Mary O. Simon v. Communications Corp. of America

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

12-1086

MARY O. SIMON

VERSUS

COMMUNICATIONS CORP. OF AMERICA

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - DISTRICT #4
PARISH OF LAFAYETTE, NO. 11-00106
SHARON MORROW, WORKERS’ COMPENSATION JUDGE

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JOHN D. SAUNDERS
JUDGE

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Court composed of Sylvia R. Cooks, John D. Saunders, and Jimmie C.
Peters, Judges.

REVERSED AND RENDERED.

Michael B. Miller
Jacqueline B. Manecke
P. O. Box 1630
Crowley, LA 70527-1630
(337) 785-9500
COUNSEL FOR PLAINTIFF/APPELLANT:
Mary O. Simon

Jeff R. Rytlewski
Attorney at Law
3900 N. Causeway Blvd., Suite 1040
Metairie, LA 70002
(504) 836-2786
COUNSEL FOR DEFENDANT/APPELLEE:
Communications Corp. of America
Sentinel Insurance Co.

SAUNDERS, J.

This case involves the payment of penalties and attorney fees under La.R.S.

23:1201(F) after an employer allegedly failed to timely investigate or pay weekly

medical benefits to its former employee. Plaintiff-employee appeals the lack of

attorney fees awarded. We reverse and award attorney fees.

FACTS AND PROCEDURAL HISTORY

Mary O. Simon (“Simon”) developed an ulnar nerve entrapment as a result

of her job duties as a receptionist while employed by Communications Corporation

of America (“CCA”). Simon made a claim for benefits on April 27, 2010. No

indemnity or medical benefits were paid to Simon. Subsequently, Simon obtained

legal counsel in January 2011.

On January 3, 2011, a letter of representation was sent to both CCA and its

insurer. In the correspondence, a request was made for the employer/insurer to

guarantee medical treatment by a physician of Simon’s choice. CCA did not

respond to this correspondence.

A motion to compel medical treatment was filed and, after a hearing with the

workers’ compensation judge (“WCJ”), CCA was ordered to pay for an

examination by Simon’s choice of physician, Dr. Robert Morrow (“Dr. Morrow”).

Dr. Morrow issued a report on May 24, 2011, which indicated Simon should

discontinue performing her job as a receptionist. This report was submitted to

CCA by correspondence dated June 14, 2011. CCA did not request that Simon see

a second physician during this period.

On August 4, 2011, CCA attempted to obtain medical evidence regarding

causation and Simon’s ability to work. Another report by Dr. Morrow, where he

again indicated Simon’s ulnar never condition resulted from her job and that she

was unable to return to work as a receptionist, was sent to CCA on October 3,

2011. CCA scheduled a deposition of Dr. Morrow for October 28, 2011. Dr.

Morrow confirmed his previous findings that he felt Simon’s ulnar never damage

resulted from her employment and that he felt Simon was not capable of returning

to her prior duties.

On November 9, 2011, CCA requested Simon appear for a Second Medical

Examination (“SMO”) to be performed by Dr. Stanley Foster (“Dr. Foster”). This

examination was set for December 20, 2011; however, Dr. Foster refused to see

Simon because she would not sign and fill out all documents presented to her by

Dr. Foster. CCA filed a motion to compel a SMO. The WCJ judge found that

Simon was not required to sign all the documents provided to her by Dr. Foster.

The SMO was not completed until after the trial on the merits.

A trial on the merits was held on January 17, 2012. The WCJ found that

Simon sustained an occupational disease in the course and scope of her

employment with CCA. As such, Simon was entitled to indemnity benefits as well

as medical treatment resulting from the ulnar nerve injury. Simon was also entitled

to supplemental earning benefits and all necessary medical treatment and

diagnostic testing for her ulnar nerve condition. The WCJ did not award penalties

or attorney fees, instead the WCJ held that CCA reasonably controverted the claim

and investigated the claim in a reasonable manner.

Simon appeals the denial of penalties and attorney fees.

ASSIGNMENTS OF ERROR

On appeal, Simon asserts the WCJ erred in failing to award penalties and

attorney fees due to CCA’s lack of reasonable basis in denying indemnity and

medical benefits.

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LAW AND ANALYSIS

Standard of Review

The decision of the WCJ to award penalties and attorney fees in a workers’

compensation case is entitled to great discretion and will not be reversed on appeal

absent an abuse of that discretion. Miles v. Pinecrest Dev. Ctr., 00-1622 (La.App.

3 Cir. 2/28/01), 779 So.2d 1112. In the instant case, there are no factual disputes;

rather, the present matter involves purely a question of law. Consequently, in

deciding whether Simon is entitled to a separate penalty for each late payment of

indemnity benefits, we must determine whether the WCJ was legally correct in her

application of La.R.S. 23:1201(F).

Availability of Penalties & Attorney Fees under La.R.S. 23:1201(F)

It is undisputed that Simon has an occupational disease as a result of her

employment with CCA. It is also undisputed that Simon is entitled to indemnity

benefits and all necessary medical treatment for her injury. These facts were not

appealed.

There are delays set forth in the Workers’ Compensation Act requiring that

employers/insurers respond within a certain period of time for requests for weekly

compensation benefits and medical benefits. An employer/insurer has fourteen

days from the receipt of notice of the employee’s disability to pay indemnity

benefits. Louisiana Revised Statutes 23:1201(B), in pertinent part, states,

The first installment of compensation payable for temporary total
disability, permanent total disability, or death shall become due on the
fourteenth day after the employer or insurer has knowledge of the
injury or death, on which date all such compensation then due shall be
paid.

Louisiana Revised Statutes 23:1201(E) provides that “[m]edical benefits payable

under this Chapter shall be paid within sixty days after the employer or insurer

receives written notice thereof.” The employer/insurer must guarantee and/or pay
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all medical benefits within sixty days of notice. Furthermore, the employer/insurer

has an obligation to timely investigate the claim and determine the compensability

of the claim. Louisiana Revised Statutes 23:1122, in pertinent part, states, “[t]he

employer shall cause the examination provided for in the proceeding section to be

made immediately after knowledge or notice of the accident.” La.R.S. 23:1122.

An employer cannot refuse to investigate a claim in order to avoid payment

of benefits. Simon worked for CCA for over three years and presented medical

evidence that her injury was related to employment duties and that she was

disabled. Simon first reported her injury to CCA on April 27, 2010. CCA failed to

investigate the medical condition of Simon for over eighteen months despite their

obligation to have an examination done immediately after knowledge of Simon’s

claim. Thus, CCA failed to timely request an examination of Simon.

Dr. Morrow’s reports clearly indicated his opinion that Simon suffered a

work-related injury and that she should not return to her duties as a receptionist. A

report from University Medical Center (“UMC”), along with interrogatory

answers, was also sent to CCA on August 2, 2011. The UMC report stated that

Simon “has bilateral ulnar neuropathy that requires surgery probably due to

repetitive work and subsequent nerve entrapment and the damage is likely

permanent.” Even after receipt of Dr. Morrow’s report on June 14, 2011, and the

responses to discovery in August 2011, CCA failed to further investigate the

causation or disability issue or pay benefits. Furthermore, Dr. Morrow’s second

report submitted on October 3, 2011, was also clear.

“The employer has a continuing duty to investigate, assemble, and assess

factual information before it denies benefits.” Mitchell v. Alliance Compressors,

05-1186, p. 8 (La.App. 3 Cir. 4/5/06), 926 So.2d 127, 133. CCA failed to do a

proper investigation and was unreasonable in its delays. CCA had fourteen days to
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respond to the multiple reports or pay disability benefits. See La.R.S. 23:1201(B).

CCA failed to do so. CCA did not obtain factual or medical information to

controvert Simon’s claim and, therefore, CCA lacked a reasonable basis for not

paying weekly benefits to Simon.

It was not until after the deposition of Dr. Morrow was taken on October 28,

2011, that CCA requested a SMO on November 9, 2011. The SMO was scheduled

for December 20, 2011, long after the legal delays for payment of indemnity

benefits for providing medical treatment had passed, as well as past the fourteen-

day period for paying weekly benefits and the sixty-day deadline for approving

medical treatment. See La.R.S. 23:1201(B), (E). An SMO was finally obtained by

Dr. Bernard after the trial held on January 17, 2012. Dr. Bernard believed that

Simon’s injuries were not related to her work activities with CCA. Had this

medical information from Dr. Bernard been available sooner, it may have provided

a reasonable basis for denying Simon’s benefits. However, the law is clear that a

defendant cannot use facts obtained after a denial as a reasonable basis for denying

the claim. See Regan v. Eunice Superette, Inc., 04-227 (La.App. 3 Cir. 9/29/04),

884 So.2d 1209.

Louisiana Revised Statutes 23:1201(F) requires that the defendant either

provide the medical treatment or have a reasonable basis for not providing the

treatment. Without a reasonable basis for denying medical treatment, the employer

will owe penalties of $50.00 per day up to $2,000.000 or 12% of all amounts due,

whichever is greater. La.R.S. 23:1201(F). A workers’ compensation claim is

“reasonably controverted” by an employer, for purposes of avoiding a claim for

penalties and attorney fees, if the employer has sufficient factual and medical

information to counter that presented by the claimant. LeJeune v. Bell Tower

Corp., 09-1222 (La.App. 3 Cir. 4/7/10), 34 So.3d 464.
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CCA had no factual or medical basis to withhold indemnity and medical

treatment to Simon. CCA had no medical evidence that Simon’s ulnar nerve

condition was unrelated to her employment or that she was not disabled. At the

time of the trial on January 17, 2012, CCA still had failed to pay any benefits to

Simon. CCA did not reasonably controvert Simon’s claim, so an award of

penalties and attorney fees is appropriate. The WCJ was manifestly erroneous in

not awarding penalties and attorney fees under La.R.S. 23:1201(F).

Calculation of Penalties & Attorney Fees under La.R.S. 23:1201(F)

There are several factors to be considered when determining the amount of

attorney fees to be awarded in a workers’ compensation case. These factors

include “the degree of skill and ability exercised by the attorney, the amount of the

claim, the amount recovered for the claimant, and the amount of time the attorney

devoted to the case.” Langley v. Petro Star Corp. of La., 01–198, p. 11 (La.

6/29/01), 792 So.2d 721, 727, citing McCarroll v. Airport Shuttle, Inc., 00–1123

(La. 11/28/00), 773 So.2d 694. We have examined the record and find that awards

of $7,000.00 in attorney fees–for work done at the trial level–and $5,000.00 in

attorney fees–for work done on this appeal–are reasonable.

Louisiana Revised Statutes 23:1201(F) provides that a penalty shall not

exceed a maximum of two thousand dollars in the aggregate for any claim, with an

eight-thousand-dollar maximum amount regardless of the number of penalties

available. The Louisiana Supreme Court in Fontenot v. Reddell Vidrine Water

Dist., 02-0439, p. 13 (La. 1/14/03), 836 So.2d 14, 24, held that La.R.S.

23:1201(B), (C), (D), and (E) impose a continuing obligation on the

employer/insurer: “(1) to pay all compensation and medical benefits due,” and “(2)

to pay for compensation and medical benefits within the time limit specified.

Should the employer/insurer not abide by those dictates, the Legislature has made
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available to the employee the provisions of La.R.S. 23:1201(F), which provide for

penalties and attorney fees, to encourage compliance.” Id. “An employer/insurer

may make multiple errors in this regard and may have two or more claims under

La.R.S. 23:1201(F).” Id.

Under La.R.S. 23:1201(F), it is the “[f]ailure to provide payment in

accordance with this Section [La.R.S. 23:1201]” that “shall result in the assessment

of a penalty.” Pursuant to La.R.S. 23:1201(B), the first installment of “all

compensation then due” is due on the fourteenth day after the employer or insurer

has knowledge of the injury. Additionally, pursuant to La.R.S. 23:1201(E),

“[m]edical benefits payable” must be paid within sixty days after the employer

receives written notice.

Fontenot makes it clear that the Office of Workers’ Compensation and

appellate courts have a duty to “ferret” out penalties for which an award should be

made. Fontenot v. Reddell Vidrine Water Dist., 836 So.2d at 26.

For employers/insurers, the need to provide for injured workers is a
continuing obligation, one recognized in the legislative enactments as
a duty to pay the employee or dependent the maximum percentage of
wages to which the employee is entitled, to make compensation
payments timely, and to provide needed medical care in conformity
with statutory guidelines.

Id. The record reflects that CCA did not pay compensation due within the requisite

time periods. Simon made a claim for benefits on April 3, 2010, and no benefits

were subsequently paid. CCA was aware of Simon’s injury and did not pay the

compensation owed within the requisite fourteen days. Furthermore, CCA did not

pay medical benefits that were payable within sixty days of written notice. Written

correspondence with a report by Dr. Morrow was submitted to CCA on June 14,

2011. CCA did not pay medical benefits payable until after the trial in January of

2012.

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CCA failed to abide by both continuing obligations–to pay all compensation

due and to pay medical benefits due and to do both within the appropriate time

limits imposed on an employer/insurer for each obligation. Simon is entitled to

$4,000.00 in penalty fees under La.R.S. 23:1201(F).

CONCLUSION

CCA did not reasonably controvert Simon’s claim and, therefore, had no

reasonable basis for withholding indemnity and medical treatment to Simon. CCA

acted unreasonably in its failure to investigate Simon’s claims and in withholding

medical payments. We award $4,000.00 in penalties and $12,000.00 in attorney

fees under La.R.S. 23:1201(F).

Costs of this appeal are assessed to CCA.

REVERSED AND RENDERED.

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