Summary
holding that federal workers' compensation claims interrupt prescription period for tort claims against third parties
Summary of this case from Drury v. U.S. Army Corps of EngineersOpinion
No. 02-0228, Section: "J"(1)
October 18, 2002
ORDER AND REASONS
Before the Court is the Motion for Judgment on the Pleadings (Rec. Doc. 12) filed by defendants Berney L. Strauss, Rhett E. King, and Strauss King APLC. (hereinafter, collectively "Strauss") and the Motion to Dismiss (Rec. Doc. 18) filed by third-party defendant Kvaerner Oilfield Products, Inc. ("Kvaerner"). Plaintiffs Donny and Tern Andrews oppose Strauss's motion; Strauss opposes Kvaerner's motion. The motions were set for hearing with oral argument on October 9, 2002, after which the Court took the matter under advisement. Now, having considered the record, the memoranda and argument of counsel, and applicable law, the Court finds that Strauss's motion should be granted and Kvaerner's motion should be denied, for the reasons that follow.
BACKGROUND
Plaintiff Donny Andrews was injured in the course of his employment with Helmerich Payne on February 2, 2000 while working on a fixed platform on the Outer Continental Shelf off the coast of Louisiana. On February 12, 2000, plaintiffs retained the defendant law firm, Strauss King, to represent them in this matter. On or about August 18, 2000, Strauss filed a claim for benefits under the Longshore and Harbor Workers' Compensation Act (LHWCA) on behalf of Donny Andrews. Donny Andrews has not yet received benefits from the employer's carrier; the claim is currently pending as an administrative action.
Before the one-year anniversary of the occurrence of the injury, plaintiffs learned that Strauss would not be filing a third-party suit in the matter. In January of 2002, plaintiffs terminated their attorney-client relationship with Strauss and retained counsel to represent them in the instant case. Plaintiffs filed this lawsuit on January 28, 2002, alleging that Strauss negligently allowed their tort claims to prescribe. On July 12, 2002, plaintiffs filed a First Amending and Supplemental Complaint (Rec. Doc. 8) naming Kvaerner as an additional defendant and alleging that Kvaerner was a third-party contractor with employees aboard the platform when Donny Andrew's injuries occurred, and that Kvaerner's negligence was the cause of the injuries. On August 21, 2002, Strauss filed the instant Motion for Judgment on the Pleadings (Rec. Doc. 12) alleging that the third party tort claim has not prescribed because the prescription period was interrupted by the filing of the LHWCA claim. On September 18, 2002, Kvaerner filed the instant Motion to Dismiss (Rec. Doc. 18) alleging that any claim against it had prescribed.
DISCUSSION
Both parties' motions turn on a single issue: whether plaintiffs' third-party claims against Kvaerner have prescribed. Beyond this narrow question, the parties agree on all material points. For instance, the parties do not dispute that because Donny Andrews was working on the Outer Continental Shelf off the coast of Louisiana at the time of his injury, this case is governed by the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. § 1331 (2002), which incorporates Louisiana state law. Thus, the one-year statute of limitations for delictual actions provided at Louisiana Civil Code article 3492 applies. It is also not disputed that because plaintiff's injury occurred on February 2, 2000, and suit against Kvaerner was not filed until July 12, 2002, absent an interruption or suspension of the prescriptive period, the claims against Kvaerner are time-barred.
The law on the interruption of prescription is straightforward. Under Louisiana law, prescription may be interrupted in two ways. Pursuant to article 3462, "prescription is interrupted when the obligee commences action . . . in a court of competent jurisdiction and venue." LA. CIV. CODE ANN. art. 3462 (West 2002). Under article 3464, "[p]rescription is interrupted when one acknowledges the right of the person against whom he had commenced to prescribe." In this case, the parties agree that there has been no acknowledgment of Donny Andrews' right to recover, and thus the Court need only be concerned with the possible interruption of prescription pursuant to article 3462.
"The interruption of prescription against one solidary obligor is effective against all solidary obligors . . . ." LA. CIV. CODE ANN. art. 1799. Under the LHWCA, an employer and a third-party defendant are solidary obligors in the case of a tort occurring in the scope of employment where the third party is at fault. See Williams v. Sewerage Water Bd. of New Orleans, 611 So.2d 1383, 1387-89 (La. 1993); Cormier v. Clemco Serv. Corp., 48 F.3d 179, 183 (5th Cir. 1995); Billizon v. Conoco, Inc., 864 F. Supp. 571, 574 (E.D. La. 1994); LA. CIV. CODE ANN. arts. 1799, 3503.
Accordingly, given that Kvaerner is solidarily liable with Donny Andrews' employer for any damages he suffered as a result of Kvaerner's fault, the Court is called upon to decide whether Donny Andrews' filing of a formal worker's compensation claim under the LHWCA is the functional equivalent of commencing an "action against the obligor, in a court of competent jurisdiction and venue" in order to satisfy article 3462 and interrupt prescription. In considering this question, the Court is mindful that prescription statutes should be construed to favor the maintenance of an action. See Lima v. Schmidt, 595 So.2d 624, 629 (La. 1992); Billizon, 864 F. Supp. at 573 ("[P]rescription statutes are to be construed in favor of permitting, rather than barring, a claim") (citing Bustamento v. Tucker, 607 So.2d 532, 537 (La. 1992)).
In arguing that the claims against it have prescribed, Kvaerner relies on the Louisiana Supreme Court's opinion in Gary v. Camden Fire Ins. Co., 676 So.2d 553 (La. 1996), in which the Court held that an employer's voluntary payment of Louisiana worker's compensation benefits did not interrupt prescription against claims against third-party tortfeasors under Louisiana Civil Code article 3464 (interruption by acknowledgment). Pointing to this holding, Kvaerner asks the Court to infer that since payment of Louisiana worker's compensation benefits doesn't constitute acknowledgment for purposes of article 3464. then filing an administrative claim for LHWCA benefits doesn't constitute "commencing action" for purposes of article 3462.
The problem with this argument is that it presumes workers' compensation claims are entirely analogous to LHWCA claims for purposes of this discussion, when the Supreme Court in Gary took pains to distinguish the two. As the Gary court noted, its holding that the payment of worker's compensation claims does not interrupt prescription by acknowledgment does not conflict with federal cases holding that the payment of LHWCA benefits does interrupt prescription by acknowledgment, because Louisiana worker's compensation law specifically provides at Title 23, section 1204 that payment of Louisiana worker's compensation claims does not constitute an admission of liability, i.e., it does not amount to an acknowledgment of a right of the person against whom prescription has begun to run. See, Cormier, 48 F.3d 179; Billizon, 864 F. Supp. 571; La. Rev. Stat. 23:1204; LA. CIV. CODE ANN. art. 3464. Accordingly, the Gary court's treatment of the issue does not stand for the proposition that payment of LHWCA benefits would not constitute an acknowledgment of a right so as to interrupt prescription pursuant to article 3464, much less does it provide a rationale for a quantum leap to the conclusion that filing such a claim would not amount to "commencing action" for purposes of 3462.
An alternative "plain language" argument against interruption of prescription in this case has been advanced by plaintiffs' counsel. According to plaintiffs' counsel, article 3462 specifies that a suit must be filed to interrupt prescription, and an administrative claim is not a suit. Thus, according to plaintiffs, under the plain language of article 3462, the filing of a formal LHWCA administrative claim cannot interrupt prescription. In support of this point, plaintiffs direct the Court to Morris v. Equitable Shipyards, Inc., 1993 WL 330016 (E.D. La., Aug. 23, 1993). In Morris, Judge Livaudais found that suit was prescribed against a plaintiff who had filed a worker's compensation claim within a year of his injury, but did not file suit for benefits until a year and a day after the injury at the soonest. Id. at *2.
Were Morris still good law, its reasoning would be instructive. However, in a subsequent suit addressing the same question, Judge Livaudais recognized that changes in the law since Morris dictated a different result, and that Morris had been tacitly overruled by subsequent Fifth Circuit precedent in Billizon and Cormier. Murry v. Aran Energy Corp., 1995 WL 581974 (E.D. La., Sept. 29, 1995). In Murry, Judge Livaudais noted that at the time he considered Morris, the Louisiana Worker's Compensation Act "provided that if, after the filing of a claim for worker's compensation, either party rejected the recommendation of the office of worker's compensation as to the resolution of the claim, the worker could file a verified petition in a district court of competent jurisdiction to recover the worker's compensation benefits." Id. at *1, citing La. R.S. 23:1311 (prior to 1990 amendments). Thus, whenMorris was decided, the Worker's Compensation scheme "invested the worker with a cause of action for benefits under the Louisiana act to be filed in a district court of competent jurisdiction." Id.
Subsequently, however, amendments to Louisiana law effective November 7, 1990, "divested district courts of original jurisdiction over Louisiana worker's compensation claims, such that the new scheme is an administrative one very similar to the federal LHWCA." Id. As a result of these changes, by the time Judge Livaudais considered Murry and up through the present, "no district court has original jurisdiction over a claim for worker's compensation, whether under Louisiana law or the LHWCA, inasmuch as both compensation acts require the filing of administrative claims." Id. (emphasis added). Accordingly, Judge Livaudais found that "the Morris decision is no longer dispositive on the question whether the filing of a lawsuit for worker's compensation, as compared with the filing of a claim for worker's compensation interrupts prescription as to a third-party defendant who is a solidary obligor." Id. at *2.
In the absence of relevant case law dictating a certain result, this Court is left to decide the question before it with reference to two uncontested principles. First, under the Civil Code, prescription is interrupted when "the obligee commences action against the obligor, in a court of competent jurisdiction and venue." LA. CIV. CODE ANN. art. 3462. Second, an individual seeking LHWCA benefits is not permitted to file suit in a state or federal district court, but instead is required to file an administrative claim with the U.S. Department of Labor, Office of Workers' Compensation, in order to recover LHWCA benefits. See, 33 U.S.C. § 903, 913.
Because a claimant has no option other than to file an administrative claim when seeking compensation benefits from his employer under the LHWCA, and only the administrative tribunal has original jurisdiction, the Court finds that for purposes of Louisiana Civil Code article 3462, filing such a claim constitutes "commenc[ing] action in a court of competent jurisdiction and venue." This finding conforms with the analogous state court decision in Gray v. Mounir, in which the Louisiana Third Circuit determined that "[b]ecause the OWC [Office of Workers' Compensation] is the only forum where an employee can bring a claim for a work-related injury, we conclude that the OWC is a court of competent jurisdiction for the purposes of interrupting prescription against a third-party tortfeasor who is . . . solidarily liable." 746 So.2d 746, 749 (La App. 3rd Cir. 1999).
This conclusion is further buttressed by the fact that it is consistent with the public policy rationale informing prescriptive statutes. "The time limit for filing a delictual action is a legislative device intended to promote legal finality, bar stale claims, and prevent prejudice to defendants." Gary, 676 So.2d at 556.
When a formal written claim is filed with the U.S. Department of Labor, Office of Workers' Compensation, there is notice to the public that "the legal system is put into motion and the purposes of prescriptive laws are satisfied." Id. There is no legal or practical reason why the filing of such a formal claim with the appropriate administrative tribunal should not serve the same purpose as a "suit" for interruption of prescription against third-party tortfeasors. In either case, there is no prejudice to third-party tortfeasors as solidary obligors because they are put on notice of the action.
The Court notes that at oral argument, it pressed the proponents of the prescription argument to indicate what goals of prescriptive statutes were served through the filing of a lawsuit (e.g., notice, finality) that were not served by the filing of an administrative claim, and none were identified.
Accordingly, the Court finds that Donny Andrews' filing of an administrative claim for LHWCA benefits sufficed to interrupt prescription against the alleged solidarily liable third-party, Kvaerner, and the subsequently filed claims against Kvaerner have not prescribed. Further, since plaintiffs claims against Kvaerner have not prescribed, as a matter of law, plaintiffs' suit against Strauss for permitting such claims to prescribe cannot proceed. Therefore,
IT IS ORDERED that the Motion for Judgment on the Pleadings (Rec. Doc. 12) filed by defendants Berney L. Strauss, et al, should be and is hereby GRANTED;
IT IS FURTHER ORDERED that the Motion to Dismiss (Rec. Doc. 18) filed by third-party defendant Kvaerner Oilfield Products, Inc. should be and is hereby DENIED.