Case Name: Donnie A. LeBLANC, Plaintiff-Appellee, v. PETCO, INC., et al., Defendants, v. AMERICAN HOME ASSURANCE COMPANY, Intervenor-Appellant
Court: United States Court of Appeals for the Fifth Circuit
Jurisdiction: United States
Decision Date: 1981-06-12
Citations: 647 F.2d 617
Docket Number: No. 80-3468
Parties: Donnie A. LeBLANC, Plaintiff-Appellee, v. PETCO, INC., et al., Defendants, v. AMERICAN HOME ASSURANCE COMPANY, Intervenor-Appellant.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 647
Pages: 617–621

Head Matter:
Donnie A. LeBLANC, Plaintiff-Appellee, v. PETCO, INC., et al., Defendants, v. AMERICAN HOME ASSURANCE COMPANY, Intervenor-Appellant.
No. 80-3468.
United States Court of Appeals, Fifth Circuit. Unit A
June 12, 1981.
C. G. Norwood, Jr., Scott E. Silbert, New Orleans, La., for intervenor-appellant.
Thompson & Sellers, Charles M. Thompson, Jr., Dennis R. Bundick, Abbeville, La., for plaintiff-appellee.
Before CHARLES CLARK and GEE, Circuit Judges, and SPEARS, District Judge.
District Judge of the Western District of Texas, sitting by designation.

Opinion:
GEE, Circuit Judge:
Atlantic Pacific Marine Corporation ("Atlantic Pacific") contracted to drill an oil well for Atlantic Richfield Company ("ARCO") on the outer continental shelf off the Louisiana coast. The Atlantic Pacific/ARCO contract required Atlantic Pacific to secure in all insurance policies obtained by it with respect to the contract a waiver of any right of subrogation the insurer would otherwise have against ARCO. Atlantic Pacific secured its Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq., coverage from the appellant, American Home Assurance Company ("American Home"); the policy contained the required waiver of American Home's right of subrogation against ARCO.
Appellee, Donnie A. LeBlanc, an employee of Atlantic Pacific, was injured while working with a set of rotary tongs on a fixed platform owned by ARCO. American Home paid to or for the benefit of LeBlanc a total of $18,615.86 in compensation benefits and medical expense payments. Le-Blanc filed suit against numerous defendants, including ARCO, Petco, Inc. ("Petco"), the supplier of the tongs, and B.J. Hughes, Inc. ("Hughes"), the manufacturer of the tongs. American Home intervened, asserting its compensation lien for the $18,615.86 it had paid LeBlanc. Prior to trial LeBlanc settled with ARCO, Hughes, and Petco for $50,000. The settlement stipulated that these three defendants were jointly liable to LeBlanc; under its terms each has paid LeBlanc one-third of the $50,000. Because LeBlanc and American Home were unable to agree on the amount of reimbursement due the insurer, the settlement further provided that any recovery subsequently secured by American Home would be paid by LeBlanc.
American Home and LeBlanc then proceeded to trial, the insurer claiming a right to reimbursement for the full $18,615.86 it had paid to or for the benefit of LeBlanc. The district court first reduced the amount claimed by one-third because American Home had waived its right of subrogation against ARCO, one of the three joint obli-gors. The trial court then reduced American Home's claim for the remaining $12,-410.59 by one-third of that figure and awarded that amount, $4,136.86, to Le-Blanc's attorney in partial payment of his fee. American Home appeals. Finding that the trial court erred in making either reduction we reverse and direct that judgment be rendered in favor of American Home for the full amount of its compensation lien.
As for the attorney's fee issue, the trial court, properly relying on our decision in Mitchell v. Scheepvaart Maatschappij Trans-Ocean, 579 F.2d 1274 (5th Cir. 1978), stated that "where the compensation carri er simply intervenes in the plaintiff's suit against a third party tortfeasor, the plaintiff's attorney may be awarded attorney's fees out of the intervenor's recovery on a quantum meruit basis." Subsequent to the trial court's decision, the United States Supreme Court held in Bloomer v. Liberty Mutual Insurance Co., 445 U.S. 74, 100 S.Ct. 925, 63 L.Ed.2d 215 (1980), that under the Longshoremen's and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq., no such reduction in the compensation lien is to be made. Accordingly, the trial court erred in reducing American Home's compensation lien for a portion of LeBlanc's attorney's fees.
The trial court's holding that American Home's compensation lien should be reduced by one-third because the insurer waived its right of subrogation against ARCO, one of the three joint obligors, is attacked by American Home on the ground that without regard to its right to the proceeds paid LeBlanc by ARCO, it is entitled to full reimbursement of the $18,615.86 from the $33,333.33 paid to LeBlanc by Pet-co and Hughes. American Home argues, and counsel for LeBlanc conceded at oral argument, that if LeBlanc had sued only Petco and Hughes and had recovered more than $18,615.86 from them American Home would have been entitled to full reimbursement. According to American Home, LeBlanc's decision to join ARCO as a defendant and his recovery of additional damages from ARCO can have no effect on American Home's rights in the proceeds received by LeBlanc from Petco and Hughes. We can only agree.
LeBlanc attempts to avoid this result by relying on the rule of Louisiana law that the release of one solidary obligor with an express reservation of rights against the others requires a pro rata reduction in the amount owed by the remaining solidary ob-ligors. La.Civ.Code art. 2203. The contention is that ARCO, Petco, and Hughes are solidary obligors; that a waiver of a right of subrogation is equivalent to a release; and thus that American Home's recovery must be reduced by one-third. If American Home's waiver of its right of subrogation against ARCO were the equivalent of a release, LeBlanc's argument might have merit. Since, however, the waiver in this case cannot be equated with a release, we reject the argument.
In Louisiana, but for article 2203 a release would adversely affect the remaining solidary obligors. Their right to contribution from the released tortfeasor would be defeated by the release because their right to contribution exists solely as a result of their being subrogated to the rights of the creditor against other solidary obligors; where one solidary obligor is released, the creditor has no rights against him to which the remaining obligors may be subrogated. Thus, the remaining obligors would be left without a right of contribution against the released obligor. See Danks v. Maher, 177 So.2d 412 (La.Ct.App.1965). In contrast, American Home's waiver of its right of subrogation against ARCO had no effect whatever on the relative liabilities of ARCO, Petco, and Hughes to LeBlanc; these defendants have already made equal one-third payments in satisfaction of the $50,000 settlement made with LeBlanc, and the outcome of this suit will have no effect on them. Accordingly, we decline to treat the waiver of subrogation in this case as a release under article 2203.
The judgment of the district court is REVERSED and the case REMANDED for further proceedings consistent with this opinion.
REVERSED and REMANDED.
. The original parties to the contract were ARCO and Walker-Huthance Offshore Co. Walker-Huthance assigned this contract to Atlantic Pacific, which assumed all obligations under the contract with ARCO.
. American Home argues that the Supreme Court's decision in Bloomer v. Liberty Mut. Ins. Co., supra, makes clear that federal law "demands that the employer/carrier be reimbursed out of the proceeds of any settlement of judgment obtained by the injured employee against a third party." To the extent that Louisiana law dictates a different result, American Home, citing Rodrigue v. Aetna Cas. & Sur. Co., 395 U.S. 352, 89 S.Ct. 1835, 23 L.Ed.2d 360 (1969), contends it is inconsistent with federal law and thus cannot be applied. In light of our view that art. 2203 is not inconsistent with American Home's reading of Bloomer on the facts presented by this case, we need not determine what result would be reached if Louisiana law did call for a reduction in the compensation lien.
. We do not imply that a waiver of a right of subrogation can never be treated as a release under art. 2203. If LeBlanc had not sued ARCO, Petco, and Hughes, American Home would have been subrogated to his rights against them. 33 U.S.C. § 933(b), (h). Suit by American Home against ARCO, however, presumably would have been precluded by the waiver of its right of subrogation against ARCO. We leave for another day the question of whether American Home's recovery against Petco and Hughes would have been reduced by one-third. See n.2, supra.