Finley v. Bass
478 So. 2d 608, 28 Educ. L. Rep. 1188 (1985)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An employer's right to seek indemnification from its negligent employee is only barred when the employee has entered into a conventional discharge, such as a settlement, with the injured party; otherwise, the employer retains its longstanding right to indemnification.
Facts:
- On January 20, 1983, Arwood L. Finley was driving his car south on a Louisiana highway during a light rain.
- Pearl Bass, driving a Franklin Parish School Board bus northbound on the same highway, intended to make a left turn.
- Bass began to negotiate his left turn and crossed the center line into Finley's lane of travel.
- The school bus driven by Bass collided with Finley's car inside Finley's lane.
- The collision caused Finley to suffer significant personal injuries, which aggravated his extensive pre-existing back and knee problems.
- Prior to the accident, Finley, despite previous injuries, was able to perform his physically demanding job as a boilermaker.
- As a result of the injuries from the collision, Finley was rendered unable to continue working as a boilermaker.
Procedural Posture:
- Arwood L. Finley and his wife sued Pearl Bass, Shelter Insurance Company, and the Franklin Parish School Board in a Louisiana trial court for damages arising from a vehicle collision.
- The Franklin Parish School Board filed an incidental demand for indemnification against Bass and Shelter Insurance.
- The trial court found Bass 100% at fault, awarded damages to the Finleys, and granted the School Board's demand for indemnification.
- All defendants appealed the damage awards to the Court of Appeal of Louisiana, Second Circuit, with Bass and Shelter Insurance designated as appellants.
- Bass and Shelter Insurance also appealed the judgment granting indemnification to the School Board.
- The Finleys, as appellees, answered the appeal, seeking an increase in the award for loss of consortium.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does Louisiana law prohibit an employer from seeking indemnification from its negligent employee for damages paid to a third party when the employee has not entered into a settlement or conventional discharge with the injured party?
Opinions:
Majority - Norris, J.
No. Louisiana law does not prohibit an employer from seeking indemnification from its negligent employee where no settlement has occurred. The court reasoned that LSA-R.S. 9:3921, which bars an employer's right of indemnification, applies only when there has been a 'remission, transaction, compromise, or other conventional discharge' between the injured party and the employee. Because Pearl Bass did not settle with the Finleys but was instead taken to trial and had a judgment rendered against him, the plain language of the statute does not protect him. The court traced the jurisprudential history from imperfect solidarity to the modern concept of solidary liability established in Foster v. Hampton, concluding that the statute was a specific legislative response to settlement scenarios, not a broad elimination of the employer's traditional right of indemnification, which is also supported by the Civil Code and longstanding precedent like Brannan, Patterson & Holliday v. Hoel.
Analysis:
This decision clarifies the scope of LSA-R.S. 9:3921, establishing that the statutory bar on an employer's indemnification claim against a negligent employee is a narrow exception applicable only in cases of settlement. The ruling affirms the default principle that an employer held vicariously liable can recover its losses from the employee who was directly at fault. This preserves a significant recourse for employers and their insurers and may influence settlement strategies, as employees who do not settle remain exposed to indemnification claims from their employers after a trial.
