Shane Salathe Versus The Parish of Jefferson Through the Department of Sewerage

SHANE SALATHE NO. 19-CA-497

VERSUS FIFTH CIRCUIT

THE PARISH OF JEFFERSON THROUGH COURT OF APPEAL
THE DEPARTMENT OF SEWERAGE
STATE OF LOUISIANA

ON APPEAL FROM THE TWENTY-FOURTH JUDICIAL DISTRICT COURT
PARISH OF JEFFERSON, STATE OF LOUISIANA
NO. 749-298, DIVISION "M"
HONORABLE HENRY G. SULLIVAN, JR., JUDGE PRESIDING

October 21, 2020

ROBERT A. CHAISSON
JUDGE

Panel composed of Judges Robert A. Chaisson,
Hans J. Liljeberg, and John J. Molaison, Jr.

AFFIRMED
RAC
HJL
JJM

COUNSEL FOR PLAINTIFF/APPELLEE,
KAREN G. SALATHE AND WAYNE SALATHE
Richard C. Trahant
Jack E. Morris

COUNSEL FOR DEFENDANT/APPELLEE,
CONSOLIDATED SEWERAGE DISTRICT NO. 1
OF THE PARISH OF JEFFERSON
Guice A. Giambrone, III
Jacob K. Best

COUNSEL FOR DEFENDANT/APPELLEE,
AMERICAN ALTERNATIVE INSURANCE COMPANY
Tara E. Clement
Jameson M. Taylor

COUNSEL FOR INTERVENOR/APPELLANT,
AMERISURE INSURANCE COMPANY
Sidney W. Degan, III
Foster P. Nash, III
Stephanie L. Cheralla
Travis L. Bourgeois

CHAISSON, J.

In this personal injury lawsuit, Amerisure Insurance Company

(“Amerisure”) filed a petition of intervention seeking reimbursement of workers’

compensation benefits that it paid to Shane Salathe, the injured plaintiff.

Amerisure now appeals a judgment of the trial court that granted motions for

summary judgment filed by Consolidated Sewerage District No. 1 of the Parish of

Jefferson (“the Parish”), American Alternative Insurance Corporation (“AAIC”),

and Karen G. Salathe and Wayne Salathe, which dismissed with prejudice the

petition of intervention filed by Amerisure. For the following reasons, we affirm

the judgment of the trial court.

FACTS AND PROCEDURAL HISTORY
This case, which has twice previously been before this Court on appeal

regarding issues of insurance coverage, arises from a worksite accident resulting in

serious injuries to Shane Salathe.1 See Salathe v. Par. of Jefferson through Dep't

of Sewerage, 18-447 (La. App. 5 Cir. 12/19/18), 262 So.3d 429 and 19-427 (La.

App. 5 Cir. 7/15/20), 300 So.3d 460. The following facts and procedural history

are relevant to this appeal.

On November 7, 2014, the Parish entered into a contract with Fleming

Construction Company, LLC (“Fleming”) for the replacement or restoration of

existing sewer mains in Jefferson Parish. The construction contract between the

Parish and Fleming, the Standard General Conditions of the Construction Contract,

required Fleming to procure certain insurance policies naming the Parish as an

additional insured, including commercial general liability (CGL) and umbrella

insurance policies. The construction contract also required Fleming to procure

workers’ compensation insurance coverage to protect against the risk of workplace

1
After the death of the original plaintiff, Shane Salathe, the trial court granted the motion of Mr. Salathe’s
parents, Karen and Wayne Salathe, to substitute themselves as his legal successors in this litigation.

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injury to Fleming’s employees. The particular contractual provisions requiring

insurance that are at issue in this appeal state the following:

5.04 CONTRACTOR’S Liability Insurance

A. CONTRACTOR shall purchase and maintain such liability and
other insurance as is provided herein or in the Supplementary
Conditions, as is appropriate for the Work being performed and as
will provide protection from claims set forth below which may arise
out of or result from CONTRACTOR’s performance of the Work and
CONTRACTOR’s other obligations under the Contract Documents,
whether it is to be performed by the CONTRACTOR, any
Subcontractor or Supplier, or by anyone directly or indirectly
employed by any of them to perform any of the Work, or by anyone
for whose acts any of them may be liable;
…
1. claims under workers’ compensation, disability benefits, and
other similar employee benefit acts;

2. claims for damages because of bodily injury, occupational
sickness or disease, or death of CONTRACTOR’s employees;
…
B. The policies of insurance so required by this paragraph 5.04 to be
purchased and maintained shall:

1. with respect to comprehensive general liability, automobile
liability, and umbrella liability, name the OWNER as additional
insured, be primary to any insurance carried by the OWNER, and
with respect to workers’ compensation only, include a Waiver of
Subrogation in favor of the OWNER and any principals for whom
the OWNER is working, including any co-lessors of such
principals; and, with respect to all of the foregoing, be subject to
the approval of the owner;
…
4. include contractual liability insurance covering
CONTRACTOR’s indemnity obligations under paragraphs 6.07,
6.11, and 6.20;
…

Pursuant to these provisions, Fleming procured a worker’s compensation

policy from Amerisure, the “Workers Compensation and Employers Liability

Insurance Policy” No. WC-2077898-03, which contained a “Waiver of Our Right

to Recover from Others Endorsement.” Fleming also procured from Amerisure the

Commercial General Liability policy bearing Policy No. GL 20778990301.

Further, Fleming procured from Alterra America Insurance Company (“Alterra”)

the Commercial Excess Liability policy bearing Policy No. MAXA3EC50001291.

19-CA-497 2

On February 5, 2015, while ascending a ladder from a wet well where he

had performed work, Fleming foreman Shane Salathe fell off the ladder nearly

thirty feet to the bottom of the well. He suffered catastrophic brain injury and

paraplegia. A few months later, on May 1, 2015, Mr. Salathe filed a petition for

damages naming the Parish as a defendant. He alleged that the Parish is liable for

his injuries through its negligence in failing to maintain the hinge on the well door,

which failed when he reached for it prior to his fall down the well. In a second

amended and supplemental petition, Mr. Salathe added as defendants the Parish’s

insurer, AAIC, and Fleming’s insurers, Amerisure and Alterra, because of their

contractual obligations to defend and indemnify the Parish as a named insured.

On January 25, 2016, Amerisure filed a petition of intervention in its

capacity as workers’ compensation insurance carrier for Fleming, wherein it

alleged that it had paid workers’ compensation benefits to Mr. Salathe and is

therefore entitled to credit or reimbursement by preference and priority out of any

settlement or judgment rendered in favor of Mr. Salathe. Alternatively, Amerisure

alleged that it is entitled to recover directly from defendants all benefits, costs, and

fees it has paid on behalf of Mr. Salathe. In his answer to the petition of

intervention, Mr. Salathe denied Amerisure’s claim and averred that Amerisure

wrongfully failed and refused to pay certain claims for compensation and benefits

owed to him pursuant to the policy and the Louisiana Workers Compensation Act.

The Parish also filed an answer to the petition denying Amerisure’s claim and

raising the affirmative defense of waiver.

Both Mr. Salathe and the Parish averred in their answers to the petition and

in subsequently filed motions for summary judgment, that pursuant to the terms set

forth in both the General Conditions Contract between Fleming and the Parish and

the “Waiver of our Right to Recover from Others Endorsement” to the Amerisure

19-CA-497 3

workers’ compensation policy, Amerisure contractually waived its right to recover

any benefits it has paid or will be called upon to pay on behalf of Mr. Salathe.

An additional development in the litigation during this time was that

Amerisure, in its capacity as the CGL carrier, and Alterra, in its capacity as the

excess liability carrier, filed motions for partial summary judgment seeking to limit

their liability under the CGL and umbrella policies issued to Fleming. In

particular, they sought to have the trial court declare as null, void, and

unenforceable under Louisiana law: 1) the sections of the General Conditions

Contract which required Fleming to contractually indemnify the Parish for any

bodily injuries which occurred to Fleming employees on the job which were

caused by the Parish’s own negligence and; 2) those provisions which required

Fleming to name the Parish as an Additional Insured in the CGL and umbrella

insurance policies to cover those same injuries. In a judgment rendered May 9,

2018, the trial court granted these motions and in so doing declared, “[t]he Court

finds that the contractual indemnity and insuring agreements between the Parish of

Jefferson and Fleming Construction Company, LLC are void, null, and

unenforceable under Louisiana law.” Mr. Salathe and the Parish and its insurer,

AAIC, appealed that judgment.

Subsequently, in November 2018, Amerisure, in its capacity as workers’

compensation insurer, filed its opposition to the motions for summary judgment

seeking the dismissal of its petition of intervention. In its opposition, Amerisure

initially argued that the waiver in the policy endorsement is inapplicable because

of the May 9, 2018 judgment of the trial court that declared null, void, and

unenforceable the language in the General Conditions Contract that required the

Parish to be named an additional insured on the commercial general liability and

umbrella insurance policies procured by Fleming. Shortly thereafter, on

December 19, 2018, this Court, in the first appeal of this case, issued an opinion

19-CA-497 4

vacating the May 9, 2018 judgment of the trial court on procedural grounds,

without addressing the parties’ arguments on the merits. Salathe, 262 So.3d at 432.

After this Court vacated the May 9, 2018 judgment on procedural grounds,

Amerisure and Alterra, in their capacities as insurers on the CGL and umbrella

policies issued to Fleming, refiled their motions for summary judgment seeking to

have the contractual indemnity and additional insured requirements of the General

Conditions Contract declared null, void, and unenforceable. Additionally,

Amerisure, in its capacity as workers’ compensation insurer, filed a supplemental

memorandum in opposition to the motions for summary judgment seeking

dismissal of its petition of intervention. In this supplemental memorandum,

Amerisure argued that any ruling on the motions seeking dismissal of its

intervention would be premature because there was no final judgment on whether

the language of the General Conditions Contract was null, void, and unenforceable.

Alternatively, Amerisure argued that the motions should be denied based on the

language of the endorsement itself, or a general prohibition against double

recovery.

On May 16, 2019, the trial court granted the motions for summary judgment

filed by Mr. Salathe and Jefferson Parish (and its insurer, AAIC) and dismissed

with prejudice Amerisure’s petition of intervention. Two weeks later, on May 30,

2019, the trial court ruled on the motions for summary judgment filed by

Amerisure and Alterra, in their capacities as insurers on the CGL and umbrella

policies issued to Fleming, and rendered a judgment again declaring the language

of the General Conditions Contract requiring Fleming to contractually indemnify

or name the Parish as an additional insured on the CGL and umbrella policies to be

null, void, and unenforceable. Amerisure now appeals the May 16, 2019 judgment

that dismissed its petition of intervention.

19-CA-497 5

On appeal, Amerisure enumerates only one assignment of error, that the trial

court erred in granting the summary judgment motions and dismissing Amerisure’s

petition of intervention, but raises multiple issues for review which may be

summarized as follows: whether summary judgment was appropriate in light of the

trial court’s subsequent judgment declaring terms of the General Conditions

Contract null, void, and unenforceable; whether the trial court erred in its

interpretation of the endorsement language which purports to prevent a double

recovery or third-party benefit accruing to the Salathes. We address these errors in

our discussion below.

DISCUSSION

Appellate courts review summary judgments de novo using the same criteria

that govern the trial court’s determination of whether summary judgment is

appropriate. In re Succession of O’Krepki, 16-50 (La. App. 5 Cir. 5/26/16), 193

So.3d 574, 577. A motion for summary judgment should be granted if, after an

adequate opportunity for discovery, the motion, memorandum, and supporting

documents show that there is no genuine issue as to material fact and that the

mover is entitled to judgment as a matter of law. La. C.C.P. art. 966(A)(4).

We begin with the primary argument made in Amerisure’s assignment of

error: whether, in its endorsement, Amerisure contractually waived its right to

recover any benefits or payments made under the workers’ compensation policy.

The language of the Waiver of Right to Recover from Others Endorsement states:

We have the right to recover our payments from anyone liable for any
injury covered by this policy. We will not enforce our right against
the person or organization named in the Schedule. (This agreement
applies only to the extent you perform work under a written contract
that requires you to obtain this agreement from us.)
This agreement shall not operate directly or indirectly to benefit
anyone not named in the Schedule.

19-CA-497 6

Schedule
“Any person or organization required by written contract or certificate
of insurance.”
(Emphasis supplied.)
Pursuant to this language, if the terms of the General Conditions Contract

required Fleming to procure a workers’ compensation policy which included a

waiver of subrogation in favor of the Parish, then the Parish is an organization

named in the Schedule against which Amerisure agrees not to enforce its rights. It

is uncontested by the parties that Section 5.04 of the General Conditions Contract

does require Fleming to procure such a policy. The question thus becomes

whether this language has been declared null, void, and unenforceable with respect

to the workers’ compensation policy.

Amerisure argues that the May 30, 2019 judgment of the trial court,

rendered subsequent to the judgment at issue in this appeal, renders these terms

null, void, and unenforceable with respect to the workers’ compensation policy.

We note that this argument (i.e., that the substance of a subsequent judgment

affects this Court’s analysis of the issues in this appeal) is distinct from the

argument made to the trial court prior to its May 16, 2019 judgment, which was

that any judgment on the motions for summary judgment would be premature.

Amerisure’s argument, therefore, is a new argument that was not before the trial

court when it ruled on May 16, 2019. Ordinarily, this Court would decline to

consider such a new argument on appeal. See Uniform Rules, Courts of Appeal,

Rule 1-3; Ehsani-Landry v. Jefferson Par., 17-468 (La. App. 5 Cir. 3/14/18), 240

So.3d 332, 335. However, given the unusual procedural circumstances of this

case, with the original May 9, 2018 judgment of the trial court having been vacated

by this Court on appeal, and in the interests of judicial economy, we will consider

the merits of Amerisure’s arguments regarding the effect of the subsequent

judgment.

19-CA-497 7

Amerisure’s argument requires a careful examination of the trial court’s

May 30, 2019 judgment, the language of which is distinct from the prior, May 9,

2018 judgment vacated by this Court. The May 30, 2019 judgment states:

IT IS ORDERED, ADJUDGED, AND DECREED that the Motion for
Summary Judgment on Behalf of Amerisure Insurance Company and
Alterra Insurance Company is hereby GRANTED as follows:

To the extent that the contractual indemnity provisions of the contract
between Consolidated District No. 1 of the Parish of Jefferson and
Fleming Construction Company, LLC., could be interpreted as
requiring Fleming Construction Company, LLC to indemnify
Jefferson Parish for Jefferson Parish’s own sole, joint, or concurrent
negligence, those provisions are declared null, void, and
unenforceable under Louisiana law.

To the extent that the contractual indemnity provisions of the contract
between Consolidated District No. 1 of the Parish of Jefferson and
Fleming Construction Company, LLC could be interpreted as
requiring Fleming Construction Company, LLC to name Jefferson
Parish as an Additional Insured for the purpose of providing coverage
to Jefferson Parish for Jefferson Parish’s own negligence, those
provisions are declared null, void, and unenforceable under Louisiana
law.

The contractual indemnity provisions of the contract between
Consolidated District No. 1 of the Parish of Jefferson and Fleming
Construction Company, LLC., remain valid, so long as they are not
interpreted to require indemnification or additional insured coverage
against Jefferson Parish’s own sole, joint, or concurrent negligence.

IT IS FURTHER ORDERED, ADJUDGED, AND DECREED that all
claims asserted against Amerisure’s Commercial Liability Policy
#GL20778990301 and Alterra’s Commercial Excess Liability Policy
#MAXA3EC50000129 are hereby dismissed, with prejudice, to the
extent that the policies could be interpreted as providing coverage for
Jefferson Parish’s own sole, joint, or concurrent negligence.

We do not read the language of this judgment as declaring null, void, and

unenforceable those provisions of the General Conditions Contract relating to the

procurement of workers’ compensation insurance. Nor do we read this language as

declaring null, void, and unenforceable the waiver of subrogation in favor of the

Parish. On the contrary, the trial court’s judgment has been carefully worded and

tailored to address only those provisions relating to the CGL and umbrella policies,

19-CA-497 8

and explicitly recognizes as valid the other portions of the General Conditions

Contract. As such, Jefferson Parish is properly considered as named party in the

Waiver of Right to Recover from Others Endorsement.2

We consider next Amerisure’s argument that the language of the

endorsement which states that “[the] agreement shall not operate directly or

indirectly to benefit anyone not named in the Schedule,” precludes granting a

motion for summary judgment dismissing their petition of intervention because it

would benefit the Salathes who are not named in the Schedule.

Mr. Salathe, as an employee of Fleming, is a third party beneficiary to the

insuring agreement between Fleming and Amerisure. As La. C.C. art. 1978 states,

once a third party has manifested his intention to avail himself of the benefit, the

parties may not dissolve the contract by mutual consent or revoke the stipulation

without the beneficiary’s agreement. In Louisiana, such a contract for the benefit

of a third party is called a “stipulation pour autrui.” Maggio v. Parker, 17-1112

(La. 6/27/18), 250 So.3d 874, 880. A stipulation pour autrui is never presumed.

Id. The most basic requirement of such a stipulation is that the contract manifest a

clear intention to benefit the third party. Id.

Such an intention is manifest here in the terms of the Amerisure workers’

compensation policy and in Amerisure’s petition of intervention. First, the policy

clearly acknowledges third party beneficiaries and their rights. Part One Section G

of the policy states, “[w]e [Amerisure] have your [Fleming’s] rights, and the rights

of persons entitled to the benefits of this insurance, to recover our payments from

anyone liable for the injury,” and Section H states further “[w]e are directly and

primarily liable to any person entitled to the benefits payable by this insurance.

2
Our determination here renders moot any further discussion concerning the applicability of La. R.S.
9:2780.1, which was not before the trial court. Further discussion of that law, which includes exceptions
for recovery of damages under workers’ compensation laws and allowances for certain indemnity
contracts where evidence shows the indemnitor recovered the cost of the required insurance in the
contract price, may be found in our prior disposition of the other appeal in this case, Salathe v. Par. of
Jefferson Through Dep't of Sewerage, 19-427 (La. App. 5 Cir. 7/15/20), 300 So.3d 460.

19-CA-497 9

Those persons may enforce our duties; …” Next, Amerisure’s petition of

intervention acknowledges that Mr. Salathe is a beneficiary under the policy who

has been paid compensation in accordance with the terms of the policy and the

provisions of the Louisiana Workers’ Compensation Act. Fleming was

undoubtedly aware, when purchasing the waiver of subrogation endorsement

which would preclude Amerisure from recovering against third party tortfeasors,

that this could provide a benefit to its own injured employees covered by the

policy. See Fontenot v. Chevron U.S.A. Inc., 95-1425 (La. 7/2/96), 676 So.2d 557,

566. Thus, the language of the endorsement creates a stipulation pour autrui in

favor of the Salathes, which cannot be revoked without their consent.

Finally, we address Amerisure’s argument that the motions to dismiss their

petition of intervention should not be granted because doing so would allow the

Salathes a double recovery for the injuries suffered by Mr. Salathe. Amerisure

points to the fact that Jefferson Parish has been named as the only tortfeasor in the

Salathes’ petition for damages. We find this argument to be without merit both

because of the arguments articulated above and because it disregards that, at the

trial on the petition, the triers of fact may apportion fault to parties other than the

Parish, including Fleming and Mr. Salathe himself. As such, this argument is

speculative and without merit.

CONCLUSION

For the foregoing reasons, we find that the trial court did not err in granting

the motions for summary judgment filed by the Salathes and Jefferson Parish. On

our de novo review, we find no genuine issues of material fact, and that the

Salathes and the Parish are entitled to summary judgment as a matter of law. The

judgment of the trial court is affirmed.

AFFIRMED

19-CA-497 10

SUSAN M. CHEHARDY CURTIS B. PURSELL

CHIEF JUDGE CLERK OF COURT

MARY E. LEGNON
FREDERICKA H. WICKER
CHIEF DEPUTY CLERK
JUDE G. GRAVOIS
MARC E. JOHNSON
ROBERT A. CHAISSON SUSAN BUCHHOLZ
STEPHEN J. WINDHORST
FIRST DEPUTY CLERK
HANS J. LILJEBERG
JOHN J. MOLAISON, JR. FIFTH CIRCUIT
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NOTICE OF JUDGMENT AND CERTIFICATE OF DELIVERY
I CERTIFY THAT A COPY OF THE OPINION IN THE BELOW-NUMBERED MATTER HAS BEEN DELIVERED
IN ACCORDANCE WITH UNIFORM RULES - COURT OF APPEAL, RULE 2-16.4 AND 2-16.5 THIS DAY
OCTOBER 21, 2020 TO THE TRIAL JUDGE, CLERK OF COURT, COUNSEL OF RECORD AND ALL PARTIES
NOT REPRESENTED BY COUNSEL, AS LISTED BELOW:

19-CA-497
E-NOTIFIED
24TH JUDICIAL DISTRICT COURT (CLERK)
HONORABLE HENRY G. SULLIVAN, JR. (DISTRICT JUDGE)
JACK E. MORRIS (APPELLEE) RICHARD C. TRAHANT (APPELLEE) GUICE A. GIAMBRONE, III (APPELLEE)
JACOB K. BEST (APPELLEE) JAMES A. PRATHER (APPELLEE) DANICA B. DENNY (APPELLEE)
KATHLEEN P. RICE (APPELLEE) PATRICK J. MCSHANE (APPELLEE) JAMESON M. TAYLOR (APPELLEE)
TARA E. CLEMENT (APPELLEE) SIDNEY W. DEGAN, III (APPELLANT) TRAVIS L. BOURGEOIS (APPELLANT)
GLEN E. MERCER (APPELLEE)

MAILED
LAUREN A. GUICHARD (APPELLEE) KOURTNEY TWENHAFEL (APPELLEE) FOSTER P. NASH, III (APPELLANT)
ATTORNEY AT LAW ATTORNEY AT LAW STEPHANIE L. CHERALLA (APPELLANT)
1100 POYDRAS STREET 365 CANAL STREET ATTORNEYS AT LAW
SUITE 3700 SUITE 1710 400 POYDRAS STREET
NEW ORLEANS, LA 70163 NEW ORLEANS, LA 70130 SUITE 2600
NEW ORLEANS, LA 70130
WILLIAM P. WORSLEY (APPELLEE) CHRISTOPHER MEEKS (APPELLEE)
ATTORNEY AT LAW JAMES W. ADAIR (APPELLEE)
701 POYDRAS STREET ATTORNEYS AT LAW
SUITE 4800 THREE SANCTUARY BOULEVARD
NEW ORLEANS, LA 70139 SUITE 301
MANDEVILLE, LA 70471