Michael McCallon v. Key Energy Services

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

20-635
MICHAEL MCCALLON
VERSUS
KEY ENERGY SERVICES
SRR RK
APPEAL FROM THE

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

fe OR ek Rokk

VAN H. KYZAR
JUDGE

3 ie ok oe ok 2s ok ok

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

AFFIRMED AS AMENDED.

Brian D. Calvit

7920 Wrenwood Blvd, Suite F

Baton Rouge, LA 70809

(225) 926-2222

COUNSEL FOR PLAINTIFF/APPELLANT:
Michael McCallon

Michael Edward Parker

Allen & Gooch

Post Office Drawer 81129

Lafayette, LA 70598-1129

(337) 291-1000

COUNSEL FOR DEFENDANT/APPELLEE:
Key Energy Services

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
Defendant’s appeal being lodged under docket number 20-634. For the reasons
found herein and in the corresponding appeal McCallon v. Key Energy Servs., LLC,
20-634 (La.App. 3 Cir. 12/15/21), __—~ So.3d__, we affirm as amended.

FACTS AND PRECEDURAL HISTORY

This workers’ compensation claim arises out of an automobile accident which
occurred on February 3, 2015, in Williston, North Dakota. Plaintiff, Michael
McCallon, was in the course and scope of his employment as a derrick hand with
Key Energy Services, LLC (Key Energy) at the time of the incident and later
underwent a lumbar discectomy. On April 16, 2016, Plaintiff was involved in a
subsequent automobile accident in Natchez, Mississippi, after which he entered into
a settlement agreement without obtaining the consent of Key Energy. This matter
has previously been before this court in a prior appeal and the pertinent facts leading
to the claim are fully set forth therein. McCallon v. Key Energy Servs., LLC, 18-880
(La.App. 3 Cir. 4/24/19), 271 So.3d 249, writ denied, 19-850 (La. 9/17/19), 279
So.3d 381. In our previous opinion, we issued 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 McCallon by his health insurer. The judgment is

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

Id. at 262-63.

On October 1, 2019, Key Energy tendered to Plaintiff the sum of $28,079.67
and an explanation as to what it considered was due under the judgment. Specifically
Key Energy tendered $11,619.42, representing weekly indemnity benefits plus
interest owed from August 4, 2015 to April 16, 2016, less a credit of $12,500.00.
Key Energy also paid $16,460.27, representing the penalties and attorney fees
awarded by the Court of Appeals. Key Energy however denied responsibility for
any additional indemnity benefits with the explanation that “[t]here is no ruling from
the Court of Appeal that Key Energy Services owes benefits subsequent to June
2016.” See McCallon, 271 So.3d 249. On October 29, 2019, Plaintiff filed a Motion
to Enforce Judgment pursuant to La.R.S. 23:1201(G), seeking penalties and attorney
fees for Key Energy’s alleged violation of this court’s judgment. A hearing on the
motion was held on January 3, 2020, after which the workers compensation judge
(WCJ) granted Plaintiffs motion to enforce in an oral ruling that also instructed each
of the parties to determine precisely what was owed and to provide those
determinations to the court. It pretermitted a determination of penalties at that time,
noting that “claimant’s counsel failed to point out what exactly was owed in this
matter[;]” though, it did assess Key Energy with attorney fees of $500.00 for
Plaintiffs counsel.

On September 2, 2020, the WCJ issued a judgment on the motion to enforce
judgment, awarding Plaintiff forty-four weeks of past due indemnity benefits in the
amount of $630.00 per week, covering the period from August 4, 2015 until June
21, 2016, for a total of $27,720.00 plus judicial interest. The WCJ also awarded

medical expenses to Plaintiff in the amount of $561.20 and interests and costs in the

amount of $3233.35. The WCJ further awarded penalties under La.R.S. 23:1201(F)
in the amount of $4000.00 and attorney fees in the amount of $12,000.00. Plaintiff
thereafter appealed that judgment. Key Energy, as noted above, additionally
appealed, separately, lodged with this court under docket number 20-634, and dealt
with in a separate opinion.

In this appeal, Plaintiff asserts the following assignments of error:

I, The WCJ committed legal error by modifying and revising a final
appellate court judgment.

II]. The WCJ committed legal error by failing to enforce the binding
stipulation between the parties.

III. The WCJ committed legal error by failing to enforce this Court’s
judgment which allowed Mr. McCallon to reserve his rights to future
compensation under La. R.S. 23:1102(B).

IV. The WCJ erred by failing to apply the sanctions provided in La.

R.S. 23:1201(G) for Key Energy’s failure to timely pay an award under

the terms of a final non-appealable judgment.

DISCUSSION
Did the WCJ modify the appellate court judgment in failing to award future benefits
after June 21, 2016?

In his first assignment of error, Plaintiff asserts that the ruling of the WCJ on
his Motion to Enforce Judgment constituted an impermissible substantive change of
a final non-appealable judgment which had acquired the authority of a thing
adjudged pursuant to La.R.S. 13:4231. As such, Plaintiff argues that the WCJ lacked
jurisdiction to modify, revise or reverse the judgment of this court. See La.R.S.
13:4231. Plaintiff also claims in his third assignment of error that the WCJ erred in
its failure to award future benefits beyond June 21, 2016, which he asserts he is

entitled to per the previous decision of this court. MeCallon, 271 So.3d 249. As we

consider these issues to be interrelated, we address them together.

It is particularly important to note the relief sought here by Plaintiff, which is
the enforcement by the WCJ of the judgment of this court in the previous appeal and
for penalties and attorney fees for Key Energy’s failure to satisfy said judgment
pursuant to La.R.S. 23:1201(G). In the prior appeal of the case, this court did four
things. First, it reversed the WCJ’s original decision that Plaintiff forfeited
compensation benefits before June 21, 2016. Second, it amended the judgment to
provide that Plaintiff is entitled to reserve his right to future compensation as
provided by La.R.S. 23:1102(B). Next, it amended the judgment awarding Plaintiff
$4,000.00 in penalties and $12,000.00 in attorney fees. Finally, it remanded the case
to the WCJ for calculation of the offset due Key Energy for medical expenses paid
on behalf of Plaintiff by his health insurer and assessed all costs of the appeal to Key
Energy. McCallon, 271 So.3d 249.

Plaintiff's October 2019 motion to enforce was in reference to this ruling and
the matter was heard on January 2, 2020, following which the WCJ awarded Plaintiff
forty-four weeks of past due indemnity benefits in the amount of $630.00 per week,
covering the period from August 4, 2015 until June 21, 2016. This ruling is in
accordance with the edict of this court and does not constitute an error by the WCJ.
However, it is the second prong of this court’s judgment that Plaintiff claims was
improperly modified by the ruling of the WCJ.

Louisiana Revised Statutes 23:1102(B) states that when the written approval
of a compromise with a third-party tortfeasor is not obtained from the employer or
the insurer before the compromise is completed, the employee or his dependent
forfeits the right to future compensation, including medical expenses. Triche v.
Reg’l Elec. & Constr., Inc., 95-105 (La.App. 1 Cir. 10/6/95) 671 So.2d 425.
However, it also provides an employee the opportunity to “buy back” the right to

future compensation. /d. In McCallon, 271 So.3d 249, we decreed that Plaintiff

4

reserved his right to seek future indemnity benefits pursuant to the application of
La.R.S. 23:1102(B), which provides for the reduction of benefits owed for up to one-
half of the amount of any settlement of a claim against a third party tortfeasor causing
the injuries for which compensation benefits were being paid, or which aggravated
said injuries, when the settlement was not noticed or authorized by the workers’
compensation carrier. The reduction for future benefits for the settlement in this
case was set at $12,500.00. Nowhere in our prior judgment did we find that Plaintiff
was not entitled to any future compensation or limit compensation for any amount
due after June 21, 2016, the date of the settlkement of Mr. McCallon’s tort claim,
other than the possible offset.

Defendant Key Energy herein argues that our judgment concluded that no
benefits were due after this date because of language in our opinion stating that “[t]he
evidence further establishes that if not for his April 2016 injury, Dr. McGuire would
likely have discharged Mr. McCallon in June 2016.” MceCallon, 271 So.3d at 259.
However, the issue in that appeal was whether Plaintiff forfeited benefits because of
his settlement with the third-party tortfeasor, not whether he was entitled to benefits
after a certain date. Thus, the language of the court therein was purely obiter dicta,
not binding on the WCJ, and not a part of the disposition of this court.

The WCJ issued partial oral reasons for its judgment to grant Plaintiff's
motion to enforce the judgment of this court on January 13, 2020, but ordered the
parties to calculate the amount owed in past benefits, as follows:

The basic argument in this case is that indemnity benefits were
owed to the plaintiff, and that the defendant has failed to comply with
the judgment in this case in paying benefits.

Counsel for plaintiff, while practically relitigating the entire case
in his briefs, has failed to point out what benefits actually are owed to
his client. He’s failed to show whether there are supplemental earning

benefits owed, or whether it’s temporary total benefits owed because
the medical in this case leads to the conclusion that the disability that

5

his client currently suffers under is the result of a subsequent accident
and not due to the accident at question with regards to the judgment.

However, this Court does find that the motion to enforce
judgment is to be granted in this case. However, the Court does not
know how to assess the 24-percent penalty because claimant’s counsel
failed to point out what exactly was owed in this matter.

The Court therefore grants the motion to enforce the judgment,
awards penalties in the amount of 24 percent, but instructs the parties
to determine exactly what is owed and to provide that to The Court.

The Court further finds that it is awarding Five Hundred Dollars
‘in attorney[] fees in this matter.

In written reasons for judgment dated September 2, 2020, the WCJ stated as
follows:

This matter came before the Court for trial on the merits. The
Court issued a ruling. The matter went up on appeal. The Court of
Appeals affirmed in part, reversed in part and remanded. The remand
calls for this Court to determine what the calculation of the offset due
to Key Energy Services is due from the amounts paid by the medical
insurer for the medical bills of Mr. McCallon. The Court of Appeals
ruled that benefits owed to Mr. McCallon were not forfeited prior to
June 21, 2016. Therefore, Mr. McCallon is owed benefits from the date
of injury until June 21, 2016.

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.

He is also entitled to TTD benefits from August 4, 2015 until
June 21, 2016. The Court, after reviewing the memoranda from the
parties, finds in favor of the Claimant, and orders that Michael
McCallon is entitled to temporary total indemnity benefits from the date
of injury until June 21, 2016. That is: 44 weeks of TTD benefits at six
hundred and thirty dollars per week, and results in a total of twenty-
seven thousand seven hundred and twenty dollars. The Court also
awards judicial interest to Michael McCallon.

6

The Court also awards costs to Michael McCallon and awards
penalties in the amount of four thousand dollars and attorney[] fees in
the amount of twelve thousand dollars.

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 matter came to the Court on a motion to enforce Judgment
and for penalties and attorney[] fees.

There was no need to review the original award in this case as
this matter was remanded for a calculation of the credit.

Formal judgment was signed the same day, in accordance with the written
reasons. While the WCJ granted Plaintiff's motion to enforce the judgment, to the
extent that it could do so, it did not award future benefits that Plaintiff claims he is
entitled to beyond June 21, 2016. We note that actual entitlement to those future
benefits was not a part of the judgment of this court in the prior appeal, only the
reservation of Plaintiff's rights to seek such. We thus conclude that the
determination of actual entitlement to future benefits after June 21, 2016, was not
part of the judgment of this court, nor did Plaintiff's motion to compel enforcement
of the judgment of this court place at issue future benefits payable, if any.
Accordingly, we find the WCJ did not err nor fail to enforce the judgment by not
awarding future benefits post June 21, 2016 at this time, subject to the reservation
of Plaintiff's rights to seek such by properly raising the issue before the WCJ.
Failure to enforce the stipulation of the parties

Plaintiff next asserts that the WCJ committed legal error in failing to enforce
the binding stipulation entered into between the parties. He claims that the
stipulation of the parties at the original trial leading to the prior appeal and decision
of this court should have resulted in an award of future benefits after June 21, 2020.

We disagree. As Key Energy correctly points out in brief, the issue of a stipulation

at the original! trial as to the average weekly wage and other facts was not an issue
presented with Plaintiffs motion to enforce the judgment of this Court. The issue
presented by this appeal is whether the WCJ properly interpreted and enforced our
previous judgment. As reflected above, the judgment of this court did not dispose
of the possibility of benefits being owed after June 21, 2016, nor did the judgment
of the WCJ have the effect of denying such, as that issue was not before the court.
The only issue related thereto was the amount of benefits due through June 21, 2016,
which the WCJ ordered be paid. We find no error in that decision.

Sanctions pursuant to La.R.S. 23:1201(G)

In his final assignment of error, Plaintiff claims that the WCJ erred by failing
to apply sanctions as provided in La.R.S. 23:1201(G) for Key Energy’s failure to
timely pay an award under the terms of a final non-appealable judgment. That
section provides precisely 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.

Ta.

After receiving the prior McCallon decision of this court, Key Energy applied
for a writ to the Louisiana Supreme Court, which was denied on September 17, 2019.
A party has fourteen days from the transmission of notice of judgment in the supreme

court to apply for a rehearing. La.Code Civ.P. art. 2167. If no such timely

application is made, the judgment of the supreme court becomes final and definitive

when the delay for application for rehearing has expired. Jd. Thus, the judgment in
this matter became final and definitive on approximately October 1, 2019.

On that date, Key Energy tendered to Plaintiff the sum of $28,079.67 with an
explanation as to what it considered was due under the judgment. Specifically, it
tendered $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. It is notable that
Key Energy tendered payment to Plaintiff for the period of August 4, 2015 through
April 16, 2016, despite this court’s clear directive that “the WCJ’s judgment is
reversed to the extent that it holds that Michael McCallon forfeited compensation
benefits before June 21, 2016[.]” McCallon, 271 So.3d at 262.

In granting Plaintiff's motion to enforce, the WCJ found Plaintiff was entitled
to benefits through June 21, 2016, totaling 44 weeks of indemnity benefits for
$27,720.00. While neither party specifically raised the correctness of this
calculation, we find that the actual amount of time for which indemnity benefits are
owed is 46 weeks, representing the time from August 4, 2015 to June 21, 2016.
Thus, we find the total amount of indemnity benefits owed to Plaintiff by Key
Energy is $28,980.00, less a credit of $12,500.00. See La.Code Civ.P. art. 2164.!
The amount tendered to Plaintiff by Key Energy was $23,310.00, less a credit of
$12,500.00. Thus, a total of $5,670.00 in indemnity benefits was still owed after
Key Energy’s initial tender of payment.’

Key Energy argues that Plaintiff forfeited his right to benefits after his April

16, 2016 car accident pursuant to this court’s statement that “we cannot say the WCJ

' The appellate court shall render any judgment which is just, legal, and proper upon the record
on appeal. La.Code Civ.P. art. 2164.

2 A total of nine weeks of indemnity benefits were not paid to Plaintiff, representing the time
from April 16, 2016 to June 21, 2016.

erred in finding that the April 2016 accident aggravated Mr. McCallon’s work-
related injury and that the forfeiture provision of La.R.S. 23:1102(B) applies.” Jd.

ace

at 259. This is based upon the supreme court holding that “‘[i]f an accident causes
a disability from which a workman would have recovered except for further
disability produced by a separate, intervening cause, there is no liability for
compensation beyond the disability produced by the job connected accident.”
Buxton v. lowa Police Dept., 09-520, p. 17 (La. 10/20/09), 23 So.3d 275, 286
(quoting Haughton v. Fireman’s Fund American Ins. Cos., 335 So.2d 927, 929
(La.1978)). Plaintiff would have the burden of distinguishing between the two
accidents to show a continuing disability from the first accident, separate from the
second non-work-related accident in order to maintain his right to compensation. Jd.
However, the question of Plaintiff's continued disability and, thus, entitlement to
benefits regarding such, was not before the court in this matter. The sole question
was whether Plaintiff forfeited his benefits due to his settlement with a third-party
tortfeasor pursuant to La.R.S. 23:1102(B) (emphasis added) which 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’s previous opinion noted that Plaintiff's

doctor testified that he had not released Plaintiff as of January 2016, and did not

10

anticipate doing so until June 2016. See McCallon, 27) So.3d 249. The ruling
clearly stated that “the WCJ’s judgment is reversed to the extent that it holds that
Michael McCallon forfeited compensation benefits before June 21, 2016[.]” /d. at
262.

Despite Key Energy’s assertion in brief that this court made no rule or
inference that Plaintiff was entitled to benefits subsequent to April 16, 2016, this
court’s judgment clearly states that Plaintiff was entitled to benefits through June
21,2016. See Id. Key Energy’s assertion that the June 21, 2016 date was chosen in
error and that April 16, 2016, the date of the second automobile accident, was the
correct date for the end of Plaintiffs benefits is counter to Louisiana jurisprudence
and unpersuasive. This court issued a final judgment in McCallon, 271 So.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 such, we find Key Energy
failed to comply with the judgment in that regard insomuch as it failed to pay the
full amount of weekly indemnity benefits owed to Plaintiff as ruled by this court.
See McCallon, 271 So0.3d 249.

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. 4/5/95), 653 So.2d 123. Louisiana Revised Statutes
23:1201(G) requires a penalty of an amount equal to twenty-four percent of the
unpaid judgment or one hundred dollars per day for each day after thirty days the

judgment remains unpaid, whichever is greater. In the matter at hand, Key Energy

11

did not pay a portion of a final judgment and it remains unpaid. As the daily penalty
exceeds the penalty of $1,360.80 representing 24% of the unpaid judgment, we
assess a penalty of $3,000.00 for failure to pay a final judgment in the form of weekly
indemnity benefits from April 16, 2016 to June 21, 2016 pursuant to La.R.S.
23:1201(G).

Thus, we find that Plaintiff is entitled to $39,274.55, plus judicial interest, as
follows: $16,480.00 representing total indemnity benefits for the period of August
4, 2015 to June 21, 2016, minus a credit of $12,500.00 pursuant to La.R.S.
23:1102(B); $4,000.00 in costs and penalties; $12,000.00 in attorney fees; $561.20
in medical expenses; $3233.35 representing costs and attorney fees assessed against
Key Energy in the original appeal;? $3,000.00 in penalties pursuant to La.R.S.
23:1201(G). We note this total amount is to be offset by Key Energy’s previous
payment.

DISPOSITION

Pursuant to the foregoing, the judgment of the workers’ compensation judge
is affirmed as amended. Plaintiff, Michael McCallon, is entitled to $11,194.88 plus
judicial interest, representing: $16,480.00 in total indemnity benefits for the period
of August 4, 2015 to June 21, 2016, minus a credit of $12,500.00 pursuant to La.R.S.
23:1102(B); $4,000.00 in costs and penalties; $12,000.00 in attorney fees; $561.20
in medical expenses; $3233.35 representing costs and attorney fees assessed against
Key Energy in the original appeal; $3,000.00 in penalties pursuant to La.R.S.

23:1201(G); less a credit of $28,079.67 to Key Energy Services, LLC for amounts

3 McCallon, 271 So.3d 249.

12

previously paid. As both parties lodged separate appeals, all costs of this appeal are
assessed to Michael McCallon.

AFFIRMED AS AMENDED.

13