Demetria Mouton v. Lafayette Physical Rehabilitation Hospital

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

13-103

DEMETRIA MOUTON

VERSUS

LAFAYETTE PHYSICAL REHABILITATION HOSPITAL, ET AL.

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - # 4
PARISH OF LAFAYETTE, NO. 11-10502
ADAM C. JOHNSON, WORKERS’ COMPENSATION JUDGE

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ULYSSES GENE THIBODEAUX
CHIEF JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, Elizabeth A. Pickett,
and John E. Conery, Judges.

REVERSED AND RENDERED.

Charles M. Jarrell
Guglielmo, Lopez, Tuttle, Hunter & Jarrell
P. O. Drawer 1329
Opelousas, LA 70571-1329
Telephone: (337) 948-8201
COUNSEL FOR:
Defendants/Appellees - Lafayette Physical Rehabilitation Hospital and
LEMIC Insurance Co.

Gloria A. Angus
Angus Law Firm, LLC
P. O. Box 2337
Opelousas, LA 70571
Telephone: (337) 948-8800
COUNSEL FOR:
Plaintiff/Appellant - Demetria Mouton

THIBODEAUX, Chief Judge.

Plaintiff, Demetria Mouton, filed this suit in the Office of Workers’

Compensation against her employer, Lafayette Physical Rehabilitation Hospital,

and Lafayette Physical’s workers’ compensation insurer, LEMIC Insurance

Company (collectively, Defendants), alleging several miscalculations involving her

workers’ compensation payments. These allegations were resolved prior to trial.

Defendants answered the suit, and alleged that they were entitled to an offset of

$988.00 a month for long-term disability (LTD) insurance payments Ms. Mouton

was eligible to receive from her disability insurer. The Workers’ Compensation

Judge (WCJ) found in favor of Defendants and granted them the full offset. Ms.

Mouton appeals that judgment. For the following reasons, we reverse and render a

new judgment based on an offset in the amount Ms. Mouton is actually receiving

from LTD.

I.

ISSUE

We will consider whether the WCJ erroneously granted Defendants an

offset of $988.00 for LTD payments Ms. Mouton was entitled to receive.

II.

FACTS AND PROCEDURAL HISTORY

Ms. Mouton sustained an injury while in the course and scope of her

employment with Lafayette Physical. As a result of her injuries, Ms. Mouton is

entitled to receive $1,010.06 per month in workers’ compensation, $988.00 per

month in LTD insurance, and $1,423.00 per month in Social Security Disability

(SSD) benefits. LEMIC is Lafayette Physical’s workers’ compensation insurer,

and Lincoln Financial Group provided Ms. Mouton with her LTD insurance, which

Lafayette Physical fully funded.

Pursuant to the LTD insurance contract, Lincoln took an offset from

Ms. Mouton’s workers’ compensation payments, resulting in a reduction of her

monthly payment to the minimum allowed by the contract, $50.00. To avoid a

dispute with Defendants, however, Lincoln switched the source of its offset to Ms.

Mouton’s SSD payments, an offset also provided by the contract, and which also

resulted in a reduction of her monthly payments to $50.00. After Ms. Mouton filed

suit to resolve other matters relating to her workers’ compensation benefits,

Defendants asserted that, under La.R.S. 23:1225, they are entitled to a $988.00

offset per month, the amount Ms. Mouton is entitled to receive from Lincoln, even

though Lincoln only pays her $50.00 a month. The WCJ found in favor of

Defendants and allowed them to take the full offset. Ms. Mouton appeals that

judgment.

III.

LAW AND DISCUSSION

Standard of Review

Statutory interpretation is a question of law. We review questions of

law de novo without deference to the lower court’s decision. Louisiana Municipal

Assoc. v. State, 04-227 (La. 1/19/05), 893 So.2d 809. “When a law is clear and

unambiguous and its application does not lead to absurd consequences, the law

shall be applied as written,” without further interpretation into the legislative

intent. Id. at 837. Further, each word in a statute is presumed to be effective and

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serve a useful purpose; therefore, we will give effect to all parts of a statute,

understood as a whole. Broussard v. Lafayette Parish Sch. Bd., 08-666 (La.App. 3

Cir. 12/10/08), 998 So.2d 1253, writ denied, 09-471 (La. 4/17/09), 6 So.3d 794.

Discussion

Defendants allege that they should receive an offset for the full

amount of LTD benefits for which Ms. Mouton is eligible, regardless of the

amount she actually collects. We disagree. Louisiana Revised Statutes

23:1225(C) states, in part, that:

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

(a) Benefits under the Louisiana Workers’
Compensation Law.

...

(c) Benefits under disability benefit plans in the
proportion funded by an employer.

(d) Any other workers’ compensation benefits,

then compensation benefits under this Chapter
shall be reduced . . . 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.

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Section 1225 is a wage-loss benefit coordination statute. Al Johnson

Const. Co. v. Pitre, 98-2564 (La. 5/18/99), 734 So.2d 623. Benefit coordination

laws serve a dual purpose in the system of wage-loss protection; namely, these

laws assure an employee receives some type of recovery for lost wages, while

precluding her from receiving duplicative benefits that exceed her actual pre-injury

wages. Id. The statute calls for the reduction of workers’ compensation benefits

when the employee receives remuneration from an employer-funded disability

plan. Here, Ms. Mouton is receiving benefits from an employer-funded LTD plan;

however, she is receiving significantly less than she is entitled to because her

disability insurer, pursuant to plan provisions, has taken an SSD offset.

Defendants contend that Section (C)(3) of the statute calls for a

reduction of the full amount of employer-funded disability benefits, even though

Lincoln is not currently paying the full amount. We believe Defendants are

misreading the statute. Section (C)(1) states that if an employee receives

remuneration from workers’ compensation and disability, then disability can be

offset. Section (C)(3) calls for an offset of the full amount of disability benefits the

employee receives (per section (C)(1)) pursuant to disability plan provisions.

Section (C)(3)’s reference to “the full amount of employer funded disability

benefits” is unavailing to the Defendants. When read as a whole, the statute

contemplates an offset for the full amount that the employee receives from her

LTD insurer. Our interpretation of the statute is consistent with the objective of

benefit coordination laws, which are designed to ensure the employee receives

certain wage-loss protection. Were we to grant Defendants the full offset, when

Ms. Mouton is not collecting that amount, she would receive $22.06 per month in

workers’ compensation benefits and $50.00 per month in disability benefits,

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thereby reducing her total benefits to a mere fraction of her pre-injury wages. This

would defeat the statute’s objective and militate against receipt of deserved

benefits.

We further conclude that Section (C)(3) envisions a situation in which

the disability insurer and workers’ compensation insurer want to take competing

offsets from each other. Defendants assert that because Section (C)(3) states that

the workers’ compensation insurer is entitled to the offset before the disability

insurer, this means that Defendants are entitled to the full amount of the disability

insurance payments. In this case, however, Lincoln and Defendants are not

fighting for the same offset; Lincoln has taken an offset from Social Security, and

Defendants want an offset from Lincoln. Section (C)(3) does not address this type

of tripartite situation.

Defendants’ reliance on Nesom v. Brown and Root, U.S.A., Inc., 987

F.2d 1188 (5th Cir. 1993), as outcome determinative in their favor is misplaced.

At the outset, we note that this is a federal decision interpreting an insurance

contract, not Louisiana law. As such, we are not bound by its holding.

Nevertheless, since Defendants rely so heavily on the decision, we will distinguish

it. In that case, the plaintiff, Nesom, claimed both workers’ compensation benefits

from Brown & Root (B&R), his employer, and disability benefits from UNUM

Life Insurance Company of America (UNUM) under a partially employer-funded

plan. While the employer initially disputed that Nesom’s injuries were work-

related, and refused to pay his workers’ compensation payments, UNUM admitted

liability and began to pay Nesom under his disability policy. The state court found

in Nesom’s favor that his injuries were work-related, and applied Section 1225 to

allow B&R to take an offset from UNUM’s payments. After this, UNUM reduced

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its monthly payments to Nesom in accordance with the provisions of the disability

policy allowing an offset for workers’ compensation. In essence, therefore, both

UNUM and B&R took simultaneous offsets from the amount the other was

required to pay. The court in that case determined that the disability policy

“envisions that once the amount of workers’ compensation is determined under

state law, that amount will be setoff under the policy.” Id. at 1193. Thus, UNUM

was allowed to set off only the amount B&R actually paid Nesom.1

We distinguish Nesom from the instant case in several respects. First,

the court in Nesom interpreted a disability insurance contract; Section 1225 was

not at issue in that case. Further, the disability insurer and the employer/workers’

compensation insurer were trying to take offsets from each other; SSD payments

were not involved. Also, both the disability insurer and the employer/workers’

compensation insurer were made parties to the case. Here, Lincoln is not a party

and thus, we are not at liberty to determine what amount Lincoln is entitled to take

as an offset under the LTD policy. Finally, Defendants’ reliance on Nesom is

misplaced because the court clearly stated that the disability insurer could only

take an offset of the actual amount the plaintiff received under workers’

compensation. The disability insurer was not allowed to take an offset for the

amount Nesom was entitled to receive under workers’ compensation. This holding

directly contradicts Defendants’ contention that we should allow the full offset,

and in fact and law support Ms. Mouton’s position.

Although we can find no case law mirroring the precise situation

presented here, in cases concerning offsets in general, the offset amount is the

1
Section (C)(3) was enacted after Nesom and attempts to clarify the appropriate
disposition in a case analogous to Nesom.

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amount the employee actually receives. See, e.g. Smalley v. Integrity, Inc., 31,247

(La.App. 2 Cir. 12/9/98), 722 So.2d 332; Holden v. Int’l Paper Co., 31,104

(La.App. 2 Cir. 10/28/98), 720 So.2d 442). Further, the Louisiana Supreme Court

has held that “workers’ compensation benefits received by an employee can only

be reduced when the aggregate remuneration from the listed benefit sources in

Section 1225(C)(1) exceeds 66 2/3 percent of the average weekly wage.” Jones v.

General Motors Corp., 03-1766, p. 14 (La. 4/30/04), 871 So.2d 1109, 118-19. If

we allow Defendants to take an offset for the full amount of disability benefits to

which Ms. Mouton is eligible, her monthly benefits would be far below 66 2/3

percent of her average weekly wage.

We are aware that after our decision, Ms. Mouton will be making

more than her pre-injury wages when SSD, workers compensation, and LTD are

all taken into account. Our Supreme Court has held, however, that the phrase

“benefits under disability benefit plans” found in Section 1225(C) does not include

SSD benefits. Pitre, 732 So.2d 623. In Al Johnson Construction Co. v. Pitre, the

court reconsidered its prior holding in Garrett v. Seventh Ward Gen. Hosp., 95-17

(La. 9/22/95), 660 So.2d 841, wherein it held that SSD benefits were included in

Section 1225’s phrasing because of the statute’s purpose: preventing an injured

employee from receiving double recovery. The court realized in Pitre, however,

that Garrett was wrongly decided because such double recovery is precluded by

federal law. The Social Security Act, 42 U.S.C. § 424a, requires that SSD benefits

be reduced when the combined benefits from SSD and workers’ compensation

amount to more than eighty percent of the injured employee’s prior earnings. Id.

Because the Louisiana Legislature specifically provided for an offset for SSD

benefits in the case of permanent total disability in Section 1225(A), and took no

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similar steps to include SSD benefits in Section 1225(C), the court determined that

it had erred in divining that the legislature intended Section 1225(C) to include

SSD benefits. SSD benefits are, therefore, not included in the calculation pursuant

to Section 1225(C).

We hold that Section 1225 entitles Defendants to an offset equal to

the amount Ms. Mouton is currently receiving in LTD benefits from Lincoln.

Defendants, therefore, may take an offset in the amount of $50.00 per month.

According to the record, Ms. Mouton is entitled to $233.09 per week in workers’

compensation benefits.2 As a monthly figure, her workers’ compensation benefits

amount to $1,010.06 a month.3 After subtracting the $50.00 a month Lincoln pays

Ms. Mouton under her disability policy, Defendants Lafayette Physical and

LEMIC are hereby required to pay Ms. Mouton $960.06 a month, or $221.55 a

week.4

IV.

CONCLUSION

For the reasons above, we reverse the Office of Workers’

Compensation judgment and render a new judgment ordering Defendants,

Lafayette Physical Rehabilitation Hospital and LEMIC Insurance Co., to pay

Demetria Mouton $960.06 a month in workers’ compensation benefits.

REVERSED AND RENDERED.

2
Ms. Mouton’s current workers’ compensation payment amount comes from both parties’
pretrial statements.
3
We multiplied Ms. Mouton’s weekly payments, $233.09, by fifty-two weeks in a year,
and then divided that number by twelve months to arrive at the monthly figure of $1,010.06.
4
We multiplied Ms. Mouton’s monthly workers’ compensation payment, $960.06, by
twelve months in a year, and then divided that number by fifty-two weeks to arrive at the weekly
figure of $221.55.

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