City of Dequincy v. Randy James Henry

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-636

CITY OF DEQUINCY

VERSUS

RANDY JAMES HENRY

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - DISTRICT 3
PARISH OF CALCASIEU, NO. 06-05331
SAM L. LOWERY, WORKERS’ COMPENSATION JUDGE

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OSWALD A. DECUIR
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Oswald A. Decuir and
Billy Howard Ezell, Judges.

AFFIRMED.

Steven Broussard
Broussard & Hart, LLC
1301 Common Street
Lake Charles, LA 70601
(337) 439-2450
Counsel for Defendant/Appellee:
Randy James Henry

Christopher R. Philipp
Attorney at Law
P. O. Box 2369
Lafayette, LA 70502-2369
(337) 235-9478
Counsel for Plaintiff/Appellant:
City of DeQuincy

DECUIR, Judge.

This workers’ compensation appeal was brought by an employer, the City of

DeQuincy, after its injured employee, Randy James Henry, successfully mediated a

resolution of his third-party tort suit against CLECO Utility Group, Inc. The City

sought to terminate all workers’ compensation benefits, including future medical

expenses, based on the allegation that Henry failed to obtain written approval of the

settlement, thereby invoking the forfeiture provision of the workers’ compensation

statute. The trial court denied the City’s motion to terminate benefits, found the City

approved the settlement between Henry and CLECO, and denied the City’s request

for a credit against future medical expenses. For the following reasons, we affirm.

On November 26, 2000, while investigating the scene of an automobile

accident, Henry, a patrolman with the City of DeQuincy, came into contact with a live

electrical transmission wire belonging to CLECO. As a result, Henry suffered severe,

totally disabling injuries. The City, through the Louisiana Municipal Risk

Management Agency (RMI), initiated workers’ compensation benefits. Henry filed

a tort suit against CLECO, and the City intervened to recover the benefits paid to and

on behalf of Henry. By the time of the mediated settlement at issue before us, the

amount of indemnity and medical benefits paid totaled $481,567.47. Information in

the sparse record before us indicates that future medical expenses will be substantial

for this forty-nine-year-old former police officer who will apparently never work

again.

After nine years of litigation, two prior visits to this court (see Henry v.

Barlow, 04-1657 (La.App. 3 Cir. 5/4/05), 901 So.2d 1207, and Henry v. Barlow and

CLECO, 06-283 (La.App. 3 Cir. 8/9/06), 937 So.2d 895, writ denied, 06-2592 (La.

1/12/07), 948 So.2d 153), and several writs to the supreme court, the parties finally

agreed to settle their differences with the help of a mediator. A date and time were

scheduled and the mediator was selected. The City and its attorney, as well as RMI,

were made aware of the upcoming mediation but specifically declined to attend. By

email, however, the City agreed to waive one-third of its lien for attorney fees “to

make the case settle,” and forwarded to the mediator a document showing the exact

amount of its lien as of the morning of the mediation. The City asked for no other

concessions. During the course of the mediation, Henry and CLECO agreed to a full

satisfaction of the City’s lien, minus one-third for attorney fees, exactly what the City

requested. The parties also agreed that Henry would have the right to allocate the

settlement funds as he saw fit; consequently, no portion of the settlement funds were

allocated for future medical expenses and $235,500.00 were allocated to Henry’s wife

and children as loss of consortium damages. In the days following the successful

mediation, the City’s attorney congratulated CLECO’s attorney on the settlement.

The City then asserted a claim for a credit against Henry’s net proceeds in the

settlement for all future disability and medical payments. When Henry disagreed with

the City’s claim for a credit for future medical expenses, the City made the assertion

that no written approval of the settlement had been given, and if Henry proceeded

without that approval, he would forfeit all future compensation benefits. Henry did

not dispute the City’s right to a credit for future indemnity benefits. Henry then

petitioned the court to declare the settlement approved; in response, the City sought

judicial approval to terminate benefits. Once this litigation was initiated, the City

released CLECO from all claims in exchange for a payment of $321,045.25, the full

amount of its workers’ compensation lien less one-third for attorney fees.

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In cases involving settlement with a third party tortfeasor, the rights of an

employer and workers’ compensation insurer are governed by La.R.S. 23:1102, which

provides in pertinent part:

B. If a compromise with such third person is made by the
employee or his dependents, the employer or insurer shall be liable to
the employee or his dependents for any benefits under this Chapter
which are in excess of the full amount paid by such third person, only
after the employer or the insurer receives a dollar for dollar credit
against the full amount paid in compromise, less attorney fees and costs
paid by the employee in prosecution of the third party claim and only if
written approval of such compromise is obtained from the employer or
insurer by the employee or his dependent, at the time of or prior to such
compromise. Written approval of the compromise must be obtained
from the employer if the employer is self-insured, either in whole or in
part. If the employee or his dependent fails to notify the employer or
insurer of the suit against the third person or fails to obtain written
approval of the compromise from the employer and insurer at the time
of or prior to such compromise, the employee or his dependent shall
forfeit the right to future compensation, including medical expenses.
Notwithstanding the failure of the employer to approve such
compromise, the employee’s or dependent’s right to future
compensation in excess of the amount recovered from the compromise
shall be reserved upon payment to the employer or insurer of the total
amount of compensation benefits, and medical benefits, previously paid
to or on behalf of the employee, exclusive of attorney fees arising out of
the compromise; except in no event shall the amount paid to the
employer or insurer exceed fifty percent of the total amount recovered
from the compromise. Such reservation shall only apply after the
employer or insurer receives a dollar for dollar credit against the full
amount paid in compromise, less attorney fees and costs paid by the
employee in prosecution of the third party claim.

C. (1) When a suit has been filed against a third party defendant
in which the employer or his insurer has intervened, if the third party
defendant or his insurer fails to obtain written approval of the
compromise from the employer or his insurer at the time of or prior to
such compromise and the employee fails to pay to the employer or his
insurer the total amount of compensation benefits and medical benefits
out of the funds received as a result of the compromise, the third party
defendant or his insurer shall be required to reimburse the employer or
his insurer to the extent of the total amount of compensation benefits
and medical benefits previously paid to or on behalf of the employee to
the extent said amounts have not been previously paid to the employer
or his insurer by the employee pursuant to the provisions of Subsection
B of this Section. Notwithstanding such payment, all rights of the

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employer or his insurer to assert the defense provided herein against the
employee’s claim for future compensation or medical benefits shall be
reserved.

Factual findings in workers’ compensation cases are subject to the manifest

error or clearly wrong standard of appellate review. Banks v. Indus. Roofing & Sheet

Metal Works, Inc., 96-2840 (La.7/1/97), 696 So.2d 551. In applying the manifest

error standard, the appellate court determines whether the fact finder’s conclusion

was reasonable, not whether the trier of fact was right or wrong. Id. “[E]ven where

the appellate court is convinced it would have weighed the evidence differently if it

had been sitting as trier, the court of appeal may not reverse if the factfinder’s

findings are reasonable in light of the record reviewed in its entirety.” Winford v.

Conerly Corp., 04-1278, p. 15-16 (La. 3/11/05), 897 So.2d 560, 569-70.

Upon review, we will not set aside the factual findings of the workers’

compensation judge in the absence of manifest error. After taking the case under

advisement, the trial court reached the following conclusions. First, the court

specifically found the City had given prior written approval, via letters and emails,

of the settlement between Henry and CLECO. Our review of the documentary

evidence in the record reveals no manifest error in this factual conclusion. Prior to

the mediated settlement, the City communicated its position regarding its lien, and

Henry and CLECO proceeded with reliance on that position. Second, the court ruled

that the City’s credit for future compensation will not extend to future medical

expenses. In support of this ruling, the court cited Breaux v. Dauterive Hosp. Corp.,

02-1072 (La.App. 3 Cir. 2/5/03), 838 So.2d 109, which we acknowledge is a correct

statement of the law: “[T]he workers’ compensation insurer is not entitled to a credit

for future medical benefits, even when the amount, which the third party tortfeasor

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paid in settlement, exceeds that sufficient to reimburse the compensation carrier.” Id.

at 112. Third, the court calculated a credit in favor of the City in the amount of

$2,054,758.10, which reflected a deduction from the settlement proceeds of the loss

of consortium damages apportioned to Henry’s wife and children. The record

discloses no manifest error in this calculation. Here, the loss of consortium damages

represent only a small percentage of the entire settlement; by contrast, the court may

have had reason to question the settlement apportionment had the consortium

damages been out of proportion to the total settlement. (See, for example, Miller v.

La. Farm Bureau Cas. Ins. Co., 95-1087 (La. App. 3 Cir. 3/6/96), 670 So.2d 622,

where the entire $77,500.00 settlement was designated as loss of consortium damages

in favor of the tort victim’s minor son.)

For the above and foregoing reasons, the judgment of the trial court is affirmed.

Costs of this appeal are assessed to the City of DeQuincy and RMI.

AFFIRMED.

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