Juan Rivera v. M & R Cable Contractors, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

WCA 04-985

JUAN RIVERA

VERSUS

M&R CABLE CONTRACTORS, INC.

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - # 4
PARISH OF LAFAYETTE, NO. 01-09031
SAM L. LOWERY, WORKERS’ COMPENSATION JUDGE

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BILLY HOWARD EZELL
JUDGE

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Court composed of John D. Saunders, Marc T. Amy, and Billy Howard Ezell, Judges.

AFFIRMED AS AMENDED AND REMANDED.

Mark Alfred Ackal
Attorney at Law
P. O. Box 52045
Lafayette, LA 70505
(337) 237-5500
Counsel for: Defendant/Appellant
M & R Cable Contractors, Inc.

Michael Keith Leger
DeJean & Leger, L.L.C.
806 S. Main
Opelousas, LA 70570
(337) 948-9066
Counsel for: Plaintiff/Appellee
Juan Rivera

EZELL, JUDGE.

M&R Cable Contractors, Inc., and its insurer, Bridgefield Casualty Insurance

Company, appeal a judgment of the Office of Workers’ Compensation which found

that Juan Rivera was its employee and, therefore, entitled to workers’ compensation

benefits. It also appeals the amount of indemnity benefits and the award of penalties

and attorney fees.

FACTS

M&R was a business located in Pine Prairie, Louisiana, engaged in the

business of installing satellite and cable television. The company was started in 1996

by Ricky Hazleton and his son-in-law, Mike Fontenot. The business was

incorporated a few years later, with Mike owning fifty percent of the stock and his

wife Penny, Ricky’s daughter, owning the other fifty percent of the stock. Ricky

explained that, although he was not listed on the documents, he did receive fifty

percent of the profits at times.

M&R received orders from a cable company. In turn M&R then issued work

orders to its installers. From the record, it appears that each installer had a certain

area he would work. Penny worked in the office handling the payroll, secretarial

work, and sending the men out on their jobs. Juan was one of the installers for the

company from November 2000 to April 2001. Juan’s wife, Deloris, is Ricky’s sister.

She also worked with the company along with her son, Willie Ford, and Juan. Juan

and Willie did not have driver’s licenses, so Deloris would drive them to the different

jobs.

In April 2001, Juan went to work for T&T Pipeline & Construction Company.

He worked through the end of June, at which time the job he was on was completed.

On July 23, 2001, Juan was installing cable on one of M&R’s jobs when he fell from

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a twenty to twenty-five foot extension ladder to the ground suffering serious injuries.

Among other injuries, Juan suffered a left pelvic fracture and L1, L2 body fractures.

He was initially taken by ambulance to the emergency room in Natchez, Mississippi.

However, due to the serious nature of his injuries, he was later transferred to St.

Francis Cabrini Hospital. Doctors at that hospital thought Juan would be better

served by having surgery in a major trauma center, so he was transferred to New

Orleans.

M&R and Bridgefield denied Juan’s request for workers’ compensation or

medical indemnity benefits. Juan filed a disputed claim with the Office of Workers’

Compensation on December 10, 2001. A trial on the matter was held on June 20,

2003. After trial, the workers’ compensation judge (WCJ) rendered oral reasons for

judgment. The judge ruled that Juan was an employee at the time of the accident thus

he was entitled to workers’ compensation benefits. Juan was awarded temporary total

disability benefits at the rate of $323.17 per week commencing with the date of the

accident. M&R and Bridgefield were also held responsible for all work-related

medical expenses. Additionally, penalties in the amount of $4,000 as well as attorney

fees in the amount of $9,000 were awarded. It is from this judgment that M&R and

Bridgefield appealed.

EMPLOYEE STATUS

M&R first argues that the WCJ erred in finding that there was an employment

relationship between it and Juan. It claims that this finding was clearly wrong

because the testimonies of Juan, his wife, his sister-in-law, his brother-in-law, and his

step-son are inconsistent.

The WCJ, in oral reasons for judgment, explained his conclusion that Juan was

an employee as follows:

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Now while not very articulate, he was believable. Under strong
pointed cross examination he never wavered, and his story, taken in
context, makes much more sense than the various versions of the
circumstances suggested by the owner.

The defense is apparently correct that payroll records do not
support his employment status; however, testimony showed that the
payroll practices of the company in existence were charitably put, very
creative. It was a strange operation until one remembers that this was
one big once happy family.

Close attention, careful attention to these witnesses especially the
owners, real and otherwise, would force any reasonable person to reach
the conclusion that Juan Rivera was, in fact, an employee of a company
who owners promptly, almost instantly erased him from corporate
memory when he was seriously injured.

The Workers’ Compensation Law does provide a presumption that a person

rendering a service for another in trades, businesses or occupations which are covered

by the Workers’ Compensation Law are employees. La.R.S. 23:1044. M&R does not

deny that Juan was rendering a service that was part of its business at the time of his

accident. It simply claims that it did not hire him so he was not an employee of the

business. Therefore, the burden was on M&R to prove, with evidence sufficient to

overcome the presumption, that Juan was its employee. Estate of Harris v. Ledet, 95-

485 (La.App. 3 Cir. 11/2/95), 664 So.2d 561, writ denied, 95-2894 (La. 2/2/96), 666

So.2d 1102.

While we agree that the testimonies were somewhat inconsistent, there was an

agreement that Juan had been hired to help Willie because Willie had fallen behind

on his orders due to a hand injury. Deloris explained that when Mike was approached

about the problem, he indicated that Juan should be hired to help Willie because Juan

had the experience. Meanwhile, Juan was waiting on another job from the pipeline

while Willie continued to get further behind on his orders. Deloris and Mike then

contacted Ricky who also told them to get Juan to help. Juan then went back to work

for M&R on July 16.

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Ricky agreed that Deloris and Willie asked him if they could get Juan to help

out. He told them to go ahead.

Pam Hazleton also worked at M&R. She is Deloris’ and Ricky’s sister. She

testified that she was in the office a few days before the accident when the secretary

indicated that Juan was helping Willie so they were catching up. She also stated that

Deloris told her that Ricky had asked that Willie get Juan to help him. Furthermore,

Willie testified that Juan had been at work a week and one day when the accident

occurred. Willie also agreed that Juan came back to work to help him catch up.

On the other hand, Mike claims to know nothing about Juan working for M&R.

He explained that he and his wife were surprised to hear about Juan’s accident

because they did not know he was on the job. He testified that he never authorized

anyone to hire Juan. It was Mike’s testimony that, although Ricky did all the firing,

he never hired anyone. He explained that Ricky could request that someone be hired

and then they would talk about it.

However, Ricky never gave the impression that he could not make hiring

decisions. Ricky testified that sometimes either of them may hire someone and then

discuss it later.

Penny agreed that both Ricky and Mike hired people. Penny recalled that

Deloris and Willie had discussions about Willie needing help, but had no idea that

Juan had been hired.

M&R also relied on evidence that Juan was not in the computer system as an

employee. Ricky explained that sometimes they hire people and it may be a week

before the person is placed into the computer system. Ricky also testified that Mike

was upset after the accident because Juan was not in the computer system because he

thought “they were going to get [him],” presumably referring to the insurance

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company. Deloris also testified that Penny told her that Juan was not covered for

workers’ compensation benefits because he was not in the computer system.

Juan testified, through an interpreter because he speaks Spanish and very little

English. Juan claims that Mike asked him to quit his job with the pipeline and return

to M&R. He testified that this conversation took place the day before the accident.

Juan’s testimony was then somewhat inconsistent because the accident happened the

first day back at work and then he said he had been at work for a week. The WCJ did

find that, while Juan was not very articulate, he was very believable.

We agree with the WCJ that Juan was an employee of M&R. This is based on

the simple fact that Ricky, who was agreed to have the ability to hire by everyone

except Mike, admitted he hired Juan. While Mike disagrees, the evidence is clear that

he was at least probably aware that Juan was going to be hired to help Willie. The

fact that Juan may not have been put in the computer system does not deprive him of

employment status with the company. We agree with the trial court that Juan

believed that he had been hired by M&R. This is especially true given the fact that

he had worked for the company before and his step-son, whom he previously worked

with, needed help. M&R failed to overcome the presumption that Juan was an

employee of the company.

TEMPORARY TOTAL DISABILITY BENEFITS

M&R disagrees with the rate of temporary total disability benefits awarded by

the WCJ. The WCJ found that Juan was entitled to $323.17 per week. M&R claims

that Juan presented no evidence whatsoever as to what he earned or what he was

expected to earn, so he was entitled to only the minimum compensation rate of $104

a week.

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The parties agree that Willie and Juan were paid by the job. Therefore, La.R.S.

23:1021(10)(d), regarding other wages, is applicable to this case to determine Juan’s

average weekly wage and provides:

Other wages. If the employee is employed on a unit, piecework,
commission, or other basis, his gross earnings from the employer for the
twenty-six week period immediately preceding the accident divided by
the number of days the employee actually worked for the employer
during said twenty-six week period and multiplied by the average
number of days worked per week; however, if such an employee has
worked for the employer for less than a twenty-six week period
immediately preceding the accident, his gross earnings from the
employer for the period immediately preceding the accident divided by
the number of days the employee actually worked for the employer
during said period and multiplied by the average number of days worked
per week.

At trial, the bookkeeping practices, which were a little odd, of the company

were explained. When Juan and Willie worked together, one would receive a check

one week for the work performed by both that week and the other would receive a

check the next week for the work performed by both. There was also some indication

that any money Deloris was entitled to was included in these checks.

Payroll records of Juan’s earnings that he received when he worked for M&R

in late 2000 and early 2001 were introduced into evidence. Juan’s 1099 tax forms

from M&R showing his income during this period were also introduced. Penny, as

the bookkeeper, agreed that these documents reflected the amount that Juan earned

during that period.

Since Juan only worked one week prior to the accident and the company would

not issue any check to him because it took the position he was not its employee after

the accident, the WCJ relied on Juan’s last sixteen weeks of employment with M&R,

including the time he worked in late 2000 and early 2001. M&R would have the

court ignore the actual wages earned by Juan when he was employed by M&R, and

instead, award the minimum amount compensable under the law since there is no

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evidence that Juan can use to prove what he would earn during the present

employment since he only worked a week.

We do not find the WCJ’s reliance on the wages Juan earned when he worked

in late 2000 and early 2001 to be in error. These wages were actual wages earned by

Juan at M&R that were “immediately preceding” his accident. The wages earned by

Juan during this time were earned only a few months before the accident and are a

reliable indicator of Juan’s earning potential at M&R at the time of his accident.

These wages are the best evidence of what Juan could have earned had he continued

in employment with M&R.

MEDICAL EXPENSES

The WCJ awarded Juan all medical expenses incurred as a result of the

accident. M&R claims that this was error because all of his medical expenses were

not emergency in nature and were not pre-approved by either M&R or Bridgefield.

M&R relies on La.R.S. 23:1142(B)(1) which provides:

Nonemergency care. (1) Except as provided herein, each health
care provider may not incur more than a total of seven hundred fifty
dollars in nonemergency diagnostic testing or treatment without the
mutual consent of the payor and the employee as provided by regulation.
Except as provided herein, that portion of the fees for nonemergency
services of each health care provider in excess of seven hundred fifty
dollars shall not be an enforceable obligation against the employee or
the employer or the employer’s workers’ compensation insurer unless
the employee and the payor have agreed upon the diagnostic testing or
treatment by the health care provider.

Louisiana Revised Statutes 23:1142(C)(1) provides that consent is not

necessary for emergency treatment. Juan asserts that La.R.S. 23:1142(C)(1) is

applicable to his situation because all his medical expenses were emergency.

Our review of the medical evidence indicates that all of Juan’s medical

expenses were of an emergency nature incurred in treating the serious injuries he

sustained in the fall, including surgery for a broken pelvis. Juan’s injuries included

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(1) a closed fracture of the left acetabulum; (2) a closed fracture of the sacrum with

no mention of spinal cord injury; (3) a closed fracture of the pelvis; (4) a closed

fracture of the lumbar spine without spinal injury; and (5) abdominal pain, left lower

quadrant. Juan’s injuries were so severe that he was transferred to a hospital in New

Orleans that was better equipped to deal with his injuries.

Furthermore, M&R has always denied that Juan was its employee and that his

injuries were compensable, so approval would never have been forthcoming. La.R.S.

23:1142(E); Parfait v. Gulf Island Fabrication, Inc., 97-2104 (La.App. 1 Cir. 1/6/99),

733 So.2d 11. We agree with the WCJ’s finding that M&R was responsible for all

of Juan’s medical expenses.

PENALTIES AND ATTORNEY FEES

The WCJ awarded Juan $2,000 in penalties for failure to commence benefit

payments in addition to a $2,000 penalty for failure to pay medical expenses.

Attorney fees in the amount of $9,000 were also awarded. M&R claims that penalties

and attorney fees are inappropriate in this matter. It claims that the adjuster

investigated the claim in good faith and had just cause in denying it.

Pursuant to La.R.S. 23:1201(F), an employee is entitled to penalties and

attorney fees when the employer fails to commence benefit payments and pay medical

expenses. La.R.S. 23:1201(F) provides, in pertinent part:

Failure to provide payment in accordance with this Section or
failure to consent to the employee’s request to select a treating physician
or change physicians when such consent is required by R.S. 23:1121
shall result in the assessment of a penalty in an amount up to the greater
of twelve percent of any unpaid compensation or medical benefits, or
fifty dollars per calendar day for each day in which any and all
compensation or medical benefits remain unpaid or such consent is
withheld, together with reasonable attorney fees for each disputed claim;
however, the fifty dollars per calendar day penalty shall not exceed a
maximum of two thousand dollars in the aggregate for any claim. The
maximum amount of penalties which may be imposed at a hearing on
the merits regardless of the number of penalties which might be imposed

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under this Section is eight thousand dollars. An award of penalties and
attorney fees at any hearing on the merits shall be res judicata as to any
and all claims for which penalties may be imposed under this Section
which precedes the date of the hearing.

Awards of penalties and attorney fees are penal in nature and are imposed to

discourage indifference and undesirable conduct by employers and insurers. Williams

v. Rush Masonry, 98-2271 (La. 6/29/99), 737 So.2d 41. These statutes awarding

penalties and attorney fees are to be strictly construed. Id.

Whether an employer or insurer should be cast with penalties and attorney fees

is a question of fact. Authement v. Shappert Engineering, 02-1631 (La. 2/25/03), 840

So.2d 1181. “The employer must adequately investigate the claim, and the crucial

inquiry is whether the employer had an articulable and objective reason for denying

or discontinuing benefits at the time it took that action.” Williams, 737 So.2d at 46.

There has never been a question in this case that Juan was injured. There was

a continual denial by Mike and his wife that Juan was an employee at the time he was

injured. But the inquiry should not have ended there. As can be seen by the previous

discussion in this opinion, there was an abundance of testimony from other people

who worked at M&R that Juan had come back to work for the purpose of helping his

stepson who had fallen behind in his work due to a hand injury. Even Juan’s medical

records indicate that he was working for M&R at the time of the injury. Ricky, who

had authority over personnel at M&R, clearly stated that he hired Juan to help Willie.

We agree with the WCJ’s decision to award penalties and attorney fees.

Juan answered the appeal and asked for an increase in the amount of penalties

because M&R denied payment of numerous work-related medical expenses,

authorization of medical treatment, and payment of indemnity benefits. We agree that

an increase in penalties is necessary for the following reasons.

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In Fontenot v. Reddell Vidrine Water District, 02-439, 02-478 (La. 1/14/03),

836 So.2d 14, rehearing granted in part on other grounds, 02-442, 01-478 (La.

4/21/03), 851 So.2d 917, the supreme court held that La.R.S. 23:1201(F) provides

multiple penalties for multiple violations of compensation and medical benefits

claims. M&R has not made any indemnity payments or medical benefits, and is,

therefore, subject to more than one penalty. With M&R’s refusal to pay indemnity

benefits, Juan has been deprived of multiple benefit payments. M&R is responsible

for this deprivation and penalties should be accessed for each failure to pay.

Furthermore, La.R.S. 23:1201(F) mandates a penalty of the greater of twelve

percent of any unpaid compensation or medical benefits or fifty dollars a day for each

day the benefits remain unpaid. Juan has never received any payment. Obviously,

the penalty will be greater than $4000 since there have been multiple violations which

have remained unpaid for several years.

We recognize that the law now provides for a ceiling on the maximum amount

of penalties at $8,000. However, this maximum penalty provision was not added

until 2003 by Acts 2003, No. 1204, § 1. Furthermore, the amendment was not

effective until August 15, 2003, after trial on this matter had been held. La.Const.

Art. III, §19. The law in effect at the time of the denial of the benefits is the law that

governs an employee’s request for penalties and attorney fees. Skipper v. Acadian

Oaks Hosp., 00-67 (La.App. 3 Cir. 5/3/00), 762 So.2d 122. Juan was injured in 2001

before this provision was added. Failure to make payments on both compensation

and medical benefits has occurred from 2001 to the date of trial. Therefore, Juan is

not subject to the maximum penalty limitation of $8,000.

We find that WCJ erred in only awarding a $2,000 penalty for the denial of

compensation benefits and $2,000 for M&R’s refusal to pay medical bills. We,

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therefore, remand this case to the Office of Workers’ Compensation for a

determination of the proper penalties.

Juan has also asked for an award of additional attorney fees for work performed

on appeal. An award for attorney fees for work done on appeal is warranted when the

appeal has necessitated additional work on the attorney’s part. Colonial Nursing

Home v. Bradford, 02-588 (La.App. 3 Cir. 12/30/02), 834 So.2d 1262, writ denied,

03-364 (La. 4/21/03), 841 So.2d 802. Obviously, Juan’s attorney had to do additional

legal research, prepare a brief and present argument to this court. We find that an

additional award of $2,500 is reasonable under these circumstances.

Accordingly, the judgment of the trial court is amended to increase the amount

of attorney fees by $2,500. Regarding the award of penalties, the case is remanded

to the Office of Workers’ Compensation to calculate the proper amount of penalties

in accordance with the discussion in this opinion. In all other respects the judgment

is affirmed. Costs of this appeal are assessed to M&R.

AFFIRMED AS AMENDED AND REMANDED.

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