Opinion
Civ. A. No. 94-1711.
August 16, 1995.
Charles W. Dittmer, Jr., Dittmer Hartman, Metairie, LA, for plaintiffs.
Susan A. Daigle, Broussard, David Daigle, Lafayette, LA, for Smith Petroleum Co., Inc.
Edward Settoon Johnson, Salvador Joseph Pusateri, Johnson, Johnson, et al, New Orleans, LA, for Grasso Production Management, Inc.
Jon Daniel Picou, Richard E. Jussaume, Jr., Leininger, Larzelere Picou, Metairie, LA, for KE Resources, Ltd.
Musa Rahman, Louisiana Workers' Compensation Corp., Baton Rouge, LA, for Louisiana Workers' Compensation Corp.
ORDER AND REASONS
Pending before the Court is plaintiffs' "Motion to Reconsider" summary judgment previously granted in favor of defendant Grasso Production Management, Inc. Having reviewed the memoranda of the parties, the record and the applicable law, the Court DENIES the motion.
Background
As explained in an Order and Reasons issued by this Court on June 13, 1995 (R.Doc. 66), plaintiffs filed this lawsuit on May 23, 1994, seeking damages as a result of injuries plaintiff Jerry Kerr Sr. allegedly sustained on an offshore platform on the Outer Continental Shelf owned, operated and/or maintained by defendants Grasso Production Management, Inc. and/or Smith Petroleum Company. (R.Doc. 1.) Plaintiffs alleged jurisdiction based on diversity of citizenship, 28 U.S.C. § 1332, between themselves as Louisiana residents and the defendants as foreign corporations. Id.
Grasso Production Management, Inc. (hereinafter "Grasso") and Smith Petroleum answered in July 1994 (R.Docs. 2 and 3), and shortly thereafter in September 1994 plaintiffs filed an unopposed motion to amend their complaint, which was granted by the judge to whom this case was previously allotted. (R.Doc. 7.) The amended complaint added as defendants K.E. Resources, Ltd., a foreign corporation, and Arcadia Investment Corporation and J.J.R., Inc., both "corporation[s] organized and existing under and by virtue of the Laws of the State of Louisiana." (R.Doc. 8., Paragraphs 1a, 1b and 1c.) The amended complaint further alleged that these three new defendants owned and/or operated the production platform where plaintiff was allegedly injured and were liable "jointly, severally and in solido" with the other two defendants. Id., Paragraph 5.
The parties proceeded with the case, filing numerous pleadings and various motions, including motions for summary judgment. Grasso Production's motion for summary judgment as to plaintiffs' claims was granted as unopposed on February 9, 1995, when plaintiffs failed to file a timely opposition memorandum. (R.Doc. 47.)
On February 13, 1995, plaintiffs filed an opposition to Grasso Production's motion, albeit late, raising for the first time the issue of whether this Court had subject matter jurisdiction due to the fact that Arcadia Investment Corporation (hereinafter "Arcadia") and J.J.R., Inc. (hereinafter "JJR") were non-diverse to plaintiffs. Plaintiffs then filed a motion to reconsider and/or remand this matter to state court, which the Court denied in its June 13 decision.
Plaintiffs now bring another motion to reconsider the granting of summary judgment in favor of Grasso based on two arguments. Plaintiffs first contend that summary judgment is improper under Brown v. Avondale Industries, Inc., 617 So.2d 482 (La. 1993). Second, plaintiffs maintain that summary judgment should be recalled because the basis for summary judgment — Grasso's defense of statutory employer — was waived by Grasso because it failed to plead statutory employer as an affirmative defense in its answer under Fed.R.Civ.P. 8(c).
The intervenor, Louisiana Workers' Compensation Corporation, filed a memorandum in support of plaintiffs' motion to reconsider, arguing that plaintiff Jerry Kerr's receipt of benefits under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq., prevents summary judgment from being granted in favor of Grasso. This argument mirrors plaintiffs' argument under Brown, supra.
In opposition, Grasso argues that this Court has already addressed plaintiffs' first contention (and intervenor's argument) in its prior decisions. As to plaintiffs' second argument, Grasso contends that because plaintiffs were not unfairly surprised or prejudiced, its failure to comply precisely with Rule 8(c) does not bar its relying on the defense of statutory employer for summary judgment.
Law and Application
The first issue is the standard of review of plaintiffs' motion to reconsider. Following the Court's June 13 decision granting summary judgment in favor of Grasso, no judgment was entered due to remaining claims in the matter. As a result, the grant of summary judgment was an order "subject to revision at any time before the entry of judgment adjudicating all the claims and rights and liabilities of the parties." Fed.R.Civ.P. 54(b). Cf. Zimzores v. Veterans Administration, 778 F.2d 264, 266 (5th Cir. 1985) (summary judgment on liability alone is interlocutory order subject to revision by the court, citing analogous provision of Rule 54(b)).
Despite having the obvious power to recall summary judgment granted in favor of Grasso, the Court declines to exercise that power for the following reasons.
As noted, plaintiffs' first argument is that his "election" of benefits under the Longshore and Harbor Workers' Compensation Act coupled with the Louisiana Supreme decision of Brown v. Avondale Industries, supra, precludes summary judgment. For the reasons set forth in its June 13 Order and Reasons, p. 9, n. 7 (R.Doc. 66), the Court again dismisses plaintiffs' argument. The Court will not belabor the point further.
The Court also addressed this same argument in granting summary judgment in favor of codefendant Smith Petroleum. See Order and Reasons, June 30, 1995, pp. 3-4 (R.Doc. 72).
Plaintiffs' second argument has not been discussed in any earlier decisions. In diversity cases, such as this one, whether a contention is an affirmative defense must be determined according to state law. Morgan Guaranty Trust Company of New York v. Blum, 649 F.2d 342, 344 (5th Cir. 1981). The Louisiana Supreme Court has found that the statutory employer defense is an affirmative defense. Berry v. Holston Well Service, 488 So.2d 934, 939 (La. 1986).
The manner and time of pleading affirmative defenses is determined according to the Federal Rules of Civil Procedure. Morgan Guaranty Trust, 649 F.2d at 344. Rule 8(c) provides that "[i]n pleading to a preceding pleading, a party shall set forth affirmatively [various specific affirmative defenses] and any other matter constituting an avoidance or affirmative defense." While Rule 8(c)'s pleading requirement appears to be stringent without any room for interpretation, the Fifth Circuit has stated that "[w]here the matter is raised in the trial court in a manner that does not result in unfair surprise . . . technical failure to comply precisely with Rule 8(c) is not fatal." Allied Chemical Corporation v. Mackay, 695 F.2d 854, 855 (5th Cir. 1983).
In Mackay, although the affirmative defense of usury was not pled in the answer, the defendant moved for summary judgment on that basis, which was granted. Id. Further, the defense was included in the court's pretrial order. Id. at 856. The court of appeals found that the defense was raised "at a pragmatically sufficient time, and Allied was not prejudiced in its ability to respond." Id. "Construing the [Federal Rules of Civil Procedure] to do substantial justice, the Fifth Circuit held that the defense of usury had not been waived." Id. Cf. United States v. Burzynski Cancer Research Institute, 819 F.2d 1301, 1307 (5th Cir. 1987) ("affirmative defense may be raised on a summary judgment only if that motion is the first pleading responsive to the substance of the allegations").
In the present case, plaintiffs' complaint alleged that Jerry Kerr was injured on an oil production platform on the Outer Continental Shelf. (Paragraph 4, R.Doc. 1.) However, subsequent discovery proved that the place of the alleged accident was actually in state waters. Shortly after learning this fact, according to Grasso, it filed its motion for summary judgment on the basis of the statutory employer defense. (Grasso's memorandum in opposition, p. 3, R.Doc. 75). Plaintiffs do not dispute this argument.
Plaintiffs conceded this fact in their previous motion to remand. (Memorandum in support of motion to remand, p. 1, R.Doc. 51.)
The Court finds that, under the circumstances, plaintiffs were not prejudiced or unfairly surprised by Grasso's raising statutory employer for the first time on summary judgment. Grasso raised its defense at "a pragmatically sufficient time" on the basis of facts which developed after plaintiffs filed their complaint. Indeed, the complaint contained erroneous facts which gave Grasso no notice to raise the defense of statutory employer. Additionally, plaintiffs did not even respond to Grasso's motion for production initially, resulting in the Court's granting the motion as unopposed. (R.Doc. 47.) Then, in what the Court construed as a motion to reconsider, the plaintiffs filed a "Motion to Remand and Recall Summary Judgment." (R.Doc. 52.) Nowhere in that motion did plaintiffs claim to be prejudiced or unfairly surprised by Grasso's reliance on the statutory employer defense. Plaintiffs still do not claim such surprise or prejudice in the present motion, relying strictly on Rule 8(c) for its argument.
In view of these findings and construing the Federal Rules of Civil Procedure "to do substantial justice," Mackay, supra, the Court finds that Grasso has not waived its defense of statutory employer.
Accordingly,
IT IS ORDERED that plaintiffs' "Motion to Reconsider" is DENIED.