Cecilia Rachal v. Wal-Mart Corporation

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

WCA 15-97

CECILIA RACHAL

VERSUS

WAL-MART CORPORATION

**********

APPEAL FROM THE
OFFICE OF WORKERS‟ COMPENSATION - # 2
PARISH OF RAPIDES, NO. 09-05255
JAMES L. BRADDOCK, WORKERS‟ COMPENSATION JUDGE

**********

BILLY HOWARD EZELL
JUDGE

**********

Court composed of Ulysses Gene Thibodeaux, Chief Judge, Billy Howard Ezell,
and Shannon J. Gremillion, Judges.

AFFIRMED.

GREMILLION, Judge, concurs in part and dissents in part and assigns
written reasons.

George Arthur Flournoy
Flournoy & Doggett
P. O. Box 1270
Alexandria, LA 71309-1270
(318) 487-9858
COUNSEL FOR PLAINTIFF/APPELLEE:
Cecilia Rachal

R. O’Neal Chadwick, Jr.
Gregory B. Odom, II
Chadwick Law Firm, LLC
P. O. Box 12114
Alexandria, LA 71315
(318) 445-9899
COUNSEL FOR DEFENDANT/APPELLANT:
Wal-Mart Corporation

EZELL, Judge.

Wal-Mart Corporation appeals a judgment of the Office of Workers‟

Compensation which found it liable to Cecilia Rachal for supplemental earnings

benefits in addition to penalties and attorney fees. Additionally, the workers‟

compensation judge denied Wal-Mart‟s claim for forfeiture of benefits due to fraud

pursuant to La.R.S. 23:1208.

FACTS

Cecilia Rachal was employed with Sam‟s Club in Alexandria as an

advantage coordinator. An advantage coordinator sets up appointments with

different companies to sell Sam‟s Club memberships. In 2009, the Alexandria

Sam‟s was remodeling its store. During the remodeling, Ms. Rachal was in a small

temporary office space with other coworkers. On June 10, 2009, Ms. Rachal was

walking between a coworker at her desk and a filing cabinet when she fell. After

the fall, Ms. Rachal had pain in her head, neck, back, right hand, and both ankles.

She was assisted to a wheelchair. Her ex-husband picked her up at Sam‟s and took

her to St. Frances Cabrini Hospital. Following a check-up in the emergency room,

it was recommended that she see Dr. Gordon Webb.

Ms. Rachal saw Dr. Webb on June 12, 2009, who he determined that Ms.

Rachal was unable to work. At the next visit on June 19, 2009, Dr. Webb

determined that Ms. Rachal was able to return to regular work duty, but Ms.

Rachal did not agree. It was at this time she hired an attorney, who filed a disputed

claim for compensation on June 25, 2009. Ms. Rachal began receiving temporary

total disability benefits on June 26, 2009. Her attorney referred her to Dr. Clark

Gunderson, an orthopedic surgeon.

Dr. Gunderson first saw Ms. Rachal on July 1, 2009. She related to him that

she was experiencing headaches, neck pain radiating into both shoulders, and

lower back pain radiating into both legs. Ms. Rachal also told Dr. Gunderson that

she had been having low back pain since she was fifteen years old but had been

able to work. Since this accident, she has not been able to work. Dr. Gunderson

diagnosed Ms. Rachal with a lumbar-straining-type injury superimposed on

degenerative disc disease. A lumbar MRI on August 7, 2009, indicated spinal

stenosis. Dr. Gunderson stated that the spinal stenosis was caused by a protrusion

of the L3-4 disc and spurring in Ms. Rachal‟s lower back. Dr. Gunderson

recommended a lumbar epidural steroid injection and referred her for physical

therapy. Even after conservative treatment, Ms. Rachal continued to have

problems, so Dr. Gunderson recommended a lumbar laminectomy from L2-L5 to

decompress the nerve roots.

Trial regarding Ms. Rachal‟s need for surgery was originally set for August

10, 2010. Prior to trial, Wal-Mart authorized the surgery, and surgery was

performed on July 26, 2010. Trial on the remaining issues was held on June 3,

2014. The workers‟ compensation judge (WCJ) issued oral reasons for judgment

on August 7, 2014.

The WCJ denied Wal-Mart‟s claims for forfeiture of benefits due to fraud

under La.R.S. 23:1208 and determined that Ms. Rachal was entitled to

supplemental earnings benefits (SEBs) at a zero earning capacity. The WCJ

further found that the surgery performed by Dr. Gunderson was necessitated by Ms.

Rachal‟s work accident. Additionally, the WCJ awarded Ms. Rachal penalties in

the amount of $8,000.00 as the result of Wal-Mart‟s payment of indemnity benefits

at the incorrect rate and its failure to pay medical travel expenses on three different

2

occasions. Wal-Mart was also ordered to pay attorney fees in the amount of

$15,000.00. Wal-Mart then filed the present appeal asserting several assignments

of error.

FORFEITURE OF BENEFITS

Wal-Mart first claims that the WCJ erred in failing to find that Ms. Rachal

forfeited her right to workers‟ compensation benefits due to her willful

misstatements and misrepresentations over the lifespan of the workers‟

compensation claim. It claims that her trial and deposition testimony is full of

inconsistencies and misstatements.

Louisiana Revised Statutes 23:1208(A) provides that a claimant shall forfeit

her workers‟ compensation benefits when the employer establishes that: (1) there is

a false statement or representation; (2) which was willfully made; (3) for the

purpose of obtaining or defeating any benefit or payment. “Forfeiture of workers‟

compensation is a harsh remedy, and statutory forfeiture must be strictly construed.

An employer has the burden of proving each element within the statute, and the

lack of any one of the elements is fatal to an employer‟s avoidance of liability.”

Our Lady of the Lake Reg. Med. Ctr. v. Mire, 13-1051, p. 6 (La.App. 1 Cir.

2/18/14), 142 So.3d 52, 56. The determination by the WCJ of whether a worker

has willfully made a false statement or representation for the purpose of obtaining

benefits is question of fact subject to the manifest error standard of review. Daniel

v. Point to Point Directional Drilling, 13-1407 (La.App. 3 Cir. 5/7/14), 139 So.3d

613, writ denied, 14-1165 (La. 9/19/14), 149 So.3d 245.

Wal-Mart claims that Ms. Rachal was not forthcoming about her previous

neck and back issues. In 2004, Ms. Rachal had surgery on her neck. She has never

denied this. When asked whether back surgery had been recommended before, she

3

denied that it had. However, in 2004, the doctor who performed the neck surgery

had also suggested that she might need back surgery. As explained by Ms. Rachal,

the concern at that time was her neck. A review of the testimony in the record

indicates that Ms. Rachal never denied that she had back problems prior to the

accident at Sam‟s. She was able to tolerate her back issues and worked several

jobs after her neck surgery, without the need for surgery for her back until this

accident.

Furthermore, Ms. Rachal was forthcoming about a fall she had at her house

in April 2009, shortly before her accident at Sam‟s in June 2009. She was out of

work for approximately one week but was able to return to work.

Wal-Mart also claims that Ms. Rachal‟s testimony regarding her earnings

from a bingo parlor in 2012 after her accident at Sam‟s was not credible. After

Wal-Mart started inquiring, it was revealed that Ms. Rachal had worked at a bingo

parlor calling the games on a part-time basis. Her earnings were not reported to

Wal-Mart until it asked whether she had any employment and earnings. Ms.

Rachal explained that she had called her attorney‟s bookkeeper asking whether she

could work at the bingo parlor. The bookkeeper testified that Ms. Rachal did call

inquiring about going to work. The bookkeeper informed Ms. Rachal that it was

permissible to work as long as she stayed within her doctor‟s restrictions. The

bookkeeper did not tell her that she had to report her earnings because she thought

Ms. Rachal would call back when she actually got the job. The bookkeeper also

did not send the report of earnings forms to Ms. Rachal because she did not think

Ms. Rachal was working.

While there may be some discrepancies between Ms. Rachal‟s 2009

deposition and her trial testimony five years later in 2014, we find nothing of

4

significance that would justify forfeiture of her workers‟ compensation benefits.

We find no manifest error in the WCJ‟s determination that Wal-Mart failed to

establish that Ms. Rachal forfeited her benefits pursuant to La.R.S. 23:1208.

SUPPLEMENTAL EARNINGS BENEFITS

Wal-Mart contends that the trial court erred in concluding that Ms. Rachal

was entitled to SEBs based on a zero earning capacity. Wal-Mart argues that Ms.

Rachal had the burden of establishing that she experienced more than a ten percent

wage loss and that the wage loss was the result of the accident at work. Wal-Mart

claims that Ms. Rachal has reached maximum medical improvement and is able to

return to work. It is Wal-Mart‟s position that Ms. Rachal‟s ongoing work

restrictions are not due to her accident at Sam‟s but due to her back problems that

existed before her accident.

The purpose of SEBs is to compensate the injured employee for
the wage earning capacity he has lost as a result of his accident. La.
R.S. 23:1221(3)(a) provides that an employee is entitled to receive
SEBs if he sustains a work-related injury that results in his inability to
earn 90% or more of his average pre-injury wage. Initially, the
employee bears the burden of proving, by a preponderance of the
evidence, that the injury resulted in his inability to earn that amount
under the facts and circumstances of the individual case. Once the
employee‟s burden is met, the burden shifts to the employer who, in
order to defeat the employee‟s claim for SEBs, must prove, by a
preponderance of the evidence, that the employee is physically able to
perform a certain job and that the job was offered to the employee or
that the job was available to the employee in his or the employer‟s
community or reasonable geographic region. La. R.S. 23:1221(3)(c)(i).

Clay v. Our Lady of Lourdes Reg’l Med. Ctr., Inc., 11-1797, p. 4 (La. 5/8/12), 93

So.3d 536, 538-39 (case citations omitted).

“Implicit in La. R.S. 23:1221(3)‟s requirement that the employee show that a

work-related injury resulted in his inability to earn 90% of his pre-injury wages is a

showing that the injury, and not some other cause, resulted in his inability to retain

5

his pre-injury job.” Poissenot v. St. Bernard Parish Sheriff’s Office, 09-2793, p. 9

(La. 1/9/11), 56 So.3d 170, 176.

In his testimony, Dr. Gunderson noted that Ms. Rachal‟s disk herniation at

the L3-4 level, a new level that was not present before this accident. Dr.

Gunderson observed that she had back pain before the accident but no leg pain,

which commenced with this accident. Her complaints were consistent with the

MRI. He noted that Ms. Rachal communicated to him that she had low back pain

since she was fifteen years old but was able to work. It was only after the incident

at Sam‟s that Ms. Rachal was not been able to work. Dr. Gunderson opined that

Ms. Rachal is not capable of working an eight-hour day.

Dr. Stephen Katz, who specializes in pain management, testified that with

medication Ms. Rachal is able to function in her daily activity. However, some of

the medications would probably affect her ability to function at work, because they

would cause her to be drowsy and confused. At the time of trial, Ms. Rachal was

still seeing Dr. Katz.

Bruce O‟Dell performed a functional capacity evaluation on Ms. Rachal. Mr.

O‟Dell was of the opinion that Ms. Rachal legitimately attempted the test. The

results of the functional capacity evaluation revealed that Ms. Rachal‟s work level

was below sedentary, because she was at a high risk due to a balancing issue when

walking.

Ms. Rachal testified that no one from Sam‟s or Wal-Mart has offered her a

job. She also has never met with a vocational consultant.

In response to the evidence offered by Ms. Rachal, Wal-Mart introduced the

testimony of two orthopedic surgeons who offered second medical opinions as to

the cause of Ms. Rachal‟s back issues. Dr. Peter Vizzi agreed that Dr.

6

Gunderson‟s recommendation of surgery was reasonable but was of the opinion it

was necessitated by all of Ms. Rachal‟s preexisting conditions and not related to

her accident. Dr. John Budden also agreed that Ms. Rachal‟s need for surgery was

not necessitated by her accident at Sam‟s but was due to her history of back

symptoms before the accident.

We find no manifest error in the WCJ‟s conclusion that Ms. Rachal‟s

accident at Sam‟s was what caused Mr. Rachal‟s need for back surgery. While

surgery had been a possibility before the accident, Ms. Rachal was able to function

and perform her duties at work. After the fall, Dr. Gunderson discovered a

herniated disk at a new level, L3-4, which started causing pain in her legs.

Following surgery, Ms. Rachal is very limited in what activities she can perform,

in addition to the fact that full-time work is not possible. The evidence establishes

that Ms. Rachal proved she is not able to earn ninety percent of her wages at this

time due to her limitations.

Since Ms. Rachal established that she is unable to earn ninety percent of her

pre-injury wages, the burden then shifted to Wal-Mart to establish that she is

“physically able to perform a certain job and that the job was offered to [her] or

was available to [her] in a reasonable geographic location.” Allen v. City of

Shreveport, 618 So.2d 386, 389 (La.1993). Wal-Mart has offered no such

evidence. The trial court was correct in finding that Ms. Rachal is entitled to SEBs.

ADMISSIBILITY OF EVIDENCE

Wal-Mart also alleges that the trial court erred in allowing evidence of three

allegedly-unpaid mileage reimbursement requests. Wal-Mart claims that the three

letters requesting reimbursment, dated March 14, 2013, March 19, 2013, and June

18, 2013, were first disclosed the morning of trial, at which time it objected to the

7

introduction of the letters. According to the WCJ‟s scheduling order, all trial

exhibits were to be exchanged between the parties and the WCJ at least ten days

prior to trial.

Pursuant to La.R.S. 23:1203(D), an employer is responsible for the payment

of mileage expenses incurred by the employee in order to obtain medical services.

When an employer fails to pay such mileage reimbursement within sixty days of

receiving written notice thereof, it is subject to the imposition of penalties. La.R.S.

23:1201(E) and (F).

Citing Maricle v. Sunbelt Builders, Inc., 05-398 (La.App. 3 Cir. 11/2/05),

916 So.2d 1226, writ denied, 05-2506 (La. 3/31/06), 925 So.2d 1261, the WCJ

ruled that the letters were admissible. In Maricle, the WCJ allowed the

introduction of evidence which the defendants claimed went beyond the scope of

the pleadings. This court found that the disputed claim for compensation and

pretrial statement filed on behalf of the defendants discussed the issue of penalties

and attorney fees.

A WCJ is vested with discretion in conducting trials in a manner which he

decides is consistent with the fair administration of justice. Russell v. H & H Metal

Contractors, Inc., 11-27 (La.App. 3 Cir. 6/1/11), 65 So.3d 806. “When there is a

„reasonable question‟ regarding the admissibility of evidence, admission of the

evidence is favored.” Id. at 811 (quoting Lemoine v. Hessmer Nursing Home, 94-

836, p. 11 (La.App. 3 Cir. 3/1/95), 651 So.2d 444, 451). “If the reason for seeking

the exclusion of the evidence is surprise, the trial court may grant a „constructive

continuance,‟ so that the party seeking exclusion may avoid prejudice by preparing

or obtaining rebuttal evidence.” Id. A WCJ is not bound by technical rules of

evidence. La.R.S. 23:1317.

8

Pretrial orders are provided for in La.Code Civ.P. art. 1551 which gives the

trial court wide discretion to provide for the pretrial order and insuring that it is

enforced. Russell, 65 So.3d 806. A trial court has wide discretion in determining

whether to modify a pretrial order, but this discretion must be exercised to prevent

substantial injustice to the parties who rely on it in the preparation and presentation

of their cases. Id. One of the reasons for pretrial procedure is the avoidance of

surprise. Id.

In the present case, the disputed claim for compensation does raise the issue

of penalties and attorney fees. However, as noted by Wal-Mart, the claim was

filed in 2009, years before the issue of nonpayment of mileage reimbursement

requests even arose. Ms. Rachal‟s pretrial statement filed on May 23, 2014, did

state that penalties and attorney fees were an issue for trial. Furthermore, her

pretrial statement also listed a printout of medical expenses and an expense ledger

as an exhibit. Wal-Mart‟s pretrial statement also stated that the issue of penalties

and attorney fees was an issue to be litigated.

At trial the WCJ allowed the testimony of Mary Attenhoffer, the bookkeeper

and workers‟ compensation secretary for Ms. Rachal‟s attorney, although objected

to by Wal-Mart because she was not on the witness list.1 At this time, the WCJ

agreed to leave the record open for fifteen days to allow Wal-Mart time to explore

whether the mileage reimbursement requests had not been paid. Ms. Attenhoffer

explained that she keeps a ledger of expenses, which was listed on Ms. Rachal‟s

pretrial statement as an exhibit, showing payments made on behalf of a claimant

1
Wal-Mart has not raised the admission of Ms. Attenhoffer‟s testimony as an error on
appeal, but the analysis would be the same if it did.

9

and payments received on behalf of a claimant. She then identified the three letters

requesting mileage reimbursement which had not been paid.

While Wal-Mart was not made aware of the specific instances of

nonpayment of mileage reimbursement requests prior to trial, it was given an

additional fifteen days to submit any evidence regarding payment. Furthermore, it

had the opportunity to cross examine Ms. Attenhoffer regarding the submission

and payment of the requests for reimbursement. In the end, Wal-Mart had never

reimbursed Ms. Rachal on these three occasions. Given these safeguards, we find

no error in the WCJ‟s admission of the three unpaid mileage reimbursement

requests.

ATTORNEY FEES

In its final assignment of error, Wal-Mart argues that the trial court‟s award

of $15,000.00 in attorney fees is unreasonably high. Wal-Mart argues that the trial

of the case only took one day and that Ms. Rachal‟s counsel received a percentage

of her indemnity checks pursuant to La.R.S. 23:1141, which was approved by the

trial court at the beginning of this case.

In awarding attorney fees, a WCJ has broad discretion and his determination

should not be disturbed in the absence of manifest error. Racca v. Acme Truck

Lines, Inc., 12-1319 (La.App. 3 Cir. 6/12/13), 115 So.3d 1222. Furthermore,

statutory attorney fees which are awarded to an employee based on the employer‟s

arbitrary behavior are intended for the benefit of the employee, who would

otherwise have to pay the contractual attorney fees out of his or her benefits

recovered in the litigation. McCarroll v. Airport Shuttle, Inc., 00-1123 (La.

11/28/00), 773 So.2d 694; Fabacher v. Stine, Inc., 13-471 (La.App. 3 Cir. 10/9/13),

124 So.3d 553.

10

While Ms. Rachal has been receiving compensation payments since her

attorney filed the disputed claim form, this case has been ongoing since 2009.

Originally, Wal-Mart was not going to pay for Ms. Rachal‟s back surgery as

recommended by Dr. Gunderson, but on the eve of trial on that issue, Wal-Mart

decided that it would pay for the surgery. At the present trial several issues were

presented including whether Ms. Rachal was entitled to continue receiving benefits

based on her fall at Sam‟s and whether she was entitled to penalties. Furthermore,

Ms. Rachal‟s attorney also defended the claim for discontinuance of benefits based

on fraud raised by Wal-Mart. While the trial may have only been one day on these

issues, numerous exhibits were gathered and introduced into evidence by Ms.

Rachal‟s attorney on her behalf. Ms. Rachal‟s attorney was successful on all issues.

We find no manifest error in the WCJ‟s award of $15,000.00 in attorney fees.

For the foregoing reasons, the judgment of the Office of Workers‟

Compensation is affirmed. Costs of this appeal are assessed to Wal-Mart

Corporation.

AFFIRMED.

11

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

15-97

CECILIA RACHAL

VERSUS

WAL-MART CORPORATION

GREMILLION, Judge, concurs in part and dissents in part.

I agree with the majority in affirming the WCJ’s finding that the surgery

performed by Dr. Gunderson was medically necessary and causally-related to the

on-the-job accident and the finding that Ms. Rachal is entitled to SEBs at zero

earning capacity. I also agree with the majority in affirming the denial of Wal-

Mart’s demand that Ms. Rachal’s benefits be deemed forfeit. And I would affirm

the award of attorney fees. There exists in the record a reasonable basis for the

WCJ’s findings on these issues; thus, there was no manifest error. I disagree with

the majority, though, on the penalties that were assessed, as the WCJ’s admission

of evidence not previously disclosed to Wal-Mart smacks of trial by ambush. I

would find that admitting this evidence does constitute an abuse of the WCJ’s

discretion.

The WCJ erred in allowing evidence of three alleged-unpaid mileage

reimbursement requests. Before trial, the three letters requesting reimbursement,

dated March 14, 2013, March 19, 2013, and June 18, 2013, were not disclosed to

Wal-Mart, in violation of the WCJ’s scheduling order, which required that all trial

exhibits be exchanged between the parties and the WCJ at least ten days prior to

trial.

Pretrial orders are provided for in La.Code Civ.P. art. 1551, subsection B of

which provides, in pertinent part, that a pretrial order “controls the subsequent

course of the action, unless modified at the trial to prevent manifest injustice.”

(Emphasis added). One of the reasons for pretrial procedure is the avoidance of

surprise. “Although the trial court is vested with much discretion to amend its pre-

trial order, this discretion must be exercised to prevent substantial injustice to the

parties who have relied on the pre-trial rulings and structured the preparation and

presentation of their cases accordingly.” Southern Casing of Louisiana, Inc. v.

Houma Avionics, Inc., 00-1930, p. 24 (La. App. 1 Cir. 9/28/01), 809 So. 2d 1040,

1055.

The majority casts aside this fact by noting that in the present case, the

disputed claim for compensation does raise the issue of penalties and attorney fees

and that Ms. Rachal’s pretrial statement filed on May 23, 2014, did state that

penalties and attorney fees were an issue for trial. The claim for compensation was

filed in 2009, years before the issue of nonpayment of mileage reimbursement

requests even arose. Penalties and attorney fees are at issue in virtually every

disputed claim for compensation. Nonetheless, it is incumbent upon the employee

in such cases to prove her entitlement to them, and not by means that violate the

pretrial order. Penalties in workers’ compensation cases are punitive, and the party

against whom they are sought must be placed on notice of those acts the plaintiff

asserts as grounds for imposing them.

The majority concedes that Wal-Mart was not on notice but states, “While

Wal-Mart was not made aware of the specific instances of nonpayment of mileage

reimbursement requests prior to trial, it was given an additional fifteen days to

submit any evidence regarding payment. Furthermore, it had the opportunity to

2

cross examine Ms. Attenhoffer [a witness not also not listed as being called to

testify by Ms. Rachal] regarding the submission and payment of the requests for

reimbursement.” This deviation from the pretrial order constitutes an abuse of the

WCJ’s discretion. Granting a party fifteen days when that party employs over two

million people, with a sizable number of them probably seeking workers’

compensation benefits, strikes me as an unrealistic demand. Furthermore, the

question arises as to how Wal-Mart was even to present such evidence in fifteen

days. Would the WCJ reconvene court in that time to entertain testimony? Would

the WCJ have allowed it to be submitted by affidavit, and, if so, how would he

address any objection Ms. Rachal may have interposed? Being allowed the

opportunity to cross-examine an undisclosed witness is not an adequate remedy for

a defendant surprised by that witness’s participation in the case.

I would reverse the penalties for each of the three allegedly-unreimbursed

mileage charges.

3