Jason Halker v. American Sheet Metal

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

WCA 04-1407

JASON HALKER

VERSUS

AMERICAN SHEET METAL

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APPEAL FROM THE
OFFICE OF WORKERS' COMPENSATION - # 3
PARISH OF CALCASIEU, NO. 01-04520
CHARLOTTE A. L. BUSHNELL, WORKERS’ COMPENSATION JUDGE

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JOHN D. SAUNDERS
JUDGE

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Court composed of John D. Saunders, Oswald A. Decuir, and James T. Genovese,
Judges.

AFFIRMED.

H. Douglas Hunter
Guglielmo, Lopez, et al.
P. O. Drawer 1329
Opelousas, LA 70571-1329
(337) 948-8201
Counsel for Defendant/Appellant:
American Sheet Metal

Marcus Miller Zimmerman
Attorney at Law
4216 Lake Street
Lake Charles, LA 70605
(337) 474-1644
Counsel for Plaintiff/Appellee:
Jason Halker

SAUNDERS, J.

American Sheet Metal appeals the Workers’ Compensation judge’s decision

that defendants violated La.R.S. 23:1201(G). As a result of the violation and in

accordance with the statute, the judge imposed penalties and attorney fees. We affirm

that decision and grant the appellee an additional $1,500.00 in attorney fees for work

done on this appeal.

FACTS

On January 22, 2003, the Office of Workers’ Compensation judge determined

that LUBA (American Sheet Metal’s compensation self-insurer’s fund) was

responsible for medical and indemnity benefits owed to Jason Halker, the appellee.

LUBA appealed the decision to the Louisiana Third Circuit Court of Appeal and on

December 10, 2003, the Third Circuit upheld the Workers’ Compensation judge’s

decision. On January 30, 2004, LUBA tendered a check for $16,488.24 to appellee.

The appellee requested a breakdown of that amount and it was received on February

12, 2004. The breakdown provided $13,747.57 for indemnity, and $2,740.67 for

interest on the indemnity amount. On March 16, 2004, appellant tendered a check for

$1,446.10 for out of pocket medical expenses incurred by Jason Halker. On April 27,

2004, appellee sent a letter to appellant concerning the remaining outstanding

balance, and the final indemnity amount, $2,538.42, was paid on May 17, 2004.

Also, on May 17, 2004, appellant paid the remaining $621.92 for medical expenses

which brought the medical total to $2,068.02. As of May 17, 2004, all outstanding

amounts were paid in full.

On March 8, 2004, appellee filed a Rule to Show Cause why Jason Halker

should not be granted enforcement of the December 10, 2003 judgment. Appellee

also requested penalties and attorney fees pursuant to La.R.S. 23:1201(G). On May

24, 2004, the Office of Workers’ Compensation heard the appellee’s argument that

the appellant had not timely complied with the Third Circuit’s judgment. The

Workers’ Compensation judge determined that the appellant paid the indemnity

untimely and in violation of La.R.S. 23:1201(G). The Workers’ Compensation judge

awarded appellee $3,000.00 in penalties and $3,000.00 in attorney fees. Appellant

filed a suspensive appeal on July 6, 2004.

ASSIGNMENT OF ERRORS

1. Appellant contends that the Workers’ Compensation judge
committed manifest error in awarding Jason Halker penalties and
attorney fees regarding the payment of disability benefits pursuant
to a judgment.

2. Appellee contends that he is entitled to an increase in the award
of attorney fees for work done on this appeal.

LAW & ANALYSIS

Findings of the trial court are reviewable on appeal, and the appellate standard

of review has been clearly established. A trial judge’s findings of fact will not be

disturbed unless they are manifestly erroneous or clearly wrong. Stobart v. State,

through Dep’t of Transp. & Dev., 617 So.2d 880 (La.1993). “Absent ‘manifest error’

or unless it is ‘clearly wrong,’ the jury or trial court’s findings of fact may not be

disturbed on appeal.” Sistler v. Liberty Mut. Ins. Co., 558 So.2d 1106, 1111

(La.1990). “If the trial court or jury’s findings are reasonable in light of the record

reviewed in its entirety, the court of appeal may not reverse, even though convinced

that had it been sitting as the trier of fact, it would have weighed the evidence

differently.” Id. at 1112.

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ASSIGNMENT OF ERROR NUMBER ONE

Appellant argues that the Workers’ Compensation judge erred by imposing

penalties and attorney fees pursuant to La.R.S. 23:1201(G). Appellee argues that the

imposition of penalties and attorney fees was proper as the defendant violated the

statute.

Louisiana Revised Statutes 23:1201(G) provides the proper sanctions when an

employer fails to timely pay a judgment and states that:

G. 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.

On December 10, 2003, the Third Circuit upheld the Workers’ Compensation

judge’s ruling in favor of Jason Halker. From that date, thirty days are provided for

a party to file for supervisory writs with the Louisiana Supreme Court. La.Code

Civ.P. art. 2166. From December 10, 2003, the parties had thirty days to file for writs

which expired on January 10, 2004. Upon conclusion of this time period, La.R.S.

23:1201(G) provides thirty days for payment of the judgment, and also provides

penalties and attorney fees for failure to pay timely. Therefore, appellant had until

February 10, 2004 to pay the judgment.

On January 30, 2004, appellant paid some of the indemnity that was owed.

Upon receipt of the payment, appellee requested a list of what that payment

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specifically encompassed and it was provided on February 12, 2004. On April 27,

2004, appellee sent a letter requesting the remaining indemnity benefits that were not

yet paid. The final amount was not received until May 17, 2004.

Appellant proposes several arguments against imposing penalties and attorney

fees. First, appellant argues that the principle of equitable estoppel should apply.

“Equitable estoppel arises when one by his actions, or by his silence when he ought

to speak, induces another to believe certain facts and the other relies on these facts

to his prejudice.” LeDoux v. Old Republic Life Insurance Co., 233 So.2d 731, 735

(La.App. 3rd Cir.), writ denied, 236 So.2d 501 (La.1970). Appellant argues that

partial payment was rendered timely on January 30, 2004, and that appellee’s silence

prevented the complete and timely performance. Appellant contends that appellee

should have notified the appellant prior to the expiration of the time period that the

judgment was not paid in full. Therefore, appellant suggests that appellee’s silence

should result in him being estopped from receiving penalties and attorney fees.

Appellant’s equitable estoppel argument has no merit in this situation as he can

not force the claimant to bear the burden of his error. The judgment provided the

information necessary for the appellant to determine the proper amount owed, and it

is not the appellee’s job to ensure that the appellant complies with the judgment or

even that he complies timely. Appellant cannot now excuse his behavior by blaming

the appellee who is merely following the provisions of the statute.

Next, appellant argues that appellee acted in bad faith by not notifying

appellant sooner that the judgment was not paid in full. Thus, appellee’s bad faith

contributed to the late payment and that bad faith should prohibit the appellee from

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receiving penalties and attorney fees. Louisiana Civil Code Article 2003 entitled

“Obligee in bad faith” provides:

An obligee may not recover damages when his own bad faith has
caused the obligor’s failure to perform or when, at the time of the
contract, he has concealed from the obligor facts that he knew or should
have known would cause a failure.

If the obligee’s negligence contributes to the obligor’s failure to
perform, the damages are reduced in proportion to that negligence.

This argument, however, disregards the relevant time period at issue here. Appellee

did not receive payment until January 30, 2004, the breakdown until February 12,

2004 and still required time to review the information with the client. At the time the

breakdown was received on February 12, 2004, appellant had already exceeded the

time allowed by the statute. Thus, appellant’s bad faith argument has no merit.

Third, appellant argues that a mathematical error should not subject him to the

imposition of penalties and attorney fees. He contends that the Louisiana Supreme

Court’s purpose of imposing penalties and attorney fees is not supported by punishing

an employer for a mere math miscalculation.

Awards of penalties and attorney’s fees in workers’ compensation cases
are essentially penal in nature, being imposed to discourage indifference
and undesirable conduct by employers and insurers. Although the
Workers’ Compensation act is to be liberally construed in regard to
benefits, penal statutes are to be strictly construed.

Williams v. Rush Masonry, Inc., 98-2271 (La. 6/29/99) 737 So.2d 41, 46. (Citations

omitted.) Although “penal statutes are to be strictly construed,” “[t]he WCJ has great

discretion in awarding or denying penalties and attorney fees. The WCJ’s decision

concerning whether or not to assess statutory penalties and attorney fees will not be

disturbed absent an abuse of discretion.” Player v. Int’l Paper Co., 39,254, p.5

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(La.App. 2 Cir. 1/28/05), ____ So.2d _____; 2005 WL 180456 (Citations omitted.)

Upon a thorough analysis, we have not discovered any abuse of discretion.

In addition, the appellant cites several cases for the proposition that

mathematical errors should not result in penalties and attorney fees. However, those

errors were partly based on the claimants who provided incorrect, incomplete or

untimely information.

Appellee suggests that the mathematical error is a result of appellant’s

carelessness and that courts have imposed penalties for careless mistakes. In Davis

v. City of New Orleans, 97-1626 (La.App. 4 Cir. 1/28/98), 706 So.2d 669, the

employer refused to pay and the claimant filed suit to enforce the judgment. Under

La.R.S. 23:1201(G), the court looked to see if the absence of payment by the

employer was a result of conditions over which it had no control. The employer

argued that failure to pay the medical bill was a mere oversight. The court stated,

“[t]he nonpayment was strictly a matter over which the City had control. It simply

failed to discharge the responsibility imposed upon it by the judgment.” Id. at 671.

In Soileau v. R&H Refractory Services, Inc., 01-0355 (La.App. 3 Cir. 10/3/01), 796

So.2d 903, writ denied, 01-2954 (La. 1/25/02) 807 So.2d 841, the employer did not

timely pay the first installment of indemnity benefits but, upon realization of this fact,

the employer immediately sent the payment. The court stated, “it is . . . clear that

R&H failed to make the payment as a result of its own carelessness.” Id. at 906.

Thus, the court imposed penalties.

In the present case, the judgment provided all the necessary information for the

appellant to determine the correct amounts owed. Therefore, based on an analysis of

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the facts and the jurisprudence, we believe that penalties and attorney fees are indeed

warranted in this situation as the payment was completely under the appellant’s

control.

ASSIGNMENT OF ERROR NUMBER TWO

Appellee requests additional attorney fees for the work incurred on this appeal.

According to Colonial Nursing Home v. Bradford, 02-588, p. 12 (La.App. 3 Cir.

12/30/02), 834 So.2d 1262, 1272, writ denied, 03-0364 (La. 4/21/03) 841 So.2d 802,

the court stated, “[a]n award for attorney fees for work done on appeal is warranted

when the appeal has necessitated additional work on the attorney’s part.” As this

appeal required additional work, we therefore find that attorney fees are appropriate,

and grant the appellee an additional $1,500.00.

CONCLUSION

We affirm the Workers Compensation judge’s decision to impose penalties and

attorney fees pursuant to La.R.S. 23:1201(G). In addition, we grant the appellee

$1500.00 in attorney fees for work performed on this appeal. Appellant is

responsible for the costs of this appeal.

AFFIRMED.

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