Court: Louisiana Court of Appeal; October 7, 2016; Louisiana; State Appellate Court
In the workers' compensation case, the employers appealed a judgment from the Office of Workers' Compensation Administration (OWCA) that determined Bobby L. Davis suffered a compensable injury while employed at New Line Environmental Systems, LLC, and awarded him temporary total disability (TTD) benefits, penalties, and attorney fees due to the wrongful termination of these benefits by the employers.
On May 1, 2014, Davis, a 55-year-old laborer, experienced an accident while operating a tractor on a levee, after which he assisted in righting the machinery and completed his workday. The following day, although he was scheduled to work, he went home after expressing that he was still 'shaken up' from the incident. He subsequently received workers' compensation benefits.
On June 17, 2014, New Line and Canal HR disputed Davis's claim, alleging he had violated Louisiana statute La. R.S. 23:1208 concerning misrepresentation for benefit payments and asserting his account of the incident was inconsistent with witness accounts. Davis admitted to the injury occurring in the course of his employment but contested the employers' claims regarding his average weekly wage and denied any refusals of rehabilitation services.
After failed mediation and denied summary judgment motions, Davis filed a separate claim for compensation seeking a determination of his disability status, reinstatement of TTD benefits, and other reimbursements. The employers continued to deny the occurrence of a compensable accident and any claim of disabling injury. The workers’ compensation judge later consolidated the actions and, following a trial, concluded that Davis sustained an injury in the course of his employment and proved he was temporarily, totally disabled starting May 2, 2014.
Mr. Davis was awarded Temporary Total Disability (TTD) benefits starting June 20, 2014, along with legal interest on overdue installments, all incurred medical expenses, and penalties and attorney fees due to the employer's unjust termination of benefits and failure to authorize medical expenses post-June 19, 2014. The workers’ compensation judge dismissed the employer's claim under La. R.S. 23:1208 with prejudice and granted the employer a suspensive appeal.
On appeal, the employers argue that the workers’ compensation judge erred in determining Mr. Davis was entitled to TTD and medical benefits, contending he did not provide sufficient recent medical evidence proving his disability. Under La. R.S. 23:1221(1)(c), the claimant must demonstrate temporary total disability by clear and convincing evidence, which surpasses the ordinary civil standard. Such proof must include objective medical evidence of a disabling condition and can also incorporate lay testimony. The fact finder evaluates all evidence to ascertain if the claimant meets this burden.
The standard of review for the factual determination of TTD benefits is one of manifest error, requiring significant deference to the original decision unless clear errors are identified. Mr. Davis testified about his background, including his age, education, and work history, indicating that he primarily worked as a laborer, which involved physical labor rather than sedentary roles. After his accident, he sought treatment from Dr. Marcus Schroeder and other medical facilities until his benefits were revoked.
Mr. Davis's workers' compensation benefits were terminated, prompting him to seek treatment at the Interim LSU Public Hospital in New Orleans for injuries sustained in an accident, specifically to his neck, back, left leg, and left shoulder. He testified that he continues to experience pain, stating, "I basically still hurt the same way," and indicated he requires further medical treatment due to frustration from being unable to work. His attempts to engage in light physical activities, such as yard work or car maintenance, result in sharp pain and necessitate frequent breaks due to nausea and discomfort.
Mr. Davis has not earned wages since his last paycheck from New Line and has not sought employment since leaving that job. His girlfriend, Charlotte May, noted that he began visiting a hospital for free treatment after his benefits ceased and described him as resilient but increasingly reliant on medication, which leads to him resting more than before.
Dr. Schroeder, a chiropractic expert, testified that Mr. Davis was totally incapacitated from work due to chronic pain and neurological issues, including diminished reflexes and weakness. He observed that working through muscle weakness could pose risks of further injury. Medical records from Redi-Med indicated the presence of muscle spasms and positive straight leg raising tests, while records from the Interim LSU Public Hospital showed ongoing complaints of pain and recommendations for medication, primary care, and physical therapy. The document emphasizes that employers have a continuous obligation to evaluate medical reports regarding an injured employee's disability and cannot deny or terminate workers' compensation based on inconclusive findings.
Employers must make reasonable efforts to medically ascertain a workers’ compensation claimant’s condition before denying benefits. In this case, the employers argued that Mr. Davis was not entitled to temporary total disability (TTD) benefits because he allegedly failed to prove his inability to work. However, evidence, including Dr. Schroeder's medical opinion and Mr. Davis's testimony, established his disability. The employers' criticism of Mr. Davis's evidence was viewed as disingenuous, as their termination of benefits hindered his ability to present sufficient medical evidence. The employers terminated TTD benefits without conclusive medical evidence demonstrating Mr. Davis could return to work, relying instead on their belief that he violated La. R.S. 23:1208. The law required the employers to prove this violation to deny benefits, which they failed to do. Consequently, the workers’ compensation judge correctly determined Mr. Davis was entitled to continued benefits.
Additionally, the employers contested penalties and attorney fees imposed for the termination of benefits, claiming they reasonably disputed Mr. Davis's claim. However, penalties are strictly construed and should not be imposed in cases with bona fide disputes. Under La. R.S. 23:1201(F), penalties and fees can be assessed for failure to timely pay benefits if the employer did not reasonably contest the claim.
A claim is deemed reasonably controverted when an employer possesses adequate factual or medical evidence to dispute an employee's claims. According to La. R.S. 23:1201(1), if an employer or insurer discontinues benefit payments arbitrarily, capriciously, or without probable cause, they may incur penalties up to $8,000 and must pay reasonable attorney fees. Arbitrary and capricious actions are described as willful and irrational, lacking consideration for the relevant facts. The key question is whether the employer had a clear and objective justification for stopping benefits at the time of the decision.
The workers’ compensation judge's ruling on penalties and attorney fees is a factual determination reviewed under the manifest error standard. In this case, the judge found insufficient basis for the employer/insurer's claim of fraud against the employee, which centered on inconsistent descriptions of the accident and whether the employee hit the ground. Evidence indicated the employee was thrown off the tractor due to it flipping, corroborated by a co-employee’s testimony urging him to jump off. However, the co-employee’s claims were deemed less credible, as they relied on leading questions and lacked convincing detail.
The employee and his girlfriend, along with Dr. Schroeder, were found credible witnesses. The court concluded that the employer/insurer failed to prove a violation of La. R.S. 23:1208 concerning fraud, lacked probable cause for terminating benefits, and should have investigated further rather than terminating the benefits. The employee had resorted to charity medical treatment due to the improper termination of benefits over a year prior.
In Brown v. Shop Rite, Inc., the appellate court upheld the workers’ compensation judge’s decision to impose penalties and attorney fees on the employer, increasing the award due to insufficient justification for the discontinuance of benefits. The court highlighted that the differences in accounts surrounding Mr. Davis's accident were minor, with a consensus that Mr. Davis was forced to dismount from a tilting tractor. The credibility of Mr. Guidry’s account was questioned, as it was deemed inconsistent with the physical dynamics of the situation. The court found the evidence insufficient to reasonably contest Mr. Davis’s claim for benefits. The employers' termination of benefits, based on alleged violations of La. R.S. 23:1208, was deemed unjustified due to an inconclusive medical report from Dr. Nutik, who noted inconsistencies in his examination of Mr. Davis. The appellate court found no errors in the assessment of penalties and attorney fees and affirmed the workers' compensation judge’s award. Costs of the appeal were assigned to the appellants, New Line Environmental Systems, Inc. and Canal HR. Additionally, the document included definitions related to Professional Employer Organizations (PEOs) and referenced a certification letter from the Interim LSU Public Hospital dated February 24, 2015, along with Dr. Nutik’s report indicating Mr. Davis's recovery progress was limited by inconsistencies noted during the examination.
