Gerald Greene v. Highlands Ins. Co.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

14-223

GERALD GREENE

VERSUS

HIGHLANDS INSURANCE COMPANY, ET AL.

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APPEAL FROM THE
OFFICE OF WORKERS COMPENSATION, DISTRICT 04
PARISH OF LAFAYETTE, DOCKET NO. 10-3635
HONORABLE ADAM JOHNSON, PRESIDING
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SYLVIA R. COOKS
JUDGE

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Court composed of Sylvia R. Cooks, Jimmie C. Peters and John E. Conery, Judges.

REVERSED AND REMANDED.

William Ken Hawkins
1180 Highway 51, Suite A
Ponchatoula, LA 70454
(985) 386-3717
ATTORNEY FOR PLAINTIFF/APPELLANT
Gerald Greene

James D. Bayard
Onebane Law Firm
1200 Camellia Boulevard, Suite 300
P.O. Box 3507
Lafayette, LA 70502-3507
(337) 237-2660
ATTORNEY FOR DEFENDANT/APPELLEE
Highlands Ins. Co.

COOKS, Judge.

FACTS AND PROCEDURAL HISTORY

The claimant, Gerald Greene, was involved in a work-related accident on

September 19, 1995, while employed by Lincoln Big Three, Inc. At the time,

Lincoln’s worker’s compensation insurer was Highlands Insurance Company.

Subsequent to the accident, Highlands began paying claimant supplemental

earnings benefits (SEB).

On February 9, 2006, Highlands filed a Form 1008 Disputed Claim for

Compensation (1008), seeking termination of SEB retroactive to September 21,

2005. Highlands based this on its belief that claimant was working and/or was

capable of working and, thus, was not entitled to SEB beyond 520 weeks.

On March 16, 2006, claimant filed his own 1008 claim, alleging he was

totally and permanently disabled and, thus, entitled to continued indemnity

benefits. Claimant’s 1008 claim was treated as a reconventional demand.

Highlands filed an answer to the claimant’s allegations, contending if claimant is

found to be permanently disabled, then they are entitled to a social security offset

pursuant to La.R.S. 23:1225(A). Highlands maintained that a Form 1004 obtained

in March 2006, showed the federal offset being taken as of 2005 (and still in effect

in 2006), was $604.60, which calculates to a weekly offset of $139.55.

Eventually, the parties entered into a formal stipulation providing: (1)

Claimant was totally and permanently disabled; (2) Highlands was entitled to a

“reverse offset of $139.55 per week retroactive to the date of judicial demand,

March 28, 2006; and (3) Highlands would pay benefits in the amount of $184.16

per week from March 28, 2006. That stipulation was signed by counsel for both

parties and filed into the record. A proposed judgment reflecting the stipulation

was submitted to the Office of Workers’ Compensation (OWC) on May 15, 2007,

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jointly by both parties and signed by counsel for both parties. The judgment was

signed by the workers’ compensation judge, Sam Lowery, the following day, May

16, 2007, and stated in pertinent part:

Pursuant to the stipulation of the parties entered herein,

IT IS ORDERED ADJUDGED AND DECREED that Gerald
Greene be and is hereby declared totally and permanently disabled. It
is further

ORDERED ADJUDGED AND DECREED that Highlands
Insurance Company is entitled to an offset for Social Security
payments received pursuant to Louisiana Revised Statute 23:1255A in
the amount of $139.55. It is further

ORDERED ADJUDGED AND DECREED that Gerald Green
[sic] is therefore entitled to compensation at the rate of $323.71 to the
date of March 27, 2006 with a credit for compensation previously paid
by Highlands Insurance Company and compensation at the rate of
$184.16 from the date of March 28, 2006. It is further

ORDERED ADJUDGED AND DECREED that the social
security offset shall not be rendered effective until such time as the
Social Security Administration shall recognize the offset and reverse
same, with Highlands Insurance Company being granted a credit for
any overpayment made between the date of March 28, 2006, and the
date the Social Security Administration recognizes this offset. It is
further

ORDERED ADJUDGED AND DECREED that all claims of
Highlands Insurance Company herein are dismissed without
prejudice, and that all other claims of Gerald Greene in this matter are
dismissed, with all parties reserving the rights to any future disputes
and/or claims which may arise.

The judgment was also signed by counsel for both parties. No motion for new trial

or appeal was filed. In accordance with the judgment, Highlands did not begin

taking the offset until the Social Security Administration recognized the offset on

May 28, 2006. This resulted in overpayments totaling $14,792.30. In August of

2008, Claimant repaid Highlands $11,753.31, which left $3,038.99 in outstanding

overpayments due.

On April 20, 2010, Claimant filed a 1008 claim alleging improper Social

Security offset. Claimant contended Highlands was entitled to an offset, but only
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to the extent that the Social Security Administration was exercising their offset,

which was only $158.00 per month. Thus, Claimant contended the offset taken by

Highlands was excessive. Defendants maintained the joint stipulation setting the

amount of the “reverse offset” due was correct, but, in any event, Claimant is

prohibited by La.Code Civ.P. art. 1951 from altering the substance of a final

judgment.

The 1008 claim was filed more than two years and eight months after the

May 16, 2007 judgment became final. The matter was tried before the OWC

(heard by a different WCJ, Adam Johnson) on June 20, 2013, and taken under

advisement with post-trial briefs submitted by the parties. The WCJ specifically

requested the parties address three issues: (1) whether the judgment entered on

May 16, 2007, can be amended; (2) if the judgment is amended, what is the correct

calculation to be followed for the “reverse offset” and the resulting indemnity to be

paid to Claimant; and (3) what is the correct amount of the overpayment made by

Highlands in light of the “reverse offset” calculation.

The WCJ issued his ruling in open court, finding under La.Code Civ.P. art.

1951, the substance of a final judgment may not be altered nor amended. Thus,

holding it did not have authority to amend a previous final judgment entered by the

OWC, it did not reach the issues of the proper offset to have been paid, and any

resulting overpayment. Thus, Claimant’s 1008 was dismissed with prejudice. The

WCJ also ruled Highlands was entitled to a credit against SEB in the amount of

$3,038.99, which purportedly reflected the balance of the overpayments made by

Highlands in 2007 and 2008, while waiting for the Social Security Administration

to recognize the reverse offset. A final judgment was signed by the WCJ, and

Claimant lodged this appeal, asserting the trial court’s judgment was erroneous.

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ANALYSIS

Initially, we note the reverse offset implemented by Highlands is statutorily

provided for in La.R.S. 23:1225(A), which provides for an offset by the employer

or insurer against social security disability benefits as follows:

The benefits provided for in this Subpart for injuries producing
permanent total disability shall be reduced when the person receiving
benefits under this Chapter is entitled to and receiving benefits under
42 U.S.C. Chapter 7, Subchapter II, entitled Federal Old Age,
Survivors, and Disability Insurance Benefits, on the basis of the wages
and self-employment income of an individual entitled to and receiving
benefits under 42 U.S.C. § 423; provided that this reduction shall be
made only to the extent that the amount of the combined federal and
workers’ compensation benefits would otherwise cause or result in a
reduction of the benefits payable under the Federal Old Age,
Survivors, and Disability Insurance Act pursuant to 42 U.S.C. § 424a,
and in no event will the benefits provided in this Subpart, together
with those provided under the federal law, exceed those that would
have been payable had the benefits provided under the federal law
been subject to reduction under 42 U.S.C. § 424a. However, there
shall be no reduction in benefits provided under this Section for the
cost-of-living increases granted under the federal law after the date of
the employee’s injury.

Essentially, Highlands argues because of the stipulations entered into

between the parties, they are entitled to receive the offset previously determined by

the parties regardless of the amount Claimant actually collects. We disagree,

finding such a result is contrary to the statute.

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

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 him from receiving duplicative benefits that exceed his actual pre-

injury wages. Id.

The Social Security Act, 42 U.S.C. § 424a, requires that Social Security

Disability (SSD) benefits be reduced when the combined benefits from SSD and

workers’ compensation amount to more than eighty percent of the injured
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employee’s prior earnings. Johnson v. Pitre, supra. The Louisiana Legislature

specifically provided for an offset for SSD benefits only in the case of permanent

total disability. Once this requirement is met, an offset is allowed, but “provided

that this reduction shall be made only to the extent that the amount of the combined

federal and workers’ compensation benefits would otherwise cause or result in a

reduction of the benefits payable under the Federal Old Age, Survivors, and

Disability Insurance Act pursuant to 42 U.S.C. § 424a.” La.R.S. 23:1225(A).

In this case, Claimant maintains it is contrary to La.R.S. 23:1225 for

Highlands to take a retroactive offset back to March 28, 2006, when the Social

Security Administration only reversed the offset back to May of 2007. Moreover,

Claimant notes the reverse offset adjusted by the Social Security Administration

was $158.00 per month, but Highlands maintains it is entitled to the offset of

$604.72 per month pursuant to the stipulation entered into previously.

In this case, the record establishes that May 16, 2007 judgment gives

retroactive effect to Highland’s request for a reverse offset back to March 28,

2006. However, the record also reflects that when the Social Security

Administration recognized the offset in 2008, it only went back to the date of the

judgment, May 16, 2007 and not March 28, 2006. Further, at that point, the Social

Security Administration only increased Claimant’s Social Security benefits by

$158.00 per month. When Highlands then began taking its reverse offset of

$604.72 per month, Claimant was left with a reduction in combined benefits of

$446.72 per month. While there is no dispute that Highlands was entitled to take

an offset in accordance with La.R.S. 23:1225, it can only be done to the extent that

the Social Security Administration was exercising their offset. That was not the

case here.

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The interpretation of the statutes must be consistent with the objective of

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

certain wage-loss protection. Were we to grant Highlands the full offset it claims

entitlement to, Claimant would experience a significant shortfall in the benefits he

is receiving and would be subject to a repayment of over $3,038.99 to Highlands.

To allow such a result here would defeat the statute’s objective and militate against

the receipt of deserved benefits.

Highlands also has argued it had no burden of proof with regard to the

amount of the offset to which it claimed it was entitled. However, the law does not

support that belief. Louisiana Revised Statutes 23:1225, to the extent it serves to

authorize a limit or reduction of the workers’ compensation obligation an

employee is entitled due to the receipt of other enumerated benefits, is a restriction

on an injured employee’s right to workers’ compensation benefits and must be

strictly construed. Cousins v. City of New Orleans, 608 So.2d 978 (La.1992). “An

employer seeking credit for benefits covered by the statute has the burden of

proving both entitlement to and the amount of the credit.” Jones v. General

Motors Corp., 03-1766, p. 12 (La. 4/30/04), 871 So.2d 1109, 1117. Thus, we

agree with Claimant that it was incumbent upon Highlands to prove their

entitlement to the credit and the amount of the credit. A review of the record

indicates the WCJ requested the parties to brief that issue in its post-trial briefs;

however, that issue was not discussed by the WCJ as it based its judgment solely

on the conclusion that La.Code Civ.P. art. 1951 disposed of the claim.

We also find the WCJ erred in finding the prohibition found in La.Code

Civ.P. art. 1951 that the substance of a final judgment may not be altered nor

amended was dispositive of the issues presented by Claimant. Ordinarily, once a

judgment becomes final and definitive, parties are bound by it, regardless of any

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future change of circumstance. See La.Code Civ.P. art. 1841; see also La.Code

Civ.P. art. 425. However, workers’ compensation judgments are treated differently

from ordinary judgments. If the rules of finality that govern ordinary civil

judgments are applied to workers’ compensation judgments, the flexibility of the

workers’ compensation scheme of recovery would be greatly restricted. Falgout v.

Dealers Truck Equip. Co., 98-3150 (La. 10/19/99), 748 So.2d 399; Critser v.

Dillard’s Dep’t Stores, Inc., 99-3113 (La.App. 1 Cir. 2/16/01), 791 So.2d 702, writ

denied, 01-753 (La. 5/4/01), 791 So.2d 659.

“Within the entire scheme of the workers’ compensation act, the concept of

modification is unique because it allows a case to be reopened and the award

amended after the judgment becomes final.” Falgout, 98-3150, at p. 8, 748 So.2d

at 405 (emphasis added), citing Denis Juge, Louisiana Workers’ Compensation, §

3:7 (2d ed.1999). Thus, it becomes clear that the WCJ was not prevented from

amending the judgment in this workers’ compensation matter by La.Code Civ.P.

art 1951.

Furthermore, it is clear that the entitlement to an offset in this case is

statutorily connected to the amount fixed by the Social Security Administration

and, thus, occurs by operation of law, and not the stipulation of the parties.

Whatever amounts stipulated to by the parties, the law is clear that Highlands

cannot take the offset until the Social Security Administration removes theirs

(which Claimant maintains was May 16, 2007 and not March 28, 2006), and they

can only take an offset to the extent it was taken by Social Security. The objective

of benefit coordination laws is not designed to place any potential loss of income

on the permanently, disabled worker. That, undoubtedly, is why the law limits the

employer/insurer to the amount removed by Social Security.

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As set forth earlier, the WCJ ordered the parties to brief the question of what

is the correct calculation to be followed for the “reverse offset” and the resulting

indemnity to be paid to Claimant if the judgment is amended; as well as the correct

amount of any overpayment made by Highlands in light of the “reverse offset”

calculation. However, since the WCJ erroneously concluded it could not amend

the previous final judgment, it did not reach those issues. In light of our ruling,

finding La.Code Civ.P. art. 1951 does not preclude the WCJ from amending the

previous judgment issued by that court, we remand this case to the Office of

Workers’ Compensation for full consideration of and ruling on all issues. All costs

of this appeal are assessed to defendant-appellee, Highlands Insurance Company.

REVERSED AND REMANDED.

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