Carlos A. Juarez Versus Aj Lazo Construction, LLC, and Louisiana Construction and Industry Self Insurer's Fund (Lci)

Louisiana Court of Appeal·Decided September 20, 2023·No. 22-CA-575·Unknown

Opinion

CARLOS A. JUAREZ NO. 22-CA-575 VERSUS FIFTH CIRCUIT

AJ LAZO CONSTRUCTION, LLC, AND COURT OF APPEAL LOUISIANA CONSTRUCTION AND INDUSTRY SELF INSURER’S FUND (LCI) STATE OF LOUISIANA

ON APPEAL FROM THE OFFICE OF WORKERS' COMPENSATION, DISTRICT 7, STATE OF LOUISIANA NO. 21-3075

HONORABLE SHANNON BRUNO BISHOP, JUDGE PRESIDING

September 20, 2023

SCOTT U. SCHLEGEL

JUDGE

Panel composed of Judges Susan M. Chehardy, John J. Molaison, Jr., and Scott U. Schlegel

AFFIRMED IN PART; REVERSED IN PART SUS SMC JJM

COUNSEL FOR PLAINTIFF/APPELLEE, CARLOS A. JUAREZ Jean-Marc Bonin Alexandre E. Bonin R. Christian Bonin

COUNSEL FOR DEFENDANT/APPELLANT, AJ LAZO CONSTRUCTION, LLC, AND LOUISIANA CONSTRUCTION AND INDUSTRY SELF INSURERS FUND Nathan L. Schrantz

SCHLEGEL, J.

Defendants/Appellants, AJ Lazo Construction, LLC (Lazo Construction) and Louisiana Construction and Industry Self Insurers Fund (LCI), seek review of the workers’ compensation court’s September 14, 2022 judgment entered in favor of claimant/appellee, Carlos A. Juarez. Defendants contend that the court erred 1) in calculating Mr. Juarez’s average weekly wage (AWW) used to determine Mr. Juarez’s temporary total disability benefits (TTD); 2) by awarding Mr. Juarez supplemental earning benefits (SEBs) at a zero-wage earning capacity; and 3) by awarding penalties and attorney’s fees against defendants for failing to pay TTD and SEB benefits at a proper rate. Mr. Juarez answered the appeal and argues that he is entitled to 1) additional penalties and attorney’s fees for defendants’ failure to investigate his claim regarding his AWW and compensation rate; and 2) additional attorney’s fees incurred to respond to defendants’ appeal.

For the reasons stated more fully below, we reverse the judgment in part with respect to 1) the increase of the AWW calculation and corresponding award of past TTD benefits; and 2) the penalties and attorney’s fees awarded in connection with the finding that defendants failed to pay TTD benefits at the proper rate. We affirm the judgment in all other respects. Finally, we deny Mr. Juarez’s request in his answer to the appeal for additional penalties and attorney’s fees. FACTS AND PROCEDURAL BACKGROUND This matter arises out of a Disputed Claim for Compensation filed by Mr.

Juarez against Lazo Construction and its insurer, LCI. On July 7, 2020, Mr. Juarez was working as a painter/drywall finisher for an uninsured subcontractor, Cuevas Construction, LLC, when he injured his right shoulder and was unable to work the following day. Mr. Juarez testified at trial that he only worked for Cuevas Construction for two weeks ‒ from June 19, 2020 to July 7, 2020 ‒ prior to his

injury. Prior to working for Cuevas Construction, Mr. Juarez testified that he did not have a permanent employer, but that he worked for different contractors. Mr. Juarez testified that Cuevas Construction paid him a rate of $18.00 per hour and he worked ten hours per day.

Four days after the accident, Mr. Juarez went to the emergency department at Ochsner Medical Center. He was diagnosed with right shoulder strain, received an injection and was referred for an orthopedic evaluation. On July 29, 2020, Mr. Juarez saw Dr. Chuck Cucchiara for right shoulder and neck pain. Dr. Cucchiara determined that Mr. Juarez was physically unable to work due to his shoulder injury, ordered an MRI, and referred him to a specialist. On September 1, 2020, Dr. Douglas Bostick reviewed the MRI of Mr. Juarez’s shoulder and opined that he had a myotendinous strain of the supraspinatus and possible tearing of the anterior inferior labrum. He diagnosed Mr. Juarez with strain, impingement, and pain in his right shoulder. Dr. Bostick kept Mr. Juarez on “out of work” status and referred him to physical therapy.

Following written demand from Mr. Juarez’s counsel, defendants initiated TTD benefits for Mr. Juarez on October 12, 2020. Because Cuevas Construction was uninsured, Lazo Construction assumed the workers’ compensation obligation for Mr. Juarez. Defendants paid TTD benefits to Mr. Juarez based on an AWW of $720.00 resulting in a compensation rate of $480.02. Defendants contend that they were unable to obtain any wage records from Cuevas Construction and therefore, relied on Mr. Juarez’s statement regarding his hourly rate, as well as two checks he received from Cuevas Construction before he was injured. Mr. Juarez provided defendants with copies of two checks, the first one dated “3/7/2020” in the amount of $954.00 and the other dated “6/27/2020” in the amount of $1,260.00. 1

1 Mr. Juarez contends that he received the check dated “3/7/20” during his second week of work just prior to the accident. He provided defendants with a photograph of his bank account indicating that he

On October 13, 2020, Mr. Juarez’s counsel sent a Notice of Disagreement letter contending that defendants erred in their AWW calculation and were underpaying Mr. Juarez’s TTD benefits. Specifically, Mr. Juarez argued that defendants should have based his AWW and compensation rate on the average of the two paychecks he received, which would have resulted in an AWW and compensation rate of $1,107.00 and $688.00, respectively. Defendants refused to modify the calculations, arguing that La. R.S. 23:1021(13)(a)(i) mandated that they utilize the 40-hour presumption to determine the AWW for a full-time hourly employee because Mr. Juarez had worked fewer than four weeks prior to the accident.2 As a result, Mr. Juarez filed his Disputed Claim for Compensation on June 1, 2021, complaining of the underpayment of his TTD benefits and further demanding penalties, attorney’s fees, costs and interest for defendants’ failure to pay the correct compensation rate. On or about February 1, 2022, defendants converted Mr. Juarez’s TTD benefits to SEBs at a rate of $160.00 per week based on a minimum wage earning capacity of $480.00 per week. This prompted Mr. Juarez to file a motion for leave to amend and supplement his Disputed Claim for Compensation on February 7, 2022 to add claims that defendants acted arbitrarily and capriciously by converting his TTD benefits to SEBs. He further complained that he was not capable of earning $480.00 per week because he was a lifelong laborer with no formal education, who only speaks Spanish. Mr. Juarez further

deposited this check into his bank account on July 8, 2020. Mr. Juarez testified at trial that he was from Honduras and explained that when they write a date there, they place the day first and the month second. 2 La. R.S. 23:1021(13)(a)(i) provides as follows:

(13) “Wages” means average weekly wage at the time of the accident. The average weekly wage shall be determined as follows:

(a) Hourly wages.

(i) If the employee is paid on an hourly basis and the employee is employed for forty hours or more, his hourly wage rate multiplied by the average actual hours worked in the four full weeks preceding the date of the accident or forty hours, whichever is greater[.]

prayed for additional penalties and attorney’s fees due to the alleged improper modification of his benefits.

Due to a conflict of opinions between the physicians, the workers’

compensation court appointed an independent medical examiner, Dr. John B. Cazale, who on August 10, 2021, opined that Mr. Juarez could perform light or light/medium work. He further opined that Mr. Juarez could not lift overhead or climb a ladder. Dr. Cazale also stated that Mr. Juarez’s lifting restrictions would be 20 to 25 pounds from the ground to the waist level, and not higher than the waist level.

Following the IME, Mr. Juarez remained under Dr. Bostick’s care and received physical therapy for his shoulder injury. Mr. Juarez contends that at the time of trial on May 31, 2022, he had not been released to work by any of his treating physicians. The parties stipulated at trial that Mr. Juarez was injured in the course and scope of his employment and that he earned $5,536.00 for 26 weeks prior to the accident on July 7, 2020.

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