Brown v. Connecticut General Life Insurance
2000 La.App. 4 Cir. 0229, 793 So.2d 211, 2001 La. App. LEXIS 599 (2001)
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Rule of Law:
The exclusive remedy provision of the Louisiana Worker's Compensation Act, which grants an employer statutory immunity from tort claims by an injured employee, does not bar a third party's separate claim for contractual indemnity against that employer.
Facts:
- CIGNA Corporation owned commercial property which it leased to Mervyn’s Department Store.
- The lease agreement between CIGNA and Mervyn's contained a clause requiring Mervyn's to defend and indemnify CIGNA against claims arising from the leased premises.
- Linda Brown was an employee of Mervyn’s working at the leased location.
- On November 14, 1994, while working, Brown fell down a flight of stairs on the premises and was injured.
Procedural Posture:
- Linda Brown filed a worker's compensation claim against her employer, Mervyn's, and Mervyn's paid benefits.
- Brown then filed a petition for damages in trial court against the property owner, CIGNA Corporation.
- CIGNA filed a Third Party Demand against Mervyn's, seeking contractual indemnity based on their lease.
- Mervyn's filed a Motion for Summary Judgment, arguing it was statutorily immune from CIGNA's indemnity claim.
- The trial court granted Mervyn's Motion for Summary Judgment, dismissing CIGNA's claim.
- CIGNA, as appellant, appealed the trial court's judgment to the Louisiana Court of Appeal, Fourth Circuit.
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Issue:
Does the exclusive remedy provision of the Louisiana Worker's Compensation Act bar a third-party claim against an employer for contractual indemnification when the underlying injury was sustained by that employer's employee?
Opinions:
Majority - Love, J.
No, the exclusive remedy provision of the Worker's Compensation Act does not bar a third-party claim for contractual indemnification against an employer. The statutory immunity granted to an employer under worker's compensation laws governs the relationship between the employer and the employee, but it does not invalidate a separate, voluntary contractual obligation the employer undertakes with a third party. The court, relying on its precedent in Norfleet, reasoned that Mervyn's voluntarily obligated itself to indemnify CIGNA in the lease agreement. This contractual obligation cannot be nullified simply because the claim against CIGNA originated from a Mervyn's employee. The court emphasized the principle of freedom of contract, stating the lease agreement is the law between the parties and that no Louisiana statute prohibits an employer from entering into such an indemnification agreement. Therefore, Mervyn's is bound by its contractual commitment to CIGNA, even though it exposes Mervyn's to liability beyond its direct worker's compensation obligation to its employee.
Analysis:
This decision clarifies that an employer's tort immunity under worker's compensation is not absolute and does not shield it from all liabilities related to an employee's on-the-job injury. It establishes that such immunity can be effectively waived through a contractual indemnity agreement with a third party. The ruling reinforces the sanctity of contracts, holding that a specific, voluntary contractual obligation will prevail over a general statutory immunity in disputes between the contracting parties. This precedent puts employers on notice that they must carefully consider indemnification clauses in leases and other contracts, as these can create liability exposure beyond the confines of the worker's compensation system.
