LOTTINGER, Judge.
This is a suit under the Workmen's Compensation Act of the State of Louisiana for death benefits by the surviving dependent widow of Clifton Holland for herself individually and for and on behalf of the three minor dependent step-children of deceased. Companion suit entitled Humphreys v. Marquette Casualty Company, 95 So.2d 872 was consolidated with this suit
The Lower Court rendered judgment in favor of Mrs. Dula Marie Holland and her three children, and against both insurance companies, in solido. The action by Mrs. Emey Holland, on behalf of her minor son was dismissed. Appeals have been taken by both insurance companies as well as Mrs. Emey Holland and Mrs. Dula Marie Holland.
The evidence shows that Bon Air Ranch was a partnership composed of Mrs. Zim W. Todd and her daughter, Mrs. Undine Todd Martone. It has been operated as a partnership since the death of Mr. Zim Todd in 1954. Prior to that time the ranch was operated as a sole proprietorship by Zim Todd. The ranch owned 670 acres of land, all of which was under lease to N. P. Martone as a rice farm. Bon Air Ranch was the lessee of an additional 15,000 acres of land from several lessors. Of the leased land, Bon Air subleased some of it to Mr. Martone as well as to others for rice farming.
The remainder of the leased land was used by Bon Air in its cattle raising activities. It might, therefore, be said that Bon Air Ranch was in the business of raising cattle as well as in the business of leasing and then subleasing land for rice farming.
Bon Air Ranch normally employed three "cowboys" to assist in its ranching activities. In addition thereto, Mr. Martone was the General Manager of the ranch, a position which he occupied without remuneration except for the satisfaction of assisting in the operation of the Bon Air Ranch, which was jointly owned by his wife and mother in law. Bon Air Ranch owned its own equipment, maintained its own payroll and other records, paid its own social security taxes, carried its own compensation insurance, and had its own cattle brand. At the time of the accident, the Bon Air Ranch owned some 1,800 head of cattle.
Mr. N. P. Martone was a rice farmer as well as a cattle rancher. He owned no real property. His business was conducted on property which he leased from others. Among the several lessors to Mr. Martone was the Bon Air Ranch. By far the greater portion of Mr. Martone's business was rice farming. As a sideline, he owned some 300 head of cattle.
Mr. Martone ran his own business. He normally employed some six to eight employees. He owned his own equipment, kept his own payroll as well as other accounts, paid his own social security taxes, carried his own compensation insurance, and had his own cattle brand. His business was conducted on property which he leased from others for a certain percentage of the crop raised. He owned several rice bins which were situated on property leased him from Bon Air. Bon Air also owned three bins which were adjoining those of Mr. Martone.
The testimony reflects that the busiest time of year for cattle ranching is during the summer months. Rice farming, on the other hand, has its peak period during harvest season, which is during the rancher's slack season. It was the custom in the area for the ranchers and farmers to swap labor, so as to help each other out during their busy season. This custom prevailed between Bon Air Ranch and
Although there was a close family relationship between the owners of the two businesses, and they cooperated one with the other, it appears that the businesses were separate and distinct entities. Loans were acquired by each in its own name; bank accounts and charge accounts with merchants were carried by each in its own name. Had it not been for the fact that they each had separate compensation insurers, this case possibly would not be before us.
The evidence discloses that on and for a few days prior to September 27, 1955, Mr. Martone was engaged in harvesting rice from land leased to him by Farmers Land and Canal Company. The rice was loaded on two trucks owned by Mr. Martone and transported a short distance away to a rice bin owned by Mr. Martone but situated on Bon Air Ranch. At the time, Mr. Martone had about seven regular employees on his payroll. As he needed two truck drivers and unloading helpers he told Clifton Holland and Joe Humphreys, who were both regularly employed as "cowboys" by Bon Air Ranch, to go to the fields and assist in harvesting his rice.
Holland and Humphreys had assisted in the harvesting for a few days prior to the accident. On the morning of September 27, 1955, prior to commencing the day's harvesting activity, it was necessary to move a horizontal and vertical auger from one bin to another bin. Holland and Humphreys assisted in moving the equipment, which came into contact with power lines resulting in the electrocution and death of both Holland and Humphreys.
Suits were filed by the surviving widows and alleged dependents of both Holland and Humphreys. Both suits were consolidated for trial, however, separate judgments were rendered. The facts are identical except for difference in the status of the dependents.
Holland's widow, Mrs. Dula Marie Holland instituted suit against the defendant, Marquette Casualty Company, compensation insurer for N. P. Martone, for maximum compensation and benefits, maximum funeral expenses, and penalties, interest and attorney fees for herself and her three minor children who were step-children of Holland and who had been dependent on Holland for support. Subsequently, Leslie James Holland, a child by prior marriage and an alleged dependent of Holland, was joined as a petitioner through his mother Mrs. Emey Holland. Defendant, Marquette Insurance Company attempted to bring in the compensation insurer of Bon Air Ranch, American Casualty Company, via Third Party Pleadings. This attempt was rejected by the Lower Court. Subsequently, the petitioners amended their pleadings to bring in American Casualty Company as a codefendant.
The main controversy is: Which insurance company is liable for compensation payments under the Workmen's Compensation Act? The parties have agreed that employees of both N. P. Martone and Bon Air Ranch are engaged in hazardous occupations. They have agreed that the accident occurred and have agreed to about everything except as to who is liable for payment of compensation, and to whom is compensation payable.
The Lower Court evidently concluded that Holland and Humphreys were working
In order to determine who is liable for the payment of compensation for the deaths of Holland and Humphreys, we must decide who was their employer at the time of the fatal accident.
56 C.J.S. Master and Servant § 330 b, p. 1093 in discussing the servant of one master controlled by another states as follows:
Malone, in his text on Louisiana Workmen's Compensation Law and Practice, on Page 61, in discussing borrowed employees says:
On Page 66, in discussing Partnership Employments and Joint Enterprises, Mr. Malone says:
In Benoit v. Hunt Tool Co., 219 La. 380, 53 So.2d 137, 140, Justice Hawthorne thoroughly explored the so-called "whose business" and "control" test, and concluded that these two tests are really one and the same and determining who controls the servant is merely a means of determining in whose business the servant is engaged.
In this case Justice Hawthorne stated:
Justice Hawthorne further stated:
The facts of the Hunt Tool Co. case are easily distinguishable. In the Hunt case, the employee was in the general employment of Hunt Tool Company, and was performing duties of the Hunt Tool Company at the time of the accident. He was under the control of Hunt Tool Company at the time of the accident, and the mere fact that the representative of Morris & Meredith suggested details of the work to be done did not create a relationship of master and servant between Guillory and Morris & Meredith.
The facts of the present case show that Bon Air Ranch and N. P. Martone were entirely separate businesses. Bon Air Ranch was in the business of raising cattle, while Martone was a rice farmer. Bon Air had no interest whatsoever in the harvesting of rice at the time of the accident. The rice was being harvested from lands of Farmers Land and Canal Company. Bon Air had nothing whatsoever to gain or lose from the harvest. The record shows, without contradiction, that both Holland and Humphreys knew when they were working for Bon Air, and they knew when they were working for Mr. Martone. The record shows that when they worked for Martone, they would sometimes jokingly say "I guess I will be a farmer today." The harvesting of the rice was under the exclusive jurisdiction and control of Mr. Martone as owner of the business and was solely for his benefit. He was supervising the operations at the time of the accident.
Mr. Martone, as owner, had the right to discharge his employees. He also had the right to discharge Holland and Humphreys from their duties in the field. We do not feel that they could be considered employees of Bon Air Ranch during the rice harvesting merely because Mr. Martone, who individually owned the rice crop was also the manager of Bon Air Ranch.
In Standard Oil Company v. Anderson, 212 U.S. 215, 29 S.Ct. 252, 254, 53 L.Ed. 480, the Supreme Court of the United States said:
The Standard Oil case was cited with approval in both the Hunt Tool case, supra, and in Spanja v. Thibodaux Boiler Works, Inc., La.App., 2 So.2d 668, 674. We feel that, under the doctrines as set forth in the Standard Oil Company case, and the test as used in the Hunt case, Holland and Humphreys were pro hac vice the servants of Mr. Martone insofar as the harvesting was concerned. Although Bon Air Ranch paid their wages during harvest operations, they were loaned to Mr. Martone who had complete control over them.
In the Spanja case, Spanja and another owned a boat which was rented as a standby boat to the Texas Co. He was assigned duties as standby for an oil rig located in marsh land near Empire, Louisiana. Repairs were needed to a steam boiler at the rig, and the Thibodaux Boiler Works sent machinery and a truck to do the repair work. Spanja was ordered to transport the truck with machinery from Empire to the rig. It was the job of the Thibodaux employees to load the truck and machinery on the boat furnished by the Texas Company. In loading the truck and machinery on the boat, Spanja, who was assisting in the loading operations, sustained serious injuries. Spanja sued the Thibodaux Company in tort. The court held Spanja to be a borrowed servant of the Thibodaux Company and dismissed the tort action. The holding of the Court was as follows:
We believe that the factual situation of the present case is even more favorable for application of the "Borrowed Servant Doctrine" than was the Spanja case. Of course, Mr. Martone's insurer claims that Holland and Humphreys were employees of Bon Air, and, in the alternative, that they were joint employees of Bon Air and Mr. Martone. The only facts which could possibly tend to such conclusion were (1) Holland and Humphreys were paid by Bon Air and (2) Mr. Martone was General Manager of Bon Air, as well as owner of his rice farms.
We conclude that Holland and Humphreys were borrowed servants of Mr. Martone at the time of the accident. It follows that an employer-employee relationship existed between Mr. Martone, on one hand, and Holland and Humphreys, on the other hand, at the time of the accident, and for which Mr. Martone's insurer is liable.
Although an appeal was lodged by Mrs. Emey Holland, on behalf of her minor son, Leslie James Holland, no brief has been filed on her behalf. The record discloses, however, that Leslie James Holland was a child of a prior marriage between Clifton Holland and Mrs. Emey Holland. Leslie was not living with his father, nor was he dependent upon his father, at the time of the accident. Clifton Holland very irregularly made gifts, or sent small sums of money, to Leslie. At most, Leslie could only be considered partially dependent upon his father.
LSA-R.S. 23:1232 provides that payments to a surviving widow and two or more children shall comprise the maximum sixty-five percent of wages allowed
We believe that Mrs. Holland is entitled to penalties and attorney fees as claimed under LSA-R.S. 22:658. There was no question but that petitioners were entitled to benefits under the compensation act. The only question was as to which insurance company, if not both, was liable. The two companies could have easily entered into an agreement to pay petitioners and then submit the controversy between themselves to arbitration. Or, either company could have offered half the amount due until the matter was settled. Instead, the companies arbitrarily let the widow and children suffer the hardships of a long and tedious legal proceeding which was merely a contest between the two insurance companies to fix liability on the other. It was necessary for petitioners to commence the proceeding to determine who was liable to them. We conclude that the refusal to pay benefits was arbitrary, capricious and without probable cause under the doctrine as set forth in Wright v. National Surety Corporation, 221 La. 486, 59 So.2d 695 and Fruge v. Pacific Employers Ins. Co., La. App., 71 So.2d 625, affirmed 226 La. 530, 76 So.2d 719.
For the reasons herein assigned, the judgment of the Lower Court is reversed, as it pertains against defendant American Casualty Company; and it is affirmed as it pertains against Marquette Casualty Company, but is amended so as to include penalties and attorney fees; and accordingly:
There is judgment herein in favor of petitioner, Mrs. Dula Marie Holland, and against defendant, Marquette Casualty Company, for compensation in the sum of $14.26 per week for a period not exceeding 300 weeks beginning September 27, 1955, with interest at 5% per annum on each past due installment from its due date until paid; and in favor of Daniel Gene Stanley, Judy Faye Sensat, and Paulette Gayle Sensat, and against defendant, Marquette Casualty Company, for compensation in the sum of $4.75 each per week for a period not exceeding 300 weeks commencing on September 27, 1955, with interest at the rate of 5% per annum on each past due installment from its due date; and
There is judgment herein in favor of petitioner, Mrs. Dula Marie Holland, and against Marquette Casualty Company, for burial expenses in the sum of $300, with interest at the rate of 5% per annum from judicial demand until paid; and
There is judgment herein in favor of petitioner, Mrs. Dula Marie Holland, and against defendant, Marquette Casualty Company, for penalties in the amount of 12% on all weekly compensation payments which are now due, with like penalty on all such payments which might become sixty days overdue, together with attorney's fees payable to the plaintiff in the sum of $500.00. All costs are to be paid by the defendant Marquette Casualty Company.
Reversed in part; amended and affirmed in part.
TATE, Judge (dissenting in part).
I concur with the excellently written and reasoned majority opinion that the judgment should be affirmed as against the special (or borrowing) employer, and that in view of its undoubted liability for compensation payments, penalties and attorneys' fees should be assessed against it for arbitrary non-payment of compensation due. I am unable to agree, however, that
Insofar as the disabled employee is concerned, no unfortunate results are sustained in the present case, since both general and special employer are financially responsible. But it is not difficult to foresee unfortunate and unjust results that can occur when the employee is directed by his financially responsible employer to report to work for a financially irresponsible "special" employer, in the course of which borrowed employment the disabling injury is sustained.
The general employer, to whom the disabled employee owes primary fealty and with whom the disabled employee entered into the employment contract partly in reliance upon the general employer's financial ability to take care of him should he be hurt, is fortuitously relieved of compensation liability by the happenstance that on the day of the accident it had sent the disabled employee to do the work of another. To say that the employee "consented" to a change of employment, when he did not disobey his general employer's commands and quit his job, seems to me to be unrealistic. (Cf. "But what seems on the surface to be such acceptance [by the employee of the transfer of employment] may actually be only a continued obedience of the general employer's commands". 1 Larson, Workmen's Compensation Law 712, Section 48.10.)
The Louisiana cases do not require the unfortunate result reached herein. They do not indicate that the general employer is not liable to its disabled employee; they simply indicate that the special employer is so liable. I think the situation analogous to that provided by the compensation act (LSA-R.S. 23:1061), where not only the disabled employee's general master, a subcontractor, is liable for workmen's compensation benefits; but also the latter's principal, who is receiving the direct benefit of the work performed, is secondarily liable.
Our compensation act provides that it shall apply "to every person performing services arising out of and incidental to his employment in the course of his employer's trade, business, or occupation", LSA-R.S. 23:1035. The employer of the decedent was undoubtedly the Bon Air Ranch, which paid his wages. (It was responsible for his social security, liable to him for unpaid wages, etc; there was a direct contract of employment between it and the decedent.) The compensation act does not provide that the employer is not responsible when he has loaned his employee to another employer. The courts, however, have held the borrowing employer liable in compensation under the general theory that one whose work is being performed by another, occupies for compensation purposes a relationship of employer also to the person injured in his service.
I think the conclusion reached by the majority herein is prohibited by such cases as Dobson v. Standard Acc. Ins. Co., 228 La. 837, 84 So.2d 210. There, a truck driver employed by a wholesale distributor was injured while working at his employer's residence upon orders of his employer. The Supreme Court, reversing the Second Circuit's determination that the injury was noncompensable because not incurred in the employer's business, stated: "Services `arise out of' and are `incidental to' an employment, whenever the employment calls for just such services." Continuing, the high tribunal held that whenever the employer requests the employee to perform services, the employer cannot deny that such services arose out of the employment because, "Otherwise, by what right has the employee been called upon to perform them?" 84 So.2d 212.
The cases cited to us or relied upon by the majority are completely inapplicable to the present question. Such tort cases as Benoit v. Hunt Tool Co., 219 La. 380, 53 So.2d 137;
Tort cases such as the B & G Crane Service, Inc., v. Thomas W. Hooley & Sons, 227 La. 677, 80 So.2d 369; Dixie Machine, Welding & Metal Works v. Boulet Transp. Co., La.App. 1 Cir., 38 So.2d 546; Hutto v. Arbour, La.App. 1 Cir., 4 So.2d 84, simply concern the liability, as between the general and special employer, for damages caused through the negligence of the borrowed employee, either to third persons or to property of one of the parties. They are not relevant to the present discussion.
While cases may be found sustaining compensation recovery against the special employer, see Sadler v. May Bros., Inc., La.App. 1 Cir., 185 So. 81, 82,
As indicated by the extensive supplementing annotations entitled "Workmen's compensation: liability of general or special employer for compensation to injured employee" found at 152 A.L.R. 816, 58 A.L.R. 1467, 34 A.L.R. 768, and 3 A.L.R. 1181, varied approaches to this problem are found in the other American jurisdictions. Some jurisdictions provide that the injured employee may recover at his option either against his general employer or against the special employer to whom he was lent, or against both; others that he may recover against the general employer, with the latter's right of reimbursement from the special employer; others that he may recover only against the general employer or only against the special employer.
But authorities from other States must be read in the context of their statutory setting. Louisiana alone of the American jurisdictions does not require that the employer secure his employees against compensation liability to them by insurance or otherwise; in the absence of which, it is usually provided that the disabled employee may elect either the compensation remedy or the old common-law remedy (with, in the latter case, the employer deprived of the customary common law defenses of assumption of the risk, the fellow-servant doctrine, and contributory negligence.) 2 Larson, Workmen's Compensation Law, 148 et seq. (Section 67.20 et seq.), 443
Thus, since compensation suits in these other jurisdictions customarily are against financially responsible defendants, basically the problem involved is which of the two employers involved shall be ultimately responsible for the injury concerned, with consequent effect upon the employer's experience rating for insurance premiums upon the risks involved. Due to this provision common to all States except Louisiana, in no State except Louisiana would such a precedent as we here seek to establish result in the real risk that an injured employee, deprived by such a doctrine of his remedy against his own (the general) employer, be relegated to a remedy against a financially irresponsible so-called "special employer" with whom the disabled employee had no employment agreement except such as may be fictitiously assigned by application of the "borrowed employee" doctrine. Cf. 58 Am.Jur. 812, "Workmen's Compensation", Section 343.
The question is not before us as to which (if either) of the two employers, as between themselves, should be solely responsible. While the insurer of the special or borrowing employer, Martone, filed a third-party petition calling the insurer of the general employer (Bon Air Ranch) in warranty, the dismissal of this petition as erroneous was not urged upon appeal and is presumed abandoned. The general employer did not file any third party petition calling the special employer or his insurer in warranty.
As a general proposition, there may be much to support the proposition that the special employer—in the risks of whose business the employee was accidentally hurt—should be ultimately responsible as between the two employers; or the contrary proposition that the responsibility should be borne by the general employer in whose actual employment the injured employee sustained the accident, as is an independent contractor vis a vis the principal, LSA-R.S. 23:1061. In the facts of this particular case, there is also much to justify the proposition expressed, in a discussion of the vicarious liability of the employer as to others, at 57 C.J.S. Master and Servant § 566, p. 290:
But this question not being before us, I see no need to express any opinion as to which of these legal rules should be applicable under the facts of the present case.
For the above and foregoing reasons, I respectfully dissent from the majority opinion insofar as it reversed the District Court's holding the general employer's compensation insurer solidarily liable with the insurer of the special employer.
Application for Rehearing.
TATE, Judge (dissenting from refusal to grant rehearing).
I adhere to the views expressed in my original dissent.
With regard to the majority's reversal of the District Court's holding that the insurers of both general and special employer were solidarily liable to the dependents of the workman killed in the course of his employment, I find to be extremely pertinent the observation found in a comment entitled "Workmen's Compensation: Liability of General and Special Employer", 26 Calif.L.Rev. 370 at 374-5:
For these reasons, I respectfully dissent from the refusal of my brethren to grant a rehearing, in order to reinstate the opinion of the District Court insofar as it held both defendants liable in solido, at least as to the dependents of the deceased employee.
Comment
User Comments