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Sparks v. Riverwood Investments, LLC

United States District Court, W.D. Arkansas, Hot Springs Division

October 9, 2019

TYLER SPARKS and CYDNEY SPARKS PLAINTIFFS
v.
RIVERWOOD INVESTMENTS, LLC d/b/a RIVERWOOD INN DEFENDANTS XL SPECIALTY INSURANCE COMPANY INTERVENOR

          MEMORANDUM OPINION AND ORDER

          ROBERT T. DAWSON SENIOR U.S. DISTRICT JUDGE

         Now before the Court is the Motion for Partial Summary Judgment (ECF No. 40) filed by Intervenor XL Specialty Insurance Company (XL herein). Plaintiff Tyler Sparks and Defendant Riverwood Investments, LLC d/b/a Riverwood Inn (Riverwood Inn) have each filed a response in opposition to the motion (ECF Nos. 59, 61), and Intervenor has replied (ECF Nos. 65, 66). The matter is now ripe for review.

         Plaintiffs Tyler and Cydney Sparks, husband and wife, are residents of Louisiana, and they bring this diversity action alleging negligence and claiming damages against Defendant Riverwood Inn. It is alleged in the complaint that, during his stay at Riverwood Inn, located in Arkansas, a stairway attached to the motel structure collapsed beneath Plaintiff Tyler Sparks causing him to fall and sustain serious bodily injury. Because Plaintiff was in Arkansas working on assignment for his Louisiana-based employer, Plaintiff filed a workers' compensation claim pursuant to the Louisiana Workers' Compensation Act. Intervenor XL is the workers' compensation insurer for Plaintiff's claim, and XL entered this case in hopes of recovering subrogation for benefits paid to Plaintiff. XL moves for partial summary judgment seeking this Court's determination that: (1) Louisiana law applies to its subrogation rights; and (2) under Louisiana law, XL is entitled to dollar-for-dollar reimbursement for any amounts it has paid out of any recovery Plaintiff obtains against Riverwood Inn. For the reasons stated herein, the motion will be granted.

         I. BACKGROUND

         The material facts relevant to XL's subrogation claim are not in dispute, and they are recounted here in a light most favorable to the non-moving parties. On or about July 30, 2016, Plaintiff Tyler Sparks was a paying guest of the Riverwood Inn. As Plaintiff attempted to walk to his motel room up a stairway connecting the first and second floor of the motel, a portion of the stairs gave way causing Plaintiff to fall and sustain injury to his right foot and lumbar spine. The Riverwood Inn, located in Glenwood, Arkansas, is owned and operated by Defendant Riverwood Investments, LLC, an Arkansas limited liability company. At the time of the incident, Plaintiff lived in Evangeline Parish, Louisiana, and was in Arkansas working on assignment for T & D Solutions, LLC (Employer), a Louisiana limited liability company based in Alexandria, Louisiana. Plaintiff was hired in Louisiana and briefly trained there. The terms of Plaintiff's employment agreement made clear that Employer was responsible for sending Plaintiff to Arkansas and paying for his travel and lodging expenses.

         Following the injury, Plaintiff filed a workers' compensation claim pursuant to the Louisiana Workers' Compensation Act. XL is the workers' compensation insurer for Plaintiff's claim. XL asserts that as of July 2019, it has paid at least $8, 000 for Plaintiff's medical expenses and more than $79, 000 for past wage loss benefits arising from the incident. According to XL, the claim remains open, and XL continues to pay Plaintiff wage benefits of $593.59 per week plus the costs of any additional incurred medical expenses. On August 17, 2017, Plaintiffs Tyler and Cydney Sparks filed this diversity lawsuit for damages against Riverwood Inn alleging the Inn negligently failed to maintain the stairway and caused injury to Plaintiffs.

         XL moved to intervene in this case as a matter of right contending that, under both the insurance policy issued to Employer and the Louisiana Workers' Compensation Act, XL is entitled to recover subrogation from Riverwood, the alleged tortfeasor whose negligence is responsible for Plaintiff's injuries (ECF No. 31). In response to the motion, Plaintiffs admitted XL is entitled to intervene but made clear their intent to seek a ruling from the Court on whether Arkansas or Louisiana law is controlling on XL's subrogation claim. (ECF No. 33.) The motion to intervene was granted with the order expressly stating, “the extent of XL's participation in the trial of this matter and the governing subrogation law will be determined prior to trial.” (Order, July 17, 2019, ECF No. 34.) XL now moves for partial summary judgment on the issues of law governing its subrogation rights.

         II. SUMMARY JUDGMENT STANDARD

         The Federal Rules of Civil Procedure provide that when a party moves for summary judgment “[t]he court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Krenik v. Cnty. of LeSueur, 47 F.3d 953, 957 (8th Cir. 1995). The Supreme Court has issued the following guidelines for trial courts to determine whether this standard has been satisfied:

The inquiry performed is the threshold inquiry of determining whether there is a need for trial-whether, in other words, there are genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party.

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986); see also Agristor Leasing v. Farrow, 826 F.2d 732 (8th Cir. 1987); Niagara of Wis. Paper Corp. v. Paper Indus. Union-Mgmt. Pension Fund, 800 F.2d 742, 746 (8th Cir. 1986). A fact is material only when its resolution affects the outcome of the case. Anderson, 477 U.S. at 248. A dispute is genuine if the evidence is such that it could cause a reasonable jury to return a verdict for either party. Id. at 252. The Court must view the evidence and the inferences that may be reasonably drawn from the evidence in the light most favorable to the nonmoving party. Enter. Bank v. Magna Bank, 92 F.3d 743, 747 (8th Cir. 1996). The moving party bears the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Id. The nonmoving party must then demonstrate the existence of specific facts in the record that create a genuine issue for trial. Krenik, 47 F.3d at 957. A party opposing a properly supported motion for summary judgment may not rest upon mere allegations or denials but must set forth specific facts showing that there is a genuine issue for trial. Anderson, 477 U.S. at 256.

         III. DISCUSSION

         A. Choice of Law

         This Court must decide which State's law - Arkansas or Louisiana - governs the issues around XL's claim for reimbursement of the workers' compensation benefits. XL favors the application of Louisiana law in this case, because it allows a dollar-for-dollar right of subrogation out of any eventual recovery Plaintiff obtains from Riverwood Inn. Plaintiff Tyler Sparks contends that Arkansas law should apply to XL's subrogation rights. Arkansas has a “made-whole doctrine, ” and if Plaintiff's actual losses exceed the amount he recovers from Riverwood, the application of Arkansas law could very well bar XL from recouping anything. For its part, Riverwood Inn argues in ...


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