of this venture by providing additional working capital in the form of land, dairy barn, milking and other related equipment estimated by Jones to have a value in excess of $40,000.00, Jones proceeded to make a loan to Danny Sanders, individually, in order that he could purchase dairy cattle.Mr. Jones further testified that without John Sanders participation he would not have made the loan to Danny Sanders.Additionally, the FHA required that Danny procure a lease from his...