Michael McCallon v. Key Energy Services

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

20-634
MICHAEL MCCALLON
VERSUS
KEY ENERGY SERVICES
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APPEAL FROM THE

OFFICE OF WORKERS’ COMPENSATION # 4
PARISH OF LAFAYETTE, NO. 15-06127
ANTHONY PALERMO, WORKERS’ COMPENSATION JUDGE

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VAN H. KYZAR
JUDGE

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Court composed of Billy Howard Ezell, Van H. Kyzar, and Jonathan W. Perry,
Judges.

AFFIRMED AS AMENDED.

Michael Edward Parker

Allen & Gooch

Post Office Drawer 81129

Lafayette, LA 70598-1129

(337) 291-1000

COUNSEL FOR DEFENDANT/APPELLANT:
Key Energy Services

Brian D. Calvit

7920 Wrenwood Blvd, Suite F

Baton Rouge, LA 70809

(225) 926-2222

COUNSEL FOR PLAINTIFF/APPELLEE:
Michael McCallon

KYZAR, Judge

On September 2, 2020, the Office of Workers’ Compensation (OWC) granted
Plaintiff Michael McCallon’s Motion to Enforce Judgment, awarding temporary
total indemnity benefits from the time period of August 2015 to June 2016, medical
expenses, interests and costs, penalties pursuant to La.R.S. 23:1201 (F), and attorney
fees. Both parties appealed the judgment of the workers’ compensation judge, with
Plaintiff's appeal being lodged under docket number 20-635. For the reasons found
herein and in the corresponding appeal McCallon v. Key Energy Servs., LLC, 20-
635 (La.App. 3 Cir. 12/15/21), ~ So.3d__, we affirm as amended.

FACTS AND PROCEDURAL HISTORY

This workers’ compensation claim arises out of an automobile accident which
occurred on February 3, 2015, in Williston, North Dakota. Plaintiff eventually filed
a motion to enforce judgment, and Plaintiff and Key Energy both appealed that
judgment of the workers’ compensation judge (WCJ). The facts and history of this
case are laid out in Plaintiffs corresponding appeal McCalion v. Key Energy Servs.,
LLC, 20-635 (La.App. 3 Cir. 12/31/15), ss So.3d__.

In its appeal, Key Energy asserts the following assignments of error:

1. The WCJ erred in granting plaintiffs motion to enforce this Court’s
judgment of April 24, 2019.

2. The WCJ erred in failing to consider the tender of funds calculated
to be due under this Court’s judgment of April 24, 2019 sent to plaintiff
through his lawyer on October 1, 2019.

3. The WCJ erred in failing to follow this Court’s judgment that
granted Key Energy Services, LLC a $12,500 credit against all
indemnity due between August 4, 2015 and June 21, 2016.

4. The WCJ erred in failing to follow this Court’s judgment of April
24, 2019 that granted Key Energy Services, LLC a dollar-for-dollar

credit for any compensation benefits that may be owed after June 21,
2016.

5. The WC] erred in failing to give Key Energy Services, LLC credit
for medical expenses paid by plaintiff's health insurer.

6. The WC] erred in awarding $561.20 in medical expenses to plaintiff.
7. The WC] erred in awarding costs of $3233.35 to plaintiff.

8. The WCJ erred in awarding penalties under La. R.S. 23:1201 (F) in
the amount of $4000 and attorney[] fees in the amount of $12,000.

DISCUSSION

Plaintiff's Motion to Enforce

Key Energy’s first two assignments of error assert its belief that Plaintiff's
Motion to Enforce was granted in error because the judgment in question had already
been honored. In McCallon v. Key Energy Services, LLC, 18-880, pp. 19-20
(La.App. 3 Cir. 4/24/19), 271 So.3d 249, 262-63, writ denied, 19-850 (La. 9/17/19),
279 So.3d 381, this court ruled on the question of whether Plaintiff forfeited his right
to benefits because of his settlement with a third-party tort-feasor, issuing the
following disposition:

For the reasons discussed herein, the WCJ’s judgment is reversed

to the extent that it holds that Michael McCallon forfeited

compensation benefits before June 21, 2016; it is amended to provide

that Michael McCallon is entitled to reserve his right to future

compensation as provided by La.R.S. 23:1102(B); it is also amended

to award Michael McCallon $4,000 in penalties and $12,000 in attorney

fees; and the matter is remanded to the trial court for calculation of the

offset due Key Energy Services, LLC. for medical expenses paid on

behalf of Michael McCallion by his health insurer. The judgment is

affirmed in all other respects. All costs are assessed to Key Energy

Services, LLC.

After the denial of writs from the supreme court, the judgment in this matter
became final and definitive on October 1, 2019. La-Code Civ.P. art. 2167. Key
Energy then tendered to Plaintiff $28,079.67, as follows: $11,619.42 representing
weekly indemnity benefits plus interest owed from August 4, 2015 to April 16, 2016

less a credit of $12,500; and $16,460.27 representing the penalties and attorney fees

awarded by this court. Key Energy contends this represents the entirety of its
obligations under the judgment of this court, and thus, the WCJ erred in granting
Plaintiff's motion to enforce judgment.

However, this court ruled that Plaintiff was entitled to indemnity benefits from
the period of August 4, 2015 to June 21, 2016. MceCallon, 271 So.3d 249. Key
Energy does not deny that indemnity benefits were only paid for the period between
August 4, 2015 to April 16, 2016, the date of Plaintiff's subsequent automobile
accident. Rather, it argues its belief that the June 21, 2016 date was chosen in error,
stating, “There is still a question as to where the June 21, 2016 date came from[.]”
We disagree.

In McCailon, 271 So.3d 249, this court noted the testimony of Plaintiff's
doctor that, before the April 2016 accident, he anticipated being able to release
Plaintiff in June 2016. The forfeiture clause of La.R.S. 23:1102(B) relied upon by
Key Energy, states, in pertinent part:

If the employee or his dependent fails to notify the employer or insurer

of the suit against the third person or fails to obtain written approval of

the compromise from the employer and insurer at the time of or prior

to such compromise, the employee or his dependent shall forfeit the

right to future compensation, including medical expenses.

The future compensation that an injured claimant forfeits for failing to obtain the
consent or approval of his employer prior to settling his claim with a third party
means any workers’ compensation benefits that became payable after the
compromise. Bolton v. Tulane Univ., 99-970 (La.App. 4 Cir. 3/1/00), 755 So.2d
1003, writ granted, 00-922 (La. 5/26/00), 762 So.2d 626, and writ granted, 00-932
(La. 5/26/00), 762 So.2d 627. This court found that Plaintiff was entitled to benefits,
at minimum, through June 21, 2016. MeCallon, 271 So.3d 249. We also found

Plaintiff was entitled to reserve his right to future compensation past that date

pursuant to provisions of La.R.S. 23:1102(B). Jd.

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This court issued a final judgment in McCallon, 271 So0.3d 249. See La.Code
Civ.P. art. 1841. A final judgment is conclusive between the parties except on direct
review. La.R.S. 13:4231. “Once a final judgment acquires the authority of the thing
adjudged, no court has jurisdiction, in the sense of power and authority, to modify,
revise or reverse the judgment, regardless of the magnitude of the error in the final
judgment.” Tolis v. Bd. of Sup ’rs of La. State Univ., 95-1529, pp. 2-3 (La. 10/16/95),
660 So.2d 1206, 1206-07. As Key Energy did not pay indemnity benefits for the
period ordered, we find its original tender of payment to Plaintiff did not satisfy the
judgment of this court, and, accordingly, we find no error with the WCJ’s granting
of Plaintiff's motion to enforce.

Entitlement to Credit from the Settlement

Key Energy next asserts that the WC] erred in failing to give a credit to Key
Energy for 50% of the amount received by Plaintiff in the settlement of the April 16,
2016 auromenile accident and in failing to grant a dollar-for-dollar credit for any
compensation benefits that may be owed after April 16, 2016. We agree.

In McCallon, 271 So.3d 249, Plaintiff argued that to preserve his right to
future benefits, he need only pay Key Energy $12,500.00 of his $25,000.00
settlement. This is pursuant to La.R.S. 23:1102(B)’s buy back provision that
preserves an employee’s right to future compensation upon payment to the employer
of the total amount of compensation benefits previously paid, with the exception
that, “in no event shall the amount paid to the employer or insurer exceed fifty
percent of the total amount recovered from the compromise.” It goes on to state that
“[s]uch reservation shall only apply after the employer or insurer receives a dollar
for dollar credit against the full amount paid in compromise, less attorney fees and
costs paid by the employee in prosecution of the third party claim.” La.R.S.

23:1102(B). The Louisiana Supreme Court has interpreted this provision to mean

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the employer is entitled to a “dollar-for-dollar” credit for future medical expenses
equal to the total amount of the settlement minus attorney fees and that this credit
should not be capped pursuant to the statutory provision limiting the “buy back”
amount to no more than fifty percent of the total settlement. Mercer v. Nabors
Drilling USA, L.P., 11-2638, p. 4 (La. 7/2/12), 93 So.3d 1265, 1267. The buy back
sum referenced in La.R.S. 23:1102(B) is not credited against the credit granted in
the final sentence of the statute. /d.

In McCallon, we ruled that $12,500.00 should be applied against the past-due
amounts owed by Key Energy, representing one-half of the net settlement received
by Plaintiff in the compromise of the third party claim. The application of this credit
reserves Plaintiff's right to future compensation, should he be so entitled. La.R.S.
23:1102(B). This court found Plaintiff was entitled to indemnity benefits for the
period of August 4, 2015 to June 21, 2016, and that Key Energy was required to
tender to Plaintiff the amount owed after the application of the $12,500.00 credit.
The ruling of the WCJ neglected to incorporate this credit at the time of ruling; as
such, the credit has been applied in our amended judgment outlined in the appeal
under docket number 20-635.

Key Energy next argues that it is also entitled to a credit for any benefits due
after April 16, 2016. We agree. For the reasons outlined above, we find that
Plaintiffs entitlement to indemnity benefits through June 21, 2016 is based upon the
February 3, 2015 accident, not his April 2016 one, and, thus, said benefits are subject
to the $12,500.00 cap. However, if Plaintiff properly files for and shows that he is
entitled to benefits other than those accrued before the April 2016 accident, Key
Energy is entitled to a dollar-for-dollar credit against the remaining $12,500.00 of
the settlement before it must pay additional benefits. MeCallon, 271 So.3d 249;

Mercer, 93 So.3d 1265. We must note that nowhere in our prior judgment did we

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find that Plaintiff was not entitled to any future compensation or limit compensation
for any amount due after June 21, 2016, other than the possible offset. Plaintiff's
entitlement to benefits after this date was not before this court in the prior appeal,
nor has it been properly raised in the current appeal. See Jones v. Capitol
Enterprises, Inc., 11-956 (La.App. 4 Cir. 5/9/12), 89 So.3d 474, writ denied, 12-
1634 (La. 13/26/12), 99 So.3d 651. As such, we amend the ruling of the WCJ to
apply the credit of $12,500.00 against the indemnity benefits owed to Plaintiff for
the period of August 4, 2015 through July 21, 2016, as shown in docket number 20-
635. We also recognize Key Energy’s entitlement to a dollar-for-dollar credit for
any future benefits that may be due to Plaintiff. As we determined in Plaintiff's
appeal,! the issue of entitlement to future benefits after June 21, 2016 was not before
the WCJ at the hearing on Plaintiff's motion to enforce the judgment of this court
from the prior appeal in McCallon, 271 So.3d 249.
Medical Expenses

Key Energy’s next assignments of error question why the WCJ did not award
credit to Key Energy for payments made by Plaintiffs health insurer and questions
the propriety of the WCJ’s award of $561.20 in medical expenses to Plaintiff.
Louisiana Revised Statutes 23:1212(A) provides that payment of medical expenses
made by anyone other than the employee, or a close friend or family member,
extinguishes an employee’s claim for those medical expenses.

Louisiana jurisprudence states that “the employer must plead its offset and
prove it with evidence showing that a payment of a certain amount of workers’
compensation claimant’s medical expenses was made by a person other than

claimant, a relative or friend of the claimant.” Feingerts v. Am. Cas. Co. of Reading,

1 McCalion v. Key Energy Servs., LLC, 20-635 (La.App. 3 Cir. ), _ So.3d
6

09-1209, p. 14 (La.App. 4 Cir. 3/10/10), 34 So.3d 358, 367. We noted that the record
in the previous appeal did not contain sufficient evidence to allow a calculation of
the appropriate offset amount and remanded this issue to the trial court. McCallon,
271 So.3d 249.

Key Energy notes in brief that “the WCJ did not order payment of those
expenses[,]” and, thus, “the ruling denying a credit is of no moment.” It then asserts
that the WCJ erred by awarding medical expenses, arguing that “[t]he judgment of
this Court from April 24, 2019 did not order the payment of medical expenses, rather,
it remanded this issue to the WCJ for determination of the amount which might be
due.” We do not find this argument persuasive.

In the previous appeal, this court ruled to “remand this issue to the trial court
for the parties to establish the offset to which Key Energy Services is entitled and
the medical expenses it owes to Mr. McCallon.” McCallon, 271 So.3d at 262
(emphasis added). In its written reasons for judgment, the WCJ stated:

The question is what is owed to Mr. McCallon with regards to

the medical expenses paid and what credit Key Energy is entitled to.

Mr. McCallon paid medical expenses for New South Neuro Spine,

LLC. in the amount of three hundred and twenty dollars and

prescriptions in the amount of two hundred and forty-one dollars and
twenty cents. He is entitled to those costs in this matter.

The Court further finds that there is no credit due to the
Defendants for medical expenses allegedly paid by the health insurer.
The Court in addition finds that medical expenses in the amount of five
hundred and sixty-one dollars and twenty cents are awarded to the
Claimant, Michael McCallon, for New South Neuro Spine and
prescriptions.

There was no evidence in this case that showed that a credit is
due to Key Energy Services for medical benefits allegedly paid by the
insurer.

This court remanded to the WCJ the issue of a possible credit due to Key

Energy, as well as the issue of potential medical expenses owed to Plaintiff. The

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WC] found Key Energy was not due a credit for medical benefits paid by Plaintiff's
insurer. The findings of the WCJ will not be set aside unless the reviewing court
finds them to be clearly wrong in light of the record viewed in its entirety. Fernandez
v. Hand Constr., LLC, 15-615 (La.App. 4 Cir. 5/16/16), 194 So.3d 1149. After a
review of the record, we cannot find that the WCJ erred in its ruling regarding
medical expenses, and accordingly, affirm its award of $561.20 to Plaintiff and its
award of no credit to Key Energy.
Award of Costs

Key Energy was assessed with all costs of the previous appeal by this court,
which the WCJ found to be $3233.35. Key Energy asserts that this issue was not
properly before the WCJ as it should have been brought on a motion to tax costs,
citing La.Code Civ.P. art. 1920. However, La.Code Civ.P. art. 1920 states that costs
“may” be taxed by a rule to show cause. The statute does not mandate that a Motion
to Tax Costs is the only appropriate procedural vehicle for enforcing an assessment
of costs against a party. A rule to tax costs is merely incidental to the original
proceedings in which costs were incurred. Barker v. Houssiere-Latreille Oil Co.,
163 La. 555, 112 So. 415 (1926). Enforcing the payment of costs of court belongs
to the court having jurisdiction of the case. Frantz v. A. Levitan Furniture Co., 6
Pelt. 408 (La. Ct. App. 1922). As the WCJ properly had jurisdiction of the matter,
we find it did not err in setting the amount of costs awarded to Plaintiff by this court.
Award of Penalties and Attorney Fees

Key Energy next asserts that the WC] erred in awarding penalties for failure
to pay a final judgment. Key Energy argues that, as it paid the previous judgment in
full, it cannot be liable for penalties and attorney fees. Workers’ compensation
statutes providing for penalties and attorney fees, which are penal in nature, must be

strictly construed. Thibodeaux v. L.S. Womack, Inc., 94-1375 (La.App. 3 Cir.

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4/5/95), 653 So.2d 123. For the foregoing reasons, as well as those outlined in
docket number 20-635, we do not find this argument persuasive. Key Energy was
obligated to pay benefits through June 21, 2016. On its own erroneous interpretation
of this court’s judgment, it paid benefits only through April 16, 2016. Thus, the
WC] did not err in its award of penalties and attorney fees.
DISPOSITION

For the foregoing reasons, as well as those outlined in McCallon v. Key
Energy Servs., LLC, 20-635 (La.App. 3 Cir._), _—«So.3d __, we affirm the
ruling of the workers’ compensation judge, as amended. Key Energy Services,
LLC’s obligations to Plaintiff Michael McCallon are laid out in detail in the cross
appeal listed above. As both parties lodged separate appeals, all costs of this appeal

are assessed against Key Energy Services, LLC.

AFFIRMED AS AMENDED.