Case ID: so2d_258/html/0199-01.html
Source: Caselaw Access Project
Author: {"author": "CHASEZ, Judge. REDMANN, Judge", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Roberta KISTNER, Widow of Samuel J. CRABTREE v. BETHLEHEM STEEL CORPORATION.
    No. 4788.
    Court of Appeal of Louisiana, Fourth Circuit.
    Feb. 7, 1972.
    Dissenting Opinion Feb. 23, 1972.
    Rehearing Denied March 7, 1972.
    Writ Granted May 1, 1972.
    
      Frank S. Bruno, New Orleans, for Roberta Kistner Crabtree.
    James C. Murphy, Jr., of Sessions, Fish-man, Rosenson, Snellings & Boisfontaine, New Orleans, for Bethlehem Steel Corp.
    Before CHASEZ, ' REDMANN and BOUTALL, JJ.
   CHASEZ, Judge.

Plaintiff, Roberta Kistner, widow of Samuel Crabtree, filed suit against defendant, Bethlehem Steel Corporation, for recovery of death benefits under the Louisiana Workmen’s Compensation Act.

Plaintiff’s deceased husband was mortally injured during the course and scope of his employment with the defendant on May 13, 1963. As a result of that accident defendant paid to the plaintiff workmen’s compensation benefits at the rate of $35.00 per week from that time until January 10, 1969, at which time compensation payments were stopped by defendant. A total of approximately $10,345.00 has been paid in compensation and since the maximum amount allowed by law to plaintiff under the compensation act is $14,600.00, a total of approximately $4,255.00 remains unpaid.

Prior to the filing of this suit plaintiff instituted a suit in tort for the wrongful death of her husband against American Insurance Company, Mason-Rust, Mason & Ranger-Silas Mason Co., Inc., The Rust Engineering Company, The Ross Corporation and other parties in the United States District Court for the Eastern District of Louisiana which case bore docket number 14545. On January 7, 1969 an agreement in compromise was reached between the plaintiff and American Insurance Company by which plaintiff received $15,000.00 cash in full settlement of all claims against the defendants in cause #14545, United States District Court, Eastern District of Louisiana, New Orleans, and an indemnity for any workmen’s compensation benefits actually paid to her by Bethlehem Steel Corporation. On January 10, 1969 all compensation payments plaintiff was then receiving were stopped by the defendant. Plaintiff then instituted this suit on October 15, 1969 to recover the payments allegedly due.

Defendant contends that because plaintiff compromised and settled her claim in tort for $15,000.00, a sum which exceeds the total amount due her under the Workmen’s Compensation Act, they are entitled to a credit of monies to be paid, and, therefore, are absolved from any further compensation payments. Defendant has waived its right to be repaid the sum of $10,-345.00, this amount being the total paid to plaintiff before compensation payments were stopped, and does not seek repayment of these funds. However, plaintiff does assert a credit for the amount of the benefits left unpaid.

Plaintiff asserts that because of the compromise agreement she entered into with American Insurance Company, et al the defendant must continue to pay the benefits to which she is entitled and that defendant, being a party to this compromise, is estopped from disallowing her claim. Plaintiff further contends that the compromise intended and contained provision for the continuance of Workmen’s Compensation death benefits. Specifically she urges that the compromise agreement provided for American Insurance Company to indemnify her against any claim for recovery or reimbursement by Bethlehem Steel Company for Workmen’s Compensation payments that were paid or to be paid.

The pertinent part of the compromise agreement is as follows:

“The American Insurance Company does by these presents agree to defend and indemnify Mrs. Roberta Kistner Crabtree against any and all liability or loss, up to but not beyond the sum paid to her herewith, that she may hereafter sustain on account of any claim, demand or suit of Bethlehem Steel Company against her for recovery by or reimbursement to Bethlehem Steel Company, solely as a result of the within settlement, of the amount of workmen’s compensation payments heretofore or hereafter paid to her by Bethlehem Steel Company because of the accidental death of the late Samuel J. Crabtree, it being understood and agreed that the foregoing obligation, herein undertaken by The American Insurance Company, is not and shall not he applicable to any claim, demand intervention or suit of Bethlehem Steel Company against the said Mrs. Roberta Kist-ner Crabtree for recovery by or reimbursement to Bethlehem Steel Company of the amount of the aforementioned workmen’s compensation payments on account of or out of any compensation settlement entered into by or judgment rendered in favor of Mrs. Roberts Kistner Crabtree in connection with any claims, demands or suits asserted or prosecuted by her against any person, joint venture or corporation other than those hereby released.” (Emphasis supplied.)

After dismissal of defendant’s motion for summary judgment, this case was tried on the merits and judgment was rendered by the lower court in favor of the plaintiff against the defendant for workmen’s compensation at the rate of $35.00 per week, commencing January 10, 1969 and running for a period of 104 weeks and 3 days, together with legal interest on past due installments until paid.

Defendant suspensively appealed the judgment rendered against it on February 10, 1971, by the Civil District Court for the Parish of Orleans.

It is well settled that where a surviving spouse settles a tort suit against a tort-feasor or third party who caused the employee’s death and that settlement is in excess of workmen’s compensation sought, an employer or his insurer is entitled to recover compensation payments made out of the amount of the tort recovery. LSA-R.S. 23:1101-23; Smith v. McDonough, 29 So.2d 818 (La.App., 4th Cir., 1947); Ford v. Kurtz, 46 So.2d 357 (La.App., 1st Cir. 1950); Geter v. Travelers Insurance Company of Hartford, 79 So.2d 120 (La.App., 1st Cir. 1955); Meyers v. Southwest Region Conference Association, 91 So.2d 106 (La.App., Orleans, 1956); Booth v. Travelers Insurance Co., 217 So.2d 483 (La.App., 1st Cir., 1968).

Plaintiff contends, however, that because of the indemnity provision contained in the compromise settlement, American Insurance Company, et al was giving $15,000 over and above the $14,600 she was to receive under Workmen’s Compensation and that the agreement was in reality a settlement of her claim for an amount totalling $29,600.

We are convinced that when plaintiff settled her claim the defendant was entitled to stop further compensation payments and claim a credit for the amount left due. The Workmen’s Compensation law does not contemplate double recovery through tort and compensation for an injured employee. Plaintiff in this case is seeking double recovery by claiming full compensation benefits over and above the amounts received by her from the settlement of her wrongful death claim.

Further, LSA-R.S. 23:1103 specifically mentions the effect of compromises with third persons to either the employer or the injured employee.

“§ 1103 Damages; apportionment of between employer and employee in suits against third person; compromise of claims
"In the event that the employer or the employee or his dependent becomes party plaintiff in a suit against a third person, as provided in R.S. 23:1102, and damages are recovered, such damages shall be so apportioned in the judgment that the claim of the employer for the compensation actually paid shall take precedence over that of the injured employee or his dependent; and if the damages are not sufficient or are sufficient only to reimburse the employer for the compensation which he has' actually paid, such damages shall be assessed solely in his favor; but if the damages are more than sufficient to so reimburse the employer, the excess shall be assessed in favor of the injured employee or his dependent, and upon payment thereof to the employee or his dependent, the liability of the employer for compensation shall cease for such part of the compensation due, computed at six per cent per annum, and shall be satisfied by such payment.
“No compromise with such third person by either the employer or the injured employee or his dependent shall be binding upon or affect the rights of the others unless assented to by him. As amended Acts 1958, No. 109, § 1.’ supplied.) (Emphasis

Through analysis of the foregoing we conclude that the compromise agreement entered into between plaintiff and American Insurance Company has no effect against defendant’s right to assert and receive a credit for the benefits not paid. Affirmance of plaintiff’s position in this matter would be tantamount to allowing private parties to negate a part of the compensation law of this state through contract. Such contracts or agreements which would by their effect negate the law are abhorrent to the orderly administration of the compensation law and therefore must be disallowed.

We likewise find no merit to plaintiff’s claim that defendant is estopped to assert a credit due. The evidence clearly reflects that defendant was not a signatory to the compromise agreement between plaintiff, and American Insurance Company, et al, was not party to the negotiations which preceded it and did not assent to it or its provisions. Defendant’s only contact with the agreement or negotiations was a letter of waiver in which defendant assured American Insurance Company that they would not seek reimbursement of compensation benefits already paid. In that letter Bethlehem specifically reserved their right to assert credit for future payments and to terminate payments of further benefits. We find no basis in equity or law to hold that by such action defendant is es-topped to assert a claim for credit of monies to be paid against the proceeds of plaintiff’s settlement of her tort action.

For the reasons assigned the judgment of the Civil District Court, Parish of Orleans, in favor of plaintiff against the defendant is reversed; and judgment is now rendered in favor of defendant, Bethlehem Steel Corporation, dismissing plaintiff, Roberta Kistner Crabtree’s suit. Costs to be paid by plaintiff-appellee.

Reversed and rendered.

REDMANN, Judge

(dissenting).

Defendant employer appeals from a judgment enforcing its admitted liability to plaintiff for workmen’s compensation. Defendant theorizes its liability was discharged by plaintiff’s compromise with some third persons (who are thought to be tort feasors).

Defendant’s affirmative defense has no other statutory foundation than the provisions of R.S. 23:1101 — 1103 that a compensation-paying employer “may bring suit against such [tortfeasant] third person to recover” compensation payments, § 1101, or intervene in the employer’s suit, § 1102, and, where damages are recovered, “such damages shall be so apportioned in the judgment that the claim of the employer for the compensation actually paid shall take precedence over that of the injured employee or his dependent,” and where part of the judgment will be payable to employee or dependent, “upon payment thereof * * * the liability of the employer for compensation shall cease for such part * * *,” § 1103.

The defense theory is thus that a claimant who receives a tort settlement, as surely as one who receives satisfaction of a tort judgment as specified in § 1103, is pro tanto no longer entitled to workmen’s compensation.

But this theory (1) assumes as a fact that the circumstances here created in the third persons “a legal liability to pay damages”, § 1101, and (2) assumes as the law that an employer cannot owe contribution or indemnity to the extent of his compensation liability even if the damages were caused by his joint or exclusive actual fault.

The fact is, as this exceptional record shows, that the circumstances did not create in the third persons a legal liability to pay damages: and that was precisely the basis of the $15,000 settlement of damages which the third persons and a judge, in pre-trial, evaluated at $100,000. This record proves that it was not quantum that was in dispute and in which differences were compromised, but liability. The only evidence regarding the third persons’ “legal liability” is that it very probably (by an 80% probability, the judge thought) did not exist.

Accordingly, if a yes-or-no result is to be had, I would have to conclude that the third persons from whom plaintiff received $15,000 had, by the “preponderance” of the evidence, no legal liability and therefore owed the employer no reimbursement. Thus there was no pro tanto discharge of the employer’s remaining comp liability under § 1103 and the judgment below was correct.

It could be concluded, with some apparent reasonableness, that any time an injured employee or dependent alleges liability in a tort suit, he is bound forever by that allegation. He would therefore have to give the employer full credit even for nuisance-value settlements. This point of view, in my opinion, both ignores the liberal construction canon and thrusts upon the employee or dependent the prior duty to settle for the employer, paying the employer’s costs and attorney’s fees, making folly of § 1102’s authorization to the employer to intervene. I therefore reject this possible rationalization (in part) of the majority result.

There is another possibility. Not as attractive or as simple as the conclusion of no liability in the third person who settled on a 15% basis, a conclusion that the third person was 15% liable, and the disinterested employer might therefore obtain reimbursement of 15% of his comp payment, seems not altogether offensive to notions of fairness (though the matter of the employer’s obligation to share the burden of attorney’s fees and costs remains, despite the unjust contrariety of Meyers v. Southwest Region, etc., La.App.1956, 91 So.2d 106, cert, denied). On this theory the employer might be relieved of a percentage of his remaining comp liability. Since no dissenting employer could ever be bound by his employee’s compromise, as expressly provided by § 1103, the employer who believes the third party’s liability is of a higher order is free to attempt a better settlement or to sue and collect more — or nothing, which is the 80% probability here.

And that raises a possibility which merits consideration, namely that every compromise between employee alone and third party — at least where the employer or comp carrier has not even intervened in the employee’s suit, much less participated in the settlement — should be considered irrelevant to the employee’s comp claim. The comp payer’s rights are unaffected, R.S. 23:1103, and so should be his duties. Consider the present mathematical facts: comp liability $14,600, third party willing to pay $15,000 because employee’s dependent hired a lawyer and filed a suit: if dependent accepts $15,000 she owes (or discharges) the employer to the extent of $14,600 and also owes her lawyer his fee, probably $5,000: She loses $4,600!

Probably, at least where the employer has not intervened, the employee and the third person ought to be able, if they wish, to reserve to the third person his liability to the employer, and settle only his excess liability to the employee or dependent. Especially if the quasi or partial contribution and indemnity theories of Moak v. Link-Belt have validity, a third person, believing himself only vicariously liable for the employer’s fault or only concurrently at fault, may both lawfully object to “discharging” the employer’s comp liability, and at the same time be willing to settle with the employee for the employee’s own account.

The instant settlement purported to he such a settlement. It indemnified the employee against any claim for reimbursement by the employer on account of the settlement. Especially where, as here, the third party’s “legal liability” is 80% improbable and therefore the employer lifts not a finger to pursue him, is it fair that the diligent employee must either forego settlement altogether or else give the fruits of his settlement to the disdainful employer?

After the majority opinion here was issued and this dissent noted but not expressed, the Supreme Court decided Vidrine v. Michigan Millers Mut. Ins. Co., La. (1972). Vidrine holds an employer’s contributory negligence bars recovery of compensation payments from a third person tortfeasor. If, then, as here, one entitled to comp sues and the employer defends on the ground that settlement with a third person bars further comp recovery, is such a defense good? Must the person admittedly entitled to comp further prove that the employer was negligent? Or must the employer rather prove, as part of its affirmative defense, that the third person’s “legal liability” existed in favor of the employer? I hold the latter view. To hold otherwise means that the injured employee must prove both his comp case and a tort case against the employer.

In my opinion, strengthened by Vidrine, the judgment appealed from should be affirmed. 
      
      . § 1101 — When an injury for which compensation is payable under this Chapter has been sustained under circumstances creating in some person (in this Section referred to as third person) other than the employer a legal liability to pay damages in respect thereto, the injured employee or his dependent may claim compensation under this Chapter and the payment or award of compensation hereunder shall not affect the claim or right of action of the injured employee or his dependent against such third person, nor be regarded as establishing a measure of damages for the injury; and such injured employee or his dependent may obtain damages from or proceed at law against such third person to recover damages for the injury.
      Any employer having paid or having become obligated to pay compensation under the provisions of this Chapter may bring suit against such third person to recover any amount which he has paid or become obligated' to pay as compensation to any injured employee or his dependent. § 1102 — If either the employee or his dependent, or the employer, brings suit against a third person as provided in R.S. 23:1101, he shall forthwith notify the other in writing of such fact and of the name of the court in which the suit is filed, and such other may intervene as party plaintiff in the suit.
      § 1103 — In the event that the employer or the employee or his dependent becomes party plaintiff in a suit against a third person, as provided in R.S. 23:1102, and damages are recovered, such damages shall be so apportioned in the judgment that the claim of the employer for the compensation actually paid shall take precedence over that of the injured employee or his dependent; and if the damages are not sufficient or are sufficient only to reimburse the employer for the compensation which he has actually paid, such damages shall be assessed solely in his favor; but if the damages are more than sufficient to so reimburse the employer, the excess shall be assessed in favor of the injured employee or his dependent, and upon payment thereof to the employee or his dependent, the liability of the employer for compensation shall cease for such part of the compensation due, computed at six per cent per annum, and shall be satisfied by such payment.
      No compromise with such third person by either the employer or the injured employee or his dependent shall be binding upon or affect the rights of the others unless assented to by him. As amended Acts 1958, No. 109, § 1.
     
      
      . See Moak v. Link-Belt Co., 229 So.2d 395 (La.App.1969), cert. granted, 255 La. 550 and 551, 232 So.2d 75 and 76, dismissed as moot on this point, 257 La. 281, 242 So.2d 515 (1970).
      A related question is that of burden of proof. Here plaintiff showed comp liability, and defendant showed only tort settlement. Must plaintiff then show tort liability in defendant, as a defense to defendant’s defense? Or must defendant, in proving its defense, show that its own position as a faultless employer entitles it to unqualified first recovery from the (presumably"!) true tortfeasor? Louisiana’s pleading rules have never required replication, rejoinder, surrejoinder, etc., and it seems preferable, especially in view of the basic rule of construing the statute liberally to afford compensation, to hold that the defendant must unequivocally prove its defense. On an analogous issue we applied this theory to require an insurer to prove completely its exception, rather than oblige the beneficiary to prove an exception to the exception ; Chambers v. First Natl. L. Ins. Co., 253 So.2d 636 (La.App.1971).
     
      
      .It is here observed that § 1103’s language presumes the intervention authorized by § 1102 has in fact occurred, for § 1103 provides damages shall be “apportioned in the judgment” which could not occur except when both employer and employee were parties. It is next observed that § 1103 provides a compromise by one shall not “be binding upon or affect the rights of the others unless assented to by him.”
     
      
      . For a contrary reasoning, see Graham v. Industrial Comm., 26 Utah 2d., 424, 491 P.2d 223 (1972).
     
      
      . Supra, n. 2. See also Redmann, Louisiana Civil Code Principles of Contribution and Indemnity, 17 Loyola L.Rev. 297 (1971).
     
      
      . Vidrine may also suggest the quasi contribution and indemnity theories of Moak v. Link-Belt, supra n. 2, become meaningless. Moak held that, e. g., where an employee recovered $100,000 in tort, of which even a joint tortfeasor employer got $14,000 comp reimbursement, the third party could have contribution from the joint tortfeasor employer up to the $14,000 comp reimbursement. Vidrine apparently would prevent the comp- reimbursement in such a case from even occurring, which would imply either that the employee would recover $114,000, a double recovery, or else that the third party could plead the employer’s concurrent negligence as a partial bar to the employee’s recovery (to the extent of the employer’s comp liability), and thus reduce the employee’s recovery from the third person to $86,000 (which added to $14,000 comp recovery would total $100,00). The majority opinion here, which would allow the employer to end comp payments upon the employee’s receipt of $86,000 from the third person, is thus inconsistent with Vidrine.