Leon Roy v. Schilling Distributing Company, Inc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

13-242

LEON ROY

VERSUS

SCHILLING DISTRIBUTING COMPANY, INC., ET AL.

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - # 4
PARISH OF LAFAYETTE, NO. 11-09643
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 Shannon J. Gremillion, Judges.

AFFIRMED IN PART; REVERSED IN
PART; AND RENDERED.

Janice Hebert Barber
Jennifer B. Valois
Barber Law Firm
111 Mercury Street
Lafayette, LA 70503
Telephone: (337) 232-9893
COUNSEL FOR:
Plaintiff/Appellant - Leon Roy

Renee C. Willis
Johnson, Rahman & Thomas
2237 South Acadian Thruway
Baton Rouge, LA 70898-8001
Telephone: (225) 231-0557
COUNSEL FOR:
Defendants/Appellees - Louisiana Workers’ Compensation Corporation and
Schilling Distributing Company, Inc.

THIBODEAUX, Chief Judge.

Leon Roy appeals from a judgment of the Office of Workers’

Compensation (OWC), finding that the termination of indemnity benefits was

proper by the defendants-appellees, employer Schilling Distributing, Inc. and its

insurer, Louisiana Workers’ Compensation Company (LWCC). For the following

reasons, we affirm in part and reverse in part the judgment of the OWC.

I.

ISSUES

We must decide:

(1) whether the OWC was clearly wrong in failing to address
the conversion of benefits;

(2) whether the OWC manifestly erred in finding that
supplemental earnings benefits were properly terminated;
and

(3) whether the OWC abused its discretion in denying
penalties and attorney fees to the claimant for arbitrary
and capricious termination of benefits.

II.

FACTS AND PROCEDURAL HISTORY

In June 2010, fifty-three-year-old Leon Roy, a warehouseman who

repackaged damaged cases for the defendant beer distributor, sustained a back and

neck injury when a rack containing the product fell on him. LWCC began paying

temporary total disability benefits (TTDs) immediately. Mr. Roy went to his

employer’s occupational clinic, then saw orthopedist Dr. John Schutte, who

ordered an MRI which revealed a disc bulge at L2-3 and a disc protrusion at L5-

S1. After a steroid injection failed and Mr. Roy developed radiculopathy, Dr.

Schutte sent him to neurologist Dr. Ricardo Leoni for evaluation.

In November 2010, Dr. Leoni recommended a microdiscectomy at

L5-S1, indicating that Dr. Schutte would be available if a fusion was required.

LWCC approved the surgery, and Dr. Leoni sent Mr. Roy to Med

South Cardiovascular Institute of the South for cardiac clearance. Mr. Roy’s

echocardiogram and nuclear stress test were abnormal. The cardiologist, Dr.

Michael McElderry, wanted an angiogram in order to complete his assessment.

Dr. McElderry’s request to LWCC for an angiogram was denied, and the surgery

was cancelled in January 2011.

At the end of March 2011, the nurse/case manager for LWCC,

Kimberly Sanders, scheduled a conference with Dr. Leoni without notifying Mr.

Roy, who was unrepresented at the time. Via telephone conference, she asked Dr.

Leoni what his medical plan would be if Mr. Roy did not have the surgery, whether

Mr. Roy was at maximum medical improvement (MMI) and what restrictions there

would be without the surgery. Dr. Leoni replied that there was no medical plan if

Mr. Roy did not have the needed surgery, that he would be at MMI, and that

sedentary duty would be his permanent restriction without the surgery.

LWCC converted Mr. Roy’s benefits from TTDs to supplemental

earnings benefits (SEBs) on April 2, 2011, paying him monthly instead of weekly.

Buster Fontenot, a vocational rehabilitation counselor, met with Mr.

Roy in May. Mr. Roy had obtained counsel, and the meeting took place in his

attorney’s office.

In July 2011, LWCC again denied authorization for the angiogram,

indicating in writing that it was a non-related medical expense. Mr. Roy’s attorney

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responded with attached case law regarding coverage of the medical testing and

explained that Mr. Roy did not have a cardiac condition or cardiac history.

Pursuant to LWCC advice in its correspondence, Mr. Roy went to the

charity hospital facility on two occasions and was put on the hospital’s list for a

non-emergency angiogram. He was never called.

In September 2011, Buster Fontenot submitted ten (10) jobs to Dr.

Leoni for his approval. Dr. Leoni answered a verification form, indicating that Mr.

Roy had reached MMI, that he would require further diagnostic testing or medical

treatment, that he was released, and that he could return to some type of

employment. In October, 2011, Dr. Leoni approved nine (9) of the ten (10) jobs

submitted to him by the vocational counselor. Dr. Leoni had not seen Mr. Roy for

eleven months since recommending the surgery in November 2010.

The vocational counselor sent Dr. Leoni’s job reviews to Mr. Roy’s

attorney in late October, 2011.

LWCC terminated Mr. Roy’s SEBs as of October 18, 2011, stating

that all of the jobs approved by Dr. Leoni paid at least 90% of Mr. Roy’s pre-injury

wages of $7.55 an hour.

In May of 2012, due to Dr. Leoni’s retirement from surgery, Dr.

Patrick Juneau, who had provided a second medical opinion (SMO), became Mr.

Roy’s choice of neurosurgeon. Dr. Juneau agreed with Dr. Leoni’s diagnosis and

sought surgical clearance by the cardiologist for the microdiscectomy at L5-S1.

In June 2012, LWCC agreed to pay for the diagnostic portion of the

angiogram. In August, Dr. Juneau recommended an L5 bilateral decompressive

laminectomy with bilateral foraminotomies and a left L5-S1 microdiscectomy,

followed by an instrumented fusion at the L5-S1 level.

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The parties entered into a partial consent judgment in September,

wherein LWCC authorized the angiogram and agreed to reinstate Mr. Roy’s

benefits when he was cleared for surgery. The consent judgment contained a

waiver of penalties and attorney fees on the issue of the angiogram.

The issue of termination of benefits, along with any attendant

penalties and attorney fees, went to trial in October 2012. The OWC found that

one (1) of the ten (10) jobs located by the vocational rehabilitation counselor was

suitable and available under the criteria enunciated in Banks v. Indus. Roofing &

Sheet Metal Works, Inc., 96-2840 (La. 7/1/97), 696 So.2d 551. It found that Mr.

Roy’s benefits were properly terminated by LWCC and that no penalties and

attorney fees were due.1

On appeal, Mr. Roy asserts that the OWC judgment should be

reversed. He asserts that he was due TTD benefits from the date of the accident

forward; that his benefits were wrongfully converted to SEBs in April 2011; that

all benefits were wrongfully terminated in October 2011; and that he is due

penalties and attorney fees for the wrongful acts. In the alternative, he asserts that

the vocational rehabilitation efforts did not meet the minimum criteria and that

SEBs should have continued from the time of termination in October 2011 through

the time that benefits were reinstated in December 2012.

1
After trial and after the angiogram, Mr. Roy was reportedly cleared for surgery, and his
wage benefits were reportedly reinstated in December 2012.

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III.

STANDARD OF REVIEW

Factual findings in workers’ compensation cases are subject to the

manifest error/clearly wrong standard of review. Banks, 696 So.2d 551. In

applying this standard, the appellate court must determine not whether the trier of

fact was right or wrong, but whether its conclusion was reasonable. Id.

IV.

LAW AND DISCUSSION

April 2011 Conversion of Benefits

Mr. Roy contends that his benefits were wrongfully converted from

TTDs2 to SEBs3 in April 2011, before the termination of all benefits six months

later in October 2011. He asserts that the release by Dr. Leoni was conditional

under Stelly v. Health South Rehabilitation, 03-171 (La.App. 3 Cir. 7/2/03), 854

960, that he was not released at all by his orthopedist, Dr. Schutte, and that the trial

court erred in failing to consider that the benefits at issue were TTDs, not SEBs.

2
Temporary total disability benefits are authorized at 66.66% of an employee’s weekly
wage “[f]or any injury producing temporary total disability of an employee to engage in any self-
employment or occupation for wages.” La.R.S. 23:1221(1)(a). If the employee is not working,
in order to receive TTDs, he must show “by clear and convincing evidence, unaided by any
presumption of disability” that he is physically unable to work. La.R.S. 23:1221(1)(c). An
award of TTDs “shall cease when the physical condition of the employee has resolved itself to
the point that a reasonably reliable determination of the extent of disability of the employee may
be made and the employee's physical condition has improved to the point that continued, regular
treatment by a physician is not required.” La.R.S. 23:1221(1)(d).
3
Supplemental earnings benefits are authorized at 66.66% of the difference between the
employee’s average monthly pre-injury wage and his average monthly post-injury wage when he
is able to work, but unable to earn “wages equal to ninety percent or more of wages at time of
injury.” La.R.S. 23:1221(3)(a)(i). SEBs are payable monthly. Id. “When the employee is
entitled to monthly [SEBs] pursuant to this Subsection, but is not receiving any income from
employment or self-employment and the employer has not established earning capacity pursuant
to R.S. 23:1226, payments of [SEBs] shall be made in the manner provided for in R.S.
23:1201(A)(1).” La.R.S. 23:1221(3)(a)(ii).

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The defendants argue that wrongful conversion of benefits was not asserted before

trial and, therefore, not properly before the OWC or this court.

The record reveals that the conversion of benefits and the release by

Dr. Leoni were not asserted in Mr. Roy’s 1008, his amended 1008, or his pre-trial

statement; nor was the issue asserted at trial. More specifically, there were thirteen

stipulations prior to trial. Stipulation number six stated that without surgery, Dr.

Leoni placed Mr. Roy at MMI with sedentary restrictions, though the statement did

not include the term “release” as argued by the defendants. However, after the

stipulations were read, the OWC next specifically clarified with the parties that the

“sole issue” for trial was the termination of benefits after October 18, 2011, and

penalties and attorney fees in connection with it. This was in accord with the

pretrial statement. Pursuant to the hearing rules promulgated in accordance with

La.R.S. 23:1310.1, La.Admin.Code, Title 40, Chapter 62, Subchapter A, § 6201

states that: “Only those issues listed in the pretrial statements shall be litigated at

trial. No new issues shall be raised except by written order of the judge for good

cause or upon mutual agreement of the parties.”

Mr. Roy’s attorney raised the issue of conversion of benefits in her

post-trial brief, but it was not addressed by the OWC orally or in the judgment.

While we have many concerns with Dr. Leoni’s release and the manner and time-

line in which it was obtained,4 we cannot find that the OWC was clearly wrong for

4
The defendant’s nurse/case manager scheduled a conference with Dr. Leoni on March
31, 2011, while Mr. Roy was waiting for an angiogram so he could have the surgery
recommended in November 2010, over four months prior. The nurse scheduled the conference
without notice to Mr. Roy, who did not have an attorney. She asked Dr. Leoni, and she reported,
only specific questions such as a “would be” MMI status and “would be” restrictions, without the
surgery. Mr. Roy’s TTD benefits were converted two days later on April 2, even before Dr.
Leoni’s written confirmation of the phone conversation. A week later, Mr. Roy hired an attorney,
who informed the defendant of the requirement for vocational rehabilitation services if SEBs
were instituted, but pointed out the road block of Mr. Roy’s having to truthfully answer a 1208

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failing to consider an issue that was not raised and argued at trial after he

specifically asked what the issues were in advance, just “to make clear” for the

record and for his decision-making process. Had the workers’ compensation judge

decided to address the issue based upon the post-trial brief and the evidence

presented during trial, he, or we, could have invoked La.R.S. 23:1317, which

provides in part that the workers’ compensation judge “shall not be bound by

technical rules of evidence or procedure” when the evidence is competent and

objective. La.R.S. 23:1317(A). See Douglas v. Grey Wolf Drilling Co., 03-515

(La.App. 3 Cir. 11/5/03), 858 So.2d 834. Under the present facts, however, we

find no manifest error on the part of the workers’ compensation judge in not

addressing the issue of the April 2011 conversion of benefits.

Termination of All Benefits as of October 18, 2011

Mr. Roy contends that the OWC manifestly erred in finding that his

benefits were properly terminated as of October 18, 2011, based upon the

vocational rehabilitation results of counselor Buster Fontenot. We agree. Fontenot

located ten jobs which he sent to Dr. Leoni for approval. Dr. Leoni signed off on

nine of the jobs, which included customer service representative for a tractor

supply company, cashier at Murphy USA, custodian at McDonalds, which

Fontenot withdrew at trial, airport car transporter for Hertz Rent A Car, Pop-A-

Lock technician, U-Haul customer service representative, service writer at an

questionnaire, thereby revealing to a potential employer that he was waiting for surgery
recommended by two neurosurgeons. The vocational rehabilitation meeting did not occur until
May 26, 2011. The term “release” did not appear until September 2011, when Dr. Leoni
simultaneously answered “yes” to the necessity for further medical testing or treatment, and
“yes” to a release, though he had not seen Mr. Roy since the prior November. Perhaps because
Mr. Roy’s SEB payments were the near equivalent of his previous TTD benefits, and perhaps
because the termination of all benefits occurred after he filed suit in October 2011, the issue of
the conversion was lost to the overriding issue of termination.

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automobile repair department, hospital courier, and customer service/lawn and

garden position at Lowe’s in Crowley. The only job not approved by Dr. Leoni

was go-cart technician at Gatti Town Family Fun Center.

Of these nine positions, the trial court eliminated eight, finding that

three were filled when submitted to Mr. Roy, one was pulled by Fontenot at trial,

two did not satisfy Banks, 696 So.2d 551, because they required lifting fifty

pounds, one was not suitable because it required a high school diploma or the

equivalent, and one failed because of insufficient evidence of availability. The

only job found appropriate by the OWC was the Lowe’s job in Crowley. The

workers’ compensation judge opined that the Lowe’s job met the defendants’

burden of proof under the Banks criteria5 where it paid a minimum of $7.50 an

hour; it was located in Crowley, while Mr. Roy lived in Carencro; the doctor’s

approval of the job was evidence that Mr. Roy was physically capable of

performing it; it fell within Mr. Roy’s age, experience, and education; and Mr.

Fontenot testified that it was still available on October 25, 2011, when he sent

notification to Mr. Roy’s attorney.

5
The Louisiana Supreme Court in Banks, 696 So.2d 551, concluded that an employer
could discharge its burden of proving job availability by establishing, at a minimum and by
competent evidence:
(1) the existence of a suitable job within claimant’s physical
capabilities and within claimant’s or the employer’s community or
reasonable geographic region;
(2) the amount of wages that an employee with claimant’s
experience and training can be expected to earn in that job; and
(3) an actual position available for that particular job at the time
that the claimant received notification of the job’s existence.
Banks, 696 So.2d at 557-58. The court explained that “suitable job” meant one that the claimant
could physically perform and one that fell within the limits of his age, experience, and education.
Id. at 558.

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We find that the record does not reflect a reasonable basis for the

OWC’s finding in favor of the defendant on the criteria of physical capability and

availability. More specifically, the OWC relied on Dr. Leoni’s approval of the

Lowe’s job as proof of Mr. Roy’s physical ability. However, Dr. Leoni also

approved two jobs that the OWC ruled out because they required lifting of fifty

pounds. The Lowe’s job description, prepared by Fontenot, who admittedly

creates all percentages in his descriptors, stated that the job required the employee

to frequently (meaning 34-66% of the time) stand, walk, reach, push, pull,

“handle,” and to lift and carry up to twenty pounds. The job duties included

assisting customers in “carrying and loading purchases,” pushing carts, cleaning

outside, organizing, watering, and arranging plants for display. The “Physical

Demand Level” of the Lowe’s job was “Light,” as was the duty level of all ten jobs

located by Fontenot; however, “Light” was also the description of Mr. Roy’s job at

Schilling, the one he was disabled from resuming.

Dr. Leoni clearly gave Mr. Roy “sedentary” restrictions. He opined in

2010 that Mr. Roy had a ten percent disability rating with or without surgery,

before his condition worsened bilaterally and a fusion was required. In September

of 2010, Dr. Leoni reported that Mr. Fontenot had pain all across his lower back,

down the right leg and into the top of the foot. He could not walk without pain.

Sitting and standing also increased the pain. Neither physical therapy nor

injections had helped. Dr. McElderry reported that he could not put Mr. Roy on a

treadmill because he could not walk. Fontenot admitted at trial that he did not

even look for sedentary positions for Mr. Roy.

Fontenot’s universal and somewhat cavalier response to questions

about the categories and job descriptions, including information in his licensing

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manual, was that he did not trust them, that most jobs these days were light duty

because equipment and other employees were available to assist every other

employee. At the same time, he admitted that a nurse at one hospital will work

extremely hard, while one at another hospital will have an easy job. He also stated

that he himself got fat working on an off-shore oil rig. His reasoning was

inconsistent, and his answers were non-specific, often evasive, and non-responsive

to the questions asked. He testified that his “job developers” sent him many of the

jobs and that he had provided Mr. Roy’s attorney with his entire file, omitting

nothing. Yet he had no documentation from the job developers, no knowledge of

who they talked to in getting their information, no dates on any of the job

descriptions, and no time sheets, which he later said were in the possession of his

wife, who did his billing.

Fontenot did not know whether Mr. Roy had a good driving record or

a GED. He did not know where Mr. Roy lived, though he had been there for forty

years; or whether he could operate a forklift, run a cash register, which was

required by Lowe’s and most of the jobs, or operate a computer. Fontenot testified

that anyone can learn a cash register in five or ten minutes, and anyone who can

use a smart phone can operate a computer; but he admitted to not knowing whether

Mr. Roy had a computer or a smart phone. Mr. Roy did not have a computer.

Prior to working for the defendant, Mr. Roy had basically washed cars, run

errands, and performed lawn maintenance at Hub City Ford for eighteen years.

With regard to the availability of the Lowe’s job, Fontenot testified

that his wife had dragged him to Lowe’s the night before he sent the jobs to Dr.

Leoni on September 15, 2011, and that he personally saw the job on the bulletin

board and looked it up on the store’s computer. Later, when specifically asked

10

about follow-up, he responded that it was “policy” to follow up within two days of

sending the jobs to the doctor and again when receiving the doctor’s response. He

admitted, however, that he had no documentation on availability or follow-up. The

defendant’s own attorney then asked him if he had any recollection or information

to indicate whether any of the jobs were still available on October 25, 2011, after

Dr. Leoni signed off on them and they were sent to Mr. Roy’s attorney.

Fontenot responded: “Okay. The Lowe’s, I know was available

because, again, I checked on the – the bulletin board and the computer.” He did

not mention whether his wife had fortuitously dragged him to Lowe’s again on

October 24 to do his follow-up on the bulletin board in the exact way he had

discovered the job over a month earlier in September. The record does not reflect

a reasonable basis for finding that Fontenot’s testimony on availability qualified as

competent evidence.

Additionally, the $7.50 per hour wage at Lowe’s was described by

Fontenot as “DOE,” an acronym which means “depending on experience,” which

is speculative under Banks. Accordingly, we reverse the OWC judgment in favor

of the defendants’ termination of benefits on October 18, 2011, and order that they

be re-instated as of that date.

Penalties and Attorney Fees

Mr. Roy contends that he is entitled to penalties and attorney fees for

the below-minimum vocational rehabilitation services resulting in the arbitrary and

capricious reduction and then termination of Mr. Roy’s benefits.

The applicable statute in this case is La.R.S. 23:1201(I), which

governs the discontinuation of benefits on October 18, 2011, and which provides

11

for attorney fees and penalties if the termination is found to be arbitrary,

capricious, or without probable cause. “Arbitrary and capricious behavior consists

of willful and unreasoning action, without consideration and regard for facts and

circumstances presented, or of seemingly unfounded motivation.” Brown v. Texas-

LA Cartage, 98-1063, pp. 8-9 (La. 12/1/98), 721 So.2d 885, 890 (citing BLACK’S

LAW DICTIONARY 104, 211 (6th ed. 1990)).

Here the termination of benefits was based upon the vocational

rehabilitation efforts and results of counselor Fontenot, who met with Mr. Roy on

one occasion, did no skills testing, and apparently never called to follow up.

Fontenot did, however, give Mr. Roy an occupational preference

questionnaire and work application log to complete, in order to gauge what kind of

work Mr. Roy leaned toward, and he did write a couple of follow-up letters

regarding these forms. Mr. Roy, who was still waiting for surgery, and who had

never been told that Schilling was not taking him back, just kept waiting. His

elderly mother was also in the hospital with cancer; and he did not send in the

requested forms. Fontenot, therefore, went through some of the motions and based

his results upon Dr. Leoni’s inattentive release and job approvals.

In conclusion, we find that the questionable vocational efforts were

far less than laudable under the standards enunciated in Banks, 696 So.2d 551,

Pinkins v. Cardinal Wholesale Supply, Inc., 619 So.2d 52 (La.1993), Livings v.

Langston Companies, Inc./Continental Bag Div., 96-636 (La.App. 3 Cir. 12/5/96),

685 So.2d 405, and Maxie v. Brown Industries, Inc., 95-19 (La.App. 3 Cir.

5/31/95), 657 So.2d 443, writ denied, 95-1630 (La. 10/6/95), 661 So.2d 469. The

communication efforts, attention to medical records and details, testing, and

follow-up were minimal, and sometimes missing altogether. We are reluctant,

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however, to find that the conduct was arbitrary and capricious under La.R.S.

23:1201(I) and the current set of facts. Accordingly, we affirm the denial of

penalties and attorney fees.

V.

CONCLUSION

Based upon the foregoing, we find no manifest error in the OWC’s

failure to address the conversion of benefits in April 2011; we reverse the

judgment as to termination of benefits and order the defendants to reinstate Mr.

Roy’s SEBs as of the date of termination, October 18, 2011; and we affirm the

denial of penalties and attorney fees.

All costs are assessed to Schilling Distributing Company, Inc.

AFFIRMED IN PART; REVERSED IN PART; AND

RENDERED.

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