Albert v. Strategic Restaurants Acquisition Co.

Citations: 168 So. 3d 507; 2014 La.App. 1 Cir. 1001; 2014 La. App. LEXIS 3053; 2014 WL 7276011Docket: No. 2014 CA 1001

Court: Louisiana Court of Appeal; December 22, 2014; Louisiana; State Appellate Court

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The court addressed an appeal regarding a workers’ compensation case where the employer, Strategic Restaurants Acquisition Company, LLC, and its insurer contested a judgment awarding Jo Ann Albert supplemental earnings benefits (SEBs), attorney’s fees, and penalties. Albert, who sustained a right foot fracture from a fall at work on May 17, 2012, underwent two surgical procedures and was later diagnosed with reflex sympathetic dystrophy. By April 24, 2013, she was restricted to sedentary work due to her condition. Strategic terminated her weekly workers’ compensation benefits on August 15, 2013, prompting Albert to file a disputed claim for compensation.

A hearing was held where the workers' compensation judge struck down Strategic's request for a preliminary determination hearing due to a lack of procedural compliance. The case proceeded to trial on February 5, 2014, during which both parties acknowledged that Albert's injury occurred in the course of her employment and stipulated to her average weekly wage of $217.65. Strategic argued that it had properly terminated Albert’s benefits, claiming she could earn over ninety percent of her pre-accident wages. Testimony was provided by Albert and a rehabilitation counselor, along with documentary evidence of her job applications and medical records.

The workers’ compensation judge ultimately ruled that Strategic's process for terminating benefits was inadequate, awarding Albert SEBs of $158.00 per week from August 16, 2013, until the trial date, along with legal interest. The judgment was subsequently amended and affirmed.

Strategic is ordered to pay Albert supplemental earnings benefits based on an annual weekly wage of $217.65 from the trial date onward, with adjustments for any wages Albert earns. Additionally, Strategic must pay $6,500 in attorney’s fees, plus legal interest, and a $2,000 penalty for terminating benefits arbitrarily without probable cause. Strategic and its insurer have appealed this judgment, arguing that the workers’ compensation judge incorrectly dismissed their request for a preliminary determination hearing, incorrectly awarded supplemental earnings benefits for the specified period and amount, and improperly awarded penalties and attorney’s fees.

Strategic claims that the failure to hold a preliminary determination hearing prevented them from contesting Albert’s claims for penalties and fees. According to Louisiana Revised Statute 23:1201.1, employers may request such a hearing when responding to disputed compensation claims. The statute outlines mandatory procedures, and a hearing should occur within ninety days of a status conference, with a possible thirty-day extension. If an employer fails to comply with these procedures or does not accept a claim as compensable, they forfeit the right to a preliminary determination and may face penalties and fees at trial.

The core issue is whether Strategic was entitled to a preliminary determination hearing despite not demonstrating compliance with all statutory requirements, specifically those outlined in LSA-R.S. 23:1201.1(A)(2) and (A)(3), which detail obligations regarding notice of compensation modifications or terminations.

A 'Notice of Payment, Modification, Suspension, Termination, or Controversion of Compensation and/or Medical Benefits' must be sent to an injured employee via certified mail to the address where compensation payments are made, on or before the effective date of any changes. A copy of this notice should be sent to the relevant office on the same business day. The interpretation of the statute LSA-R.S. 23:1201.1 is a de novo issue for the court, which emphasizes starting with the statute's language. Clear and unambiguous laws must be applied as written, while ambiguous language should be interpreted to align with the law's purpose. Compliance with subsection A of the statute is mandatory for employers to be entitled to a preliminary determination hearing.

Specifically, a 'notice of initial indemnity payment' must be sent on the same day as the first compensation payment and to the office within ten days. Strategic failed to provide evidence that it sent this notice when the first payment was made to Albert. Despite this, Strategic argues that the notice's relevance is moot, claiming that compliance with the statute's requirements during payment modifications is impractical. The court disagrees, asserting that the statute clearly mandates sending the initial indemnity notice with the first payment and separate notices for any subsequent modifications. 

Furthermore, LSA-R.S. 23:1201.1 was enacted after Albert's injury, but it is deemed remedial and can be applied retroactively unless it impairs contractual obligations or vested rights. The court concludes that requiring Strategic to demonstrate compliance with the statute does not lead to absurd outcomes nor infringe upon its rights, as previous laws already required similar notifications with the first compensation check.

The notice requirement referenced is a longstanding procedural obligation, not a new one enacted in 2013, and Strategic has failed to provide evidence of compliance with this requirement. Consequently, the trial court correctly struck Strategic's request for a preliminary hearing, as LSA-R.S. 23:1201.1(1) stipulates that non-compliance precludes entitlement to such a hearing.

In a subsequent assignment of error, Strategic argues against the workers’ compensation judge’s decision to award Albert supplemental earnings benefits (SEBs) from August 16, 2013, until the trial date of February 5, 2014. An employee qualifies for SEBs if a work-related injury prevents them from earning at least ninety percent of their average pre-injury wages. The employee bears the initial burden of proof, which involves a detailed factual analysis while adhering to the principle of liberal construction in favor of workers' compensation coverage. The judge must consider various factors impacting the employee’s earning capacity, such as medical condition, job search efforts post-injury, and work history.

Once the employee establishes their inability to earn the required amount, the burden shifts to the employer to demonstrate, by a preponderance of evidence, the employee's physical capability to perform a specific job and the job's availability in the relevant community. The Louisiana Supreme Court's ruling in Banks v. Industrial Roofing outlines the employer's minimal requirements for proving job availability.

Factual findings in these cases are reviewed under the manifest error or clearly wrong standard, where the appellate court assesses the reasonableness of the factfinder's conclusions based on the entire record. The court will not reverse findings if they are reasonable, even if it would have weighed the evidence differently if in the factfinder's position. Albert, a fifty-eight-year-old widow, testified during the trial that she lives with her son.

Albert has a GED and eighteen years of experience as a substitute teacher. She earned an associate degree in commercial art in 1993 but was unable to find employment in that field. In 2008, she completed a medical assistant diploma but worked for only one year before being laid off due to typing and spelling difficulties stemming from a spinal injury in 1998, which also causes her ongoing pain and requires her to use a cane and walker at times. After her fall at Burger King, Albert applied for several jobs, including those suggested by her vocational rehabilitation counselor, but did not apply for a receptionist position due to the physical demands of handling dogs, a security job due to the requirement for frequent standing, and a collector position because of her past termination for lack of aggression. The vocational rehabilitation counselor, Rusty Pleune, met with Albert twice and had limited knowledge of her physical condition, primarily relying on a December 2012 orthopedic report that recommended light-duty work. Pleune was questioned by the workers’ compensation judge regarding Albert's qualifications for the jobs he proposed, including her familiarity with medical terminology and computer skills, and admitted he had not assisted her with her resume. The workers’ compensation judge made factual findings about Albert’s employment capabilities and determined she met her burden of proving her injury led to an inability to earn 90% of her pre-injury wages. The judge also found that the job positions provided by Pleune were unsuitable for Albert, a conclusion supported by the evidence presented.

Strategic argues that the trial court miscalculated Supplemental Earnings Benefits (SEBs) owed to Albert. Using an average weekly wage of $217.65, Strategic claims SEBs should amount to $628.77 monthly, while the court awarded $684.67 monthly. The correct calculation per LSA-R.S. 23:1221(3)(a)(i) determines SEBs as sixty-six and two-thirds percent of the difference between the average monthly wages at the time of injury and those Albert can earn afterward. The method for calculating average monthly wages involves multiplying weekly wages by fifty-two and dividing by twelve. The court agrees with Strategic's calculation of $628.77 per month, noting the workers’ compensation judge's miscalculation is unclear. If the judge used the 'minimum compensation' under LSA-R.S. 23:1202(2), it would constitute an error, as the minimum compensation does not apply to SEBs. The court amends the judgment to mandate Strategic pay Albert $145.10 weekly from August 16, 2013, through the trial date, plus interest.

Regarding SEBs post-trial, Strategic contends there was insufficient evidence of Albert’s condition or earning ability after February 5, 2014. The court dismisses this argument, referencing a precedent case, Washington v. Lyons Specialty Co., which affirms that SEBs can extend beyond the trial date under LSA-R.S. 23:1221(3), rejecting Strategic's claim as meritless.

Strategic's assignment of error regarding the award of attorney's fees and penalties to Albert is rejected. The court awarded Albert $6,500 in attorney’s fees and $2,000 in penalties, stating she proved the termination of her benefits was arbitrary and capricious. The law stipulates that employers or insurers who discontinue workers’ compensation payments without valid justification may face penalties and must pay reasonable attorney fees. The court defined "arbitrary and capricious" as actions that are unreasonable and lack consideration of the facts. The workers’ compensation judge found that Strategic’s insurer terminated Albert’s benefits based on an inadequate vocational rehabilitation process, which was deemed insufficient and not genuinely aimed at aiding her employment. The judge deemed Strategic's rationale for termination as pretextual, noting it was aimed at justifying the cessation of benefits rather than supporting Albert's job search. Citing a precedent where similar circumstances warranted penalties and fees, the court upheld the judge's findings, concluding there was no manifest error in the award. Consequently, the court amended the judgment to require Strategic to pay Albert $145.10 per week in SEBs from August 16, 2013, until the trial date, with legal interest, and assigned all appeal costs to Strategic.

The court affirmed the decision, stating that the notice of the initial indemnity payment should be sent to the injured employee on the same day as the first compensation payment, as per the relevant regulations. Counsel for Strategic indicated they lacked evidence showing any documentation was sent along with the initial payment, aside from the payment itself. The LDOL-WC-1002 form, established by the Department of Labor in February 1999, specifies that it must accompany the first check or be sent within ten days of any changes in benefits, with a copy also sent to the Office of Workers’ Compensation. Testimony from Albert confirmed that Strategic had not contacted her regarding her return to work, and Strategic did not provide evidence to counter this claim. The case involved a calculation of pre-accident and post-accident wages, resulting in a monthly wage of $943.15 and a weekly amount of $145.10. Strategic did not contest the awarded attorney’s fees and penalties as excessive in their assignments of error.