Paul Latiolais v. Bellsouth Telecommunications, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

11-383 consolidated with CW10-978

PAUL LATIOLAIS

VERSUS

BELLSOUTH TELECOMMUNICATIONS, INC., ET AL.

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APPEAL FROM THE
SIXTEENTH JUDICIAL DISTRICT COURT
PARISH OF IBERIA, NO. 109345
HONORABLE PAUL JOSEPH DEMAHY, DISTRICT JUDGE

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ELIZABETH A. PICKETT
JUDGE

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Court composed of Elizabeth A. Pickett, Billy Howard Ezell, and Shannon J.
Gremillion, Judges.

REVERSED IN PART; AFFIRMED IN PART;
AMENDED AND AFFIRMED AS AMENDED.

Aaron Wayne Guidry
Porter & Guidry
P. O. Drawer 53320
Lafayette, LA 70505
(337) 289-0626
Counsel for Plaintiff/Appellee:
Paul Latiolais

Eric J. Waltner
Lana G. Duhon
D. Paul Gardner, Jr.
Allen & Gooch
P. O. Box 81129
Lafayette, LA 70598-1129
(337) 291-1400
Counsel for Intervenors/Appellants:
The Gray Insurance Company
Newpark Drilling Fluids, LLC

PICKETT, Judge.

Employer and its workers’ compensation carrier appeal judgment on their

intervention in employee’s third-party suit for damages. For the following reasons,

the judgment is reversed in part, affirmed in part, amended, and affirmed as

amended; the employee’s request for damages for frivolous appeal is denied.

FACTS
On March 27, 2006, Paul Latiolais was injured in the course and scope of his

employment with Newpark Drilling Fluids, LLC when the vehicle he was driving

was struck by a vehicle owned by Bellsouth Telecommunications, Inc. d/b/a

AT&T Louisiana (Bellsouth). His injuries rendered him unable to perform his

work duties, and Newpark and its workers’ compensation carrier, The Gray

Insurance Company, Inc. (Intervenors), paid Mr. Latiolais indemnity benefits and

his medical expenses. Mr. Latiolais filed suit against Bellsouth to recover damages

he sustained as a result of his injuries. On May 18, 2009, Intervenors filed a

Petition for Intervention, seeking to recover the benefits they paid to or on

Mr. Latiolais’s behalf.

Mr. Latiolais’s claims were tried before a jury beginning May 12, 2010. On

the second day of trial, Mr. Latiolais and Intervenors introduced into evidence a

written stipulation which provided that Intervenors had paid indemnity benefits to

Mr. Latiolais in the amount of $147,456.76 and medical expenses to or on his

behalf which totaled $87,168.00. The stipulation further provided that Intervenors

were legally subrogated to Mr. Latiolais’s rights to the extent of the amounts they

had paid and any additional amounts they would pay in the future.

The jury rendered a verdict in Mr. Latiolais’s favor. It assessed 80% fault to

Bellsouth’s employee and 20% fault to a third party not sued by Mr. Latiolais and

awarded Mr. Latiolais damages totaling $802,000.00. A judgment in

Mr. Latiolais’s favor which reduced his damage award by 20% was signed

June 2, 2010. The judgment also awarded judgment in favor of Intervenors,

reimbursing them $187,699.81 paid in workers’ compensation benefits with legal

interest from May 18, 2009, less attorney fees owed by Intervenors to Mr. Latiolais

and his attorney fees pursuant to La.R.S. 23:1102-1103.

Thereafter, Intervenors filed a motion to have the amount Mr. Latiolais had

to reimburse them fixed at $193,314.80, plus any additional workers’

compensation benefits paid before and after trial with legal interest on the total

sum from the date of judicial demand by Mr. Latiolais, less Mr. Latiolais’s

attorney fees. The motion also sought a “dollar for dollar credit” against any and

all future and post-judgment workers’ compensation benefit obligations in the full

amount of the judgment, as provided in La.R.S. 23:1102(B).

After a hearing, the trial court awarded judgment in favor of Mr. Latiolais in

the amount of $641,600.00, together with legal interest from March 12, 2007, until

paid, and in favor of Intevenors, providing for “reimbursement of $187,699.81 paid

in workers’ compensation benefits . . . together with legal interest from May 18,

2009, until paid, less attorney’s fees and costs owed” to Mr. Latiolais and his

attorneys. The judgment also reduced Intervenors’ recovery by 32%, representing

Mr. Latiolais’s attorney fees, or Moody fees, on the amount recovered for

Intervenors, as provided in La.R.S. 23:1102.

Intervenors then filed a Motion for Reconsideration and New Trial in which

they reiterated the assertions made in their first motion and further asserted that the

trial court’s judgment on the Motion to Fix was contrary to the law and evidence.

The trial court denied that Motion. With regard to Intervenors’ request for a new

trial on their first motion, the trial court denied their requests: 1) to increase the

amount of their reimbursement/recovery claim; 2) for legal interest from the date
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of Mr. Latiolais’s judicial demand, March 12, 2007; and 3) for a dollar for dollar

credit against any and all future and post-judgment workers’ compensation medical

benefits owed to Mr. Latiolais. Intervenors’ requests to reduce Mr. Latiolais’s

Moody fees and for a dollar for dollar credit against any and all future and post-

judgment workers’ compensation indemnity benefit obligations up to $51,000 were

also denied.

Intervenors filed a Motion to Appeal the trial court’s judgment and a Notice

of Intention to Apply for Writs. The writ application was granted for the limited

purpose of consolidating it with this appeal. See Paul Latiolais v. Bellsouth

Telecomm., Inc., an unpublished writ bearing docket number CW10-978 (La.App.

3 Cir. 10/4/10). Mr. Latiolais answered the appeal, seeking damages on the basis

that the appeal is frivolous with regard to Intervenors’ claim for judicial interest

from the date Mr. Latiolais filed suit, rather than from the date they filed their

intervention.

ASSIGNMENTS OF ERROR

Intervenors assign five errors with the trial courts’ judgment:

1. The trial court erred in refusing to include in the lien recovery the monies
paid after the effective date of the payment printout attached to the joint
stipulation.

2. The trial court erred in holding that the credit only applied against future
indemnity benefits and not against future medical expenses, and in
limiting the credit to the award of damages classified as loss of earnings
by the court.

3. The trial court erred in holding that legal interest on the Intervenors’
recovery runs only from the date that the intervention was filed rather
than the date that plaintiff’s suit was filed.

4. The trial court erred in holding that Intervenors’ recovery and credit were
subject to “Moody fees” of 32% given the actions performed by
Intervenors to assist Plaintiff with his claim.

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5. The trial court erred in denying Intervenors’ Motion for Reconsideration
and New Trial.

DISCUSSION

To the extent that they are obligated to pay Mr. Latiolais workers’

compensation benefits, Intervenors became subrogated to Mr. Latiolais’s rights

against Bellsouth. La.R.S. 23:1101-1103. The issues presented for our review by

Intervenors’ appeal concern the trial court’s application of these, and other related

laws, to their subrogation rights herein. Appellate courts review a trial court’s

conclusion regarding a question of law to determine whether the conclusion is

legally correct. Forum for Equality PAC v. McKeithen, 04-2477, 04-2523 (La.

1/19/05), 893 So.2d 715. If the conclusions are found to be incorrect, the flawed

legal conclusions must be reviewed de novo. Id.

Should Total Lien Amounts be Included in Judgment?
After the hearing on the Motion for Reconsideration and/or New Trial, the

trial court denied the Intervenors’ request to increase the amount of their

reimbursement from the $187,699.81 stated in their Petition for Intervention to

include amounts they paid from the date of the Stipulation until the Judgment was

signed. Intervenors contend that their lien for recovery included amounts paid

after trial but before judgment was signed and that the judgment should have

ordered that they be reimbursed those amounts.

Pursuant to La.R.S. 23:1103(A)(1), “the claim of the employer for the

compensation actually paid shall take precedence over that of the injured

employee.” Furthermore, in addition to providing the specific amounts paid by

Intervenors as of the date of the Stipulation, the Stipulation provided:

By virtue of the unreimbursed payments previously made, to be
made between now and the time of trial, and all further payments to
be made in the future, [Intervenors] are subrogated legally to the

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rights of Paul Latiolais to the extent of the amounts Intervenors have
paid to or on behalf of Paul Latiolais as aforesaid, plus any other
amounts of workers’ compensation benefits, including indemnity,
vocational rehabilitation, and/or medical expenses (excluding all nurse
case management expenses), Intervenors may become obligated to
pay to or on behalf of Paul Latiolais in the future.

The trial court’s June 2, 2010 judgment provided for Intervenors to be

reimbursed $187,699.81 for workers’ compensation benefits they had paid to Mr.

Latiolais. This amount represents the $234,624.76 provided in the Stipulation less

20% for the fault of the unnamed co-tortfeasor. The August 23, 1010 judgment

also awarded Intervenors “a dollar for dollar credit against any and all future and

post judgment workers’ compensation indemnity benefit obligations.”

Mr. Latiolais contends Intervenors have no right to increase the amount of

their reimbursement stated in the June 2, 2010 judgment because they did not

introduce evidence of those amounts when the Stipulation was introduced into

evidence. Refusing to increase the amount stated in the Stipulation to reflect the

actual amounts paid by Intervenors ignores the plain language of the Stipulation

and, more importantly, La.R.S. 23:1103(A)(1) that the employer’s claim for the

compensation actually paid takes precedence over the injured employee’s claim for

damages for damages.

Review of how courts have previously addressed the reimbursement issue

exposes the error of Mr. Latiolais’s arguments. In Billeaud v. U.S. Fidelity &

Guaranty Co., 349 So.2d 1379 (La.App. 3 Cir. 1977), the trial court’s judgment

provided as the judgment here provides−for reimbursement of benefits paid

through the date of trial. On appeal, this court held, as argued by Intervenors, that

an employer/compensation carrier is entitled to reimbursement for all amounts it

actually paid to an injured employee as of the date the judgment awarding the

employee damages becomes final or is satisfied. To achieve this result, the court

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revised an earlier judgment to award judgment in favor of the employer/workers’

compensation carrier “in the full sum of the amount [the compensation carrier] has

actually paid, or will actually pay prior to the date of the satisfaction of this

judgment, to or on behalf of [the employee] as weekly workmen’s compensation

benefits and medical expenses (which sum, as of April 22, 1976, was $5,981.12).”

Id. at 1385. See also Hall v. Hartford Acc. & Indem. Co., 278 So.2d 795 (La.App.

4 Cir.), writ denied, 281 So.2d 753 (La.1973).

In the hearing on Intervenors’ motion to fix the amount of the

reimbursement, counsel for Mr. Latiolais stated that Bellsouth had paid

Mr. Latiolais the damages it owed under the judgment. Accordingly, we amend

the judgment to award Intervenors the full sum of the amounts they have actually

paid or will actually pay prior to Mr. Latiolais’s satisfaction of his obligation to

reimburse them. If Mr. Latiolais and Intervenors cannot agree on the amount Mr.

Latiolais is to reimburse Intervenors, they are instructed to file a motion to have the

amount determined by the trial court.

Does the Credit in Favor of Intervenors Apply to Medical Expenses and
Indemnity Benefits?

Intervenors’ next assignment of error addresses the extent of its credit for

benefits it paid after Bellsouth’s satisfaction of Mr. Latiolais’s judgment. They

argue that the trial court erred in holding the credit provided in La.R.S. 23:1103(B)

applied only to future indemnity benefits, not to future medical expenses and in

limiting the credit to loss of earnings damages. The supreme court recently

addressed these arguments in City of DeQuincy v. Henry, 10-70 (La. 3/15/11), 62

So.3d 43, where it pointed out that amendments to La.R.S. 23:1102 and La.R.S.

23:1103 specify that the employer’s credit extends to all damages awarded

regardless of classification. The court explained:

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According to [the amendment to La.R.S. 23:1102(B)], an
employer is now liable only for “any benefits under this Chapter
which are in excess of the full amount paid by such third person, only
after the employer or the insurer receives a dollar for dollar credit
against the full amount paid in compromise, less attorney fees and
costs.” The “Chapter” referred to in the amended language is Chapter
10, Workers’ Compensation. The phrase “any benefits under this
Chapter,” then, necessarily includes future medical benefits, which are
included in “this Chapter,” Chapter 10, Workers’ Compensation.
Further, the statute specifically mandates that employers receive a
“dollar for dollar credit against the full amount paid in compromise.”
La.Rev.Stat. § 23:1102 (emphasis added). Again, the “full amount”
paid in compromise would necessarily include any future medical
benefits paid in compromise. Likewise, the amendment to Section
23:1103 added a new Paragraph B, which reads:

The claim of the employer shall be satisfied in the
manner described above from the first dollar of the
judgment without regard to how the damages have been
itemized or classified by the judge or jury. Such first
dollar satisfaction shall be paid from the entire judgment,
regardless of whether the judgment includes
compensation for losses other than medical expenses and
lost wages.

Id. at 51. The supreme court determined that the changes to Sections 1102(B) and

1103(B) “clearly evidence the intent of the legislature to require that employers

and their insurers receive a credit for the entire amount of any compromise or

settlement, or for the entire amount of a judgment, no matter how the damages

have been itemized or classified.” Id. Accordingly, the trial court erred in refusing

to extend Intervenors’ credit to future medical expenses and the credit provided in

La.R.S. 23:1103(B), and this holding is reversed.

When Did Interest Begin to Accrue on Intervenors’ Demands?

The trial court awarded Intervenors interest on their judgment from the date

their Petition for Intervention was filed, but Intervenors contend they are entitled to

interest from the date Mr. Latiolais filed his suit against Bellsouth.

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Litigants are entitled to interest on their judgment “as prayed for or as

provided by law.” La.Code Civ.P. art. 1921. In suits seeking “ex delicto”

damages, such as Mr. Latiolais’s suit, legal interest begins to accrue from the date

of judicial demand. La.R.S. 13:4203.

Intervenors urge that as subrogees, they “step into [Mr. Latiolais’s] shoes”

with regard to his rights against Bellsouth; therefore, legal interest began to accrue

on their claims from the date he filed suit. Louisiana Civil Code Article 1825

defines subrogation as “the substitution of one person to the rights of another.”

The supreme court explained a subrogees’ rights in Barreca v. Cobb, 95-1651, p. 3

(La. 2/28/96), 668 So.2d 1129, 1131, stating “the insurer stands in the shoes of the

insured and acquires the right to assert the actions and rights of the plaintiff.” See

also Copeland Enters., Inc. v. Slidell Mem’l Hosp., 94-2011 (La. 6/30/95), 657

So.2d 1292. Intervenors acquired the right to assert Mr. Latiolais’s claims against

Bellsouth; therefore, they were not entitled to legal interest until they asserted the

claims. Accordingly, the trial court did not err in denying Intervenors’ interest on

their reimbursements from the date Mr. Latiolais filed suit.

Is the Trial Court’s Calculation of Moody Fees Correct?

Pursuant to La.R.S. 23:1103(C)(1), Intervenors are responsible for a share of

reasonable legal fees and costs incurred by Mr. Latiolais and his attorney which is

“based on the proportionate services of the attorneys which benefitted or

augmented the recovery from the third party.” These fees are commonly known as

“Moody” Fees. See Moody v. Arabie, 498 So.2d 1081 (La.1986), where the

supreme court held that as co-owners of a property right, a cause of action against

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a third-party tortfeasor, the employer and worker are each obligated to contribute

proportionately to the maintenance and conservation of the right and set forth the

calculation for determining each party’s contribution based on various factors

including each party’s proportionate participation in obtaining the recovery.

At the hearing held to determine Intervenors’ share of attorney fees and

costs, counsel for Intervenors noted that they had drafted the Stipulation and

asserted that the Stipulation assisted Mr. Latiolais in obtaining an award of

$148,000.00 in past medical expenses, as well as some of his general damages.

The trial court concluded that, contrary to their arguments, the Intervenors’

involvement in the preparation and presentation of Mr. Latiolais’s claims was

limited and warranted Mr. Latiolais’s counsel being awarded 32% of the amount

recovered by Intervenors as a result of the suit. The trial court noted that the

itemized information contained in the Stipulation’s outline of indemnity benefits

and medical expenses were insufficient to prove Mr. Latiolais’s claims and

explained that Mr. Latiolais had to use expert testimony to establish causation and

necessity to prove his claims for lost wages, medical expenses, and damages to

carry his burden of proof. We have reviewed the record in this light and find no

error with the trial court’s conclusion.

Did the Trial Court err in Denying Intervenors’ Motion for Reconsideration and
for New Trial?
As previously discussed, the trial court erred in some respects when it denied

Intervernors’ Motion for Reconsideration and for New Trial, and the issues

presented therein have been addressed.

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Is Intervenors’ Appeal Frivolous?

Mr. Latiolais answered Intervenors’ appeal, claiming their appeal is

frivolous to the extent that they argued the trial court erred in denying them interest

on their judgment from the date Mr. Latiolais filed suit.

Pursuant to La.Code Civ.P. art. 2164, an appellate court can award damages

for frivolous appeal. This provision is penal in nature; therefore, damages will not

be awarded unless it appears the appeal was taken merely to delay the proceeding,

no serious legal issue was raised, or counsel did not seriously believe in the

position taken on appeal. Cooks v. Rodenbeck, 97-1389 (La.App. 3 Cir. 4/29/98),

711 So.2d 444. While we determined Intervenors’ claim for interest was without

merit, we do not find the criteria for frivolous appeal exist, as no case or statute

directly on point was cited by either party and no such case or statute was found by

this court. Accordingly, Mr. Latiolais’s request is denied.

Disposition

For the reasons set forth above, the judgment on Intervenors’ Motion for

Reconsideration and New Trial and Motion to Fix Recovery and Credit is amended

to provide:

Intervenors are awarded the full sum of all amounts they have
paid or actually pay to Mr. Latiolais prior to his reimbursement to
them. If Mr. Latiolais and Intervenors cannot agree on the amount
Mr. Latiolais is to reimburse Intervenors, Intervenors are instructed to
file a motion to have the amount determined by the trial court.

Additionally, the judgment is reversed to the extent that it limits Intervenors’

recovery for indemnity benefits to $51,000.00 and denies their request for a dollar

for dollar credit for any and all future and post-judgment medical expenses. These

credits are limited only by the amount of the recovery and Intervenors’ Moody fees

as determined by the trial court.

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The trial court’s denial of interest on Intervenors’ recovery from the date

Mr. Latiolais filed suit and its calculation of Intervernors’ Moody fees is affirmed.

The judgment of the trial court is affirmed in all other respects. Mr. Latiolais’s

request for damages for frivolous appeal is denied. Costs of this appeal are divided

equally between the parties.

REVERSED IN PART; AFFIRMED IN PART; AMENDED AND
AFFIRMED AS AMENDED.

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