Berard v. Lemoine Co., LLC

Citations: 169 So. 3d 839; 15 La.App. 3 Cir. 152; 2015 La. App. LEXIS 1367; 2015 WL 4099025Docket: No. 15-152

Court: Louisiana Court of Appeal; July 8, 2015; Louisiana; State Appellate Court

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Tony and Mona Berard filed a personal injury lawsuit following Mr. Berard's severe injuries from falling through a skylight while working for Schilling Acquisitions, Inc., which owned the building. The Berards sued both Schilling and The Lemoine Company, LLC, a contractor for renovations. After adding Mrs. Berard as a plaintiff, Lemoine moved for summary judgment, claiming it was Mr. Berard’s statutory employer, thus limiting its liability under the Louisiana Workers’ Compensation Act. The trial court sided with Lemoine, dismissing it as a defendant after a hearing on October 20, 2014, with a judgment executed on November 3, 2014. The Berards and Schilling appealed the dismissal. Louisiana appellate courts review summary judgments de novo, adhering to the criteria set for trial court considerations. Summary judgments are favored for their efficiency, requiring no genuine material fact disputes and demonstrating the movant’s entitlement to judgment as a matter of law. The burden remains with the movant to show a lack of factual support for the opposing party's claims, and if the opposing party cannot provide sufficient support, there is no genuine issue of material fact.

Schilling owns the building where the accident occurred and entered into a contract with Lemoine on November 1, 2011, for roof repairs. Lemoine subcontracted part of this work to Vaughan Roofing, Sheet Metal LLC, on the same day, which in turn subcontracted to Cormico, Inc., on December 29, 2011. On January 5, 2012, Mr. Berard fell through a skylight while working with Cormico, sustaining serious injuries. Lemoine claims statutory employer status under Louisiana law, specifically referencing the exclusivity provisions of La.R.S. 23:1032, which limits employee remedies to workers' compensation in the absence of intentional acts, and the definition of 'principal' in La.R.S. 23:1032(A)(2). This statute defines 'principal' as an entity contracting for work as part of their business, and La.R.S. 23:1061 extends exclusive remedy protections to principals employing contractors for work execution. Thus, Lemoine asserts that it is shielded from additional claims due to its statutory employer status.

Work is deemed part of the principal's trade if it is integral to generating the principal's goods or services. A statutory employer relationship is established when the immediate employer's services are included in a contract between the principal and a third party, except when a written contract recognizing the principal as a statutory employer exists. If such a contract is in place, there is a rebuttable presumption of a statutory employer relationship, which can only be contested by proving the work is not essential to the principal's operations. If the principal is liable for compensation, they are entitled to indemnity from any party that would otherwise be liable for the employee's compensation. The statutory employer doctrine was created to ensure that workers receive compensation for industrial accidents, balancing the interests of employers and employees by limiting employers' defenses while providing employees with guaranteed benefits. Louisiana has adopted a broad version of this doctrine, ensuring that principals are considered employers for the purpose of workers' compensation. The two contract theory applies when a principal engages a third party to fulfill contractual obligations through subcontracting for part of the work.

The statutory employer doctrine, established to protect employees, is being invoked by Lemoine to shield itself from tort liability, despite its original purpose. Under La.R.S. 23:1032 and 23:1061, Lemoine is identified as the 'principal' in its contract with Vaughan, who is the 'contractor.' All criteria from the Allen case are met, confirming Lemoine's status as the statutory employer of Vaughan’s employees. Similarly, Vaughan is the 'principal' to Cormico, the 'contractor,' with all Allen requirements satisfied, making Vaughan the statutory employer of Cormico’s employees, including Mr. Berard. There is no direct contractual relationship between Lemoine and Cormico, leading to the question of whether Lemoine's statutory-employer status includes Cormico’s employees.

Lemoine asserts that it does, while the Berards and Schilling argue that the relationship should only pertain to the two contracts directly involved, contending that Cormico’s designation as an independent contractor in their subcontract with Vaughan precludes Mr. Berard from being considered an employee of Lemoine. The court finds this argument unpersuasive, stating that the independent contractor designation does not alter any statutory employer/employee relationship established by law. Furthermore, there is no supporting statute or case law for the Berards’ and Schilling's position.

The court references a history of jurisprudence that extends statutory employer status beyond the principal/contractor relationship, citing the case of Mathew v. Aetna Casualty and Surety Co. Although Mathew did not require a ruling on this extension, it noted previous cases that endorsed a broader application of the statutory employer doctrine, including circumstances involving employees of sub-subcontractors.

In Louisiana Workers’ Compensation Corporation v. Genie Industries, the Fourth Circuit addressed whether an injured worker was an independent contractor or employee while working for a subcontracting company. The court noted that statutory immunity applies to all principals involved in the work, regardless of their distance from the direct employer. In Naiman v. Goldsberry Operating Co. Inc., the Second Circuit recognized a typical two-contract scenario, affirming that the statutory defense involves relationships among a general contractor, a subcontractor, and the subcontractor’s employee. The court concluded that Mr. Berard is a statutory employee of Lemoine, despite concerns that this interpretation may unintentionally shield the general contractor from liability. The court referenced Crochet v. Westminster City Center Properties, emphasizing that the Louisiana legislature intended for exclusive remedy provisions to cover all principals, including employees of sub-subcontractors. The interpretation aligns with the liberal construction of worker's compensation laws in favor of the worker. Ultimately, the court determined that Gervais Favrot should be regarded as the statutory employer of the injured plaintiff, despite acknowledging that this application may benefit the general contractor at the expense of the injured worker's ability to seek tort damages. The court found no authority suggesting a different conclusion.

Gervais Favrot is deemed liable for worker’s compensation benefits if either the sub-subcontractor or subcontractor fails to provide those benefits, as established by the statutes. This liability aligns with the principle that worker's compensation immunity from tort liability is essential to fulfill the law's purpose. Louisiana case law, including Beddingfield v. Standard Construction Co. and Albin v. Red Stick Construction Co., supports this position, as well as earlier rulings from the third circuit and a federal case from 1964 (Daigle v. American Ins. Co.). Although not binding, these precedents affirm the current legal interpretation. The court finds no merit in the Berards' and Schilling's claims, affirming the trial court’s summary judgment in favor of The Lemoine Company, LLC, and dismissing the Berards' claims. Costs are shared equally between the Berards and Schilling Acquisitions, Inc. Additional pleadings are noted but are not relevant to the current issue. A specific clause in the subcontract between Vaughan and Cormico clarifies that the subcontractor operates as an independent contractor, emphasizing that no employer/employee relationship is created under the agreement.