Keith A. Miller v. Ricky Ellender D/B/A Ellender's Portable Buildings

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-99 consolidated with 07-100

KEITH A. MILLER

VERSUS

RICKY ELLENDER, D/B/A ELLENDER’S PORTABLE BUILDINGS

**********

APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - # 3
PARISH OF CALCASIEU, NO. 04-6024
CHARLOTTE L. BUSHNELL, WORKERS’ COMPENSATION JUDGE

**********

MARC T. AMY
JUDGE

**********

Court composed of John D. Saunders, Oswald A. Decuir, Jimmie C. Peters, Marc T.
Amy and Billy H. Ezell, Judges.

REVERSED AND REMANDED.

SAUNDERS, J., dissents and assigns written reasons.
EZELL, J., dissents and assigns reasons.

Matthew W. Tierney
Tierney and Smiley, LLC
7525 Picardy Avenue, Suite 210
Baton Rouge, LA 70808
(225) 765-7488
COUNSEL FOR PLAINTIFF/APPELLANT:
Louisiana United Businesses Association Self Insurers Fund

Claude P. Devall
Cox, Cox, Filo & Camel, LLP
723 Broad Street
Lake Charles, LA 70601
(337) 436-6611
COUNSEL FOR DEFENDANTS/APPELLEES:
Ricky Ellender, d/b/a Ellender’s Portable Buildings
Dwayne Ellender

AMY, Judge.

Louisiana United Businesses Association Self Insured Fund (LUBA) appeals

the workers’ compensation judge’s finding that she lacked subject matter jurisdiction

over claims stemming from a workers’ compensation agreement between LUBA and

its member. For the following reasons, we reverse and remand.

Factual and Procedural Background

The record indicates that Keith A. Miller (Miller) filed a disputed claim for

compensation alleging that he was injured while in the course and scope of his

employment with Ricky Ellender d/b/a Ellender’s Portable Buildings (Ellender). He

subsequently filed an amended disputed claim adding LUBA, the workers’

compensation self-insured fund for Ellender, as a defendant. LUBA responded by

filing a petition for declaratory judgment, in which it alleged that at the time of his

accidents,1 Miller was not employed with Ellender. As such, LUBA contended that

the workers’ compensation agreement between it and Ellender did not provide

coverage. This matter was consolidated with the workers’ compensation suit filed by

Miller.2

Ellender filed an answer stating that at the time of his accidents, Miller was

employed by him to work on the home of his brother, Dwayne3 Ellender. Ellender,

therefore, argued that “there is coverage under the LUBA contract.” In a

supplemental and amending petition, LUBA alleged that Ellender “violated the

provisions of [La.R.S.] 23:1208 by willfully making false statements and

1
According to the disputed claim form, Miller alleged that he was injured on two separate
occasions.
2
For the companion case to this appeal, see Louisiana United Businesses Self Insurers Fund
v. Ricky Ellender d/b/a Ellender’s Portable Bldgs., et. al, 07-100 (La.App. 3 Cir. _/_/06), _ So.2d
_.
3
We note that throughout the record, the defendant’s first name is spelled as both “Dwayne”
and “Dwaine.” For purposes of this appeal, we use “Dwayne” as reflected on the record’s cover.

representations with regard to the employment status of the claimant herein, Keith A.

Miller.” LUBA also added Dwayne Ellender as a defendant, asserting that he

“violated the provisions of [La.R.S.] 23:1208(B) by aiding and abetting Ricky

Ellender d/b/a Ellender’s Portable Buildings, directly and/or indirectly, in making

false statements and/or representations.”

The record shows that prior to trial, a settlement agreement was reached in

which LUBA paid Miller $10,000.00, and he released all parties. LUBA reserved its

right to assert its coverage issue. Trial was set for September 21, 2006. Before the

submission of any evidence, the workers’ compensation judge held that since this was

an allegation of insurance fraud, subject matter jurisdiction was lacking. LUBA

appeals, asserting the following as error:

1. The trial court committed legal error by finding, sua sponte, that
it lacked the requisite subject matter jurisdiction over the claims
of coverage, indemnification and overpayment brought by the
Appellant herein;

2. The trial court committed legal error in finding, sua sponte, that
it lacked the requisite subject matter jurisdiction over claims
brought by the Appellant pursuant to LSA-R.S. 23:1208; and

3. The trial court committed legal error in finding, sua sponte, that
it lacked the requisite subject matter jurisdiction over claims
brought by the Appellant pursuant to LSA-R.S. 23:1172.2.

Discussion

Subject Matter Jurisdiction

LUBA argues that the matter arises under the Workers’ Compensation Act

insofar as its claims involve La.R.S. 23:12084 and La.R.S. 23:1172.2.5 Therefore, it

4
Louisiana Revised Statutes 23:1208 provides in pertinent part:

A. It shall be unlawful for any person, for the purpose of obtaining or
defeating any benefit or payment under the provisions of this Chapter, either for
himself or for any other person, to willfully make a false statement or representation.

2

argues that the Office of Workers’ Compensation had the requisite subject matter

jurisdiction.

In ruling that subject matter jurisdiction was lacking, the workers’

compensation judge explained:

The Court finds that if it were a [La.R.S. 23:]1208 [violation], you
would have to link the fraud to the claimant. In this case, the claimant’s
case was settled. At first glance to this Court, it appears to be a case of
allegations of insurance fraud. It appears to be that there was a lie in not
complying in their coverage application, an alleged lie of not complying
in that coverage application. This does appear to be more an allegation
of insurance fraud than 1208 fraud; therefore, I find that I do not have
subject matter jurisdiction.

Louisiana Constitution Article 5, § 16 provides: “Except as otherwise

authorized by this constitution or except as heretofore or hereafter provided by law

for administrative agency determinations in worker’s compensation matters, a district

court shall have original jurisdiction of all civil and criminal matters.” With regard

B. It shall be unlawful for any person, whether present or absent, directly or
indirectly, to aid and abet an employer or claimant, or directly or indirectly, counsel
an employer or claimant to willfully make a false statement or representation.
5
Louisiana Revised Statutes 23:1172.2 provides in pertinent part:

A. It shall be unlawful for any person to knowingly make any false,
fraudulent, or misleading oral or written statement, or to knowingly omit or conceal
material information for the purpose of obtaining workers’ compensation coverage,
or for the purpose of avoiding, delaying, or diminishing the amount of payment of
any workers’ compensation premiums.

B. It shall be unlawful for any person to knowingly misrepresent or conceal
payroll, classification of workers, or information regarding any employer’s loss
history which would be material to the computation and application of an experience
rating modification factor for the purpose of avoiding or diminishing the amount of
payment of any workers’ compensation premiums.

C. It shall be unlawful for any person, whether present or absent, directly or
indirectly, to aid and abet any other person, or directly or indirectly counsel any other
person, to engage in conduct in violation of this Section.

3

to the claims in which the workers’ compensation judge is vested with original,

exclusive jurisdiction, La.R.S. 23:1310.3 provides:

E. Except as otherwise provided by R.S. 23:1101(B), 1361, and
1378(E), the workers’ compensation judge shall be vested with original,
exclusive jurisdiction over all claims or disputes arising out of this
Chapter, including but not limited to workers’ compensation insurance
coverage disputes, group self-insurance indemnity contract disputes,
employer demands for recovery for overpayment of benefits, the
determination and recognition of employer credits as provided for in this
Chapter, and cross-claims between employers or workers’ compensation
insurers or self-insurance group funds for indemnification or
contribution, concursus proceedings pursuant to Louisiana Code of Civil
Procedure Articles 4651 et seq. concerning entitlement to workers’
compensation benefits, payment for medical treatment, or attorney fees
arising out of an injury subject to this Chapter.

In Beutler England Chiropractor Clinic v. Mermentau Rice, 05-942 (La.App.

3 Cir. 5/31/06), 931 So.2d 553, this court decided whether the Office of Workers’

Compensation had jurisdiction over a healthcare provider’s claim. At the outset, we

noted the jurisdiction granted to district courts in Article 5, Section 16 of the

Louisiana Constitution. We also reiterated our holding in Cajun Bag & Supply v.

Baptiste, 94-1218 (La.App. 3 Cir. 3/1/95), 651 So.2d 943, that pursuant to La.R.S.

23:1310.3(E), the Office of Workers’ Compensation has original jurisdiction over

claims that arise out of the Workers’ Compensation Act, but not those that are simply

related to workers’ compensation. Id.

Furthermore, we noted in Beutler that the amendment to La.R.S. 23:1310.3(E),

which became effective on August 15, 2005 and has retroactive effect, outlined the

types of claims or disputes in which the workers’ compensation judge will be vested

with original, exclusive jurisdiction. Specifically, La.R.S. 23:1310.3(E) gives the

workers’ compensation judge jurisdiction over “workers’ compensation insurance

coverage disputes, group self-insurance indemnity contract disputes” as well as

4

“cross-claims between employers or workers’ compensation insurers or self-insurance

group funds for indemnification or contribution[.]” Having found that subject matter

jurisdiction existed, we held that the employee’s settlement of his case did not divest

the Office of Workers’ Compensation of jurisdiction insofar as La.R.S. 23:1310.3(E)

“statutorily confers jurisdiction over the claim asserted by [the healthcare provider],

which is separate and independent from any of [the employee’s] claims under the

Louisiana Workers’ Compensation Act.” Beutler 931 So.2d at 558.

Here, LUBA’s claims arise out of the Workers’ Compensation Act insofar as

La.R.S. 23:1310.3(E) confers original, exclusive jurisdiction upon the Office of

Workers’ Compensation to adjudicate the contractual dispute relating to the claims

asserted by LUBA, i.e., that Ellender and Dwayne Ellender made false statements

about Miller’s employment status and therefore, the workers’ compensation

agreement did not provide coverage. Id. As in Beutler, the settlement of the

employee’s (Miller’s) claim does not divest the Office of Workers’ Compensation of

jurisdiction. Therefore, the workers’ compensation judge erred in finding that subject

matter jurisdiction was lacking.

DECREE

For the foregoing reasons, the ruling of the workers’ compensation judge is

reversed, and this case is remanded to the Office of Workers’ Compensation for a trial

on the merits. All costs of this appeal are assessed against the defendant, Ricky

Ellender d/b/a Ellender’s Portable Buildings.

REVERSED AND REMANDED.

5

NUMBER WCA 07-0099 consolidated with WCA 07-0100

COURT OF APPEAL, THIRD CIRCUIT

STATE OF LOUISIANA

KEITH A. MILLER

VERSUS

RICKY ELLENDER, D/B/A ELLENDER’S PORTABLE BUILDINGS

SAUNDERS, J., dissents and assigns written reasons.

I respectfully disagree with the majority’s opinion. Counsel for LUBA

references Grant v. Natchitoches Manor Nursing Home, 96-1546 (La.App. 3 Cir.

5/14/97), 696 So.2d 73. In his brief, counsel for LUBA dismissed Grant and cited

various case law that, to him, meant, “it has been made resoundingly clear that the

Office of Workers’ Compensation does in fact have subject matter jurisdiction over

claims brought under LSA-R.S. 23:1208.” I wrote Grant and my opinion regarding

a workers’ compensation judge having subject matter jurisdiction over La.R.S.

23:1208 fraud claims has not changed.

The majority argues for allowing the workers’ compensation judges to

adjudicate the fraud claims brought forth under La.R.S. 23:1208 by referencing the

language of La.R.S. 23:1310.3(E). Louisiana Revised Statute 23: 1310.3(E) provides

the specific jurisdiction of the Office of Workers’ Compensation Administration as

follows:

Except as otherwise provided by R.S. 231101(B), 1361, and 1378(E),
the workers’ compensation judge shall be vested with original, exclusive
jurisdiction over all claims or disputes arising out of this Chapter,
including but not limited to workers’ compensation insurance coverage
disputes, group self-insurance indemnity contract disputes, employer
demands for recovery for overpayment of benefits, the determination
and recognition of employer credits as provided for in this Chapter, and
cross-claims between employers and workers’ compensation insurers or

Page 1 of 4

self-insurance group funds for indemnification or contribution,
concursus proceedings pursuant to Louisiana Code of Civil Procedure
Articles 4651 et seq. Concerning entitlement to workers’ compensation
benefits, payment for medical treatment, or attorney fees arising out of
an injury subject to this Chapter. (Emphasis added.)

The majority states in its opinion that “LUBA’s claims arise out of the

Workers’ Compensation Act insofar as La.R.S. 23:1310.3 confers original, exclusive

jurisdiction upon the Office of Workers’ Compensation to adjudicate the contractual

dispute relating to the claims asserted by LUBA, i.e., that Ellender and Dwayne

Ellender made false statements about Miller’s employment status and, therefore, the

workers’ compensation agreement did not provide coverage.”

This court addressed whether a workers’ compensation judge has subject matter

jurisdiction over La.R.S. 23:1208 fraud claims in an en banc decision in Lanthier v.

Family Dollar Store, 02-429 (La.App. 3 Cir. 1/8/03), 848 So.2d 605. The majority

opinion in Lanthier 848 So.2d 605 outlined the argument for allowing workers’

compensation judges subject matter jurisdiction over La.R.S. 23:1208 fraud claims

while the dissent written by Judge Thibodeaux outlined the argument against. I joined

in Judge Thibodeaux’s dissent in Lanthier, 848 So.2d 605, and I incorporate his

argument in his dissent as my own for affirming the workers’ compensation judge’s

finding in the case at bar.

In addition to La.R.S. 23:1208, the workers’ compensation judge also

addressed the propriety of a workers’ compensation court’s subject matter jurisdiction

in relation to La.R.S. 23:1172.2. I feel that it is clear that the workers’ compensation

judge was correct in holding that she did not have subject matter jurisdiction of

claims asserted under La.R.S. 23:1172.2.

Article 5 Section 16 of the Louisiana Constitution addresses the original

jurisdiction of district courts. Article 5 Section 15 (A)(2) states, “It [District courts]

Page 2 of 4

shall have exclusive original jurisdiction of felony cases.(Emphasis added).

Louisiana Revised Statute 23:1172.2(D) provides “[w]hoever violates any

provision of this Section shall be imprisoned, with or without hard labor, for not less

than one year nor more than ten years, or fined not more than ten thousand dollars,

or both.” (Emphasis added). Louisiana Revised Statute 14:2(A)(4) defines felony as,

“any crime for which an offender may be sentenced to death or imprisonment at hard

labor.” (Emphasis added).

Clearly, a person who violates La.R.S. 23:1172.2 may be imprisoned with hard

labor, and, therefore, a case stemming from La.R.S. 23:1172.2 is a felony case.

Inasmuch as all criminal felony jurisdiction must begin in district court and all

articles of criminal law and criminal procedure in the Revised Statutes reference the

district court of our state, the workers’ compensation judge was assuredly not in error

in ruling that she did not have felony jurisdiction.

I am mindful of Lanthier v. Family Dollar Store, 02-2663 (La. 11/27/02), 827

So.2d 547. In that case, this court’s judgment declaring La.R.S. 23:1208

unconstitutional was vacated. Our Louisiana Supreme Court was clear in its opinion

that an appellate court is not to make a declaration regarding the constitutionality of

a statute on its own accord. They based their opinion on the fact that an appellate

court making this judgment, “did not have a record on the issue of constitutionality,

nor did it have the benefit of briefing and argument on this issue by the parties.” Id at

7.

While my opinion regarding the lack of subject matter jurisdiction of workers’

compensation courts is based, in part, upon constitutional provisions, I in no way

intend to pass judgment on the constitutionality of La.R.S. 23:1208, nor La.R.S.

23:1172.2. I feel that the conflict between our workers’ compensation statutes versus

Page 3 of 4

our criminal statutes and constitutional provisions necessitate a finding that the

workers’ compensation judge was correct in asserting that she lacked the power to

adjudicate the issues placed before her. Accordingly, I would vote to affirm the

workers’ compensation judge’s ruling.

Page 4 of 4

STATE OF LOUISIANA

COURT OF APPEAL, THIRD CIRCUIT

07-99 CONSOLIDATED WITH 07-100

KEITH A. MILLER

VERSUS

RICKY ELLENDER, D/B/A ELLENDER’S PORTABLE BUILDINGS

EZELL, J. dissenting.

I can see where the majority is correct as to the claims under La.R.S. 23:1208

vesting original jurisdiction to the Office of Workers’ Compensation. On the other

hand, I do not feel that the Office of Workers’ Compensation can under Article 5 §

15 (A)(2) hear claims that are a felony under the laws of our State.

I have a hard time allowing people who are not elected to the bench make

decisions on matters such as these and do not want to extend the jurisdiction any

further than it has already reached.

I must respectfully disagree with the majority opinion on this issue.