Deggs v. Fives Bronx, Inc.

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA

TAYLOR DEGGS, CIVIL ACTION

individually and on behalf

of the minor children of

Stephen Deggs, deceased

APTIM MAINTENANCE, LLC, ET AL. NO. 19-00406-BAJ-EWD

RULING AND ORDER

Before the Court is Third Party Defendant Stupp Bros., Inc.’s (“Stupp”)

12(b)(6) Motion To Dismiss Third Party Demand Filed By Fives Bronx, Inc.

(Doc. 59). The Motion is opposed. (Doc. 62). Stupp filed a Reply Memoranda.

(Doc. 64). For the reasons stated herein, Stupp’s Motion is DENIED.

I. BACKGROUND

On March 27, 2019, Plaintiff Taylor Deggs filed this wrongful death and

survival action on behalf of herself and her two minor children following an alleged

workplace incident that resulted in the death of Stephen Deggs (“Decedent”),

Plaintiffs’ husband and father. (Doc. 1-2, 1, 7, 18-15). Decedent allegedly suffered

serlous injuries when wedged between a pipe and pipe cutting machine at a facility

operated by Stupp Corporation, resulting in his death. (7d. at [{ 13-14).

Plaintiff asserts negligence and product liability claims against several

Defendants, including Defendant Fives Bronx, Inc. (“Fives”). Ud. at J] 2-6; 16-24),

Fives is the alleged manufacturer, designer, and distributor of the conveyer and

cutting machine involved in the underlying incident.! (/d. at |] 15).

On June 9, 2020, Fives brought a Third Party Complaint against

Stupp Bros., Inc. (Stupp”). (Doc. 50). Fives asserts that Stupp is contractually

required to indemnify, defend, and hold Fives harmless. (Doe. 50, 4 9, 10, 13). Fives

alleges that Stupp’s failure to do so was a breach of contract, entitling Fives to

damages, costs, and attorney’s fees. (Ud. at § 13). Stupp moves to dismiss Fives’ Third

Party Complaint. (Doc. 59).

II. LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) tests the sufficiency of the complaint

against the legal standard set. forth in Federal Rule of Civil Procedure 8, which

requires “a short and plain statement of the claim showing that the pleader is entitled

to relief” Fed. R. Civ. P. 8(a)(2). “To survive a motion to dismiss, a complaint must

contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is

plausible on its face.” Asheroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)), “Determining whether a

complaint states a plausible claim for relief [fis] .. . a context-specific task that

requires the reviewing court to draw on its judicial experience and common sense.”

Ashcroft, 556 U.S. at 679.

“{FJacial plausibility” exists “when the plaintiff pleads factual content that

allows the court to draw the reasonable inference that the defendant is liable for the

Plaintiff alleges that Fives was formerly known as Abbey International, Ltd. and/or Abbey

Kitna Machine Company. (Doc. 62, p. 2 (citing Doc. 50-1, $4] 2, 15, 19-24)).

misconduct alleged.” Id. at 678 (citng Twombly, 550 U.S. at 556). Hence, the

complaint need not set out “detailed factual allegations,” but something “more than

labels and conclusions, and a formulaic recitation of the elements of a cause of action”

is required. Twombly, 550 U.S. at 555. When conducting its inquiry, the Court

“accepts all well-pleaded facts as true and views those facts in the light most favorable

to the plaintiff” Bustos v. Martini Club Inc., 599 F.3d 458, 461 (th Cir. 2010)

(quotation marks omitted).

III, DISCUSSION

Stupp moves to dismiss Fives’ Third Party Complaint based on its argument

that no enforceable indemnity provision between Stupp and Fives exists.

(Doc. 59-1,p. 4; Doc. 50). Additionally, Stupp argues that the

Louisiana Anti-Indemnity Act (LAIA”) precludes any indemnity in favor of Fives.

(Doc. 59-1, p. 5).

The Court considers whether Fives has plausibly alleged that it is entitled to

indemnity from Stupp under Louisiana law. See Thibodeaux v. Red Frog Events, LLC,

No. CV 17-00695-BAJ-EWD, 2018 WL 4373758, at *2 (M.D. La. Sept. 18, 2018).

Under Louisiana law, there are two types of indemnity—contractual and implied. Jd.

(citing Nassif v. Sunrise Homes, Inc., 789 So.2d 183, 185 (La. 1999)). The Court will

consider each in turn.

A. Contractual Indemnity

The parties dispute the existence of a valid contract between Fives and Stupp.

(Doc. 59-1, p. 4; Doc. 62, p. 6). Fives argues that it pled and produced the existence of

contract documents upon which Stupp is liable for breach of contract and for defense

and indemnity obligations. (Doc. 62, p. 6; Doc. 50—Doc. 50-3). Stupp argues that no

enforceable contract exists. (Doe. 59-1, p. 4).

“A contract is formed by consent of the parties established through offer and

acceptance.” SnoWizard, Inc. v. Robinson, 897 F. Supp. 2d 472, 478 (E.D. La. 2012)

(citing La. Civ. Code art. 1927). To create a binding obligation, both parties must

agree to the substantial elements of the contract. fd. (citing La. Civ. Code arts. 1779

and 1798). Consent to a sales contract must include agreement on the thing and the

price. /d. (citing La. Civ. Code art. 2489). If the parties do not agree on all the terms,

then there is no contract. Jd. (citing Philips v. Berner, 2000-0103

(La. App. 4th Cir. 5/16/01); 789 So. 2d 41, 45).

Unless specific statutes state otherwise, Louisiana law allows offer and

acceptance to be made in any manner that is “clearly indicative of consent,” and there

need not be conformity between the manner in which the offer is made and the

manner in which it is accepted. /d. (citing La. Civ. Code art. 1927). Louisiana courts

have held that consent may be implied, even through a party's silence, from the

circumstances. Id. (citing Bailey v. R.E. Heidt Const. Co., 205 So. 2d 508, 506

(La. App. 3d Cir. 1967)). If there is a genuine dispute, it is left to the fact-finder to

determine whether there has been a “meeting of the minds” between the parties so

as to constitute mutual consent. Id. (citing Bailey, 205 So. 2d at 506).

However, “[t}he existence or nonexistence of a contract is a question of fact and,

accordingly, the determination of the existence of a contract is a finding of fact.” Id.

(citing Sam Staub Enters., Inc. v. Chapital, 2011-1050 (La. App. 4th Cir. 3/14/12);

88 So. 3d 690, 694). Accordingly, the determination of whether a valid contract exists

here between Fives and Stupp “requires factual findings that cannot be made at the

Rule 12(b)(6) stage.” See Thibodeaux v. Red Frog Events, LLC,

No. CV 17-00695-BAJ-EWD, 2018 WL 48737538, at *2 (M.D. La. Sept. 13, 2018)

Gnternal citations omitted).

Additionally, to determine whether any alleged indemnity provision is void

under the Louisiana Anti-Indemnity Act (““LAIA”) as Stupp argues, the Court must

first determine whether a contract exists. (See Doc. 87, Court’s Ruling and Order

describing relevant provisions of the LATA). The Court cannot determine whether the

contract, if any, constitutes a “construction contract’ pursuant to

Louisiana Revised Statutes § 9:2780.1(2)(a) without first determining whether the

alleged contract documents are valid and binding between Fives and Stupp.

Stupp also argues that claims against it must be analyzed against the backdrop

of the Louisiana Workers’ Compensation Act. (Doc. 64, p. 2). Louisiana courts have

held, however, that tort immunity under workers’ compensation statutes does not

preclude contractual indemnity. Jarreau v. City of Baton Rouge, 602 So. 2d 1124,

1126-27 (La. App. lst Cir. 1992) ([W]hile a joint tortfeasor may not seek tort

contribution or indemnification from a plaintiffs employer, there is no prohibition

against an employer contractually agreeing to indemnify another party.”). Thus, to

the extent a valid contractual indemnity provision between Fives and Stupp exists,

such contractual indemnity is not barred by the Louisiana Workers’ Compensation

Act.

At this stage of litigation, the Court is only concerned with whether Fives has

alleged sufficient facts to state a plausible third party claim for indemnity. See Buratt

vu. Red Frog Events, LLC, No. CV 17-00100-JJB-EWD, 2017 WL 5147156, at *3

(M.D.La. Nov. 6, 2017) (citing Martco Lid. P'ship vu. Bruks Inc.,

430 Fed. Appx. 882, 887-88 (5th Cir. 2011); Cedar Ridge, LLC

Landmark American Ins. Co,, 20138 WL 4854388 *5-7 (.D. La Sept. 10, 2018)).

Additionally, the Court must view all facts in the light most favorable to Fives. See

Bustos v. Martint Club Inc., 599 F.3d 458, 461 (5th Cir. 2010) (quotation marks

omitted). Accordingly, Stupp’s Motion to Dismiss is denied as to Fives’ contractual

indemnity claim.

Implied Indemnity

Fives argues that even in the absence of a written contract, it has stated a

plausible indemnity claim against Stupp, relying on the United States Court of

Appeals for the Fifth Circuit’s decision in Martco Ltd. P'ship v. Bruks Inc.,

430 F. App'x 332, 334-85 (5th Cir. 2011). (Doc. 62, p. 12).

In Martco, the Fifth Circuit overruled the district court's dismissal of a

third-party complaint due to the distriet court's narrow interpretation of Louisiana

indemnity law. See Martco Lid. P'’ship, 4380 F.App'x at 3832: see also

Cedar Ridge, LLC v. Landmark Am. Ins. Co., No. CIV.A. 18-672, 20138 WL 4854388,

at *6 (.D. La. Sept. 10, 2013). There, a customer brought an action against an

equipment manufacturer who allegedly sold it defective equipment. Id. The

manufacturer filed a third-party complaint seeking indemnity from an engineering

firm that provided it with designs for the equipment. Id. The district court originally

held that non-contractual indemnity was limited to the context of employer-employee

or contractor-subcontractor relationships and dismissed the engineering firm.

Id. at 336.

The Fifth Cireuit overruled the district court's decision, finding that at the

third-party complaint stage, “we are only concerned whether [third-party plaintiff]

has stated in its third-party complaint, a plausible basis for an entitlement to legal

indemnity ... [and] we do not decide whether, or under what circumstances any of

the theories of relief will ultimately support an indemnity claim.” Id. at 338.

The Court should dismiss a third party claim for indemnity if “[t]here is no

foreseeable combination of findings, viewing the allegations of the pleadings... in

the light most favorable to [the party seeking indemnity], that could result in [that

party] being cast in judgment for mere technical or passive fault.” Thibodeaux v.

hed Frog Events, LLC, No. CV 17-00695-BAJ-EWD, 2018 WL 4873753, at *2

(M.D. La. Sept. 18, 2018) (citing Threlkeld v. Haskins Law Firm, 922 F.2d 265,

267-68 (5th Cir. 1991) (citation and internal quotation marks omitted)). An action for

indemnity will le so long as the party's fault “can be characterized as merely

technical or constructive,” and where the party “was exposed to liability and

compelled to pay damages ... on account of the negligent act of’ the third-party

defendant. See Martco Lid. P'ship v. Bruks Inc., 430 F. App'x 332, 336 (6th Cir. 2011).

When considering whether there is a foreseeable combination of findings that

could find that Fives is only technically liable for Stupp’s alleged negligence, the

Court looks at the third party complaint itself, without making factual findings at

this stage. Id, at p. 338. In its Third Party Complaint, Fives alleges that Stupp failed

to:

properly use the Equipment; ensure the operating conditions were

within normal conditions for the Equipment; and ensure the Equipment

complies with OSHA requirements, including the provision of guards,

barriers, and interlocks, for operating areas, platforms, pits,

maintenance operations, and barriers and interlocks for all activities

requiring personnel barriers and interlocks.

(Doc. 50, { 11). In short, Fives has alleged negligence against Stupp.

Stupp responds, however, that claims against it must be “analyzed against the

backdrop of the [Louisiana Workers’ Compensation Act],” because Stupp was

Decedent’s statutory employer. (Doc. 64, p. 2; see also Doc. 59-1, p. 2). Louisiana

courts have held that due to the exclusive remedy provision of the worker's

compensation statutes, employers are immune from tort claims brought by third

parties for contribution or indemnification on the basis of an employer's negligence

in causing an employee's injuries. Jarreau v. City of Baton Rouge, 602 So. 2d 1124,

1126 (la. Ct. App. 1992) (citing Berninger v. Georgia-Pacific Corp.,

582 So. 2d 266, 267 (La. App. Ist Cir. 1991)). Thus, to the extent Fives brings an

implied indemnification claim based on Stupp’s negligence, and to the extent Stupp

is found to be Decedent’s statutory employer, such claim would be barred by

Louisiana law.

IV. CONCLUSION

Accordingly,

IT IS ORDERED that Third Party Defendant Stupp Bros., Inc.’s

12(b)(6) Motion To Dismiss Third Party Demand Filed By Fives Bronx, Inc.

(Doc. 59) is DENIED.

□□

Baton Rouge, Louisiana, this day of March, 2021

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JUDGE BRIAN KSON

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF LOUISIANA