Stewart Head, Et Ux. v. Shetler Mutual Ins. Co.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

05-168

STEWART HEAD, ET UX.

VERSUS

SHELTER MUTUAL INS. CO.

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APPEAL FROM THE
FIFTEENTH JUDICIAL DISTRICT COURT
PARISH OF VERMILION, NO. 80,183
HONORABLE JULES D. EDWARDS III, DISTRICT JUDGE

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ELIZABETH A. PICKETT
JUDGE
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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Michael G. Sullivan, and
Elizabeth A. Pickett, Judges.

AFFIRMED.

Kyle Sherman
111 Mercury Street
Lafayette, LA 70503
Counsel for Plaintiffs/Appellants:
Stewart and Stacy Head

John F. Wilkes, III
Lisa E. Mayer
Joy C. Rabalais
Libby Heinen
Borne, Wilkes, L.L.P.
200 West Congress Street, Suite 1000
P. O. Box 4305
Lafayette, LA 70502-4305
Counsel for Intervenor/Appellant:
Risk Management, Inc.

Thomas R. Hightower Jr.
Wade Kee
John A. Durrett
Attorneys at Law
1019 Lafayette Street
P. O. Drawer 51288
Lafayette, LA 70505
Counsel for Defendant/Appellee:
Shelter Mutual Ins. Co.

Pickett, J.

The plaintiffs, Stewart and Stacy Head, and the intervener, Risk Management,

Inc., appeal a judgment of the trial court sustaining the defendants’, Luby Landry’s

and Shelter Mutual Insurance Company’s (Shelter), exception of prescription and

dismissing the plaintiffs’ suit with prejudice. We affirm the judgment of the trial

court.

FACTS AND PROCEDURAL HISTORY

This case arises out of a traffic accident which occurred on July 24, 2002, in

the City of Abbeville, Louisiana (the City). The plaintiff, Stewart Head, an employee

of the City, was traveling east on West Port Street (La. Hwy. 14) in a pickup truck

owned by the City. He intended to make a left turn onto Weygand Street. As he

started his turn, a following vehicle driven by the defendant, Luby Landry, attempted

to pass the pickup on the left, striking the vehicle and injuring Mr. Head. At the time,

Mr. Head was an employee of the City, acting within the course and scope of his

employment. Following the accident, the City through its workers’ compensation

agent, Risk Management, Inc. (Risk Management), voluntarily paid Mr. Head

workers’ compensation benefits.

Subsequently, on July 25, 2003, Mr. Head and his wife, Stacy Head, filed the

instant tort suit against Luby Landry and his insurer, Shelter Mutual Insurance

Company (Shelter). The defendants answered the petition, and on May 24, 2003,

they filed an exception of prescription. Before the hearing on the exception, Risk

Management filed a petition of intervention, seeking to recover medical and

compensation benefits that it had paid , on behalf of the City to, or on behalf of, Mr.

Head, as a result of the accident.

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The trial court heard the exception on August 16, 2004, and granted the

defendants’ exception on August 24, 2004. This appeal followed.

LAW AND DISCUSSION

The record establishes that the plaintiffs’ suit was indeed filed after the one

year prescriptive period had run. On appeal, the plaintiffs argue that the trial court

erred in granting the defendants’ exception in that the City had acknowledged the

“debt” it owed Mr. Head in June of 2003, thereby interrupting the one year

prescriptive period. The plaintiffs maintain that the trial court based its judgment on

an improper interpretation of La.R.S. 23:1204, which states: “Neither the furnishing

of medical services nor payments by the employer or his insurance carrier shall

constitute an admission of liability for compensation under this Chapter.”

We find no merit in the plaintiffs’ argument. In Gary v. Camden Fire Ins. Co.,

96-55, pp. 3-5 (La. 7/2/96); 676 So.2d 553, 555-56 (footnotes omitted), the Louisiana

Supreme Court explained the law applicable to this case as follows:

La.Civ.Code art. 3492 provides a one-year prescriptive period for
delictual actions. Because plaintiffs’ suit for tort damages was filed
more than one year after the accident, the action had prescribed on its
face. In such a circumstance, the plaintiff carries the burden of proving
that prescription was interrupted, suspended or renounced. Lima v.
Schmidt, 595 So.2d 624, 628 (La.1992). Prescription may be interrupted
by the filing of a lawsuit pursuant to La.Civ.Code art. 3462, or by the
debtor’s acknowledgement of the obligation as provided by
La.Civ.Code art. 3492.

La.Civ.Code art. 3462 provides that prescription is interrupted
when suit is filed in a court of competent jurisdiction. In Williams v.
Sewerage & Water Bd. of New Orleans, 611 So.2d 1383 (La.1993), this
court concluded that prescription was interrupted with regard to an
injured employee’s claims against a third-party tortfeasor when the
employee filed a timely suit seeking workers’ compensation benefits
from his employer. In the present case, however, no suit was filed; only
voluntary workers’ compensation payments were made by the employer.
Such voluntary payments are insufficient to toll prescription under
Article 3462 which specifically requires the filing of a lawsuit.

2

The reason for adherence to the dictate of Article 3462, which
requires filing suit to interrupt prescription, is simple. When a lawsuit
is filed against the employer, prescription is interrupted as to claims
against the employer pursuant to Article 3462. Because the third-party
tortfeasor is a solidary obligor, the interruption of prescription is
applicable also to a claim against a third-party tortfeasor, as this court
held in Williams v. Sewerage & Water Bd. of New Orleans, 611 So.2d
at 1387. See also La.Civ.Code arts. 1799 and 2324C. When a lawsuit
is filed against the employer in a competent court, prescription is
interrupted because the legal system is put into motion and the purposes
of prescriptive laws are satisfied. The time limit for filing a delictual
action is a legislative device intended to promote legal finality, bar stale
claims, and prevent prejudice to defendants. When the employer
voluntarily pays workers’ compensation benefits (which may continue
for many years), and the injured employee files no lawsuit against any
party, none of the goals of prescription statutes are met with regard to
claims against a third-party tortfeasor. There is no analogy between a
lawsuit against an employer and mere claim assertion which prompts
voluntary workers’ compensation payments. While the former may
interrupt prescription, Williams v. Sewerage & Water Bd. of New
Orleans, supra, the latter simply does not.

In addition to interruption by the filing of a lawsuit, Louisiana
codal articles provide another means of interrupting the prescriptive
period. La.Civ.Code art. 3464 provides that “[p]rescription is
interrupted when one acknowledges the right of the person against
whom he had commenced to prescribe.” The court of appeal in this
case held that the employer’s voluntary payment of workers’
compensation benefits constituted an acknowledgement which
interrupted prescription with regard to plaintiffs’ claims against
defendants/third-party tortfeasors. We disagree with that conclusion.

An acknowledgement is “the recognition of the creditor's right or
obligation that halts the progress of prescription before it has run its
course.” Lima v. Schmidt, 595 So.2d at 631. It involves an admission
of liability, either through explicit recognition of a debt owed, or
through actions of the debtor that constitute a tacit acknowledgement.
Acknowledgement may be made “verbally, in writing, by partial
payment, by payment of interest or by pledge, or in other ways; or it
may be implicit or inferred from the facts and circumstances.” Id. at
632; see also, Robert E. Blum, Comment, Interruption of Prescription
by Acknowledgement in Louisiana, 14 Tul.L.Rev. 430 (1940). A tacit
acknowledgement arises from a debtor’s acts of reparation or indemnity,
unconditional offers or payments, or actions which lead the creditor to
believe that the debtor will not contest liability. Lima v. Schmidt, 595
So.2d at 634. Acknowledgement interrupts prescription before it has
expired, with the prescriptive period beginning to run anew from the
time of the interruption. Id. at 631.

3

Were it not for the existence of La.Rev.Stat. 23:1204, it would
seem evident that voluntary payment of compensation benefits
constitutes an acknowledgement of the employer's debt to the injured
employee. Section 1204, however, encourages voluntary payment of
compensation by assuring the employer that his voluntary payment does
not, and will not, constitute an admission of liability. Because of
Section 1204’s statutory command, the voluntary payment of
compensation here is not an acknowledgement of debt or liability and
does not interrupt prescription under La.Civ.Code art. 3464.

Thus, it is clear that the voluntary payment of compensation benefits by the

City did not interrupt the one-year prescriptive period for delictual actions. The

plaintiffs argue, however, that statements made by Francis Touchet, Jr., an Abbeville

city councilman, in June of 2003, was an acknowledgement by the City which

interrupted the one-year prescriptive period. We do not agree. As our colleagues of

the fifth circuit stated in Woods v. St. Charles Parish School Bd., 00-1350, p. 6

(La.App. 5 Cir. 1/23/01), 783 So.2d 387, 392:

Recognition of the mere existence of a disputed claim is not an
acknowledgment within the contemplation of article 3464; the
acknowledgment must be accompanied by or coupled with a clear
declaration of intent to interrupt prescription. Stagni [v. State Farm
Mut. Auto. Ins. Co., 96-493, p. 5 (La.App. 5 Cir. 11/26/96), 685 So.2d
338,] 340 (emphasis supplied). And finally, the right to recover for
personal injuries is distinct from the right to recover medical expenses,
and legal interruption does not transfer from one obligation or action to
another. Flowers v. U.S. Fidelity & Guaranty Co., 381 So.2d 378, 382-3
(La.1979); Touchet v. State Farm Fire & Cas. Co., 542 So.2d 1142,
1146 (La.App. 3 Cir.1989).

By his own admission, Councilman Touchet’s statements and action were

nothing more than an attempt to help Mr. Head obtain the necessary medical care due

under the workers’ compensation statutes so that Mr. Head could return to work as

soon as possible. Additionally, acting alone without benefit of a resolution by the

City council, Mr. Touchet had no authority to take any legal action on behalf of the

City.

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Accordingly for the reasons stated above, the judgment of the trial court is

affirmed. Costs of this appeal are taxed at 50% to the plaintiffs, Stewart and Stacy

Head, and 50% to the intervener, Risk Management.

AFFIRMED.

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