"IME" Killer Bill Put Down

Under Louisiana’s comparative fault system, each party in a lawsuit generally is only liable for their own percentage of fault. However, in some instances, a party may be “vicariously” liable for the fault of another party. One example of vicarious liability is an employment relationship, where an employer can be liable for the fault of its employees. On the other hand, vicarious liability generally does not apply when the alleged “employee” is found to be an independent contractor. Whether a worker qualifies as an employee or an independent contractor often becomes an important issue in suits related to construction projects.

The test for determining whether a party is an employee or an independent contractor involves analysis of who has the right to control his or her work. In the construction context, courts distinguish between “operational control” (which suggests an employment relationship) and control as it relates to the results of the work (which suggests an independent contractor relationship). Two recent cases examine this issue and provide examples of how courts analyze the type of control necessary to establish vicarious liability in the construction projects.

In Stonetrust Com. Ins. Co. v. TBT Contracting, Inc. of LA, homeowners hired a general contractor to renovate their home. During the project, an electrical subcontractor was injured after falling through an attic space. It was alleged that the general contractor created a hazard by cutting a hole in the attic and concealing it. The plaintiff sued the general contractor and the homeowner. The court had to determine whether the homeowner could be liable for the subcontractor’s injuries, which would require a finding that the homeowner was vicariously liable for the general contractor’s fault.

The plaintiff argued that the homeowners were particularly involved in the project. It presented evidence to show the homeowners would give suggestions regarding the work to be performed and also directed alterations or additions to the work. The plaintiff argued that this demonstrated control over the general contractor’s work. However, the court disagreed. Despite the homeowners’ level of involvement, the court held that their control was limited to the results of the work, and was not “operational control.” The general contractor therefore was an independent contractor, and the homeowners were not vicariously liable for its acts.

In Baham v. Fisk Elec. Co., a city worker brought suit against a general contractor after suffering injuries from an electrical shock. The worker alleged that the general contractor was vicariously liable for the fault of its subcontractor. While evidence showed the subcontractor relied on the general contractor for the location of its work, the court found that this was not “operational control.” The court observed that general contractors are entitled to exercise supervisory control over its independent contractors to ensure compliance with the contract. It further found that suggestions or instructions given to an independent contractor do not equate to control over the methods or details of the work. Absent such “operational control” vicarious liability could not be imposed.

Though they may be limited to their facts, these cases show courts usually require a showing of more than suggestions or instructions regarding the work to establish the “operational control” necessary to trigger vicarious liability. Absent such a showing, independent contractors usually remain independent.

Case References:

Stonetrust Com. Ins. Co. v. TBT Contracting, Inc. of LA, 2022-0971 (La. App. 1 Cir. 4/14/23), 2023 WL 2947826

Baham v. Fisk Elec. Co., 2022-0551 (La. App. 4 Cir. 3/22/23), 2023 WL 2595253

Louisiana is a fact-pleading state. Accordingly, Louisiana law requires that a petition contain “a short, clear and concise statement of all causes of action and material facts arising out of the transaction or occurrence that is the subject matter of the litigation.” See La. C.C.P. art. 891. Generally, the pleader must state what act or omission he will establish at trial. Legal conclusions disguised as factual allegations do not meet the pleading standards required by Louisiana law.

This concept recently was examined in Henderson v. State Farm Mut. Auto. Ins. Co., 2021-0654 (La. App. 4 Cir. 12/17/21), 2021 WL 7162224, where the court considered bad faith allegations the plaintiff tried to assert against an insurer in his petition for damages. At the time of the underlying accident, the plaintiff was a passenger in a Lyft vehicle that was struck by an unknown driver. Steadfast Insurance Company was the Lyft driver’s insurer, and the plaintiff named Steadfast as a defendant to recover damages under its policy.

The plaintiff later amended his petition to seek uninsured/underinsured motorist benefits under the Steadfast policy. He also sought penalties from Steadfast for alleged bad faith and dealing in its insurance practices. In turn, Steadfast filed an exception of no cause of action, arguing that plaintiff’s petition only contained legal conclusions and not specific facts, which were insufficient to support a cause of action. The trial court overruled the exception.

The Fourth Circuit Court of Appeal reversed the decision. Plaintiff’s amended petition alleged that Steadfast “refused to deal with him in good faith, including but not limited to, refusing to issue unconditional (McDill) tenders and taking actions in violation of La. R.S. 22:1892 and La. R.S. 22:1973.” The plaintiff also generally alleged the insurer acted “arbitrarily, capriciously and without probable cause” in its failure to pay money under its policy.

The Court noted that the plaintiff’s allegations were legal conclusions asserted as facts, which could not be considered as well-pleaded factual allegations for purposes of a no cause of action. Importantly, the court reiterated that a court may not consider legal conclusions “clothed as facts,” citing Hooks v. Treasurer, 06-0541, p. 10 (La. App. 1 Cir. 5/4/07), 961 So.2d 425, 431-32. Accordingly, the plaintiff’s allegations, absent additional information, were insufficient to state a cause of action. The plaintiff failed to state specific actions or omissions that would be established at trial. Hence, he failed to state a cause of action.

During week seven of the 2025 Regular Session, Louisiana Governor Jeff Landry signed the following bills into law:

HB450 legislatively overrules Housley v. Cerise, 579 So. 2d 973 (La. 1991) (which provided a presumption of medical causation where plaintiff had no pre-existing history) and became effective upon signature by the governor. The Act has prospective application only and shall not apply to causes of action arising prior to the effective date.

HB434 modifies “No Pay/No Play” and bars uninsured motorists from recovering for the first $100,000.00 of bodily injury and the first $100,000.00 of property damage based on any cause or right of action arising out of an automobile accident. The Act allows for an uninsured motorist, who institutes an action to recover damages, regardless of fault, and is awarded an amount equal to or less than $100,000.00, to be held liable for all court costs incurred by all parties to the action. The Act’s effective date is August 1, 2025.

HB436 bars unauthorized aliens from recovering general damages and past and future wages for damages arising from an automobile accident. The Act does not apply to a claim made against an uninsured or underinsured motorist policy which names the unauthorized alien as an insured. The Act’s effective date is August 1, 2025.

HB431 provides for modified comparative fault and bars claimants, who are found greater than or equal to 51% at fault, from recovering for damages. If fault attributable to the claimant is less than 51%, the amount recoverable shall be reduced in proportion to the fault attributable to the claimant. The bill does not say whether this applies only to auto claims. We expect this will be clarified. The Act’s effective date is January 1, 2026.

HB549 requires a premium discount for policyholders of commercial motor vehicles with installed dashboard cameras and telematic systems and who meet the other requirements enumerated in the Act. The Act’s effective date is January 1, 2026.

HB148 requires insurance companies to display prior premium amounts in close proximity to the renewal premium. The Act also provides for rate filing standards and methods and changes the process by which the insurance commissioner can disapprove a rate if he determines it is excessive, inadequate or unfairly discriminatory. The Act’s effective date is August 1, 2025.