Antonio G. Rodriguez v. Integrity Contracting

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

09-1537 consolidated with 09-1538 and 09-1539

ANTONIO G. RODRIGUEZ

VERSUS

INTEGRITY CONTRACTING, ET AL.

**********

APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - # 4
PARISH OF LAFAYETTE, NO. 04-1827
SHARON MORROW, WORKERS’ COMPENSATION JUDGE

**********

MARC T. AMY
JUDGE

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Court composed of Jimmie C. Peters, Marc T. Amy, and J. David Painter, Judges.

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

Gregory E. Bodin
Baker, Donelson, Bearman,
Caldwell & Berkowitz, P.C.
450 Laurel Street, 20th Floor
Baton Rouge, LA 70801
(225) 381-7000
COUNSEL FOR DEFENDANT/APPELLANT:
Louisiana Workers’ Compensation Corporation

Kirk L. Landry
Keogh, Cox & Wilson, Ltd.
Post Office Box 1151
Baton Rouge, LA 70821
(225) 383-3796
COUNSEL FOR DEFENDANT/APPELLANT:
Vaughan Roofing & Sheet Metal, Inc.

Robert M. Martina
Galloway & Jeffcoat, LLP
Post Office Box 61550
Lafayette, LA 70596
(337) 984-8020
COUNSEL FOR DEFENDANT/APPELLEE:
Integrity Contracting

Janice H. Barber
Post Office Drawer 1909
Sulphur, LA 70664-1909
(337) 625-4443
COUNSEL FOR PLAINTIFF/APPELLEE:
Antonio G. Rodriguez

AMY, Judge.

The claimant sought compensation benefits from his direct employer, its

insurer, and an alleged statutory employer. The statutory employer demanded

indemnification from the defendant insurer, based on contractual and statutory claims.

The workers’ compensation judge ultimately found the statutory employer, the direct

employer, and the insurer were liable, in solido, for benefits, penalties, and attorney

fees. It ordered indemnification by the insurer only on statutory grounds as it

concluded that it lacked subject matter jurisdiction to consider the contractual

indemnity claim. Both the statutory employer and the defendant insurer appeal. For

the following reasons, we affirm the workers’ compensation judge’s ruling and award

additional attorney fees for work performed on appeal.

Factual and Procedural Background

Antonio Garcia Rodriguez (also identified in the pleadings and the record as

Antonio Garcia) alleged that he sustained injury on February 6, 2004 when he fell

from a roof while performing roofing work for Integrity Contracting. He filed this

workers’ compensation matter, claiming benefits from Integrity and its workers’

compensation insurer, Louisiana Workers’ Compensation Corporation (LWCC).

However, LWCC denied coverage, asserting that Integrity failed to pay its premium

in December 2003, and, thus, LWCC cancelled the policy.

The claimant further named Vaughan Roofing & Sheet Metal, LLC as a

defendant, alleging that the company was liable as a statutory employer. He pointed

out that Vaughan had a contract with the University of Louisiana at Lafayette for

repair work and that Integrity was performing as a subcontractor. Vaughan denied

the relationship and asserted that, in any event, the claimant was precluded from

receiving compensation benefits since he was an undocumented worker at the time

of the accident, having remained in this country after the expiration of a work visa.

Vaughan filed a third party demand against Integrity, as well as LWCC, seeking

indemnification and defense costs.

Although separate suits were filed below, the matters were consolidated.1 After

a hearing, the workers’ compensation judge entered a ruling in favor of the claimant

and against Vaughan and LWCC. The ruling included an order of indemnity benefits,

medical benefits, vocational rehabilitation as needed, and penalties and attorney fees.

The workers’ compensation judge further determined that the LWCC policy provided

coverage to Integrity for the subject accident and that LWCC owed Integrity

reimbursement for costs of its defense in the matter.

Thereafter, the workers’ compensation judge granted Vaughan’s and LWCC’s

motions for new trial, in part, and issued an amended judgment which: recognized

Integrity as the claimant’s employer and, thus, a responsible party liable in solido

with Vaughan and LWCC; recognized the average weekly wage as $487.08 with a

compensation rate of $324.75 per week; and granted Vaughan’s indemnification

claim against Integrity and LWCC pursuant to La.R.S. 23:1063. Further, the

workers’ compensation judge determined that it lacked subject matter jurisdiction in

assessing the contractual claim that resulted in the award of defense costs to Integrity.

It, therefore, denied that claim.2

1
For disposition of the companion matters, see Antonio Garcia v. State of Louisiana, 09-
1538 (La.App. 3 Cir. _/_/10), _ So.3d _; Jason W. Stanton v. Louisiana Workers’ Compensation
Corporation, 09-1539 (La.App. 3 Cir. _/_/10), _ So.3d _.
2
The recast judgment reads:

IT IS ORDERED AND DECREED that there be judgment in favor of
Antonio Garcia Rodriguez against Jason Stanton d/b/a Integrity Contracting,
Louisiana Workers’ Compensation Corporation, and Vaughan Roofing & Sheet
Metal, L.L.C., in solido, for indemnity benefits at the rate of $324.75 per week from
February 6, 2004 until further order of this Court, subject to a credit for $3250 paid
by Jason Stanton; all medical expenses related to the work accident, subject to the

2

Vaughan and LWCC appeal the reformed judgment. Vaughan assigns the

following as error:

1. The workers’ compensation judge committed legal error in
finding that a statutory employer (as opposed to a direct
employer) can be liable for state workers’ compensation benefits
to an illegal alien. The legal error consisted of: a) improperly
applying Louisiana jurisprudence applicable to direct employers
to a statutory employer; b) failing to note that the issue is res nova
in Louisiana; c) failing to apply directly applicable federal law
and U.S. Supreme Court jurisprudence, thereby committing legal
error involving the constitutional precepts of preemption,
substantive due process and equal protection.

2. The workers’ compensation judge committed legal and manifest
error in awarding penalties and attorney’s fees against Vaughan
Roofing & Sheet Metal, LLC as an alleged statutory employer.
She committed legal error by failing to distinguish the defenses
presented by the direct employer (and its insurer) from those of
Vaughan, and thereby failing to consider the separate and
independent defenses submitted by Vaughan as more particularly
set forth in the preceding assignment of error.

3. The workers’ compensation judge committed legal error in
awarding any indemnity or wage replacement benefits to the
illegal alien claimant. She committed legal error first in failing to
state what category or type of benefits were being awarded,
instead simply awarding a numerical value. But, based upon

Fee Schedule; vocational rehabilitation as appropriate, except that job availability
under La.R.S. 23:1226 and 23:1221(3) shall consider jobs that are appropriate and
suitable for Antonio Garcia Rodriguez and would be available but for his illegal
status; penalties of $4,000; attorney’s fees of $18,000; interest as provided by law;
and all costs of this case.

IT IS FURTHER ORDERED AND DECREED that there be judgment
herein in favor of Vaughan Roofing & Sheet Metal L.L.C. against Jason Stanton
d/b/a Integrity Contracting and Louisiana Workers’ Compensation Corporation, in
solido, pursuant to La.R.S. 23:1063 for indemnification of compensation payments
it may be required to pay as the statutory employer in this case, but denying Vaughan
Roofing & Sheet Metal L.L.C.’s claims for its defense costs under § 1063 and §
1201(F) and reserving the rights of Vaughan Roofing & Sheet Metal L.L.C. to bring
its contractual indemnity and defense costs claims in a court of proper jurisdiction.

IT IS FURTHER ORDERED AND DECREED that the claims of Jason
Stanton d/b/a Integrity Contracting against Louisiana Workers’ Compensation
Corporation for defense costs arising out of the contractual claim arising under the
policy issued by Louisiana Workers’ Compensation Corporation are hereby
dismissed for lack of subject matter jurisdiction, reserving the rights of Jason Stanton
d/b/a Integrity Contracting to bring those claims in a court of proper jurisdiction.

3

other factual findings, it is presumed that the only type of benefits
that could have been awarded would have been supplemental
earnings benefits. However, the workers’ compensation judge
committed further legal error by improperly shifting the burden
of proof to defendants to disprove claimant’s entitlement, when
the illegal alien claimant did not and could not meet his initial
burden.

4. The workers’ compensation judge committed manifest error by
improperly calculating the claimant’s average weekly wage.

5. The workers’ compensation judge committed legal error in
failing, on jurisdictional grounds and by misapplying applicable
statutes, to award defense costs in favor of Vaughan as statutory
employer against Stanton/Integrity and LWCC, and in failing to
award contractual indemnification in favor of Vaughan and
against Stanton/Integrity.

LWCC also appeals, asserting that:

1. The OWC erred as a matter of law in finding that LWCC
terminated Policy No. 100154 invalidly and, therefore, had in force and
effect a policy of workers’ compensation insurance covering Jason W.
Stanton, individually, and doing business as Integrity Contracting on
February 6, 2004, the date of the Claimant’s alleged accident.

2. The OWC erred as a matter of law in finding LWCC liable
in solido with Stanton/Integrity to indemnify Vaughan for any future
compensation payments it may be required to pay as Claimant’s
statutory employer, as LWCC had no policy in effect providing coverage
for Stanton/Integrity, and as Vaughan has not paid any workers’
compensation benefits to Claimant, its right to indemnification does not
yet exist.

3. The OWC erred as a matter of law in finding that LWCC
did not reasonably controvert this claim and awarding penalties and
attorney’s fees against LWCC when LWCC[] denied this claim in good
faith and based on the only applicable law as stated by this Court in
Caesar v. New England Ins. Co.[, 92-463 (La.App. 3 Cir. 4/7/93), 616
So.2d 850.]

4. The OWC erred as a matter of law in finding that
Claimant’s illegal alien status has no effect on his eligibility to receive
benefits under the Workers’ Compensation Act or on the liability and
ability of LWCC to provide such benefits and, thus awarding claimant
medical and wage benefits and vocational rehabilitation.

4

5. The OWC erred as a matter of law in finding that the
Claimant met his burden of proving the existence and amount of wages,
when Claimant submitted no evidence that he was paid a wage; in
incorrectly holding that evidence of payments to another was evidence
of the amount of Claimant’s alleged wages for the purposes of
calculating Claimant’s average weekly wage and in failing to award the
statutory minimum in the absence of evidence of Claimant’s actual
wages.

The claimant answers the appeal and seeks additional attorney fees for work

performed on appeal.

Discussion

Statutory Employer Liability

It is undisputed that the claimant was an undocumented worker at the time of

the accident. Vaughan asserts that this affected his ability to receive workers’

compensation benefits in numerous ways. In short, it contends that such benefits

violate United States Supreme Court jurisprudence and federal law. It also contends

that the award violates its own right to due process and equal protection.

A panel of this court considered the question of whether a direct employer

owed an undocumented worker compensation benefits in Artiga v. M.A. Patout and

Son, 95-1412 (La.App. 3 Cir. 4/3/96), 671 So.2d 1138. In Artiga, this court

recognized that there is no express statutory provision excluding undocumented

workers from workers’ compensation coverage. Instead, La.R.S. 23:1035(A)

indicates that workers’ compensation benefits are applicable to “every person

performing services arising out of and incidental to his employment in the course of

his own trade, business, or occupation, or in the course of his employer’s trade,

business, or occupation . . . .” While certain statutory exclusions exist, there is no

5

exclusion for a worker who is in this country illegally. See, e.g., La.R.S. 23:1035(B)3;

La.R.S. 23:1035.24; La.R.S. 23:10375; and La.R.S. 23:10456. The workers’

3
Louisiana Revised Statutes 23:1035(B) provides:

B. (1) There is exempt from coverage under this Chapter all labor, work, or
services performed by any employee of a private residential householder in
connection with the private residential premises of such householder or any employee
of a private unincorporated farm, in connection with cultivating the soil, or in
connection with raising or harvesting of any agricultural commodity, including the
management of livestock, when the employee’s annual net earnings for labor, work,
or services amounts to one thousand dollars or less and the total net earnings of all
employees of such farm do not exceed two thousand five hundred dollars and which
labor, work, or services are not incidental to and do not arise out of any trade,
business, or occupation of such householder or private unincorporated farm. With
respect to such labor, work, or services and any employee performing the same, a
private residential householder or a private unincorporated farmer, shall have no
liability under the provisions of this Chapter either as employer or as a principal;
however, any person who is engaged in the trade, business, or occupation of
furnishing labor, work, or services to private residential premises or farms, shall be
liable under the provisions of this Chapter to his employees or their dependents for
injury or death arising from and incidental to their employment in rendering such
labor, work, or services.

(2) There is also exempt from coverage under this Chapter, musicians and
performers who are rendering services pursuant to a performance contract.
4
Louisiana Revised Statutes 23:1035.2 provides that: “No compensation shall be payable
in respect to the disability or death of any employee covered by the Federal Employer’s Liability Act,
the Longshoremen’s and Harbor Worker’s Compensation Act, or any of its extensions, or the Jones
Act.”
5
Louisiana Revised Statutes 23:1037 provides:

This Chapter shall not apply to any employer acting as a common carrier
while engaged in interstate or foreign commerce by railroad, where the employee of
such common carrier was injured or killed while so employed; but if the injury or
death of an employee of a railroad occurs while the employer and employee are both
engaged and employed at the time in an intrastate operation or movement not
controlled or governed by the laws, rule of liability, or method of compensation
which has been or may be established by the Congress of the United States, then this
Chapter shall govern and compensation shall be recovered hereunder; but nothing in
this Chapter shall be construed to apply to any work done on, nor shall any
compensation be payable to the master, officers or members of the crew of, any
vessel used in interstate or foreign commerce not registered or enrolled in the State
of Louisiana.
6
Louisiana Revised Statutes 23:1045 provides that:

A. (1) This Chapter shall not apply to, and there is specific exclusion from the
operation thereof for, all members of the crew of any airplane engaged in dusting or
spraying operations insofar as such members of an airplane crew might be regarded
as independent contractors, subcontractors, or employees of any person, firm, or
corporation engaged in the principal business of agriculture or farming operations.

6

compensation judge referenced Artiga in setting forth written reasons for ruling.7

(2) All rights of employers and employees in tort are reserved to the parties.

B. (1) The provisions of Subsection A of this Section shall not exempt or in
any way apply to independent contractors, subcontractors, or employees of any
person, firm, partnership, or corporation engaged in the business of applying any
products by use of aircraft, either fixed wing or rotor craft, in connection with
commercial agricultural, aquacultural, horticultural, silvicultural, floricultural, or
agronomic operations or vegetation suppression.

(2) The provisions of this Subsection shall apply to all independent
contractors, subcontractors, and employees of such businesses irrespective of whether
such person would be considered a member of the crew of such aircraft.
7
This portion of the workers’ compensation judge’s reasons indicate, in part, as follows:

Since the Artiga case, the legislature has not amended the pertinent
provisions, and therefore the same result applies.

The WCJ finds that Vaughan is the statutory employer of Mr. Garcia pursuant
to La.R.S. 23:1061. Vaughan contracted with Integrity, Garcia’s direct employer, to
provide labor for its contract with the State. Vaughan’s main argument is that it
should not be held responsible for Integrity’s failure to ensure that its laborers were
legal. Vaughan distinguishes itself from the Artiga case as an innocent party that
took an interest in hiring only legal workers and required same in its contract, yet
now is being asked to be responsible for an injured worker it would not have hired,
and who cannot be vocationally rehabilitated due to his illegal status. This argument
fails to take into account that the employer in Artiga was misled as to Artiga’s status.
Artiga presented the employer with a “resident alien card” and signed an employment
eligibility verification. The employer was only notified 4 months after the accident
of Artiga’s illegal status. The case did not discuss at all any significance attaching
to an “innocent” versus “knowing” or “negligent” hire by an employer. The legal
premise of the decision is that the Act does not exclude illegal aliens from coverage,
and therefore:

“. . . It is clear that the entitlement of benefits under the Louisiana
Workers’ Compensation Act is dependent upon the employee status
of the claimant. Once it is shown that a claimant has the employee
status, the employe[r] is burdened with showing the application of
some specific exclusion under which benefits may be denied.” 671
So.2d at 1139

Mr. Garcia is the statutory employee of Vaughan, and therefore Vaughan is
burdened with showing the application of some specific exclusion under which
benefits may be denied. Vaughan has argued the preemption of Louisiana workers’
compensation benefits by the United States Supreme Court case of Hoffman Plastic
Compounds, Inc. v. NLRB, 535 U.S. 137 (2002) which held that the National Labor
Relations Board could not award back pay to an undocumented alien. However,
Vaughan acknowledges in footnote number 19 of its Pretrial Memorandum and
footnote number 9 of its Post Trial Memorandum that while some states have directly
responded to the decision in Hoffman by amending its compensation laws, Louisiana
has not. The Louisiana legislature has failed to respond to both the Artiga decision
and the Supreme Court in Hoffman. The myriad difficulties posed by illegal
immigrants in the work force need to be addressed by the legislature if a result

7

On review, we find that Vaughan has failed to demonstrate why the

straightforward reasoning applicable in Artiga, 671 So.2d 1138, is inapplicable to it

as a statutory employer. A statutory employer’s liability for the employee of a direct

employer, such as Integrity, is dictated by La.R.S. 23:1061.8

different from Artiga is sought, but under the current interpretation of the Louisiana
Workers’ Compensation Act, Vaughan is liable to Garcia as the statutory employer
under La.R.S. 23:1061(A)(2).
8
Louisiana Revised Statutes 23:1061, provides for the liability of statutory employers, i.e.
principal contractors, as follows:

A. (1) Subject to the provisions of Paragraphs (2) and (3) of this Subsection,
when any “principal” as defined in R.S. 23:1032(A)(2), undertakes to execute any
work, which is a part of his trade, business, or occupation and contracts with any
person, in this Section referred to as the “contractor”, for the execution by or under
the contractor of the whole or any part of the work undertaken by the principal, the
principal, as a statutory employer, shall be granted the exclusive remedy protections
of R.S. 23:1032 and shall be liable to pay to any employee employed in the execution
of the work or to his dependent, any compensation under this Chapter which he
would have been liable to pay if the employee had been immediately employed by
him; and where compensation is claimed from, or proceedings are taken against, the
principal, then, in the application of this Chapter reference to the principal shall be
substituted for reference to the employer, except that the amount of compensation
shall be calculated with reference to the earnings of the employee under the employer
by whom he is immediately employed. For purposes of this Section, work shall be
considered part of the principal’s trade, business, or occupation if it is an integral part
of or essential to the ability of the principal to generate that individual principal’s
goods, products, or services.

(2) A statutory employer relationship shall exist whenever the services or
work provided by the immediate employer is contemplated by or included in a
contract between the principal and any person or entity other than the employee’s
immediate employer.

(3) Except in those instances covered by Paragraph (2) of this Subsection, a
statutory employer relationship shall not exist between the principal and the
contractor’s employees, whether they are direct employees or statutory employees,
unless there is a written contract between the principal and a contractor which is the
employee’s immediate employer or his statutory employer, which recognizes the
principal as a statutory employer. When the contract recognizes a statutory employer
relationship, there shall be a rebuttable presumption of a statutory employer
relationship between the principal and the contractor’s employees, whether direct or
statutory employees. This presumption may be overcome only by showing that the
work is not an integral part of or essential to the ability of the principal to generate
that individual principal’s goods, products, or services.

B. When the principal is liable to pay compensation under this Section, he
shall be entitled to indemnity from any person who independently of this Section
would have been liable to pay compensation to the employee or his dependent, and
shall have a cause of action therefor.

8

Vaughan contends that it cannot be held liable for Integrity’s employment of

the claimant since it “neither knew of the claimant’s illegal status nor did it have a

duty under federal or state law to inquire into claimant’s status.” It asserts that it had

a right to rely on Integrity’s obligation to ensure that its work force was legally

working in this county. It argues that it is, therefore, deprived of due process of law

under both the United States and Louisiana Constitutions. It states that “the making

of contracts is a matter of private concern” and the state has not regulated in this area,

“the inclusion of illegal aliens within the compensation scheme renders the agreed to

provisions in the contract moot, which would in turn require Vaughan to illegally

fund benefits to an illegal alien.” It contends that it obviously had a property interest

in the amounts paid in compensation.

To the extent that Vaughan asserts that operation of the workers’ compensation

statutes is unconstitutional as applied to its situation, we do not consider those claims

on review as the claim has not been presented in proper form in proceedings below.

However, central to Vaughan’s overall contention in this area is an apparent argument

that its contract with Integrity ensured its lack of liability under the workers’

compensation scheme. Yet, La.R.S. 23:1033 provides that “[n]o contract, rule,

regulation or device whatsoever shall operate to relieve the employer, in whole or in

part, from any liability created by this Chapter except as herein provided.” Again,

there is no provision in the workers’ compensation statutes that excludes coverage for

undocumented workers for either direct or statutory employers. We find no error in

the workers’ compensation judge’s recognition that the legislature has not amended

the statutory provisions in this regard since the decision in Artiga, 671 So.2d 1138.

9

Neither is there merit in Vaughan’s assertion that the workers’ compensation

judge’s ruling runs afoul of Hoffman Plastic Compounds, Inc. v. National Labor

Relations Board, 535 U.S. 137, 122 S.Ct. 1275 (2002). According to Vaughan,

Hoffman indicates that federal law preempts an award of state workers’ compensation

benefits to an undocumented worker. However, a reading of Hoffman does not

support this argument. Instead, Hoffman addressed whether an undocumented worker

was entitled to back pay following a termination of employment after an employer

found him or her to be unauthorized to work. The Supreme Court determined that the

worker was not entitled to such pay as it was contrary to federal immigration policy.

In particular, such a payment was contrary to the Immigration Reform and Control

Act of 1986. While Hoffman contains a wealth of information regarding immigration

policy, its reach does not include language indicating that a matter of state workers’

compensation coverage, such as this, is preempted by this policy. The workers’

compensation judge noted an absence of legislation in this state on this topic, stating:

Vaughan has argued the preemption of Louisiana workers’
compensation benefits by the United States Supreme Court case of
Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (2002) which
held that the National Labor Relations Board could not award back pay
to an undocumented alien. However, Vaughan acknowledges in
footnote number 19 of its Pretrial Memorandum and footnote number 9
of its Post Trial Memorandum that while some states have directly
responded to the decision in Hoffman by amending its compensation
laws, Louisiana has not. The Louisiana legislature has failed to respond
to both the Artiga decision and the Supreme Court in Hoffman. The
myriad difficulties posed by illegal immigrants in the work force need
to be addressed by the legislature if a result different from Artiga is
sought, but under the current interpretation of the Louisiana Workers’
Compensation Act, Vaughan is liable to Garcia as the statutory employer
under La.R.S. 23:1061(A)(2).

We find no error in the workers’ compensation judge’s statement of the law on this

subject.

10

Neither do we find merit in Vaughan’s contention that, due to the

circumstances of the claimant’s status, numerous definitions and provisions of the

Workers’ Compensation Act are inapplicable to the claimant, thus revealing a

positive statement of inapplicability to an undocumented worker.9 Again, we find no

positive expression in the workers’ compensation provision excluding its application

in this case. Instead, La.R.S. 23:1035(A) reveals broad applicability.

Penalties and Attorney Fees

Vaughan contends that the workers’ compensation judge erred in finding that

it failed to reasonably controvert the payment of benefits in light of its arguments

regarding the inapplicability of the Workers’ Compensation Act to an undocumented

worker. It contends that its actions in denying benefits should have been considered

separately from those of the direct employer.

Louisiana Revised Statutes 23:1201 provides that:

F. 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 when such consent is required by R.S. 23:1121
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

9
For instance, Vaughan notes that the award of any benefits requires a calculation of an
average weekly wage, which, it suggests, is impossible as wages received by an undocumented
worker would be illegal and “[i]t is patently unreasonable to include wages illegally obtained in the
calculation of an employee’s capacity to earn money.” Similarly, Vaughan contends that, for
calculation of SEBs, there could be “no legal wage to compare before and after an accident” and that
vocational rehabilitation could not be used to return a worker to the workplace when he could not
be legally employed. Vaughan also references La.R.S. 23:1121’s requirement that claimants may
be required to periodically submit to medical examinations and argues that it would be inapplicable
as the undocumented worker would be “subject to deportation and, thus, may not be available for
periodic medical examinations.” Finally, Vaughan points to La.R.S. 23:1361 which prohibits an
employee from being discharged due to the filing of a compensation claim and asserts that the
“remedy is obviously not available to an illegal alien whose very employment and subsequent wages
are in violation of federal and state law.”

11

maximum amount of penalties which may be imposed at a hearing on
the merits regardless of the number of penalties which might be imposed
under this Section is eight thousand dollars . . . .

....

(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.

It is clear that the claimant was injured while performing work for Integrity,

Vaughan’s subcontractor. And, in fact, on appeal, Vaughan does not contest the

factual determination as to its status as a statutory employer. Further, it chose to deny

benefits in the face of Artiga and in the absence of positive legislation excluding a

claimant such as Mr. Rodriguez from receiving compensation benefits.

This assignment lacks merit.

Burden of Proof

The workers’ compensation judge awarded indemnity benefits without

specifically defining those benefits as temporary total disability benefits or

supplemental earnings benefits. Vaughan asserts that, because the ruling included

language regarding the availability of vocational rehabilitation benefits, it indicated

that the benefits awarded were SEBs. In turn, it contends that the workers’

compensation judge impermissibly applied the burden of proof for an award of SEBs.

In pertinent part, the ruling under review included that:

IT IS ORDERED AND DECREED that there be judgment in
favor of Antonio Garcia Rodriguez against Jason Stanton d/b/a Integrity
Contracting, Louisiana Workers’ Compensation Corporation, and
Vaughan Roofing & Sheet Metal L.L.C., in solido, for indemnity
benefits at the rate of $324.75 per week from February 6, 2004 until
further order of this Court, subject to a credit for $3250 paid by Jason
Stanton; all medical expenses related to the work accident, subject to the
Fee Schedule; vocational rehabilitation as appropriate, except that job
availability under La.R.S. 23:1226 and 23:1221(3) shall consider jobs

12

that are appropriate and suitable for Antonio Garcia Rodriguez and
would be available but for his illegal status[.]

(Italics added; bold in the original).

While the above ruling was, perhaps, premature with regard to the ultimate

availability of vocational rehabilitation, we reject Vaughan’s assertion that this

language indicates that the workers’ compensation judge awarded SEBs rather than

TTD. The record indicates that only TTD benefits were at issue given the claimant’s

debilitating injuries10 and continued difficulties at the time of trial. The inclusion of

the vocational rehabilitation language would seemingly be in response to Vaughan’s

assertion that the Workers’ Compensation Act cannot be applied to this case since

vocational rehabilitation attempts to return a worker to the workplace. The workers’

compensation judge’s ruling must be viewed in this light and not, as construed by

Vaughan, as an indication that SEBs were awarded. Neither was vocational

rehabilitation immediately ordered. Instead, the workers’ compensation judge merely

recognized its availability “as appropriate[.]”

This assignment lacks merit.

Average Weekly Wage Calculation

The workers’ compensation judge determined the claimant’s average weekly

wage to be $487.08. Vaughan contends this determination was manifestly erroneous.

10
The parties stipulated that, as a result of the claimant’s fall, he “suffered a burst fracture
of L-1, resulting in bowel and bladder incontinence.” The claimant testified that, following the
accident, he was in the hospital for twenty-two days, his problems have not changed since his
release, he is catheterized every six hours, and that he is constantly constipated. The claimant
explained his most severe pain stems from his rectum and back. He denied that any physician had
released him to return to work. The claimant’s pain management physician testified via deposition
that the claimant suffers from Cauda Equina Syndrome, a diagnosis reached by other physicians
treating the claimant as well. This physician opined that the claimant will not be able to work now
or in the future “because of severe pain and bowel and bladder dysfunction.”

13

It argues that the claimant failed to adequately prove his wages insofar as he was paid

on a cash basis.

In light of the circumstances of this case, we find no manifest error in the

shaping of the AWW.11 Testimony indicated that the claimant worked on a crew put

together by Jose Celedon while employed by Integrity. According to Jason Stanton,

an owner of Integrity, Integrity paid Mr. Celedon for the entirety of his crew and did

so based upon the amount of work they completed. Thereafter, Mr. Celedon paid the

men on his crew. Mr. Stanton explained that he did not consider the men on Mr.

Celedon’s crew to be his employees.12 Thus, the claimant was unable to rely upon

pay stubs or other documentation from Integrity to establish his pay rate.

However, the claimant testified that he typically made between $350 to $500

per week. Another member of the crew, Miguel Bostos, offered a similar wage range,

stating that his pay was typically $405 per week, but that the figure would “go up and

down[.]” Mr. Bostos stated that the members of the crew were paid equally.

Furthermore, and as noted by the workers’ compensation judge in her reasons for

ruling, the record includes an audit of Integrity’s accounting records for the period

11
The workers’ compensation judge explained:

The WCJ finds that Garcia’s average weekly wage is $487.08. As noted in the
plaintiff’s Post Trial Rebuttal Brief, LWCC’s audit of Jason Stanton reflected that
Stanton paid Jose Celedon $52,605.00 for the 18 week period between August 30,
2003 and December 25, 2003. The testimony was consistent that Garcia was
working on Celedon’s crew at the time of the accident, that Stanton paid Jose
Celedon by check and Celedon paid the rest of the crew. The men were paid per
square foot. Miguel Bostos testified the men each received between $400 and $500
per week. Mr. Garcia testified he was paid between $350 and $500 per week. The
testimony was that the crew varied from 5 to 6 persons, and they worked 3 to 5 days
per week, depending on the weather and other variables. Given that the audit of
Stanton’s records provides the best documentary evidence of what Celedon’s crew
was paid, and given that the amount is within the range estimated by the witnesses
at trial, the sum of $487.08 per week is reasonably supported . . . .
12
Integrity did not appeal the workers’ compensation judge’s determinations as to its
liability.

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of May 13, 2003 through December 25, 2003. The workers’ compensation judge

used the figure contained in this audit, and purportedly paid to Mr. Celedon, as

corroboration for the figures advanced by the claimant.

In light of the circumstances of this case, we find no manifest error in the

AWW set forth by the workers’ compensation judge. Admittedly, the reasons for

ruling indicate that the judge’s arrival at the figure relied upon sources not typically

necessary in a workers’ compensation case. However, that does not signal an error

in the workers’ compensation judge’s ruling. Rather, it is a consequence of the

irregular employment system utilized in this case. To find merit in Vaughan’s

argument, would allow it to impermissibly rely on its subcontractor’s informal

payment system as a defense to circumvent the workers’ compensation laws regarding

payment of a wage. While this payment may have challenged the workers’

compensation judge in precisely shaping the award, we find no manifest error in the

figure she ultimately found appropriate.

Subject Matter Jurisdiction

As explained above, Vaughan filed a third party demand against both Integrity

and LWCC for indemnification and court costs. At the time the workers’

compensation judge considered the motions for new trial, she determined that the

Office of Workers’ Compensation lacked subject matter jurisdiction over the

indemnification claim that arose pursuant to the Vaughan/Integrity contract.

On appeal, Vaughan questions this determination, arguing that La.R.S.

23:1310.3(E) provides a basis for jurisdiction on this claim. This paragraph provides:

Except as otherwise provided by R.S. 23:1101(B), 1361, and
1378(E), the workers’ compensation judge shall be vested with original,
exclusive jurisdiction over all claims or disputes arising out of this
Chapter, including but not limited to workers’ compensation insurance

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coverage disputes, group self-insurance indemnity contract disputes,
employer demands for recovery for overpayment of benefits, the
determination and recognition of employer credits as provided for in this
Chapter, and cross-claims between employers or workers’ compensation
insurers or self-insurance group funds for indemnification or
contribution, concursus proceedings pursuant to Louisiana Code of Civil
Procedure Articles 4651 et seq. concerning entitlement to workers’
compensation benefits, payment for medical treatment, or attorney fees
arising out of an injury subject to this Chapter.

La.R.S. 23:1310.3. (Emphasis added.) In particular, Vaughan asserts that its claim

is included within La.R.S. 23:1310.3 as it related to a “cross-claim[] between

employers or workers’ compensation insurers or self-insurance group funds for

indemnification or contribution[.]”

We conclude that the workers’ compensation judge correctly determined the

subject matter jurisdiction issue. Here, Vaughan’s indemnification and defense

claims arose from its contract with Integrity and, in turn, Integrity’s contract with

LWCC. As in Broussard Physical Therapy v. Family Dollar Stores, Inc., 08-1013

(La. 12/2/08), 5 So.3d 812, no party in this case could dispute whether the main claim

arose under the workers’ compensation statutory provisions. However, the

indemnification claim over which the workers’ compensation judge found no subject

matter jurisdiction did not. Instead, these indemnification claims stemmed solely

from its contract with Integrity. Accordingly, they did not arise under the Act. See,

e.g., id. In this regard, however, the workers’ compensation judge retained

jurisdiction over those indemnification claims arising under the Act insofar as she

granted Vaughan’s indemnification under La.R.S. 23:1063.13

13
Louisiana Revised Statutes 23:1063 provides:

A. A principal contractor, when sued by an employee of a subcontractor or
his dependent, may call that contractor, or any intermediate contractor or contractors,
as a co-defendant, and the principal contractor shall be entitled to indemnity from his
subcontractor for compensation payments paid by the principal contractor on account
of an accidental injury to the employee of the subcontractor.

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Having found no merit in Vaughan’s appeal, we turn to consideration of

LWCC’s assignments of error.

Termination of LWCC Policy

LWCC first questions the workers’ compensation judge’s determination that

a valid policy was in effect at the time of the February 2004 accident due to LWCC’s

failure to demonstrate that it validly cancelled that policy.

Previously entitled La.R.S. 22:636.4, La.R.S. 22:1267 presently provides, in

pertinent part:

C. (1) If coverage has not been in effect for sixty days and
the policy is not a renewal, cancellation shall be effected by mailing or
delivering a written notice to the first-named insured at the mailing
address shown on the policy at least sixty days before the cancellation
effective date, except in cases where cancellation is based on
nonpayment of premium. Notice of cancellation based on nonpayment
of premium shall be mailed or delivered at least ten days prior to the
effective date of cancellation. After coverage has been in effect for more
than sixty days or after the effective date of a renewal policy, no insurer
shall cancel a policy unless the cancellation is based on at least one of
the following reasons:

(a) Nonpayment of premium.

....

(2)(a) A notice of cancellation of insurance coverage by an insurer
shall be in writing and shall be mailed or delivered to the first-named
insured at the mailing address as shown on the policy. Notices of
cancellation based on R.S. 22:1267(C)(1)(b) through (g) shall be mailed
or delivered at least thirty days prior to the effective date of the
cancellation; notices of cancellations based upon R.S. 22:1267(C)(1)(a)

B. A principal contractor, when sued pursuant to the provisions of R.S.
23:1021(6) by an independent contractor who is a sole proprietor and who has elected
by written agreement not to be covered by the provisions of this Chapter in
accordance with R.S. 23:1035 or his dependent, may call such independent contractor
as a co-defendant, and the principal contractor shall be entitled to indemnity from his
independent contractor for compensation payments paid by the principal contractor
on account of an accidental injury to the independent contractor.

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shall be mailed and delivered at least thirty days prior to the effective
date of the cancellation; notices of cancellations based upon R.S.
22:1267(C)(1)(a) shall be mailed or delivered at least ten days prior to
the effective date of cancellations. The notice shall state the effective
date of the cancellation.

(Emphasis added.)

With regard to the coverage issue, the workers’ compensation judge explained:

I am going to find that there was an invalid termination of coverage, and
I am going to base that on Revised Statute 22:636[.]4 which requires
that notice of termination be mailed or delivered ten days prior to the
termination. That wasn’t done in this case. Ms. Lamb did cite the case
of Perkins versus Baptiste, 469 Southern Second 27 for the proposition
that the coverage period could extend for the ten-day period. I simply
note that that case was decided before at least the current exception of
the statute. To my knowledge, there has been no similar interpretation
since that time and the parties have cited none. My own research didn’t
reveal much either.

And I’d like to note that particularly under the facts and
circumstances of this case, the termination was confusing as pointed out
in Ms. Barber’s post-trial memorandum. There is some question as to
whether LWCC could actually have reinstated the policy as it had done
previously. Also, contributing to the confusion is the fact that premium
notices continued to be sent to Mr. Stanton after the purported
termination, those invoices being for continued coverage. Certainly, it
contributed to the ultimate confusion that we saw at the trial of the
matter.

I was interested in Mr. Landry’s argument in his brief attempting
to demonstrate that, in fact, the policy was paid up. But I have to
confess my mind does not wrap easily around numbers; and given our
short time frame here, I didn’t get to completely determine whether I
agreed with him or not. Certainly, I wanted to, but I cannot make that
part of my finding today.

I will say that I don’t think that the estoppel applies. I probably
don’t need to get there, and this should be considered just my additional
thoughts on the matter. Quality was not the contractual agent at the time
that all of this went forward, the contractual agent for LWCC, and the
estoppel arguments don’t nicely tie in with what the actual agency
agreements were at the time. So my ruling is solely based on the statute.

This case is resolved with reference to the exhibits and the statute. LWCC

contends that it “issued” a notice of cancellation on December 15, 2003 due to

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Integrity’s failure to pay its premium in full. The notice, which was introduced into

evidence, includes a date of December 15th and a scheduled expiration date of

December 25, 2003.

However, and although the notice is dated December 15th, LWCC’s exhibits

support the workers’ compensation judge’s view that the notice was not mailed until

the following day, December 16th. The workers’ compensation judge was not

manifestly erroneous in taking this date into account in determining that this nine-day

period of notice was insufficient under La.R.S. 22:1267(C)(1) insofar as the statute

requires that the notice “be mailed or delivered at least ten days prior to the effective

date of cancellation.”

Although LWCC contends that jurisprudence indicating that, although

untimely, the notice of cancellation could be reformed as it provided the insured with

actual notice, we reject LWCC’s reliance on these cases. See, e.g.,, Caesar v. New

England, Ins., Co., 616 So.2d 850 (La.App. 3 Cir. 1993); Perkins v. Battiste, 469

So.2d 27 (La.App. 1 Cir. 1985). Instead, the circumstances surrounding this

cancellation are unclear at best. Mr. Stanton denied that Integrity received the

December 2003 notice of cancellation. Furthermore, and despite the purported

cancellation, LWCC sent invoices for the policy into 2004 and also received

payments from Integrity in this regard. It did so despite testimony from its

representative that, once the policy cancelled on December 25th, it could not be

reinstated. In short, and in addition to the explicit wording of La.R.S. 23:1267(C)(1),

the record supports the workers’ compensation judge’s determination that LWCC

failed to prove the effective termination of the pertinent workers’ compensation

policy.

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Solidary Liability

In light of the finding on the preceding assignment, LWCC’s contention that

it could not be solidarily liable with Vaughan absent a valid contract is rendered

moot.

Penalties and Attorney Fees

LWCC alternatively argues that the workers’ compensation judge erred in

casting it with penalties and attorney fees. It contends that its denial of the claim was

reasonably controverted based on its good faith belief that it effectively cancelled

Integrity’s policy.

We find no manifest error in the workers’ compensation judge’s determination

that penalties and attorney fees were appropriate in this case. The wording of La.R.S.

22:1267 is explicit regarding the time periods associated with notices of cancellation.

Furthermore, the confusion surrounding the paperwork, correspondence, and

payments associated with the policy were within LWCC’s control. This assignment

lacks merit.

Benefits, Calculation of AWW, and Vocational Rehabilitation

Finally, LWCC adopts the arguments of Vaughan and makes similar arguments

regarding the claimant’s right to indemnity benefits, the calculation of the AWW, and

the availability of vocational rehabilitation. For the reasons set forth above in

discussion of Vaughan’s claim, these arguments lack merit.

Answer

The claimant has answered the appeal, seeking additional attorney fees for

work performed in defense of this appeal. In this regard, we award an additional

20

$5,000 in attorney fees for appellate work necessitated by successfully defending the

separate appeals of LWCC and Vaughan.

DECREE

For the foregoing reasons, the workers’ compensation judge’s ruling on appeal

is affirmed. We award the claimant/appellant, Antonio Garcia Rodriguez, an

additional $5,000 as attorney fees for work performed on appeal. Costs of this

proceeding are assessed equally to the appellants, Vaughan Roofing & Sheet Metal,

LLC and Louisiana Workers’ Compensation Corporation.

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

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