Gerald Moss v. Tommasi Construction, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-1419

GERALD MOSS

VERSUS

TOMMASI CONSTRUCTION, INC., ET AL.

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION -DISTRICT # 3
PARISH OF CALCASIEU, NO. 08-3126
SAM L. LOWERY, WORKERS’ COMPENSATION JUDGE

**********
ELIZABETH A. PICKETT
JUDGE
**********

Court composed of Ulysses Gene Thibodeaux, Chief Judge, Sylvia R. Cooks, and
Elizabeth A. Pickett, Judges.

AFFIRMED.

Thibodeaux, Chief Judge, concurs in the result.
Cooks, J., concurs in the result.

Christopher M. Trahan
Raggio, Cappel, Chozen & Berniard
P. O. Box 820
Lake Charles, LA 70602
Counsel for Defendant/Appellant:
Donald P. Shaw

Foster P. Nash III
Degan, Blanchard & Nash
400 Poydras St., #2600
New Orleans, LA 70130
Counsel for Defendant/Appellee:
LEMIC Insurance Company

Thomas J. Solari
Woodley, Williams, Boudreau
P. O. Box 3731
Lake Charles, LA 70602-3731
Counsel for Defendant/Appellee:
Tommasi Construction, Inc.

Gregory P. Marceaux
Marceaux Law Firm
2901 Hodges St.
Lake Charles, LA 70601
Counsel for Plaintiff/Appellant:
Gerald Moss

PICKETT, Judge.

The defendant, Don Shaw, appeals a decision of a Workers’ Compensation

Judge (WCJ) finding him, personally, the employer of the claimant, Gerald Moss, and

liable for all compensation benefits plus $6,000.00 in penalties, $17,500.00 in

attorney’s fees and the interest on all elements of the award. The claimant also

appeals, listing five alleged legal errors made by the WCJ. The claimant, further,

seeks additional attorney’s fees for this appeal. We affirm the decision of the WCJ

and award the claimant $4,000.00 in additional attorney’s fees for work on this

appeal.

FACTS

The claimant, Moss, who was employed by Leonard Darson, was severely

injured when he fell of a scaffold on January 5, 2008, while installing Hardi Plank (a

synthetic wood) siding. He had been hired by Darson to install the siding on an

apartment complex which was being built by Don Shaw, a Lake Charles businessman.

After the accident, Darson disappeared and, as of the trial, was still missing.

In order to build the complex, building permits were required. Shaw, who is

not a contractor, and thus, who was unable to obtain the necessary permits, entered

into a verbal agreement with a friend, Louis “Tony” Tommasi, owner of Tommasi

Construction to “pull” the necessary permits and to “oversee” the project. During the

trial of this matter, one of the contested issues was the nature of that agreement.

Shaw claimed he hired Tommasi as his general contractor, while Tommasi maintained

that he was engaged as a “consultant” to oversee the project and to obtain the needed

permits, which could only be obtained by a person/firm holding a general contractor’s

license. Tommasi and Shaw had collaborated before on several projects. The two

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never worked via written contracts, but by verbal agreement. From the depositions

of the two men, it appears that Tommasi performed some functions of a general

contractor, i.e. he obtained the needed permits listing himself as contractor on the

project, and he supervised the work of the subcontractors. However, Tommasi

neither paid for the building materials nor paid the subcontractors, but rather he

verified to Shaw that work had been completed so that Shaw would pay the

subcontractors.

Shaw also performed some functions of a general contractor, although he is not

licensed as such. Shaw hired all the subcontractors, signed any written contracts that

were entered into with the subcontractors (for instance, electrical and plumbing), paid

for materials, and paid the subcontractors as Tommasi reported their work was

completed.

Neither Shaw nor Tommasi inquired if any of the subcontractors carried

workers’ compensation insurance. Shaw stated that the “thought didn’t cross my

mind.” Both Shaw and Tommasi were insured by LEMIC Insurance

Company—Shaw for his insurance business and Tommasi for his contracting

business.

The apartment project was progressing amicably, without incident, until the

claimant fell off the scaffold on which he was working, severely injuring his ankle

and sustaining additional injuries to his leg and knee.

When the claimant looked to Darson for workers’ compensation benefits, it was

discovered that Darson had no workers’ compensation insurance. Shortly thereafter,

Darson disappeared. The claimant then looked to Shaw, Tommasi, and/or LEMIC for

benefits. All denied coverage, and this suit commenced.

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ASSIGNMENTS OF ERROR

On appeal Gerald Moss, the claimant, filed two briefs, one as appellant and one

as appellee. As appellant, Moss argues the WCJ committed several errors: (1) in not

finding Tommasi the general contractor for the project; (2) in not finding Darson,

Shaw and Tommasi Construction solidary obligors; (3) in not awarding him an

increase of 50% of the indemnity amount as per La.R.S. 23:1171.2; (4) in allowing

Shaw to rely on the fee schedule and to pay the medical providers directly; and (5)

in not finding that LEMIC Insurance Company provided coverage for this claim. The

claimant also seeks additional attorney’s fees for work necessitated by this appeal.

As appellee, Moss completely agrees with the WCJ that Darson was his direct

employer, but, under the circumstances of this case, Shaw is his employer by law and,

as such, is responsible for any sums for which Darson is liable. We agree with

Moss’s argument as appellee, and we reject most of his arguments as appellant.

Don Shaw also appears as both appellant and appellee. As appellee, he argues

that the WCJ was correct in ordering payment of medical expenses to be paid per the

fee schedule, directly to the medical providers. As appellant, he argues that the WCJ

erred in finding him liable for the benefits owed Moss, in awarding Moss penalties

and attorney’s fees, and in finding that his workers’ compensation policy with

LEMIC did not provide coverage for this claim.

We agree with Shaw’s arguments as appellee, but we reject his arguments as

appellant.

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LAW AND DISCUSSION

The standard of review applicable in workers’ compensation cases was set out

by our supreme court in Dean v. Southmark Const., 03-1051, p.7 (La. 7/6/04), 879

So.2d 112, 117 (citations omitted), wherein the court stated:

In worker’s compensation cases, the appropriate standard of
review to be applied by the appellate court to the OWC’s findings of fact
is the “manifest error-clearly wrong” standard. Accordingly, the
findings of the OWC will not be set aside by a reviewing court unless
they are found to be clearly wrong in light of the record viewed in its
entirety. Where there is conflict in the testimony, reasonable evaluations
of credibility and reasonable inferences of fact should not be disturbed
upon review, even though the appellate court may feel that its own
evaluations and inferences are as reasonable. The court of appeal may
not reverse the findings of the lower court even when convinced that had
it been sitting as the trier of fact, it would have weighed the evidence
differently. The determination of whether injury occurred in the course
and scope of employment is a mixed question of law and fact.

The case before us rests mainly on the conflicting testimony of two of the

parties: Don Shaw, the owner and financier of the project, and Tony Tommasi, the

owner of Tommasi Construction, Inc. We have no contracts to examine between

Shaw, Tommasi, and Darson, and there is no evidence that Darson carried workers’

compensation insurance. The record shows that both Shaw and Tommasi carried

workers’ compensation insurance, Shaw for his insurance business and Tommasi for

his construction company.

In Rosell v. ESCO, 549 So.2d 840, 844-45 (La.1989) (citations omitted) our

supreme court explained the manifest error/clearly wrong standard:

When findings are based on determinations regarding the
credibility of witnesses, the manifest error--clearly wrong standard
demands great deference to the trier of fact’s findings; for only the
factfinder can be aware of the variations in demeanor and tone of voice
that bear so heavily on the listener’s understanding and belief in what is
said. Where documents or objective evidence so contradict the
witness’s story, or the story itself is so internally inconsistent or
implausible on its face, that a reasonable fact finder would not credit the

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witness’s story, the court of appeal may well find manifest error or clear
wrongness even in a finding purportedly based upon a credibility
determination. But where such factors are not present, and a factfinder’s
finding is based on its decision to credit the testimony of one of two or
more witnesses, that finding can virtually never be manifestly erroneous
or clearly wrong.

In his reasons for judgment in this case, the WCJ pointed out the following:

[T]he relationship between and among all of these parties here was
pretty well understood - or at least was not a point of contention - right
up until the time that Mr. Moss fell off the scaffolding seriously injuring
himself. At that junction, apparently the principals here, upon facing the
prospect of being liable for some very substantial medical and indemnity
risk, found themselves in total disagreement as to their respective roles
in contractual obligations in relation to one another.

At that point, Shaw took the position that Tommasi was his general contractor,

a position which Tommasi vehemently denied. The WCJ found that, based upon

testimony and on the facts that Tommasi was only being paid $50,000.00 on a project

which cost over one million dollars and that he neither hired nor paid the

subcontractors, Tommasi was indeed acting as a consultant, not as a general

contractor.

In making his finding on this issue the WCJ stated:

The plaintiff argues that under the “two-contract” provision,
Tommasi as the general contractor contracted to do a job for another (in
this case, Shaw as the owner). Subsequently, Tommasi contracted with
Darson to perform some or all of the work, thus making Tommasi the
plaintiff’s statutory employer, according to the plaintiff’s view.

The problem with this view is that the evidence at trial showed
conclusively that Tommasi never contracted with subcontractor Leonard
Darson to do anything. Darson was interviewed, hired, negotiated with,
and paid by Don Shaw, not Tommasi. The two-contract theory requires
just what the name suggests—two contracts, but the two contracts here
were effected between Don Shaw and Leonard Darson and subsequently
between Darson and his employee, Gerald Moss. Shaw is the proper
party to any two-contract configuration. The testimony which was
offered at trial bears out this judgment. The following is basically what
happened:

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A well known and widely respected business developer, Don
Shaw, asked his long-time business associate, Tony Tommasi, to use his
contractor[’s] license to get permits for the apartment complex Shaw
planned to build. Now, at this point in time, there is no doubt that
Tommasi was, in fact, the licensed contractor for the project, in title at
least, because that’s what the records at City Hall says he was; however,
his role as the full-fledged general contractor seemed to have a very
short shelf life because once construction began, Don Shaw apparently
took the reins fully into his own hands. From all accounts, he did so for
the rather practical reason that he had built buildings—large ones in
fact—before and he knew the construction business quite well. The
testimony indicated that Shaw negotiated with, contracted with, and paid
every subcontractor who was on the job site, including Leonard Darson.
There is no reasonable way to interpret the evidence except to conclude
that for all intents and purposes, Tony Tommasi’s functional role was
that of an employee, a supervisory employee perhaps, but still an
employee of Don Shaw. Plaintiff’s argument that somehow Shaw and
Tommasi co-hired, for want of a better term, Darson has very little
evidentiary foundation.

We agree with the WCJ’s finding on this issue. The record supports the

conclusion that Tommasi was acting as “a supervisory employee” of Shaw, not as the

general contractor on this project. That finding absolved Tommasi and LEMIC, as

Tommasi’s workers’ compensation insurer, from any liability to Moss and precluded

a finding of solidarity between Shaw and Tommasi.

That left the question of the liability of Shaw and LEMIC as his workers’

compensation insurer. The WCJ found that Shaw acted as the general contractor and

that the LEMIC policy issued to Shaw did not contemplate coverage for any

construction activities based upon the plain language of the policy and the premium

paid. We agree.

In reaching this conclusion that Shaw acted as his own general contractor, the

WCJ noted that Shaw “did so for the rather practical reason that he had built

buildings—large ones in fact—before, and he knew the construction business quite

well. The testimony indicated that Shaw negotiated with, contracted with, and paid

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every subcontractor who was on the job site, including Leonard Darson.” Thus, the

WCJ concluded that Shaw is the “legal” employer of Moss and is responsible for

Moss’s workers’ compensation benefits.

On appeal, Shaw argues that Tommasi, not he, is the responsible party,

maintaining that Tommasi is the “statutory employer” of Moss.

The liability for payment of workers’ compensation benefits in situations such

as this is not crystal clear. We have been unable to find a case directly on point.

However, the analysis by our colleagues of the fifth circuit, in a case with similar

facts (although seeking different relief), is instructive. In the case of Lumar v. Zappe

Endeavors, L.L.C., 06-317 (La.App. 5 Cir. 10/31/06), 946 So.2d 188, the plaintiff, an

employee of an independent contractor, sought to recover damages under tort law for

injures she sustained in an on-the-job accident, rather than to proceed under workers’

compensation law. In granting summary judgment in favor of Zappe, finding that it

was liable for workers’ compensation and not tort liability, the court stated:

Aramark, an independent contractor, contracted with Zappe to provide
cleaning services for Zappe’s manufacturing facility. Plaintiff
[Aramark’s employee] was in the course and scope of her employment,
providing those cleaning services, when she was injured.

LSA R.S. 23:1032 provides that:

A. (1)(a) Except for intentional acts provided for in
Subsection B, the rights and remedies herein granted to an
employee or his dependent on account of an injury, or
compensable sickness or disease for which he is entitled to
compensation under this Chapter, shall be exclusive of all
other rights, remedies, and claims for damages, including
but not limited to punitive or exemplary damages, unless
such rights, remedies, and damages are created by a statute,
whether now existing or created in the future, expressly
establishing same as available to such employee, his
personal representatives, dependents, or relations, as
against his employer, or any principal or any officer,
director, stockholder, partner, or employee of such

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employer or principal, for said injury, or compensable
sickness or disease.

(b) This exclusive remedy is exclusive of all claims,
including any claims that might arise against his employer,
or any principal or any officer, director, stockholder,
partner, or employee of such employer or principal under
any dual capacity theory or doctrine.

LSA-R.S. 23:1021(7) provides that:

(7) “Independent contractor” means any person who
renders service, other than manual labor, for a specified
recompense for a specified result either as a unit or as a
whole, under the control of his principal as to results of his
work only, and not as to the means by which such result is
accomplished, and are expressly excluded from the
provisions of this Chapter unless a substantial part of the
work time of an independent contractor is spent in manual
labor by him in carrying out the terms of the contract, in
which case the independent contractor is expressly covered
by the provisions of this Chapter. The operation of a truck
tractor or truck tractor trailer, including fueling, driving,
connecting and disconnecting electrical lines and air hoses,
hooking [06-317 La.App. 5 Cir. 5] and unhooking trailers,
and vehicle inspections are not manual labor within the
meaning of this Chapter.

Thus, LSA-R.S. 23:1021(7) allows workers’ compensation
coverage for a certain type of independent contractor, one who is
engaged in manual labor for a substantial part of the work time, and
LSA-R.S. 23:1032 allows tort immunity to that type of independent
contractor’s “employer.” As the court noted in Fleniken v. Entergy
Corp., 780 So.2d 1175, 95 A.L.R.5th 665, 2000-1824 (La.App. 1 Cir.
2/16/01), writ denied, 2001-1268, 793 So.2d 1250 (La.6/15/01), the
Legislature has seen fit to extend workers’ compensation coverage to
certain independent contractors who perform manual labor and that
extension of coverage encompasses tort immunity for the employer who
contracts with the laborer. Aramark performed cleaning services, which
are considered manual labor, and accordingly is immune from tort
liability.

Ms. Lumar contends that she is not an independent contractor, but
an employee of an independent contractor, and therefore she is not
limited by the exclusivity provisions of the worker’s compensation
statutes. In finding Ms. Lumar’s argument to be without merit, the trial
judge said that “The court does not see the distinction being made by
plaintiff. Plaintiff falls within the class of independent contractors

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contemplated by this statute which perform manual labor, and are
therefore covered by worker’s compensation.” We agree with the trial
court.

Aramark performs its duties through its employees, and is liable
for the acts of its employees. The limitations applicable to Aramark are
also applicable to its employees. Furthermore, LSA-R.S. 23:1021 does
not state that it is not applicable to independent contractors who are
partnerships, corporations or other juridical persons, and does not limit
itself to independent contractors who are natural persons only. Pursuant
to LSA-R.S. 23:1021, plaintiff is entitled to collect worker’s
compensation benefits, and is prohibited from filing actions in tort,
against Zappe.

Id. at 190-91 (footnote omitted; emphasis ours).

The factual relationship vis-a-vis Moss and Shaw and Lumar and Zappe is identical.

We agree with the analysis in Zappe and find that the analysis in Zappe supports the

WCJ’s conclusion on this issue.

Concerning the issue of a 50% increase in indemnity payments—because

La.R.S. 23:1171.2 requires the payment of additional workers’ compensation benefits

when an employer fails to comply with La. R.S. 23:1168, it is penal in nature and

must be strictly construed. See Williams v. Rush Masonry, Inc., 98-2271 (La.

6/29/99), 737 So.2d 41. In this case, Shaw’s liability for indemnity payments arises

from his solidarity with Darson. If Darson was proven liable for a 50% increase in

indemnity payments, then Shaw would be also. However, the record is devoid of any

evidence of Darson’s status as to workers’ compensation insurance. Considering the

lack of evidence on this issue we cannot say the WCJ was erroneous in denying

increased benefits. See Savoy v. Clark Directional Drilling Equip., 01-918 (La.App.

3 Cir. 12/12/01), 801 So.2d 610.

Shaw also appeals the WCJ’s award of penalties and attorney’s fees. As to

those issues, we turn to the words of Judge Hall, who in Demery v. Dupree, 511

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So.2d 1268, 1273 (La.App. 2 Cir.)(emphasis ours), writ denied, 514 So.2d 456

(La.1987) stated:

Determination of whether an insured acted arbitrarily,
capriciously or without probable cause in refusing to pay benefits is
ultimately one of fact and trial court’s finding should not be disturbed
on appeal absent a showing of manifest error. Harrison v. Chicago Mill
& Lumber Co., 446 So.2d 843 (La.App. 2d Cir.1984).

Failure to pay is not arbitrary, capricious or without probable
cause when there existed a serious dispute as to liability. Schepp v. Olin
Corporation, 445 So.2d 1280 (La.App. 3d Cir.1984), writ denied, 448
So.2d 117 (La.1984). However, a dispute between the statutory and
regular employer as to which one owes compensation benefits is not a
justifiable basis for withholding benefits from the injured employee.
Guillot v. Guillot, 445 So.2d 1270 (La.App. 3d Cir.1984). See also
Fontenot v. Town of Kinder, 377 So.2d 554 (La.App. 3d Cir.1979), writ
denied, 379 So.2d 1102 (La.1980).

In the case sub judice, there is no question of liability; Moss was severely

injured on the job. The only dispute was which “employer” was going to pay

compensation benefits. Either Shaw or Tommasi could have chosen to pay and then

third partied the other, but neither did. In his reasons for judgment, the WCJ stated

(emphasis ours):

The evidence here forces the following conclusion: Co-defendant
Don Shaw, operating apart and separate from his insurance agency,
hired Leonard Darson as a subcontractor on an apartment complex
construction project. Darson had no workers’ compensation insurance,
and far as we can tell no insurance of any sort. Don Shaw’s workers’
compensation insurance covered strictly and explicitly the clerical
workers in his office. That’s what the policy plainly says. When
plaintiff Gerald Moss was seriously injured, his direct employer, the
impecunious and uninsured Darson disappeared, leaving over a quarter
of a million dollars in unpaid medical bills.

It is undisputed that Darson is the direct employer of plaintiff
Moss. Louisiana law has long recognized that the principals should
ensure that the subcontractors they hire have some means of security to
ensure that workers’ compensation benefits are paid to injured
employees. The facts presented to the court indicated that Don Shaw
issued, negotiated with, contracted with, hired and paid Leonard Darson.
As such, Don Shaw was Gerald Moss’secondary employer and is

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responsible for the medical expenses and any indemnity payments
arising out of the accident.

There is absolutely no good reason for a worker such as Gerald
Moss, as imperfect an individual as he probably is, to find himself
totally and completely outside the protection of the workers’
compensation system. Apparently, virtually nobody in the management
or operation of this construction project checked whether this laborer
was covered by a valid workers’ compensation insurance program.
There were a lot of assumptions, many purely speculative and ill-
founded but no effort worthy of note. None of this had to happen. Fixing
the situation is going to be far more expensive than the simple steps
which could have been taken to prevent it.

We find no error in the imposition of penalties and attorney’s fees.

Moss, as appellant, also seeks the fully payment of all medical expenses

directly to him, rather than scheduled expenses awarded directly to the medical

providers. We once again turn to the WCJ’s reasons for judgment, wherein he stated

(emphasis ours):

There is a great deal of money owed in medical expenses relating
to the plaintiff's injury on the job here. Thus far, the total is
$269,058.48. Direct employer Darson can’t or won’t pay these bills,
leaving that responsibility to the statutory employer, Don Shaw.
However, I disagree with plaintiff[’s] counsel who contends that the
employer here should not be permitted to take advantage of the fee
schedule in these circumstance.

There’s both a legal and practical reason for my thinking on this
subject.

Plaintiff cites Smith V. Roy 0. Marin Lumber Company[, 03-1441
(La.App. 3 Cir. 4/14/04), 871 So.2d 661, writ denied, 04-1311 (La.
9/24/04), 882 So.2d 1144], for the proposition that an award of medical
benefits is not subject to a reduction in accordance to the reimbursement
fee schedule of 23:1034.2 if the employer denies the claim from the
beginning, forcing the employee to get treatment on his own.

But my understanding from the jurisprudence is that this
injunction from using the fee schedule is for situations where the
claimant has been forced to pay for his own medical treatment. That
would seem only just, but that didn't happen here. Nothing has been
paid to anybody. All of the bills are still due, and I think it’s important
to remember that if the fee schedule were applied in this case, the

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$269,058.48 bill would be considerable less, specifically the bill should
be $62,847.46. The term “windfall” comes to mind, especially if the
Court were to order the $269,058.48 be paid directly to the plaintiff as
counsel urges.

On appeal, Moss once again relies on the Smith case. We find the Smith case

distinguishable from the case at bar. In Smith, the claimant alleged he suffered a

herniated disc as he walked up some stairs. He immediately reported the accident and

was transported by the company nurse to Louisiana Occupational Health Services.

Yet Martco denied the claim from the onset, forcing Smith to fund the costs of

medical treatment himself. There was no question as to who was liable for payment

of Smith’s workers’ compensation benefits, Martco (the owner of Roy O. Martin

Lumber Company). In the Smith case, La.R.S. 23:1142(E) (emphasis ours), which

provides: “In the event that the payor has denied that the employee’s injury is

compensable under this Chapter, then no approval from the payor is required prior

to the provision of any diagnostic testing or treatment for that injury,” was clearly

violated. Here, no one “denied that the employee’s injury is compensable under this

Chapter,” but rather the dispute was over who was going to pay for the employee’s

injury. Further, payments of medical expenses had already been made by the claimant

in Smith. Here, they were not.

We, in agreement with the WCJ, believe that it a better procedure for the

workers’ compensation insurer to directly pay the health care provider. Not only does

this procedure relieve the employee of this burden, but it insures that the employee

is not over charged. The employee gets the benefit of the reimbursement schedule

envisioned by La.R.S. 23:1034(A), and it insures that the health care provider

receives the reimbursement it is due.

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Finally, we address Moss’s request for additional attorney’s fees for work

necessitated by this appeal. “Because attorney fees were correctly awarded below,

failing to award increased attorney fees for the additional work required for this

appeal would be inconsistent with that judgment.” Frank v. Kent Guidry Farms,

01-727, p. 5 (La.App. 3 Cir. 5/8/02), 816 So.2d 969, 973, writ denied, 02-1608 (La.

6/27/03), 847 So.2d 1273. Given the number of assignments of error raised by the

Shaw and the amount of work Moss’s attorney performed in his two capacities, as

appellant and appellee, we grant additional $4,000.00 in attorney's fees for work done

on this appeal.

Accordingly, for the reasons stated, the judgment of the WCJ is affirmed.

Gerald Moss is awarded an additional $4,000.00 in attorney’s fees for work done on

this appeal. Each party is bear his own costs on appeal.

AFFIRMED.

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