Court Opinion

ID: 9467875
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:58:37.890954+00
Date Added: 2024-06-11T17:40:34.313084
License: Public Domain

SPEARS, District Judge,
Dissenting:
I agree, of course, that the decision of the district court on the question of attorney’s fees awarded to LeBlanc’s counsel must be reversed. However, I would affirm the trial court’s action in deducting one-third (%) of American Home’s claim for reimbursement before awarding it the balance, and to that extent I respectfully dissent.
The majority has chosen to ignore a substantial part of the pertinent case law, and make its decision on the basis of a “contrast” between the rights of solidary obli-gors, “but for” Article 2203,1 and the effect of American Home’s waiver of its right of subrogation on the relative liabilities of ARCO, Petco and Hughes to LeBlanc. Thus, by erroneously adjudicating this controversy as of the time the proceeds of the settlement came into LeBlanc’s hands, rather than pursuant to the legal rights of LeBlanc and American Home, as plaintiff and intervenor, separate and apart from the settlement itself, the majority would circumvent the rights of LeBlanc, and permit American Home to recover the entire amount of its claim (a situation that could not have existed if a trial to judgment had taken place) and thereby do indirectly what it could not have done directly.
Aside, therefore, from the questionable nature of the premises utilized by the majority in its “contrast” syllogism, is the simple fact that American Home’s rights are derivative of the employee’s cause of action. In order to assert its compensation lien, American Home exercised its right to intervene in this lawsuit. If LeBlanc had received nothing, there would have been no reimbursement whatever to American Home. As it is, since ARCO, together with Petco and Hughes, the other two solidary obligors, were all parties to the suit, the law requires that any recovery by American Home would have to be reduced by one-third.
The Courts have long recognized an independent right of subrogation in favor of employers and their carriers who voluntarily pay compensation to an injured employee without a formal award. The Etna, 138 F.2d 37 (3rd Cir. 1943); Allen v. Texaco, Inc., 510 F.2d 977 (5th Cir. 1975). However, as above indicated, this right of subrogation is deemed to be wholly derivative of the employee’s right of action against third parties. The employer-carrier’s rights are properly asserted through intervention in the employee’s suit for the purpose of placing a lien on the recovery for compensation benefits previously paid. In Allen this Court held that a waiver of subrogation rights by a compensation carrier barred a lien against and participation in the proceeds of a settlement between the injured employee and the third party tortfeasor. “It is fundamental”, noted the Court, “that a lien does not exist without a right or obligation to support it”. (Emphasis added). Id. at 981.
As in Allen, the only right which American Home had to the proceeds of the settlement with the third party tortfeasors was the right of subrogation to which it succeeded as insurer. Consequently, when American Home waived its right of subro-gation against ARCO, it necessarily waived the lien which it claims to assert to the proceeds paid into the recovery fund by *621ARCO. See, e. g., Petro-Weld v. Luke, 619 F.2d 418, 421 (5th Cir. 1980) (although the waiver precluded reimbursement for the benefits already paid, it did not prevent future compensation benefits determined according to the statutory set-off); Capps v. Humble Oil & Refining Co., 536 F.2d 80, 81-82 (5th Cir. 1976) (carrier which had agreed to waive its rights of subrogation could not avoid the consequences of its agreement, because it had no other rights independent of the right of subrogation for reimbursement); Stewart v. Cran-Vela Rental Co., 510 F.2d 982, 984-985 (5th Cir. 1975) (waiver of subrogation by a carrier precludes the carrier from asserting a compensation lien against recovery by employee in a suit against third party tortfeasor).
The effect of the trial court’s ruling here was to treat the waiver as a release of ARCO, one of the three solidary obligors, and require a pro rata reduction in the amount owed by the remaining obligors, without requiring the employee to make up the difference. See Danks v. Maher, 177 So.2d 412 (La.App. 4th Cir. 1965); La.Civ. Code, Art. 2203.
The majority postulates that if LeBlanc had sued only Petco and Hughes, and had received more than the amount claimed by American Home from them, American Home would have been entitled to full reimbursement. This necessarily presupposes that Petco and Hughes were the only soli-dary obligors; however, the fact remains that there were three — not two — solidary obligors. Under Louisiana law, when the combined negligence of two or more parties contributes to and results in an injury, they are deemed joint tortfeasors, and are liable in solido to the injured party. Lowenburg v. Labor Pool of America, 296 So.2d 846 (La.App.), writ denied, 300 So.2d 891 (La. 1974). So, even if LeBlanc had sued only Petco and Hughes, it is a virtual certainty that ARCO would have been impleaded under Rule 14, F.R.Civ.P., or joined as a party under Rule 19, F.R.Civ.P., and if the case had proceeded to judgment against all three, Article 2203, in either situation, would have limited American Home as In-tervenor, to only two-thirds of the total amount it sought.
At no time did ARCO voluntarily relinquish its right to the waiver of subrogation by American Home. Even when the settlement agreement was reached, the amount American Home was entitled to receive was left for resolution by the court. However, the majority appears to believe that the settlement has somehow resurrected and breathed new life into a lien that had ceased to exist, and changed the relative rights of the parties to the extent that the carrier would be entitled to reimbursement in full for the compensation it paid, whereas, the injured employee would have to pay out of his pocket that which the carrier had specifically agreed to forego. With this I cannot agree.

. La.Civ.Code, Art. 2203 provides:
“The remission or conventional discharge in favor of one of the co-debtors in solido, discharges all the others, unless the creditor has expressly reserved his rights against the latter.
“In the latter case, he cannot claim the debt without making a deduction of the part to him to whom he has made the remission.”