Derick Wade Burnett v. Vector Electric & Controls, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

10-81

DERICK WADE BURNETT

VERSUS

VECTOR ELECTRIC & CONTROLS, INC.

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - # 3
PARISH OF CALCASIEU, NO. 08-21861
SAM L. LOWERY, WORKERS’ COMPENSATION JUDGE

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MARC T. AMY
JUDGE

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Court composed of Oswald A. Decuir, Marc T. Amy, and James T. Genovese, Judges.

AFFIRMED.

John J. Simpson
Stockwell, Sievert, Viccellio,
Clements & Shaddock, LLP
Post Office Box 2900
Lake Charles, LA 70602
(337) 436-9491
COUNSEL FOR DEFENDANT/APPELLANT:
Vector Electric & Controls, Inc.

Jason Bell
Cox, Cox, Filo, Camel & Wilson
723 Broad Street
Lake Charles, LA 70601
(337) 436-6611
COUNSEL FOR PLAINTIFF/APPELLEE:
Derick Wade Burnett

AMY, Judge.

The claimant allegedly sustained injuries in a work-related accident. The

claimant filed suit against the defendant employer, seeking authorization and payment

for shoulder surgery. The defendant contends that the claimant forfeited benefits for

what it asserted were fraudulent statements concerning his medical history. The

workers’ compensation judge entered judgment in favor of the claimant, ordering the

defendant to authorize and pay for the surgery. Both parties appeal. For the

following reasons, we affirm.

Factual and Procedural Background

The claimant, Derick Wade Burnett, alleges that on March 3, 2007, while

working for the defendant employer, Vector Electric & Controls, Inc., as an electrical

helper, he sustained an injury to his left shoulder when he was pulling a wire cable

and heard “a loud popping sound.” The record indicates that the claimant sought

medical treatment at Business Health Partners, where he was referred to Dr. Alan

Hinton, an orthopedic surgeon.

On March 30, 2007, Dr. Hinton recommended surgery to repair a dislocation,

lesion, and fracture in the claimant’s shoulder. The defendant approved the surgery,

which took place on April 26, 2007. After the surgery, the claimant continued to

complain of pain and instability in his left shoulder. In response, Dr. Hinton referred

the claimant to another orthopedic surgeon and shoulder specialist, Dr. Bradley

Edwards. After his first examination, Dr. Edwards diagnosed the claimant with

“recurrent anterior shoulder dislocation” with “failed prior operation.” Dr. Edwards

recommended that the claimant undergo another surgery, an iliac bone graft of the

glenoid, in order to stabilize his shoulder. The defendant approved this surgery,

which subsequently took place on June 27, 2007.

In his deposition, Dr. Edwards explained that the claimant related to him that

the pain in his shoulder had “gotten worse, not better” after the June 2007 surgery.

After the claimant underwent further testing, Dr. Edwards recommended that the

claimant undergo another procedure to “scope his shoulder” and determine whether

there was any tearing or fraying of the shoulder. Dr. Edwards also determined that

the claimant’s pain may be caused by hardware in his shoulder, which was placed

there from the previous surgeries and could be removed at the time of the scope. 1

At this point, the claimant again sought the defendant’s approval of the

recommended surgery; however, the defendant denied the claimant’s request. This

matter was instituted on October 9, 2008, when the claimant filed a “Disputed Claim

for Compensation” seeking the authorization of shoulder surgery. The defendant

answered the claim, asserting that the claimant had forfeited benefits under La.R.S.

23:1208 and La.R.S. 23:1208.1. In a pre-trial statement, the defendant contended that

the claimant, “failed to disclose very serious medical problems and treatment when

asked direct questions under oath in violation of” La.R.S. 23:1208. Further, it

contended that the claimant “failed to disclose the seriousness and extent of his prior

shoulder injuries when he answered a second injury questionnaire prior to his

employment[.]” La.R.S. 23:1208.1.

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In his deposition, Dr. Edwards stated the following:

Now, do I think that the hardware is necessarily causing his pain? Probably not,
because most people that have that phenomenon usually will complain about this
posterior shoulder pain or pain in the back of the shoulder probably where the
screw’s going to come out into the muscle a little. They never really stop
complaining over time. Now, he didn’t complain for a while, so I am less optimistic
saying, oh, I take these screws out and your pain’s going to go away. Where
somebody that is complaining the whole time, we say, we take the screws out, your
pain will get better and it almost always does; but, you know, if we’re going to scope
him and put him to sleep, you know, I think you take the screws out to just eliminate
one more thing that could be a potential source.

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The workers’ compensation judge issued judgment on November 10, 2009,

ordering the defendant to authorize and pay for the claimant’s requested surgery.

Further, it found no violation of La.R.S. 23:1208 or La.R.S. 23:1208.1 and denied the

claimant’s request for penalties and attorney fees.

The defendant appeals and argues that the workers’ compensation judge erred

in failing to find that the claimant forfeited benefits under La.R.S. 23:1208 and

La.R.S. 23:1208.1. The claimant answers the appeal and asserts that the workers’

compensation judge erred in not assessing penalties and attorney fees against the

defendant for its failure to authorize surgery.

Discussion

Forfeiture under La.R.S. 23:1208

The defendant asserts that it proved a violation of La.R.S. 23:1208 due to the

claimant’s failure to disclose his “real medical history to both of his treating

physicians.” To support its position, the defendant points to several emergency room

records in 2005 and 2006 in which the claimant complained of shoulder dislocation

and indicate that the claimant related a history of dislocation of his left shoulder to

the treating medical providers. The defendant then points to the medical records of

the treating physicians, Dr. Hinton and Dr. Edwards, which do not indicate that the

claimant related any history of shoulder dislocations to them. In a deposition, the

defendant asked Dr. Edwards whether the claimant told the doctor about any prior left

shoulder problems. Dr. Edwards responded, “If he did, I did not note it, and I usually

do note that as well.” Dr. Hinton also answered negatively in response to whether the

claimant discussed with him his previous shoulder problems.

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Louisiana Revised Statutes 23:1208, entitled “Misrepresentations concerning

benefit payments; penalty[,]” provides in pertinent part:

A. It shall be unlawful for any person, for the purpose of
obtaining or defeating any benefit or payment under the provisions of
this Chapter, either for himself or for any other person, to willfully make
a false statement or representation.

....

E. Any employee violating this Section shall, upon
determination by workers’ compensation judge, forfeit any right to
compensation benefits under this Chapter.

To successfully assert a defense under La.R.S. 23:1208, the employer must

prove “that (1) there is a false statement or representation, (2) it is willfully made, and

(3) it is made for the purpose of obtaining or defeating any benefit or payment.”

Resweber v. Haroil Constr. Co., 94-2708, p. 7 (La. 9/5/95), 660 So.2d 7, 12. The

Resweber court explained that:

[T]he statute does not require the forfeiture of benefits for any false
statement, but rather only false statements that are willfully made for the
purpose of obtaining benefits. It is evident that the relationship between
the false statement and the pending claim will be probative in
determining whether the statement was made willfully for the purpose
of obtaining benefits. Clearly, an inadvertent and inconsequential false
statement would not result in forfeiture of benefits.

Id. at 16.

Here, in its oral reasons for judgment, the workers’ compensation judge stated

the following:

The employer argues that [the claimant] conveniently omitted
telling his employer that his shoulder had been dislocated at least two
times before the accident and that he tailored his accident story to
somehow manage to get his old injuries covered by the workers’
compensation system.

The defense put on evidence to show that, indeed, [the claimant]
did not tell his workers’ compensation treating physicians about visits
to the emergency room seeking treatment for shoulder problems. This

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omission, the employer contends, amounts to deceit and reflects a
deliberate attempt to defraud.

For his part, [the claimant] readily admits that he did not disclose
to his treating physicians every problem he’s had with his left shoulder
since he first dislocated it when he was about 15 years old. In the first
place, he testified, he did not and does not remember all the dates, times,
and places, but more important, he said was the fact that the March 2007
incident created a problem which was entirely different from the one
that he had before that date. The pain experienced was more severe and
decidedly different, he testified.

The explanation finds some support in the medical and live
testimony which indicates that prior to the March 2007 accident,
apparently no physician had ever recommended any sort of surgery on
[the claimant’s] left shoulder. . . .

I suppose the situation would be different if [the claimant] told his
treating physicians in clear and unmistakable terms that his left shoulder
was just fine until March 17 and then became disabling. That’s just not
the case here.

....

The language used by [the claimant] when he was deposed by
defense counsel does not paint a portrait of a sly conniver. He explained
that there were at least two occasions where he remembered when his
left shoulder either popped out or was dislocated and that there might
have been more. Now, [the claimant] is not all that articulate, but he did
make it clear that he may very well have had other shoulder problems,
but they paled in comparison to the 2007 incident.

A workers’ compensation judge’s determination related to a forfeiture defense

is subject to the manifest error/clearly wrong standard of review. Doyal v. Vernon

Parish Sch. Bd., 06-1088 (La.App. 3 Cir. 2/7/07), 950 So.2d 902, writ denied, 07-832

(La. 6/15/07), 958 So.2d 1190. A review of the record in the present matter supports

the workers’ compensation judge’s determination that the claimant did not willfully

make false statements to obtain workers’ compensation benefits. The record reveals

that the claimant failed to tell either Dr. Hinton or Dr. Edwards about prior problems

with his shoulder; however, the claimant explained at trial that his omissions were

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because he either did not remember the events or, as explained by reference to his

deposition, did not find it relevant because “it wasn’t nothing bad like this was.”

Further, when Dr. Hinton was asked whether information about the claimant’s prior

dislocation was important in the terms of diagnosing the claimant, Dr. Hinton

responded that “it may have been somewhat helpful, but it doesn’t change, wouldn’t

have changed my course of action on the diagnosis.”

The record also reveals that on the day of the accident, a “Progress Record”

was filled out by the defendant’s medical department. On that report, there is a

notation that the claimant related a history of “sublaxing/dislocating shoulder.”

Further, it stated that the claimant’s “last dislocation age 15; several sublaxtions since

then.” This “Progress Record” indicates that the claimant, before visiting either Dr.

Hinton or Dr. Edwards and immediately following the accident, directly related to the

defendant a history of shoulder dislocations. This history supports the workers’

compensation judge’s determination that the claimant’s omissions were not made for

the purposes of obtaining workers’ compensation benefits.

Accordingly, after a review of the record, we find no manifest error in the

denial of the defendant’s forfeiture defense under La.R.S. 23:1208.

Forfeiture under La.R.S. 23:1208.1

The defendant contends that the workers’ compensation judge erred in denying

its claim for forfeiture under La.R.S. 23:1208.1, as the claimant failed to disclose

previous shoulder injuries in his post-hire employment health questionnaire.

Louisiana Revised Statutes 23:1208.1 provides:

Nothing in this Title shall prohibit an employer from inquiring
about previous injuries, disabilities, or other medical conditions and the
employee shall answer truthfully; failure to answer truthfully shall result
in the employee’s forfeiture of benefits under this Chapter, provided said

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failure to answer directly relates to the medical condition for which a
claim for benefits is made or affects the employer’s ability to receive
reimbursement from the second injury fund. This Section shall not be
enforceable unless the written form on which the inquiries about
previous medical conditions are made contains a notice advising the
employee that his failure to answer truthfully may result in his forfeiture
of worker’s compensation benefits under R.S. 23:1208.1. Such notice
shall be prominently displayed in bold faced block lettering of no less
than ten point type.

To prevail under La.R.S. 23:1208.1, the employer must prove the existence of

“(1) an untruthful statement; (2) prejudice to the employer; and (3) compliance with

the notice requirements of the statute.” Jeffers v. Kentucky Fried Chicken, 08-1380,

p. 8 (La.App. 3 Cir. 4/1/09), 7 So.3d 812, 820, writ denied, 09-956 (La. 6/19/09), 10

So.3d 738 (citing Nabors Drilling USA v. Davis, 03-136 (La. 10/21/03), 857 So.2d

407).

In the present matter, the workers’ compensation judge addressed this issue in

its oral reasons for judgment, stating:

It is undoubtedly accurate to say that [the claimant’s] responses
to questions posed by his physicians and asked of him on post-hiring
questionnaires could have, and perhaps should have, been more
accurate; however, it takes a real effort at purposeful parsing to read into
his answers a cunning, concerted, and calculated effort to defraud
anyone. On the first page of the employment questionnaire, he checked
yes to the question as to whether he had had rotator cuff injury,
explaining that seemed to him to be the closest description to his
shoulder problem. That response seemed fine with the employer at the
time.

The post-hiring questionnaire, submitted into evidence by the defendant,

includes a “medical history” section which directs the person filling out the form to

“check in the appropriate space whether or not you currently have or previously have

had any of the following medication conditions.” The claimant’s questionnaire

indicates that he checked “yes” under the box entitled “rotator cuff injury.” On the

form when asked to explain, the claimant wrote “Dislocated left shoulder when I was

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a kid. Went to ER. Put it back in place. Fine now.” At trial, the claimant testified

that when filling out the form:

I can’t remember what I put on there but my shoulder but I know I put
something because I wasn’t sure exactly, you know, what was wrong
with my shoulder; but I think I put something on there about it becoming
dislocated but it was fine now because I had worked a harder job before
that one and it was - - it was fine.

The defendant argues that the claimant’s failure to include portions of his

medical history related to his left shoulder “prevented the employer from gaining that

knowledge and, thus, prejudiced the employer’s ability to obtain second injury

recovery.”

As explained above, to prevail under La.R.S. 23:1208.1, the employer must

prove the existence of an untruthful statement. Jeffers, 7 So.3d 812. Lack of proof

as to this element is fatal to the employer’s claim of forfeiture. Id. As indicated in

its oral reasons for judgment, the workers’ compensation judge found that the

claimant did not supply to the defendant an untruthful statement; rather he found that

the claimant described his shoulder problem to the best of his ability at the time of

filling out the form. This determination is supported by the record. The medical

records on which the defendant relies do not indicate that the claimant underwent

shoulder surgery or that shoulder surgery was ever recommended to the claimant.

Neither do they indicate that the claimant was diagnosed with any particular condition

that he failed to disclose on his post-hiring questionnaire. It appears that when the

claimant completed his post-hiring questionnaire for the defendant, he was aware that

he did have previous problems with his shoulder and indicated such.

Accordingly, we find no error in the workers’ compensation judge’s

determination that the defendant failed to prove forfeiture under La.R.S. 23:1208.1

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Penalties and Attorney Fees

In his answer to the appeal, the claimant contends that the workers’

compensation judge erred in failing to award penalties and attorney fees for the

defendant’s failure to pay medical benefits.

Louisiana Revised Statutes 23:1201(F) subjects an employer to “penalties and

attorney fees for failure to pay benefits owed, unless the claim is reasonably

controverted or if the nonpayment results from conditions beyond the control of the

employer or insurer.” Armand v. Denton-James, L.L.C., 08-920, p. 9 (La.App. 3 Cir.

2/4/09), 2 So.3d 1272, 1277-78. In Burks v. City Savings Bank, 08-1556, p. 3

(La.App. 3 Cir. 5/6/09), 10 So.3d 365, 366-67, quoting Fontenot v. J.K. Richard

Trucking, 97-220, pp. 12-13 (La.App. 3 Cir. 6/4/97), 696 So.2d 176, 182 (citations

omitted) a panel of this court explained:

Penalties and attorney fees are not due to a claimant where the employer
has a bona fide dispute as to whether the employee is entitled to
benefits. Additionally, an employer will not be penalized for bringing
a close factual or legal issue to the court for resolution:

Whether an employer should be cast with penalties
and attorney’s fees is a finding of fact which will not be
reversed in the absence of manifest error. An employer
will only be responsible for penalties and attorney’s fees if
it fails to reasonably controvert a workers’ compensation
claim, and if its failure to pay benefits is arbitrary,
capricious, and without probable cause. La.R.S. 23:1201,
1201.2. However, an employer will not be penalized for
bringing a close issue to court.

Here, the workers’ compensation judge addressed the claimant’s request for

penalties and attorney fees, stating:

I do agree with the defense that the employer’s investigation did unearth
enough information to legitimize the litigation it brought here. No
employer should be penalized for bringing a close legal issue to the
Court for a decision. [The claimant’s] responses, although not laced

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with fraudulent intent, are sufficiently cloudy to cause the employer
legitimate concerns.

Under these circumstances, no penalty and attorney’s fees should be due.

At trial, Ramsey Grant Horn, the defendant’s insurance claims representative,

testified that the claimant’s benefits were not terminated after the discovery of the

medical records that revealed prior shoulder dislocations and injuries suffered by the

claimant. Mr. Horn testified that instead of terminating benefits, it was thought to “be

better for a hearing officer to make that determination.” In its oral reasons for

judgment, the workers’ compensation judge indicated that he agreed that the

“unearth[ing]” of the previous medical records “legitimize[d] the litigation it brought

here.” As stated above, the worker’s compensation judge found that the alleged

fraudulent statements were “sufficiently cloudy” to cause the employer concerns. The

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

matter was a bona-fide dispute. In accordance with the jurisprudence cited above,

we find no error in the workers’ compensation judge’s decision to not assess penalties

and attorney fees against the defendant. Similarly, we deny the claimant’s request for

attorney fees for the preparation of this appeal.

DECREE

For the foregoing reasons, the judgment is affirmed. All costs of this

proceeding are assessed against the defendant-appellant, Vector Electronic &

Controls, Inc.

AFFIRMED.

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