Todd Crochet v. Calcasieu Parish Police Jury

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

16-954

TODD CROCHET

VERSUS

CALCASIEU PARISH POLICE JURY, ET AL.

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APPEAL FROM THE
OFFICE OF WORKERS' COMPENSATION - District 03
PARISH OF CALCASIEU, NO. 14-03253
CHARLOTTE BUSHNELL, WORKERS’ COMPENSATION JUDGE

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SHANNON J. GREMILLION
JUDGE

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Court composed of Marc T. Amy, Billy Howard Ezell, and Shannon J. Gremillion,
Judges.

REVERSED AND REMANDED.

Jeffrey Charles Napolitano
Juge, Napolitano, Guilbeau, Ruli and Frieman
3320 W. Esplanade Ave., North
Metairie, LA 70002
(504) 831-7270
COUNSEL FOR DEFENDANT/APPELLANT:
Calcasieu Parish Police Jury

Kevin Louis Camel
Cox, Cox, Filo, Camel & Wilson, LLC
723 Broad St.
Lake Charles, LA 70601
(337) 436-6611
COUNSEL FOR PLAINTIFF/APPELLEE:
Todd Crochet

GREMILLION, Judge.

Defendant/appellant, the Calcasieu Parish School Board (CPSB) appeals the

judgment in favor of plaintiff/appellee, its employee, Mr. Todd Crochet, which

denied its claimed offset for disability benefits and awarded Mr. Crochet penalties

and attorney fees. For the reasons that follow, we reverse and remand with

instruction for the Workers’ Compensation Judge (WCJ) to enter a judgment

consistent with this opinion.

FACTS AND PROCEDURAL HISTORY

Mr. Crochet injured his left leg and ankle on March 2, 1998, while working

with a power saw clearing a right-of-way in the course and scope of his

employment with CPSB. He received weekly indemnity benefits of $348.58 until

September 18, 2014, when CPSB reduced them to $251.72 because of its

contributions on Mr. Crochet’s behalf to the Parochial Employees Retirement

System (PERS). Until then, Mr. Crochet had received disability benefits from

PERS in the amount of $932.75; however, this amount had changed through the

years of his disability. On June 25, 2015, CPSB suspended Mr. Crochet’s benefits,

claiming a credit for $42,232.19 in past disability benefits paid by PERS.

Mr. Crochet opposed the reduction and suspension of his weekly indemnity.

The matter proceeded to trial. The parties submitted the matter on stipulations,

exhibits, and briefs.

One of the exhibits introduced at trial was the deposition of Mr. Gary S.

Curran of G.S Curran & Co., Ltd., which provides actuarial consulting for all nine

statewide retirement plans, including, of course, PERS. Mr. Curran testified that

PERS is divided into two plans, Plan A and Plan B. Each plan has a separate trust

into which contributions are paid. Plan A is a defined-benefit plan that

incorporates tenure-based retirement, disability retirement, and survivor benefits,

the latter two of which Mr. Curran termed “ancillary benefits.”

Sixty-two parishes participate in Plan A, and about 200 entities in all,

including CPSB, participate in the plan. Payments into the PERS plans are not

allocated to individual employees; however, the employees’ contributions to PERS

are tracked. Each governmental entity’s annual contribution is fixed as a

percentage of its total payroll, and the payments are made periodically.

Allocations are also contributed by the State general fund, and a portion is funded

by ad valorem taxes. These amounts and proportions change yearly. In

establishing the rate each governmental entity must contribute, PERS makes no

attempt to differentiate between tenure-based retirement and the ancillary benefits.

The employee contributes between 9.25% and 9.5%, and that has consistently been

the case since 1980. In 2015, employers contributed 10.5% of their total payrolls

to fund PERS, and employees contributed 9.5%.

At trial, documents were introduced that showed the contributions, by

percentage, between the employers and the employees, to PERS, from 1988

through 2001, the years Mr. Crochet contributed to PERS. Those showed that the

following percentages were paid by employers:

1988 7.15%
1989 7.15%
1990 8.50%
1991 8.25%
1992 9.25%
1993 8.75%
1994 8.25%
1995 8.00%
1996 7.25%
1997 7.75%
1998 7.75%
1999 7.75%
2000 7.75%

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2001 7.75%

CPSB calculated the reduction of Mr. Crochet’s weekly indemnity by

comparing the proportion of his contribution, 9.5%, with the average of its

contribution, 7.95%. That produced a percentage of the reduction of Mr. Crochet’s

benefits of 45.56%. Therefore, it reduced his weekly indemnity benefits by $96.86.

The WCJ ruled in Mr. Crochet’s favor, reinstated his weekly indemnity, and

awarded him penalties of $8,000.00 and attorney fees of $20,000.00. CPSB

appeals this judgment and argues that the WCJ applied superseded law in ruling in

Mr. Crochet’s favor. It asks that we conduct a de novo review and render

judgment in its favor.

ANALYSIS

The reduction of workers’ compensation benefits for other disability benefits

paid by one’s employer is governed by La.R.S. 23:1225. Pertinent to this case is

subsection (C)(1)(c), which reads:

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

....

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

....

then compensation benefits under this Chapter shall be reduced,
unless there is an agreement to the contrary between the employee and
the employer liable for payment of the workers’ compensation benefit,
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.

In invoking the reduction in workers’ compensation benefits under Section 1225,

the employer assumes the burden of proving both the entitlement to and the

amount of the credit. Vallery v. State, through Dep’t of Health and Hosp., 605

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So.2d 1380 (La.App. 3 Cir.), writ denied, 609 So.2d 225 (1992). The employer

satisfies that burden by showing that the employee is receiving disability benefits

and then proving the proportion of its contribution to those the employee

contributed, and the proportion need not be proven “with mathematical precision.”

Matthews v. City of Alexandria, 619 So.2d 57, 61 (La.1993).

However, Mr. Crochet argues that La.R.S. 23:1225 does not apply to him

because PERS is governed by statutes that supersede the general workers’

compensation statutes. Among those is La.R.S. 11:1934(E), which states:

A disability retirement allowance shall be modified by the board of
trustees when the sum of (1) a whole life annuity equivalent of the
benefits or financial awards which accrue to a disability retiree solely
as the result of his disability and (2) the disability pension to which
the retiree is entitled exceeds the amount of his average final
compensation, in such a manner that the sum of the above equals the
amount of average final compensation. Should these outside benefits
or awards be reduced, exhausted, or terminated, the board of trustees
shall increase the disability pension then being received by a retiree so
that the sum of the pension benefits and the outside benefits equals the
amount of average final compensation; but, in no case shall the
disability pension be increased to an amount greater than that to which
the beneficiary was originally entitled when he retired. Individual
private insurance settlements and separate private retirement accounts
and any other similar private resources shall be specifically exempted
from consideration in any of the above computations.

We disagree with Mr. Crochet’s reading of the statute. In brief, Mr. Crochet

highlighted the first sentence of the statute. However, a reading of the second

sentence of La.R.S. 11:1934(E) shows that the legislature clearly contemplated that

“outside benefits or awards,” such as workers’ compensation, might be reduced or

terminated. In such a case, the PERS board of trustees “shall increase the

disability pension then being received by [the] retiree.” The two statutes operate in

harmony to balance a disabled employee’s workers’ compensation benefits with

those he derives from disability retirement.

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Mr. Crochet also maintains that CPSB is not entitled to an offset because

PERS is a tenure-based retirement plan and not a disability plan. Is support of this

proposition, Mr. Crochet cites Cousins v. City of New Orleans, 608 So.2d 978

(La.1992). Mr. Crochet has misread Cousins.

Mr. Cousins had been employed as a firefighter in New Orleans for twenty-

two years when he was injured on the job in 1983. In 1984, he retired from the

City, which suspended his workers’ compensation benefits. It resumed paying

weekly indemnity after Mr. Cousins filed suit. He continued to receive benefits

until 1987, when the city claimed it was entitled to an offset pursuant to La.R.S.

23:1225.

The supreme court looked to the unique statutes governing the Firefighters’

Pension and Relief Fund in the City of New Orleans, which are now embodied in

La.R.S. 11:3361, et seq. Under that plan, a firefighter such as Mr. Cousins, who

was totally disabled on the job was eligible to receive fifty percent of his

compensation or fifty percent of his compensation plus two-and-one-half percent

for each year of service past twenty. La.R.S. 11:3376. Because Mr. Cousins was

fully vested in the retirement system, he could have taken early retirement but

chose disability retirement because it received more favorable tax treatment.

Accordingly, the court ruled that the City was not entitled to its claimed offset.

The present case presents a markedly distinct scenario from Cousins. The

statutes governing PERS contain no disability provision similar to that governing

the Firefighters’ Pension and Relief Fund in the City of New Orleans, La.R.S.

11:3376. Employees participating in PERS “Plan A,” the defined-benefit plan,

such as Mr. Crochet, are only eligible to retire when they achieve certain

milestones: age sixty-five with seven years’ service; age sixty with ten years’

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service; age fifty-five with twenty-five years’ service; any age with thirty years’

service; or disability benefits at any age with five years’ service if his disability

status is approved by the State Medical Disability Board. 1 La.R.S. 11:1941,

La.R.S. 11:209. Mr. Crochet was employed by CPSB in 1988 at age twenty-three.

At the time of his disability, Mr. Crochet had nine-and-one-half years’ service and

was age thirty-two. Therefore, he was not vested in the tenure-based retirement

component of PERS.

Still, the employer is required to prove that the employee is receiving

disability benefits and the proportion of its contribution to those of the employee.

CPSB presented the affidavit of Ms. Dainna S. Tully, Administrative Director of

PERS. Ms. Tully asserted therein that Mr. Crochet receives disability retirement

benefits from PERS and is not eligible for “normal” retirement benefits. She

further attested that during the relevant years, those in which Mr. Crochet

contributed to PERS, CPSB’s annual contribution rate was as stated above. The

average of those contributions is 7.95%. The sum of Mr. Crochet’s and CPSB’s

contributions is 17.45%. Accordingly, CPSB contributed 45.56% compared to Mr.

Crochet’s 54.44%. The documents annexed to Ms. Tully’s affidavit establish that

Mr. Crochet receives disability benefits from PERS in the amount of $932.75 per

month, which equates to $215.25 per week. Applying CPSB’s 45.56%

contribution to Mr. Crochet’s disability benefits would yield an offset of $98.06,

which is higher than the offset it claimed of $96.86.

CPSB urges us to conduct a de novo review of the record because the WCJ

erred legally in such a manner that it impaired her fact finding. Ordinarily, the

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The age-and-service provisions only apply to those hired on or before December 31, 2006.
La.R.S. 11:1941(A). They are different for those hired thereafter. La.R.S. 11:1941(B).

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factual findings of a WCJ are subject to review under the manifest error standard.

Dean v. Southmark Constr., 03-1051 (La. 7/6/04), 879 So.2d 112. This requires

the reviewing court to review the record in its entirety and determine whether it

reasonably supports the WCJ’s conclusions. Stobart v. State, through Dep’t of

Transp. and Dev., 617 So.2d 880 (La.1993).

However, where one or more trial court legal errors interdict the fact-
finding process, the manifest error standard is no longer applicable,
and, if the record is otherwise complete, the appellate court should
make its own independent de novo review of the record and determine
a preponderance of the evidence.

Evans v. Lungrin, 97-0541, pp. 6-7 (La. 2/6/98), 708 So.2d 731, 735.

The WCJ relied upon the case of Nugent v. Dep’t of Health & Human Serv.,

617 So.2d 1347 (La.App. 3 Cir.), writ denied, 624 So.2d 1226 (1993) for the

proposition that the burden of proof imposed upon the employer requires that it

prove not only the proportion of its contribution to the benefits, but also the

proportion of those contributions that are strictly for disability retirement versus

tenure-based retirement.

City of Natchitoches v. Williams, 94-1411 (La.App. 3 Cir. 5/24/95), 657

So.2d 320, recognized that Nugent was abrogated by Matthews, 619 So.2d 57. The

court in Williams held that an “employer may not use the employee’s receipt of

normal retirement benefits as grounds for reduction.” Williams, 657 So.2d. at 322

(emphasis added). The WCJ’s approach, in following the Nugent case,

fundamentally ignores the statutory framework within which PERS is operated. It

is not possible for the employer to prove the percentage of its contribution that is

applied to disability retirement because the statutory framework makes no such

distinction. Applying the incorrect legal standard interdicted the WCJ’s fact-

finding process, necessitating a de novo review of the matter.

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After a thorough review of the record, as set forth above, we conclude that

CPSB is entitled to its claimed offset. The judgment of the WCJ denying CPSB’s

past offset is reversed.

CPSB also claims that it is entitled to suspend Mr. Crochet’s benefits until

the amount of its overpayment to Mr. Crochet is satisfied by the passage of time.

Also annexed to Ms. Tully’s affidavit was a history of payments by PERS to Mr.

Crochet. Payments began on July 1, 2001. CPSB argues that it is entitled to this

credit from July 1, 2006. This date corresponds to the date on which PERS

removed its offset for workers’ compensation benefits and began paying Crochet

his full disability retirement benefit. Accordingly, CPSB is entitled to a credit for

its overpayment of workers’ compensation benefits from July 1, 2006, through its

suspension of benefits on September 18, 2014. We have already noted, however,

that there appears to be a discrepancy between the amount of offset claimed by

CPSB and our calculation of the offset amount. Accordingly, we remand the

matter to the WCJ with instructions to enter a judgment, consistent with our

opinion, establishing with specificity the offset to which CPSB is entitled.

Because we have found for CPSB on all issues, we further reverse the

WCJ’s award of penalties and attorney fees. All costs of this appeal are taxed to

plaintiff/appellee, Mr. Todd Crochet.

REVERSED AND REMANDED.

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