Court: Louisiana Court of Appeal; November 1, 2000; Louisiana; State Appellate Court
Ronald George was employed by Harold Dousay, a subcontractor for Tillman Guillory, cutting pulpwood and longwood. On February 1, 1993, a tree fell on him, injuring his left shoulder and side, leading to a three-day hospitalization. Tillman Guillory, acting as George's statutory employer, paid workers' compensation benefits through Louisiana Workers' Compensation Corporation (LWCC), which also covered George's medical expenses. George's compensation was calculated based on his production wages, classified as "other wages" under Louisiana Workers' Compensation Law, since he worked less than twenty-six weeks before the accident.
LWCC calculated his average weekly wage by dividing his gross wages for the fourteen weeks prior to the accident by the total number of days he actually worked, multiplied by four. LWCC incorrectly used seventy days, including three days post-accident when George did not return to work. Initially, LWCC paid George a minimum indemnity benefit of $82.00 per week from February 9 until May 13, 1993, later adjusting this to $127.92 per week after discovering underpayment. This adjustment factored in an estimated $40.00 weekly expense for chainsaw-related costs, totaling $560.00 for the fourteen weeks worked, which was deducted from his gross wages of $3,918.54 prior to recalculating his average weekly wage. LWCC did not revise George's benefits despite being informed he had not worked the full seventy days.
LWCC continued to pay Mr. George's weekly benefits based on seventy days of employment, without adjustments, at the time he filed suit. Mr. George's claims included an inaccurate compensation rate and LWCC's refusal to authorize necessary shoulder surgery. Dr. Waldman, Mr. George's orthopedic surgeon, testified on May 18, 1999, that Mr. George required arthroscopic decompression surgery for his left shoulder, believing there was a 75% chance of a good outcome, based on prior successful cortisone injections. Despite Dr. Waldman requesting approval for the surgery seven times, LWCC denied authorization each time.
Various doctors evaluated Mr. George's condition post-injury. Dr. Riad Haj Murah examined him first in August 1993, releasing him for light duty work in December 1996 and deeming him at maximum medical improvement by April 1997. Dr. Murah did not find neck surgery necessary but deferred the shoulder surgery decision to Dr. Waldman. Dr. Babson Fresh, a neurosurgeon, examined Mr. George in January 1998, noting chronic neck pain and recommending against surgery, stating Mr. George was a non-surgical candidate.
At LWCC's request, Dr. Louis Blanda assessed Mr. George in August 1993 and found a healing left scapula fracture, concluding Mr. George was at his maximum recovery potential without significant difficulty. Dr. Blanda disagreed with Dr. Waldman regarding the necessity of shoulder surgery. Dr. John Sandifer, in a May 1994 independent medical evaluation, reported Mr. George's post-fracture status and recommended lighter work due to probable cervical strain, without expressing an opinion on the proposed surgery. A functional capacity examination was conducted by Dr. Phillip Osborne on June 27, 1995.
Dr. Osborne assessed Mr. George's physical capabilities, indicating he could perform heavy work with specific lifting limits but would struggle with overhead lifting. He assigned a 4% whole person impairment rating and found no brachial plexus abnormalities. Dr. Osborne did not comment on the necessity of recommended back surgery. Subsequently, Dr. Vanda Davidson evaluated Mr. George at LWCC's request, noting limited left shoulder range of motion linked to an accident. After reviewing previous medical records, Dr. Davidson diagnosed late effects from a brachial plexus contusion and a scapula body fracture, proposing a higher impairment rating of 3-5%. He disagreed with a prior recommendation for shoulder decompression surgery, believing it would not significantly alleviate Mr. George's pain, suggesting instead a CT scan and EMG study for further investigation.
On November 6, 1996, LWCC denied authorization for the proposed surgery based on conflicting medical opinions. Subsequently, Mr. George filed suit due to LWCC's denial and miscalculation of his compensation benefits. At trial, the workers' compensation judge ruled in favor of Mr. George, ordering LWCC to pay $8,372.26 in back benefits and to authorize the requested surgery. The judge imposed a $2,000 penalty and $3,500 in attorney fees against LWCC for its arbitrary refusal regarding surgery authorization. The appellate review standard for factual findings in workers' compensation cases is based on whether the fact finder’s conclusion was reasonable, allowing for multiple permissible interpretations of the evidence without being deemed manifestly erroneous.
Defendants assert that the workers' compensation judge incorrectly awarded penalties and attorneys' fees against LWCC for not authorizing Mr. George's shoulder surgery, totaling $2,000 in penalties and $3,500 in attorneys' fees, and mandated that LWCC approve the surgery within ten days. The judge justified this award by highlighting evidence from trial, including multiple EMG and nerve conduction studies confirming nerve deficits in Mr. George's left scapula. Dr. Waldman, Mr. George's orthopedic surgeon, had repeatedly sought authorization for the surgery, supported by findings from independent doctors who noted Mr. George's inability to lift objects above shoulder level and weakness in his left shoulder. The judge concluded that the refusal to authorize surgery was arbitrary and capricious, with no substantial dispute regarding the injury's existence, only the treatment approach.
On appeal, Defendants maintain the judge's decision to impose penalties and fees was erroneous. The determination of penalties and attorneys' fees hinges on factual findings, generally upheld unless clearly erroneous. Under Louisiana law, penalties and fees are warranted when an employer or insurer fails to meet their obligations for workers' compensation benefits, with the adequacy of their response to medical claims assessed based on the evidence available at the time.
Defendants in Gibson v. Dynamic Indus. Inc. appealed a decision regarding Mr. George's request for shoulder surgery, arguing that they reasonably controverted his claim. They cited Dr. Blanda's second opinion and Dr. Davidson's independent examination, both of which disagreed with Dr. Waldman's recommendation for surgery. However, the court upheld the trial court's finding that the Defendants did not reasonably contest the claim. The court emphasized that the treating physician's testimony (Dr. Waldman) should carry more weight than that of examining physicians, noting that Dr. Waldman indicated surgery was necessary and that denial of treatment could lead to further injury. The court affirmed the awarding of penalties and attorney fees to Mr. George.
On statutory interpretation, Defendants contended that the award of penalties was legally erroneous, asserting that La. R.S. 23:1142 is the only statute under which penalties can be awarded for delayed medical treatment. They cited La. R.S. 23:1142(D), which addresses the conditions under which a payor can be liable for attorney fees and medical expenses when consent for treatment is denied. The court found this argument without merit, clarifying that La. R.S. 23:1142(D) allows an employee or healthcare provider to recover costs post-denial and enhances remedies available under La. R.S. 23:1201, permitting recovery for aggravated conditions due to withheld treatment.
A judge may impose attorney fees on employers and insurers who unreasonably deny nonemergency diagnostic testing or treatment. The defendants' claim that La. R.S. 23:1142 alone governs penalties in this instance is rejected. Employees can seek penalties under La. R.S. 23:1201 when medical benefits are not timely paid. This includes penalties for employers who delay in providing necessary medical attention, as established in several case precedents. In this case, LWCC failed to promptly authorize a necessary surgery for Mr. George, which warranted penalties under La. R.S. 23:1201.
Mr. George contested the trial court's ruling that he was not entitled to penalties or attorney fees related to back due workers' compensation benefits. He argued that LWCC did not rectify an initial calculation error after being notified. The determination of penalties and fees is fact-dependent and will not be overturned absent clear error. Employers and insurers must actively investigate claims before denying benefits. LWCC's failure to correct the calculation error after notification constituted grounds for penalties and attorney fees.
Trial testimony revealed that LWCC's representative did not verify Mr. George's claims regarding his workdays, despite having access to relevant information. LWCC mistakenly included days when Mr. George was injured in their calculations, leading to an incorrect assessment of his benefits.
LWCC was aware that Mr. George could not have worked more than sixty-seven days, as evidenced by their payment records indicating he received weekly indemnity benefits for February 2-4, 1993. The evaluation of whether an insurer has acted arbitrarily or has reasonably disputed claims hinges on the information available to them at the time. For an insurer to avoid penalties, they must have sufficient factual or medical information that counters the claims made by the worker. In this case, LWCC lacked evidence to reasonably dispute Mr. George's claim regarding his workdays. Since LWCC had access to the correct information since 1993 and failed to provide sufficient counter-evidence, the workers' compensation judge erred by not awarding Mr. George penalties and attorney fees for LWCC's failure to pay benefits properly. Consequently, Mr. George is entitled to an additional $2,000.00 in penalties and $2,000.00 in attorney fees.
Additionally, Mr. George argued that the judge erred by not awarding him the costs related to the proceedings or fixing the expert fees for Dr. Waldman. Despite the trial court's discretion in assessing costs, the general rule mandates that the losing party pays all trial costs. Since the judgment did not specify costs, they should be imposed on the Defendants, Tillman Guillory and LWCC. Costs related to witness fees and depositions should also be charged to the Defendants. The appellate court found no error in the trial court's cost assessment against the Defendants. However, the court did recognize a failure to specify the amount due to Dr. Waldman, agreeing that the workers' compensation judge should have fixed the expert witness fees.
An expert witness is entitled to reasonable compensation for court appearances and preparatory work, as established in Bourgeois v. Heritage Manor of Houma. Dr. Waldman's testimony fee of $244.00 was deemed reasonable, and the trial court erred by not fixing this fee, which is to be included as part of the costs. In terms of legal interest on penalties and attorneys' fees, the workers' compensation judge failed to award Mr. George legal interest from the date of judgment. However, legal interest is mandatory under the workers' compensation statute, and it attaches automatically to penalties and attorneys' fees. Thus, Mr. George is entitled to legal interest from the judgment date, despite the trial court's silence on this issue.
Mr. George also requested additional attorneys' fees for work done on appeal, which is permissible when defending against an unsuccessful appeal. The appeal required significant preparation, and the court awarded Mr. George an additional $2,500.00 in attorneys' fees for this work. The decree affirms the trial court's decisions regarding penalties and attorneys' fees against LWCC for refusing to authorize surgery and confirms that costs are to be borne by the defendants. The court reverses the trial court's failure to fix expert witness fees and not awarding penalties for underpayment of benefits, imposing $2,000.00 in penalties and $2,000.00 in attorneys' fees against LWCC. The final decision includes the additional $2,500.00 in attorneys' fees for the appeal, resulting in a mixed outcome: affirmed in part, rendered in part, and reversed in part.
