Preview:

FOR IMMEDIATE NEWS RELEASE NEWS RELEASE #020 FROM: CLERK OF SUPREME COURT OF LOUISIANA

The Opinions handed down on the 16th day of March, 2010, are as follows:

BY KNOLL, J.:

2009-C -0572

VERA M. RAINEY v. ENTERGY GULF STATES, INC. AND MIKE CASE (Parish of Iberville) Kimball, C.J., participated in oral argument but did not participate in the deliberation of this opinion. Retired Judge Thomas C. Wicker, Jr., assigned as Justice ad hoc, sitting for Justice John L. Weimer, recused. Judge Benjamin Jones, of the Fourth Judicial District Court, assigned as Justice Pro Tempore, participating in the decision. For the foregoing reasons, we affirm the judgment of the Court of Appeal. AFFIRMED.

3/16/2010

SUPREME COURT OF LOUISIANA NO. 09-C-572 VERA M. RAINEY versus ENTERGY GULF STATES, INC., and MIKE CASE ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIRST CIRCUIT, PARISH OF IBERVILLE

KNOLL, Justice* This writ concerns whether the affirmative defense of statutory employer tort immunity can be urged when the written contract providing for this relationship was not hand-signed by the principal, but was hand-signed only by the contractor. Plaintiff, Vera Rainey, an employee of the contractor, ABB C-E Services, Inc. (ABB) was injured in the course of her employment at the business of the principal, Entergy Gulf States, Inc. (Entergy) at its Willow Glen power plant. She filed a tort suit against Entergy, which was eventually met with the affirmative defense of statutory employer tort immunity. After a complex and tortuous procedural history, a bench trial was held wherein the trial court denied Entergy's affirmative defense. The Court of Appeal sitting en banc with one judge recused, reversed the trial court in a 6-5 decision. We granted plaintiff's1 writ primarily to address the contract issue.2
Kimball, C.J., participated in oral argument but did not participate in the deliberation of this opinion. Retired Judge Thomas C. Wicker, Jr., assigned as Justice ad hoc, sitting for Justice John L. Weimer, recused. Judge Benjamin Jones, of the Fourth Judicial District Court, assigned as Justice Pro Tempore, participating in the decision. At the time of the trial of the statutory employer defense issue, Vera Rainey was deceased. Her children, Jo Ann Mays and James McCallister, were substituted as parties in this action. Rainey v. Entergy Gulf States, Inc., 01-2414 (La. Ct. App. 1 Cir. 6/25/04), 885 So.2d 1193. Additionally, Leonard Cardenas, III, Esq., who was retained by and represented Rainey in connection with this suit, was allowed to intervene in the proceeding to protect any interests and rights he may have and to assert a privilege for any attorney's fees and costs. Thus, any reference
1 *

The plaintiff also urges the composition of the en banc court was constitutionally flawed, which we will address preliminarily to the contract issue. For reasons set forth below, we find the en banc court majority was constitutionally composed, and finding no error in the Court of Appeal's determination that a lawful and enforceable contract existed between Entergy and ABB, we affirm. FACTS AND PROCEDURAL HISTORY In January 1999, ABB began a construction project for Entergy at Entergy's Willow Glen power plant in St. Gabriel, Louisiana. This work was performed pursuant to a General Operations Agreement for Contracted Services (Agreement) that was executed between these two entities in 1992. On February 15, 1999, Vera Rainey, a journeyman boilermaker working for ABB at Willow Glen, fell down a stairway on the jobsite and was injured. Rainey filed a tort suit for damages against Entergy, alleging Entergy was at fault for, inter alia, using a substandard staircase and failing to provide adequate lighting in the work area. This complex and lengthy procedural battle commenced when Entergy did not assert the statutory employer defense in its answer to Rainey's petition for damages. Approximately ten and a half months later, two days prior to the scheduled trial date of August 31, 2000, Entergy filed a motion for leave of court to file a supplemental and amending answer to allege the statutory employer defense. The basis for Entergy's assertion of the statutory employer defense was an addendum to the Agreement, which stated, in pertinent part, "[t]he parties mutually agree that it is their intention to recognize Entergy Corporation . . . as the statutory employers [sic] of the Contractor's [ABB] employees . . . in accordance with Louisiana Revised Statute
to plaintiff in the portion of this opinion concerning the trial of the statutory employer issue necessarily refers to these parties. For sake of clarity, we will refer to these parties as "plaintiff" throughout this opinion.
2

Rainey v. Entergy Gulf States, Inc., 09-572 (La. 6/19/09), 10 So.3d 747. 2

23:1061 while Contractor's employees are providing work hereunder." The trial court denied the motion. Due to plaintiff's illness, the trial date was continued until December 6, 2000. After a bench-trial, the trial court awarded damages to Rainey. On appeal, finding the trial court abused its discretion by denying Entergy's motion to amend to assert the statutory employer defense, the judgment was reversed and the case remanded to the trial court for a trial on the merits of the statutory employer issue only. Rainey v. Entergy Gulf States, Inc., 01-2414 (La. Ct. App. 1 Cir. 11/8/02), 840 So.2d 586. The trial of the statutory employer defense was held on August 1, 2005. At issue was whether an addendum to the Agreement validly provided in writing a statutory employer relationship between Entergy and ABB. This initial Agreement was executed in 1992. In 1997, the Louisiana Legislature amended La. Rev. Stat. 23:1061 to require a written contract between the principal and the contractor recognizing the principal as a statutory employer in order for a statutory employer relationship to exist between the principal and the contractor's employees. The statute provided, in relevant part: Except in those instances covered by Paragraph (2) of this Subsection, a statutory employer relationship shall not exist between the principal and the contractor's employees, whether they are direct employees or statutory employees, unless there is a written contract between the principal and a contractor which is the employee's immediate employer or his statutory employer, which recognizes the principal as a statutory employer. . . . La. Rev. Stat. 23:1061A(3). Entergy sent a letter to ABB dated February 27, 1998, specifically referencing the Agreement and proposing an amendment to the Agreement to comply with the then recently amended La. Rev. Stat. 23:1061 requiring a written contract to recognize the principal as the statutory employer of the contractor's employees. This letter stated, in pertinent part:
3

The following proposed amendment to the above-referenced agreement includes our intention to continue the statutory employment relationship in accordance with the new law. We believe that the following amendment is for the mutual benefit of both Entergy and ABB [Contractor's name]. [sic] Thus, we are requesting that you execute this letter in order to amend Agreement Number FHA00166, dated 08-Dec-92 to include the following language: The parties mutually agree that it is their intention to recognize Entergy Corporation and any of its affiliated and associated companies that are parties to the above-referenced agreement as the statutory employers of the Contractor's employees, whether direct employees or statutory employees of the Contractor, in accordance with Louisiana Revised Statute 23:1061 while Contractor's employees are providing Work hereunder. The parties recognize that this amendment is not intended to change the relationship between the parties and that it has always been the intent of the parties that Entergy Corporation and any of its affiliated associated companies that are parties to the above-referenced agreement would be entitled to raise the "statutory employer" defense, where applicable, to personal injury suits by an employee of the Contractor for injuries suffered while performing work under the above-referenced Agreement. The letter concludes by requesting a fully executed copy be returned to Entergy no later than March 20, 1998. After the complimentary close of "very truly yours" appears the typewritten name of Bobbie S. Babin. Underneath that along the left margin appears "Agreed Upon by Contractor" with the signature of R. I. Beckman whose title is V.P. [of] Construction and the date of March 10, 1998. At trial of the statutory employer issue, plaintiff vehemently opposed the validity of the addendum, questioning the circumstances of Entergy producing the addendum two days before the original scheduled trial date of August 31, 2000. Notwithstanding this argument, plaintiff did not allege fraud or bad faith. Testimony and evidence introduced at the trial of the statutory employer issue showed in response to plaintiff's first set of interrogatories and request for production of documents, Entergy responded it had not specifically alleged it was plaintiff's

4

statutory employer and was unaware of any facts which would support an immunity defense, but with the caveat that if such facts became available it would amend its pleadings and supplement its response. Subsequently, on August 29, 2000, Entergy supplemented its answers to plaintiff's interrogatories with the addendum to the Agreement. Entergy's in-house counsel, John Braymer, testified when he received Rainey's suit, he sent a demand letter to ABB for defense and indemnity. A copy of his letter to ABB dated June 25, 1999 was admitted into evidence. ABB responded they

would assume the defense and indemnity of Entergy and that Richard Duplantier of Galloway, Johnson, Thompkins and Burr had been retained to represent Entergy. Braymer further testified although Duplantier was responding to discovery propounded by Rainey's counsel, Duplantier failed to keep Entergy informed, through Braymer, regarding the status of the statutory employer defense or the discovery responses submitted with regard to a potential statutory employer defense. Admitted into evidence was a letter from Braymer to Duplantier dated May 3, 2000, wherein Braymer requested information regarding efforts to develop defenses, including statutory employer immunity. Duplantier's June 19, 2000 letter in

response, although addressing potential defenses and possible third party fault, did not make reference to statutory employer defense. Braymer sent a letter to Duplantier and his associate, John E. W. Baay, II, asking if they were anticipating filing a motion for summary judgment claiming Rainey was the statutory employee of Entergy and, if not, their reasons for not doing so. Messrs. Duplantier and Baay replied on July 27, 2000, stating they were not planning on such a motion because, based on their review of the Agreement between Entergy and ABB, such a motion would be denied. Braymer testified upon receiving

5

this letter on August 1, 2000, he was "shocked" and immediately contacted the appropriate Entergy employees to ascertain whether the Statutory Employer Addendum existed and, if so, for it to be produced. Braymer testified Michael G. Pennison located an indication in Entergy's contract database that Entergy had received the statutory employer Addendum back from ABB.3 Cara Carpenter, an Entergy employee assigned to locate the Addendum, responded to Braymer on August 24, 2000, that she could not find any such Addendum. Braymer testified that in response to this communication, he responded with an e-mail questioning whether it had been misplaced or misfiled. He testified there are thousands of contracts in that area of the company and there was a possibility it had been misplaced or misfiled. On August 25, 2000, Carpenter sent an e-mail to Braymer that she was faxing the Addendum to him. Carpenter's affidavit was attached to Entergy's motion to file a supplemental and amending answer. In this affidavit, Carpenter swears she was unaware of the existence of a second folder containing the Addendum until August 25, 2000, when she discovered the folder. In Carpenter's deposition testimony she stated the Addendum was located in this second folder. She found the folder on top of a "working" desk outside of Brian Lawson's office, about three cubicles down the aisle from the filing cabinet where the ABB contracts were supposed to be kept. In rendering its judgment denying Entergy's statutory employer defense, the trial court declared it did "not dispute the fact that there existed a purported written addendum to the original" Agreement, "even though there is some question as to the circumstances in which the addendum to the original contract was found." Notwithstanding, the court found the addendum was not in the proper form as

Plaintiff's counsel disputed that characterization of Pennison's deposition testimony; portions of that deposition were admitted as Plaintiff's Exhibit 10. 6

3

statutorily required because "[u]nder Louisiana jurisprudence, a `written contract' must be signed by both parties in order to be perfected." Entergy's appeal was considered by the Court of Appeal sitting en banc. Eleven of the twelve judges of the First Circuit Court of Appeal participated as Judge Hughes was recused. According to the court's per curiam opinion, four of the judges would have reversed the trial court, finding the trial court erred in concluding Entergy was not Rainey's statutory employer; three of the judges would have affirmed the trial court's judgment on the basis Entergy failed to establish the existence of a timelyexecuted, written addendum (or, alternatively, remand for the trial court to determine whether such an addendum was timely executed before Rainey's accident); one judge would have remanded for the trial court to make a full and reasoned determination as to whether the addendum was executed prior to the accident; and three judges would have dismissed the appeal, finding the Court of Appeal did not have jurisdiction.4 Rainey v. Entergy Gulf States, Inc., 06-816, pp. 6-7 (La. Ct. App. 1 Cir. 8/15/08), 993 So.2d 735, 739. Relying upon Parfait v. Transocean Offshore, Inc., 07-1915 (La. 3/14/08), 980 So.2d 634, 636, and 639, the court held the effect of it not having an executable majority made the trial court's decision stand. Simultaneous with that decision, the en banc court denied a motion by plaintiff to dismiss the appeal. Writs were taken to this court from both of these decisions. We denied plaintiff's writ from the appellate court's decision denying the motion to dismiss Entergy's appeal. Rainey v. Entergy Gulf States, Inc., 08-2209 (La.

12/12/08), 996 So.2d 1118. Because we denied that writ, we granted Entergy's writ

As we observed in Rainey v. Entergy Gulf States, Inc., 08-2233, p. 1, n.2 (La. 12/12/08), 996 So.2d 1058, 1059, although three judges dissented from the order denying the motion to dismiss the appeal for lack of jurisdiction, Judge Pettigrew concurred in the per curiam stating although he found the court had no jurisdiction to reach the merits of the appeal, the majority found otherwise. Thus he felt compelled to address the merits and found no legal or manifest error on the part of the trial court. 7

4

and remanded the matter to the Court of Appeal for the judges who found the appellate court did not have jurisdiction to reach the merits upon remand, and for the Court of Appeal to reach an executable majority judgment. Rainey v. Entergy Gulf States, Inc., 08-2233, p. 2 (La. 12/12/08), 996 So.2d 1058, 1059. On remand, in a 6-5 decision, the appellate court held the trial court erred in concluding Entergy was not Rainey's statutory employer at the time of her fall at Entergy's Willow Glen facility. Rainey v. Entergy Gulf States, Inc., 06-816, p. 1 (La. 2/13/09), 6 So.3d 877, 879. The per curiam declared a majority of the judges either agreed or concurred with Judge Kuhn's concurring opinion in Rainey, 06-816, 993 So.2d at 741. Rainey, 06-816 at p. 1, 6 So.3d at 879. Adopting Judge Kuhn's reasoning, the majority found La. Rev. Stat. 23:1061A(3), which must be strictly construed, requires a "written contract . . . which recognizes the principal as a statutory employer", but does not require both parties to affix a handwritten signature to the agreement. Rainey, 06-816 at p. 6, 993 So.2d at 745. The appellate court relied upon Fleming v. JE Merit Constructors, Inc., 07-926, p. 11 (La. Ct. App. 1 Cir. 3/29/08), 985 So.2d 141, 147, which held in the absence of a statute prescribing the method of affixing a signature, it may be written by hand, printed, stamped, typewritten, engraved, or provided by various other means. The court held the addendum valid because it was signed by both ABB and Bobbie Babin. Rainey, 06-816 at p. 7, 993 So.2d at 745. The appellate court further found the addendum valid based on ABB's signature alone. Noting other statutes expressly require both a writing and a signature, the court reasoned if the legislature had intended a writing and a signature by both parties, it would have expressly so provided. Rainey, 06-816 at p. 7, 993 So.2d at 745-746. Moreover, the Court of Appeal found Entergy was not required to

8

sign the addendum, which was prepared under Entergy's direction and reflected Entergy's clear intent to be bound once ABB assented to it. The appellate court addressed plaintiff's argument that even if the addendum met the requirements of La. Rev. Stat. 23:1061A(3), the lack of credibility and reliability could not be overlooked. Plaintiff questioned Entergy's finding of the addendum two days before trial. Plaintiff also argued no evidence was presented to show the exact date ABB signed the addendum, as Beckman, who signed for ABB, testified in his deposition he was not the person who dated it. Further, Entergy's tracking software was unable to show when it received the addendum from ABB. The majority rejected these arguments. It was undisputed Beckman signed the addendum. Although he testified he did not personally date the addendum, he testified an ABB representative would have dated the addendum no more than one day prior to his signing it, in accordance with ABB's standard operational procedure. Although the addendum was found shortly before trial and Entergy's tracking software could not indicate when the addendum was received, this did not affect the validity of the document. There were no facts indicating Entergy and ABB colluded to produce a forged document. Based upon a de novo review of the evidence, the majority concluded it was insufficient to warrant a finding the addendum was confected as a result of fraud. Rainey, 06-816 at p. 11, 993 So.2d at 748. For assigned reasons joined by two other judges, Judge Whipple dissented. Although she agreed with the majority the trial court legally erred in concluding the written contract contemplated by La. Rev. Stat. 23:1061A(3) must be signed by both parties, she was unable to find on the record Entergy satisfied its burden of proving the existence of an authentic timely executed written addendum. Rainey, 06-816 at pp. 3-4, 6 So.3d at 881 (Whipple, J., dissenting). The dissent would have affirmed

9

the trial court's judgment or, alternatively, remanded for a determination of whether the statutory employer relationship existed between Entergy and ABB's employees, given the credibility issues. Id., 06-816 at p. 6, 6 So.3d at 882.5 LAW AND ANALYSIS Constitutional Appellate Court Majority Preliminarily, we address plaintiff's argument attacking the appellate court's judgment as constitutionally invalid. Plaintiff contends for the Court of Appeal sitting en banc to modify or reverse a district court judgment, there must be a majority of the full complement of the elected court, not just those sitting. The First Circuit Court of Appeal consists of twelve elected judges. In an order dated July 2, 2008, the court clarified the July 18, 2008 docket was the court's en banc consideration of the case. Judge Hughes had previously recused himself in this matter, thus eleven judges considered and decided this case. In a split six to five decision, the Court of Appeal reversed in part and vacated in part the trial court's judgment. Plaintiff maintains six judges do not compose the constitutionally required majority of the full complement of the First Circuit Court of Appeal necessary to reverse or modify the district court judgment. In support of the argument, plaintiff relies upon Dauzat v. Allstate Ins. Co., 257 La. 349, 242 So.2d 539 (1970), specifically its conclusion "when the Court of Appeal sits En banc, a judgment must be rendered by a majority of the full complement or membership of the Court

Download 2009-C-0572 VERA M. RAINEY v. ENTERGY GULF STATES, INC. AND MIKE CASE.pdf

Louisiana Law