Title: Richard v. United States Fidelity & Guaranty Co.

State: louisiana

Issuer: Louisiana Supreme Court

Document:

175 So. 2d 277 (1965) 247 La. 943 Sam RICHARD v. UNITED STATES FIDELITY & GUARANTY COMPANY and Landreneau Enterprises, et al. No. 47547. Supreme Court of Louisiana. May 3, 1965. Rehearing Denied June 7, 1965. *278 Preston N. Aucoin, Ville Platte, Daniel J. McGee, Mamou, for plaintiff-appellee-applicant. Gist, Gist, Methvin & Trimble, by DeWitt T. Methvin, Jr., Alexandria, Donald Soileau, Mamou, for defendants-appellants-respondents. HAMLIN, Justice: In the exercise of our supervisory jurisdiction (Art. VII, Sec. 11, La.Const. of 1921, LSA), we directed certiorari to the Court of Appeal, Third Circuit, in order that we might review its judgments in the cases of Richard v. Landreneau Enterprises, Et Al., and Richard v. United States Fidelity & Guaranty Company, which reversed the judgments of the trial court rendered in favor of plaintiff. La.App., 167 So. 2d 827; La.App., 167 So. 2d 840; 247 La. 254, 170 So. 2d 510. The cases were consolidated for trial and appeal, but separate judgments were rendered. Certiorari having been granted at the instance of plaintiff-relator, the matter has been consolidated in this Court and one judgment will be rendered herein. This matter involves workmen's compensation. Sam Richard filed suit against United States Fidelity & Guaranty Company, in which he alleged that while in the course and scope of his employment with Landreneau Enterprises, Adraste Landreneau Gins, Inc., and/or the Estate of Adraste Landreneau, on November 19, 1962, he suffered a myocardial infarction (heart attack) with superimposed pneumonitis, as well as a stroke, from which he became permanently and totally disabled. Plaintiff further alleged that he was informed and believed that the defendant had insured his employers and that the insurance covered the alleged liability. By supplemental and amending petition, plaintiff alleged that the policy sued upon erroneously and through inadvertence named only Adraste Landreneau Gins, Inc. as insured, whereas, it was the true intention of the parties that the policy should cover the employees of Landreneau Enterprises, Adraste Landreneau Gins, Inc., and the Estate of Adraste Landreneau; he prayed for reformation of the policy. The defendant insurer denied liability and filed a Third Party Complaint against Adraste Landreneau Gins, Inc. It alleged that the policy of workmen's compensation insurance it had issued to Adraste Landreneau *279 Gins, Inc. did not cover the work being performed by plaintiff at the time he suffered his heart attack. Landreneau Enterprises, Semantha Vidrine, Widow of Adraste Landreneau, Joseph Gibbons Landreneau, Louis Calvin Landreneau, Charles Edward Landreneau, Annabelle Landreneau, and Adraste Landreneau Gins, Inc. denied the allegations of the Third Party Complaint. After filing the above suit, Sam Richard filed a workmen's compensation suit against Landreneau Enterprises, Adraste Landreneau Gins, Inc., and the Succession of Adraste Landreneau. He alleged the accident, supra, and made a demand against the defendants for total disability, penalties and attorney's fees, and medical expenses, said demands being the same as those prayed for in his suit against the insurer. These defendants denied liability and filed a Third Party Complaint against United States Fidelity & Guaranty Company. They alleged that they were insured by United States Fidelity & Guaranty Company on and prior to the date of plaintiff's alleged accident, against liability to their employees, including Sam Richard, under the provisions of the Louisiana Workmen's Compensation Laws, and that this insurance was in full force and effect when Richard was injured. The third party defendant prayed for rejection of the third party plaintiffs' demands. For a complete understanding of this matter, we repeat the following facts correctly found by the Court of Appeal: The Landreneau Estate owned a mortgage on a dilapidated house and a lot located in the town of Mamou, which property was turned over to the Estate by the mortgagor. The Estate also owned another dilapidated house which had belonged to the Landreneau grandmother. The Estate employed Marcel Guillory as foreman to oversee the tearing down of these two houses and, from the same lumber, the reconstruction of one house on one of the loss; Guillory was paid by the Landreneau Enterprises. The reconstruction was the first in which the Landreneaus had engaged. They owned four other houses in Mamou; two were rented for cash, one was occupied by a Landreneau, and the other was occupied by a farm manager. Plaintiff Sam Richard worked at the gin on November 17, 1962. On November 19, 1962, he worked as a carpenter's helper on the reconstruction project and suffered his heart attack while performing carpentry work; he thereafter instituted the two proceedings supra. At the time plaintiff suffered his heart attack, the Landreneaus carried workmen's compensation insurance with United States Fidelity & Guaranty Company. The policy was an alleged renewal of the insurance carried by the deceased Adraste Landreneau. The policy recited that it expired on July 3, 1963, and the name of the insured was listed as "Adraste Landreneau Gins, Inc., Mamou, Louisiana." (The previous policy, which expired July 2, 1962, named the insured as "Landreneau Gin.") The declarations on the back of the policy recited, under Locations, "2 Gins-Mamou, Louisiana." The following appeared under classification of Operations: Adraste Landreneau desired to increase his coverage while he was alive; the following is a file memorandum of the insurer with respect thereto: "File Memorandum: Adraste Landreneau. Having the above facts before it, the trial court found that there was a causal relationship between the plaintiff's heart attack and the work in which he was engaged when he suffered the attack. It further found that it was part of the business of plaintiff's employer to repair houses; that plaintiff suffered his heart attack while working for his employer and that said employment was a part of the business, trade, and occupation of the employer. The court stated that the serious question presented to it was whether or not the policy of insurance upon which the suit was brought afforded coverage to the Landreneau Enterprises, the alleged employer of the plaintiff. In answering the question affirmatively and ordering the reformation of the instant policy, the trial court stated: The trial court rendered judgment in favor of plaintiff, Sam Richard, and against the defendant, United States Fidelity & Guaranty Company, for total disability ($35.00 per week for 400 weeks) and medical expenses; it denied penalties and attorney's fees. In the matter of Sam Richard vs. Landreneau Enterprises, Et Al., the court rendered judgment in favor of plaintiff for total disability and medical expenses; it denied penalties and attorney's fees. The court stated in both judgments that satisfaction of the judgment in one suit would satisfy the judgment in the other suit. It further stated that it was its intention to render only one solidary judgment against all defendants in both suits. All defendants appealed from the above judgments. The Court of Appeal found that, "From all of the evidence we think the only reasonable and fair conclusion is that the strenuous physical work being done by plaintiff was the immediate precipitating cause of *282 this heart attack." The Court said it would next consider whether the construction of the rent house[1] was a part of the regular trade, business or occupation of the employer within the meaning of LSA-R.S. 23:1035; it stated: The Court of Appeal found that the services being performed by plaintiff at the time of his heart attack did not arise out of, nor were they incidental to, his work for the gin corporation; it concluded that neither Landreneau Enterprises, nor Adraste Landreneau Gins, Inc., nor the Estate of Adraste Landreneau was liable to plaintiff for workmen's compensation benefits. With respect to the insurer, the Court of Appeal found that the estoppel set forth in LSA-R.S. 23:1166 did not apply. It stated that in reality the insurer raised the defense that the construction of a rent house was not a regular part of the business of renting houses. On the basis of its prior findings, the Court rejected plaintiff's claim against the insurer. The Court of Appeal made no determination, however, as to whether Adraste Landreneau Gins, Inc., Landreneau Enterprises, and/or the Estate of Adraste Landreneau were all covered by the instant policy; it stated that there was no need to make a finding because the insurer was not estopped to deny liability under LSA-R.S. 23:1166. Plaintiff-relator, Sam Richard, assigns the following errors to the judgments of the majority of the Court of Appeal:[2] As stated supra, both the trial court and the Court of Appeal found that there was a causal connection between the work stress placed on plaintiff and his resulting injury. We agree with the findings and conclude that an accident occurred while plaintiff was performing hazardous work, as a result of which he was permanently and totally disabled. As a result of the injury, plaintiff incurred sizeable medical bills. Adraste Landreneau, as stated supra, owned all of the Landreneau endeavors at the time of his death and operated as a sole proprietor. There is evidence of record that previous to his death he was in the process of incorporating, but the process was not completed. His wife and children began to break down the numerous Landreneau businesses and occupations into separate categories in 1962, for the purpose of taxation and bookkeeping; in other words, their accounting was facilitated. At the time plaintiff suffered his accident, the Landreneaus (other than what was reflected on their books) were operating in the same fashion as had Adraste Landreneau. In brief, counsel for the Landreneaus state that the policy issued by the United States Fidelity & Guaranty Company covered all of the business and/or ventures of "The Landreneaus" and "there was in fact no division of the business." We are therefore constrained to conclude that Landreneau Enterprises was not carrying on a separate rental business; whatever rental business existed was a part of all the Landreneau endeavors. It follows that at the time of his accident plaintiff was not working for just one phase of the Landreneau businesses, but that he was working for Landreneau Enterprises, Adraste Landreneau Gins, Inc., and/or the Estate of Adraste Landreneau. This conclusion is substantiated by the following pertinent testimony of Louis Calvin Landreneau, General Manager of Landreneau Enterprises, President of Adraste Landreneau Gins, Inc., and Co-Administrator of the Estate of Adraste Landreneau:[3] The record is replete to the effect that many of the business phases of the endeavors of "The Landreneaus", which we have heretofore found were not divided at the time of the instant accident, were hazardous. The record is also replete to the effect that plaintiff performed many hazardous duties for his employers (Landreneau Enterprises, Adraste Landreneau Gins, Inc., and/or the Estate of Adraste Landreneau) and was exposed to and frequently brought into contact with the hazardous features of his employers' business. The record also substantiates the finding of the trial judge that "whether or not the house upon which Mr. Richard was working at the time of the accident was part of the farming operations, certainly it was part of the business of his employer to repair houses." Our jurisprudence has held that the rental of houses may not of itself be a hazardous business, but if the employer's business has hazardous features, the non-hazardous phase does not preclude amenability to the provisions of the Workmen's Compensation Law. Cf. Luce v. New Hotel Monteleone, 234 La. 1075, 102 So. 2d 461. It is now well settled that an employee is covered where he is regularly exposed to or is frequently brought in contact with the hazardous feature of the business, even though he is primarily engaged in the non-hazardous part. Luce v. New Hotel Monteleone, supra. Also, if one is engaged in both hazardous and non-hazardous branches of his employer's business, and his employment is one employment, it is immaterial whether his non-hazardous duties constituted his major employment to which his hazardous duties were merely incidental, or vice versa; the important fact is that the employee was injured while actually engaged in performing duties, whether main or incidental, called for by his employment. Byas v. Hotel Bentley, Inc., 157 La. 1030, 103 So. 303. If the operator of an admittedly hazardous business, in the conduct of that business undertakes repair, whether it be of the building housing the same or the equipment therein, rather than have it done under contract, his employees come under the protection of the employers' liability laws of this State. Speed v. Page, 222 La. 529, 62 So. 2d 824. *287 Our findings and the jurisprudence cited, supra, compel us to conclude that the accident suffered by plaintiff in the instant case was within the purview of the Workmen's Compensation Act, LSA-R.S. 23:1021-1166, and that plaintiff was covered by the provisions of the statute. He is therefore entitled to recover workmen's compensation and medical benefits from his employers, Landreneau Enterprises, Adraste Landreneau Gins, Inc., and/or the Estate of Adraste Landreneau. Cf. Landry v. Fuselier, 230 La. 27, 88 So. 2d 218; Boggs v. Great Atlantic & Pacific Tea Company, La.App., 125 So. 2d 419; Allen v. Travelers Insurance Company, La.App., 124 So. 2d 367, 165 So. 2d 589; Richmond v. Weiss & Goldring, La.App., 124 So. 2d 601; Costanzo v. Southern Farm Bureau Casualty Ins. Co., La.App., 124 So. 2d 621; Effler v. Edwards, La.App., 142 So. 2d 599; Edwards v. Stafford, La.App., 153 So. 2d 106; 19 La.L.Rev. 341; 11 Loyola L.Rev. 278. The final question presented for our determination is whether the instant insurance policy covered plaintiff's employers and the employment performed by plaintiff at the time he suffered his heart attack. The evidence of record affirmatively reflects that all of the Landreneaus thought that they were renewing, and intended to renew, the workmen's compensation insurance carried by their father. Roscoe A. Bolton, Vice-President of Alex & Bolton, Inc., local agents handling the business of United States Fidelity & Guaranty Company, testified that after Adraste Landreneau died only the name of the insured was changed and that there was no change in coverage. The record also reflects that the premiums paid by Adraste Landreneau and those paid by his successors were substantially the same. Also evidenced in the record is a policy which expired on July 3, 1961 (this policy must have been issued prior to Adraste Landreneau's death on July 13, 1960), which sets forth the name of the insured as "Adraste Landreneau, d/b/a Landreneau Gin, Mamou, Louisiana." The file memo of Adraste Landreneau's insurer, supra, definitely recites that it was the intention of Adraste Landreneau to cover all of his operations, farm operations as well as residence carpentry. The endorsement on the back of the instant policy, as well as the endorsement on Adraste Landreneau's policy, states that an additional premium was to be paid for farm operations, which we conclude covered residence carpentry as set forth in the insurer's file memo. Under such facts and circumstances, we are constrained to conclude that although the named insured was "Adraste Landreneau Gins, Inc., Mamou, Louisiana", the intended and real insured were Landreneau Enterprises, Adraste Landreneau Gins, Inc., and/or the Estate of Adraste Landreneau. The following statement in Maggio v. State Farm Mutual Automobile Ins. Co., La.App., 123 So. 2d 901, 905, is applicable to the present matter: Having found that the intended insured were the Landreneau interests, supra, we conclude that a mutual mistake existed between the insurer and the insured; such mistake was one of terminologydesignating the insured as only "Adraste Landreneau Gins, Inc., Mamou, Louisiana", instead of the interests, supra. There is ample authority for the reformation of insurance *288 contracts where, by reason of mutual mistake, the policy as written does not express the actual intent of the parties. The instant policy must therefore be reformed or corrected to recite the true intention of Adraste Landreneau, now deceased, and all his successors. Maryland Casualty Company v. Kramel, La.App., 80 So. 2d 897; Easley v. Boston Insurance Company, La.App., 132 So. 2d 654. For the reasons assigned, the judgments of the Court of Appeal, Third Circuit, are reversed and set aside. The judgments of the trial court are affirmed and reinstated. All costs are to be paid by defendants. HAMITER, J., concurs in the result. [1] The evidence reflects that the reconstructed house was rented at the time of trial. [2] Judge Albert Tate dissented from the opinions and judgments of the majority of the Court of Appeal. [3] Louis Calvin Landreneau's testimony is not contradicted and is supported by that of other witnesses.