Senac v. SandeferSenac v. Sandefer
The plaintiff, Henry J. Senac, filed suit against Ronald D. Sandefer and his automobile liability insurer, Manchester Insurance & Indemnity Company, seeking damages for personal injuries received in an automobile accident. Plaintiff was operating his employer‘s delivery truck when it was involved in an accident on December 3, 1971, with a vehicle owned by the defendant, Ronald Sandefer and insured by Manchester Insurance & Indemnity Company. Plaintiff sought recovery for medical expenses, pain and suffering, and loss of wages. Manchester Insurance & Indemnity Company became insolvent and its obligations were assumed by the Louisiana Insurance Guaranty Association (LIGA) pursuant to
The parties entered into a joint stipulation which provides as follows:
“1. That, but for the legal issue involved herein, there shall be judgment rendered in favor of plaintiff, HENRY J. SENAC, and against the defendants, MANCHESTER INSURANCE & INDEMNITY COMPANY AND LOUISIANA INSURANCE GUARANTY ASSOCIATION, in the full sum of FOUR THOUSAND NINE HUNDRED and no/100 ($4,900.00) DOLLARS.
“2. That all recovery due the plaintiff shall be for general damages and shall not be construed as recovery for special damages such as lost wages or medical expenses.
“3. That plaintiff, HENRY J. SENAC, recovered from Employers Commercial Union Insurance Company, the sum of $4,900.00 in weekly indemnity workmen‘s compensation benefits. (not medical expenses).
“4. That the parties hereto agree that the legal issue to be decided by this Court is whether the Louisiana Insurance Guaranty Association is entitled, under
LSA R.S. 22:1386 to offset the stipulated general damages due plaintiff of $4,900.00 with the $4,900.00 in workmen‘s compensation benefits received by the plaintiff from Employers Commercial Union Insurance Company.”
The legal issue stated in section 4 of the joint stipulation, supra, was resolved in favor of the plaintiff by the trial court. In written reasons for judgment, the trial court observed that the $4,900 in stipulated general damages to which the plaintiff was entitled did not include recovery for any loss of wages. The compensation benefits received by the plaintiff under the provisions of
The court of appeal reversed the trial court judgment finding that “compensation payments are in lieu of both wage loss and damages for pain and suffering, and that recovery of both compensation payments and damages for pain and suffering is double recovery under the workmen‘s compensation law.” Senac v. Sandefer, 405 So.2d 1128, 1131 (La.App. 1st Cir. 1981). This court granted writs to review the correctness of that decision. 407 So.2d 747 (La. 1981).
The Insurance Guaranty Association Law,
The purpose of this Part is to provide a mechanism for the payment of covered claims under certain insurance policies to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detection and
prevention of insurer insolvencies, and to provide an association to assess the cost of such protection among insurers.
(b) Be deemed the insurer to the extent of its obligation on the covered claims and to such extent shall have all rights, duties and obligations of the insolvent insurer as if the insurer had not become insolvent.
Accordingly, in the instant case, LIGA is to be treated as though it were the insurer that issued Mr. Sandefer‘s policy. Billeaudeau v. Lemoine, 386 So.2d 1359 (La.1980); Hickerson v. Protective National Insurance Company, 383 So.2d 377 (La.1980). LIGA contends, however, that it is entitled to a credit for the benefits which Senac has received from his employer‘s compensation insurer, by virtue of
“(1) Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim, shall be required to exhaust first his right under such policy. Any amount payable on a covered claim under this Part shall be reduced by the amount of any recovery under such insurance policy.”
The purpose of this provision is to prevent double recovery. Hickerson, supra, at 379. The issue before this court, therefore, is whether double recovery will result from a judgment against a third party tortfeasor awarding a claimant, who has already received workers’ compensation disability benefits, general damages which do not include lost wages or medical expenses.
The Workers’ Compensation Act was described by this court in Atchison v. May, 201 La. 1003, 10 So.2d 785 (1942), as social legislation passed for the joint benefit of labor and management.
“In order that this end might be accomplished, the Legislature provided for sacrifices to be made by both the employer and the employee. The employee was required to waive the right granted him under the general law, Article 2315 of the Civil Code, in consideration of receiving a fixed percentage of his wages during the period of his disability. The employer, on the other hand, was deprived of the defenses afforded to him by the general law and he was assured that, in case any of his employees were injured, they would be entitled to no more than the amount stipulated in the statute as compensation during the period of disability.” 10 So.2d at 788.
It can thus be seen that as between the employee and his employer, the employee surrenders his former right to full damages and accepts, instead, compensation measured as a percentage of his wages. See W. Malone & H. Johnson, Workers’ Compensation in 13 Louisiana Civil Law Treatise § 32 (1980); 1 A. Larson, The Law of Workmen‘s Compensation § 1.10 (1981).
The same quid pro quo arrangement is not present in the relationship between the injured worker and a third party tortfeasor.
“This is merely a recognition of the well established rule in tort law that where an injured party proceeds against the wrongdoer for damages, he is entitled to an award for the full amount of his loss, even though the loss is partially or wholly made good by an insurer. Such a result does not amount in truth to `double recovery’ or at least is not one that is to be regarded as offensive. The primary objection to `double recovery’ is that it makes a wrongdoer pay twice for the same item, and thus he pays more than would be proper. But in this situation, the wrongdoer pays only what he would have been obliged to pay had the Act never existed: a complete tort recovery.”
We do not think that a different result should prevail merely because the third party‘s insurer is insolvent. We therefore hold that a double recovery, in the contemplation of
Decree
The judgment of the court of appeal is reversed and the trial court judgment is reinstated.
CALOGERO, J., concurs and assigns reasons.
MARCUS and BLANCHE, JJ., dissent and assign reasons.
CALOGERO, Justice, concurring.
I concur in the majority opinion because it has been stipulated, and is not disputed, that the $4,900.00 judgment against the tortfeasor and LIGA is for general damages and does not include recovery for lost wages. However, if that point was disputed or if the employer‘s compensation insurer had intervened,1 a different result might be in order.
MARCUS, Justice (dissenting).
I agree with the court of appeal that “compensation payments are in lieu of both wage loss and damages for pain and suffering, and that recovery of both compensation payments and damages for pain and suffering is double recovery.” Hence, I consider that LIGA is entitled to a credit for the benefits which Senac received from his employer‘s compensation insurer under
BLANCHE, Justice (dissenting).
In the instant case, plaintiff recovered workmen‘s compensation benefits from Employers Commercial Union Insurance Company. By allowing plaintiff to also recover against LIGA, the majority has ignored the express language of
(1) Any person having a claim against an insurer under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim, shall be required to exhaust first his right under such policy. Any amount payable on a covered claim under this Part shall be reduced by the amount of any recovery under such insurance policy. (emphasis added)
LIGA was entitled to receive a credit for the workmen‘s compensation benefits collected by plaintiff. Because the appellate court‘s opinion was correct, I respectfully dissent.