Opinion
2016 CA 0461
05-04-2017
TRUMAN STANLEY, III v. AIRGAS-SOUTHWEST, INC., PRAXAIR, INC., GULF COAST HYDROSTATIC TESTERS, LLC, ENGINEERED CONTROLS INTERNATIONAL, LLC, AND T.H. LABORATORIES, LTD.
Robert E. Kleinpeter Jay G. McMains Hester R. Dornan Baton Rouge, Louisiana and Joseph E. Ritch Corpus Christi, Texas Counsel for Plaintiff/Appellant Truman Stanley, III William B. Gaudet Robert L. Bonnaffons Raymond P. Ward Jennifer L. Barriere New Orleans, Louisiana and R. Ryland Percy, III Gonzales, Louisiana Counsel for Defendant/Appellee Airgas, Inc.
NOT DESIGNATED FOR PUBLICATION
On Appeal from the Twenty-Third Judicial District Court In and for the Parish of Ascension State of Louisiana
No. 104,043 Honorable Jessie M. LeBlanc, Judge Presiding Robert E. Kleinpeter
Jay G. McMains
Hester R. Dornan
Baton Rouge, Louisiana
and
Joseph E. Ritch
Corpus Christi, Texas Counsel for Plaintiff/Appellant
Truman Stanley, III William B. Gaudet
Robert L. Bonnaffons
Raymond P. Ward
Jennifer L. Barriere
New Orleans, Louisiana
and
R. Ryland Percy, III
Gonzales, Louisiana Counsel for Defendant/Appellee
Airgas, Inc. BEFORE: WHIPPLE, C.J., GUIDRY, AND McCLENDON, JJ.
McCLENDON, J.
The plaintiff appeals a trial court judgment finding a defendant parent company immune from tort liability. For the reasons that follow, we affirm.
FACTUAL AND PROCEDURAL HISTORY
On June 20, 2011, the plaintiff, Truman Stanley, III, suffered a traumatic workplace injury at the place of his employment with Airgas USA, LLC (Airgas USA), when a defective oxygen cylinder exploded as it was being refilled, sending large steel fragments through the air and tragically severing Mr. Stanley's right arm below the elbow.
Airgas USA is the successor of Airgas-Southwest, Inc., Mr. Stanley's employer at the time of the accident.
On June 19, 2012, Mr. Stanley filed a personal injury lawsuit seeking tort recovery against Airgas USA and several other parties. He later amended his petition to allege a claim against Airgas USA's parent company, Airgas, Inc. (Airgas Inc.), asserting that Airgas Inc. developed, implemented, trained, audited, and insured compliance with the safety policies and procedures at the Geismar facility where the accident occurred. Mr. Stanley further alleged that Airgas Inc., by and through its employees and departments, provided and explained instructional materials to Airgas USA, pertaining to policies, procedures, and safety, as well as provided pre-employment training to the employees of Airgas USA. Mr. Stanley alleged that the policies and procedures, instructional materials, and pre-employment training were wholly inadequate, substandard, flawed, led to an unsafe workplace, and failed to ensure the safety of the workers in the workplace, therefore causing the injuries and damages sustained by Mr. Stanley and rendering Airgas Inc. liable in tort.
The record indicates that Mr. Stanley is receiving workers' compensation benefits from his direct employer, Airgas USA.
Airgas Inc. responded by moving for summary judgment arguing that, as a principal and sole stockholder of Airgas USA, it is immune from tort liability under the exclusive-remedy provision of the Louisiana Workers' Compensation Act. Airgas Inc. also asserted that it was entitled to summary judgment because it did not affirmatively undertake and supplant its subsidiary's duty to provide a safe working environment. After a hearing, the trial court granted summary judgment on September 24, 2015, in favor of Airgas Inc., finding that Airgas Inc. was entitled to tort immunity under LSA-R.S. 23:1032A and dismissing all claims against Airgas Inc. with prejudice.
Louisiana Revised Statutes 23:1032 sets forth the "[e]xclusiveness of rights and remedies" under the Louisiana Workers' Compensation Act.
Mr. Stanley appealed the trial court judgment, asserting that the trial court erred in finding Airgas Inc. immune from tort liability under Louisiana's workers' compensation law. Airgas Inc. answered the appeal, seeking to strike the affidavit of Richard L. Miller, submitted in opposition to Airgas Inc.'s motion for summary judgment. However, because Airgas Inc. has failed to brief this issue, this claim is deemed abandoned. See Uniform Rules - Courts of Appeal, Rule 2-12.4; Freeman v. Medical Systems, Inc., 08-2372, p. 2 (La.App. 1 Cir. 8/4/09) (unpublished); Carson v. Witty, 471 So.2d 1003, 1004 n.1 (La.App. 1 Cir. 1985).
SUMMARY JUDGMENT
Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, admissions, together with the affidavits, if any, admitted for purposes of the motion for summary judgment, show there is no genuine issue as to material fact and that the movant is entitled to judgment as a matter of law. LSA-C.C.P. art. 966B(2); Tomaso v. Home Depot, U.S.A., Inc., 14-1467 (La.App. 1 Cir. 6/5/15), 174 So.3d 679, 681. The summary judgment procedure is favored and is designed to secure the just, speedy, and inexpensive determination of every action. LSA-C.C.P. art. 966A(2). In ruling on a motion for summary judgment, the trial court's role is not to evaluate the weight of the evidence or to determine the truth of the matter, but instead to determine whether there is a genuine issue of triable fact. Fournerat v. Farm Bureau Ins. Co., 11-1344 (La.App. 1 Cir. 9/21/12), 104 So.3d 76, 80, writ denied, 12-2148 (La. 11/21/12), 102 So.3d 59.
The summary judgment law was amended by 2015 La. Acts, No. 422, but the provisions of Act 422 do "not apply to any motion for summary judgment pending adjudication or appeal on [January 1, 2016]."
In determining whether summary judgment is appropriate, appellate courts review evidence de novo under the same criteria that govern the trial court's determination of whether summary judgment is appropriate. In re Succession of Beard, 13-1717 (La.App. 1 Cir. 6/6/14), 147 So.3d 753, 759-60. Because the applicable substantive law determines materiality, whether a particular fact in dispute is material can be seen only in light of the substantive law applicable to the case. Jackson v. City of New Orleans, 12-2742, 12-2743 (La. 1/28/14), 144 So.3d 876, 882.
DISCUSSION
In his appeal, Mr. Stanley seeks to avoid the exclusive remedy set forth in LSA-R.S. 23:1032. He initially argues that the trial court erred as a matter of law in finding Airgas Inc. immune from tort liability as a "principal" and "stockholder" based solely on Airgas Inc.'s status as the parent corporation of Mr. Stanley's employer, Airgas USA. He asserts that stockholder immunity applies only when the stockholder causes injury through acts that are in the normal scope of the stockholder's duties, and the creation and implementation of safety rules are not within the normal course and scope of Airgas Inc.'s stockholder duties. See LSA-R.S. 23:1032C(1). To the contrary, Airgas Inc. maintains that, as a matter of law, providing a safe workplace is within the course and scope of every employer's business, and if Airgas Inc. stepped into the shoes of Airgas USA to perform these duties, then Airgas Inc., as Airgas USA's stockholder, has the same tort immunity as Airgas USA.
Mr. Stanley also contends, referring to LSA-R.S. 23:1061A(3), that after amendments to the workers' compensation law in 1997, a principal cannot be immune from tort liability without a written contract recognizing it as a principal and statutory employer. However, Airgas Inc. does not claim to be Mr. Stanley's statutory employer. We note that although Airgas Inc. has not abandoned its argument that it is a "principal" immune from tort liability, its appellee brief focuses on its immunity as the sole "stockholder" of Airgas USA.
Because Airgas Inc. was seeking to avail itself of the immunity from tort liability granted under the Workers' Compensation Act, it had the burden of proving entitlement to such immunity. See Champagne v. American Alternative Ins. Corp., 12-1697 (La. 3/19/13), 112 So.3d 179, 182-83. Additionally, Airgas Inc. filed for summary judgment on the issue of statutory immunity and thus had the burden of proof on the motion for summary judgment, as well as the burden of proof on the issue of immunity. Id; LSA-C.C.P. art. 966D.
Louisiana Revised Statutes 23:1032 sets forth the "[e]xclusiveness of rights and remedies" under the Louisiana Workers' Compensation Act and provides, as follows:
A. (1)(a) Except for intentional acts provided for in Subsection B, the rights and remedies herein granted to an employee or his dependent on account of an injury, or compensable sickness or disease for which he is entitled to compensation under this Chapter, shall be exclusive of all other rights, remedies, and claims for damages, including but not limited to punitive or exemplary damages, unless such rights, remedies, and damages are created by a statute, whether now existing or created in the future, expressly establishing same as available to such employee, his personal representatives, dependents, or relations, as against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal, for said injury, or compensable sickness or disease.
(b) This exclusive remedy is exclusive of all claims, including any claims that might arise against his employer, or any principal or any officer, director, stockholder, partner, or employee of such employer or principal under any dual capacity theory or doctrine.
(2) For purposes of this Section, the word "principal" shall be defined as any person who undertakes to execute any work which is a part of his trade, business, or occupation in which he was engaged at the time of the injury, or which he had contracted to perform and contracts with any person for the execution thereof.
B. Nothing in this Chapter shall affect the liability of the employer, or any officer, director, stockholder, partner, or employee of such employer or principal to a fine or penalty under any other statute or the liability, civil or criminal, resulting from an intentional act.
C. The immunity from civil liability provided by this Section shall not extend to:
(1) Any officer, director, stockholder, partner, or employee of such employer or principal who is not engaged at the time of the injury in the normal course and scope of his employment; and
(2) To the liability of any partner in a partnership which has been formed for the purpose of evading any of the provisions of this Section.
The exclusiveness provision of LSA-R.S. 23:1032A(1) extends not only to direct employers, but also to "any principal or any officer, director, stockholder, partner, or employee of such employer or principal." Immune parties are the employer and those who may stand in the employer's shoes, so to speak, due to their relationship under which they must act on behalf of the employer. Brown v. Adair, 02-2028 (La. 4/9/03), 846 So.2d 687, 689. Further, the tort immunity provided by the Workers' Compensation Act operates as an affirmative defense; it is not a law evaluating conditions of legality of defendant's conduct but, rather, serves as a vehicle for asserting a substantive defense that defeats an otherwise viable claim. Those which are specifically named in LSA-R.S. 23:1032 may assert this defense. Brown, 846 So.2d at 690. The immunity provisions of the Workers' Compensation Act derogate from the delictual rights of injured workers existing in the Louisiana Civil Code and, therefore, must be narrowly construed to make the least, rather than the most, change in the existing body of law. Champagne, 112 So.3d at 184.
There are two exceptions to the immunity provisions. The first exception, for injuries occasioned by an intentional act, is inapplicable herein, as the supreme court has previously dismissed Mr. Stanley's intentional tort claim. See LSA-R.S. 23:1032B; Stanley v. Airgas-Southwest, Inc., 15-0274 (La. 4/24/15), 171 So.3d 915. The second exception, found in LSA-R.S. 23:1032C(1), involves injuries that occur outside the course and scope of the employment. See Menson v. Taylor, 99-0300 (La.App. 1 Cir. 4/17/00), 764 So.2d 1079, 1083. The limiting language of LSA-R.S. 23:1032C(1) refers to the normal course and scope of the employment of the stockholder vis-à-vis the business of the employer. See Jewell v. Haire, 03-1825 (La.App. 1 Cir. 9/17/04), 887 So.2d 490, 493; Scott v. Pontchartrain Materials Corporation, 98-1611 (La.App. 4 Cir. 8/12/98), 717 So.2d 682, 685, writ denied, 98-2398 (La. 11/20/98), 729 So.2d 555. That is, for the immunity to apply to a stockholder, the stockholder must have been engaged at the time of the injury in the normal course and scope of the employer's business. Scott, 717 So.2d at 685. See also Jewell, 887 So.2d at 493. As the court in Scott explained, "for the immunity to apply to the officer/stockholder, he must have been engaged at the time of the injury in the normal course and scope of the employer's business." The court further stated that the question posed is "whether or not the officer or stockholder is regularly engaged in such employment." Scott, 717 So.2d at 685-86. See also Bates v. King, 04-1564 (La.App. 3 Cir. 11/2/05), 915 So.2d 1037, 1040.
Louisiana Revised Statutes 23:13 provides:
Every employer shall furnish employment which shall be reasonably safe for the employees therein. They shall furnish and use safety devices and safeguards, shall adopt and use methods and processes reasonably adequate to render such employment and the place of employment safe in accordance with the accepted and approved practice in such or similar industry or places of employment considering the normal hazard of such employment, and shall do every other thing reasonably necessary to protect the life, health, safety and welfare of such employees. Nothing in
this Section shall apply to employment in private domestic service or to agricultural field occupations.
An employer's duty to provide safe working conditions for its employees is non-delegable. See Muniz v. National Can Corp., 737 F.2d 145, 148 (1st Cir. 1984). Therefore, it follows that providing a safe working environment is within the course and scope of every employer's business. It is undisputed that Airgas Inc. is the parent company and sole stockholder of Airgas USA. Accordingly, if Airgas Inc. "stepped into the shoes" of Airgas USA, as asserted by Mr. Stanley, then Airgas Inc. was "engaged at the time of the injury in the normal course and scope of his employment" and is, therefore, immune from tort liability under LSA-R.S. 23:1032.
Additionally, even were we to consider Mr. Stanley's argument that Airgas Inc. voluntarily assumed a duty to provide a safe work environment at the Geismar facility and negligently performed that duty, he failed to carry his burden of proof to establish same. He states that SAFECOR, a division of Airgas Inc., provided safety services to Airgas Inc.'s subsidiaries, including conducting regular inspections and audits of safety issues and offering safety training and instruction to Airgas USA employees since 1996. Mr. Stanley contends that at the time of his injury, SAFECOR was responsible for developing safety manuals and mandatory safety procedures to be implemented at the Geismar facility, as well as providing online safety training to Airgas USA's employees through a program called Airgas University.
A corporation is a legal entity distinct from its shareholders, and the same principle applies where one corporation wholly owns another. Bujol v. Entergy Services, Inc., 03-0492, 03-0502 (La. 5/25/04), 922 So.2d 1113, 1127. While generally a parent corporation, by virtue of its ownership interest, has the right, power, and ability to control its subsidiary, a parent corporation generally has no duty to control the actions of its subsidiary and thus no liability for a failure to control the actions of its subsidiary. Id. Additionally, a parent corporation is not responsible for the working conditions of its subsidiary's employees merely on the basis of a parent-subsidiary relationship. Bujol, 922 So.2d at 1132. However, under Louisiana law, one who does not owe a duty to act may assume such a duty by acting. Hebert v. Rapides Parish Police Jury, 06-2001, 06-2164 (La. 4/11/07), 974 So.2d 635, 643. Mr. Stanley makes that argument in this case. He maintains that Airgas Inc. voluntarily undertook Airgas USA's duty of providing a safe workplace and that it breached that duty.
We note that the court in Bujol did not address tort immunity under LSA-R.S. 23:1032.
In Bujol, 922 So.2d at 1128, the supreme court explained:
One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third person or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise reasonable care to protect [perform] his undertaking, if
(a) his failure to exercise reasonable care increases the risk of harm, or
(b) he has undertaken to perform a duty owed by the other to the third person, or
(c) the harm is suffered because of reliance of the other or the third person upon the undertaking.
This common law doctrine has existed for centuries and has traditionally been used to impose liability upon an actor who has failed to exercise reasonable care when it undertook to perform a duty owed to a third party.
The Bujol court was faced with the question of whether a parent corporation had assumed a duty for the workplace safety of its subsidiary, the plaintiff's employer. The supreme court noted that, under Louisiana jurisprudence, "parties who voluntarily assume certain duties for workplace safety must perform those duties in a reasonable and prudent manner." Bujol, 922 So.2d at 1129. In order to find such an assumed duty, the supreme court required "some proof of a positive undertaking" for work place safety, stating that "[n]either mere concern with nor minimal contact about safety matters creates a duty to ensure a safe working environment for employees of a subsidiary corporation." Bujol, 922 So.2d at 1131 (citing Muniz, 737 F.2d at 148). See also Gardner v. Craft, 47,360 (La.App. 2 Cir. 9/26/12), 105 So.3d 135, 137, writ denied, 12-2645 (La. 1/25/13), 105 So.3d 723.
The court in Bujol described the action required by the defendant in such instances as an affirmative undertaking and further explained that the determination of whether such an action was taken involves an examination of the scope of the defendant's involvement, the extent of the defendant's authority, and the underlying intent of the defendant. Bujol, 922 So.2d at 1131. The court explained that because an employer has a non-delegable duty to provide safe working conditions for its employees, courts will not "lightly assume" that a parent corporation has agreed to accept that responsibility. Bujol, 922 So.2d at 1131 (citing Muniz, 737 F.2d at 148). Thus, a parent corporation may be liable for unsafe conditions at a subsidiary only if it assumes a duty by affirmatively undertaking to provide a safe working environment. Id. Neither a defendant's concern with safety conditions and its general communications regarding safety matters, nor its superior knowledge and expertise regarding safety issues, will create a duty to guarantee safety. Bujol, 922 So.2d at 1133. Likewise, inspections and mere safety recommendations, which recommendations are not mandatory and are not within the authority of the defendant to remediate, cannot create such a duty. Bujol, 922 So.2d at 1133-34; Hebert, 974 So.2d at 644. Further, a parent corporation will only be liable for a voluntary assumption of duty where that corporation's undertaking was intended to supplant, not just supplement, the subsidiary's duty. Bujol, 922 So.2d at 1136.
In support of its motion for summary judgment, Airgas Inc. presented evidence to show that Airgas USA, a wholly owned subsidiary of Airgas Inc., was in the compressed gas distribution trade and business. Airgas Inc. also presented evidence that it is not involved in the management and day-to-day operations of Airgas USA, which has its own managers and supervisors.
In his affidavit, Brent Sparks, the president of Airgas USA, attested that Airgas USA had its own safety director who, along with plant management, also Airgas USA employees, had the responsibility for the safety of the plant's employees, including implementation of safety procedures, and safety training and supervision of Airgas USA employees. Mr. Sparks further testified that while SAFECOR drafted recommended procedures to be followed at the Geismer plant, it was the Geismer plant management's responsibility, and not SAFECOR's responsibility, to implement and ensure compliance with those procedures. He also stated that Airgas USA did not rely on SAFECOR or Airgas Inc. to undertake its duty to provide a safe place to work for its employees and that Airgas USA did not rely on SAFECOR or Airgas Inc. to replace or supplant its duties to provide a safe working environment. Mr. Sparks testified that the safety procedures recommended by SAFECOR did not replace or lessen the responsibility of the Geismer plant management for the safety of the plant employees and that Airgas USA and Geismer plant management maintained the responsibility for safe working conditions and the safety of Airgas USA employees at the Geismer plant.
Duane Young, the director of SAFECOR at the time of Mr. Stanley's injury, stated in his affidavit that neither he nor any other employee of SAFECOR had any management authority over employees of Airgas USA, nor could he or any other employee of SAFECOR hire, fire, or reprimand employees of Airgas USA. Mr. Young further attested that SAFECOR's role was to draft general safety guidelines and procedures that comport with federal regulations and the recommendations of the Compressed Gas Association. He also stated that SAFECOR and Airgas Inc. were not responsible for implementing safety procedures, safety training, nor ensuring compliance with the safety procedures implemented at the Geismer plant; that the plant management of each facility was responsible for implementing and ensuring compliance with any and all safety procedures and policies related to safety; that the safety procedures drafted by SAFECOR did not replace or supplant the responsibility of the Geismer plant management regarding how Geismer plant employees were to safely perform their operations at the plant; and that SAFECOR did not schedule regular visits and did not conduct safety audits and inspections at the Geismer plant, with the exception that a SAFECOR representative generally, but not always, visited the Geismer plant once a year to review hydrotesting certification procedures.
As part of his opposition to the motion for summary judgment, Mr. Stanley submitted evidence to show that SAFECOR was responsible for the promulgation, implementation, and compliance with safety procedures at Airgas USA. Particularly, Mr. Stanley offered the affidavit of Mr. Richard L. Miller, a certified industrial hygienist, certified safety professional, and former industrial hygiene compliance officer with the Occupational Safety and Health Administration of the United States Department of Labor. It was Mr. Miller's professional opinion that "Airgas, Inc. and SAFECOR had a duty to ... develop policies, train, audit, and ensure regulatory compliance for entities such as Airgas [USA]" and that "SAFECOR was negligent in this regard." In formulating his opinion, Mr. Miller relied on the September 1, 2011 press release of Airgas Inc., through its executive vice-president and chief operating officer, Michael Molinini, naming Jim McCarthy vice-president of safety and compliance and noting that SAFECOR is "the Airgas organization responsible for developing and implementing the Company's safety, compliance, environmental, and risk management practices" and that Mr. McCarthy had an "array of responsibilities that includes policy development, training, auditing, regulatory compliance, and oversight of the Airgas Emergency Response Organization."
In this case, there is no question that Airgas USA, as Mr. Stanley's employer, was under a statutory duty to provide its employees with a reasonably safe place to work. See Bujol, 922 So.2d at 1133. Further, as a matter of general corporate law, Airgas Inc. had no duty as a parent corporation to control the activities of any of its subsidiaries, to ensure that its subsidiaries were complying with their duty to provide a reasonably safe place to work, nor an independent duty to notify its subsidiaries of any safety recommendations. Id. The evidence presented in this matter simply does not establish that Airgas Inc. positively undertook any obligation to ensure the safety of Airgas USA employees. At best, the evidence presented by Mr. Stanley may have shown some expertise by SAFECOR, a separate legal entity, in workplace safety, but it did not establish that Airgas Inc. affirmatively undertook that duty. The evidence established that Airgas USA employees had the responsibility for the safety of the Geismer plant's employees, including implementation of safety procedures and safety training and supervision of Airgas USA employees, and that the safety procedures drafted by SAFECOR did not replace or supplant the responsibility of the Geismer plant management.
Because Airgas Inc. pointed out the absence of factual support for an element essential to Mr. Stanley's claim, the burden shifted to Mr. Stanley to produce factual support sufficient to establish the existence of a genuine issue of material fact. Given the evidence presented herein, Mr. Stanley failed to show the creation or the assumption of any duty on the part of Airgas Inc. to ensure a safe working environment for the employees of its subsidiary at the Geismer plant. Thus, Mr. Stanley failed to bear his burden of producing evidence that there were genuine issues of material fact. Accordingly, summary judgment in favor of Airgas Inc. was appropriate.
CONCLUSION
For the above and foregoing reasons, we affirm the September 24, 2015 judgment of the trial court and assess all costs of this appeal against the plaintiff, Truman Stanley, III.
AFFIRMED.