Lester Smith v. Quarles Drilling Company

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

03-795

LESTER SMITH

VERSUS

QUARLES DRILLING COMPANY

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APPEAL FROM THE
OFFICE OF WORKERS' COMPENSATION - # 4
PARISH OF VERMILION, NO. 01-00511
SHARON MORROW, WORKERS COMPENSATION JUDGE

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ELIZABETH A. PICKETT
JUDGE

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Court composed of Billie Colombaro Woodard, Glenn B. Gremillion, and Elizabeth
A. Pickett, Judges.

REVERSED AND RENDERED.

Michael Benny Miller
Miller & Miller
P. O. Box 1630
Crowley, LA 70527-1630
(337) 785-9500
Counsel for Plaintiff Appellant:
Lester Smith

Sidney W. Degan, III
Foster P. Nash III
Degan, Blanchard & Nash
400 Poydras St., #2600
New Orleans, LA 70130
(504) 529-3333
Counsel for Defendant Appellee:
Quarles Drilling Company

PICKETT, Judge.

FACTS

Lester Smith was injured on the job on November 4, 1994. After protracted

litigation, including a previous appeal to this court (Smith v. Quarles Drilling Co., 99-

171 (La.App. 3 Cir. 6/2/99), 741 So.2d 829, writ denied, 99-1949 (La. 10/8/99), 751

So.2d 227, reversing the WCJ’s determination that Smith forfeited his right to benefits

by misrepresenting a previous injury and remanding for further proceedings), Smith

was awarded benefits on November 30, 2000. The WCJ also awarded $2,000.00 in

penalties and $6,000.00 in attorney’s fees. On appeal of that determination, this court

increased the amount of attorney’s fees to $29,000.00, and the supreme court denied

writs. Smith v. Quarles Drilling Co., 01-351 (La.App. 3 Cir. 10/3/01), 801 So.2d

1128, writs denied, 02-80, 02-123 (La. 3/28/02), 811 So.2d 943, 945. On May 7,

2002, Quarles made payment of $23,000.00 to Michael Miller, Smith’s attorney,

which was the balance owed on the $29,000.00 judgment. Miller responded by filing

a Motion for Penalties and Attorney’s Fees, alleging that Quarles had not paid the full

amount of the judgment timely since they failed to include interest from the date of

the judgment of this court, October 3, 2001. Quarles responded by filing a Motion for

Sanctions against Miller.

The WCJ found that interest on the judgment was not a “clear, discernable

‘award payable’ per 23:1201(G).” Thus, penalties and attorney’s fees were not

payable. The WCJ did not rule on whether interest was payable or not. Finally, she

denied Quarles’ Motion for Sanctions.

Both parties appealed the judgment, but Quarles has abandoned their appeal.

Thus, only Smith appeals.

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ASSIGNMENTS OF ERROR

The appellant Smith alleges one assignment of error:

The hearing officer erred in failing to award penalties and attorney fees.

DISCUSSION

The sole assignment of error is based on the proposition that the increased

attorney’s fees awarded by this court in its October 3, 2001 judgment should bear

legal interest from that date until the date paid, May 7, 2002. The appellant relies

primarily on George v. Guillory, 00-591 (La.App. 3 Cir. 11/2/00), 776 So.2d 1200,

to support this contention. In that case, the WCJ awarded penalties and attorney’s

fees, but failed to award legal interest thereon. This court found no error in that

ruling, and found that legal interest attaches automatically by operation of law:

The fact that a workers’ compensation judge is silent as to legal
interest in his judgment does not constitute denial of such interest; legal
interest is mandatory under the workers’ compensation statute. Kortz v.
Colt Energy Servs., Inc., 97-159 (La.App. 5 Cir.7/29/97), 698 So.2d 460.
Legal interest is due on penalties and attorneys fees from the date of
judgment in workers’ compensation cases. See McLaughlin v. Hill City
Oil Co./Jubilee Exxon, 97-577 (La.App. 3 Cir. 10/8/97); 702 So.2d 786,
writ denied, 97-2797 (La.2/13/98); 706 So.2d 994; Sharbono v. Steve
Lang & Son Loggers, 97-0110 (La.7/1/97); 696 So.2d 1382. This
interest automatically attaches until judgment is satisfied, whether
prayed for in petition or mentioned in judgment. See Crooks v. Town of
Ball, 94-466 (La.App. 3 Cir. 11/2/94); 649 So.2d 597. Accordingly, the
trial court did not err by not including an award of legal interest in its
judgment. Such legal interest automatically attaches upon the award of
penalties and attorneys fees under workers’ compensation law. Thus,
Mr. George is entitled to legal interest on the award of penalties and
attorneys fees by the trial court from the date of judgment.

Id. at 1211.

Quarles argues that George was wrongly decided, citing Sharbono v. Steve

Lang & Son Loggers , 97-110 (La. 7/1/97), 696 So.2d 1382, or, alternatively, that

Smith’s disputed claim for compensation was untimely because it was not filed until

after the judgment was paid, citing Fallen v. City of New Orleans, 01-544 (La.App.

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4 Cir. 2/6/02), 812 So.2d 692, writ denied, 02-702 (La. 5/3/02), 815 So.2d 823. The

WCJ found that interest on the award was not clearly due, so La.R.S. 23:1201(G) was

not applicable.

A WCJ’s rulings with regard to attorney’s fees are factual determinations which

will not be disturbed by a reviewing court unless they are clearly wrong. Clifton v.

Ditto’s Apparel, 98-1180, 99-1181 (La.App. 3 Cir. 2/3/99); 736 So.2d 882, writ

denied 99-651 (La. 4/23/99); 742 So.2d 891. In this case, if interest is due, penalties

and attorney’s fees would be payable under La.R.S. 23:1201(G), which states:

If any award payable under the terms of a final, nonappealable
judgment is not paid within thirty days after it becomes due, there shall
be added to such award an amount equal to twenty-four percent thereof
or one hundred dollars per day together with reasonable attorney fees, for
each calendar day after thirty days it remains unpaid, whichever is
greater, which shall be paid at the same time as, and in addition to, such
award, unless such nonpayment results from conditions over which the
employer had no control. No amount paid as a penalty under this
Subsection shall be included in any formula utilized to establish
premium rates for workers’ compensation insurance. The total one
hundred dollar per calendar day penalty provided for in this Subsection
shall not exceed three thousand dollars in the aggregate.

There is no jurisprudence to support the “clear, discernable” language used by

the WCJ. The issue is whether interest was due, and if it was, whether penalties and

attorney’s fees are owed. Thus, interest is “the award payable.” There is no

“reasonably controverted” language in section 1201(G), as there is in section 1201(F).

We must determine if interest is due to determine if it is an award payable, and that

is strictly a legal question. The WCJ’s reasoning is flawed, in that she failed to

determine if there was in fact an award payable which was not paid.

The facts in Fallen were succinctly put forth by the fourth circuit:

On January 15, 2000, our opinion in Fallen v. City of New
Orleans, which affirmed the award of additional penalties and attorney's
fees under LSA-R.S. 23:1201(G), became final. On February 15, 2000,
the thirty-day deadline for payment called for by LSA-R.S. 23:1201(G)
passed. On March 28, 2000, the defendant paid the judgment and

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penalties assessed against it. On April 10, 2000, the plaintiff filed
another LSA-R.S. 23:1201(G) rule for additional penalties and attorney’s
fees. On June 5, 2000, after a hearing on this rule, additional penalties
and attorney’s fees were denied. It is from this judgment that the
plaintiff now appeals.

Id. at 693.

The court found that since the language of section 1201(G) states that penalties

and attorney’s fees shall be paid at the same time as the award which is the basis for

the penalty, it follows that once the judgment has been paid, even if it is beyond the

thirty days required, additional penalties and attorney’s fees cannot be sought. Judge

Gorbaty dissented. He claimed that the penalties and attorney’s fees are mandatory

for failure to pay timely.

This case is distinguishable from our case, because if interest is due on the

judgment of this court, as argued by the appellants, then the tender of $23,000.00 on

May 7, 2002, did not satisfy the judgment. Thus, there would still be an award

payable, and the filing on May 9, 2002, of a disputed claim for compensation was

timely.

In the hearing below, Smith claimed that interest was automatic pursuant to

La.R.S. 23:1201.3. The supreme court in Sharbono held that that section “does not

govern the calculation of interest on a hearing officer’s award of penalties and

attorney’s fees.” Id. at 1386. They reasoned that fees and penalties are not

compensation within the meaning of the statute. They did conclude, however, that a

judgment awarding attorney’s fees and penalties do bear interest from the date of

judgment, where interest is awarded.

Quarles’ argument that the failure to seek interest on the awards in the previous

hearing before this court bars the current action is misplaced. This court’s opinion in

George indicates that interest attaches to an award of penalties and attorney’s fees as

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a matter of law, even though the court does not include such an award in the

judgment. Thus, interest was due, Quarles failed to pay interest, and the filing by

Smith was timely on May 9, 2002, because the entire judgment had not been paid

within thirty days. Smith is entitled not only to the interest but also to further

penalties and attorney’s fees under the mandatory provisions of section 1201(G).

We find the WCJ erred in denying the appellant’s request for penalties and

attorney fees. That judgment is reversed and we hereby grant penalties in the amount

of $3,000.00 and attorney fees in the amount of $2,500.00. Costs of this appeal are

assessed to Quarles Drilling.

REVERSED AND RENDERED.

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