Case Title: Humphreys v. Marquette Casualty Co.

Citation: 103 So. 2d 895, 235 La. 355

Docket Number: 

State: louisiana

Court: Louisiana Supreme Court

Date: 1958-06-27T00:00:00Z

Document:
103 So. 2d 895 (1958) 235 La. 355 Malacy HUMPHREYS et al. v. MARQUETTE CASUALTY CO. et al. Malacy HUMPHREYS et al. v. MARQUETTE CASUALTY CO. and American Casualty Co. Mrs. Dula Marie HOLLAND et al. v. MARQUETTE CASUALTY CO. et al. Mrs. Dula Marie HOLLAND et al. v. MARQUETTE CASUALTY CO. et al. Nos. 43641, 43653, 43662, 43663. Supreme Court of Louisiana. February 10, 1958. On Rehearing June 27, 1958. *896 Jacque B. Pucheu, Eunice, for plaintiffs-appellants. Lawes, Cavanaugh, Hickman & Brame, Lake Charles, for respondent. On Rehearing in Nos. 43,641 and 43,662, June 27, 1958. MOISE, Justice. Four writs of certiorari were granted by this Court, so that we might review two decisions of the First Circuit Court of Appeal, which reversed and amended two judgments of the District Court. Suits filed in this matter were consolidated for hearing in the District Court, in the Court *897 of Appeal, and in this Court. One opinion will suffice, with separate decrees rendered in each suit. Clifton Holland and Joe Humphreys were electrocuted on September 27, 1955, while in the course of their employment for either the Bon-Air Ranch or N. P. Martone. Death benefit suits under the Workmen's Compensation Act were filed against Marquette Casualty Company, insurer of N. P. Martone, by for maximum compensation, funeral expenses, penalties, interest, and attorneys' fees. American Casualty Company, insurer of Bon-Air Ranch, was named co-defendant after the filing of amended pleadings. The District Court rendered judgment in favor of Malacy Humphreys and against Marquette Casualty Company and American Casualty Company, in solido, for funeral expenses in the sum of $197.60, with legal interest. It dismissed her individual demands and rendered judgment in favor of the minor, Geranda Ann Humphreys, and against Marquette Casualty Company and American Casualty Company, in solido, for compensation at the rate of $9.75 per week for three hundred weeks, with legal interest. The Court of Appeal reversed the judgment insofar as it pertained against American Casualty Company, and affirmed and amended it against Marquette Casualty Company so as to include 12% penalties and $500 attorneys' fees. Marquette Casualty Company and Malacy Humphreys both applied to this Court for writs, which were granted. Malacy Humphreys filed a supplemental and amended petition in this Court, praying that her attorneys' fees be increased to $3,000. The District Court also rendered judgment in favor of Mrs. Dula Marie Holland and against Marquette Casualty Company and American Casualty Company, in solido, for burial expenses in the sum of $300, with legal interest, and for compensation at the rate of $14.26 per week for three hundred weeks, with legal interest. It rendered judgment in favor of the minors, Daniel Gene Stanley, Judy Faye Sensat, and Paulette Gayle Sensat, and against Marquette Casualty Company and American Casualty Company, in solido, for compensation at the rate of $4.75 each per week for three hundred weeks, with legal interest. The Court of Appeal reversed the judgment, insofar as it pertained against American Casualty Company, and affirmed and amended it against Marquette Casualty Company so as to allow 12% penalties and $500 attorneys' fees. Marquette Casualty Company and Mrs. Holland both applied to this Court for writs, which were granted. Mrs. Holland filed a supplemental and amended petition in this Court, praying that her attorneys' fees be increased to $3,000. The District Court dismissed with prejudice the demands on behalf of Leslie James Holland, and the Court of Appeal affirmed the action of the District Court. No writs were applied for to this Court. The Court of Appeal, First Circuit, (95 So. 2d 878, 879), correctly stated the facts as follows: The Court of Appeal found that the defendants disputed liability between themselves, but that they agreed that the accident occurred while the deceased were in the scope of their employment and that their dependents legally recognized under the Workmen's Compensation Law were entitled to compensation. The Court of Appeal concluded that N. P. Martone had borrowed the services of Humphreys and Holland and that the "Borrowed Servant Doctrine" applied to the controversy. It, therefore, held Marquette Casualty Company liable to the legally recognized dependents. The principal question before us is whether the "Borrowed Servant Doctrine" applies to N. P. Martone and his insurer, Marquette Casualty Company, or whether a solidary obligation exists between Marquette Casualty Company and American Casualty Company. Both insurance companies agree that the awards are correct, except for the penalties and attorneys' fees. Malacy Humphreys, common-law wife of Joe Humphreys, still insists that as a dependent she is entitled to compensation. Plaintiffs' compensation demands are consistent with their original demands, except for their prayers for an increase in attorneys' fees. In 35 Am.Jur., Master and Servant, sec. 18, p. 455, we find the following discussion of "Lending of Employee to Another": See, Dougall v. Spokane, P. & S. Ry. Co., 9 Cir., 207 F.2d 843, certiorari denied 347 U.S. 904, 74 S. Ct. 429, 98 L. Ed. 1063. In Standard Oil Company v. Anderson, 212 U.S. 215, 29 S. Ct. 252, 254, 53 L.Ed 480, the United States Supreme Court thoroughly discussed the "Borrowed Servant Doctrine", as follows: In Standard Oil Co. v. Ogden & Moffett Co., 6 Cir., 242 F.2d 287, 290, we find the following statement as to the intricacies and refinements of the "Borrowed Servant Doctrine": The loaned servant doctrine is established in Louisiana, and in the case of Benoit v. Hunt Tool Co., 219 La. 380, 53 So. 2d 137, 140, we stated: Applying the above tests to the facts of the present case, we find that the deceased at the time of their deaths were "loaned" or "borrowed" servants. They were paid by Bon-Air Ranch, but the evidence clearly shows that the method of payment was by the custom of the particular vicinity in which the deceased worked. The general employer continued to pay his *902 employees' salaries when they were loaned to rice farmers, because he, likewise, borrowed servants from the rice farmers during their slack seasons, and these servants' salaries were paid by their general employers. Mr. N. P. Martone, as manager of his rice farming business, had direct control over the deceased. Their hours, duties, and method of work were controlled by him. There is no doubt that he could have discharged the deceased had they not worked in an obedient and satisfactory manner. It is an extraneous circumstance that he could have also discharged them when he was acting as Manager of Bon-Air Ranch. The deceased employees were aware of the custom of swapping employees, and they knew that they were working as farmers and not as "cowboys". Mr. Martone's testimony is that: The rice which was loaded into the bins had been harvested from the land of Farmers Land and Canal Company and not from Bon-Air Ranch property. It was loaded into Martone's bins and was to be disposed of by him. The record also reflects that Mr. Martone kept separate records of the time the deceased worked for him. All of this negates a joint employer relationship between N. P. Martone and Bon-Air Ranch. It is further negated by the fact that Martone's assets, liabilities, profits and expenses were not commingled with those of Bon-Air Ranch. All bank accounts and loan accounts were separate and individual, even though a relationship existed between Mr. Martone and the owners of Bon-Air Ranch. We conclude, as did the Court of Appeal, "that an employer-employee relationship existed between Mr. Martone, on the one hand, and Holland Humphreys, on the other hand, at the time of the accident, and for which Mr. Martone's insurer," Marquette Casualty Company, "is liable." We come next to the question of whether a common-law wife can recover death benefits under the Workmen's Compensation Act for herself individually. Malacy Humphreys testified that she had lived with Joe Humphreys for thirty-two years, and that during that time she had never lived with any one else. She said that she and Joe had resided under the same roof and had never separated. She stated that she was not working when Humphreys was killed. Her testimony is substantiated by that of other witnesses. Counsel for the concubine contends that in determining whether a person is entitled to death benefits under the workmen's compensation laws, the question presented is one of dependency rather than that of relationship, and that in this case, Malacy was a dependent of the deceased Humphreys. LSA-Revised Statutes 23:1232, paragraph (8), provides: In its decision (95 So.2d 878), the Court of Appeal discussed the above quoted provision of the Workmen's Compensation Statute, as well as all prior jurisprudence on this point. We feel that we can add little to its opinion, except to say that it was never within the contemplation of the legislature to include under the provisions of LSA-R.S. 23:1232, a dependent who had lived in open concubinage with a deceased during his lifetime. In the case of Moore v. Capitol Glass & Supply Co., La.App., 25 So. 2d 248, 250, *903 Writs Refused, Justice LeBlanc so well stated: The following syllabus of the case of Simpson v. Norman, 51 La.Ann. 1355, 26 So. 266, well states the predicate for disallowing a concumbine to recover under such conditions as are advanced in the instant proceeding: We conclude, as did the Court of Appeal, that Malacy Humphreys, the common-law wife of Joe Humphreys, is not entitled to death benefits under the provisions of LSA-R.S. 23:1232, sec. 8. Marquette Casualty Company contends that a valid dispute existed among all parties as to the assessment of liability, and that, therefore, it should not be held liable for penalties. As did the Court of Appeal, we conclude that: The doctrine above mentioned is to the effect that: Attorneys for plaintiffs contend that when penalties are allowed, their fees are not limited by the provisions of LSA-R.S. 23:1141, which provides: Counsel for plaintiffs further urge that the purpose of the above statute is to prevent attorneys from charging the claimant more than 20% of the award, with a maximum of $1,000, and that this provision is for the protection of the claimant and is not applicable where the defendant is compelled to pay the attorney's fees. They argue that the provisions of LSA-R.S. 22:658[1] are applicable to the present controversy and that therein no limit is set on attorneys' fees other than that they be reasonable. Because of the amount of work entailed in compiling the voluminous record for this review, they suggest that the original prayer of plaintiffs' petitions for $1,000 as attorneys' fees should be increased to $3,000 for each counsel. When penalties are allowed in a workmen's compensation proceeding, attorneys' fees are allowed in addition to the compensation award. Hall v. Pipe Line Service Corporation, 233 La. 821, 98 So. 2d 202. However, under no condition can an award exceed a demand, because in Article 156 of the Code of Practice it is stated: We agree with counsel that their work has been lengthy and extensive; but, since this Court is one of appellate jurisdiction, except for enumerated causes, it cannot entertain a supplemental and amended petition. We, therefore, conclude that each counsel is entitled to the original demand of $1,000. For the reasons assigned, the judgment of the Court of Appeal, First Circuit, 95 *905 So. 2d 878, in the case of Humphreys v. Marquette Casualty Co., No. 43,641 of the Docket of this Court, is amended, so as to allow the plaintiff attorney's fees in the sum of $1,000; in all other respects, it is affirmed. All costs are to be paid by the defendant, Marquette Casualty Company. SIMON, J., absent. FOURNET, Chief Justice (dissenting in part and concurring in part). I fully concur with the view of the majority in so far as the claim of Malacy Humphreys is concerned, and also with respect to the assessment of penalties and attorney fees. But I cannot subscribe to the majority view that the so-called "borrowed servant doctrine," generally obtaining in the common law in tort actions, and, to this extent, adopted by us, is controlling in compensation cases. Moreover, it is my considered opinion that an employer and insurer can never, by the application of this doctrine, relieve themselves of their responsibility to the employee as fixed by our compensation laws. In any event, the facts of this case do not warrant the application of the "borrowed servant doctrine" here, even if it is applicable. Whether the control exercised by Martone was for himself personally, or as manager of the Bon-Air Ranch, is problematical. The record does show that the salaries of these men were always paid by the Bon-Air Ranch, even while they were working for Martone, and there is no direct evidence, and none from which it can be inferred, establishing that these employees ever consented to accept Martone as the new employer, as is required under the doctrine. McCALEB, Justice (dissenting in part). I concur in the rulings of the majority herein in all respects save one. Conceding the correctness of the conclusion that Holland and Humphreys were the borrowed employees of Martone, I do not believe that this circumstance relieves the insurer of the principal employer, Bon-Air Ranch, from liability for workmen's compensation under our law. When these employees were performing personal services for Martone, manager of Bon-Air Ranch, the services rendered were incidental to their employment by Bon-Air Ranch and, hence, both it and Martone should be responsible, in solido. That the regular employer of a borrowed employee is liable for workmen's compensation for accidental injuries sustained by the borrowed employee, while engaged in performance of services for the borrowing employer, has heretofore been recognized by us in the leading case of Kern v. Southport Mill, 174 La. 432, 141 So. 19. To the same effect in principle is Dobson v. Standard Accident Insurance Co., 228 La. 837, 84 So. 2d 210 and I perceive no reason why these authorities should not be applied here. I therefore dissent from that part of the judgment which relieves American Casualty Company from liability. On Rehearing of Nos. 43641 and 43662. McCALEB, Justice. We granted a rehearing to Marquette Casualty Company mainly for the purpose of reconsidering our ruling that Marquette alone was liable for the compensation benefits payable to plaintiff, for the use of her minor child, as a result of the accidental death of the employee, Joe Humphreys, while engaged in the business individually operated by N. P. Martone. The facts of the case, which was consolidated in all courts with that of Holland v. Marquette Casualty Company, have been fully stated by the Court of Appeal (see 95 So.2d 878) and in our original opinion. Therefore, they need not be repeated again in detail. *906 For purposes of our present discussion, it suffices to say that Clifton Holland and Joe Humphreys were electrocuted on September 27, 1955, while temporarily performing services for N. P. Martone, a rice farmer insured by Marquette Casualty Company. They were regularly employed by Bon Air Ranch, a land-leasing and cattle-raising enterprise managed by Martone for a partnership composed of his wife and mother-in-law. Bon Air Ranch was insured for workmen's compensation liability by defendant, American Casualty Company, and Holland and Humphreys were at all times carried on the payroll of the ranch as cowboys, it being understood by them, however, that they would be required to assist Martone in his rice farming operations during the harvest season. Under this factual situation, a majority of the Court ruled on the original hearing that Holland and Humphreys were borrowed employees of Martone, engaged in his work at the time of their accidental deaths, and that Martone alone and not the general employer, Bon Air Ranch, was liable for workmen's compensation. We are now convinced that this holding was incorrect insofar as it releases Bon Air's insurer from responsibility. Accepting as final, for purposes of this discussion, our former conclusion that Holland and Humphreys were borrowed employees of Martone[1] and that he would be liable for the torts committed by them and also responsible to them for compensation for accidental injuries sustained by them during their working hours, it does not follow that this necessarily relieves Bon Air Ranch, the regular employer, from its legal duty to pay compensation. In the leading case of Kern v. Southport Mill, 174 La. 432, 141 So. 19, 20, this Court laid down the test for determining whether injuries to or death of an employee is sustained while he is "performing services arising out of and incidental to his employment in the course of his employer's trade, business or occupation * * *" as required by R.S. 23:1035. It was there held that services arise out of and are incidental to the employment whenever the employment calls for the services that are being performed at the time of the accident and that, whenever the employer directs the employee to render any particular service, "* * * he, at least (that is to say, the employer himself), is in no position any longer to deny that the services thus requested arise out of and are incidental to the employment." This test was recently applied in Dobson v. Standard Accident Insurance Co., 228 La. 837, 84 So. 2d 210, where it was held that an employer, who has directed his employee to perform a particular service outside of the normal scope of his duties, is in no position to assert, when sued for compensation benefits for injuries resulting from an accident occurring while the employee was performing the particular service, that the services rendered by the employee at his request were disconnected from and not incidental to the employment. Thus, it is evident that, since Holland and Humphreys were performing special services for Martone which they had been directed to render in compliance with their employment contracts, American Casualty, as insurer of their regular employer, may not escape liability for compensation as Bon Air Ranch cannot be heard to assert that the services which were being rendered at its request did not arise out of and in the course of the employment. *907 Counsel for American Casualty maintain that this case is distinguishable from the Kern and Dobson cases in that, here, the accident occurred while the employees were performing services for their special employer, Martone, who is liable for compensation, whereas, in those cases the injured employees had only their regular employers from whom compensation benefits could be claimed. We perceive no justifiable foundation for the attempted differentiation. The principal upon which the regular employer is held is the same in each instance, i.e., that the special service of the employee, being performed at his principal's request, is service arising out of his employment. Hence, the circumstance that the special employer is likewise liable for compensation affords no basis for relieving the regular employer from liability for compensation imposed by the law in virtue of the hiring contract. Indeed, it is the good fortune of the regular employer that the special employer is likewise liable and able to respond, thus contributing in part to his liability for the entire compensation due. It was well said by the Court of Appeals of New York in De Noyer v. Cavanaugh, 1917, 221 N.Y. 273, 116 N.E. 992, 993, in speaking of the liability of a general employer for compensation in a case of this sort, that: Finding that both of the insurance companies, Marquette Casualty and American Casualty, are liable in solido for the compensation due plaintiff's child, we pass on to their contentions that penalties and attorneys' fees are not recoverable as their denials of liability were not arbitrary or capricious. Counsel for Marquette say that, since there was a division of opinion on original hearing concerning the borrowed servant rule, this in itself is evidence of reasonable grounds for Marquette's denial of liability. And counsel for American argue that it can hardly be said that this insurance company acted arbitrarily in view of the fact that a majority of the Court of Appeal, and this Court on original hearing, found that it was not liable. These arguments are not impressive. It cannot be doubted that either one or the other or both of these insurance companies were liable for compensation. This being so, they should have made provision, either collectively or separately, for payment of compensation until their respective legal liability was determined. They could not justifiably withhold all benefits and force plaintiff to undergo the legal expense and the delay in collecting an admittedly valid claim, even though each might have had reasonable grounds to litigate the issue of its legal liability for compensation. For the foregoing reasons, the judgment of the Court of Appeal is set aside and that of the district court is amended by including therein an award in favor of plaintiff and against defendants, in solido, for attorneys' *908 fees in the sum of $1,000 and a 12% penalty on all weekly compensation payments which are now due or which may hereafter become 60 days overdue. As thus amended, the judgment of the district court is reinstated and affirmed, defendants to pay all costs. HAMITER, J., concurs in the decree. TATE, J., recused. [1] "All insurers issuing any type of contract other than those specified in R.S. 22:656 and 22:657, shall pay the amount of any claim due any insured including any employee under Chapter 10 of Title 23 of the Revised Statutes of 1950 within sixty days after receipt of satisfactory proofs of loss from the insured, employee or any party in interest. Failure to make such payment within sixty days after receipt of such proofs and demand therefor when such failure is found to be arbitrary, capricious, or without probable cause, shall subject the insurer to a penalty, in addition to the amount of the loss, of 12% damages on the total amount of the loss, payable to the insured, or to any of said employees, together with all reasonable attorney's fees for the prosecution and collection of such loss. * * *" [1] Counsel for Marquette urge on this rehearing that our prior holding that the employees were "borrowed" is not well founded. We see no reason to consider counsel's argument because the best that they could hope for would be a factual finding of joint enterprise, in which event Marquette would be liable in solido with American Casualty for compensation.