STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
NO. 04-1139
CHAD SASSER
VERSUS
TYLER TIMBER, INC.
************
APPEAL FROM THE OFFICE OF WORKERS’ COMPENSATION, DISTRICT 2 PARISH OF RAPIDES, NO. 03-02201 HONORABLE JAMES L. BRADDOCK WORKERS’ COMPENSATION JUDGE
JIMMIE C. PETERS JUDGE
Court composed of Oswald A. Decuir, Jimmie C. Peters, and Glenn B. Gremillion, Judges.
REVERSED AND RENDERED.
George Flournoy Flournoy & Doggett Post Office Box 1270 Alexandria, LA 71309 (318) 487-9858 COUNSEL FOR PLAINTIFF/APPELLEE: Chad Sasser
Frank Carroll Mayer, Smith & Roberts, L.L.P. 1550 Creswell Shreveport, LA 71101 (318) 222-2135 COUNSEL FOR DEFENDANT/APPELLANT: Tyler Timber, Inc. PETERS, J.
In this workers’ compensation case, Tyler Timber, Inc. (Tyler Timber) appeals
the denial of its request for recognition of an offset against its payment of workers’
compensation benefits due to the payment of disability benefits to its former
employee, Chad Sasser, by the Social Security Administration. The specific issue on
appeal is whether the Social Security Administration’s unilateral relinquishment of
its offset deprives the employer of its right to the offset provided for in La.R.S.
23:1225(A). Finding that it does not under the facts of this case, we reverse the
judgment of the workers’ compensation judge and render judgment awarding and
setting the amount of the appropriate offset.
DISCUSSION OF THE RECORD
It is undisputed that Chad Sasser was formerly employed by Tyler Timber and
sustained injuries in a work accident on January 17, 1992. Thereafter, Tyler Timber
began paying Sasser workers’ compensation indemnity benefits at the rate of $295.00
per week, or $1,278.30 per month. In October of 1992, Sasser became eligible for
social security disability benefits, but the Social Security Administration availed itself
of an offset provided in 42 U.S.C. § 424a, because the combined workers’
compensation and social security disability benefits exceeded eighty percent of
Sasser’s average current earnings. This action initially resulted in the Social Security
Administration paying no social security disability benefits to Sasser.
Ultimately, Tyler Timber paid 520 weeks of workers’ compensation indemnity
benefits and thereafter terminated benefits on March 10, 2003. Concomitantly, in
April of 2003, the Social Security Administration unilaterally discontinued applying its offset against Sasser’s social security disability benefits and began paying Sasser
monthly benefits.1
On March 26, 2003, or before the Social Security Administration removed its
offset and began paying him disability benefits, Sasser filed a workers’ compensation
claim against Tyler Timber, seeking total and permanent disability benefits, penalties,
and attorney fees. On April 14, 2003, Tyler Timber answered the claim by asserting
that Sasser had been paid all benefits to which he was entitled and by denying that
Sasser continued to be disabled. On December 19, 2003, and despite the assertion in
its answer that Sasser was no longer disabled, Tyler Timber unilaterally classified
Sasser as totally and permanently disabled and reinstated his $295.00 weekly benefit,
retroactive to March 10, 2003.
This appeal arises because, on January 21, 2004, Tyler Timber filed a motion
for recognition of its right to claim the offset against benefits provided for in La.R.S.
23:1225(A) and followed that filing with a February 23, 2004 amendment to its
pleading, admitting that Sasser was totally and permanently disabled. On March 29,
2004, Tyler Timber filed a motion for summary judgment seeking a declaration that
Sasser was totally and permanently disabled such that it could avail itself of the
La.R.S. 23:1225(A) offset.
After a hearing, the workers’ compensation judge granted the motion for
summary judgment, finding that Sasser was totally and permanently disabled, but the
workers’ compensation judge denied the motion for recognition of the offset. In
denying that motion, the workers’ compensation judge stated in part:
1 The record contains no explanation as to why the Social Security Administration took this unilateral action, although one might speculate that the action was taken in response to Tyler Timber’s action in discontinuing the payment of workers’ compensation benefits.
2 This Court has found no similar case to the current factual situation and haven’t [sic] been provided any by the counsel. I appreciate the argument being made on behalf of the employer. However, as this Court reads the statute [La.R.S. 23:1225(A)], I’m in agreement with [Sasser’s attorney] that this is a claim for reverse offset, and the Social Security persons are not taking any type of offset, so there’s nothing to reverse. It’s speculation as to the reason why they terminated any offset that they may have been taking in April of 2003. So based on the literal wording of the statute and the fact that there is no current offset being taken by Social Security, I would deny the request for the Social Security offset and sustain the Motion for Summary Judgment, that Mr. Sasser is permanently and totally disabled.
Tyler Timber’s appeal followed this ruling.
OPINION
Louisiana Revised Statutes 23:1225(A) provides for an offset by the employer
against social security disability benefits as follows:
The benefits provided for in this Subpart for injuries producing permanent total disability shall be reduced when the person receiving benefits under this Chapter is entitled to and receiving benefits under 42 U.S.C. Chapter 7, Subchapter II, entitled Federal Old Age, Survivors, and Disability Insurance Benefits, on the basis of the wages and self-employment income of an individual entitled to and receiving benefits under 42 U.S.C. § 423; provided that this reduction shall be made only to the extent that the amount of the combined federal and workers’ compensation benefits would otherwise cause or result in a reduction of the benefits payable under the Federal Old Age, Survivors, and Disability Insurance Act pursuant to 42 U.S.C. § 424a, and in no event will the benefits provided in this Subpart, together with those provided under the federal law, exceed those that would have been payable had the benefits provided under the federal law been subject to reduction under 42 U.S.C. § 424a. However, there shall be no reduction in benefits provided under this Section for the cost-of-living increases granted under the federal law after the date of the employee’s injury.
In Al Johnson Construction Co. v. Pitre, 98-2564, pp. 6-8 (La. 5/18/99), 734
So.2d 623, 626-27, the supreme court discussed the history and application of both
the federal and state offset provisions as they apply to an employer’s request for an
offset as follows:
3 The present federal statute, under the 1965 re-enactment as part of the major revision of the Social Security Act, requires that the amount of Social Security benefits be reduced when the combined amounts of Social Security disability benefits and state workers’ compensation benefits exceeds eighty percent of the employee’s “average current earnings.” 42 U.S.C.
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STATE OF LOUISIANA COURT OF APPEAL, THIRD CIRCUIT
NO. 04-1139
CHAD SASSER
VERSUS
TYLER TIMBER, INC.
************
APPEAL FROM THE OFFICE OF WORKERS’ COMPENSATION, DISTRICT 2 PARISH OF RAPIDES, NO. 03-02201 HONORABLE JAMES L. BRADDOCK WORKERS’ COMPENSATION JUDGE
JIMMIE C. PETERS JUDGE
Court composed of Oswald A. Decuir, Jimmie C. Peters, and Glenn B. Gremillion, Judges.
REVERSED AND RENDERED.
George Flournoy Flournoy & Doggett Post Office Box 1270 Alexandria, LA 71309 (318) 487-9858 COUNSEL FOR PLAINTIFF/APPELLEE: Chad Sasser
Frank Carroll Mayer, Smith & Roberts, L.L.P. 1550 Creswell Shreveport, LA 71101 (318) 222-2135 COUNSEL FOR DEFENDANT/APPELLANT: Tyler Timber, Inc. PETERS, J.
In this workers’ compensation case, Tyler Timber, Inc. (Tyler Timber) appeals
the denial of its request for recognition of an offset against its payment of workers’
compensation benefits due to the payment of disability benefits to its former
employee, Chad Sasser, by the Social Security Administration. The specific issue on
appeal is whether the Social Security Administration’s unilateral relinquishment of
its offset deprives the employer of its right to the offset provided for in La.R.S.
23:1225(A). Finding that it does not under the facts of this case, we reverse the
judgment of the workers’ compensation judge and render judgment awarding and
setting the amount of the appropriate offset.
DISCUSSION OF THE RECORD
It is undisputed that Chad Sasser was formerly employed by Tyler Timber and
sustained injuries in a work accident on January 17, 1992. Thereafter, Tyler Timber
began paying Sasser workers’ compensation indemnity benefits at the rate of $295.00
per week, or $1,278.30 per month. In October of 1992, Sasser became eligible for
social security disability benefits, but the Social Security Administration availed itself
of an offset provided in 42 U.S.C. § 424a, because the combined workers’
compensation and social security disability benefits exceeded eighty percent of
Sasser’s average current earnings. This action initially resulted in the Social Security
Administration paying no social security disability benefits to Sasser.
Ultimately, Tyler Timber paid 520 weeks of workers’ compensation indemnity
benefits and thereafter terminated benefits on March 10, 2003. Concomitantly, in
April of 2003, the Social Security Administration unilaterally discontinued applying its offset against Sasser’s social security disability benefits and began paying Sasser
monthly benefits.1
On March 26, 2003, or before the Social Security Administration removed its
offset and began paying him disability benefits, Sasser filed a workers’ compensation
claim against Tyler Timber, seeking total and permanent disability benefits, penalties,
and attorney fees. On April 14, 2003, Tyler Timber answered the claim by asserting
that Sasser had been paid all benefits to which he was entitled and by denying that
Sasser continued to be disabled. On December 19, 2003, and despite the assertion in
its answer that Sasser was no longer disabled, Tyler Timber unilaterally classified
Sasser as totally and permanently disabled and reinstated his $295.00 weekly benefit,
retroactive to March 10, 2003.
This appeal arises because, on January 21, 2004, Tyler Timber filed a motion
for recognition of its right to claim the offset against benefits provided for in La.R.S.
23:1225(A) and followed that filing with a February 23, 2004 amendment to its
pleading, admitting that Sasser was totally and permanently disabled. On March 29,
2004, Tyler Timber filed a motion for summary judgment seeking a declaration that
Sasser was totally and permanently disabled such that it could avail itself of the
La.R.S. 23:1225(A) offset.
After a hearing, the workers’ compensation judge granted the motion for
summary judgment, finding that Sasser was totally and permanently disabled, but the
workers’ compensation judge denied the motion for recognition of the offset. In
denying that motion, the workers’ compensation judge stated in part:
1 The record contains no explanation as to why the Social Security Administration took this unilateral action, although one might speculate that the action was taken in response to Tyler Timber’s action in discontinuing the payment of workers’ compensation benefits.
2 This Court has found no similar case to the current factual situation and haven’t [sic] been provided any by the counsel. I appreciate the argument being made on behalf of the employer. However, as this Court reads the statute [La.R.S. 23:1225(A)], I’m in agreement with [Sasser’s attorney] that this is a claim for reverse offset, and the Social Security persons are not taking any type of offset, so there’s nothing to reverse. It’s speculation as to the reason why they terminated any offset that they may have been taking in April of 2003. So based on the literal wording of the statute and the fact that there is no current offset being taken by Social Security, I would deny the request for the Social Security offset and sustain the Motion for Summary Judgment, that Mr. Sasser is permanently and totally disabled.
Tyler Timber’s appeal followed this ruling.
OPINION
Louisiana Revised Statutes 23:1225(A) provides for an offset by the employer
against social security disability benefits as follows:
The benefits provided for in this Subpart for injuries producing permanent total disability shall be reduced when the person receiving benefits under this Chapter is entitled to and receiving benefits under 42 U.S.C. Chapter 7, Subchapter II, entitled Federal Old Age, Survivors, and Disability Insurance Benefits, on the basis of the wages and self-employment income of an individual entitled to and receiving benefits under 42 U.S.C. § 423; provided that this reduction shall be made only to the extent that the amount of the combined federal and workers’ compensation benefits would otherwise cause or result in a reduction of the benefits payable under the Federal Old Age, Survivors, and Disability Insurance Act pursuant to 42 U.S.C. § 424a, and in no event will the benefits provided in this Subpart, together with those provided under the federal law, exceed those that would have been payable had the benefits provided under the federal law been subject to reduction under 42 U.S.C. § 424a. However, there shall be no reduction in benefits provided under this Section for the cost-of-living increases granted under the federal law after the date of the employee’s injury.
In Al Johnson Construction Co. v. Pitre, 98-2564, pp. 6-8 (La. 5/18/99), 734
So.2d 623, 626-27, the supreme court discussed the history and application of both
the federal and state offset provisions as they apply to an employer’s request for an
offset as follows:
3 The present federal statute, under the 1965 re-enactment as part of the major revision of the Social Security Act, requires that the amount of Social Security benefits be reduced when the combined amounts of Social Security disability benefits and state workers’ compensation benefits exceeds eighty percent of the employee’s “average current earnings.” 42 U.S.C. § 424a(a) (1991). This offset of state benefits against federal benefits prevents a disabled employee who is receiving both types of disability benefits from receiving more than eighty percent of his pre-injury wages, while at the same time allowing a supplement to the generally inadequate state workers’ compensation benefits. For a limited period of time, the federal offset statute provided that the federal offset was not applicable when a state law provided for an offset of Social Security disability benefits against overlapping state workers’ compensation benefits. This “reverse offset” provision allowed state legislatures to bestow an advantage on local employers, since state employers, instead of Social Security, could take the offset that Social Security otherwise would have alone been authorized to take. If the state legislature acted under this authorization, the single offset was a reduction in overall benefits that accrued to the benefit of employers on the state workers’ compensation side of the equation, at the expense of Social Security. There was no corresponding disadvantage to employees, since either the state or the federal system, but not both, would receive the benefit of the reduction to the eighty percent ceiling on the total benefits. In 1978, the Louisiana Legislature took advantage, to some extent, of this Congressional beneficence by enacting the reverse offset provision now included in La.Rev.Stat. 23:1225 A. However, the Legislature for some reason chose to make the reverse offset applicable only in cases of permanent total disability, and the reverse offset therefore does not apply in the present case. Nevertheless, in the cases in which the reverse offset applied, the state’s reduction took precedence over the federal reduction and precluded application of a second offset. Sciarotta v. Bowen, 837 F.2d 135 (3d Cir.1988). The Louisiana Legislature took no further action to extend the reverse offset to cases other than those involving permanent total disability. After the cutoff date of February 18, 1981, states could no longer enact reverse offset provisions, or add to or alter the scope of an existing state reverse offset statute. The result is that while federal law provides for a reduction in overall benefits in all cases in which a disabled employee is receiving Social Security disability benefits and state workers’ compensation benefits, Louisiana employers receive the advantage of the reverse offset reduction only when the employee is permanently totally disabled.
(Footnotes omitted.)
4 Although Sasser’s total and permanent disability status was not in dispute, the
workers’ compensation judge denied Tyler Timber the offset provided for in La.R.S.
23:1225(A) based on the fact that the Social Security Administration had unilaterally
relinquished its offset and instituted payment of disability benefits when Tyler Timber
ceased paying workers’ compensation benefits. In other words, the workers’
compensation judge concluded that, because the Social Security Administration no
longer took an offset, there was no offset to reverse. We do not agree that the Social
Security Administration must be claiming an offset before an employer may claim an
offset under La.R.S. 23:1225(A). When Tyler Timber filed its motion for recognition
of the offset, Sasser was receiving both workers’ compensation disability benefits and
social security disability benefits. Louisiana Revised Statutes 23:1225(A) provides
that Tyler Timber’s payment of permanent total disability benefits “shall be reduced”
when it establishes that Sasser is receiving both workers’ compensation benefits for
permanent total disability and social security disability benefits. (Emphasis added.)
Indeed, the Social Security Administration simply unilaterally undertook to do itself
that which it could have been required to do otherwise. Thus, the workers’
compensation judge erred in rejecting Tyler Timber’s request for an offset against
social security disability payments.
Having concluded that Tyler Timber is entitled to claim the benefit of the offset
provisions of La.R.S. 23:1225(A), we must now determine the effect of that claim on
the benefits due Sasser. Tyler Timber argues that we should calculate the offset due
it through use of the formula established in Lofton v. Louisiana Pacific Corp., 423
So.2d 1255 (La.App. 3 Cir.1982), and described in Jones v. Walpole Tire Service,
Inc., 38,206, pp. 9-10 (La.App. 2 Cir. 3/3/04), 867 So.2d 927, 933, as follows:
5 The offset is determined by adding the total family benefits (“TFBs”) received from Social Security (before any offset has been taken by Social Security) and the employee’s monthly workers’ compensation benefits and then subtracting from the result either the TFB or 80% of the average current earnings (“ACE”) (a figure calculated by Social Security), whichever is greater.
Based on the evidence in the record before us, the use of the Lofton formula
would produce the following result:
Total Family Benefit (TFB): $ 423.50
80% of the Average Current Earnings (ACE): $ 566.40
Combined benefits cannot exceed: $ 566.40
Monthly workers’ compensation benefit (MWCB): $1,278.30
TFB % MWCB: $1,701.80
Offset ($1,701.80 & $566.40): $1,135.40
Weekly offset (1,135.40 × 3 ÷ 13): $ 262.01
As pointed out by Tyler Timber in brief, this calculation would result in it paying
Sasser $142.90 ($1,278.30 ! $1,135.40) monthly, or a weekly payment of $32.99
($295.00 ! 262.01).
While we agree that the use of the Lofton method of calculation would
mathematically reach this result, we find the method inapplicable to this matter. The
evidence establishes that the Social Security Administration is currently paying
Sasser $565.50 per month in disability benefits. Thus, based on the application of the
Lofton formula, Sasser’s monthly income would total $827.51 ($565.50 % 262.01).
This is $450.79 less than the sixty-six and two-thirds percent of wages he is entitled
to under the Louisiana Workers’ Compensation Law. We do not find that La.R.S.
23:1225(A) ever intended to allow such an inequitable result.
6 In Coleman v. Times-Picayune Publishing Corp., 570 So.2d 80, 81 (La.App.
4 Cir. 1990), the fourth circuit recognized that “[b]lind application” of the Lofton
method of calculation is not appropriate and that when its application results in a
reduction below the amount to which the employee is entitled under the Louisiana
Workers’ Compensation Law, it cannot be applied. We agree with the
Coleman analysis and approach and find the appropriate offset to be $164.49 per
week {[($1,278.30 ! 565.50) ÷ 13] × 3}. We order this offset to be retroactive to the
date of judicial demand, January 21, 2004. See generally Lofton, 423 So.2d 1255.
Finally, we make no determination, as was urged by Sasser at the hearing, regarding
whether his monthly compensation rate may be reduced by attorney fees he must pay
to his attorney. While the Social Security Administration form allows for a
“reduction due to allowable expenses” from the monthly workers’ compensation rate,
whether attorney fees qualify as “allowable expenses” for purposes of calculating the
offset is a matter properly addressed to the Social Security Administration.
DISPOSITION
For the foregoing reasons, we reverse the decision of the workers’
compensation judge and render judgment awarding Tyler Timber, Inc. the La.R.S.
23:1225(A) offset, and we set the offset in the amount of $164.49 per week, for a total
indemnity benefit rate of $130.51 per week. We order this offset to be retroactive to
January 21, 2004. We assess the costs of this appeal equally between the litigants.