Kelly Nash v. Aecom Technology Corp.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

07-990

KELLY NASH

VERSUS

AECOM TECHNOLOGY CORPORATION

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION, DISTRICT 02
PARISH OF RAPIDES, NO. 06-06852
HONORABLE JAMES L. BRADDOCK, PRESIDING
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SYLVIA R. COOKS
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks and
Jimmie C. Peters, Judges.

AFFIRMED AS AMENDED.

Scott Webre
556 Jefferson Street, Suite 500
Lafayette, LA 70501
(337) 593-4178
COUNSEL FOR PLAINTIFF/APPELLEE:
Kelly Nash

James J. Hautot
Judice & Adley
926 Coolidge Blvd.
Lafayette, LA 70505
(337) 235-2405
COUNSEL FOR DEFENDANTS-APPELLANTS:
Aecom Technology Corporation and Insurance Company
of the State of Pennsylvania

COOKS, Judge.

In this workers’ compensation case, the employer, Aecom Technology

Corporation, and its insurer, Insurance Company of the State of Pennsylvania, appeal

the judgment of the Office of Workers’ Compensation finding they were arbitrary and

capricious in failing to authorize a necessary surgical procedure and assessing

penalties and attorney fees for that failure. For the following reasons, we affirm as

amended.

FACTS AND PROCEDURAL HISTORY

Claimant, Kelly Nash, fell at work on March 7, 2005. Mr. Nash promptly

reported the accident to his supervisor and filled out an accident report that same day.

He complained of pain in his lower left side hip and back to the degree he could

barely walk within an hour of the accident. That same day, Mr. Nash sought

treatment from the employer’s physician, Dr. Hanna Lubbos. He was assessed with

“low back pain, secondary to fall.” A lumbar MRI was ordered which revealed “mild

narrowing at L5-S1” and “severe findings . . . on the Left at L2-3.” Dr. Lubbos

referred Mr. Nash to a neurosurgeon.

Mr. Nash began treatment with neurosurgeon, Dr. Alan Appley, which did not

provide much benefit. On February 20, 2006, a follow-up MRI, with and without

axial loading, was performed. It revealed a herniated disc at L5-S1, for which Dr.

Appley recommended microdiscectomy surgery. A recommendation and request for

surgery was received by the insurer on June 9, 2006. A second opinion was obtained

by the insurer’s choice of neurosurgeon, Dr. Ricardo Leoni. Dr. Leoni’s report, dated

July 25, 2006, concluded Mr. Nash had “radicular pain that goes all the way down

into the bottom of his foot and one would have to say that this is probably from L5-

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S1. I think that he would probably do best with a microdiscectomy.”

On August 11, 2006, the insurer’s case manager, Debbie Kershaw, inquired to

Dr. Leoni as to whether “the L5-S1 problem occurred after the MRI from 4/8/05.”

On August 15, 2006, Dr. Leoni replied that the “L5-S1 disc bulge occurred after the

4-8-05 MRI scan.” Ms. Kershaw then asked Dr. Appley if he agreed with Dr. Leoni’s

opinion that the disc bulge occurred after the MRI. Ms. Kershaw received a note

from Dr. Appley on August 21, 2006, stating that he agreed with Dr. Leoni’s above

conclusion. Ms. Kershaw then asked Dr. Appley if he believed the L5-S1 bulge was

related to the work accident.

On December 7, 2006, Dr. Leoni stated in correspondence to Ms. Kershaw that

“I don’t think I could make a case that [claimant’s] accident caused this herniated disc

at L5-S1.” On March 16, 2007, Dr. Appley stated he believed the herniated disc was

more likely than not caused by the work accident. He wrote:

The MRI of 4/8/05 is not normal at L5-S1. There is diffuse bulging and
a central HIZ (high intensity zone) consistent with an annular tear. This
was, more likely than not, secondary to the 3/7/05 work injury.

Despite Dr. Appley’s conclusion, the insurer’s adjuster did not approve the

recommended surgery, basing its decision on Dr. Leoni’s report.

Mr. Nash filed a claim with the Office of Worker’s Compensation alleging an

“arbitrary and capricious denial of surgical treatment recommended by treating

physician warranting penalties and attorney fees.” Mr. Nash has received regular

indemnity benefits since the accident, thus, there are no issues relating to indemnity.

The employer/insurer requested the appointment of an independent medical examiner

(IME) to evaluate what the MRI of April 8, 2005 showed. The Workers’

Compensation Judge (WCJ) denied this request, finding, under La.R.S. 23:1123, an

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IME is inappropriate where the condition of the employee is not in question, but only

the causation of the employee’s condition. The WCJ noted the dispute was not

whether claimant had a herniated disc, but whether the herniated disc occurred

because of the work accident.

Approximately one week before trial on the matter, the employer/insurer

authorized the surgery. Thus, the only issue at trial was whether Defendants were

unreasonable in withholding authorization for surgery pending an investigation as to

whether the proposed surgery was related to the work accident.

After trial on the matter, the workers’ compensation judge (WCJ) found the

employer/insurer utilized “a lot of speculation and conjecture” in the denial of the

recommended medical care and thus, “unreasonably, arbitrarily and capriciously

denied and delayed reasonable and necessary medical treatment recommended” by

Dr. Appley. The trial court awarded a penalties of $2,000.00 and attorney fees in the

amount of $3,500.00. The employer/insurer appealed. Mr. Nash answered the appeal

seeking additional attorney fees for the work necessitated by the appeal.

ANALYSIS

This court in Noel v. Home Health 2000, Inc., 01-1543 (La.App. 3 Cir. 5/8/02),

816 So.2d 955, 956-57, set forth the applicable law governing the refusal to authorize

recommended medical treatment:

The law governing the furnishing of medical care, and the
consequences of the refusal to authorize such care, is found in Louisiana
Revised Statutes 23:1203 and 23:1201. 23:1203(A) states in pertinent
part:

In every case coming under this Chapter, the
employer shall furnish all necessary drugs, supplies,
hospital care and services, medical and surgical treatment,
and any nonmedical treatment recognized by the laws of
this state as legal, and shall utilize such state, federal,

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public, or private facilities as will provide the injured
employee with such necessary services.

Louisiana Revised Statute 23:1201(E) provides that: “[m]edical
benefits payable under this Chapter shall be paid within sixty days after
the employer or insurer receives written notice thereof.” Subsection (F)
states that failure to comply with this section “shall result in the
assessment of a penalty ... together with reasonable attorney fees for
each disputed claim.”

The decision to impose penalties is a factual question, which will
not be disturbed on appeal in the absence of manifest error. Spencer v.
Gaylord Container Corp., 96-1230 (La.App. 1 Cir. 3/27/97), 693 So.2d
818. Louisiana courts have consistently held that failure to authorize a
medical procedure for an employee eligible to receive workers’
compensation is deemed to be a failure to furnish compensation benefits,
thereby triggering the penalty provisions of the Louisiana Workers’
Compensation Act. Gay v. Georgia Pacific Corp., 32,653 (La.App. 2
Cir. 12/22/99), 754 So.2d 1101. Penalties and attorney fees for failure
to timely pay benefits will be assessed against an employer or insurer
unless the claim is reasonably controverted or such nonpayment results
from conditions over which the employer or insurer had no control.
La.R.S. 23:1201; Brown v. Texas-LA Cartage, Inc., 98-1063
(La.12/1/98), 721 So.2d 885. The supreme court in Brown went on to
state that:

in order to reasonably controvert a claim, the defendant
must have some valid reason or evidence upon which to
base his denial of benefits. Thus, to determine whether the
claimant’s right has been reasonably controverted, thereby
precluding the imposition of penalties and attorney fees
under La. R.S. 23:1201, a court must ascertain whether the
employer or his insurer engaged in a nonfrivolous legal
dispute or possessed factual and/or medical information to
reasonably counter the factual and medical information
presented by the claimant throughout the time he refused
to pay all or part of the benefits allegedly owed.

Brown, 721 So.2d at 890.

In applying the manifest error-clearly wrong standard, the
appellate court must determine not whether the trier of fact was right or
wrong, but whether the fact finder’s conclusion was a reasonable one.
Stobart v. State Through DOTD, 617 So.2d 880 (La.1993); Mart v. Hill,
505 So.2d 1120 (La.1987). Where there are two permissible views of
the evidence, a factfinder’s choice between them can never be

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manifestly erroneous or clearly wrong. Stobart, 617 So.2d 880. Thus,
“if the [factfinder’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.” Sistler v. Liberty Mut. Ins. Co., 558
So.2d 1106, 1112 (La.1990).

The WCJ specifically noted that appellants’ suggestions of sneezing, coughing

and hunting activities as possible reasons for denial of the recommended surgery were

pure speculation and conjecture. Further, the WCJ stated that appellants did not ask

the appropriate question of Dr. Leoni nor Dr. Appley regarding whether or not the

herniated disc at L5-S1 was causally related to the work accident. This was

corroborated by the testimony of appellants’ adjuster on claimant’s file, Brian

Lindsey, who testified as follows:

Q. Did you make any inquiry of any person specifically as to whether
or not an MRI one month following an accident and injury can show,
basically, normal findings only to develop later into a herniation, the
herniation stemming from an injury occurring prior to the MRI? Do you
have any appreciation for whether or not that’s possible?

A. It’s my understanding that that’s how it can occur, but we have to
go with what the doctors are saying which is not what he said.

Q. But you didn’t ask that of Dr. Appley in this letter, did you?

A. I asked if he thought it occurred after 04/08 of 05? That’s what I
asked him.

Q. You asked if the L5, S1 problem occurred after the MRI from
04/05, but you didn’t specifically address whether or not it could have
been a latent injury stemming from the March 7, 2005 accident only to
surface later or present itself later on the second MRI.

A. Well, we didn’t - - we weren’t aware that that was what essentially
was going on until we got the letter in March from Dr. Appley.

(Emphasis added.)

The WCJ also noted that the first MRI was not done with axial loading, whereas the

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second MRI was performed with axial loading. Mr. Lindsey explained that axial

loading in an MRI means weight is applied to the back to compress the discs and that

“something really small might not show up on a normal one.” Mr. Lindsey

acknowledged that he became aware that only the second MRI was done with axial

loading. Despite his awareness that the first MRI was substantially different in its

ability to measure a problem than the second MRI, that detail was not discussed with

Dr. Leoni at any time.

Mr. Lindsey’s testimony, as set forth below, clearly indicates a lack of urgency

on appellants’ part to fully investigate Dr. Appley’s conclusions that the disc

herniation was more likely than not caused by the work accident:

Q. So in March of ‘07 when you learned what was going on, that there
were these high intensity zones on the original MRI, you then formed an
opinion that the L5, S1 problem did stem from the March 7, ‘05
accident, correct?

A. Well, I had formed the opinion that that was what Dr. Appley was
saying. Like I said, I’m not - - I mean, as we said earlier, I’m not a
doctor or a neurosurgeon, so I kind of have to go with what they’re
saying.

Q. Okay, and you had - - and you had - - since that time, had not
formed - - not been provided any information to develop an opinion that
Dr. Appley was wrong?

A. No, I have not.

Q. And you did not contact Dr. Leoni subsequent to the March ‘07
report of Dr. Appley to check his opinion against Dr. Appley’s?

A. Well, we were going to ask for an IME with the State to come on
in.

Q. I understand that, but that’s not my question. My question is, you
never went back to Dr. Leoni to inquire whether or not what Dr. Appley
said about these high intensity zones was correct, right?

A. No. At that point, we had his opinion three times. It didn’t seem

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that relevant.

Q. So the answer to my question is, “No,” you didn’t - -

A. No, I did not.

Q. When was the first time you made an effort to go to back to Dr.
Leoni and find out?

A. Early - - in May 2nd, I believe, within a week or two of the trial
where our IME was denied.

Q. Why didn’t you go to him immediately in March after receipt of
Dr. Appley’s report?

A. Well, we had already had his opinion three times that he disagreed
with what Appley was saying, and so we felt that getting a third opinion
was really the best way to go.

Q. You didn’t have an opinion from Dr. Leoni as to the high intensity
zones referenced by Dr. Appley from the ‘05 MRI, right?

A. No.

Q. So that’s something new that could have been addressed with Dr.
Leoni as soon as you got Dr. Appley’s report, right?

A. If he would have been available to comment, yes.

Q. Well, was he unavailable to comment?

A. As of May 2nd, he was, when we sent our response - - our request
for that exact information.

Q. Do you know whether he was available in the month of April?

A. No, I don’t.

Q. Do you know whether he was available in the end of March after
receiving Dr. Appley’s report?

A. No, I don’t.

Taking the record as a whole, appellants’ refusal to authorize the recommendation for

surgery by Dr. Appley was not reasonably controverted by competent medical

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evidence. The WCJ was not manifestly erroneous in its imposition of penalties and

attorney fees.

We also note La.R.S. 23:1201(E) provides that “[m]edical benefits payable

under this Chapter shall be paid within sixty days after the employer or insurer

receives written notice thereof.” (Emphasis added.) Violation of this section “shall

result in the assessment of a penalty” as well as “reasonable attorney fees.” La.R.S.

23:1201(F). Although the WCJ did not base his decision on the failure to pay

benefits within the sixty day period, we find appellants were in violation of this

provision. The recommendation and request for surgery was received by the insurer

on June 9, 2006. By the expiration of the sixty day period, August 8, 2006, appellants

possessed the recommendation for surgery by Dr. Appley, the second opinion of its

choice of physician, Dr. Leoni, agreeing with Dr. Appley’s recommendation for

surgery, and the utilization review performed by Health Direct, Inc., acknowledging

the surgery had been “recommended as medically necessary.” It was not until August

11, 2006, after the expiration of the sixty day period, when the insurer’s case

manager, Debbie Kershaw, first approached Dr. Leoni and inquired as to whether “the

L5-S1 problem occurred after the MRI from 4/8/05.” Appellants neither reasonably

controverted the recommendation for surgery within sixty days, nor demonstrated its

failure to do so was beyond its control. Thus, penalties and attorney fees are

appropriate under R.S. 23:1201(F).

Claimant answered the appeal, and requests an additional award of attorney

fees for work performed on this appeal. A workers’ compensation claimant is entitled

to an increase in attorney fees to reflect additional time incurred in defending an

employer/insurer’s unsuccessful appeal. Hickman v. Allstate Timber Co., 94-1275

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(La.App. 3 Cir. 4/5/95), 653 So.2d 154, writ denied, 95-1133 (La. 6/23/95), 656

So.2d 1017. Accordingly, we award an additional $2,000.00 in attorney fees for the

successful handling of this appeal.

DECREE

For the above reasons, the judgment is amended to award an additional

$2,000.00 in attorney fees for the appeal and is otherwise affirmed. Costs of this

appeal are assessed to the appellants, Aecom Technology Corporation and Insurance

Company of the State of Pennsylvania.

AFFIRMED AS AMENDED.

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