Belinda Flores v. a & Z Tobacco, LLC, D/B/A Pak a Sak

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

WCA 14-505

BELINDA FLORES

VERSUS

A & Z TOBACCO, LLC, D/B/A PAK A SAK

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - # 3
PARISH OF CALCASIEU, NO. 12-03305
CHARLOTTE A. L. BUSHNELL, WORKERS’ COMPENSATION JUDGE

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BILLY HOWARD EZELL
JUDGE

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Court composed of Ulysses Gene Thibodeaux, Chief Judge, John D. Saunders, and
Billy Howard Ezell, Judges.

AFFIRMED AS AMENDED.

Thibodeaux, Chief Judge, concurs in part and dissents in part and assigns
written reasons.

James Ray Morris
4216 Lake St.
Lake Charles, LA 70605
(337) 990-0256
COUNSEL FOR DEFENDANT/APPELLANT:
A & Z Tobacco, LLC

Scott James Pias
522 Alamo St.
Lake Charles, LA 70607
(337) 436-1288
COUNSEL FOR PLAINTIFF/APPELLEE:
Belinda Flores

Larry Arlen Roach, Jr.
2917 Ryan St.
Lake Charles, LA 70601
(337) 433-8504
COUNSEL FOR DEFENDANT/APPELLANT:
A & Z Tobacco, LLC

EZELL, Judge.

In this workers’ compensation appeal, A&Z Tobacco, LLC raises issues

concerning an award of penalties and attorney fees for failure to pay a judgment

within thirty days pursuant to La.R.S. 23:1201(G). Belinda Flores, the claimant,

answered the appeal claiming that the award of penalties should have been greater

and asking for additional attorney fees for work performed on appeal.

FACTS

Ms. Flores was injured on April 14, 2012, while working for A&Z. At the

time of her injury she was moving and lifting a case of beverages when she felt a

pop in her right arm and shoulder. She injured her rotator cuff which ultimately

required surgery. Ms. Flores filed a workers’ compensation claim on May 9, 2012.

A&Z contested whether Ms. Flores suffered an injury.

Trial was set for April 24, 2013. After discussions with the workers’

compensation judge, the parties entered into an agreement on a motion to compel

discovery. Trial of the matter was continued until June 24, 2013. On the day set

for trial, the parties entered a stipulation settling the case which was recited in open

court. A&Z agreed to pay back indemnity to Ms. Flores in the amount of

$9,619.02. It was also agreed that indemnity would continue at the rate of $178.13

a week while Ms. Flores received treatment from Dr. Brent Cascio, an orthopedic

surgeon. If Ms. Flores required surgery, A&Z agreed to pay for medical care for

six weeks after surgery. If Ms. Flores required physical therapy after surgery, then

A&Z agreed to pay for ten weeks of medical care. A&Z also agreed to pay

outstanding medical bills in the amount of $845.47. Additionally, A&Z agreed to

pay penalties in the amount of $4,000.00 and attorney fees in the amount of

$7,500.00. Also, Dr. Anand Roy personally obligated himself to pay the stipulated

penalties and attorney fees if A&Z did not pay.

On July 25, 2013, Ms. Flores filed a motion for contempt of court and for

penalties pursuant to La.R.S. 23:1201(G). Ms. Flores also complained that

improper contact had been made with her treating physicians. On July 26, 2013,

A&Z presented a check in the amount of $21,964.49. A hearing was held on

September 18, 2013. After taking the matter under advisement, the workers’

compensation judge rendered judgment on December 26, 2013. The court awarded

penalties in the amount of $2,000.00 and attorney fees in the amount of $3,000.00

pursuant to La.R.S. 23:1201(G) for failure to timely pay a final and nonappealable

judgment within thirty days. The trial court also held that any verbal

communication or personal conferences with any of Ms. Flores’s health care

providers was to be conducted pursuant to La.R.S. 23:1127.

A&Z filed the present appeal. It argues that penalties and attorney fees

were inappropriate. A&Z also argues that a stipulation was entered into at trial

about contact with Ms. Flores’s health care providers and the judgment should

have been worded in conformity with the stipulation. Ms. Flores answered the

appeal claiming that the amount of penalties should be increased and asking for

additional attorney fees for work performed on appeal.

PENALTIES AND ATTORNEY FEES

A&Z sets forth three reasons that penalties and attorney fees were

inappropriately awarded pursuant to La.R.S. 23:1201(G). It first argues that Ms.

Flores waived and compromised any right to the penalties and attorney fees when

she cashed the check. Next, it argues that there was not a final and nonappealable

judgment at the time it made payment. Finally, A&Z argues that it was unable to

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pay the judgment due to conditions over which it had no control, falling under the

exception in La.R.S. 23:1201(G).

Awards of penalties and attorney fees in workers’ compensation cases are

essentially penal in nature and are imposed to deter indifference and undesirable

conduct by employers and their insurers toward injured workers. Williams v. Rush

Masonry, Inc., 98-2271 (La. 6/29/99), 737 So.2d 41. While the benefits conferred

by the Workers’ Compensation Act are to be liberally construed, penal statutes are

to be strictly construed. Id.

Louisiana Revised Statutes 23:1201(G) provides:

If any award payable under the terms of a final, nonappealable
judgment is not paid within thirty days after it becomes due, there
shall be added to such award an amount equal to twenty-four percent
thereof or one hundred dollars per day together with reasonable
attorney fees, for each calendar day after thirty days it remains unpaid,
whichever is greater, which shall be paid at the same time as, and in
addition to, such award, unless such nonpayment results from
conditions over which the employer had no control. No amount paid
as a penalty under this Subsection shall be included in any formula
utilized to establish premium rates for workers’ compensation
insurance. The total one hundred dollar per calendar day penalty
provided for in this Subsection shall not exceed three thousand dollars
in the aggregate.

Louisiana Revised Statutes 23:1201(G) only applies when there is a final and

nonappealable judgment. Therefore, we will first address A&Z’s argument that

there was not a final and nonappealable judgment.

Final and Nonappealable Judgment

A&Z argues that there was not a final and nonappealable judgment until the

trial court signed the judgment on September 11, 2013, because Ms. Flores

requested that the judgment be reduced to writing and there was a dispute

regarding the content and intent of the stipulation and language of the judgment.

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A&Z argues that Ms. Flores’s reliance on Trahan v. Coca Cola Bottling Co.,

United, Inc., 04-100 (La. 3/2/05), 894 So.2d 1096, is misplaced in this case

because the claimant did not cash the check in Trahan, whereas the check was

cashed in this case.

Whether the check was cashed or not makes no difference as to whether

there was a final and nonappealable judgment. The supreme court held that a

signed judgment is unnecessary when the requirements for an oral compromise

pursuant to La.Civ.Code art. 3071 are satisfied. The supreme court noted that

La.Civ.Code art. 3071 “provides for two elements of a compromise: (1) mutual

intention of preventing or putting an end to the litigation, and (2) reciprocal

concessions of the parties to adjust their differences.” Trahan, 894 So.2d at 1104.

“To be enforceable under Article 3071, a compromise must either be reduced to

writing and signed by the parties or their agents, or be recited in open court and be

capable of transcription from the record of the proceeding.” Id. (emphasis added).

The supreme court also observed that a compromise recited in open court

and entered into by the parties, whereby the employer agrees to pay certain sums to

the claimant in exchange for ending pending litigation, constitutes a confession of

judgment such that defendant is not entitled to an appeal. Id. It “confers upon the

parties the right of judicial performance.” Id. at 1109.

A review of the record in the present case discloses that all the elements of a

compromise were met; the compromise was recited in open court and capable of

transcription from the record on June 24, 2013. At that point the agreement

became enforceable and constituted a final and nonappealable judgment.

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A&Z further argues that the compromise was not final because there was a

dispute as to the stipulation’s intent and content. It refers to the fact that both

parties submitted judgments, with the trial court signing the judgment it submitted.

The only difference between the two submitted judgments was that the one

submitted by A&Z broke down the total amount owed into the specific amounts

owed for each item as recited in the stipulation. There was no dispute as to the

content of the stipulation made in court.

Waiver

Having determined that the recitation in trial court constituted a final and

nonappealable judgment, we now turn to the issue of whether Ms. Flores waived

her right to pursue penalties and attorney fees under La.R.S. 23:1201(G) when she

cashed the check. An attempt was made to deliver the check to Ms. Flores’s

attorney’s office on July 25, 2013, but the office had already closed for the day.

The check was delivered the next day. A letter accompanied the check tendered to

Ms. Flores which stated “do not negotiate A&Z Tobacco, LLC’s check until such

time that the release documents have been executed and returned to our office.”

The check was cashed that day, but the release was not signed until several days

later. Among other language, the “PARTIAL RECEIPT AND RELEASE”

included the following:

Plaintiff and her attorney therefore release Defendant from any and all
such claims they may have under the laws of Louisiana through the
date of execution of this release, including but not limited to those for
payment of past indemnity, past medical expenses, interest, costs,
penalties owed under any statute and attorney fees under any statute.

Ms. Flores and her attorney did sign the release on July 29, 2013, but only after

crossing out the above language.

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In Trahan, 894 So.2d 1096, the supreme court recognized that the claimant

could refuse to sign a receipt and release when the parties did not contemplate the

execution of a receipt and release as part of the stipulation. There is no evidence

whatsoever in this case that a receipt and release had to be signed as part of the

stipulation. Therefore, it was not necessary for Ms. Flores to sign the document

before cashing the check. She further indicated her understanding of the

stipulation by crossing out language that was not part of the compromise before

signing the document. Ms. Flores did not waive her right to penalties and attorney

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

Nonpayment Due to Conditions A&Z Could Not Control

A&Z asserts that its failure to pay resulted from conditions over which it had

no control. “A plain reading of [La.R.S. 23:1201] G raises two questions (1) was

the payment timely, and (2) if not, did the delay result from conditions beyond the

employer’s control.” Fontenot v. Sonnier, 09-1215, p. 5 (La.App. 3 Cir. 4/7/10),

34 So.3d 473, 476. The manifest error standard of review applies to a workers’

compensation judge’s finding as to whether untimely payment was the result of

conditions beyond an employer’s control. Id.

A&Z introduced evidence that it had $1,699.03 in its account on June 24

when the stipulation was entered into and that it had to make a loan/cash call on its

members to pay the stipulated amount. The final deposit to cover the stipulated

amount was made on July 24. As noted by the workers’ compensation judge, the

thirtieth day was July 24, 2013. This does not include the day the stipulation was

entered into. Therefore, any attempt to deliver the check on July 25 was already

late.

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A&Z claims that it was having financial difficulties which caused it issues in

securing the money to pay the stipulation. We first observe that A&Z did not have

workers’ compensation insurance as required by La.R.S. 23:1168, which would

have provided coverage for Ms. Flores’s accident. Failure to secure funding to pay

this workers’ compensation claim timely is not a condition beyond the employer’s

control. We find no manifest error in the workers’ compensation judge’s ruling on

this issue.

CONTACT OF HEALTH CARE PROVIDERS

A&Z’s final argument is that the workers’ compensation judge erred when it

ruled that it could only contact Ms. Flores’s health care providers in accordance

with La.R.S. 23:1127. A&Z argues that this issue was moot and resolved by the

stipulation so that the judgment should have been worded in conformity with the

stipulation.

Contact on behalf of A&Z had been made with Ms. Flores’s doctors

questioning whether her injury was work-related. This was after A&Z and Ms.

Flores entered into the stipulation and A&Z agreed to pay indemnity benefits,

medical benefits, and penalties and attorney fees. Ms. Flores then raised this issue

in her motion for contempt. We find no error with the workers’ compensation

judge’s ruling that contact with Ms. Flores’s doctors should be made in accordance

with the law and including this issue as part of her judgment.

AMOUNT OF PENALTIES

In her answer to the appeal, Ms. Flores argues that the trial court erred in

awarding her a penalty in the amount of $2,000.00 when the amount awarded

should have been greater based on the mandatory language found in La.R.S.

23:1201(G). Louisiana Revised Statutes 23:1201(G) provides, in pertinent part,

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that a penalty “shall” be awarded in “an amount equal to twenty-four percent

thereof or one hundred dollars per day together with reasonable attorney fees, for

each calendar day after thirty days it remains unpaid, whichever is greater.”

The payment by A&Z was two days late, so the $100.00 a day penalty

results in a $200.00 penalty. Whereas, 24% of the total stipulated amount of

$21,964.49 is $5,271.48. Pursuant to La.R.S. 23:1201(G), we are mandated to

increase the penalty award to $5,271.48 as the greater penalty.

ATTORNEY FEES

Ms. Flores has also asked for an award of additional attorney fees for work

performed on this appeal. An additional award of attorney fees for work done on

an appeal is proper when a party is forced to and successfully defends an appeal

and the party makes a proper request for additional attorney fees. Alpizar v. Dollar

General, 13-1150 (La.App. 3 Cir. 3/5/14), 134 So.3d 99. Since Ms. Flores was

successful on appeal in defending her case and obtaining an increase in the

penalties awarded as requested in her answer, we make an additional award of

$3,500.00 for the work performed on appeal.

For the reasons set forth in this opinion, we amend the judgment to increase

the penalties awarded from $2,000.00 to $5,271.48. We also award an additional

award of attorney fees in the amount of $3,500.00. In all other respects, the

judgment is affirmed. Costs of this appeal are assessed to A&G Tobacco, LLC.

AFFIRMED AS AMENDED.

8

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

14-505

BELINDA FLORES

VERSUS

A & Z TOBACCO, LLC, D/B/A PAK A SAK

THIBODEAUX, Chief Judge, concurring in part and dissenting in part.

I agree with the majority’s treatment of the waiver argument and the

nonpayment of the judgment for the alleged reason that it was beyond the

employer’s control. I disagree, however, with their treatment of what constitutes a

final and nonappealable judgment. I would, therefore, reverse and not award any

penalties or fees.

I agree that a binding and enforceable compromise was reached under

both Article 3071 of the Code of Civil Procedure and La.R.S. 23:1272(A) which

governs compromises under workers’ compensation laws. The defendant does not

and cannot dispute this fact and its settlement consequences. What is at issue is

whether penalties and fees inure to the plaintiff as a result of a “final,

nonappealable judgment” which is not paid within thirty days after becoming due.

Louisiana Revised Statutes 23:1201(G) provides for penalties when

the judgment has not been paid within thirty days of it being rendered. This article

begins the thirty-day period from the time of a “final, nonappealable judgment.”

The phrase, “final, nonappealable judgment” is not defined in the workers’

compensation statutes. When the issue is not addressed in the specific area of law

as in workers’ compensation, the general codal provisions are used. Section

40:6601 of the Louisiana Administrative Code states, “[u]nless otherwise provided

for in these rules, any practice or procedure not in conflict with either the Workers’

Compensation Act or these rules will be guided by practice and procedure

provided for in the Louisiana Code of Civil Procedure.”

Article 911 of the Louisiana Code of Civil Procedure provides that a

final judgment must be in writing and signed by the judge unless otherwise

provided for by law. Louisiana Revised Statutes 23:1201(G) does specifically say

a “final, nonappealable judgment” and not an enforceable compromise as does

La.R.S. 23:1272(A). In my view, since a final judgment has to be in writing and

not simply recited in open court, as does a compromise, a written document has to

be executed in order to effectuate the imposition of penalties.1

Moreover, the plaintiff’s attorney himself requested a written

judgment. When asked by defense counsel, “do you require a written judgment or

will this suffice?”, the plaintiff’s counsel answered, “I would like a written.” Thus,

the written judgment which plaintiff’s counsel requested and which was signed on

September 11th, is the appropriate time by which to govern whether penalties and

fees are due under Section 1201(G).

For the foregoing reasons, I respectfully dissent in part.

1
I am cognizant of Trahan v. Coca Cola Bottling Co. United, Inc., 03-827 (La.App. 3 Cir.
12/1/03), 861 So.2d 783, a panel on which I sat. I now reject the views expressed and the
conclusion reached therein.
2