State, Off of Risk Mgmt, La. dept.of Trans. & Develop. v. Patrick Richard

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

12-1247

STATE, OFFICE OF RISK MANAGEMENT,
LOUISIANA DEPARTMENT OF TRANSPORTATION
& DEVELOPMENT

VERSUS

PATRICK RICHARD

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION, DISTRICT 4
PARISH OF LAFAYETTE, NO. 11-00825
ADAM C. JOHNSON, WORKERS’ COMPENSATION JUDGE

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PHYLLIS M. KEATY
JUDGE

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Court composed of Elizabeth A. Pickett, J. David Painter, and Phyllis M. Keaty,
Judges.

AFFIRMED IN PART, REVERSED IN PART, AND RENDERED.

Michael B. Miller
Miller & Miller
Post Office Box 1630
Crowley, Louisiana 70527-1630
(337) 785-9500
Counsel for Defendant/Appellant:
Patrick Richard

Sylvia M. Fordice
Louisiana Department of Justice
Division of Risk Litigation
Assistant Attorney General
556 Jefferson Street, Fourth Floor
Lafayette, Louisiana 70501
(337) 262-1700
Counsel for Plaintiff/Appellee:
State, Office of Risk Management, Louisiana Department of Transportation
& Development

KEATY, Judge.

Employee appeals from a judgment rendered by the workers’

compensation’s judge (WCJ) denying his exception of prescription and finding that

his employer is entitled to a $224.05 per week offset/credit against his workers’

compensation benefits until he converts to regular retirement benefits, retroactive

to April 21, 2007, and until his employer recoups its overpayment. Employee

further appeals from a judgment denying his motion for new trial. For the

following reasons, we affirm in part, reverse in part, and render.

FACTS AND PROCEDURAL BACKGROUND

Defendant, Patrick Richard (Richard), was an employee of the State of

Louisiana, through the Department of Transportation and Development (DOTD).

On September 20, 2005, he was injured in the course and scope of his employment

with DOTD. After Richard’s injury, he was paid temporary total disability

workers’ compensation benefits by Plaintiff, State of Louisiana, the Office of the

Governor, Division of Administration, Office of Risk Management (State);

however, he turned over his workers’ compensation benefits checks to the State

and used his accrued vacation and sick leave in order to continue to receive his

regular salary.

Richard retired on April 20, 2007, and began receiving disability retirement

benefits from the Louisiana State Employees’ Retirement System (LASER’S).

Upon his retirement, he began retaining his workers’ compensation benefits for the

first time. More than three years later, on January 31, 2011, the State filed a 1008

Disputed Claim for Compensation (1008) and a Petition for Offset of Disability

Retirement Benefits pursuant to La.R.S. 23:1225(C)(1),1 in which the State sought

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This statute “provides for an offset of workers’ compensation benefits when other
specified benefits are also being received by the employee.” Stanich v. Canal Entm’t, 09-707, p.
4 (La.App. 4 Cir. 11/12/09), 26 So.3d 269, 272.

reimbursement for the workers’ compensation benefits Richard had retained after

he began receiving disability retirement benefits. Richard responded to the State’s

petition by filing an exception of prescription wherein he asserted that the State’s

claim for reimbursement of benefits had prescribed. Both the hearing on the

exception of prescription and the trial of the State’s petition for offset were set for

hearing on March 5, 2012. Following the hearing, the WCJ took the matter under

advisement and set a date for the parties to file post-trial memoranda. On

March 28, 2012, the WCJ issued an oral ruling in the matter. The WCJ denied the

exception of prescription and granted the State an offset in the amount of $224.05

per week until Richard converts to regular retirement benefits at sixty years of age.

The State was granted an offset in the amount of $224.05 per week retroactive to

April 21, 2007. The WCJ also ruled that Richard’s future indemnity benefits were

suspended until all overpayments were recouped by the State. The WCJ signed a

written judgment in the substance of the oral reasons on May 1, 2012. Richard

filed a motion for new trial which the WCJ denied after a contradictory hearing.

Richard now appeals, contending that the WCJ erred: (1) in failing to grant

his exception of prescription; (2) in granting the State an offset against his

indemnity benefits; and (3) in failing to grant his motion for new trial.

DISCUSSION

I. Exception of Prescription

“In reviewing a peremptory exception of prescription, the standard of review

requires an appellate court to determine whether the trial court’s finding of fact

was manifestly erroneous.” Taranto v. La. Citizens Prop. Ins. Corp., 10-105, p. 5

(La. 3/15/11), 62 So.3d 721, 726. Similarly, “[i]f evidence is introduced at the

hearing on the peremptory exception of prescription, the district court’s findings of

fact are reviewed under the manifest error-clearly wrong standard of review.”
2

Menard v. Iberia Parish Sheriff’s Office, 11-707, p. 2 (La.App. 3 Cir. 12/7/11), 77

So.3d 1090, 1092, writ denied, 12-73 (La. 3/9/12), 84 So.3d 553 (quoting Rando v.

Anco Insulations, Inc., 08-1163 (La. 5/22/09), 16 So.3d 1065).

Louisiana Revised Statutes 23:1225 (hereafter sometimes referred to as “the

offset statute”) provides, in pertinent part, as follows:

C. (1) If an employee receives remuneration from:

....

(d) Any other workers’compensation benefits,

then compensation benefits under this Chapter shall be reduced,
unless there is an agreement to the contrary between the employee and
the employer liable for payment of the workers’ compensation benefit,
so that the aggregate remuneration from Subparagraphs (a) through
(d) of this Paragraph shall not exceed sixty-six and two-thirds percent
of his average weekly wage.

....

(3) If an employee is receiving both workers’ compensation
benefits and disability benefits subject to a plan providing for
reduction of disability benefits, the reduction of workers’
compensation benefits required by Paragraph (1) of this Subsection
shall be made by taking into account the full amount of employer
funded disability benefits, pursuant to plan provisions, before any
reduction of disability benefits are made.

“It is well established in our jurisprudence that La.Rev.Stat. 23:1225(C)(1) is

a restriction on an injured employee’s right to workers’ compensation benefits and

must be strictly construed.” Stanich, 26 So.3d at 273. “An employer seeking

credit for benefits covered by the statute has the burden of proving both entitlement

to and the amount of the credit.” Id. “In calculating an offset, the trier of fact must

(1) determine the claimant’s average weekly wage and (2) determine the total

remuneration from the workers’ compensation benefits and the other identified

benefits as set forth in La.Rev.Stat. 23:1225(C)(1).” Id.

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The offset statute does not provide a prescriptive period within which an

employer must file a petition for offset. After reviewing the jurisprudence, we

have found no cases addressing this issue. Thus, we are presented with what

appears to be a res nova issue in Louisiana.

Both Richard and the State contend that La.R.S. 23:1209 supplies the

prescription period applicable to this dispute. Louisiana Revised Statutes

23:1209(A)(2) provides:

Where such payments have been made in any case, the
limitation shall not take effect until the expiration of one year from the
time of making the last payment, except that in cases of benefits
payable pursuant to R.S. 23:1221(3) this limitation shall not take
effect until three years from the time of making the last payment of
benefits pursuant to R.S. 23:1221(1), (2), (3), or (4).

Richard submits that La.R.S. 23:1209 deals specifically with claimants and

does not directly address the prescription for causes of actions by the

employers/insurers, i.e., the State. However, Richard argues the three-year time

limit set forth in La.R.S. 23:1209 for indemnity benefits should be applicable to

both the employee and employer. Richard contends that the State had constructive

and actual knowledge of its cause of action in 2007, as evidenced by State’s

Exhibit 1, which was accepted into evidence.2 Since the State did not assert its

claim for an offset within three years of 2007, Richard contends the State’s claim

prescribed.

The State contends that its claim seeking an offset against the disability

retirement benefits paid to Richard was timely filed, contending as follows in its

appellee brief to this court:

2
Exhibit 1 is correspondence dated August 3, 2007, from a State Risk Claims Adjuster
Tara Shelton to LASER’S noting that the State was paying workers’ compensation benefits to
Richard, that it had been advised that Richard was receiving a disability retirement, and that the
State “may be entitled to an offset.”
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It is reasonable to conclude that an injured worker is paid
workers’ compensation benefits before deciding that his work related
injury will lead to his retirement. Thus, the receipt of disability
retirement benefits normally would commence only after workers’
compensation benefits have started. Once payments have
commenced, the termination of benefits triggers the running of
prescription. Since Richard’s benefits were being paid at the time the
claim was filed, prescription would not have begun to run on any
claims he would have filed.

Moreover, the State submits that if equal treatment were afforded to the employer,

the prescriptive period for it to seek an offset would likewise not have begun to run.

The language of La.R.S. 23:1209 does not rely upon whether the employer

has knowledge that it has a right to file a claim. Instead, the right to file a claim in

this case relies upon when “the last payment,” if any, has been made and when the

claim is actually filed. The record shows that at the time the State filed its claim

on January 31, 2011, Richard had been receiving both workers’ compensation

indemnity and retirement disability payments since April 1, 2007. There was no

discontinuation of either of those benefits at the time the State filed its claim.

Since “the last payment” had not been made as of January 31, 2011, the State’s

claim to offset the indemnity benefits against the disability retirement benefits had

not prescribed. The WCJ’s finding was not manifestly erroneous in this regard.

II. Offset

Richard submits that although the offset statute allows an employer to

reduce workers’ compensation benefits if the employer is also providing disability

benefits according to a plan, in the proportion paid by the employer, no reduction

is allowed when “there is an agreement to the contrary between the employee and

the employer liable for payment of the workers’ compensation benefit.” See

La.R.S. 23:1225(C)(1)(d). Richard contends that around the time that he retired in

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April of 2007, he was told by Lynn Dodge (Dodge),3 a State employee that his

receipt of disability retirement benefits would not have an effect on his workers’

compensation benefits. More specifically, Richard testified that he asked Dodge,

“Will this workman’s comp affect my retirement?” and she answered, “Nope.

That’s two different departments.” Arguing that the assurance made to him by

Dodge amounted to “an agreement to the contrary” between him and the State,

Richard contends that the State is precluded from enforcing any reduction against

him in accordance with the offset statute. Richard submits that he had “good

reason to believe that Ms. Dodge was acting within the scope of her authority,” and

that, as an unrepresented employee, he could not be expected to the know the

intricacies of the Louisiana Workers’ Compensation Laws or that the State might

be entitled to claim it was due an offset. Richard further contends that the State’s

act of paying him workers’ compensation benefits for more than three years after

he retired was a form of acknowledgment that it owed him the benefits paid and is

wholly inconsistent with the State’s recently asserted claim that it is due a credit

retroactive to when he retired.

In opposition, the State attempts to minimize the effect of Richard’s

conversation with Dodge, claiming that the extent of his contact with Dodge was

his signing of papers. The State points out that Richard is unsure of Dodge’s

position or authority and that he failed to prove that there was a duty on the part of

Dodge to advise Richard on the law as it relates to intricacies arising out of the

juxtaposition of disability retirement and workers’ compensation law. Thus, the

State alleges Richard failed to prove by a preponderance of evidence that an

3
At trial, Richard testified that Dodge was the DOTD employee “that takes care of
insurance and retirement.”
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agreement existed between the parties that no reduction in indemnity benefits

would be made by the State.

Neither Richard nor the State submits any jurisprudence in support of their

arguments regarding this issue. Nevertheless, we find the following case helpful to

our analysis. In Fontenot v. Houston General Insurance Co., 467 So.2d 77, 80

(La.App. 3 Cir. 1985), this court held that the defendants were “estopped to plead

prescription with regard to plaintiff’s claim for medical benefits” where the

plaintiff, a State employee, was “lulled into complacency by the representations

made by the State’s representative.” In Fontenot, the evidence showed that a State

safety inspector “had assured the plaintiff that all he needed to do to maintain his

right to receive medical payments was to go to his doctor at least once a year” and

that the plaintiff “relied on this representation.” Id. The evidence further showed

that the State failed to notify the plaintiff of a change in its billing procedures. We

held that “[g]iven that plaintiff was already relying on representations made by a

representative of the State,” the State’s failure to notify the plaintiff of the change

“was a serious act of omission.” Id.

According to his appellant brief, Richard was not represented by counsel at

the time he retired; he hired an attorney only after the State filed its petition for

offset. While the State downplays the significance of Richard’s conversation with

Dodge, it does not dispute that the conversation took place, that Dodge was its

employee, or that Richard only signed papers with Dodge when he retired, and that

Richard did not speak with anyone from LASERS about his retirement.

Considering the assurances that Richard received from Dodge, along with the

State’s continuing to pay him both workers’ compensation benefits and disability

retirement benefits for over three years, while acknowledging that it might be

entitled to an offset, we conclude that the State is estopped from claiming that it is
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owed an offset under La.R.S. 23:1225. Thus, the WCJ committed manifest error in

finding that the State was entitled to an offset.

III. Motion for New Trial

Our finding that the WCJ erred in granting the State an offset against the

workers’ compensation benefits it was paying Richard renders moot Richard’s

claim that the WCJ erred in failing to grant his motion for new trial.

DECREE

For the foregoing reasons, the portion of the WCJ’s judgment ordering that

the State of Louisiana, the Office of the Governor, Division of Administration,

Office of Risk Management, is entitled to an offset against Patrick Richard’s

workers’ compensation benefits is reversed as the State is estopped from asserting

that it overpaid Patrick Richard. In all other respects, the judgment is affirmed. In

accordance with La.R.S. 13:5112, costs of this appeal in the amount of $445.00 are

assessed against the State of Louisiana, the Office of the Governor, Division of

Administration, Office of Risk Management.

AFFIRMED IN PART, REVERSED IN PART, AND RENDERED.

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