author: GARRETT, J.

text:
    LOUISIANA SAFETY ASSOCIATION OF TIMBERMEN-SELF INSURERS FUND, Plaintiff-Appellant v. WILL TRANSPORT, L.L.C., Defendant-Appellant
    No. 51,798-CA
    Court of Appeal of Louisiana, Second Circuit.
    Judgment rendered February 28, 2018 Rehearing Denied April 5, 2018
    PROVOSTY, SADLER & DELAUNAY, APC By: Joseph J. Bailey, John Dexter Ryland, Eli Jules Meaux, Counsel for Appellant, Louisiana Safety Association of Timbermen-Self Insurers Fund, Brett Brunson, Trustee
    PAUL LOY HURD, Counsel for Appellant/Third Party Petitioner, Will Transport, L.L.C.
    McKEITHEN, RYLAND & CHAMPAGNE By: Joseph W. Grassi, Counsel for Appellee, K.P. Trucking, L.L.C., Karl Pentecost d/b/a Ouachita Truck & Trailer
    BAKER DONELSON BERMAN, CALDWELL & BERKOWITZ, PC By: Gregory E. Bodin, Robert L. Blankenship, Towson, Counsel for Appellee/Third Party Defendant, Lexington Insurance Company
    Before BROWN, WILLIAMS, and GARRETT, JJ.
   GARRETT, J.

The defendant, Will Transport, L.L.C., appeals from a trial court judgment which held that it owed almost $670,000 in unpaid premiums for long haul truck drivers under a workers' compensation insurance policy for the years 2004 to 2006. It maintains that the drivers were statutorily exempt from coverage and benefits under the Louisiana Workers' Compensation Act (hereinafter "LWCA"). Will Transport also appeals from the dismissal of its third-party demand against Lexington Insurance Company, its contingent liability insurer. The plaintiff, Louisiana Safety Association of Timbermen-Self Insurers Fund (hereinafter "LSAT"), appeals the trial court's dismissal of two other defendants which it contends were solidarily liable with Will Transport. For the reasons set forth below, we affirm in part and reverse in part the trial court judgment.

FACTS

This suit, which began with the filing of a simple one-and-a-half page petition, has spawned more than a decade of litigation, including numerous motions, two writ applications, and now two appeals. To understand the issues currently before us, which date back to events occurring years ago, some background information is necessary.

In 1996, Karl Pentecost started K.P. Trucking, L.L.C. (hereinafter "K.P."). This company owned 18-wheeler trucks which were leased to various freight haulers and employed drivers. In 2000, Pentecost created another entity, Will Transport, a contract hauler which secured shipping contracts and subcontracted cargo pick-up and delivery of the contracts to independent drivers. After Will Transport was created, K.P. provided trucks and drivers only to it. However, Will Transport also utilized drivers not affiliated with K.P. The cargo included roll stock paper, recycled paper, and lumber products from customers such as Georgia-Pacific and Graphic Packaging. Pentecost owned 95% of each of the two L.L.C.s, with the remaining 5% being owned by office manager Janet Hill. He was also the sole owner of Ouachita Truck & Trailer (hereinafter "Ouachita"), which performed repairs for a number of trucking companies, including K.P. All three business had the same street address, and the payroll for all three entities flowed through Will Transport. K.P.'s drivers were employees who received W-2 tax forms. Other drivers who provided services for Will Transport did so under a written contract which was labelled "Equipment Lease." These drivers received 1099 tax forms for the compensation they received, and they are the drivers at issue in this case.

In 2003, seeking a better rate for workers' compensation insurance, Pentecost submitted an application for membership with LSAT on behalf of Will Transport. He signed these documents as "manager LLC"; however, he attached member financial statements for both Will Transport and K.P. Additionally, a workers' compensation application was submitted to LSAT by the insurance agency used by Pentecost. The application was made on behalf of both Will Transport and Ouachita and signed by Pentecost. In a box specifying "additional coverages/endorsements," there was a notation to add K.P. as a named insured. The federal employer identification numbers ("FEIN") for each of these three entities were included on the application next to their names.

LSAT provided workers' compensation coverage for Pentecost's companies for the policy years 2004 to 2006. Its certificate of self-insurance provided as follows for the computation of the premiums:

C. REMUNERATION
Premium for each work classification is determined by multiplying a rate times a premium basis. Remuneration is the most common premium basis. This premium basis includes payroll and all other remuneration paid or payable during the policy period for the services of:
1. all your officers and employees engaged in work covered by this policy; and
2. all other persons engaged in work that could make us liable under Part One (Workers' Compensation Insurance) of this certificate of coverage. If you do not have payroll records for these persons, the contract price for their services and materials may be used as the premium basis. This paragraph 2 will not apply if you give us proof that the employers of these persons lawfully secured their workers' compensation obligations. [Emphasis added.]

In 2004, the Louisiana legislature passed a workers' compensation bill designed "to exempt 'owner operators' from being classified as employees." See Acts 2004, No. 188, § 1, which became effective on June 10, 2004. It amended the definition of "independent contractor" and added a definition of "owner operator" in La. R.S. 23:1021. Specifically, La. R.S. 23:1021(7) was amended to add the last sentence:

(7) "Independent contractor" means any person who renders service, other than manual labor, for a specified recompense for a specified result either as a unit or as a whole, under the control of his principal as to results of his work only, and not as to the means by which such result is accomplished, and are expressly excluded from the provisions of this Chapter unless a substantial part of the work time of an independent contractor is spent in manual labor by him in carrying out the terms of the contract, in which case the independent contractor is expressly covered by the provisions of this Chapter. The operation of a truck tractor or truck tractor trailer, including fueling, driving, connecting and disconnecting electrical lines and air hoses, hooking and unhooking trailers, and vehicle inspections are not manual labor within the meaning of this Chapter. [Emphasis added.]

La. R.S. 23:1021(10) was enacted and states:

(10) "Owner operator" means a person who provides trucking transportation services under written contract to a common carrier, contract carrier, or exempt haulers which transportation services include the lease of equipment or a driver to the common carrier, contract carrier, or exempt hauler. An owner operator, and the drivers provided by an owner operator, are not employees of any such common carrier or exempt hauler for the purposes of this Chapter if the owner operator has entered into a written agreement with the carrier or hauler that evidences a relationship in which the owner operator identifies itself as an independent contractor. For purposes of this Chapter, owner operator does not include an individual driver who purchases his equipment from the carrier or hauler, and then directly leases the equipment back to the carrier or hauler with the purchasing driver.

Before the law changed, Pentecost did not exclude any of his contract drivers from his workers' compensation policy. He collected payment for the coverage from the drivers and remitted it to the insurer on their behalf. He exempted them from this reimbursement procedure if they had their own workers' compensation policy. According to Pentecost, the owner operators wanted to be exempt to reduce their costs. If Pentecost allowed them to be exempt, it was a competitive advantage in recruiting for him against other trucking companies. Because of legal uncertainty arising from the 2004 changes in the law, which was viewed as a "gray area," Pentecost sought a solution from his insurance agent in order to protect against suits and claims by the contract drivers. He was presented with a package of an AIG occupational accident policy combined with a Lexington contingent liability policy.

The proposal designed for Will Transport stated, in relevant part:

[In the Truckers Occupational Accident Insurance portion]
THIS [sic] NOT WORKERS' COMPENSATION INSURANCE OR SICKNESS COVERAGE.
[In the Contingent Liability Insurance portion]
The Contingent Liability Program is a policy which is purchased by the motor carrier to help fill the gray area that exists between owner-operator drivers and employee drivers. It does pay benefits which may be equivalent to those that would be payable in accordance with workers' compensation law.
Contingent Liability responds only in the event that an owner-operator is deemed, or is seeking to be deemed, an employee of a motor carrier by a workers' compensation board, bureau or court.
The Contingent Liability Program is available in all states except Delaware and requires an AIG Occupational Accident Program with at least $500,000 Combined Single Limit coverage. The Contingent Liability Program cannot be written as a stand-alone product[.] [Emphasis theirs.]

The AIG and Lexington policies were issued to Will Transport, effective July 1, 2004. The AIG policy contained a notation, again stating that its coverage was not workers' compensation coverage and not a substitute for such coverage. The declarations page of the Lexington policy, which was a companion policy to the AIG occupational accident policy, stated it was "a surplus line coverage." The policy itself stated in relevant part:

SECTION I-INSURING AGREEMENT
Insuring Agreement. Upon the occurrence of a Covered Contingency, we will, at our sole option and in accordance with applicable law, either:
1. Pay benefits that are equivalent to the benefits payable under the workers' compensation and employers' liability law that would apply to the Named Insured if this Policy was a policy of workers' compensation insurance, but only with respect to an Owner-Operator or Contract Driver who is deemed in accordance with applicable law to be an employee of the Named Insured by order of any administrative or regulatory agency or court of competent jurisdiction; or
2. Pay benefits that are equivalent to the benefits payable under the workers' compensation and employer's liability law that would apply to the Named Insured if this Policy was a policy of workers' compensation insurance, but only with respect to the Owner-Operator or Contract Driver who is seeking to be deemed an employee of the Named Insured in accordance with applicable law.
This Policy provides for our right and duty to defend the Named Insured with respect to those benefits required under the workers' compensation laws of such states, or such other states as may be determined to apply to the Owner-Operator, and/or Contract Driver.
...
Covered Contingency means a contingency which occurs when the Named Insured receives written notice of a Claim for Injury by an Owner-Operator or Contract Driver seeking workers' compensation or employer's liability benefits within the meaning of the applicable workers' compensation law.
Covered Contract means a long-term lease as defined by applicable state statute, regulation or otherwise. To be a Covered Contract such lease must satisfy all of the following requirements:
...
2. The contract must specify that the Owner-Operator's or Contract Driver's relationship with the Named Insured is that of an independent contractor who is at risk for profit or loss of his or her own individual business, and not that of an employee.
...
Owner-Operator means a person who:
...
3. has entered into a Covered Contract with the Named Insured for lease of his or her owned vehicle, provided that such Covered Contract must be in effect when a Covered Contingency occurs[.]
...
SECTION III-EXCLUSIONS
This Policy shall not apply to, and no coverage shall be provided under this Policy for, any Claim:
...
6. brought by an individual who meets any applicable statutory or regulatory definition of an independent contractor[.]

As explained in the trial testimony of Lexington's representative, Alberto Fajardo, Will Transport was the policyholder for the occupational accident policy; the insureds under that policy were the owner operators. In his Will Transport corporate deposition, which was admitted at trial, Pentecost said the drivers paid for the occupational accident policy themselves, with him deducting it on their settlement sheets. Will Transport was the insured under the contingent liability policy. Fajardo testified that, as specified in the proposal, Will Transport, the motor carrier which purchased the policy, was to pay the premium, which was calculated per owner operator per month.

Pursuant to LSAT's standard procedures, audits were performed at the end of policy years to verify the correctness of the premiums assessed. The auditor obtained payroll information from the insured and calculated the premiums. Any independent trucker who had a certificate of insurance verifying that he had his own workers' compensation policy listing him as the insured was excluded from the payroll calculations. Conflict arose between LSAT and Pentecost as to whether the owner operators and independent contractors utilized by Will Transport should be exempt from the workers' compensation premium calculations. Will Transport argued that they were exempt due to the 2004 changes in Louisiana law. LSAT contended that, under its policy language, these drivers were "persons engaged in work that could make us liable under Part One (Workers' Compensation Insurance) of this certificate of coverage." Consequently, it maintained that it had provided workers' compensation coverage for them and was entitled to premiums for that coverage. In November 2006, LSAT issued a notice cancelling the policy on the grounds of "failure to report 1099 labor."

In January 2007, LSAT filed suit against Will Transport, asserting that it had failed to pay all of the premiums and assessments due for the fund years of 2004 and 2005. It sought $212,341.14, plus judicial interest and all costs of the proceedings. In its first supplemental and amending petition, which was filed in December 2009, LSAT added the 2006 policy year and increased the sum owed to $435,530.04. In its second supplemental and amending petition, which was filed in January 2013, LSAT alleged that the amount owed was $748,930.44.

In its answers, Will Transport asserted that it had paid all the charges and premiums owed under the policy for 2004 to 2006, excluding the activities of long distance truck drivers who contracted to deliver by truck specific loads of goods to a specific destination for a specified compensation. Will Transport alleged that these drivers were "independent contractors" and/or "owner-operators" statutorily excluded from coverage of the workers' compensation law pursuant to La. R.S. 23:1021(7) and (10). Alternatively, Will Transport claimed that, if workers' compensation exposure or benefits were owed by it based upon the activities and services provided by the long distance truck drivers, they were fully covered under the contingent workers' liability insurance coverage from Lexington Insurance Company.

On May 24, 2013, Will Transport offered to settle for $10,000. The letter sent by counsel claimed that Will Transport had not operated for more than two years and had no assets. Thereafter, on May 30, 2013, LSAT filed a third supplemental and amending petition, in which it added two new defendants: K.P. and Pentecost d/b/a/ Ouachita. It asserted that all of the defendants were liable in solido. A motion for summary judgment filed by K. P. and Pentecost d/b/a Ouachita was granted, and they were dismissed with prejudice. However, finding the existence of genuine issues of material fact, this court reversed the summary judgment and remanded the case for further proceedings. Louisiana Safety Ass'n of Timbermen-Self Insurers Fund v. Will Transp., L.L.C. , 49,740 (La. App. 2 Cir. 4/15/15), 164 So.3d 945.

Following remand, Will Transport filed a third-party petition against Lexington, alleging that its contingent liability policy was represented as providing coverage for independent contractors and independent truck operators should it be determined they were entitled to workers' compensation. Will Transport asserted that, pursuant to this policy, Lexington owed it a duty to defend. Consequently, it sought a declaratory judgment that the contingent policy provided coverage or, alternatively, that Lexington was liable to it for any insurance premiums it was found to owe. It also requested costs for defending the action, including attorney fees. Lexington responded with an answer pleading the policy as the best evidence of its contents, as well as exceptions of lack of subject matter jurisdiction, prematurity and no cause of action. All of the exceptions were subsequently denied, and this court denied Lexington's subsequent writ application. Louisiana Safety Ass'n of Timbermen-Self Insurers Fund v. Will Transp., L.L.C. , 51,294 (La. App. 2 Cir. 9/29/16).

In August 2016, Will Transport filed a motion for partial summary judgment ("MPSJ") as to truck drivers who were "insureds" under the Lexington policy. In September 2016, Will Transport also filed exceptions of no right of action and no cause of action pursuant to the statutory exceptions for independent contractors and owner operators. At a hearing on September 6, 2016, the MPSJ was denied, and the exceptions were taken under advisement and referred to the merits at the trial. The court also denied Will Transport's motion to continue the trial, which was scheduled for October 3, 2016. It further excluded evidence pertaining to the workers' compensation statutory exclusion, but granted Will Transport's discovery motions against Lexington. Writs were taken to this court. We granted the writ in part to reverse the exclusion of evidence pertaining to the statutory exclusion. As to the remaining issues, including the refusal to continue the trial, the writ was denied. Louisiana Safety Ass'n of Timbermen-Self Insurers Fund v. Will Transp., L.L.C. , 51,299 (La. App. 2 Cir. 9/29/16).

A bench trial was finally held on October 3 and 4, 2016. Testimony was given by Pentecost; Alberto Fajardo, a vice-president of underwriting for AIG/Lexington and Lexington's trial representative; and Nan Harrel, a LSAT underwriting manager who was working for the bankruptcy trustee. The deposition of Gordon McDaniel, an LSAT auditor, and the corporate deposition for Will Transport were admitted into evidence. Voluminous exhibits were introduced. A motion for involuntary dismissal on behalf of K.P., Ouachita, and Pentecost individually was granted after LSAT presented its case. At the trial's conclusion, the matter was taken under advisement.

On January 18, 2017, the trial court issued written reasons for judgment. It found that Ouachita and K.P. were additional insureds under the policy but were not responsible for payment of the premiums. It held that Will Transport was the only named insured, as well as the party which was billed and paid all premiums and paid all payroll. Therefore, it was the only party responsible for payment of the premiums to the plaintiff. The court found no legal basis for placing liability for the premiums on K.P., Ouachita, or Pentecost individually.

The trial court further held that the contract between LSAT and Will Transport controlled whether or not there was an obligation to pay a premium. The contract provided that a premium was due for all persons engaged in work that "could make" LSAT liable for workers' compensation. The court reasoned that potential exposure to liability or risk of liability-not actual claims-triggered the obligation to pay the premiums and the fact that a particular risk did not materialize was not a defense to payment of the premium. The court concluded that it was not relevant to the inquiry whether the individual drivers were actually "independent contractors" or "owner-operators."

According to the trial court, only a workers' compensation insurance policy issued to the subcontractors in question would relieve Will Transport of liability for the premium. It specifically held that the AIG and Lexington policies did not satisfy the requirements of the contract between LSAT and Will Transport. The court held that when the policy was originally taken out, it was understood that all "independent contractors" or "owner-operators" were to secure their own workers' compensation or a premium would be due. The court assessed premiums in the following amount against Will Transport: $153,495.00 for 2004; $298,791.54 for 2005; and $217,273.90 for 2006.

Lastly, the trial court found no basis for liability against Lexington. It found that Lexington's policy was not a workers' compensation policy, and did not cover or insure the payment of the premiums at issue. Finding no duty to defend, the court dismissed all claims against Lexington. Judgment was signed on March 1, 2017.

Will Transport appealed the imposition of premiums against it and the dismissal of its third-party demand against Lexington. LSAT also appealed the involuntary dismissal of K.P. and Pentecost d/b/a Ouachita.

PREMIUMS OWED UNDER POLICY

In three assignments of error, Will Transport argues that the trial court erred in finding that it owed LSAT unpaid premiums for the years 2004 to 2006. It asserts that it paid all the premiums it owed for those years, with the exception of "independent, long haul, owner operator truck drivers" who were exempt from coverage under the 2004 changes in the LWCA. Will Transport further claims that it complied with the LSAT policy by purchasing coverage from Lexington.

Will Transport contends that it offered the LSAT auditor proof (written contracts and settlement statements) which established that its long haul drivers fell into the "independent contractor" and "owner operator" statutory exclusions, but he refused to accept or consider the information. LSAT maintains that its auditor properly conducted the audits in compliance with the applicable guidelines found in the National Council on Compensation Insurance ("NCCI") manual.

Will Transport points to the jurisprudence that has developed after the 2004 changes to the workers' compensation law, wherein courts have applied the statutory exceptions in workers' compensation cases to exclude coverage to truck drivers deemed independent contractors. In particular, they cite Bridges v. New Orleans Trucking & Rental Depot, Inc. , 2013-1969 (La. App. 1 Cir. 6/27/14), 146 So.3d 288 ; Grant v. Sneed , 49,511 (La. App. 2 Cir. 11/19/14), 155 So.3d 61 ; Council v. FedEx Custom Critical, Inc. , 46,558 (La. App. 2 Cir. 9/21/11), 73 So.3d 461, writ denied , 2011-2332 (La. 12/2/11), 76 So.3d 1178 ; Hair v. Louisiana Crane & Trucking Co. , 43,566 (La. App. 2 Cir. 9/17/08), 996 So.2d 435 ; Course v. Fox Wolff Const. , 08-58 (La. App. 5 Cir. 5/27/08), 987 So.2d 277, writ denied , 2008-1396 (La. 9/26/08), 992 So.2d 992. Will Transport maintains that, because courts have enforced the statutory exclusions, the applicability and effectiveness of the exclusions is "unquestionable" at this time. As a result, it argues that the trial court erred in not applying the same principle to the instant case to exclude the premiums for these statutorily excluded drivers. It criticizes the trial court for reasoning that the statutory exclusions were irrelevant and instead focusing only on the language of the LSAT insurance contract.

In order to address Will Transport's complaints about the trial court's alleged failure to consider all the evidence and all the applicable law, we have conducted an exhaustive review of everything deemed pertinent by Will Transport. As more fully explained below, we agree with the trial court's ultimate conclusion that Will Transport was responsible for the unpaid premiums. Our conclusion that the ruling was correct is based upon our complete review and analysis of all of the evidence presented below, even though some of it may not have been considered by the trial court. Our conclusion is also based upon our analysis of the evidence in this record in light of the 2004 changes to the workers' compensation law.

As mentioned above, Will Transport has cited numerous cases where the courts have considered the 2004 changes to the workers' compensation law. Most of the cases involve independent drivers seeking coverage under the LWCA. One case, which will be discussed more fully below, involved a tort claim. These cases do not address the precise issues before us pertaining to insurance premiums. They involve situations that have arisen after someone has been injured and filed a claim. Suffice it to say, they are all fact intensive and the outcome is dependent upon the unique factual circumstances presented in each case.

The present litigation-a suit for unpaid premiums under an insurance contract-dictates that we should consider the provisions of the various insuring agreements, the LWCA, and the contracts relied upon by Pentecost. We must also review whether Will Transport produced evidence proving compliance with the law and the LSAT insurance contract.

We note that the distinction between an employee and an independent contractor is a factual determination that must be decided on a case-by-case basis. Smith v. Moreau , 2017-0003 (La. App. 1 Cir. 6/2/17), 222 So.3d 761. An employer asserting that a claimant is an independent contractor is required to bear the burden of proving this status. Smith v. Prime, Inc. , 2009-269 (La. App. 3 Cir. 10/7/09), 20 So.3d 1184. We recognize that these cases ordinarily arise when claims are made, but they teach us that whether someone is an employee or an independent contractor is dependent upon the facts and circumstances peculiar to each case.

In order to fall under the definition of "owner operator" in La. R.S. 23:1021(10), there must be a "written agreement" which "evidences a relationship in which the owner operator identifies itself as an independent contractor." Pentecost testified that initially his written contracts with owner operators had to be renewed every year; at some point, they made them continuous until cancelled. After the changes in the law in 2004, he began inserting the phrase "(an independent contractor)" next to the driver's name in his written contracts with these drivers; no other changes to the contracts were made. Thirty-nine such contracts, which were entitled "Equipment Lease," were admitted at trial. We have conducted a thorough review of these documents. It appears from the testimony that Pentecost obtained a lease agreement form from another company and used this as a template. The documents are less than clear. Only four of them contained the "(an independent contractor)" language. However, 23 of the contracts dated after the changes went into effect on June 10, 2004, did not have the additional language. The remaining 12 contracts were dated prior to the effective date and did not contain the "independent contractor" language. The contract required the driver, or lessor, to maintain public liability insurance for bodily injury, property damage liability insurance and cargo damage liability insurance, which Will Transport, the lessee, would obtain and place. The lessor would then reimburse the lessee for that insurance at a fixed weekly rate. Significantly, the contracts contained no mention whatsoever of workers' compensation insurance or responsibility for workers' compensation claims.

In support of its contentions that the contract drivers were exempt, Will Transport relies upon Grant v. Sneed , supra , which was decided by this court in 2014. That case stemmed from an accident that occurred in 2008 at the Weyerhaeuser lumbermill. Grant was a driver working for V & M Trucking, which had an equipment lease contract with Will Transport. This document was apparently one of the four contracts mentioned above, in which the phrase "(an independent contractor)" had been added after the contract driver's name. V & M had workers' compensation insurance coverage with LSAT which paid workers' compensation benefits to Grant. In response to the tort suit filed by Grant, Weyerhaeuser claimed to be a "statutory employer" of Grant in order to shield itself from tort liability. The contract between Will Transport and Weyerhaeuser specifically provided that the persons operating vehicles were not to be considered as employees of Weyerhaeuser and the obligation for providing workers' compensation insurance was on the carrier. In analyzing whether Weyerhaeuser could invoke the "statutory employer" statute under the LWCA, we noted in the opinion that the independent contractor relationship between Will Transport and V & M came under La. R.S. 23:1021(10). We held that Weyerhaeuser was not entitled to tort immunity. Any issues pertaining to who was responsible for workers' compensation benefits to Grant were not before us. This tort case does not stand for the broad proposition advanced by Will Transport that this court has universally approved the statutory adequacy of Will Transport's contract for any and all purposes.

Only a handful of the written contracts offered by Will Transport to LSAT's auditor include the "independent contractor" language required under La. R.S. 23:1021(10). Although Pentecost claimed there were settlement sheets available to the auditor, he admitted that he could not recall ever offering them to the auditor. Additionally, the information found on those documents did not establish whether the drivers were owner operators under La. R.S. 23:1021(10). Simply put, neither Grant v. Sneed , supra , nor the documents in this record support Will Transport's position that all the drivers were automatically exempt under the workers' compensation statutes.

Will Transport also argues that the trial court erred in not finding that the Lexington policy satisfied the LSAT policy provision which allowed it to avoid paying premiums if proof was supplied that "the employers of these persons [engaged in work that could make us liable] lawfully secured their workers' compensation obligations." LSAT maintains that the Lexington policy was a contingent liability policy issued to Will Transport which did nothing to reduce LSAT's liability. We agree and find the trial court's interpretation of this provision requiring that the owner operators have their own workers' compensation policies with the drivers as insureds was reasonable. Review of the Lexington policy reveals that its scope of coverage was, at best, questionable. Among other things, it required that the "Covered Contract" between Will Transport and owner operators specify that the relationship of the owner operator with the named insured was that of independent contractor. As already discussed, the overwhelming majority of Will Transport's contracts were deficient in this regard.

Will Transport further argues before us that no claims were made under the LSAT policy. However, assertions that none of the truck drivers ever filed a claim for workers' compensation coverage are irrelevant. The premiums cover potential exposure to liability, not actual claims. Louisiana Workers' Comp. Corp. v. N/C Materials, Inc. , supra .

Based on the foregoing, we cannot find that the proof presented at trial established that LSAT was apprised that it had no exposure for workers' compensation to Will Transport's drivers. Louisiana Workers' Comp. Corp. v. Frey , supra . Will Transport failed to carry its burden of proving exemption from payment of unpaid premiums by means of written contracts which showed La. R.S. 23:1021(10) compliance and were offered to LSAT's auditor or by providing proof of appropriate workers' compensation coverage as required by the contract language. Consequently, the trial court did not err in its ruling that Will Transport was liable for the unpaid premiums under the policy.

DISMISSAL OF CODEFENDANTS

LSAT appeals from the trial court's dismissal of K.P. and Pentecost d/b/a Ouachita as codefendants. It argues that that trial court erred in its reasoning that they were not named insureds and thus were not responsible for premiums. LSAT asserts that they were liable in solido with Will Transport for all unpaid premiums owed under the policy. We agree. As explained below, the trial court failed to consider all of the documentary evidence and was manifestly erroneous.

Signatures are not mere ornaments. Tweedel v. Brasseaux , 433 So.2d 133 (La. 1983) ; JPS Equip., LLC v. Cooper , 50,506 (La. App. 2 Cir. 2/24/16), 188 So.3d 1106. A person who signs a written agreement is presumed to know its contents and cannot avoid its obligations by claiming that he did not read it, that he did not understand it, or that it was not explained. Greely v. OAG Properties, LLC , 44,240 (La. App. 2 Cir. 5/13/09), 12 So.3d 490, writ denied , 2009-1282 (La. 9/25/09), 18 So.3d 77. Whoever signs or executes an instrument bearing blanks and later contests the correctness of the completion of the blanks, bears the burden of proving by a preponderance of the evidence that the document was completed in a manner not agreed to between the parties. Masonite Corp. v. Serv. Door & Millwork, LLC , 2014-1035 (La. App. 3 Cir. 4/1/15), 162 So.3d 702, writ denied , 2015-0860 (La. 6/5/15), 171 So.3d 951.

A finding of a solidary obligation requires a clear expression of the parties' intent and is not presumed. La. C.C. art. 1796 ; Louisiana Safety Ass'n of Timbermen Self Insurers Fund v. Courtney Const. Co. of Alexandria , 41,564 (La. App. 2 Cir. 12/13/06), 949 So.2d 490, writ denied , 2007-0443 (La. 4/27/07), 955 So.2d 687.

The evidence presented at trial demonstrated that an application for insurance was submitted to LSAT with Will Transport and Ouachita listed as applicants and a notation to add K.P. as a named insured. Pentecost admitted his signature on the application, but insisted that he only wanted K.P. and Ouachita to be additional insureds. However, he stated that he could not testify whether the application was filled in or not when he signed it because he had signed blank forms for insurance agents to fill in later on several occasions. Nonetheless, he conceded that he answered all questions asked by his insurance agent.

A letter from Pentecost's insurance agent dated June 9, 2003, requested that LSAT bind workers' compensation and employers liability coverage for "Will Transport, LLC, Ouachita Truck & Trailer, K.P. Trucking." The information page for the subsequently issued policy listed Will Transport as the insured, followed by a mailing address. Under the next section, which is "[o]ther workplaces not shown above," there is a notation to "See Schedule of Operations." The attached "Schedule of Operations" listed all three entities-Will Transport, K.P., and Ouachita-and their FEINs with each having the same street address. According to the trial testimony of Harrel, LSAT's representative, only Will Transport was listed as the insured on the first page due to lack of space; as a result, "See Schedule of Operations" was added to list the others on the following page. Thus, the information page of the policy comported with the coverage requested by Pentecost's agent.

Despite Pentecost's self-serving trial testimony to the contrary, the documentation produced and admitted at trial showed that Pentecost requested that LSAT provide coverage to all three of his businesses without specifying that any of them should be merely additional insureds. In fact, the workers' compensation application-which he signed-listed both Will Transport and Ouachita as applicants and included a notation to add K.P. as a "named insured." While the LSAT membership application listed only "Will Transport, LLC" as the business name of the applying entity and Pentecost signed as "manager, LLC," Pentecost completed the "member financial statement" portion of the application by attaching balance sheets for both "Will Transport, LLC" and "KP Trucking, LLC." In view of these facts, Pentecost's equivocal testimony about the circumstances under which he signed the insurance procuring documents failed to prove by a preponderance of the evidence that they were actually filled out by his insurance agent contrary to his instructions.

We find that the trial court was manifestly erroneous in its factual finding that Will Transport was the only named insured. All of the documentary evidence presented at trial-which the trial court never addressed and apparently failed to properly consider-established that the three entities are all named insureds and a single policy was issued to cover all of them. All three businesses were at the same location, and all of the payroll was handled by Will Transport. Under all of these circumstances, they are bound solidarily. See Louisiana Safety Ass'n of Timbermen Self Insurers Fund v. Courtney Const. Co. of Alexandria , supra , a factually similar case in which the appellate court found that, while the intent to be solidarily bound was not stated in the words of the insurance contract, the defendants' actions-entering the agreement together, paying the premiums jointly and corresponding with the insurer as a single entity-were a clear expression of an intent to be jointly responsible for the premiums. The same is true here. Accordingly, we reverse the trial court's granting of the involuntary dismissal.

LIABILITY OF LEXINGTON

In two assignments of error, Will Transport argues that the trial court erred in dismissing its third-party demand against Lexington. It maintains that Lexington's contingent liability policy provided workers' compensation coverage to Will Transport's independent drivers and somehow "shifted" the payment of the contested LSAT premiums to Lexington, warranting an award of monetary damages in its favor. Will Transport further asserts that the contingent liability policy imposed upon Lexington a duty to defend on its behalf and seeks the defense costs incurred in this matter.

Will Transport argues that the proposal represented that the Lexington policy provided workers' compensation benefits and that Lexington should have to pay, as contractual damages, its unpaid premiums under the LSAT contract because its coverage was not deemed to fulfill the LSAT contract requirements. However, nothing in the record suggests that the Lexington proposal or policy warranted in any fashion that it would satisfy those provisions. The proposal itself provided that "[t]he Contingent Liability Program is a policy which is purchased by the motor carrier to help fill the gray area that exists between owner-operator drivers and employee drivers. It does pay benefits which may be equivalent to those that would be payable in accordance with workers' compensation law." [Emphasis added.] This equivocal language fails to rise to the degree of "proof that the employers of these persons lawfully secured their workers' compensation obligations."

Review of the Lexington policy reveals that it is a contingent liability policy, not a workers' compensation policy. The covered contingency, the occurrence of which would have activated Lexington's coverage-receipt of a "written notice of a Claim for Injury by an Owner-Operator or Contract Driver seeking workers' compensation or employer's liability benefits within the meaning of the applicable workers' compensation law"-did not happen here. Nothing in the policy required Lexington to pay the premiums owed by Will Transport under the LSAT policy. Furthermore, because there was no triggering covered contingency, we find that the policy language does not impose upon Lexington a duty to defend under the circumstances of the instant case. Thus, Will Transport is not entitled to any defense costs.

Accordingly, the portion of the trial court judgment dismissing Will Transport's third-party action against Lexington is affirmed.

CONCLUSION

We affirm the portions of the trial court judgment ordering Will Transport, L.L.C., to pay the disputed premiums to Louisiana Safety Association of Timbermen-Self Insurers Fund and dismissing Will Transport's third-party demand against Lexington Insurance Company.

We reverse the portion of the trial court judgment dismissing K.P. Trucking, L.L.C., and Karl Pentecost d/b/a Ouachita Truck & Trailer as codefendants and hold that they are solidarily liable with Will Transport, L.L.C., for the premiums.

Costs of this appeal are assessed against Will Transport, L.L.C., K.P. Trucking, L.L.C., and Karl Pentecost, d/b/a Ouachita Truck & Trailer.

AFFIRMED IN PART, REVERSED IN PART.

APPLICATION FOR REHEARING

Before BROWN, WILLIAMS, GARRETT, STONE and MCCALLUM, JJ.

Rehearing denied.

      The only cases construing this policy language arose before the 2004 amendment to La. R.S. 23:1021. See Highlands Underwriters Ins. Co. v. Foley , 96-1018 (La. App. 1 Cir. 3/27/97), 691 So.2d 1336 (because policy provisions were ambiguous regarding automatic inclusion of sole proprietors and additional premiums, no additional premiums allowed); Louisiana Workers' Comp. Corp. v. N/C Materials, Inc. , 2002-2127 (La. App. 1 Cir. 6/27/03), 858 So.2d 534, writ denied , 2003-2134 (La. 11/7/03), 857 So.2d 504 (pursuant to policy and endorsement, additional premiums allowed when insured failed to provide valid certificates of workers' compensation insurance as proof the drivers did not expose insurer and insured to additional liability); and Louisiana Workers' Comp. Corp. v. Frey , 2004-2517 (La. App. 1 Cir. 3/29/06), 934 So.2d 107, writ denied , 2006-1004 (La. 6/23/06), 930 So.2d 980 (no additional premiums allowed where the sole proprietor truck drivers signed notarized statements to opt out of workers' compensation and had individual workers' compensation policies with endorsements excluding themselves from coverage; documentation apprised plaintiff insurer that it would have no exposure for workers' compensation to those drivers).

      At some point in the proceedings, LSAT filed for bankruptcy. Pursuant to LSAT's ex parte motion, the trial court substituted its trustee, Brett Brunson, as plaintiff in September 2016.

      This was its third motion for partial summary judgment. The previous ones, which are not in the appellate record but were included in the opposition to the writ application in # 51,299-CW, were also denied. In its April 5, 2013 reasons for judgment, the trial court stated that, "absent production of proof that the defendant secured or made the drivers secure workers compensation insurance to cover their work, the defendant would be liable for premiums based on the payroll records or contract price for the services of the drivers as the case may be." The trial court stated that it did not believe that the occupational accident policy or the contingent liability policy secured the workers' compensation obligations of the drivers retained by the defendant who were engaged in work that could have made the insurance company liable. It maintained this position throughout the proceedings.

      The developing jurisprudence is not as clear cut as argued by Will Transport. See for example McGrew v. Quality Carriers, Inc. , 2011-440 (La. App. 3 Cir. 10/5/11), 74 So.3d 1253, in which a summary judgment in favor of a carrier service was reversed because a genuine issue of material fact existed as to the amount of manual labor being performed by the driver.

      These documents were exhibits to Pentecost's corporate deposition on behalf of Will Transport. The corporate deposition and its exhibits were offered by LSAT and admitted over the objections of Will Transport. (While Lexington objected to the admission of the corporate deposition on hearsay grounds, it later sought to introduce the already admitted owner operator contracts.) Pentecost testified that these were all of the contracts with drivers he could locate at that time and he could not find about a dozen more of them. At trial, Pentecost testified that he offered the written contracts to the auditor, who did not want to see them.

      Interestingly, one of these was dated in February 2004, before the law changed.


source: Caselaw Access Project

author: GASKINS (Ad Hoc ), J.

license: Public Domain

text:
    Matthew CHANEY, Plaintiff-Appellee v. Randy VAUGHN and Lori Vaughn, Defendants-Appellants
    No. 51,795-CA
    Court of Appeal of Louisiana, Second Circuit.
    Judgment rendered February 28, 2018
    HALES AND STRICKLAND, By: Myrt T. Hales, Jr., Joshua L. Strickland, Counsel for Appellants
    NELSON, ZENTNER, SARTOR & SNELLINGS, LLC, By: F. Williams Sartor, Jr., Counsel for Appellee
    Before PITMAN, STONE, and GASKINS (Ad Hoc ), JJ.
   GASKINS (Ad Hoc ), J.

Randy and Lori Vaughn (the "Vaughns") appeal a judgment finding them liable for damages sustained by Matthew Chaney when a vehicle driven by Chaney struck a black cow owned by the Vaughns on a stock-law highway in Richland Parish. We affirm.

FACTS

The Vaughns raise cattle on property in Richland Parish that is west of and adjacent to an approximately 1.25- to 1.5-mile stretch of Louisiana Highway 583 as it runs north from its intersection with Louisiana Highway 852. A pasture that is referred to as the Vaughns' "home pasture" is located along about 0.5 miles of this stretch. The portion of the home pasture facing the highway is enclosed by a two-strand electrical fence, with the remainder enclosed by a barbed wire fence.

Chaney was a volunteer fireman in Richland Parish. At 2:00 a.m. on January 5, 2012, he received a call over his radio about a fire. He was unable to use his own vehicle because it was blocked in at his parents' home where he was spending the night, so Chaney drove his parents' Chrysler Pacifica to the fire. The Pacifica was not equipped with a siren or flashing lights. As Chaney drove 75 mph south on Highway 583, the left front of the Pacifica struck a black cow that was in the highway approximately 0.3 miles north of Highway 852. The Pacifica landed in a ditch to the west of the highway, while the cow landed in a ditch on the opposite side of the highway.

Richland Parish Sheriff's Deputy Loyd Hamm was the first law enforcement officer to reach the accident scene. He recalled that upon arriving, he saw several other cows on the highway about 100-200 feet from the crash, and that these cows jumped to the west and into the Vaughns' pasture in response to his activated lights and siren.

Richland Parish Sheriff's Deputy Roger Achord also responded to the accident. Deputy Achord, who arrived after Deputy Hamm, did not see a cow at the scene other than the one struck by Chaney.

A sheriff's dispatcher called the Vaughns' home, which was located to the north of the home pasture, to inform them of the accident. Lori Vaughn and her son Travis Cowell drove the short distance to the site. The fence near the accident scene was a two-strand electrical fence, and Lori did not see the fence down near where the accident occurred. Travis recalled that after he arrived, he checked the fence with a pair of fencing pliers and found that the fence was still "hot." Travis added that he got a good spark on the fence, which he said he would not have gotten if the fence had been down in any location. Lori remembered seeing a spark from the fence that night. After checking the fence, Lori and Travis went to the ditch to look at the cow. Lori claimed that because the cow landed with her head underneath the body, she could tell only that it was a black cow.

Master Trooper Kenneth Baker from the Louisiana State Police took over the accident investigation when he arrived on the scene approximately 40 minutes after the accident. Trooper Baker recalled that Lori said the cow belonged to them when he asked her. When Lori requested to move the cow, he told them to wait until daybreak. Around sunrise that morning, the cow was dragged to a site on the Vaughns' property, where it remained unburied.

Lori claimed that as soon as she was able to inspect the cow, she knew it did not belong to them because not only did she not recognize it, but it also lacked an ear tag or any indication that it had ever had an ear tag. Lori's husband, Randy Vaughn, returned home on the weekend following the accident after being out of town because of his job. Randy maintained that he knew the black cow struck by Chaney's vehicle was not one of his cows when he examined it.

Trial

Chaney filed suit against Randy and Lori Vaughn on October 22, 2012. He alleged that they owned the cow in question and the accident was caused by their negligence in failing to: (i) keep a proper lookout, (ii) maintain control of their livestock, (iii) pay proper attention to fence conditions, and (iv) make proper repairs to their fences. The Vaughns filed an answer denying ownership of the cow.

The trial judge heard testimony from Chaney, Cowell, and the Vaughns. The depositions of Deputies Achord and Hamm, Trooper Baker, and Major Claude Mercer, who had worked as an investigator for Chaney's attorney, were admitted into evidence. Major Mercer testified as an expert in accident investigations.

Lori believed that she was called to the scene as the presumed owner of the cow. She maintained that when Trooper Baker asked who owned the cow, she responded that she guessed it could be her cow. Lori stated that although she told Trooper Baker that it could be her cow, at that time she had no way to positively identify it because it was in a water-filled ditch with its head underneath the body. Once the cow was dragged out of the ditch, she did not recognize the cow or see any tags or holes in its ears. Lori, who claimed that she was familiar with the cows and had named most of them, added that she would not have said it was their cow that night had she been able to see the cow's head. Travis testified that he was unable to tell whether or not it was his mother's cow when it was in the ditch because he could not see any identifying tags or markings.

Trooper Baker observed Lori and Travis walk down to the ditch to look at the cow. He did not recall them lifting the cow or trying to move its head. Deputy Hamm testified that he heard Lori tell Trooper Baker that it was their cow.

Trooper Baker looked down into the ditch for any identifying marks on the cow. He would have noted any tags or tattoos on the cow as his practice was to record this information. Photographs of the accident scene were taken by Trooper Baker. Neither deputy inspected the cow.

Randy explained that all of his cows had plastic ear tags that measured approximately two-thirds of a pencil in length, and one-half of a pencil in width. The tags were usually placed in the left ear. Randy further explained that if a tag was accidentally removed by a cow fighting or the tag getting caught on something, then it would have been either ripped across the ear or pulled through the ear making a hole as big as the tag itself. Neither Lori nor Travis found a tag or a hole or tear in the cow's ears when they examined it after the cow was removed from the ditch. Randy inspected the cow's ears upon returning home and did not see a tag or any tears or holes indicating that a tag had ever been placed in the cow's ear.

Lori stated she observed no holes in the cow's ears, which meant it never had an ear tag. She explained that once an ear is tagged, the hole remains in the cartilage, and if the tag is torn out, it leaves a slice since the cartilage will not heal because of low blood flow. She estimated that a tag would leave a hole in the ear about the size of an ink pen.

According to Travis, he specifically looked at the cow's head and ears after it was removed from the ditch to see if he could identify it, and he did not see a tag or a hole where a tag had been. In Travis's opinion, a tag had never been placed in the cow's ear because a tag leaves a permanent hole that is very visible.

Travis took photos of the cow after it was dragged out of the ditch, while Randy took photos of the cow's ear when he returned home. The photos, which were admitted into evidence, were taken to show the absence of an ear tag or any holes or tears in the cow's ears. Also admitted into evidence were photographs of a calf and another cow owned by the Vaughns. Lori had named the other cow "Grabber," and the Vaughns maintained that the bottom of a white ear tag could be seen at the top of one of the photos of Grabber.

The Vaughns also maintained that they had the same number of cattle before and after the accident. The cattle, not all of which were black, had been counted about a month prior to the accident when they were wormed, and the count showed 72 cows and 3 bulls in the home pasture. They counted the cattle again several weeks after the accident when they were moved to another pasture. The count remained 72 cows and 3 bulls, with no cows missing but a few calves added. Lori admitted keeping a ledger showing the number of cows, but she did not bring the ledger to trial.

Randy testified that other individuals own black cows in the immediate proximity of his property. He stated that black cows were located north of his property on the east side of Highway 583. He added that south of Highway 852, there were black cows in pastures on both sides of Highway 583. Randy admitted there were no black cows directly to the east of his property on the north side of 852, or next to the home pasture. Lori stated that her husband's testimony regarding the location of nearby black cows was accurate.

Deputy Achord did not see any other cows nearby while at the accident scene, and to his knowledge, the Vaughns' pasture was the closest one to the accident scene.

Major Claude Mercer, who had been with the Louisiana State Police for 34 years and had been in charge of criminal investigations, was working for the Richland Parish Sheriff's Office at the time of his deposition. Chaney met with Major Mercer at the accident scene on January 18, 2012. Major Mercer drove several miles north of the accident site and did not see any cows. When he drove south on Highway 583, he saw cows to his left as he passed the intersection with Highway 852, but none of the cows were black.

Randy acknowledged that an electrical fence will sometimes short out, and that Farm Bureau did not offer him coverage when he applied for it because Farm Bureau required that he have a three-strand electrical fence.

Lori and Travis noticed that the fence was still "hot" when they checked it after arriving at the accident. Deputy Hamm thought it was an electrical fence, but did not inspect it or determine if it was working at the time. Deputy Achord noticed that the electrical fence was up, and while he did not see any holes in it, he never checked the fence to see if it was "hot." Trooper Baker made no observations about the fence.

Lori and Travis checked the fence the next morning and did not see any indication that the fence was down. The fence remained "hot." Lori agreed at trial that it would not make a difference whether or not a fence is "hot" if a cow jumps it, but she added that generally a cow will not jump a fence unless something is pursuing it. Randy checked the fence when he returned home. He did not find any spots where it was down, and he determined that the fence was still working.

Major Mercer looked at the fence when he met with Chaney, and while he did not see any part of it down, he did not think it was in good condition. Major Mercer never touched the fence and believed it was a barbed wire fence.

Deputy Hamm testified that he observed cows in the road near the accident scene, and that these cows jumped into the Vaughns' pasture when they were startled by his patrol car's siren and flashing lights. Lori countered that Deputy Hamm told her that he saw no other cows out that night. Trooper Baker could not recall anyone telling him that there had been other cows out that night.

Deputy Hamm also remembered several prior instances when he either received a call that the Vaughns' cows were out or had driven up to find them out on the highway. Deputy Hamm added that usually the cows would just jump back into the pasture. Deputy Hamm also stated that he had gotten calls concerning cows not owned by the Vaughns being on the road, but not in that same area. Deputy Achord testified that his department had received numerous complaints of cows out in that area in the past. Randy admitted to receiving prior calls about cows being out, but maintained that in not every instance did the cows belong to him. One of Randy's cows had gotten out of the pasture before jumping back in a few days before he gave his deposition.

As part of his investigation, Major Mercer interviewed Trooper Baker and Deputy Achord. He spoke briefly with Deputy Hamm on the date of his deposition when Deputy Hamm brought up seeing the cows on the road after he mentioned to Deputy Hamm that he was going to give a deposition. Major Mercer, who testified as an expert in accident investigations, believed that it was more probable than not that the cow in question belonged to the Vaughns based on the proximity of the cow to their property, the fact he did not see any other black cows in the area, what Lori had told Trooper Baker about owning the cow, what dispatchers had told him about the Vaughns' cows being on the road on prior occasions, and what Deputy Hamm had mentioned to him.

The trial court rendered judgment in favor of Chaney, awarding general damages of $10,000, and special damages of $13,627.60 after accounting for 20% of fault that was assessed against Chaney. Even though Chaney was responding to an emergency, the court concluded that he was driving at an excessive speed considering the time of day, lack of visibility, and lack of emergency lights that could have scared the cow off the highway.

In her detailed reasons for judgment, the trial judge noted that the photos of Grabber and her calf did not show a tag in their ears. The trial judge also noted that not only was Lori the only person to corroborate Randy's testimony that there were other cow owners in close proximity to the accident scene, but there also were no photos of these purported cows. She contrasted this with what Major Mercer reported seeing when driving in the area, as well as Deputy Achord's testimony that he did not see other cows nearby and that the Vaughns' cows were the closest to the scene.

The trial judge noted that the case was a close call, but she could not ignore the testimony of the disinterested law enforcement officers. The court gave substantial importance to Deputy Hamm's testimony that other cows in the road jumped back into the Vaughns' pasture when he approached the accident scene. She also gave great weight to Lori's initial statement at the scene claiming ownership, noting that it took Trooper Baker nearly an hour to get to the accident scene. This lapse of time allowed Lori and Travis ample time to more closely examine the cow or have it repositioned if she had any doubt about who owned it. Finally, the trial judge noted that it was significant that the Vaughns did not produce photos of cows with ear tags or of other black cows in neighboring pastures.

After finding that it was more probable than not that the Vaughns owned the cow, the trial court then cited La. R.S. 3:3003 and La. C.C. art. 2321, and applied the doctrine of res ipsa loquitur to the facts. The trial court concluded that Chaney proved the defendants' negligence because he presented evidence sufficient to meet the three criteria necessary to invoke res ipsa loquitur . First, the cow would not have been on the highway if the Vaughns had adequately controlled their livestock with proper fencing. Second, subject to Chaney's comparative fault, neither Chaney nor anyone else was responsible for the accident. Third, the Vaughns owed Chaney a duty to control and contain the cow so it did not enter his path on the highway.

The Vaughns appealed the finding of liability.

DISCUSSION

Applicable law

La. R.S. 3:2803 provides that no person owning livestock shall knowingly, willfully, or negligently permit his livestock to go at large upon certain enumerated public highways of Louisiana.

In Hines v. Garrett , 2004-0806, p. 2 (La. 6/25/04), 876 So.2d 764, 766, fn. 1, the supreme court stated the following regarding collisions between livestock and vehicles on state roads:

The jurisprudence interpreting La. Rev. Stat. 3:2803 is well settled that when an automobile strikes a horse or cow on one of the enumerated "stock law" highways, the burden of proof rests upon the owner of the animal to exculpate himself from "even the slightest degree of negligence." Thus, the courts have recognized that a legal presumption of fault or negligence on the part of the animal's owner is created in such cases. To rebut that presumption, the defendant must not only show that he has taken all reasonable and prudent measures and precautions to enclose his livestock, but he must also explain the presence of the animal on the highway by showing when, where, and how the animal escaped from its enclosure, that is, his complete freedom from fault.

Citations omitted.

As this court discussed in Church v. Shrell , 43,972, pp. 4-5 (La. App. 2 Cir. 1/21/09), 8 So.3d 70, 73-4 :

To establish a prima facie case of liability under LSA-R.S. 3:2803, the plaintiff must establish (1) ownership of the cattle; (2) the highway was one enumerated by the statute; and (3) presence of the cattle upon the roadway. Once the prima facie case is established, the burden shifts to the livestock owner to exculpate himself. The owner may only do so by establishing that the harm or damages to the plaintiff was the result of an independent cause. An independent cause is defined as: (1) a fortuitous event; (2) the actions of a third party over which the owner has no control; or (3) the fault of the plaintiff. Cedotal v. Hopkins , 589 So.2d 20 (La. App. 1 Cir. 1991). However, in order to relieve a landowner of liability, the independent cause must be the sole cause of the plaintiff's damages. Olsen v. Shell Oil , 365 So.2d 1285 (La. 1978) ; Dotson v. Matthews , 480 So.2d 860 (La. App. 2 Cir. 1985).

Highway 583 is not one of the highways specifically enumerated in La. R.S. 3:2803. However, La. R.S. 3:3001 states that "each ward of every parish in the state shall have the right, by local option election, to prohibit livestock from roaming at large in each said ward on those public highways other than those provided for in R.S. 3:2803." Furthermore, La. R.S. 3:3003 contains similar language to La. R.S. 3:2803 in that it states:

No person owning livestock shall knowingly, willfully or negligently permit his livestock to go at large upon the public highways of any ward of any parish where livestock is presently prohibited from roaming at large or any ward of any parish that shall hereafter adopt a stock law as hereinafter provided for.

Thus, the principle found in La. R.S. 3:2803 is applicable to violations of local option stock laws adopted pursuant to La. R.S. 3:3001. See Buller v. American Nat. Property & Cas. Cos. , 2002-820 (La. App. 3 Cir. 2/5/03), 838 So.2d 67.

The trial court noted that Richland Parish adopted such a stock law in Richland Parish Rule 5-31. This rule, which is reproduced in Chaney's memorandum on liability and quantum that was filed into evidence, states:

It shall be unlawful for any livestock or animals known as cattle ... to roam, run or be at large ... upon highways, roads ... throughout the parish; and every person owning or having under his control any such livestock shall keep the same continuously confined under fence or confined in a safe enclosure.

Ownership of the cow

The Vaughns argue that the trial court erred in determining that they owned the cow. They contend that until the day of Mercer's deposition, Deputy Hamm had never told anyone that he had seen cows on the road when he arrived at the accident. They also contend that testimony from Deputy Achord that Lori told him the cow belonged to her was contradicted by Mercer's testimony that Deputy Achord had told him that he did not remember hearing Lori say this. The Vaughns also point out that Deputy Achord gave inaccurate testimony about the presence of Chaney's father at the scene and how Chaney was transported to the hospital.

The Vaughns try to discredit Mercer by pointing out that he never interviewed them or inspected the cow, and that he never obtained the names of their neighbors or interviewed them to see if they owned black cows. The Vaughns also contend there were omissions in Mercer's investigation, and note that Mercer thought the fence was barbed wire.

An appellate court may not set aside a trial court's or a jury's finding of fact in the absence of manifest error or unless it is clearly wrong. Rosell v. ESCO , 549 So.2d 840 (La. 1989). To reverse a fact finder's determination, the appellate court must find from the record that a reasonable factual basis does not exist for the finding of the trial court and that the record establishes that the finding is clearly wrong. Stobart v. State through Dept. of Transp. & Dev. , 617 So.2d 880 (La. 1993).

The appellate review of fact is not completed by reading only so much of the record as will reveal a reasonable factual basis for the finding in the trial court; but, if the trial court's findings are reasonable in light of the record reviewed in its entirety, the court of appeal may not reverse even though convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently. Where there are two permissible views of the evidence, the fact finder's choice between them cannot be manifestly erroneous or clearly wrong. Rosell , supra .

After noting that part of the rationale behind the manifest error standard of review is the trial court's better capacity to evaluate live witnesses, the Vaughns point out that Major Mercer and the other law enforcement officers testified by deposition. Nevertheless, this does not impact our standard of review. The manifest error standard of review applies even when the evidence before a trial court that considered the merits consisted solely of records and depositions. See Shephard on behalf of Shepard v. Scheeler , 96-1690 (La. 10/21/97), 701 So.2d 1308 ; and Williams v. Jackson Parish Hosp. , 31,492 (La. App. 2 Cir. 1/13/99), 729 So.2d 620, writ denied , 99-0458 (La. 4/1/99), 742 So.2d 558.

The ownership of cattle involved in an accident may be proved by circumstantial evidence. State Farm Mutual Auto. Ins. Co. v. Thompson , 433 So.2d 376 (La. App. 3 Cir. 1983), writ denied , 441 So.2d 212 (La. 1983).

The trial judge's conclusion that the Vaughns owned the black cow in question is well supported by the record. The accident occurred near the home pasture where the Vaughns were keeping their cows at the time of the accident. Deputy Hamm testified that upon his arrival at the accident scene, he observed several cows on the highway jump into the Vaughns' pasture. Deputy Hamm had dealt with the Vaughns' cows being on the highway in the past. Lori told Trooper Baker that the cow belonged to her. While Lori attempted to minimize this statement by asserting that she realized it was not their cow once she was able to see its head, the trial court noted that if Lori had any doubts about ownership of the cow, then she had adequate time before Trooper Baker arrived to confirm whether or not it was their cow.

The Vaughns contended that all of their cows had ear tags. Although an ear tag was filed into evidence, there was no photograph introduced that fully showed one of their cows with an ear tag. One photo of a cow showed what was purported to be the bottom of a tag. The Vaughns also asserted that counts taken of their cows before and after the accident showed that they were not missing any cows, yet a ledger showing the counts was not produced at trial.

The Vaughns claimed that other nearby property owners also kept black cows. As noted by the trial judge, there were no independent witnesses to corroborate this, and the Vaughns failed to produce any photographs supporting this. Furthermore, Major Mercer did not see any black cows in nearby pastures when he drove south and north of the accident site.

Based on the foregoing, we cannot conclude that the trial judge was clearly wrong in finding that the evidence established that it was more probable than not that the Vaughns owned the cow struck by Chaney's vehicle.

Legal presumption of negligence

Once the Vaughns' ownership of the cow was established, a legal presumption of fault or negligence on their part was created. The Vaughns could rebut this presumption only by both showing they had taken all reasonable and prudent measures and precautions to enclose their cattle, and by explaining the presence of the cow on the highway by showing when, where, and how the cow had escaped. See Hines v. Garrett , supra ; Church v. Shrell , supra . The Vaughns argued that even if the cow belonged to them, the evidence showed that they were free from fault.

After the trial court determined that the Vaughns owned the cow, the court moved on to the issue of liability and began by citing La. R.S. 3:3003. The court also cited La. C.C. art. 2321 as well as jurisprudence for the position that the standard for owners of animals other than dogs is ordinary negligence instead of strict liability. The court then concluded that based on the last sentence of art. 2321, it could apply the doctrine of res ipsa loquitur in this matter. The court concluded that Chaney had proven the Vaughns were negligent based on this doctrine.

It was unnecessary for the trial court to apply the doctrine of res ipsa loquitur in this matter. Once it was established that the Vaughns had owned the cow, which Richland Parish Rule 5-31 prohibited from being at large on Highway 583, a legal presumption of their negligence had been created under La. R.S. 3:3003 and the jurisprudence interpreting La. R.S. 3:2803. Nevertheless, in her analysis, the trial court found that the Vaughns had not adequately controlled their livestock with proper fencing. The Vaughns' first burden in rebutting the presumption of negligence was to show they had taken all reasonable and prudent measures and precautions to enclose their livestock. The finding that they had not adequately controlled their livestock with proper fencing meant they did not meet their burden.

Randy admitted that Farm Bureau Insurance had turned him down for insurance coverage because his electric fence was a two-strand fence instead of a three-strand fence. Randy had testified at his deposition that it would have cost $100 per quarter mile to add an additional strand to the fence. Cleary the Vaughns had not taken all reasonable and prudent measures and precautions to enclose their livestock when the fence could have been upgraded at a cost that was minimal when compared to the danger presented to the motorists by a cow being on the highway.

The Vaughns gave extensive testimony about their practice of inspecting their fences. Randy walked the fences about once every three months, and he rode a four-wheeler about once a month to check whether the fence was still conducting electricity. Travis would usually accompany him. Lori would check the fence along Highway 583 each time she drove past it, which she did at least twice a day.

Although the Vaughns explained that a cow would be sold if it left the pasture twice, they clearly had a history of their cows entering nearby roads. Significantly, Deputy Hamm recalled several instances when he either received a call that the Vaughns' cows were out or had just driven up and found them out, and he added that usually the cows would just jump back into the pasture.

In order to rely on the doctrine of res ipsa loquitur , a plaintiff must satisfy three factors: (1) present evidence which indicates at least a probability that injury would not have occurred without negligence; (2) sufficiently exclude inference of his or her own responsibility or responsibility of others besides the defendant in causing the accident; and (3) establish that negligence falls within the scope of duty to the plaintiff. Honeycutt v. State Farm Fire & Cas. Co. , 39,301 (La. App. 2 Cir. 12/22/04), 890 So.2d 756, writ denied , 2005-0184 (La. 3/24/05), 896 So.2d 1046. A plaintiff need not completely eliminate all other possible causes or inferences. Id.

The trial court concluded that Chaney had established the Vaughns' negligence based on the doctrine of res ipsa loquitur in light of: (i) Randy's testimony that the fence can sometimes short out and that Farm Bureau decided not to insure him because of his two-strand fence; (ii) Deputy Hamm's testimony that the Sheriff's Office had received calls in the past about the Vaughns' cows being out, that he had also driven up on their cows being on the highway, and that the cows would almost always jump back into the pasture; (iii) Deputy Achord's testimony that the Sheriff's Office had received numerous complaints about cows being out in the area near the Vaughns' home; and (iv) Randy's testimony that a cow had escaped a few days before his January 2014 deposition by running through the fence onto the highway before jumping over the fence to return to the pasture.

Based upon our review of the record, we cannot conclude the finding of the Vaughns' liability was clearly wrong under either a La. R.S. 3:3003 presumption of negligence analysis or the res ipsa loquitur analysis utilized by the trial court.

CONCLUSION

At the Vaughns' costs, the judgment is AFFIRMED.