Opinion
CIVIL ACTION NO. 02-3099 SECTION C (1)
October 29, 2003
MINUTE ENTRY
Before the Court is Defendant's, Superior Shipyard and Fabrication, Inc. (hereinafter referred to as "Defendant"), Motion for Summary Judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure seeking to dismiss Plaintiffs, Brian K. Cheramie (hereinafter referred to as "Plaintiff"), claims against Defendant. After a thorough review of the record, the law, the Motion, and the memoranda filed in support and in opposition to the Motion, the Defendant's Motion for Summary Judgment is DENIED.
I. BACKGROUND AND PROCEDURAL HISTORY
The Plaintiff avers and, for the purposes of this Motion only , the Court accepts as true the following allegations. This matter arises out of an accident at Superior Shipyard and Fabrications, Inc. in Golden Meadow, Louisiana, on April 12, 2001. Plaintiff was working as a welder with others to perform repairs on the M/V NIGHT MOVES at Superior Shipyard. At the time of the accident, Plaintiff was in the process of welding a new hand rail around the bulwark of the vessel. In order to reach the bulwark, he was positioned on a scaffold which was not equipped with any type of guard rail or other device to prevent falls. While he was positioned approximately twelve or fifteen feet above the ground, he received a shock from his welding gun and fell backwards onto the ground. As a result of the fall, Plaintiff suffered serious injuries.
Both parties agree that Plaintiff is a Longshoreman as defined by the Longshore and Harbor Workers' Compensation Act (hereinafter "LHWCA). 33 U.S.C.A. §§ 901 et seq. (West 2001). Moreover, both parties agree that Defendant was Plaintiffs employer as contemplated by the LHWCA.
Apparently, Plaintiff was also an employee of TTC, an employee leasing company. Defendant entered into a contract with TTC whereby Defendant would lease the services of its employees to Defendant. Among the obligations undertaken by TTC in the contract was to obtain workers' compensation coverage under the LHWCA for the employees whose services were leased to Defendant, such as Plaintiff. However, it appears from the record that the insurance company which provided coverage to TTC and the Defendant under the LHWCA, Credit General Insurance (hereinafter referred to as "CGI") may have become bankrupt prior to Plaintiffs injury.
Initially, Plaintiff attempted to recover payments against Defendant under the procedure outlined in the LHWCA. However, when the Department of Labor informed Plaintiff that Defendant did not have valid insurance coverage under the LHWCA applicable at the time of Plaintiffs injury, Plaintiff brought suit against Defendant and T.T.C., Illinois, Inc. (hereinafter referred to as "TTC"), on October 15, 2002, seeking damages for the injuries he suffered.
Defendant brings the instant Motion for Summary Judgment set for hearing on October 29, 2003.
Defendant argues that summary judgment is proper for two reasons.
First, Defendant argues that it contracted with TTC to provide coverage to TTC's employees employed by Defendant at the time of Plaintiffs injury, and, therefore, Plaintiffs exclusive recovery against Defendant is governed by the worker's compensation scheme embodied in the LHWCA regardless of whether TTC could not provide coverage subsequent to Plaintiffs injury due to its own insolvency and regardless of whether TTC provided coverage through an approved insurance carrier at the time of Plaintiffs injury.
Plaintiff answers that, even if Defendant had contracted with TTC to provide coverage under the LHWCA until the time of its insolvency, merely contracting with TTC does not satisfy the requirements under the LHWCA that Defendant "secure" compensation payments. Plaintiff argues that Defendant's obligation to secure compensation payments required Defendant to secure the compensation payments that meet the requisites of the LHWCA, not just to secure TTC's obligation.
Second, Defendant argues summary judgment is proper because Plaintiff cannot create a genuine issue of material fact as to whether TTC provided the necessary coverage as contemplated by the LHWCA through May of 2001 when TTC, due to its own financial situation, was no longer able to provide insurance coverage.
Plaintiff argues that summary judgment is not proper because it has created a genuine issue of material fact as to whether TTC actually did provide coverage to TTC's employees employed by Defendant at the time of Plaintiffs injury.
II. STANDARD OF REVIEW
A district court can grant a motion for summary judgment only when the "`pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.'" Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (quoting Fed.R.Civ.P. 56(c)). When considering a motion for summary judgment, the district court "will review the facts drawing all inferences most favorable to the party opposing the motion." Reid v. State Farm Mut. Auto. Ins. Co., 784 F.2d 577, 578 (5th Cir. 1986). The court must find "[a] factual dispute . . . [to be] `genuine1' if the evidence is such that a reasonable jury could return a verdict for the nonmoving party . . . [and a] fact . . . [to be] `material' if it might affect the outcome of the suit under the governing substantive law." Beck v. Somerset Techs., Inc., 882 F.2d 993, 996 (5th Cir. 1989) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248(1986)).
"If the moving party meets the initial burden of showing that there is no genuine issue of material fact, the burden shifts to the non-moving party to produce evidence or designate specific facts showing the existence of a genuine issue for trial." Engstrom v. First Nat 7 Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir. 1995) (citing Celotex, 477 U.S. at 322-24, and Fed.R.Civ.P. 56(e)). The mere argued existence of a factual dispute will not defeat an otherwise properly supported motion. See Anderson, 477 U.S. at 248. "If the evidence is merely colorable, or is not significantly probative," summary judgment is appropriate. Id. at 249-50 (citations omitted).
III. LAW AND ANALYSIS
A) Does Defendant's Contract with TTC Alone Amount to Securing Compensation Payments under the LHWCA?
Title 33, section 905(a) of the United States Code (Section 5(a) of the Longshore and Harbor Workers' Compensation Act) provides in pertinent part:
The liability of an employer prescribed in section 904 of this title shall be exclusive and in place of all other liability of such employer to the employee . . . except that if an employer fails to secure payment of compensation as required by this chapter, an injured employee . . . may elect to claim compensation under the chapter, or to maintain an action at law or in admiralty for damages on account of such injury."33 U.S.C.A. § 905(a) (West 2001).
Defendant argues that it was enough that it contracted with TTC to provide coverage to TTC's employees. By so doing, Defendant claims Plaintiffs exclusive recovery is the LHWCA's worker's compensation plan. Defendant relies on two cases for this proposition, B.S. Costello, Inc. v. Meagher, 867 F.2d 722 (5th Cir. 1989) and Thibodeaux v. J. Ray McDermott Co., 276 F.2d 42 (5th Cir. 1960).
In B.S. Costello. Inc., the United States Fifth Circuit Court of Appeals held that an employer is liable for periodic disability payments to an injured former employee under the LHWCA when the employer's insurance carrier becomes insolvent and can no longer make payments as required under the LHWCA. B.S. Costello, Inc., 867 at 726. In that case, the employer actually secured payment through a proper insurance carrier under the LHWCA. Id. at 725. The insurance carrier became insolvent after the plaintiffs injury and after having made several payments to the injured employee under the LHWCA. Id. The Fifth Circuit decided that, although it was an unfortunate circumstance to burden the employer with making payments under the LHWCA even after it had complied with all the requirements of the LHWCA, the language of the LHWCA mandated that result. Id. at 726. The Court did not address whether the LHWCA would allow an employee to maintain an action for damages against his employer after the insurance carrier became insolvent, but it seemed to suggest that the LHWCA would not. Id.
This case is not analogous to the present case. Defendant suggests that as long as Defendant took some measure to ensure payment under the LHWCA, then the failure of that measure to produce the necessary disability payments under the LHWCA subjects the employer to liability only for payment of the disability payments and not for damages for the injuries sustained. If indeed CGI was bankrupted previous to Plaintiffs injury, then the present case differs from B.S. Costello, Inc. because Defendant would not have secured valid coverage under the LHWCA applicable at the time of Plaintiffs injury.
In Thibodeaux, a welder apparently fell to his death while loading and unloading a flat-deck unmanned barge. Thibodeaux, 276 F.2d at 45. The welder's relatives sued seeking damages against the welder's employer asserting the action at law was maintainable (1) under the LHWCA for failure to secure payment of compensation; (2) under the Jones Act, 46 U.S.C.A. § 688; and (3) for loss of consortium. Id. The plaintiffs asserted that the employer's failure to adequately post notice of the LHWCA coverage amounted to failure to secure payment under the LHWCA and, accordingly, entitled them to damages for that failure. Id. at 46. The district court dismissed the plaintiffs claim holding that the plaintiffs exclusive remedy was under the LHWCA. Id. In affirming the district court, the United States Fifth Circuit Court of Appeals held that a failure of the employer to adequately post notice of its coverage under the LHWCA is not a failure to secure compensation under the LHWCA. Id. More pertinently, the Fifth Circuit stated that "the reference in § 905 to an employer who Tails to secure payment of compensation as required by this chapter' relates to the specific provision in § 932 which prescribes how and in what manner an employer shall comply with the obligation to secure payment of compensation." Thibodeawc, 276 F.2d at 46.
Defendant's argument that, regardless of TTC's failure to secure the proper insurance coverage as required by the LHWCA, its Contract with TTC should amount to the securing of payment under the LHWCA is not buttressed by Thibodeawc. In fact, the language from Thibodeawc quoted above directly contradicts Defendant's position.
33 U.S.C.A. § 932 provides in pertinent part:
(a) Every employer shall secure the payment of compensation under this chapter —
(1) By insuring and keeping insured the payment of such compensation with any stock company or mutual fund company or association, or with any other person or fund, while such person or fund is authorized (A) under the laws of the United States or of any State, to insure workmen's compensation, and (B) by the Secretary, to insure payment of compensation under this chapter . . .33 U.S.C.A. § 932 (West 2001) (emphasis added).
Neither party alleges that TTC is either authorized under the laws of the United States or any State to insure workmen's compensation or authorized by the Secretary of Labor to insure payment of compensation under the LHWCA. Therefore, Defendant's contract with TTC alone cannot amount to securing compensation payments under the LHWCA.
Accordingly, Defendant's first argument that it is entitled to summary judgment because it contracted with TTC to provide coverage to TTC's employees employed by Defendant at the time of Plaintiffs injury must fail.
B) Has Plaintiff Created a Genuine Issue of Material Fact as to Whether, at the Time of Plaintiffs Injury, Defendant had Secured Payment under the LHWCA?
Defendant contends that TTC did provide valid coverage at the time of Plaintiff s injury. Defendant alleges that TTC did provide the correct insurance at the time of Plaintiff s injury through CGI, an insurer which neither party disputes could validly provide coverage under the LHWCA.
To support its proposition that Plaintiff cannot create a genuine issue of material fact as to whether TTC obtained the proper coverage at the time of Plaintiff s injury, Defendant attaches to its Motion for Summary Judgment the following exhibits: the affidavit of Brent Duet, owner of Defendant, claiming that TTC did in fact obtain the proper coverage until May of 2001 (Rec. Doc. 26, exhibit 1); a copy of a document entitled "SERVICE AGREEMENT" signed by Defendant and TTC wherein TTC agrees to "obtain and pay the costs of providing all necessary and legally required worker's compensation (and Longshore and Harbor Workers Act, where applicable) insurance coverage" (Rec. Doc. 26, exhibit A); three certificates of liability insurance indicating that CGI insured TTC and Defendant for workers compensation and employers' liability for a period including the date of Plaintiff s accident (Rec. Doc. 67, exhibit A).
Plaintiff claims that CGI was bankrupt at the time of Plaintiffs injury and, therefore, TTC could not have secured payment through CGI for Defendant. Plaintiff attaches numerous exhibits including the affidavit of Michael O. Brewer, who states that at the time Plaintiffs claim was pending before the Department of Labor he was the acting District Director and that CGI filed for bankruptcy prior to the time of Plaintiff s injury. (Rec. Doc. 28, exhibit C).
Plaintiff has created a genuine issue of material fact as to whether TTC had secured payment of compensation under the LHWCA at the time of Plaintiffs injury.
IV. CONCLUSION
Accordingly, Defendant's Motion for Summary Judgment is DENIED.