Larry Groover v. Scottsdale Insurance Company; Omni Pinnacle LLC; Cahaba Disaster Recovery LLC

District Judge of the Eastern District of Louisiana, sitting by designation.*
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 08-31051
LARRY GROOVER; AMBER LEE WELLS, natural guardian and mother of
Brianna Sadie Nicole; LAURA CRISTINA MARCADO, natural guardian and
mother of Matthew Gabriel Nickolas,
Plaintiffs–Appellants,
v.
SCOTTSDALE INSURANCE COMPANY; OMNI PINNACLE LLC; CAHABA
DISASTER RECOVERY LLC,
Defendants–Appellees.
Appeal from the United States District Court
for the Eastern District of Louisiana
Before HIGGINBOTHAM and STEWART, Circuit Judges, and ENGELHARDT,
District Judge.*
KURT ENGELHARDT, District Judge:
Larry Groover and the guardians of decedent Chad Groover’s minor
children (collectively the “Groovers”) appeal the district court’s summary
judgment order dismissing their tort claims against Omni Pinnacle, LLC (Omni)
and Cahaba Disaster Recovery, LLC (Cahaba). Because we hold that the
United States Court of Appeals
Fifth Circuit
F I L E D
October 30, 2009
Charles R. Fulbruge III
Clerk

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No. 08-31051
Warfield v. Byron, 436 F.3d 551, 557 (5th Cir. 2006).1
F ED. R. CIV. P. 56(c).2
2
Louisiana workers’ compensation scheme shielded Omni and Cahaba from tort
liability, we affirm.
I
Shortly after Hurricanes Katrina and Rita, St. Tammany Parish (St.
Tammany) entered into a contract with Omni to provide all labor and materials
for various types of debris removal and disposal. Omni in turn subcontracted
with Cahaba for private property demolition and debris removal. Cahaba then
entered into a subcontract with Sure Form, Inc. (Sure Form) which included the
removal of stumps, logs, and limbs. Sure Form hired Groover Tree Service
(GTS) to cut down trees and branches.
Chad Groover, an employee of GTS, worked on the St. Tammany clean-up
project. Groover was electrocuted and subsequently died from injuries sustained
when a lift machine he was operating came into contact with a power line. The
Groovers brought bystander, survival, and wrongful death actions against Omni,
Cahaba, Sure Form, and their respective insurers. Omni and Cahaba brought
motions for summary judgment on the ground that Groover’s recovery was
limited to workers’ compensation. The district court agreed and granted
summary judgment for Omni and Cahaba. The Groovers filed a notice of appeal,
and the district court certified the order for appeal under Federal Rule of Civil
Procedure 54(b).
II
We review a district court’s grant of summary judgment de novo, using the
same standard as the district court. Summary judgment is proper when there1
is no genuine issue of material fact and the movant is entitled to judgment as a
matter of law.2

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No. 08-31051
L A. REV. STAT. ANN. § 23:1061(A)(1).3
See Allen v. State ex rel. Ernest N. Morial-New Orleans Exhibition Hall Auth., 02-4
1072, (La. 4/9/03); 842 So. 2d 373, 377.
L A. REV. STAT. ANN. § 23:1032(A)(1)(a).5
L A. REV. STAT. ANN. § 23:1061(A)(1).6
Id.7
See Allen, 842 So. 2d at 378.8
3
Under Louisiana law, a general contractor typically is required to pay
workers’ compensation to a subcontractor’s employee who is injured on the job.3
This scheme was adopted to prevent employers from circumventing the workers’
compensation laws by interjecting intermediary entities between themselves and
their workers. Consequently, the general contractor is generally exempt from4
work-related tort liability to a subcontractor’s employee. General contractors5
so exempt are referred to as “statutory employers.”6
A general contractor, or “principal,” is a statutory employer when it
“undertakes to execute any work, which is a part of his trade, business, or
occupation and contracts with any person, in this Section referred to as the
‘contractor,’ for the execution by or under the contractor of the whole or any part
of the work undertaken by the principal.” Thus, the statute provides two7
alternative bases for liability: (1) when the principal undertakes work that is a
part of his trade, occupation, or business by means of a contract with another,
or (2) when the principal has contracted to perform work and subcontracts all or
a portion of the work to another (the “two-contract” theory of the statutory
employer defense). The two-contract theory applies here since (1) the principal,8
Omni, was hired by St. Tammany to perform tree and debris removal; (2) Omni
entered into a subcontract with Cahaba to perform the work; (3) Cahaba

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No. 08-31051
See id. at 379 (“The ‘two contract’ defense applies when: (1) the principal enters into9
a contract with a third party; (2) pursuant to that contract, work must be performed; and (3)
in order for the principal to fulfill its contractual obligation to perform the work, the principal
enters into a subcontract for all or part of the work performed.”).
In re Argo Fin., Inc., 337 F.3d 516, 519 n.1 (5th Cir. 2003).10
L A. CIV. CODE ANN. art. 2439.11
See Allen, 842 So. 2d at 379.12
4
subcontracted with Sure Form; and (4) Sure Form subcontracted a portion of the
work to Groover Tree Service.9
The Groovers do not dispute that the two-contract theory applies to
successive subcontracts or that these relationships would normally give rise to
the two-contract defense. Rather, they contend that the two-contract theory is
inapplicable because Omni’s contract with St. Tammany was not assignable
under Louisiana Revised Statute section 39:1515.1 and by the terms of the
contract.
The Groovers’ arguments, however, rest on the faulty premise that Omni
assigned the Parish contract. It did not. Omni’s agreement with Cahaba was
a subcontract, which was barred by neither statute nor contract.
Louisiana law provides that an assignment is a “species of sale.” A sale10
is defined as “a contract whereby a person transfers ownership of a thing to
another for a price in money.” The plain language of Omni’s contract with11
Cahaba indicates that it did not countenance a sale. Omni did not sell its
interest in the contract to Cahaba, but instead agreed to pay Cahaba 75% of the
proceeds received from St. Tammany in exchange for Cahaba’s performance of
the work under the contract. This arrangement is a classic subcontract, in which
a general contractor, after having been hired by a third party to perform certain
work, contracts with a “sub” to do all or part of the work contracted by the
general.12

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No. 08-31051
5
Further, the agreement between St. Tammany and Omni explicitly
contemplates that subcontractors will be used. For instance, subcontractors
were required to attend pre-construction and progress meetings as needed, and
the names of the subcontractors were to be included in submittals regarding
project work plans. The contract contains numerous other references to
subcontractors. As such, the contractual relationship between Omni and
Cahaba was not prohibited by Omni’s contract with St. Tammany—it was
expressly contemplated by the contract. The Groovers’ argument in this regard
thus has no merit.
The Groovers’ statutory argument fails for the same reason. Louisiana
Revised Statute section 39:1515.1 provides that “[n]o contractor shall assign any
interest in any professional, personal, consulting, or social service contract with
any governmental body as defined by R.S. 39:1484(11) by assignment, transfer,
or novation, without the prior written consent of the secretary or director of the
governmental body.” Because Omni did not assign its interest to Cahaba, the
statute is inapplicable.
* * *
For the foregoing reasons, we AFFIRM the district court’s grant of
summary judgment in favor of Omni and Cahaba.

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