Hall v. Pipe Line Service Corporation

On Rehearing MOISE, Justice. A rehearing was granted in this matter, and defendants, Pipe Line Service Corporation and St. Paul Mercury Indemnity Company, urge that our original decision contains the following two errors: 1. Allowing attorney’s fees under LSA-R.S. 23:1141. 2. Unfairly averaging the percentage of loss of use or function of the foot by employing the low percentages of disability found by defendants’ medical witnesses and the high percentage of plaintiff’s doctor. Our original decision held that the penalty provisions of LRS-R.S. 22:658, 1 Act 417 of 1952, do not apply to the present controversy, as plaintiff did not prove that his former employer acted in an arbitrary or capricious manner. Under that section, attorney’s fees are allowed in addition to the compensation award, but, only where the insurer has acted unfairly by not paying the employee promptly the compensation due him. Fruge v. Pacific Employers Insurance Co., 226 La. 530 , 76 So.2d 719 . *833 “It is seen that the statute, which is written into the policy, makes it the direct obligation of the insurer to pay the injured employee. Thus, the employee is constituted, for all intents and purposes, the insured under the policy. The fact that LSA-R.S. 22:658, as a penalty statute, is subject to strict construction, does not necessitate an interpretation which leads to consequences plainly unintended by the lawmaker. A reading of the statute reveals a clear intent and purpose to penalize the arbitrary refusal of insurers to pay just claims after 60 days notice of the loss. Manifestly, in workmen’s compensation cases, the loss is sustained by the employee and the obligation imposed on the insurer by the Employer’s Liability Act (LSA-R.S. 23:1162) is directly in favor of such employee; it is to him that the claim is payable. To hold otherwise, would require that we blind our eyes to obvious realities and render impotent the provisions of R.S. 22:658 in so far as workmen’s compensation policies are concerned. This we will not do.” Wright v. National Surety Corp., 221 La. 486 , 59 So.2d 695, 699 . There is no provision for assessing the employer or his insurer with attorney’s fees when — as in the instant case — neither of them has acted unfairly. LSA-R.S. 23:1141 provides: “Claims of attorneys for legal services in connection with any claim arising under this Chapter shall not be enforceable unless approved by the court. ' If so approved, such claims shall have a privilege upon the compensation award, but shall be paid therefrom only in the manner fixed by the coürt. “In no case shall the fees of an attorney who renders services for an employee coming under the provisions of this Chapter exceed twenty per centum of the amount of the award, provided that the maximum fee shall in no case exceed one thousand dollars.” We interpret the above section to mean that attorney’s fees are to be paid from the compensation award in a manner fixed by the Court. Therefore, our original decision was in error in allowing attorney’s fees over and above the compensation awarded to plaintiff. In Hemphill v. Tremont Lumber Co., 209 La. 885 , 25 So.2d 625 , the fees were allowed from the compensation award. We have carefully reviewed our original decision, and, while we do not hold that the percentage of disability found by attending physicians and surgeons should be averaged in all workmen’s compensation cases, we find that a process of averaging was correct and reasonable under the existing circumstances in the instant matter and that the compensation awarded was fair and just. *835 For the reasons assigned, it is ordered that our original decree set aside by the granting of a rehearing in this proceeding be reinstated and amended to disallow attorney’s fees as additional award. It is further ordered, in conformity with LSA-R.S. 23:1141, that attorney’s fees be allowed plaintiff’s attorney, not to exceed 20% of the compensation payments nor more than $1,000, to be deducted as such from said payments. . “All insurers issuing any type of contract other than those specified in R.S. 22:656 and 22:657 shall pay the amount of any claim due any insured including any employee under Chapter 10 of Title 23 of the Revised Statutes of 1950 within sixty days after receipt of satisfactory proofs of loss from the insured, employee or any party in interest. Failure to make such payment within sixty days after receipt of such proofs and demand therefor when such failure is found to be arbitrary, capricious, or without probable cause, shall subject the insurer to a penalty, in addition to the amount of the loss, of 12% damages on the total amount of the loss, payable to the insured, or to any of said employees, together with all reasonable attorney’s fees for the prosecution and collection of such loss, or in the event a partial payment or tender has been made 12% of the difference between the amount paid or tendered and the amount found to be due and all reasonable attorney’s fees for the prosecution and collection of such amount. * * * “