Mary Ortega v. Cantu Services, Inc

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

17-1123

MARY ORTEGA

VERSUS

CANTU SERVICES, INC., ET AL.

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APPEAL FROM THE
OFFICE OF WORKERS’ COMPENSATION - # 2
PARISH OF RAPIDES, NO. 14-04296
JAMES L. BRADDOCK, WORKERS’ COMPENSATION JUDGE

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CANDYCE G. PERRET
JUDGE

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Court composed of Marc T. Amy, Van H. Kyzar, and Candyce G. Perret, Judges.

MOTION TO STRIKE GRANTED; JUDGMENTAFFIRMED.

George Arthur Flournoy
Flournoy, Doggett & Losavio
P. O. Box 1270
Alexandria, LA 71309-1270
(318) 487-9858
COUNSEL FOR CLAIMANT/APPELLANT:
Mary Ortega

Gregory John Laborde
Daigle Rayburn, LLC
P. O. Box 3667
Lafayette, LA 70502
(337) 234-7000
COUNSEL FOR DEFENDANTS/APPELLEES:
Liberty Mutual Insurance Company
Cantu Services, Inc.

PERRET, Judge.

Mary Ortega appeals the judgment of the Office of Workers’ Compensation

denying her Motion to Enforce Settlement and for penalties and attorney fees after

concluding the settlement was conditioned on CMS approval of a Medicare Set-

Aside Agreement.

FACTS AND PROCEDURAL HISTORY

This workers’ compensation case arises out of a work injury that Claimant-

Appellant, Mary Ortega (“Ms. Ortega”), sustained while she was employed by

Cantu Services, Inc. (“Cantu”). Ms. Ortega filed a Disputed Claim for

Compensation on June 27, 2014. The parties reached a settlement agreement in

2016, which was judicially approved and recited in open court on September 1,

2016. The agreement was explained on the record by counsel for Cantu and its

insurer, Liberty Mutual Insurance Company, as follows:

Mr. Laborde: Your Honor, we’ve agreed to
compromise all claims asserted by Ms. Ortega in each
docket number for the total sum of $120,000.
We will file with CMS [Centers for Medicare and
Medicaid Services] approval for a Medicare set-aside
agreement [MSA] in the amount of $56,049. The
balance that would then be paid in benefits is $63,951.
Now, the proviso is if CMS does not approve the
requested amount, but alters it in any way, we will fund
the MSA as directed by CMS and then adjust the amount
to be paid in benefits accordingly, so that the total of the
settlement still amounts to $120,000. And we will
continue to pay benefits until we get the CMS approval
and the funds tendered to claimant.

Mr. Flournoy [counsel for Ms. Ortega]: . . . .
Yeah, that’s right.

Judge Braddock: And you understand the nature
of this compromise, Ms. Ortega?

....

Ms. Ortega: Yes, sir.

Judge Braddock then approved the compromise and stayed the docket numbers

until he heard from the parties in the future, after CMS approved the MSA, to then

close out the cases.

On December 22, 2016, Ms. Ortega filed a Motion and Order to Amend

1008, adding penalties and attorney fees under La.R.S. 23:1201(F) and/or 1201(G)

for Appellees’ failure to pay the settlement within thirty days after the recitation of

the agreement in open court. Ms. Ortega also filed a Motion to Enforce Settlement

and for penalties and attorney fees, which was heard on June 1, 2017. The court

considered the minutes from the September 1, 2016 hearing,1 the testimony of Ms.

Ortega that she was present at the September hearing and understood the

settlement was conditioned on CMS approval, and argument of counsel. The

court, relying on Harrelson v. Arcadia, 10-1647 (La.App. 1 Cir. 6/10/11), 68 So.3d

663, writ denied, 11-1531 (La. 10/7/11), 71 So.3d 316, concluded the settlement

was conditioned on CMS approval of an MSA and accordingly denied Ms.

Ortega’s Motion to Enforce Settlement and for penalties and attorney fees. Ms.

Ortega filed a “Motion and Order for New Trial for Reargument Only” and, after a

hearing was held on August 21, 2017, this was also denied.

Ms. Ortega now appeals and asserts two assignments of error: (1) that the

workers’ compensation judge (“WCJ”) erred in finding the settlement of

$120,000.00 did not need to be paid within thirty days of the judicial approval of

the settlement agreement and therefore denying La.R.S. 23:1201(G) sanctions, and

(2) that the WCJ erred in finding CMS approval was a suspensive condition that

must be fulfilled before paying Ms. Ortega the $120,000.00 settlement.

1
At the time of the Motion to Enforce Settlement hearing, the parties and court only had
the minutes of the September 1, 2016 hearing because there was an issue getting the transcript
from the court reporter. However, a copy of the transcript was obtained and is contained in this
record on appeal. The transcript was prepared by and considered by the workers’ compensation
judge at the hearing on Ms. Ortega’s Motion and Order for New Trial.
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Additionally, on appeal and in response to Appellees’ opposition brief, Ms.

Ortega filed a Motion to Strike with this Court, requesting that two portions of

Appellees’ brief be stricken for lack of support in the record. This motion was

referred to the merits in this case. For the following reasons, we grant Ms.

Ortega’s Motion to Strike, but affirm the WCJ’s judgment.

MOTION TO STRIKE

Ms. Ortega requests we strike two portions of Appellees’ brief for lack of

support in the appellate record. Specifically, on page two of Appellees’ brief:

Appellees submitted a request to the Center for
Medicare Services for approval of the negotiated
Medicare Set Aside Agreement, submitting the
appropriate medical records and information. However,
the request for approval was denied by CMS. Appellant
was informed of the denial and provided with the reasons
for denial and informed of what additional information
was needed from Appellant and Appellees in order to
address the concerns of CMS regarding the sufficiency of
the Medicare Set Aside Agreement. To date, Appellant
has not furnished to Appellees any of the requested
information.

Also, Ms. Ortega moves to strike a portion of Appellees’ brief on page 5:

Appellant has been advised of the reasons for the denial
of the Medicare Set Aside Agreement and has yet to
furnish to Appellees any of the information needed in
order to respond to the objections of CMS.

This court must render judgment upon the record that is on appeal. La.Code

Civ.P. art. 2164. “This court has no authority to consider on appeal facts referred

to in appellate briefs if those facts are not in the record on appeal.” In re

Succession of Badeaux, 08-1085, pp. 5-6 (La.App. 1 Cir. 3/27/09), 12 So.3d 348,

352, writ denied, 09-822 (La. 5/29/09), 9 So.3d 166.

A review of Appellees’ brief shows that counsel refers to actions he took in

contacting CMS for approval of the MSA funding, the CMS denial and request for

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additional information, and Appellant’s failure to furnish that information to

Appellees. Although this argument by Appellees’ counsel is found in his pre-trial

statement to the WCJ, as well as in argument to the WCJ, when counsel asked the

court to recognize his pre-trial statement as an officer of the court under oath, his

request was never addressed or responded to by the court. Therefore, because was

no evidence submitted with counsel’s statement and his statement was not admitted

as fact, counsel’s statements are mere argument and not evidence. Argument by

counsel “is not evidence and cannot be considered as proof of fact.” Taiae v. City

of Baton Rouge, 00-915, p. 4 (La.App. 1 Cir. 6/22/01), 808 So.2d 677, 680, n. 3;

see also Maxie v. McCormick, 95-1105 (La.App. 1 Cir. 2/23/96), 669 So.2d 562,

Harrison v. La. State Univ. Med. Ctr., 623 So.2d 707 (La.App. 4 Cir. 1993).

Accordingly, we grant Ms. Ortega’s Motion to Strike.

STANDARD OF REVIEW

The first circuit in Harrelson, 68 So.3d at 665-66, set forth the standard of

review for a factually similar case:

In workers’ compensation cases, our standard of
review to be applied to findings of fact is the manifest
error-clearly wrong standard. Dean v. Southmark
Construction, 03–1051 (La.7/6/04), 879 So.2d 112, 117.
However, when legal error interdicts the fact-finding
process in a workers’ compensation proceeding, the de
novo standard of review applies. Brantley v. Delta Ridge
Implement, Inc., 41,190 (La.App.2d Cir.6/28/06), 935
So.2d 308, 314. We also use the de novo standard of
review for determining if the WCJ was legally correct
when interpreting statutes pertaining to workers’
compensation, because the interpretation of a statute is a
question of law. Lirette v. Patterson Services, Inc., 05–
2654 (La.App. 1st Cir.11/17/06), 951 So.2d 223, 226.
This case involves the interpretation of a statute and the
determination of whether that statute was violated; thus,
we review de novo the WCJ’s statutory interpretation,
while using the manifest error standard of review for the
WCJ’s factual findings regarding any statutory violation.

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DISCUSSION OF APPEAL

Ms. Ortega’s first assignment of error depends on the outcome of the second

assignment of error, namely, whether the CMS approval of the MSA funding was a

condition that suspended the payment of $120,000.00 to Ms. Ortega. The WCJ

held that CMS approval was a suspensive condition. We agree and find no

manifest or legal error with this finding.

Louisiana Revised Statutes 23:1201(G) (emphasis added) provides for

penalties and attorney fees in workers’ compensation cases as follows:

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.

A final, nonappealable judgment includes a workers’ compensation settlement

agreement, and triggers La.R.S. 23:1201(G) upon court approval and entry into

judgment. Williamson v. Liberty Mut. Ins. Co., 12-148 (La.App. 3 Cir. 6/6/12), 92

So.3d 1218.

However, obligations may be suspended by a suspensive condition which

prevents enforcement of the obligation until an uncertain event occurs.

La.Civ.Code art. 1767. “Conditions may be either expressed in a stipulation or

implied by the law, the nature of the contract, or the intent of the parties.”

La.Civ.Code art. 1768. When the suspensive condition “depends solely on the

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whim of the obligor[,]” the obligation is null. La.Civ.Code art. 1770. The first

circuit in Harrelson, 68 So.3d 663, found that a settlement agreement requiring

CMS approval of funding for an MSA was a suspensive condition that suspended

the obligation to fund the MSA account until CMS approval was received. The

WCJ in this case correctly recognized that this case is factually like Harrelson.

In Harrelson, the employer agreed to pay the claimant “$125,000.00, with

$42,010.00 of that amount to be placed in a MSA account to cover future medical

expenses and $82,990.00 to be paid in one lump sum.” Id. at 664. The agreement

further contained a clause stating:

[Bestaff] and insurer agree that, if CMS . . .
requires that additional money be placed into the [MSA]
in this case, [Bestaff]/insurer will, at its option, pay all
such additional amounts and comply with all Medicare
requirements regarding such, or will withdraw the
proposal for a [MSA], and the claim for future medical
care will remain open.

Id. (Emphasis and alterations in original). The agreement was judicially approved

on December 10, 2009. The employer immediately paid the claimant $82,990.00

and withheld the remaining amount for the MSA funding while awaiting CMS

approval. CMS ultimately approved the amount on January 27, 2010, and the

employer issued a check for the balance of the funds on February 2, 2010, within

thirty days of CMS’s approval, but over thirty days from the date of judicial

approval of the agreement. The claimant then filed a motion to enforce settlement

judgment seeking penalties and attorney fees pursuant to La.R.S. 23:1201(G) for

the employer’s failure to pay the entirety of the settlement agreement within thirty

days of the judgment. On appeal, the first circuit affirmed the WCJ, agreeing that

“[t]he approval by CMS was an uncertain event that once it occurred made the

WCJ’s order approving the entire settlement agreement final and enforceable.” Id.

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at 666. “Additionally, we find that the timing of this uncertain event—CMS

approval—was completely out of [the employer’s] control since the payment of the

MSA funds was entirely dependent upon whether CMS approved the funding.” Id.

As in Harrelson, the agreement between the parties in this case was that

CMS needed to approve the funding of the MSA. The difference between this case

and Harrelson, is that in Harrelson, $82,990.00 was to be paid in one lump sum

regardless of the outcome of the CMS approval. In Harrelson, if CMS did not

approve of the MSA funding, the employer had two options—to pay the additional

amount requested by CMS or withdraw the proposal for a MSA. However, in the

case before this Court, the calculation of the amount to be paid to Ms. Ortega in

benefits is entirely dependent on the amount required to fund the MSA. The

judicially approved agreement as evidenced by the court transcript was that:

Now, the proviso is if CMS does not approve the
requested amount, but alters it in any way, we will fund
the MSA as directed by CMS and then adjust the amount
to be paid in benefits accordingly, so that the total of the
settlement still amounts to $120,000.

Additionally, Exhibit P-2, submitted by Ms. Ortega and which is the affidavit of

her counsel, states:

Furthermore, it was agreed that post-settlement
documents would be prepared by defense counsel with
the understanding that whatever amount for medical
expenses was approved by CMS would be designated in
the settlement documents as a full and final compromise
of all claims for medical expenses and the remainder of
the $120,000.00 settlement fund would be attributed to a
full and final settlement of all claims for indemnity
benefits, penalties and attorney fees.

Finally, the settlement documents signed by Ms. Ortega specify that Appellees

would write two checks, one to Ms. Ortega, and one to the Mary Ortega MSA

Account. Appellees could not possibly write these two checks without knowing

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the amount CMS approved to fund the MSA account. Therefore, we agree with

the WCJ that the need for CMS’s approval of the MSA funding was a suspensive

condition.

The next question is whether the suspensive condition depends on the whim

of the employer, making the obligation null according to La.Civ.Code art. 1770, or

whether the employer had no control over CMS approving the MSA funding.

Ms. Ortega argues that the suspensive condition depends on the whim of the

employer to file the request with CMS. This issue was also raised in Harrelson,

however, in that case, the court received evidence that the request was in fact made

to CMS, and therefore Appellees could not do anything more without the CMS

approval. Ms. Ortega, on the other hand, asserts Appellees have not sought CMS

approval and that there was no requirement in the settlement that Appellees do so

within a certain timeframe. Therefore, under the WCJ ruling, Appellees can

continue not funding the settlement because they were not required to obtain CMS

approval by any specific date.

Ms. Ortega correctly stated that there is no evidence in the record that

Appellees have sought CMS approval. The only contrary argument is just that,

merely argument and not proof of fact. Taiae, 808 So.2d 677; Maxie, 669 So.2d

562; Harrison, 623 So.2d 707. However, regardless of when Appellees apply for

CMS approval, that approval will ultimately be beyond Appellees’ control.

Therefore, the WCJ did not err in concluding that Appellees were not required to

pay Ms. Ortega the settlement funds prior to CMS approval of the MSA funding.

Additionally, because we conclude nonpayment was the result of conditions over

which the employer had no control, the WCJ did not err in denying statutory

penalties and attorney fees, in this case, for Appellees’ failure to pay the funds

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within thirty days of the final and nonappealable judgment. Costs of this appeal

are assessed to Appellant, Mary Ortega.

MOTION TO STRIKE GRANTED; JUDGMENT AFFIRMED.

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