Chester J. Frederick v. Port Aggregates, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-552

CHESTER J. FREDERICK

VERSUS

PORT AGGREGATES, INC.

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - # 3
PARISH OF CALCASIEU, NO. 04-08897
CHARLOTTE A. L. BUSHNELL, WORKERS’ COMPENSATION JUDGE

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MARC T. AMY
JUDGE

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Court composed of Marc T. Amy, Michael G. Sullivan, and James T. Genovese,
Judges.

AFFIRMED. ADDITIONAL ATTORNEY FEES AWARDED FOR WORK
PERFORMED ON APPEAL.

Robert T. Jacques, Jr.
Post Office Box 1883
Lake Charles, LA 70602
(337) 433-4674
COUNSEL FOR PLAINTIFF/APPELLEE:
Chester J. Frederick

Shaun S. Gill
Yul D. Lorio
Blaine A. Doucet
Doucet Lorio, L.L.C.
One Lakeshore Drive, Suite 1695
Lake Charles, LA 70629
(337) 433-0100
COUNSEL FOR DEFENDANT/APPELLANT:
Port Aggregates, Inc.

AMY, Judge.

The claimant received indemnity and medical benefits for a work-related

accident and injury. His medical benefits were subsequently terminated when his

employer discovered that he was selling watermelons. Filing a disputed claim form,

the claimant sought medical benefits, penalties, and attorney fees. Following a

hearing, the workers’ compensation judge found in the claimant’s favor. The

employer appeals. For the following reasons, we affirm. Additional attorney fees are

awarded for work performed on appeal.

Factual and Procedural Background

The claimant, Chester J. Frederick (Frederick), began working for the

defendant, Port Aggregates, Inc. (PAI), in November 2003 as a cement truck driver.

According to Frederick, on October 12, 2004, he was “[t]rying to get the cement

chute off the back of the truck. . . I went to twist it, get it off when I pulled something

in my left arm. . . .” Frederick testified that when he returned to the work premises,

he reported the accident to Howard Manuel (Manuel), who advised him to come back

if his pain worsened. His pain persisted; therefore, on the following day, Frederick

requested that Warner Hanks (Hanks), plant supervisor, be notified of his accident.

Frederick testified that:

They took me to Business Health Partners the following week,
and they put me on light duty, told me no straining, pushing, and pulling
with that arm. They kept me on light duty one day, then Hanks --
Warner Hanks called and told Manuel to put me back on the truck and
he said that he needed everybody on the truck; and if I got to hurting too
bad, he would pull me off the truck.

Frederick testified that he drove the truck for a brief period of time before he made

the decision to stop. Frederick returned to Business Health Partners and the treating

physician referred him to Dr. Alan Hinton, an orthopedic surgeon. He testified that

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Dr. Hinton administered a cortisone shot in his arm, which did not alleviate his pain.

Dr. Hinton put him on light duty and referred him to Dr. James Perry, an orthopedic

surgeon, for neck and back pain that, according to Frederick, began “when they put

me back on the truck and . . . they wasn’t supposed to do that.” Frederick stated that

Dr. Perry gave him a cortisone shot in his neck to no avail.

Frederick stated that Dr. Perry placed him on light duty, which he worked for

a couple of days. However, Frederick alleged that Hanks told him that “he didn’t

f’ing need me, to go home . . . . If you can’t get on the truck, I don’t f’ing [need] you.”

Frederick maintained that Hanks “made me stop coming to work. He sent me home,

told me not to come back.” Frederick complied and subsequently began receiving

workers’ compensation benefits.

Frederick filed a disputed claim for compensation form on December 2, 2004,

in which he alleged that wage benefits had not been paid, medical treatment had not

been authorized, he had not been allowed to select his choice of physician, and

vocational rehabilitation had not been provided. He sought penalties and attorney

fees, costs, and interest on all amounts.

Although his requests to see Dr. Clark Gunderson, his choice of orthopedic

surgeon, were initially denied, the record indicates that Frederick visited with Dr.

Gunderson on March 9, 2005. On March 24, 2005, Dr. Gunderson requested that

Frederick undergo a cervical discogram at the C3-4 and C4-5 levels. Because two

ruptured discs were discovered in Frederick’s neck, Dr. Gunderson recommended

surgery. Dr. Perry concurred.

Frederick testified that in October 2005, he was presented with several

“Employee’s Monthly Report of Earnings” forms that he was told to complete. A

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review of the forms shows that Frederick was asked if he was “self-employed or

involved in any business enterprise.” He was also asked if he received wages.

Frederick testified that although he had sold watermelons during June and July 2005,

he did not disclose this information on the forms. He maintained that he did not

understand the questions and that he simply complied with his attorney’s instructions

to sign the forms.

Frederick stated that he sold watermelons out of his truck on the side of the

road, not for profit but, “to get out of the house, give me something to do because I

was getting bored there being in the house all the time, cooped up. I was fixing to

lose it. I couldn’t do anything.” He testified that he sold watermelons a couple of

days a week, usually for three or four hours per day. Frederick claimed that he did

not sell many melons and that in fact, he came “out in the hole.” He acknowledged

that he was receiving workers’ compensation benefits at that time.

According to Frederick, PAI terminated his medical benefits when it learned

of this activity; however, it continued to pay his indemnity benefits. He explained

that “I didn’t think I was doing anything wrong. . . . Dr. Perry and Dr. Hinton said that

I could be on light duty, so I figured doing that shouldn’t affect the money. Sitting

there collecting money wasn’t nothing.” He emphasized that when he purchased the

melons, they were loaded into his truck for him. Furthermore, when his customers

“came to buy them, I told them, ‘if you want the melon, you will have to pick it up

because I can’t do it. I have tried and I couldn’t do it. It make me hurt too bad.’”

Frederick subsequently filed a supplemental disputed claim form in which he

alleged, among other things, that medical treatment had not been authorized. He

sought penalties, attorney fees, and interest. Thereafter, PAI filed a motion for

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summary judgment alleging that Frederick “admittedly made false statements and

representations while receiving workers’ compensation benefits.” Specifically, PAI

contended that Frederick made false statements/misrepresentations about his work

ability and condition, his employment status, and wages received. Thus, PAI argued

that Frederick violated La.R.S. 23:1208, thereby forfeiting his right to receive

benefits. After a hearing, PAI’s motion for summary judgment was denied.

On October 30, 2006, a hearing was held in which the workers’ compensation

judge found that Frederick did not commit fraud in violation of La.R.S. 23:1208. PAI

was ordered to pay a $2,000.00 penalty “for failure to reasonably controvert Chester

J. Frederick’s entitlement to authorization of regular continued medical treatment”

and a $2,000.00 penalty for “failure to reasonably controvert Chester J. Frederick[’]s

entitlement to surgery, the necessity of which, was verified by Port Aggregates, Inc.’s

physician, Dr. James Perry, M.D.” The workers’ compensation judge additionally

held that Frederick was entitled to surgery. Frederick was awarded $7,000.00 in

attorney fees plus legal interest.

It is from this ruling that PAI appeals, designating the following as error:

A. The Trial Court was clearly wrong and committed a manifest
error in establishing that the Claimant did not willfully defraud
the workers compensation system.

B. The Trial Court was clearly wrong and committed a manifest
error in not allowing the video surveillance of the claimant caught
in the act of which he readily admitted to.

C. The Trial Court was clearly wrong and committed manifest error
in awarding penalties and attorneys fees when the ruling is
established from unsupported facts which would not be obvious
to the employer.

Frederick answered the appeal, seeking additional attorney fees for work performed

on appeal.

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Discussion

Violation of La.R.S. 23:1208

PAI argues that Frederick made willful, fraudulent statements regarding his

work activity, thereby forfeiting his right to receive medical benefits under La.R.S.

23:1208. To support its position, PAI points to the Employee’s Report of Monthly

Earnings forms as well as Frederick’s deposition testimony which, it alleges differs

from his trial testimony.

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.

....

E. Any employee violating this Section shall, upon determination
by workers’ compensation judge, forfeit any right to compensation
benefits under this Chapter.

A violation of La.R.S. 23:1208 occurs when: “(1) there is a false statement or

representation, (2) it is willfully made, and (3) it is made for the purpose of obtaining

or defeating any benefit or payment.” Resweber v. Haroil Constr. Co., 94-2708, 94-

3108, p. 7 (La. 9/5/95), 660 So.2d 7, 12. Unless manifestly erroneous, the workers’

compensation judge’s finding of a violation of La.R.S. 23:1208 will not be overturned

on appeal. Cajun Rental & Servs. v. Hebert, 05-482 (La.App. 3 Cir. 12/30/05), 918

So.2d 605.

In addressing whether the statute was violated, the workers’ compensation

judge concluded:

The claimant herein is unsophisticated, unlearned and is
inarticulate. He does not present himself very well; however, the court
does not find that the claimant committed fraud, nor has the defendant

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proven that the claimant committed fraud. The claimant did not make
a false statement or misrepresentation willfully for the purpose of
obtaining workers’ compensation benefits as set forth in the Louisiana
R.S. 23:1208. The defendant failed to prove its contention. In fact, the
alleged surveillance which defendants [sic] argued as proof of the 1208
was not part of the evidence in this record. The claimant has failed to
meet expectations as an ideal candidate for workers’ compensation
payments and he may have a less than firm grasp of what is expected of
him in order to avail himself of medical treatment under the Comp act,
but he is not a cheat and a fraud.

After reviewing the record, we find that it supports the workers’ compensation

judge’s determination that PAI did not prove that Frederick made willful, false

statements for the purpose of obtaining workers’ compensation benefits. In its brief,

PAI references Frederick’s deposition in which he acknowledged: (1) that he sold

watermelons for profit, during which time he was receiving workers’ compensation

benefits; (2) that he signed several Employee’s Monthly Report of Earnings forms in

which he did not indicate that he was working and/or receiving wages; and (3) that

he understood the forms and the penalty imposed for making false statements.

However, at trial, Frederick testified that he did not know the purpose of the

Employee’s Monthly Report of Earnings forms and that he did not understand the

questions. Rather, Frederick stated that he simply signed the forms per his attorney’s

instructions.

At trial, PAI’s attorney noted that a question on the form asked, “For the period

covered in this report, were you self-employed or involved in any business enterprise?

These include but are not limited to farming, sales work, operating business (even if

the business lost money), child care, yard work, mechanical work, or any type of

family business.” Frederick checked the “No” box. He reasoned that he did not

consider himself self-employed because he “wasn’t receiving a paycheck. I wasn’t

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receiving any wages. It’s not a job. It was something to get me out the house,

something for me [to] do, keep me occupied, keep me from going nuts.”

Additionally, PAI’s attorney pointed out that Frederick answered, “No” to the

question, “For the period covered in this report, did you receive a salary, wage, sales

commission, or payment, including cash, of any kind?” According to Frederick, he

did not understand that he should have indicated that he received money even though

he did not generate a profit. Further, he testified that during his deposition, he stated

that he understood the penalty for providing false information on the forms because

he “didn’t think [he] was doing anything wrong on the side of the road selling

watermelons.”

Given the circumstances, the workers’ compensation judge’s finding that

Frederick did not willfully make false statements or representations for the purpose

of obtaining workers’ compensation benefits was not manifestly erroneous. It is clear

from the record that Frederick, who did not graduate from high school,1 did not fully

understand and/or was not aware of what kinds of activity were prohibited under the

statute. Frederick testified that he thought he was complying with the light duty

restriction, did not consider himself self-employed, and did not believe that he needed

to report any income because he came “out in the hole.” Given this testimony, we

find no manifest error in the workers’ compensation judge’s conclusion that there was

no violation of La.R.S. 23:1208. See Herrera v. Cajun Co., 06-1627, pp. 13-14

(La.App. 4 Cir. 6/6/07), 960 So.2d 1161, 1169 (wherein the fourth circuit noted that

after observing the claimant’s demeanor and testimony, the workers’ compensation

judge found that his “misstatements were not intentional and were the result of his

1
Frederick testified that he failed three times before he quit school in the tenth grade. He
stated that, “I don’t read too well and some words, I don’t understand what they are. . . .”

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limited ability to read relevant documents and to understand his situation.” Thus, the

court concluded that the claimant’s inadvertent statements did “not support

imposition of the harsh remedy provided by the anti-fraud statute.”)

This assignment is without merit.

Video Surveillance

PAI contends that the workers’ compensation judge erred in allowing Frederick

to invoke his right against self-incrimination when it sought to introduce into

evidence a videotape of him selling watermelons. According to PAI, the workers’

compensation judge “committed an error in not allowing the claimant to view the

video before any questions were raised.” It asserts that “[h]ad the claimant had an

opportunity to view the video, he could have identified himself, thus making the

video authenticated.” PAI points out that Frederick had already admitted to engaging

in this activity.

During the cross-examination of Frederick, counsel for PAI stated that, “I want

to show the defendant [sic] something right quick, which is the video surveillance we

have all gone over and we have all seen before, and I will just ask him simply to

identify the man in the video.” The following exchange then occurred:

MR. JACQUES [Frederick’s attorney]:
I don’t know what video that is, Your Honor.

MR. GILL [PAI’s attorney]:
It’s the same one I have provided you.

MR. JACQUES:
Who is going to identify it?

(MR. GILL)
Q. Mr. Frederick, I’m playing this for you.

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MR. JACQUES:
Objection, Your Honor.

THE COURT:
Stand at ease for a moment. Let’s take a brief recess.
(A discussion was held off the record).

THE COURT:
Gentlemen, I think we took a recess at the objection of the video
surveillance testimony. Did you gentlemen need to put further
objections on the record?

MR. JACQUES:
Your Honor, I’m going to object for no foundation, and that
would be self-incriminating. This is a fraud case.

THE COURT:
Would you like to respond, Mr. Gill?

MR. GILL:
Your Honor, you know, the claimant has already made an
admission to doing that on the record. I can show him a video, could be
of anybody, and he can identify if that individual in the video is him or
somebody else; and I would think that that would make the video
admissible if he identified it as being a person in this courtroom today.

THE COURT:
Well, to get him to authenticate the video, that is improper and,
further, it is a violation of his fifth amendment rights, to which Mr.
Jacques has objected. And I do not believe the video surveillance is
currently in evidence; therefore, I am going to sustain the objection.

After reviewing the record, we find that the workers’ compensation judge did

not abuse her discretion in refusing to require Frederick to view the videotape.2

Medine v. Roniger, 03-3436 (La. 7/2/04), 879 So.2d 706. We note that there is no

indication that Frederick was familiar with the recording of the videotape, the date

on which it was taped, and/or the location of the recording. Also, Frederick had

already admitted to selling the melons. Therefore, this assignment has no merit.

2
We note that PAI did not proffer the excluded evidence.

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Penalties

PAI asserts that Frederick “was admittedly working selling watermelons for

money while receiving workers’ compensation.” Thus, it argues that it “reasonably

controverted the claimant’s injury, and in an effort to err on the side of caution, only

terminated medical benefits related to the claimant. An award of . . . penalties is

wholly inappropriate given the nature of the circumstances surrounding the case.”

Louisiana Revised Statutes 23:1201(E) states that “[m]edical benefits . . . shall

be paid within sixty days after the employer or insurer receives written notice

thereof.” Louisiana Revised Statutes 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 . . . 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 of the number of penalties which might be
imposed 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.

....

(2) This Subsection shall not apply if the claim is reasonably
controverted or if such nonpayment results from conditions over which
the employer or insurer had no control.

If medical treatment is not authorized within sixty days, the sanctions of La.R.S.

23:1201(F) will be applied. Lambert v. Brookshire Grocery Co., 06-1001 (La.App.

3 Cir. 12/20/06), 945 So.2d 918. This court has explained that:

To avoid the imposition of penalties and attorney fees, the
employer and its insurer must provide factual and medical evidence to

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reasonably controvert a workers’ compensation claim. Whether or not
the employer is cast with attorney fees and penalties is a question of fact
that will not be reversed on appeal absent manifest error. Id. at 927.
(citations omitted).

In her reasons for ruling, the workers’ compensation judge remarked:

Based on the evidence presented, [this] court finds that the
claimant is entitled to penalties in the amount of $4,000 for the
defendant’s failure to authorize medical treatment as well as for
defendant’s failure to reasonabl[y] controvert the request for surgery.
Defendant’s own doctor, Dr. James Perry, concurred in the need for
surgery.

Claimant is further entitled to attorney’s fees for defendant’s
arbitrary and capricious handling of this claim. Attorney’s fees are
owed in the amount of $7,000. Defendants [sic] shall pay all costs of
these proceedings, including interest.

Medical Treatment with Dr. Gunderson and Dr. Lopez

After reviewing the record, we find that it supports the workers’ compensation

judge’s imposition of a $2,000.00 penalty for PAI’s failure to authorize medical

treatment with Dr. Gunderson, Frederick’s choice of orthopedic surgeon, and Dr.

Frank Lopez, his choice of pain-management physician. According to a letter dated

November 10, 2004, Frederick’s attorney requested that PAI authorize visits with

both physicians. However, the parties’ stipulations demonstrate that Frederick’s

treatment with Dr. Gunderson was not authorized until March 4, 2005. Nevertheless,

Dr. Gunderson was notified that no further treatment would be authorized following

Frederick’s November 15, 2005 appointment. As for Dr. Lopez, Frederick was not

able to visit him until October 24, 2005.

With regard to Dr. Gunderson’s recommended course of treatment, the

stipulations state that:

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On March 24, 2005 Dr. Clark A. Gunderson requested
authorization for a cervical discogram at C 3-4 and C 4-53 [,which] was
denied pending a second medical opinion with Dr. James Perry, initially
scheduled for July 11, 2005 and re-scheduled by the claimant for August
8, 2005. The discogram was approved on September 12, 2005 for River
Oaks Imaging in Houston, Texas.

The record clearly reflects that PAI did not timely consent to Frederick’s

request to be seen by his choice of treating physicians. Nor did it timely authorize the

discogram. Insofar as PAI did not reasonably controvert Frederick’s claim, we find

that the workers’ compensation judge’s imposition of a penalty pursuant to La.R.S.

23:1201(F) was not manifestly erroneous.

This assignment is without merit.

Surgery

The record indicates that on October 25, 2005, Dr. Gunderson requested

authorization for an anterior cervical fusion at the C3-4 and C4-5 levels. The parties

stipulated that: “Authorization was denied on October 26, pending Dr. Perry’s

opinion. On November 15, 2005 Dr. Clark A. Gunderson received further

notification that surgery was denied[.]”4 On March 27, 2006, Dr. Perry agreed with

Dr. Gunderson’s recommendation; however, the surgery still was not authorized.

On April 4, 2006, Frederick’s attorney sent a letter to PAI’s attorney requesting

that the adjuster handling Frederick’s claim approve the surgery. Two subsequent

demand letters were sent to PAI. By correspondence sent to Frederick’s attorney on

April 13, 2006, PAI denied authorization “until the conclusion of the trial on this

matter.” This position was reiterated in correspondence dated April 26, 2006, in

3
The evidence shows that Frederick’s attorney sent demand letters dated April 11, 2005 and
July 29, 2005 for the approval of the discogram.
4
According to a notation in Dr. Gunderson’s records, surgery was denied on November 14,
2005.

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which PAI stated, “our client will not be approving and/or paying for Mr. Frederick’s

surgical procedure until all legal remedies have been exhausted and a final judgment

adverse to my client has been rendered.” Nevertheless, Frederick once again sought

approval in September 2006, one month prior to the hearing on this matter.

Insofar as Frederick repeatedly requested approval for the anterior cervical

fusion, which PAI denied without possessing any medical evidence that surgery was

not necessary, we conclude that the $2,000.00 penalty imposed by the workers’

compensation judge was not manifestly erroneous. See Vincent v. Napa Auto Parts

& Supply, 03-295 (La.App. 3 Cir. 6/23/04), 879 So.2d 301, writ denied, 04-1845 (La.

10/29/04), 885 So.2d 591 (wherein this court awarded penalties for the employer’s

failure to timely authorize the employee’s discogram, even after the initial request

was corroborated by the employer’s physician of choice).

Accordingly, this assignment has no merit.

Attorney Fees

PAI contends that the workers’ compensation judge erred in awarding attorney

fees insofar as it reasonably controverted Frederick’s claim.

In Lambert, 945 So.2d at 933, this court stated:

Louisiana Revised Statutes 23:1201(F) allows an award of
attorney’s fees when the employer fails to timely pay medical expenses
and/or authorize treatment. Although there is no limitation on the
amount of attorney’s fees which may be awarded, the award must be
reasonable, and it will not be overturned absent manifest error.
Alexander [v. Autozone, Inc., 04-871 (La.App. 3 Cir. 12/8/04)], 889
So.2d 366. The reasonableness of an award of attorney’s fees is
determined from “the degree of skill and ability exercised, the amount
of the claim, and the amount recovered for the plaintiff, and the amount
of time devoted to the case.” Id. at 378 (quoting Semere v. Our Lady of
Lourdes Hosp., 03-1702, p. 14 (La.App. 3 Cir. 6/29/04), 875 So.2d
1048, 1057.)

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Because PAI did not timely authorize treatment, an award of attorney fees is

proper under La.R.S. 23:1201(F). Further, the fee is reasonable in light of our view

of the record. Accordingly, we find that the workers’ compensation judge did not

abuse her discretion in awarding $7,000.00 in attorney fees. Jackson v. Christus

Health Cent. La., 05-983 (La.App. 3 Cir. 2/1/06), 922 So.2d 748. This assignment

has no merit.

Answer to Appeal

Frederick answered the appeal seeking additional attorney fees for work

performed on appeal. Accordingly, we award $2,500.00 for work on this appeal.

DECREE

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

affirmed. Additional attorney fees for work performed on appeal in the amount of

$2,500.00 are awarded to Frederick. All costs of this appeal are assessed against the

defendant, Port Aggregates, Inc.

AFFIRMED. ADDITIONAL ATTORNEY FEES AWARDED FOR WORK
PERFORMED ON APPEAL.

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