Shane Salathe Versus The Parish of Jefferson Through the Department of Sewerage ( 2020 )

SHANE SALATHE NO. 19-CA-497
VERSUS FIFTH CIRCUIT
THE PARISH OF JEFFERSON THROUGH COURT OF APPEAL
THE DEPARTMENT OF SEWERAGE
STATE OF LOUISIANA
ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT
PARISH OF JEFFERSON, STATE OF LOUISIANA
NO. 749-298, DIVISION "M"
HONORABLE HENRY G. SULLIVAN, JR., JUDGE PRESIDING
October 21, 2020
ROBERT A. CHAISSON
JUDGE
Panel composed of Judges Robert A. Chaisson,
Hans J. Liljeberg, and John J. Molaison, Jr.
AFFIRMED
RAC
HJL
JJM
COUNSEL FOR PLAINTIFF/APPELLEE,
KAREN G. SALATHE AND WAYNE SALATHE
Richard C. Trahant
Jack E. Morris
COUNSEL FOR DEFENDANT/APPELLEE,
CONSOLIDATED SEWERAGE DISTRICT NO. 1
OF THE PARISH OF JEFFERSON
Guice A. Giambrone, III
Jacob K. Best
COUNSEL FOR DEFENDANT/APPELLEE,
AMERICAN ALTERNATIVE INSURANCE COMPANY
Tara E. Clement
Jameson M. Taylor
COUNSEL FOR INTERVENOR/APPELLANT,
AMERISURE INSURANCE COMPANY
Sidney W. Degan, III
Foster P. Nash, III
Stephanie L. Cheralla
Travis L. Bourgeois
CHAISSON, J.
In this personal injury lawsuit, Amerisure Insurance Company
(“Amerisure”) filed a petition of intervention seeking reimbursement of workers’
compensation benefits that it paid to Shane Salathe, the injured plaintiff.
Amerisure now appeals a judgment of the trial court that granted motions for
summary judgment filed by Consolidated Sewerage District No. 1 of the Parish of
Jefferson (“the Parish”), American Alternative Insurance Corporation (“AAIC”),
and Karen G. Salathe and Wayne Salathe, which dismissed with prejudice the
petition of intervention filed by Amerisure. For the following reasons, we affirm
the judgment of the trial court.
FACTS AND PROCEDURAL HISTORY
This case, which has twice previously been before this Court on appeal
regarding issues of insurance coverage, arises from a worksite accident resulting in
serious injuries to Shane Salathe.1 See Salathe v. Par. of Jefferson through Dep't
of Sewerage, 18-447 (La. App. 5 Cir. 12/19/18), 262 So.3d 429 and 19-427 (La.
App. 5 Cir. 7/15/20), 300 So.3d 460. The following facts and procedural history
are relevant to this appeal.
On November 7, 2014, the Parish entered into a contract with Fleming
Construction Company, LLC (“Fleming”) for the replacement or restoration of
existing sewer mains in Jefferson Parish. The construction contract between the
Parish and Fleming, the Standard General Conditions of the Construction Contract,
required Fleming to procure certain insurance policies naming the Parish as an
additional insured, including commercial general liability (CGL) and umbrella
insurance policies. The construction contract also required Fleming to procure
workers’ compensation insurance coverage to protect against the risk of workplace
1
After the death of the original plaintiff, Shane Salathe, the trial court granted the motion of Mr. Salathe’s
parents, Karen and Wayne Salathe, to substitute themselves as his legal successors in this litigation.
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injury to Fleming’s employees. The particular contractual provisions requiring
insurance that are at issue in this appeal state the following:
5.04 CONTRACTOR’S Liability Insurance
A. CONTRACTOR shall purchase and maintain such liability and
other insurance as is provided herein or in the Supplementary
Conditions, as is appropriate for the Work being performed and as
will provide protection from claims set forth below which may arise
out of or result from CONTRACTOR’s performance of the Work and
CONTRACTOR’s other obligations under the Contract Documents,
whether it is to be performed by the CONTRACTOR, any
Subcontractor or Supplier, or by anyone directly or indirectly
employed by any of them to perform any of the Work, or by anyone
for whose acts any of them may be liable;
…
1. claims under workers’ compensation, disability benefits, and
other similar employee benefit acts;
2. claims for damages because of bodily injury, occupational
sickness or disease, or death of CONTRACTOR’s employees;
…
B. The policies of insurance so required by this paragraph 5.04 to be
purchased and maintained shall:
1. with respect to comprehensive general liability, automobile
liability, and umbrella liability, name the OWNER as additional
insured, be primary to any insurance carried by the OWNER, and
with respect to workers’ compensation only, include a Waiver of
Subrogation in favor of the OWNER and any principals for whom
the OWNER is working, including any co-lessors of such
principals; and, with respect to all of the foregoing, be subject to
the approval of the owner;
…
4. include contractual liability insurance covering
CONTRACTOR’s indemnity obligations under paragraphs 6.07,
6.11, and 6.20;
…
Pursuant to these provisions, Fleming procured a worker’s compensation
policy from Amerisure, the “Workers Compensation and Employers Liability
Insurance Policy” No. WC-2077898-03, which contained a “Waiver of Our Right
to Recover from Others Endorsement.” Fleming also procured from Amerisure the
Commercial General Liability policy bearing Policy No. GL 20778990301.
Further, Fleming procured from Alterra America Insurance Company (“Alterra”)
the Commercial Excess Liability policy bearing Policy No. MAXA3EC50001291.
19-CA-497 2
On February 5, 2015, while ascending a ladder from a wet well where he
had performed work, Fleming foreman Shane Salathe fell off the ladder nearly
thirty feet to the bottom of the well. He suffered catastrophic brain injury and
paraplegia. A few months later, on May 1, 2015, Mr. Salathe filed a petition for
damages naming the Parish as a defendant. He alleged that the Parish is liable for
his injuries through its negligence in failing to maintain the hinge on the well door,
which failed when he reached for it prior to his fall down the well. In a second
amended and supplemental petition, Mr. Salathe added as defendants the Parish’s
insurer, AAIC, and Fleming’s insurers, Amerisure and Alterra, because of their
contractual obligations to defend and indemnify the Parish as a named insured.
On January 25, 2016, Amerisure filed a petition of intervention in its
capacity as workers’ compensation insurance carrier for Fleming, wherein it
alleged that it had paid workers’ compensation benefits to Mr. Salathe and is
therefore entitled to credit or reimbursement by preference and priority out of any
settlement or judgment rendered in favor of Mr. Salathe. Alternatively, Amerisure
alleged that it is entitled to recover directly from defendants all benefits, costs, and
fees it has paid on behalf of Mr. Salathe. In his answer to the petition of
intervention, Mr. Salathe denied Amerisure’s claim and averred that Amerisure
wrongfully failed and refused to pay certain claims for compensation and benefits
owed to him pursuant to the policy and the Louisiana Workers Compensation Act.
The Parish also filed an answer to the petition denying Amerisure’s claim and
raising the affirmative defense of waiver.
Both Mr. Salathe and the Parish averred in their answers to the petition and
in subsequently filed motions for summary judgment, that pursuant to the terms set
forth in both the General Conditions Contract between Fleming and the Parish and
the “Waiver of our Right to Recover from Others Endorsement” to the Amerisure
19-CA-497 3
workers’ compensation policy, Amerisure contractually waived its right to recover
any benefits it has paid or will be called upon to pay on behalf of Mr. Salathe.
An additional development in the litigation during this time was that
Amerisure, in its capacity as the CGL carrier, and Alterra, in its capacity as the
excess liability carrier, filed motions for partial summary judgment seeking to limit
their liability under the CGL and umbrella policies issued to Fleming. In
particular, they sought to have the trial court declare as null, void, and
unenforceable under Louisiana law: 1) the sections of the General Conditions
Contract which required Fleming to contractually indemnify the Parish for any
bodily injuries which occurred to Fleming employees on the job which were
caused by the Parish’s own negligence and; 2) those provisions which required
Fleming to name the Parish as an Additional Insured in the CGL and umbrella
insurance policies to cover those same injuries. In a judgment rendered May 9,
2018, the trial court granted these motions and in so doing declared, “[t]he Court
finds that the contractual indemnity and insuring agreements between the Parish of
Jefferson and Fleming Construction Company, LLC are void, null, and
unenforceable under Louisiana law.” Mr. Salathe and the Parish and its insurer,
AAIC, appealed that judgment.
Subsequently, in November 2018, Amerisure, in its capacity as workers’
compensation insurer, filed its opposition to the motions for summary judgment
seeking the dismissal of its petition of intervention. In its opposition, Amerisure
initially argued that the waiver in the policy endorsement is inapplicable because
of the May 9, 2018 judgment of the trial court that declared null, void, and
unenforceable the language in the General Conditions Contract that required the
Parish to be named an additional insured on the commercial general liability and
umbrella insurance policies procured by Fleming. Shortly thereafter, on
December 19, 2018, this Court, in the first appeal of this case, issued an opinion
19-CA-497 4
vacating the May 9, 2018 judgment of the trial court on procedural grounds,
without addressing the parties’ arguments on the merits. Salathe, 262 So.3d at 432.
After this Court vacated the May 9, 2018 judgment on procedural grounds,
Amerisure and Alterra, in their capacities as insurers on the CGL and umbrella
policies issued to Fleming, refiled their motions for summary judgment seeking to
have the contractual indemnity and additional insured requirements of the General
Conditions Contract declared null, void, and unenforceable. Additionally,
Amerisure, in its capacity as workers’ compensation insurer, filed a supplemental
memorandum in opposition to the motions for summary judgment seeking
dismissal of its petition of intervention. In this supplemental memorandum,
Amerisure argued that any ruling on the motions seeking dismissal of its
intervention would be premature because there was no final judgment on whether
the language of the General Conditions Contract was null, void, and unenforceable.
Alternatively, Amerisure argued that the motions should be denied based on the
language of the endorsement itself, or a general prohibition against double
recovery.
On May 16, 2019, the trial court granted the motions for summary judgment
filed by Mr. Salathe and Jefferson Parish (and its insurer, AAIC) and dismissed
with prejudice Amerisure’s petition of intervention. Two weeks later, on May 30,
2019, the trial court ruled on the motions for summary judgment filed by
Amerisure and Alterra, in their capacities as insurers on the CGL and umbrella
policies issued to Fleming, and rendered a judgment again declaring the language
of the General Conditions Contract requiring Fleming to contractually indemnify
or name the Parish as an additional insured on the CGL and umbrella policies to be
null, void, and unenforceable. Amerisure now appeals the May 16, 2019 judgment
that dismissed its petition of intervention.
19-CA-497 5
On appeal, Amerisure enumerates only one assignment of error, that the trial
court erred in granting the summary judgment motions and dismissing Amerisure’s
petition of intervention, but raises multiple issues for review which may be
summarized as follows: whether summary judgment was appropriate in light of the
trial court’s subsequent judgment declaring terms of the General Conditions
Contract null, void, and unenforceable; whether the trial court erred in its
interpretation of the endorsement language which purports to prevent a double
recovery or third-party benefit accruing to the Salathes. We address these errors in
our discussion below.
DISCUSSION
Appellate courts review summary judgments de novo using the same criteria
that govern the trial court’s determination of whether summary judgment is
appropriate. In re Succession of O’Krepki, 16-50 (La. App. 5 Cir. 5/26/16), 193
So.3d 574, 577. A motion for summary judgment should be granted if, after an
adequate opportunity for discovery, the motion, memorandum, and supporting
documents show that there is no genuine issue as to material fact and that the
mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(4).
We begin with the primary argument made in Amerisure’s assignment of
error: whether, in its endorsement, Amerisure contractually waived its right to
recover any benefits or payments made under the workers’ compensation policy.
The language of the Waiver of Right to Recover from Others Endorsement states:
We have the right to recover our payments from anyone liable for any
injury covered by this policy. We will not enforce our right against
the person or organization named in the Schedule. (This agreement
applies only to the extent you perform work under a written contract
that requires you to obtain this agreement from us.)
This agreement shall not operate directly or indirectly to benefit
anyone not named in the Schedule.
19-CA-497 6
Schedule
“Any person or organization required by written contract or certificate
of insurance.”
(Emphasis supplied.)
Pursuant to this language, if the terms of the General Conditions Contract
required Fleming to procure a workers’ compensation policy which included a
waiver of subrogation in favor of the Parish, then the Parish is an organization
named in the Schedule against which Amerisure agrees not to enforce its rights. It
is uncontested by the parties that Section 5.04 of the General Conditions Contract
does require Fleming to procure such a policy. The question thus becomes
whether this language has been declared null, void, and unenforceable with respect
to the workers’ compensation policy.
Amerisure argues that the May 30, 2019 judgment of the trial court,
rendered subsequent to the judgment at issue in this appeal, renders these terms
null, void, and unenforceable with respect to the workers’ compensation policy.
We note that this argument (i.e., that the substance of a subsequent judgment
affects this Court’s analysis of the issues in this appeal) is distinct from the
argument made to the trial court prior to its May 16, 2019 judgment, which was
that any judgment on the motions for summary judgment would be premature.
Amerisure’s argument, therefore, is a new argument that was not before the trial
court when it ruled on May 16, 2019. Ordinarily, this Court would decline to
consider such a new argument on appeal. See Uniform Rules, Courts of Appeal,
Rule 1-3; Ehsani-Landry v. Jefferson Par., 17-468 (La. App. 5 Cir. 3/14/18), 240
So.3d 332, 335. However, given the unusual procedural circumstances of this
case, with the original May 9, 2018 judgment of the trial court having been vacated
by this Court on appeal, and in the interests of judicial economy, we will consider
the merits of Amerisure’s arguments regarding the effect of the subsequent
judgment.
19-CA-497 7
Amerisure’s argument requires a careful examination of the trial court’s
May 30, 2019 judgment, the language of which is distinct from the prior, May 9,
2018 judgment vacated by this Court. The May 30, 2019 judgment states:
IT IS ORDERED, ADJUDGED, AND DECREED that the Motion for
Summary Judgment on Behalf of Amerisure Insurance Company and
Alterra Insurance Company is hereby GRANTED as follows:
To the extent that the contractual indemnity provisions of the contract
between Consolidated District No. 1 of the Parish of Jefferson and
Fleming Construction Company, LLC., could be interpreted as
requiring Fleming Construction Company, LLC to indemnify
Jefferson Parish for Jefferson Parish’s own sole, joint, or concurrent
negligence, those provisions are declared null, void, and
unenforceable under Louisiana law.
To the extent that the contractual indemnity provisions of the contract
between Consolidated District No. 1 of the Parish of Jefferson and
Fleming Construction Company, LLC could be interpreted as
requiring Fleming Construction Company, LLC to name Jefferson
Parish as an Additional Insured for the purpose of providing coverage
to Jefferson Parish for Jefferson Parish’s own negligence, those
provisions are declared null, void, and unenforceable under Louisiana
law.
The contractual indemnity provisions of the contract between
Consolidated District No. 1 of the Parish of Jefferson and Fleming
Construction Company, LLC., remain valid, so long as they are not
interpreted to require indemnification or additional insured coverage
against Jefferson Parish’s own sole, joint, or concurrent negligence.
IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that all
claims asserted against Amerisure’s Commercial Liability Policy
#GL20778990301 and Alterra’s Commercial Excess Liability Policy
#MAXA3EC50000129 are hereby dismissed, with prejudice, to the
extent that the policies could be interpreted as providing coverage for
Jefferson Parish’s own sole, joint, or concurrent negligence.
We do not read the language of this judgment as declaring null, void, and
unenforceable those provisions of the General Conditions Contract relating to the
procurement of workers’ compensation insurance. Nor do we read this language as
declaring null, void, and unenforceable the waiver of subrogation in favor of the
Parish. On the contrary, the trial court’s judgment has been carefully worded and
tailored to address only those provisions relating to the CGL and umbrella policies,
19-CA-497 8
and explicitly recognizes as valid the other portions of the General Conditions
Contract. As such, Jefferson Parish is properly considered as named party in the
Waiver of Right to Recover from Others Endorsement.2
We consider next Amerisure’s argument that the language of the
endorsement which states that “[the] agreement shall not operate directly or
indirectly to benefit anyone not named in the Schedule,” precludes granting a
motion for summary judgment dismissing their petition of intervention because it
would benefit the Salathes who are not named in the Schedule.
Mr. Salathe, as an employee of Fleming, is a third party beneficiary to the
insuring agreement between Fleming and Amerisure. As La. C.C. art. 1978 states,
once a third party has manifested his intention to avail himself of the benefit, the
parties may not dissolve the contract by mutual consent or revoke the stipulation
without the beneficiary’s agreement. In Louisiana, such a contract for the benefit
of a third party is called a “stipulation pour autrui.” Maggio v. Parker, 17-1112
(La. 6/27/18), 250 So.3d 874, 880. A stipulation pour autrui is never presumed.
Id. The most basic requirement of such a stipulation is that the contract manifest a
clear intention to benefit the third party. Id.Such an intention is manifest here in the terms of the Amerisure workers’
compensation policy and in Amerisure’s petition of intervention. First, the policy
clearly acknowledges third party beneficiaries and their rights. Part One Section G
of the policy states, “[w]e [Amerisure] have your [Fleming’s] rights, and the rights
of persons entitled to the benefits of this insurance, to recover our payments from
anyone liable for the injury,” and Section H states further “[w]e are directly and
primarily liable to any person entitled to the benefits payable by this insurance.
2
Our determination here renders moot any further discussion concerning the applicability of La. R.S.
9:2780.1, which was not before the trial court. Further discussion of that law, which includes exceptions
for recovery of damages under workers’ compensation laws and allowances for certain indemnity
contracts where evidence shows the indemnitor recovered the cost of the required insurance in the
contract price, may be found in our prior disposition of the other appeal in this case, Salathe v. Par. of
Jefferson Through Dep't of Sewerage, 19-427 (La. App. 5 Cir. 7/15/20), 300 So.3d 460.
19-CA-497 9
Those persons may enforce our duties; …” Next, Amerisure’s petition of
intervention acknowledges that Mr. Salathe is a beneficiary under the policy who
has been paid compensation in accordance with the terms of the policy and the
provisions of the Louisiana Workers’ Compensation Act. Fleming was
undoubtedly aware, when purchasing the waiver of subrogation endorsement
which would preclude Amerisure from recovering against third party tortfeasors,
that this could provide a benefit to its own injured employees covered by the
policy. See Fontenot v. Chevron U.S.A. Inc., 95-1425 (La. 7/2/96), 676 So.2d 557,
566. Thus, the language of the endorsement creates a stipulation pour autrui in
favor of the Salathes, which cannot be revoked without their consent.
Finally, we address Amerisure’s argument that the motions to dismiss their
petition of intervention should not be granted because doing so would allow the
Salathes a double recovery for the injuries suffered by Mr. Salathe. Amerisure
points to the fact that Jefferson Parish has been named as the only tortfeasor in the
Salathes’ petition for damages. We find this argument to be without merit both
because of the arguments articulated above and because it disregards that, at the
trial on the petition, the triers of fact may apportion fault to parties other than the
Parish, including Fleming and Mr. Salathe himself. As such, this argument is
speculative and without merit.
CONCLUSION
For the foregoing reasons, we find that the trial court did not err in granting
the motions for summary judgment filed by the Salathes and Jefferson Parish. On
our de novo review, we find no genuine issues of material fact, and that the
Salathes and the Parish are entitled to summary judgment as a matter of law. The
judgment of the trial court is affirmed.
AFFIRMED
19-CA-497 10
SUSAN M. CHEHARDY CURTIS B. PURSELL
CHIEF JUDGE CLERK OF COURT
MARY E. LEGNON
FREDERICKA H. WICKER
CHIEF DEPUTY CLERK
JUDE G. GRAVOIS
MARC E. JOHNSON
ROBERT A. CHAISSON SUSAN BUCHHOLZ
STEPHEN J. WINDHORST
FIRST DEPUTY CLERK
HANS J. LILJEBERG
JOHN J. MOLAISON, JR. FIFTH CIRCUIT
MELISSA C. LEDET
JUDGES 101 DERBIGNY STREET (70053)
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GRETNA, LOUISIANA 70054 (504) 376-1400
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NOTICE OF JUDGMENT AND CERTIFICATE OF DELIVERY
I CERTIFY THAT A COPY OF THE OPINION IN THE BELOW-NUMBERED MATTER HAS BEEN DELIVERED
IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY
OCTOBER 21, 2020 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES
NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:
19-CA-497
E-NOTIFIED
24TH JUDICIAL DISTRICT COURT (CLERK)
HONORABLE HENRY G. SULLIVAN, JR. (DISTRICT JUDGE)
JACK E. MORRIS (APPELLEE) RICHARD C. TRAHANT (APPELLEE) GUICE A. GIAMBRONE, III (APPELLEE)
JACOB K. BEST (APPELLEE) JAMES A. PRATHER (APPELLEE) DANICA B. DENNY (APPELLEE)
KATHLEEN P. RICE (APPELLEE) PATRICK J. MCSHANE (APPELLEE) JAMESON M. TAYLOR (APPELLEE)
TARA E. CLEMENT (APPELLEE) SIDNEY W. DEGAN, III (APPELLANT) TRAVIS L. BOURGEOIS (APPELLANT)
GLEN E. MERCER (APPELLEE)
MAILED
LAUREN A. GUICHARD (APPELLEE) KOURTNEY TWENHAFEL (APPELLEE) FOSTER P. NASH, III (APPELLANT)
ATTORNEY AT LAW ATTORNEY AT LAW STEPHANIE L. CHERALLA (APPELLANT)
1100 POYDRAS STREET 365 CANAL STREET ATTORNEYS AT LAW
SUITE 3700 SUITE 1710 400 POYDRAS STREET
NEW ORLEANS, LA 70163 NEW ORLEANS, LA 70130 SUITE 2600
NEW ORLEANS, LA 70130
WILLIAM P. WORSLEY (APPELLEE) CHRISTOPHER MEEKS (APPELLEE)
ATTORNEY AT LAW JAMES W. ADAIR (APPELLEE)
701 POYDRAS STREET ATTORNEYS AT LAW
SUITE 4800 THREE SANCTUARY BOULEVARD
NEW ORLEANS, LA 70139 SUITE 301
MANDEVILLE, LA 70471