The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
DANIEL KENNEDY, ET AL. CIVIL ACTION
v. NO. 18-12084
BRASKEM AMERICA, INC., ET AL. SECTION "F"
ORDER AND REASONS
Before the Court is the defendants’ motion for summary
judgment invoking an immunity defense under the Texas Workers’
Compensation Act. For the reasons that follow, the motion is
DENIED without prejudice.
Background
This lawsuit arises from a construction worker’s claim that
he was severely injured after being struck by a large piece of mud
which caused him to fall. Daniel Kennedy, who lives in
Mississippi, alleges that he was injured on December 2, 2017 while
working on a construction site at a petrochemical facility, located
in LaPorte, Texas. The site and facility are owned by Braskem
America, Inc., which is incorporated in Delaware with its principal
place of business in Pennsylvania. At the time of the incident,
Linde Engineering North America, Inc., which is incorporated in
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Delaware with its principal place of business in Oklahoma, was the
contractor on the project involving engineering, procuring, and
constructing a polypropylene plant for Braskem. Kennedy worked on
the site as an employee of an alleged project subcontractor, Cajun
Deep Foundations, LLC.
On June 1, 2017, Braskem contracted with LENA to act as the
general contractor on the project. Several months later, the
original Engineering, Procurement, and Construction Contract (EPC
Contract), which is governed by Texas law, was amended on October
1, 2017. The amendment deleted the parties’ prior agreement on
insurance, and replaced it with an Owner Controlled Insurance
Program (the “OCIP”). By the OCIP, Braskem provided workers’
compensation insurance coverage for LENA, all tiers of
subcontractors enrolled in the OCIP, and their employees for on-
site work on the project. Article 18.1.1 of the Amended EPC
Contract provides:
Owner has arranged for the Work to be performed under
this Contract to be insured under its OCIP Program. The
OCIP is an insurance program that insures Owner eligible
and enrolled Contractor and its Subcontractors, and
other Owner-designated parties for Work performed at the
covered Project Site. Certain contractor and
subcontractors are excluded from this OCIP and these
parties are identified in Exhibit C-11, Schedule 001.
Coverage under the OCIP includes Workers Compensation
and Employers Liability, General Liability and Umbrella
Liability (excluding automobile, rental equipment (owned
2
or third party), aircraft, watercraft, professional, and
environmental liability) and apply only to the
operations of Contractor and its Subcontractor of any
tier conducted at or emanating from the specified
Project Site. Such OCIP insurance does not apply to
manufacturing, fabrication, or other operations at
Contractor’s regular offsite main or branch office,
warehouse, or similar places of business. Contractor
shall enroll in OCIP provided by Owner. The provisions
of this Article 18.1.1 shall apply to Contractor and any
Subcontractors of any tier to the extent enrolled in and
covered by the OCIP unless otherwise agreed upon by the
Parties. It is the responsibility of the Contractor
acting as Owner’s Construction Manager and Prime
Contractor to include the OCIP requirements in all
subcontracts and to insure that any lower tier contracts
include the OCIP requirements.
(emphasis added). Liberty Mutual was the insurance carrier for
the workers’ compensation coverage provided under the OCIP.
Shortly after Braskem established the OCIP, on October 17,
2017, Cajun Constructors, LLC, allegedly one of the subcontractors
on the project, enrolled in the OCIP. On November 13, 2017,
Liberty Mutual issued to LENA Policy Number WA2-65D-292072-037,
which is governed by Texas Workers’ Compensation law, providing
LENA with workers’ compensation coverage insurance from October 1,
2017 to April 30, 2020. Also, on November 13, 2017, Liberty Mutual
issued to Cajun Constructors, LLC, Policy Number WA2-65D-292072-
047 (the “Cajun Constructors Policy”) providing Cajun Constructors
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with workers’ compensation coverage from October 17, 2017 to April
30, 2020.
On December 2, 2017, it is alleged that a large piece of mud
fell onto Kennedy’s head while he was working for Cajun Deep at
the project site. As a result, he fell to the ground, injuring
his head, neck, thoracic and lumbar spine, ankle, and knee.
Five days after the incident, on December 7, 2017, a claim
was submitted to Liberty Mutual under the Cajun Constructors Policy
in connection with Kennedy’s alleged injury. In processing
Kennedy’s claim, it was discovered that Cajun Deep was not enrolled
in the OCIP. Nevertheless, Liberty Mutual agreed to provide
coverage under the Cajun Constructors Policy.1 Liberty Mutual
insured Cajun Deep under the Cajun Constructors Policy, effective
November 20, 2017, which is allegedly the date on which Cajun Deep
became a subcontractor on the project.2
On November 5, 2018, Kennedy filed a “disputed claim” for
workers’ compensation in Louisiana.3 Three weeks later, on
November 21, 2018, Kennedy filed an Employee’s Claim for
1 Liberty Mutual determined that Cajun Constructors and Cajun Deep were
combinable and should be insured under a single workers’ compensation policy.
2 There is no subcontract of record, but the parties do not appear to dispute
that Cajun Deep was a subcontractor on the project.
3 Cajun Deep and Liberty Mutual have challenged subject matter jurisdiction in
the Louisiana Office of Workers’ Compensation proceeding because, they argue,
the incident occurred in Texas and Kennedy performed all of his work in Texas.
4
Compensation for a Work-Related Injury or Occupational Disease
with the Texas Department of Insurance, Division of Workers’
Compensation. On November 30, 2018, Kennedy and his wife, Brandi
Smith, sued Braskem America, Inc. and Linde Engineering North
America, Inc. in this Court, alleging negligence and premises
liability. The defendants now move for summary judgment that they
are immune from suit.
I.
Federal Rule of Civil Procedure 56 instructs that summary
judgment is proper if the record discloses no genuine dispute as
to any material fact such that the moving party is entitled to
judgment as a matter of law. No genuine dispute of fact exists if
the record taken as a whole could not lead a rational trier of
fact to find for the non-moving party. See Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). A genuine
dispute of fact exists only "if the evidence is such that a
reasonable jury could return a verdict for the non-moving party."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
The Court emphasizes that the mere argued existence of a
factual dispute does not defeat an otherwise properly supported
motion. See id. Therefore, "[i]f the evidence is merely
colorable, or is not significantly probative," summary judgment is
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appropriate. Id. at 249-50 (citations omitted). Summary judgment
is also proper if the party opposing the motion fails to establish
an essential element of his case. See Celotex Corp. v. Catrett,
477 U.S. 317, 322-23 (1986). In this regard, the non-moving party
must do more than simply deny the allegations raised by the moving
party. See Donaghey v. Ocean Drilling & Exploration Co., 974 F.2d
646, 649 (5th Cir. 1992). Rather, he must come forward with
competent evidence, such as affidavits or depositions, to buttress
his claims. Id. Hearsay evidence and unsworn documents that
cannot be presented in a form that would be admissible in evidence
at trial do not qualify as competent opposing evidence. Martin v.
John W. Stone Oil Distrib., Inc., 819 F.2d 547, 549 (5th Cir.
1987); Fed. R. Civ. P. 56(c)(2). "[T]he nonmoving party cannot
defeat summary judgment with conclusory allegations,
unsubstantiated assertions, or only a scintilla of evidence."
Hathaway v. Bazany, 507 F.3d 312, 319 (5th Cir. 2007)(internal
quotation marks and citation omitted). In deciding whether a fact
issue exists, courts must view the facts and draw reasonable
inferences in the light most favorable to the nonmoving party.
Scott v. Harris, 550 U.S. 372, 378 (2007). Although the Court
must "resolve factual controversies in favor of the nonmoving
party," it must do so "only where there is an actual controversy,
that is, when both parties have submitted evidence of contradictory
6
facts." Antoine v. First Student, Inc., 713 F.3d 824, 830 (5th
Cir. 2013)(internal quotation marks and citation omitted).
II.
A.
“A federal court sitting in diversity jurisdiction must apply
the choice of law rules of the forum state when a conflict of law
exists.” Burdett v. Remington Arms Co., L.L.C., 854 F.3d 733, 735
(5th Cir. 2017) (quoting Ingalls Shipbuilding v. Federal Ins. Co.,
410 F.3d 214, 230 (5th Cir. 2005)).4 Neither side identifies an
actual conflict between Texas and Louisiana law. Nevertheless,
the defendants’ motion is predicated on Texas law, the only
contracts of record choose Texas law, and a perfunctory choice of
law analysis indicates that Texas law applies to the issue
presented.
When there is a conflict of law, Louisiana Civil Code Article
3515 states that the applicable law is “the law of the state whose
policies would be most seriously impaired if its law were not
applied to that issue.” La. Civ. Code Ann. art. 3515. Louisiana
4 A conflict of law is a legal question, which the court determines. Santovenia
v. Confederation Life Ass'n, 460 F.2d 805, 809 (5th Cir. 1972) (quoting Klaxon
Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477
(1941)).
7
Civil Code Article 3542 sets out the general conflict of law
provision for tort claims. See La. Civ. Code Ann. art. 3542.5
Here, the alleged tortious conduct and injury occurred in
Texas. For the purposes of resolving the defendants’ motion
invoking Texas immunity, the Court will apply Texas law.
III.
The defendants seek summary relief solely on the ground that
they are immune from this negligence suit. They invoke the Texas
Workers’ Compensation Act’s exclusive-remedy defense, submitting
that they are immune from this tort suit because Braskem is the
plaintiff’s statutory employer and LENA is Kennedy’s statutory
“co-employee.” See Tex. Lab. Code Ann. § 406.123. The plaintiffs
5 Louisiana Civil Code Article 3542 provides:
Except as otherwise provided in this Title, an issue of delictual
or quasi-delictual obligations is governed by the law of the state
whose policies would be most seriously impaired if its law were not
applied to that issue.
That state is determined by evaluating the strength and pertinence
of the relevant policies of the involved states in the light of:
(1) the pertinent contacts of each state to the parties and the
events giving rise to the dispute, including the place of conduct
and injury, the domicile, habitual residence, or place of business
of the parties, and the state in which the relationship, if any,
between the parties was centered; and
(2) the policies referred to in Article 3515, as well as the
policies of deterring wrongful conduct and of repairing the
consequences of injurious acts.
La. Civ. Code Ann. art. 3542. No party identifies a more specific conflict of
law codal provision that might apply instead of article 3542.
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contend that the defendants have not shown entitlement to summary
judgment. On this record, the Court agrees.
A.
Texas courts, in construing contracts, ascertain and give
effect to the parties' intentions as expressed in the contract
itself. Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of
Am., 341 S.W.3d 323, 333 (Tex. 2011). In determining the parties'
intent, the Court “must examine and consider the entire writing in
an effort to harmonize and give effect to all the provisions of
the contract so that none will be rendered meaningless.” Id.
(quoting J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex.
2003)) (internal quotation marks omitted).
B.
The Texas Labor Code provides:
(a) A general contractor and a subcontractor may enter
into a written agreement under which the general
contractor provides workers' compensation
insurance coverage to the subcontractor and the
employees of the subcontractor.
(e) An agreement under this section makes the general
contractor the employer of the subcontractor and
the subcontractor's employees only for purposes of
the workers' compensation laws of this state.
Tex. Lab. Code Ann. § 406.123(a), (e). And, the Texas Labor Code
likewise articulates the TWCA’s exclusive-remedy defense:
9
Recovery of workers' compensation benefits is the
exclusive remedy of an employee covered by workers'
compensation insurance coverage or a legal beneficiary
against the employer or an agent or employee of the
employer for the death of or a work-related injury
sustained by the employee.
Tex. Lab. Code Ann. § 408.001(a).
The TWCA’s exclusive-remedy defense allows employees to
recover workers’ compensation benefits promptly and without
proving liability, Austin Bridge & Rd., LP v. Suarez, 556 S.W.3d
363 (Tex. App. 2018); meanwhile, it exempts employers and their
employees from negligence liability. See Tex. Lab. Code Ann. §
408.001(a). A written agreement, which provides workers’
compensation insurance coverage, between a general contractor and
subcontractor is “absolutely necessary to qualify for immunity.”
Briggs v. Toyota Mfg. of Tex., 337 S.W.3d 275, 284 (Tex. App.
2010). That is, for the TWCA’s deemed employer/employee
relationship to extend throughout all tiers of subcontractors, the
lower-tier contracts must incorporate the workers’ compensation
insurance coverage included in the original contract. See Austin
Bridge & Rd., LP, 556 S.W.3d at 386.
C.
The defendants submit that Braskem is the plaintiff’s
statutory employer and LENA is Kennedy’s statutory “co-employee,”
therefore, both are immune from suit in tort under the TWCA’s
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exclusive-remedy defense. To support their invocation of the
TWCA’s exclusive-remedy defense, the defendants point to these
items in the summary judgment record: Cajun Constructors’ and Cajun
Deep’s OCIP enrollment forms and the Amended EPC Contract executed
between Braskem and LENA. But the defendants’ submission falls
short of meeting the substantive requirements of Texas law, and
thus likewise fails to meet their burden on summary judgment.
Consistent with Texas law’s requirement that written
subcontracts incorporate a prime contract’s workers’ compensation
coverage, the OCIP provision in the Amended EPC Contract between
Braskem and LENA provides:
It is the responsibility of [LENA] acting as [Braskem’s]
Construction Manager and Prime Contractor to include the
OCIP requirements in all subcontracts and to insure that
any lower tier contracts include the OCIP requirements.6
Conspicuously absent from the record is any subcontract between
LENA and any subcontractor such as Kennedy’s employer, Cajun Deep.7
The defendants are not entitled to summary judgment on their
immunity defense on this record. To be sure, “the specific
contractual relationships among the parties [are] critical” to
6 The EPC Contract, in its Preamble section, defines LENA as “Contractor” and
Braskem as “Owner.” The term “general contractor” includes the term “prime
contractor.” Tex. Labor Code Ann. § 406.121(1).
7 The defendants spill ink attempting to persuade the Court that Cajun
Constructors and Cajun Deep are indistinguishable entities for the purpose of
OCIP enrollment and, by extension, their statutory immunity defense. There being
no written subcontract in the record, the Court need not reach this argument.
11
resolve this immunity defense. Maxim Crane Works, L.P. v. Zurich
Am. Ins. Co., No. CV H-18-3667, 2019 WL 2524244, at *11 (S.D. Tex.
June 19, 2019).
For the defendants to find safe harbor in the exclusive-
remedy defense, Texas law mandates a written agreement
incorporating the OCIP program between Braskem or LENA and the
relevant subcontractor/employer. See Briggs, 337 S.W.3d at 283
(citing Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 436
(Tex. 2009)). Absent a written agreement, the defendants fail to
prove that they are the plaintiff’s statutory employer, or that
the TWCA’s “deemed employer/employee relationship extends
throughout all tiers of subcontractors.” See Tex. Lab. Code Ann.
§ 406.123(a), (e); Maxim Crane Works, L.P., 2019 WL 2524244, at
*11 (S.D. Tex. June 19, 2019)(citing Austin Bridge & Rd., LP, 556
S.W.3d at 386 (Tex. App. 2018)); see also Etie v. Walsh & Albert
Co., 135 S.W.3d 764, 767-68 (Tex. App. 2004); Hunt Const. Grp.,
Inc. v. Konecny, 290 S.W.3d 238, 240 (Tex. App. 2008).8
The plaintiffs state that a written subcontract between LENA
and Cajun Constructors was produced in discovery. Which begs the
question: Why has it not been filed into the summary judgment
8 This requirement of Texas law was expressly incorporated into the Amended EPC
Contract: Braskem required LENA to incorporate the OCIP requirements into any
lower-tier contracts.
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record? The defendants suggest that the Amended EPC Contract,
along with enrollment forms,9 are sufficient to establish their
immunity defense. Texas law and the defendants’ own prime contract
require more. That the Amended EPC Contract called for OPIC
enrollment and put the onus on LENA “to include the OCIP
requirements in all subcontracts and to insure that any lower tier
contracts include the OCIP requirements” and, further, that
certain subcontractors including Kennedy’s employer completed
enrollment forms for participation in the OPIC, however belatedly,
is necessary but not sufficient to comply with the mandate of Texas
law. By failing to submit any “written agreement under which the
general contractor provides workers' compensation insurance
coverage to the subcontractor and the employees of the
subcontractor,” the defendants have not satisfied their burden of
establishing the existence of a written agreement between either
of them and any subcontractor.10
9 Cajun Constructors apparently completed an enrollment form for participation
in the OCIP on October 17, 2017, whereas Cajun Deep enrolled on December 6,
2017.
10 The defendants fail to show how Cajun Deep‘s enrollment in the OCIP and the
Amended EPC Contract’s establishment of the OCIP are sufficient to conclusively
establish the existence of a written agreement providing workers’ compensation
insurance coverage between Braskem or LENA and the relevant subcontractors. The
case literature uniformly requires a written agreement between the general
contractor and subcontractor. See Maxim Crane Works, L.P., 2019 WL 2524244, at
*11; Austin Bridge & Rd., LP, 556 S.W.3d at 382-83; Briggs, 337 S.W.3d at 283-
85; Hunt Const. Grp., Inc., 290 S.W.3d at 244; Berkel & Co. Contractors, Inc.
v. Lee, 543 S.W.3d 288, 296 (Tex. App. 2018), reh'g granted in part (Jan. 23,
2018). If there is contrary authority dispensing with the written subcontract
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Accordingly, the defendants’ motion for summary judgment is
hereby DENIED without prejudice.1!1
New Orleans, Louisiana, August 7, 2019
.
MARTIN/jL. C. PELDMAN
UNITED STAVES DISTRICT JUDGE
requirement in favor of generic enrollment forms, the defendants fail to invoke
such authority.
ll Any future submissions must fully brief conflicts of law, if any, and contain
all relevant evidence.
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