Vidrine v. Michigan Millers Mut. Ins. Co.

• Decision Date: 21 February 1972
• Docket Number: No. 51135,51135
• Citation: 268 So.2d 233,263 La. 300
• Parties: Theodule VIDRINE, Plaintiff, Ashy Construction Company, Intervenor-Appellant-Respondent, v. MICHIGAN MILLERS MUTUAL INSURANCE COMPANY, Defendant-Appellee-Relator.
• Court: Louisiana Supreme Court

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268 So.2d 233 263 La. 300 Theodule VIDRINE, Plaintiff,
Ashy Construction Company, Intervenor-Appellant-Respondent,
v.
MICHIGAN MILLERS MUTUAL INSURANCE COMPANY, Defendant-Appellee-Relator. No. 51135. Supreme Court of Louisiana. Feb. 21, 1972.
On Rehearing Oct. 4, 1972.
Rehearing Denied Nov. 6, 1972.

[263 La. 302] Champagne & Colomb, Patrick L. Colomb, Lafayette, for defendant-relator.

Guillory, Guillory & Guillory, Isom J. Guillory, Jr., Eunice, for plaintiff-respondent.

TATE, Justice.

The only issue before us concerns the right of an employer, who has paid workmen's compensation benefits to an injured employee, to be indemnified for such benefits by a third person whose negligence has

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caused or contributed to the employee's injuries. La.R.S. 23:1101--03. The precise issue is whether the employer, if he is negligent himself, is entitled to recover such benefits from a joint tortfeasor.

For reasons detailed by the court of appeal opinion, 242 So.2d 249 (La.App.3d Cir. 1970), the only claim before us is that of the intervenor, Ashy Construction Company, for reimbursement of the workmen's compensation benefits paid by it as employer to the original plaintiff, its employee Vidrine. Vidrine was injured at work while riding as a passenger in an Ashy company truck driven by a co-employee, Cormier. The Ashy truck was involved with a Hardy automobile in an accident caused by the negligence of both drivers. The defendant is the liability insurer (Michigan Millers) of the Hardy automobile.

Despite the negligence of the Ashy driver, the court of appeal allowed Ashy recovery[263 La. 303] for compensation benefits paid to Vidrine (who was himself free of negligence) up to the defendant's policy limits of $5,000. In so doing, the court of appeal relied on an earlier decision of this court, which it (and some other intermediate court decisions) construed as holding that the negligence of the employer is immaterial to its claim for reimbursement.

We granted certiorari, 257 La. 855, 244 So.2d 608 (1971), because we wished to re-examine the holding in that early decision, City of Shreveport v. Southwestern Gas & Electric Co., 140 La. 1078, 74 So. 559 (1919).

Before doing so, it may be appropriate to discuss the nature of the employer's right to reimbursement from a tortfeasor of compensation benefits paid to an employee injured through such third person's negligence.

This right is provided by La.R.S. 23:1101--1103 (1950). The present enactment employs substantially the same language as set forth in a 1920 amendment of our workmen's compensation act. See Act 247 of 1920, re-enacting section 7 of our workmen's compensation act. Before this 1920 amendment, and as originally enacted, the employer was merely subrogated to the right, if any, of the injured employee to recover against the third person. See: Act 20 of 1914, Section 7; Act 38 of 1918, re-enacting Section 7.

[263 La. 304] However, by the 1920 amendment the employer was granted a right independent of the employee's to be indemnified fied for compensation benefits paid to an employee because of the third person's tort; the employer's right to recover does not depend upon subrogation to the rights of the employee. Board of Commissioners, etc. v. City of New Orleans, 223 La. 199, 65 So.2d 313 (1953). In Marquette Casualty Co. v. Brown, 235 La. 245, 103 So.2d 269, 271 (1968), we summarized as follows the employer's rights to indemnification by reason of the statutory provisions here applicable:

'Considering the provisions of R.S. 23:1101, 1102 and 1103 together, it seems plain that there is but one cause of action recognized for the recovery of damages resulting from a single tort. However, the right of redress against the tortfeasor has been extended by the provisions to the injured workman's employer, who is accorded a preferential right to recover, out of the judgment for damages which may be assessed against the tortfeasor, the amount of compensation he has paid or become obligated to pay to the injured employee. This right is, of course, conditioned upon the basic right of the employee to recover damages and, according to R.S. 23:1103, if the damages awarded are for an amount less than the total compensation paid, the employer's recovery is accordingly limited to that amount. Thus, though the compensation[263 La. 305] paying employer is given the preferential right to reimbursement out of the judgment, recovery is necessarily restricted to the amount for which the tortfeasor is liable to the injured employee for the consequences of his wrongful act.'

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This summary correctly describes the Non-negligent employer's right to indemnification arising out of tort injury to his employee compensated therefor under workmen's compensation law.

If this language were literally applied to the present facts, the employer Ashy, despite its own contributory negligence (imputed to it because of the fault of its driver-employee), can recover from the joint tortfeasor insurer for the compensation benefits paid to its injured employee, Vidrine. For, Vidrine, himself being free of fault as a mere passenger, could have recovered (had he persisted with his suit) the damages caused him by the tortfeasor, subject to the perferential indemnification of his employer off the top of the plaintiff employee's award. ¹

The quoted language, however, must be viewed in the context of the question there at issue. The limited question before the court was whether the indemnification suit by the employer's compensation insurer was prescribed as in the case of tort suits, since filed more than one year after [263 La. 306] the accident. Civil Code Article 3536. The primary determination of this court was that the cause of action sounded in tort, with the prescriptive period commencing at the date of the accident and not at some later date when a right to indemnification accrued.

The court was not there concerned with the question of whether an employer could recover from the joint tortfeasor for benefits paid, despite any negligence by such employer contributing to the accident. Neither was such issue involved in Board of Commissioners, etc. v. City of New Orleans, 223 La. 199, 65 So.2d 313 (1953), perhaps the leading case analyzing the employer's right to indemnification as being independent of the employee's right to recover--the issue there being whether the employer could recover for compensation paid to an illegitimate child of a worker killed through a third person's negligence, although the illegitimate child himself was not entitled at that time to wrongful death benefits under Civil Code Article 315. See Also Thomas v. Matthews Lumber Co., 253 La. 1, 215 So.2d 832 (1963).

The precise question before us, so far as we can find, has never been passed upon by an opinion of this court.

Characterized relevantly to the present issue, the cited jurisprudence holds that the [263 La. 307] employer's right to indemnification is a statutorily created right to tort recovery against a negligent tortfeasor independent of the employee's. ² The cited jurisprudence

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does not require us to hold that a negligent employer may nevertheless be indemnified by his joint tortfeasor for benefits paid to his employee.

Since the indemnification action by the employer is in tort, we see no reason why we should not apply the usual rule in tort cases that a claimant's contributory negligence bars his recovery.

By reason of the workmen's compensation act, the employer may have paid benefits to his injured employee. However, the employer is so liable for injuries at work whether or not the negligence of a third person caused them.

[263 La. 308] The legislature may have authorized a non-negligent employer to be indemnified by the tortfeasor. Nevertheless, we find no legislative intent to permit such indemnification to an employer whose negligence has itself contributed to the employee's injuries, in contravention of the general tort principle that one himself at fault cannot recover damages caused in whole or part by his own fault. To allow a windfall to a negligent employer does not seem to be within the intent of the compensation statute; if there is to be a windfall, it should be in favor of the employee, for whose protection the compensation act was enacted and in whose protection such statute should be liberally construed.

Such a conclusion is in accord with the analysis by Professor Wex Malone in his [263 La. 309] authoritative work, Louisiana Workmen's Compensation, Section 367, at pp. 475--476 (1951):

'It would seem that if the employer himself were guilty of negligence which, in conjunction with that of the third party, brought on the accident, the employer should be denied reimbursement for the compensation he has paid the employee. Since the principle underlying Section 7 (La.R.S. 23:1101--1103) is the notion of requiring the wrongdoer to indemnify the blameless employer, this principle would be inapplicable where the employer were as guilty as the party being sued. Many decisions in other jurisdictions have so held. It cannot be successfully contended that the effect here would be to permit the employee to recover by indirection from the employer contrary to Section 34 (La.R.S. 1032) of the Compensation Act, since the [263 La. 310] employee is insisting only that the faulty employer should not be allowed a bite out of the damages to which the employee is justly entitled from the third party. However, in the one Louisiana case (Footnote cites City of Shreveport v. Southwestern Gas & Elec. Co., 145 La. 670, 82 So. 785 (1919)) in which this problem was presented the court stated that the carelessness of the employer is immaterial in his claim for reimbursement of compensation paid.' ³

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In holding that the employer's contributory negligence was immaterial to its suit for indemnification against the tortfeasor, the intermediate court in the present case relied...