Luke Delahoussaye v. Live Oak Gardens, Ltd.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-246

LUKE DELAHOUSSAYE

VERSUS

LIVE OAK GARDENS, LTD.

**********

APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - DISTRICT 4
PARISH OF LAFAYETTE, NO. 07-01305
SHARON MORROW, WORKERS’ COMPENSATION JUDGE

**********

OSWALD A. DECUIR
JUDGE

**********

Court composed of Sylvia R. Cooks, Oswald A. Decuir, and J. David Painter, Judges.

Cooks, J., dissents and assigns written reasons.

AFFIRMED.

Michael B. Miller
Attorney at Law
P. O. Box 1630
Crowley, LA 70527
(337) 785-9500
Counsel for Plaintiff-Appellant:
Luke Delahoussaye

W. Michael Stemmans
M. Todd Alley
Michael J. Taffaro
Jennifer E. Frederickson
Stemmans & Alley
2798 O’Neal Lane, Suite B3
Baton Rouge, LA 70816
(225) 752-5266
Counsel for Defendants-Appellees:
Live Oak Gardens, Ltd.
Bridgefield Casualty Insurance Company

DECUIR, Judge.

Luke J. Delahoussaye was a heavy equipment operator with Live Oak Gardens,

Ltd. when he was injured on the job on January 3, 2006. Delahoussaye was paid

compensation benefits until he returned to work but filed this contested claim for

benefits after his employment was terminated in November of 2006. The workers’

compensation judge awarded supplemental earnings benefits, which were subject to

a credit for all business income received by Delahoussaye as a result of his ownership

interest in two local companies. Medical benefits, penalties, and attorney fees were

also awarded. Delahoussaye has appealed the business income credit awarded in

favor of the employer. The employer has neither appealed nor answered the appeal.

For the following reasons, we affirm.

The record reveals the following chronology of events. The workers’

compensation insurer, Bridgefield Casualty Insurance Company, paid weekly

indemnity and medical benefits from the time of injury through May 16, 2006. On

that date, the claimant returned to work in a light-duty supervisory position created

for him, earning pre-injury wages and benefits. He worked in that position until

November 16, 2006, when he was terminated by his employer. The evidence in the

record indicates that Live Oak management felt Delahoussaye’s continued

employment was creating morale problems, as Delahoussaye was receiving the same

pay for what was seen by other employees as less work; plus, he occasionally

conducted other business activities solely for his own profit during his work day at

Live Oak. While Delahoussaye’s other business activities did not constitute full-time

employment, the evidence shows that he did occasional work that consisted of

monitoring jobs, making contacts, picking up or hauling supplies, and answering

questions or calls.

Upon termination by Live Oak, compensation benefits were not reinstated. The

defendants were aware that Delahoussaye was a one-half owner of J.L.Hydroseeding,

LLC, an erosion control business, and a one-third owner of Southern Innovative

Services, LLC, an excavation and sales business. Live Oak was aware that

Delahoussaye had income from these businesses; indeed, the companies often did

business together and the president of Live Oak, Michael Richard, authorized

Delahoussaye’s involvement in the ventures. However, neither Live Oak nor its

insurer were informed of the amount of that income. Hence, the workers’

compensation judge concluded the defendants “[were] never in a position to even

estimate an amount to tender” as supplemental earnings benefits.

The Workers’ Compensation Act requires injured employees who are receiving

indemnity benefits to report business income monthly by filing a Louisiana

Department of Labor form referred to as Form 1020. The form requires information

on self-employment or involvement in any business enterprise, including “farming,

sales work, operating a business (even if the business lost money), child care, yard

work, mechanical work, or any type of family business.” The worker must describe

the type of business, his job duties, and the amount of income received from the

business. In the instant case, Delahoussaye did not complete any Form 1020s.

The parties do not dispute Delahoussaye’s eligibility for supplemental earnings

benefits, nor do they contest the factual conclusions regarding the award of penalties

and attorney fees. Rather, the question raised in this appeal is whether the trial court

erred in concluding that Delahoussaye’s earnings from his business interests operate

as a credit against any indemnity benefits the defendants might owe after

Delahoussaye’s termination from his modified job at Live Oak. The trial court gave

the following analysis:

2

Business income is to be used in the calculation of supplemental
earnings benefits. In Lafleur v. Hartford Insurance Company, 449
So.2d 725 (La. App. 3 Cir. 1984), the employee and his wife opened a
sausage kitchen after his injury disabled him from his job of injury. The
court found that the lower court had correctly assigned one-half of the
business profits of the community business to the employee’s post-
injury wage credit. In Caparotti v. Shreveport Pirates Football Club,
[33,570 (La.App. 2 Cir. 8/23/00), 768 So.2d 186, writ denied, 00-2947
(La. 12/15/00), 777 So.2d 1230], the court specifically held that profits
from the claimant’s business would be treated in the same manner as
wages for the purpose of calculating supplemental earnings benefits.

In those cases, the claimants became self-employed only after
their work injuries. In the present case, Delahoussaye’s businesses
existed prior to his injury with Live Oak and continued after his injury.
Mr. Delahoussaye’s counsel correctly asserts that under current
jurisprudence, the claimant’s business earnings cannot be included in the
calculation of the average weekly wage, citing cases including Lott v.
Louisiana [Power & Light], 377 So.2d 1277 (La. App. 3 Cir. 1979) and
Guillory v. Interstate Hotels [& Resorts, 05-650 (La.App. 3 Cir.
12/30/05), 918 So.2d 550.]...

Delahoussaye contends that because the business income cannot
be included in the average weekly wage calculation, it cannot be
credited against him as post-injury earnings....

While Delahoussaye’s counsel is correct that using income from
other employment for the post-injury calculation but not in the
calculation of average weekly wage deprives the employee of the
maximum protection of his earnings, the Third Circuit already
considered that possibility in Lott when it stated that the law, as
presently constituted, may, in certain isolated cases, not fully provide for
the employee’s loss of earning capacity... . Malone and Johnson also
address this concern in the following discussion of the Jones [v. Orleans
P. Sch. Bd., 370 So.2d 677 (La. App. 4 Cir. 1979)] case:

However, upon closer examination, the alleged unfairness
is less apparent. The Act is not a wage-insurance plan.
Rather, it is a legislative scheme intended to insure a basic
minimum subsistence to persons now wholly or partially
unable to earn their prior wage to work-related injuries.
This is apparent when one considers the plight of two
injured workers now wholly disabled. Even if one earned
$500 per week prior to the injury and the other $1000 per
week, they receive precisely the same benefit check: the
statutory maximum. The higher-paid worker may argue
that this is unfair, and he would be right if the legislative
objective were a wage-replacement plan. But the
legislative intent is to guarantee basic subsistence levels
thought to be reasonable and economically feasible, not to

3

replace wages at pre-injury levels. If the higher-paid
worker wants a wage-replacement plan, he will have to
purchase it in the private sector.

Wex S. Malone & H. Alston Johnson III, Workers’ Compensation
Law and Practice, 13 Louisiana Civil Law Treatise, § 277 (4th ed. 2002).
See also Malone & Johnson, Workers’ Compensation Law and Practice,
14 Louisiana Civil Law Treatise, § 324 (4th ed. 2002).

After considering the position advocated by each side, we find the ruling of the

workers’ compensation judge to be correct. Delahoussaye’s involvement in the

operation of J.L. Hydroseeding and Southern Innovative Services was minimal but

clearly more than just an investment. We conclude, therefore, that the type of

business income generated by Delahoussaye must be treated as any other post-injury

business earnings. It should have been disclosed on a Form 1020. It will be used to

offset supplemental earnings benefits as the law provides in La.R.S. 23:1221.

Finally, in this appeal, the claimant has requested additional attorney fees for

work performed pursuant to the appeal. We decline to grant the claimant’s request

as his appeal has been unsuccessful.

For the above and foregoing reasons, the judgment appealed from is affirmed

in all respects. Costs of the appeal are assessed to the claimant, Luke J.

Delahoussaye.

AFFIRMED.

4

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-246
LUKE DELAHOUSSAY

VS.

LIVE OAK GARDEN

COOKS, J. DISSENT

While I agree a portion of Delahoussay’s “business profits” should be

offset to account for his “labor” in creating the companies’ combined net profit,

the total profit of his business ventures are not attributable to his labor and do

not constitute earnings within the contemplation of the Act. Rather, the total

“profit” line in this case reflects two amounts- one solely attributable to

Delahoussay’s labor and the other solely a return on his investment which is not

subject to SEB offset.

SRC/emb