Stanley Richard Gordon v. Glen Hurlston, M.D.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

03-0112

STANLEY RICHARD GORDON

VERSUS

GLEN HURLSTON, M.D.

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APPEAL FROM THE
THIRTIETH JUDICIAL DISTRICT COURT
PARISH OF VERNON, NO. 67,804
HONORABLE VERNON BRUCE CLARK, DISTRICT COURT JUDGE

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JOHN D. SAUNDERS
JUDGE
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Court composed of Ulysses Gene Thibodeaux, John D. Saunders, and Billy Howard
Ezell, Judges.

Thibodeaux, J., dissents in part and assigns written reasons.

AFFIRMED IN PART; REVERSED IN
PART; AND RENDERED.

John E. Bergstedt
The Bergstedt Law Firm
P. O. Box 1884
Lake Charles, LA 70602
Telephone: (337) 436-4600
COUNSEL FOR DEFENDANT/APPELLEE:
Glen Hurlston, M.D.

Scott Westerchil
101 South First Street
Leesville, LA 71446
Telephone: (337) 239-9076
COUNSEL FOR PLAINTIFF/APPELLANT:
Stanley Richard Gordon

SAUNDERS, Judge.

In this employment status case, Plaintiff, Stanley Richard Gordon, a certified

registered nurse anesthetist (CRNA), appeals the trial court’s judgment in favor of

defendant and plaintiff-in-reconvention/appellee, Glen Hurlston, M.D., A Professional

Medical Corporation. The trial court held that Mr. Gordon was an independent

contractor rather than an employee of Dr. Hurlston. Mr. Gordon further appeals the

trial court’s judgment in favor of Dr. Hurlston on his reconventional demand for

reimbursement of amounts billed for services provided, which are now uncollectible

or not reimbursable due to Mr. Gordon’s failure to maintain his CRNA license. For

the following reasons, we affirm the judgment of the trial court with respect to its

determination that Mr. Gordon was an independent contractor. We affirm the trial

court’s judgment on Hurlston’s reconventional demand and its award of $53,354.55.

We also affirm the trial court’s denial of Mr. Gordon’s request for past due wages.

Finally, we reverse the trial court’s award of $2,500.00 in attorney’s fees to Dr.

Hurlston.

FACTS

Mr. Gordon and Dr. Hurlston entered into a contract on June 30, 1999.

Although the agreement states that Mr. Gordon is to be an independent contractor, the

parties’ dispute centers around whether Mr. Gordon was an independent contractor or

an employee of Dr. Hurlston. The agreement provided that Mr. Gordon would work

five days per week at a salary of $10,000.00 per month. Dr. Hurlston also agreed to

provide Mr. Gordon with vacation coverage to accrue at “the rate of three (03) weeks

per year, Saturdays and Sundays included.” Provisions for reviewing the terms and

conditions of the contract, six months from the beginning date of the contract and

annually thereafter, were included in the agreement.

By February 2001, Mr. Gordon’s salary was increased to $12,500.00 per month.

The parties dispute whether the contract was ever reviewed and modified during Mr.

Gordon’s term with Dr. Hurlston. Dr. Hurlston contends that there was a salary

modification and negotiations involving the payment of overtime. Dr. Hurlston claims

that he presented a new contract to Mr. Gordon at the time Mr. Gordon announced his

resignation. On February 9, 2001, Mr. Gordon submitted his resignation and gave a

thirty-day notice of his intent to leave his employment. Mr. Gordon stopped working

for Dr. Hurlston on March 20, 2001, and claims that Dr. Hurlston did not pay him for

three weeks he worked during the month of March 2001. Meanwhile, Dr. Hurlston

received notification two days prior to Mr. Gordon’s last day of work that Mr. Gordon

was not licensed to provide CRNA services in the state of Louisiana. When the

parties entered into the employment contract Mr. Gordon had received a temporary

permit from the Louisiana Board of Nursing, effective September 15, 1999, with an

expiration date of February 15, 2000. However, Mr. Gordon continued to provide

CRNA services pursuant to the contract until March 20, 2001. Dr. Hurlston was

further notified that he could be called upon to reimburse third parties for the amounts

billed for CRNA services provided by Mr. Gordon during the time he was not

licensed, and that he could not bill for services performed by Mr. Gordon that had not

yet been billed.

On September 19, 2001, Mr. Gordon filed a petition for “Past Due Wages

Attorney’s Fees and Court Costs.” In response, Dr. Hurlston filed an “Answer and

Reconventional Demand” seeking reimbursement for CRNA services performed by

Mr. Gordon during the period he was not licensed. The trial court rejected Mr.

Gordon’s claim that he was an employee of Dr. Hurlston and, therefore, entitled to the

remedies prescribed by La.R.S. 23:631. With respect to Dr. Hurlston’s reconventional

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demand, the trial court found in favor of Dr. Hurlston, and against Mr. Gordon,

granting Dr. Hurlston’s request for reimbursement of amounts billed and paid for

services provided by Mr. Gordon as a CRNA when he was not licensed to provide

such services. It is from this judgment that Mr. Gordon appeals.

The following issues are presented for our review:

(1) whether Mr. Gordon was an employee or
independent contractor;

(2) whether Mr. Gordon is entitled to past due wages,
vacation pay, penalties, and attorney fees;

(3) whether the trial court erred in concluding that Dr.
Hurlston suffered financial losses as a result of Mr.
Gordon’s unlicensed status; and,

(4) whether Dr. Hurlston was entitled to attorney fees.

LAW AND DISCUSSION

Mr. Gordon asserts that although his agreement with Dr. Hurlston states that he

is to supply CRNA services as an independent contractor, he is actually an employee

of Dr. Hurlston. Therefore, he argues he is entitled to be paid “on or before the next

regular payday or no later than fifteen days following the date of resignation,

whichever occurs first.” La.R.S. 23:631(A)(1)(b). He further notes that failure to pay

subjects the employer to penalties and attorney fees. La.R.S. 23:632.

Independent Contractor/Employee

The distinction between independent contractor and employee status is a factual

determination decided on a case-by-case basis. Tower Credit, Inc. v. Carpenter, 01-

2875 (La. 9/4/02); 825 So.2d 1125. Mr. Gordon raised the issue of whether he was

an employee of Dr. Hurlston or an independent contractor. The application of

La.R.S. 23:631-632 to the present case is contingent upon a finding that Mr. Gordon

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was, in fact, an employee of Dr. Hurlston. See Knapp v. The Management Co., 476

So.2d 567 (La.App. 3 Cir. 1985).

In Hickman v. Southern Pacific Transport Company, 262 So.2d 385 (La.1972),

the supreme court found the following factors relevant in determining whether the

principal-independent contractor relationship exists, so as to relieve the employer from

liability for the tortious acts of its employee: (1) there is a valid contract between the

parties; (2) the work being done is of an independent nature such that the contractor

may employ non-exclusive means in accomplishing it; (3) the contract calls for

specific piecework as a unit to be done according to the independent contractor's own

methods, without being subject to the control and direction of the principal, except as

to the result of the services to be rendered; (4) there is a specific price for the overall

undertaking agreed upon; and (5) the duration of the work is for a specific time and

not subject to termination or discontinuance at the will of either side without a

corresponding liability for its breach. The supreme court’s analysis with respect to

determining whether one is an independent contractor or an employee for purposes of

liability under La.C.C. art. 2320 is helpful in determining an employee’s status vis-à-

vis the employer’s liability for claims arising under La.R.S. 23:631.

In Hughes v. Goodreau, 01-1207, p. 7 (La.App. 1 Cir. 12/31/02); 836 So.2d

649, 656, writ denied, 03-0232 (La. 4/21/03), 841So.2d 793, the court explained “[i]t

is not the actual supervision or control which is actually exercised by the employer

that is significant, but whether, from the nature of the relationship, the right to do so

exists.” The trial court concluded that the relationship between Mr. Gordon and Dr.

Hurlston was one of principal-independent contractor and not one of employer-

employee. We find this conclusion to be supported by the record. The agreement

between Mr. Gordon and Dr. Hurlston is entitled “Independent Contractor’s

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Agreement.” Mr. Gordon was hired by Dr. Hurlston to perform a specific task as a

licensed CRNA. Dr. Hurlston did not control or direct the manner in which Mr.

Gordon provided anesthetic to patients. The contract also allowed Mr. Gordon to

provide CRNA services to companies other than Dr. Hurlston. Dr. Hurlston paid Mr.

Gordon a flat rate per month without taking any deductions from that monthly

compensation rate. Maintaining his nurse anesthetist license was Mr. Gordon’s

responsibility, not Dr. Hurlston’s. Further, although Mr. Gordon authorized Dr.

Hurlston to bill for his services, he had the right to conduct his own billing. Mr.

Gordon chose to have Dr. Hurlston do the billing. Moreover, Dr. Hurlston did not

supply Mr. Gordon with the equipment and materials necessary for Mr. Gordon to

provide his services. The record shows clearly that Dr. Hurlston did not have the right

to supervise and control Mr. Gordon’s work. Thus, we find no manifest error in the

trial court’s finding that Mr. Gordon was an independent contractor.

Past Due Wages/Penalties/Attorney Fees

Mr. Gordon asserts that, because Dr. Hurlston failed to pay him for services he

rendered during the pay period prior to his resignation, the trial court should have

awarded him past due wages, penalties, and attorney fees. On the other hand, Dr.

Hurlston argues that prior to the time that payment for Mr. Gordon’s CRNA services

became due, he discovered that Mr. Gordon did not possess a valid CRNA license.

Therefore, the services performed by Mr. Gordon during the pay period prior to his

withdrawal from the employment contract were performed without a license. Because

Mr. Gordon performed those services without a license, Dr. Hurlston contends that he

is unable to bill for those services and should not have to pay Mr. Gordon for them.

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There is precedent in this circuit holding that the failure of a licensed contractor

to maintain a license does not relieve the principal from an obligation to provide

payment for services rendered. See Hagberg v. John Bailey Contractor, 435 So.2d

580 (La.App. 3 Cir. 1983), writ denied, 444 So.2d 1245 (La.1984). We find that there

is a clear distinction between the prior case law addressing licencing of general

contractors and the particular facts of this case. The majority of cases addressing

contractor licencing deal specifically with general contractor licensing and

construction work. In the present matter, we are dealing with the very different

situation of a highly specialized independent contractor working in the medical

profession. The licensing in question in the present matter is not independent

contractor licensing, but rather licensing of a medical specialist, presenting a

somewhat unique public safety concern.

There is a clear distinction between the purposes for licensing general

contractors such as construction workers and licencing specialized medical

professionals such as CRNAs. Medical professionals, through the very jobs they

perform, are directly responsible for the health, safety, and welfare of the people they

treat. In such a sensitive profession as this, the importance of ensuring proper training

through licensing procedures takes on a high level of importance.

In addition to this added concern for the safety and welfare of the public, the

independent contractor agreement between Mr. Gordon and Dr. Hurlston in this

instance clearly indicated by its terms that Mr. Gordon was solely responsible for

obtaining and maintaining the required licencing for his certification as a CRNA.

According to the contract agreement between the parties, Mr. Gordan’s properly

licensed status was a material term of the principal-independent contractor agreement.

The Independent Contractor’s Agreement provides, in pertinent part:

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This agreement in made to be effective as of July 1, 1999 to record the
understanding between Stanley R. Gordon, Certified Registered Nurse
Anesthetist, (CRNA), and Glen D. Hurlston, M.D., a Professional
Medical Corporation (Corporation), for the provision of anesthesia
services to patients in Leesville, Louisiana and surrounding areas.

CRNA agrees:
a. to furnish the corporation with the full time services of a
certified registered nurse anesthetist (CRNA) duly licensed
to practice in the State of Louisiana.
b. to furnish to the corporation proof of Medical Malpractice
Insurance un the minimum amount required by current
Louisiana law and proof of participation in the Louisiana
Patient’s Compensation Fund. If applicable, anesthetist
shall comply with the Louisiana Workmen’s Compensation
Law.
c. to fulfill such continuing education requirements necessary
to maintain licensure.

(Emphasis in original).

We agree with the trial court as to its finding that Mr. Gordon was not an

employee of Dr. Hurlston, and, for the reasons stated above and under the clear terms

of the Independent Contractor’s Agreement between the parties, we affirm the trial

court’s denial of Mr. Gordon’s demand for payment of past due wages for CRNA

services he provided on behalf of Dr. Hurlston.

Louisiana law does not allow an award of attorney fees, except where

authorized by statute or contract. Quealy v. Paine, Webber, Jackson & Curtis, Inc.,

475 So.2d 756 (La.1985). Since Mr. Gordon’s situation does not fall within the

purview of La.R.S. 23:631-632, which provides for the payment of attorney fees for

the prevailing employee, and he has not presented any other statutory or contractual

authority for an award of attorney fees in the instant lawsuit, the award of legal fees

is denied. We find likewise with respect to Mr. Gordon’s request for penalties.

Dr. Hurlston’s Reconventional Demand

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In his reconventional demand, Dr. Hurlston seeks damages for the breach of the

employment contract due to Mr. Gordon’s failure to maintain his CRNA license. Mr.

Gordon’s temporary nurse anesthetist license expired on February 15, 2000, yet he

continued to provide CRNA services for Dr. Hurlston until March 20, 2001. Dr.

Hurlston contends he is entitled to reimbursement from Mr. Gordon for the amount

of money he billed various patients and insurers for the services Mr. Gordon provided

while not licensed. Dr. Hurlston claims he will have to reimburse or not bill those

patients and insurers the amounts they paid him for CRNA services. Dr. Hurlston

contends that one insurer, Tri-Care, has already recovered some of what it paid to Dr.

Hurlston for CRNA services due to Mr. Gordon’s failure to maintain his license. Dr.

Hurlston also claims that he decided not to bill other patients/insurers after he learned

Mr. Gordon was not licensed when he provided CRNA services.

Dr. Hurlston requested reimbursement in excess of $200,000.00. Mr. Charles

Enright of Southwest Louisiana Administrative Services, a company that provides

practice management services for physicians, and that provided this service for Dr.

Hurlston, testified on behalf of Dr. Hurlston regarding the reconventional demand.

Mr. Enright testified that Dr. Hurlston did not bill for $19,305.00 in services after

learning that Mr. Gordon did not have the proper license. He further testified that the

amount of payments made to Dr. Hurlston for the period of time that Mr. Gordon was

unlicensed totaled $265,016.24. The trial court found that $265,016.24 was the

potential amount of reimbursement that Dr. Hurlston would have to make. Mr.

Enright also testified that, as of the date of trial, the only insurer who requested

reimbursement was Tri-Care, which had already been reimbursed $20,854.99. Tri-

Care has indicated they will seek an additional sum of $13,194.56 for a total amount

of $34,049.55. From Mr. Enright’s testimony, the trial court concluded that some of

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the reimbursement amount requested by Dr. Hurlston was speculative and therefore

awarded Dr. Hurlston $53,354.55, the total of the amount Tri-Care had already been

reimbursed ($20,854.99), the additional amount Tri-Care has stated they intend to

seek ($13,194.56), and the amount Dr. Hurlston did not bill ($19,305.00).

We agree with the trial court’s conclusion that Dr. Hurlston is entitled to

reimbursement due to Mr. Gordon’s failure to maintain his nurse anesthetist license

and affirm the trial court’s award of $53,354.55.

Attorney Fees/Dr. Hurlston

The trial court awarded Dr. Hurlston $2,500.00 in attorney fees. However, the

employment contract between Mr. Gordon and Dr. Hurlston does not provide for the

payment of attorney fees should a dispute as to the agreement arise. Further, there is

no statute authorizing the payment of attorney fees under the circumstances presented

in this case. Therefore, we find that the trial court erred in awarding Dr. Hurlston

attorney fees.

DECREE

For the above reasons we affirm the trial court’s conclusion as to Mr. Gordon’s

liability on Dr. Hurlston’s reconventional demand. We further affirm the trial court’s

judgment finding that Mr. Gordon was an independent contractor of Dr. Hurlston and

not entitled to the benefits of La.R.S. 23:631-632. We further reverse the judgment

of the trial court with respect to its award of attorney fees to Dr. Hurlston as there was

no contractual agreement or statutory provision authorizing such an award. It is

further ordered that the assessment of costs in the trial court is affirmed. Finally, it is

ordered that all costs of this appeal are to be borne by Stanley Richard Gordon.

AFFIRMED IN PART; REVERSED IN PART; AND RENDERED.

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STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

03-112

STANLEY RICHARD GORDON

VERSUS

GLEN HURLSTON, M.D.

THIBODEAUX, J., dissenting in part.

The majority affirms the trial court on Dr. Hurlston’s reconventional

demand of $53,354.55 and affirms the trial court’s denial of Mr. Gordon’s request for

past due wages. I disagree on these two issues.

The plaintiff in Hagberg v. John Bailey Contractor, 435 So.2d 580

(La.App. 3 Cir. 1983), writ denied, 444 So.2d 1245 (La.1984), sought payment for

work it did in connection with rejuvenating and resurfacing streets in Lake Arthur,

Louisiana. The general contractor, with which the sub-contractor company worked

on the project, refused to pay because it found out that the sub-contractor failed to

maintain its contractor license and was not licensed at the time the road work was

done. However, at the time the two contractors entered into the agreement to upgrade

the streets, the sub-contractor was properly licensed to do the work.

After noting that the purpose of the state’s contractor’s licensing

requirement “is [for] the protection of general public ‘against the incompetent,

inexperienced, unlawful and fraudulent acts of contractors,’” this court held that this

case “does not present a situation of the type within the intended scope of protection

of the licensing statute.” Hagberg, 435 So.2d at 586. We further held “[w]here

incompetency or inexperience or fraudulence is not involved, the licensing statute can

not be invoked to avoid payment of valid charges.” Id. Likewise, in the present case,

Dr. Hurlston does not allege that Mr. Gordon was incompetent in providing nurse

anesthetist services, nor does he allege that Mr. Gordon was inexperienced or acted

fraudulently. Mr. Gordon testified that he was unaware that his temporary license had

expired and there is no evidence in the record to show that Mr. Gordon did not

perform his duties competently. He certainly was experienced in that he had worked

for Dr. Hurlston since June 30, 1999.

The majority seeks to distinguish Hagberg by observing that “[i]n such

a sensitive profession [medical] as this, the importance of ensuring proper training

through licensing procedures takes on a high level of importance” because “[m]edical

professionals . . . are directly responsible for the health, safety, and welfare of the

people they treat.” Indisputably, this is true. However, isn’t a contractor which is in

charge of repairing streets also responsible for the safety and welfare of the citizens

which use those streets? Furthermore, there is not one allegation of Mr. Gordon’s

incompetence, inexperience, or fraudulent conduct. The majority’s attempt to

distinguish Hagberg is unpersuasive. Mr. Gordon’s failure to maintain his nurse

anesthetist license cannot be invoked by Dr. Hurlston to avoid payment of valid

charges for work done by Mr. Gordon. That Mr. Gordon was not licensed is a matter

to be dealt with by the appropriate state licensing authority. Dr. Hurlston has

collected for these services and Tri-Care or an insurer may or may not seek

reimbursement for these charges which have been collected by Dr. Hurlston. What

if reimbursement is not sought? Does Dr. Hurlston get the benefit of the services

performed by Mr. Gordon but Mr. Gordon does not?

Tri-Care has only indicated it may seek reimbursement from Dr. Hurlston

for $13,194.56. Dr. Hurlston has not reimbursed Tri-Care for that amount. He,

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therefore, has not shown a loss of $13,194.56. An intention by Tri-Care to seek

reimbursement is too speculative and should not be a basis for recovery. The majority

has effectively lowered the standard for a breach of contract recovery based on an

intent to recover. That is improper. I, therefore, would amend the trial court’s

judgment to award Dr. Hurlston $40,159.99 on his reconventional demand.

For the foregoing reasons, I respectfully dissent.

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