Opinion
CIVIL ACTION NO. 02-1828 SECTION: "R"
November 13, 2003
ORDER AND REASONS
Before the Court is plaintiff United States Fire Insurance Company's Motion for Partial Summary Judgment against defendant Louisiana Workers' Compensation Corporation. Also before the Court is LWCC's opposition to the motion for partial summary judgment. For the following reasons, the Court GRANTS plaintiff's motion.
I. BACKGROUND
On June 20, 2001, a car driven by defendant Kershia Miller crossed the median and struck the vehicle that Roger Dyson was driving. Dyson was en route to Mott's Boat Landing to pick up time tickets for various Liberty Services employees who were working offshore. The accident left Dyson permanently disabled.
Dyson submitted a claim for worker's compensation benefits through his nominal employer Seacor Marine. There is no dispute that Dyson was in the course and scope of his employment at the time of the accident. Seacor requested coverage from its workers' compensation carrier, United States Fire Insurance Company. United States Fire paid medical payment benefits and disability benefits to Dyson, which payments are ongoing. To date, United States Fire has paid approximately $2,000,000 on behalf of Dyson. It now seeks subrogation against Liberty Services, Inc., and its workers' compensation carrier, the Louisiana Workers' Compensation Corporation.
At the time of Dyson's injury, Seacor owned two-thirds of Energy Logistics, Inc., which, in turn, owned 100 percent of Liberty Services. Liberty Services owns the vehicle that Dyson was driving at the time of the accident. Liberty Services reported to its insurer that Mr. Dyson was its leased employee at the time of the accident. Plaintiff alleges that Dyson was a borrowed employee of Liberty Services at the time of his injury and that LWCC, as the workers' compensation carrier of Liberty Services, is liable to it for one-half of the workers' compensation payments that it has made to Dyson. In the alternative, plaintiff argues that LWCC is liable for one-half of the workers' compensation payments because Seacor, ELI, and Liberty Services act as a single business enterprise. In response, LWCC argues that Seacor was Dyson's employer, and that it is not liable under the "borrowed employee" doctrine. LWCC also contends that the "single enterprise" doctrine is inapplicable to workers' compensation cases under the Longshore and Harbor Workers' Compensation Act.
For the following reasons, the Court grants plaintiff's motion for partial summary judgment.
II. DISCUSSION
A. LEGAL STANDARD
Summary judgment is appropriate when there are no genuine issues as to any material facts, and the moving party is entitled to judgment as a matter of law. See FED. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). A court must be satisfied that no reasonable trier of fact could find for the nonmoving party or, in other words, "that the evidence favoring the nonmoving party is insufficient to enable a reasonable jury to return a verdict in her favor." Lavespere v. Niagara Mach. Tool Works, Inc., 910 F.2d 167, 178 (5th Cir. 1990) ( citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). The moving party bears the burden of establishing that there are no genuine issues of material fact.
If the dispositive issue is one on which the nonmoving party will bear the burden of proof at trial, the moving party may satisfy its burden by merely pointing out that the evidence in the record contains insufficient proof concerning an essential element of the nonmoving party's claim. See Celotex, 477 U.S. at 325; see also Lavespere, 910 F.2d at 178. The burden then shifts to the nonmoving party, who must, by submitting or referring to evidence, set out specific facts showing that a genuine issue exists. See Celotex, 477 U.S. at 324. The nonmovant may not rest upon the pleadings, but must identify specific facts that establish a genuine issue exists for trial. See id. at 325; Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1996).
B. APPLICABLE LAW
Defendant argues that the Longshore and Harbor Workers' Compensation Act may be applicable here. It therefore asserts that Mr. Dyson may not even be entitled to benefits under the Louisiana Worker's Compensation Act. Defendant's argument is without merit.
The traditional test to determine whether an injured employee is a maritime worker entitled to coverage under the LHWCA is whether "at the time of his injury (a) he was loading, unloading, repairing, building, or breaking a vessel, or (2) although he was not actually carrying out these specified functions, he was `directly involved' in such work." Holcomb v. Robert W. Kirk Assocs., Inc., 655 F.2d 589, 592 (5th Cir. 1981) (emphasis added). Plaintiff presents testimony that Dyson was not a maritime worker, seaman, or longshoreman because he worked onshore, never worked on a vessel, and never loaded equipment on to vessels. See Pl.'s Mem. Supp. Mot. Summ. J., Ex. G, at 46-49. Indeed, Butch Guidry, who acted as operations manager for Liberty Services and who later became its vice-president, testified:
Q. Okay. After the acquisition, did Mr. Dyson — I don't know if he did before either, I'm just giving you a time reference, did he ever load equipment onto vessels?
A. Did Mr. Dyson ever load equipment on the vessels? I don't think so. Let me put it like this: I've instructed all of the base managers that worked for me, if they had to run a forklift and a crane, I didn't need them managing my business.
. . .
Q. You have a lot of experience in this area. In your opinion, was Mr. Dyson a maritime worker?
A. No, ma'am. Definitely not.
See id., Ex. G, at 49. Indeed, the operations manager of Liberty Services specifically instructed his supervisors, such as Dyson, not to engage in traditional maritime work. See id. In addition, at the time of the accident, Mr. Dyson was en route to Mott's Boat Landing to retrieve time cards. Dyson worked in a managerial position and performed billing services for ELI and Liberty Services. See id., Ex. A, 8, 10-11, 69-70. Dyson's activities do not have a significant relationship to traditional maritime employment. See Benoit v. Transco Exploration Company, et al., 577 F. Supp. 304, 306 (W.D. La. 1983) (stating that the "relevant inquiry in determining whether an employee is engaged in maritime employment is whether his activities have a `realistically significant relationship to traditional maritime employment'"). Defendant presents no rebuttal evidence to establish that Dyson may be a maritime worker. Defendant's argument is therefore without merit.
C. THE "BORROWED EMPLOYEE" DOCTRINE
The Court finds that LWCC is liable for one-half of Dyson's workers' compensation benefits because Dyson was a "borrowed employee" of Liberty Services at the time of the accident. Under the Louisiana Workers' Compensation Act, an employee injured in an accident while in the scope and course of his employment is limited to the recovery of workers' compensation benefits as his exclusive remedy against his employer. See LA. REV. STAT. § 23:1032(A). A "borrowed employee" or "borrowed servant" is limited as well to worker's compensation benefits. See Lejeune v. Allstate Ins. Co., 365 So.2d 471, 481 (La. 1978).
If plaintiff establishes that Mr. Dyson was a borrowed employee of Liberty Services at the time of his injury, plaintiff is entitled to seek contribution for one-half of the amount of workers' compensation benefits it has paid:
In the case of any employee for whose injury or death payments are due and who is, at the time of the injury, employed by a borrowing employer in this Section referred to as a "special employer", and is under the control and direction of the special employer in the performance of the work, both the special employer and the immediate employer, referred to in this Section as a "general employer", shall be liable jointly and in solido to pay benefits as provided under this Chapter. As between the special and general employers, each shall have the right to seek contribution from the other for any payments made on behalf of the employee unless there is a contract between them expressing a different method of sharing the liability.
La. R.S. § 23:1031(C). lf[I]t is firmly established that a lending employer and a borrowing employer are liable in solido for workers' compensation benefits . . . As solidary obligors, each employer is entitled to contribution equal to one-half of the obligation from the other employer." Travelers Ins. Co. v. Paramount Drilling Co., 395 So.2d 849, 851-52 (La.Ct.App. 1981).
The Louisiana courts, and the Fifth Circuit, have fashioned a ten-factor test to determine whether an employee is a borrowed employee for workers' compensation purposes. Melancon v. Amoco Prod. Co., 834 F.2d 1238, 1244-45 (5th Cir. 1988); Ruiz v. Shell Oil Co., 413 F.2d 310, 312-13 (5th Cir. 1969); Richard v. Teague, 92-17, p. 17, (La.App. 3 Cir. 5/4/94). These factors are:
1) Who has the right of control over the employee beyond mere suggestion of details or cooperation?
2) Whose work is being performed?
3) Was there an agreement, understanding, or meeting of the minds between the original and the borrowing employer?
4) Did the employee acquiesce in the new work situation?
5) Did the original employer terminate his relationship with the employee?
6) Who furnished the tools and the place of performance?
7) Was the new employment over a considerable length of time?
8) Who had the right to discharge the employee?
9) Who had the obligation to pay the employee?
10) Who selects the employees?
Id. Although no single factor or combination of factors is determinative, the Fifth Circuit generally considers the factor of control to be central. See Brown v. Union Oil Co., 984 F.2d 674, 676 (5th Cir. 1993); Melancon, 834 F.2d at 1245; McCarty v. Vastar Resources, Inc., 2002 WL 1837918, No. Civ. A. 01-2206, *3 (E.D. La. 2002). In Gaudet v. Exxon Corp., however, the Fifth Circuit de-emphasized the control factor and found that only the fifth, eighth, ninth, and tenth factors are "essential." 562 F.2d 351, 356 (5th Cir. 1977); see also Brown, 948 F.2d at 677 n. 2; McCarty, 2002 WL 1837918, No. Civ. A. 01-2206, at *3. Gaudet's rule affirms that the Court need consider only those factors that are salient in the case presented.
Plaintiff argues that Dyson was a borrowed employee at the time of the accident. Defendant argues that Dyson was an employee of Seacor only because Seacor issued his check. The Court will now consider each factor in turn.
a. Who had control over the employee and the work he was performing?
Determination of the control factor requires the Court to distinguish "`between authoritative direction and control, and mere suggestion as to details or the necessary cooperation, where the work furnished is part of a larger undertaking.'" Ruiz, 413 F.2d at 313 (quoting Standard Oil Co. v. Anderson, 212 U.S. 215, 222 (1909); McCarty, 2002 WL 1837918, No. Civ. A. 01-2206, at *3.
The Court first notes that Liberty Services described Mr. Dyson as their "leased employee from Se [a] cor" on the accident report. See Pl.'s Mem. Supp. Mot. Partial Summ. J., Ex. F. At the time of the accident, then, Liberty Services considered itself the "leased employer" of Mr. Dyson. In addition, from the testimony presented, only two men supervised and could control Dyson: Joe Same and Butch Guidry. See id., Ex. G, at 112-13. Joe Sarne is President of Liberty Services. See id., Ex. G, at 111-12. Joe Sarne supervised Butch Guidry, the operations manager, and Butch Guidry supervised Dyson. See id., Ex. G, at 112, Guidry testified:
Q. You [were] subject to supervision by Joe Sarne?
A. Correct.
Q. When Mr. Dyson was under your supervision, you were under the supervision of Sarne, who is the President of Liberty Services?
A. That's correct.
Q. And, also, you did say this earlier, but I want to be clear.
A. Sure.
Q. Mr. Dyson could only be fired by you or Mr. Sarne, who is the highest in line at Liberty Services?
A. Correct.
See id., Ex. G, at 112-13. Therefore, in the corporate hierarchy, only two people, the president and the operations manager of Liberty Services, supervised Dyson. Although defendant points out that Butch Guidry, like Dyson, was paid by Seacor, there is no question that Guidry supervised Liberty Services' operations and that Guidry performed no work for Seacor. See id., Ex. G, at 38; discussion infra at 10-11. Plaintiff therefore presents evidence that Liberty Services controlled Dyson's work because Butch Guidry, and indirectly Joe Sarne, supervised his work. See id. Accordingly, the control factor weighs in favor of finding that Dyson was a borrowed employee of Liberty Services.
b. Whose work was being performed?
Liberty Services owns and operates the Venice shore-based facility where Dyson worked. See Def.'s Mem. Opp. Partial Summ. J., at 4. Dyson was a shore-based manager in charge of thirteen Liberty Services employees. See PL's Mem. Supp. Mot. Partial Summ. J., Ex. B, at 69-70. Guidry himself testified that " [w]hen ELI acquired Liberty Services, Roger [Dyson] then took over the responsibilities for managing the Liberty Services asset in Venice." See id., Ex. G, at 26, 46. In addition, the record reflects that Dyson entertained Liberty Services' clients for which Liberty Services reimbursed him. See id. Ex. G, at 61-62, 99. Moreover, Liberty Services, not Seacor, prepared the accident report on the day Dyson was injured, in which it noted that Dyson was a " [l]eased employee from Se[a]cor." See id., Ex. F. Liberty Services itself therefore considered Dyson a "leased employee" from Seacor at the time of Dyson's injury.
There is no evidence in the record that Dyson performed any work for Seacor. Indeed, Guidry testified:
Q. . . . I think Dyson said ELI, which is incorrect, but he said, "I'm paid by ELI. I supervised Liberty Services employees. I didn't do any work for Seacor." Do you agree with that?
A. Yeah. I would agree that we didn't do any work for Seacor.
Q. I specifically mean Mr. Dyson.
A. Yeah. Because, when you ask us that question, did we try to, you know — did we manage any Seacor vessels, did we manage any Seacor crews? The answer to that question is no, you know, because we did not conduct Seacor's business.See id., Ex. G., at 48. Guidry's testimony affirms that neither he nor Dyson performed any work on behalf of Seacor. The evidence reflects that both men performed services for Liberty Services. Accordingly, the second factor weighs in favor of borrowed employee status.
c. Was there an agreement, understanding, or meeting of the minds between the original and the borrowing employer?
Although there is no contract or agreement to provide labor or services between Liberty Services and Seacor, the evidence here suggests that Dyson was a borrowed employee. As noted, Liberty Services reported to its insurance company that Dyson was a leased employee from Seacor at the time of the accident. See id., Ex. F. This evidence suggests that an understanding existed between Seacor and Liberty Services to entitle Liberty Services to call Dyson a "leased employee from Se[a]cor" at the time of his accident.
d. Did the employee acquiesce in the new work situation?
"The focus of this factor is whether the employee was aware of his work conditions and chose to continue working in them." Brown, 948 F.2d at 678. Dyson "took over the responsibilities for managing the Liberty Services asset in Venice" in 1999. See. Pl.'s Mem. Supp. Mot. Partial Summ. J., Ex. G, at 26. There is no evidence in the record that Dyson objected to or complained about this arrangement. This indicates that Dyson acquiesced in the Liberty Services-Seacor work arrangement, which favors borrowed employee status.
e. Did the original employer terminate his relationship with the employee?
This factor does not require the lending employer to sever completely its relationship with the employee, because such a requirement would effectively eliminate the borrowed employee doctrine. See Melancon, 834 F.2d at 1238; Capps v. N.L. Baroid-NL Inds., Inc., 784 F.2d 615, 617-18 (5th Cir. 1986)., Rather, the Court must examine the lending employer's relationship with the employee while the borrowing occurs. See Capps, 784 F.2d at 618. The only affiliation that Dyson had with Seacor is that Seacor issued his paychecks. Based on this evidence, the Court finds that Seacor had little or no relationship with Dyson. Factor five weighs in favor of borrowed employee status.
f. Who furnished the tools and the place of performance?
Liberty Services furnished Dyson with the place of employment. Dyson worked out of a trailer located on the Liberty Services Venice shore base. See id., Ex. A, at 37. Liberty Services assigned a Liberty Services vehicle to Dyson, and he drove this vehicle at the time of the accident. See id., Ex. A, at 21-22. On a regular basis, Liberty Services reimbursed Dyson for gas, office expenses, computer supplies, entertainment of its customers, stamps, country club dues, automobile maintenance and other expenses. See id., Ex. A, at 21-22; Ex. B, at 70, 78-95. This factor also favors borrowed employee status.
g. Was the new employment over a considerable length of time?
The Fifth Circuit has held that when "the length of employment is considerable, this factor supports a finding that the employee is a borrowed employee," but that "the converse is not true." Capps, 784 F.2d at 618. Dyson had supervised the Liberty Services assets in Venice since ELI acquired Liberty Services in December 1999. See id., Ex. G, at 22, 26. The Court finds that the length of employment favors borrowed employee status.
h. Who had the right to discharge the employee?
Butch Guidry, who acted as operations manager for Liberty Services and who later became its vice-president, and Joe Same, the President of Liberty Services, had the authority to terminate Dyson. See id., Ex. G, at 113. This fact favors borrowed employee status. See Melancon, 834 F.2d at 1216; Capps, 784 F.2d at 618; see also Allen, 2001 WL 611391 at *6.
i. Who Had the obligation to pay the employee?
Dyson was on Seacor's payroll. The Court finds that this factor weighs against finding borrowed employee status.
j. Who selects the employees?
The testimony of Richard Johnston, vice-president and corporate secretary of Liberty Services, supports the argument that Butch Guidry, with Joe Sarne's concurrence, promoted Dyson to manager of Liberty Services' Venice shore base at the time of ELI's acquisition of Liberty Services. See Pl.'s Mem. Supp. Mot. Partial Summ. J., Ex. B, at 41-3. Factor ten weighs in favor of borrowed employee status.
Nine of the ten factors weigh in favor of finding that Dyson was a borrowed employee of Liberty Services at the time of the accident. The Court finds that the evidence overwhelmingly favors borrowed employee status. Because the Court finds the borrowed employee doctrine dispositive, the Court will not address whether Liberty Services, Seacor Marine, and Energy Logistics operate as a single business enterprise.
D. Motion to Strike
Also before the Court is plaintiff's motion to strike the opposition to the motion for partial summary judgment filed by defendant. Plaintiff argues that defendant's motion was untimely pursuant to Local Rule 7.5E. The Court denies the motion because plaintiff is not prejudiced by the Court's consideration of defendant's memorandum in opposition.
III. CONCLUSION
For the foregoing reasons, the Court grants plaintiff's motion for partial summary judgment.