Richard McDonald v. City of Bastrop

• Court: Louisiana Court of Appeal
• Decided: September 25, 2019
• Docket: 52,911-WCA
• Status: Published

Opinion

Judgment rendered September 25, 2019. Application for rehearing may be filed within the delay allowed by Art. 2166, La. C.C.P.

No. 52,911-WCA

COURT OF APPEAL SECOND CIRCUIT STATE OF LOUISIANA

*****

RICHARD McDONALD Plaintiff-Appellee

versus

CITY OF BASTROP Defendant-Appellant

Appealed from the Office of Workers’ Compensation, District 1-E Parish of Ouachita, Louisiana Trial Court No. 16-06248

Brenza Irving-Jones Workers’ Compensation Judge

HUDSON, POTTS & BERNSTEIN, Counsel for Appellant L.L.P. By: Johnny R. Huckabay, II L. Casey Auttonberry

LAW OFFICES OF STREET & Counsel for Appellee STREET By: C. Daniel Street

Before WILLIAMS, PITMAN, and McCALLUM, JJ.

McCALLUM, J., concurs with written reasons. PITMAN, J.

The City of Bastrop (“the City”) appeals the judgment of the Office of

Workers’ Compensation (“OWC”) judge, which accelerated payment of an

award of supplemental earnings benefits (“SEBs”) in favor of Plaintiff

Richard McDonald. For the following reasons, we reverse.

FACTS

This court rendered a judgment in McDonald v. City of Bastrop,

52,366 (La. App. 2 Cir. 9/26/18), 254 So. 3d 1285, upholding the OWC’s

decision awarding Plaintiff SEBs. The facts, as stated in the opinion, are

that Plaintiff was employed by the City as a fire captain. He was injured in

an accident on April 21, 2013, at a house fire in Bastrop, Louisiana, when a

fire hose he was pulling over his shoulder got caught and jerked him,

injuring his neck and shoulder. He consulted a neurosurgeon and had

surgery on his neck. He was released to work, but with weight-lifting

restrictions. He had indicated that he wanted to take part in the Deferred

Retirement Option Program and intended to continue working in whatever

capacity he could. He began receiving workers’ compensation benefits in

September 2013; but in September 2016, he filed a disputed claim for

compensation, Form 1008, against the City and claimed his SEBs had been

wrongfully discontinued based on a false claim of retirement or voluntary

withdrawal from the workforce.

His complaint was heard by the OWC judge, who ruled in his favor

and ordered the City to pay him $1,303.76 per month beginning August 11,

2016, and to continue paying in accordance with the law. The City appealed

to this court, which, in the appeal mentioned above, affirmed the judgment of the OWC. No review of the decision was sought with the Louisiana

Supreme Court, and the judgment became final on October 26, 2018.

The City failed to pay the judgment due to Plaintiff; and because more

than 30 days had elapsed since the judgment became final on October 26,

2018, Plaintiff filed a pleading entitled “Motion for Penalties and Attorney

Fees and for Acceleration of Judgment,” alleging that under the provisions

of La. R.S. 23:1201(G) he was entitled to recover a penalty of 24 percent of

the amount due under the judgment, together with attorney fees to be fixed

by the court. He also alleged that because more than six successive weekly

payments had not been paid, he was entitled to have the judgment

accelerated under La. R.S. 23:1333. He further alleged that he was entitled

to recover the judgment amount through December 29, 2018, or 124 weeks

at $300.87 per week, which equaled $37,907.88, with legal interest from the

due date of each payment until paid, plus a penalty of 24 percent of that

amount. He further alleged that after calculation of the judgment through

December 2018, the amount of SEBs remaining of the ten years of payments

was $67,394.88, which represents 224 weeks at $300.87 per week.

After the motion was filed, the City issued a check on January 16,

2019, for $50,791.20, which was the amount of the judgment with interest,

plus the 24 percent penalty and attorney fees covering the period between

August 12, 2016, and January 16, 2019. The monthly SEBs were resumed.

The hearing on the motion to accelerate was held on February 11, 2019.

Plaintiff’s attorney proved that he had made two written reminders to the

City’s attorney, prior to the filing of the motion, of the need to pay the SEBs.

The City argued that acceleration was improper since the oversight in

payment was not willful and, therefore, was not an appropriate remedy under 2 the statute and jurisprudence. The City further argued that the failure to pay

was caused by miscommunication between its attorney and the City after

this court’s judgment was rendered and while the attorney awaited

instructions regarding seeking writs to the Louisiana Supreme Court on the

appellate decision. They termed this miscommunication an “administrative

error,” and alleged that during this time period “several key personnel for the

client [were] out of the office and it slipped through the cracks.” As soon as

Plaintiff’s motion was filed, the City immediately paid the judgment due at

that time, with interest and penalties, and resumed the payment of the SEBs.

For these reasons the City claimed the failure to pay was not willful.

At the hearing on the motion, the OWC judge stated that she had

considered the legal definition of “willful” and found several, including

“preceding [sic] from a conscious motion of the will, intending the result

which comes to pass, or with the specific intent to fail to do something.”

Another definition of “willful” was “[I]ndifferent to the natural

consequences.” The OWC judge found there was specific intent based upon

the failure to pay itself and also found that the person who failed to authorize

payment of the judgment was indifferent to the natural consequences and

effects of La. R.S. 23:1333 and the Workers’ Compensation Act. For these

reasons, the motion to accelerate was granted, but the City was given credit

for the payment it had already made. The judgment stated that there was

judgment in favor of Plaintiff and against the City granting Plaintiff’s

motion for acceleration and awarding him $67,394.88, representing 224

weeks of SEBs.

The City appeals this judgment granting the motion to accelerate the

payments for its failure to pay in a timely fashion. 3 DISCUSSION

The City argues that the penalty provided in La. R.S. 23:1333, by

which compensation benefits are accelerated upon failure of the employer to

pay six successive installments, cannot be invoked unless the failure to pay

by the employer is willful. It reiterates its arguments from the OWC hearing

that there was no willful refusal to pay, just an unfortunate

miscommunication. It contends that the statute was not designed to punish

the employer, but to protect an employee against the insolvency or

approaching insolvency of an uninsured employer by granting the employee

the right to obtain a judgment for the employer’s entire accelerated

compensation liability. Its immediate payment of the amount due, along

with penalties and attorney fees, without court involvement, shows there was

no willful refusal. This is a case of mere oversight, and it clearly did not

intend the result.

For these reasons, the City argues that Plaintiff failed to meet his

burden of proof that its failure to timely pay the six successive installments

was willful, and the OWC judge erred in accelerating the payments.

Plaintiff argues that he was without payment of SEBs for years while

his case was pending at the OWC and then at this court. In the meantime, he

was still fighting with the City to get treatment and an MRI for his neck

injury. He states that after the judgment of this court became final in

October 2018, his attorney sent two letters to the City reminding it that the

payments to him were due and were to be sent to his attorney’s office. The

City failed to respond. It was not until he filed his motion to accelerate that

the City finally took action—some 12 weeks after the judgment became

final. 4 Plaintiff further argues that the decision of the OWC hearing officer is

reviewed under the manifest error/clearly wrong standard; and, if the

decision is supported by evidence in the record, it cannot be manifestly

erroneous or clearly wrong. He contends that review of this matter will

show that the decision of the OWC judge is backed by solid evidence and

that the City produced no evidence at the hearing.

Plaintiff also argues that the two reminders to the City that his

payments were due convinced the OWC judge that the City’s failure to pay

was willful. The fact that his attorney was communicating with the City

regarding ongoing medical problems indicates that someone at the City was

handling his case; therefore, it is unreasonable to think that for 12 weeks

“key personnel” at the City were unable to make the payments due to him

after the judgment became final. Further, he contends that the City’s only

evidence allegedly showing its failure to pay was not willful was a City

employee affidavit attached to a memorandum stating that the failure to pay

was due to an oversight rather than willful.

La. R.S. 23:1333(A) states as follows:

If the employer against whom an award awarding compensation has been rendered becomes insolvent or fails to pay six successive installments as they become due, the installments not yet payable under the award shall immediately become due and exigible and the award shall become executory for the whole amount; but if the employee or his dependent is adequately protected by insurance and receives payments thereunder this right shall not accrue.

In Dyke v. Time Warner Cable, 42,216 (La. App. 2 Cir. 6/27/07),

961 So. 2d 602, this court stated that four statutory elements must be

satisfied prior to accelerating a prior award of weekly benefits. They

include: 1) an “award awarding compensation” against the employer,

5 2) insolvency or failure to pay six successive installments as they become

due, 3) installments not yet payable under the award, and 4) the employee is

not adequately protected by insurance and receiving payments thereunder.

Citing Atwood v. Ewing Timber, Inc., 36,732 (La. App. 2 Cir.1/29/03),

836 So. 2d 1199, writ denied, 03-0888 (La. 5/16/03), 843 So. 2d 1134.

Because La. R.S. 23:1333 imposes a very harsh penalty and because

forfeitures are not favored in the law, jurisprudential interpretation of the

statute has added two more requirements which must be met before the

penalty can be invoked. Mason v. CCC Express, Inc., 32,759 (La. App.

2 Cir. 3/1/00), 754 So. 2d 352, writ granted, 00-0918 (La. 6/16/00),

763 So. 2d 610. Those requirements include a showing that the employer’s

failure to pay the installments was a willful refusal to pay and that the

employee made demand on the employer for past due payments. Id.

In Mason v. CCC Express, Inc., supra, this court held that the mere

context of willful behavior does not relieve the petitioner of first making a

demand upon the employer. An allegation of willful failure to pay under the

statute did not result in a waiver of demand for the payment. The

requirement of the demand is not just to inform the employer of its

nonpayment, but is also meant to put the defendant on notice and provide an

opportunity for it to litigate the issue prior to a motion to accelerate.

Therefore, without such a demand, the acceleration penalty could not be

invoked.

Louisiana courts have tempered the harshness of the forfeiture

penalty found in La. R.S. 23:1333. Dyke, supra. It is the claimant’s burden

to prove the willful withholding of benefits by the employer and to

demonstrate that notice of such delinquency was given in the form of a 6 demand for payment. Id. The two are related because if the employer

ignores the notice and continues in its failure to pay benefits ordered under a

prior court award, the willfulness of the delinquency is indicated and

eliminates the possibility of a negligent failure to pay. Id.

Dyke, supra, is instructive on the issue of the petitioner’s ability to

invoke the acceleration penalty when he fails to make a demand upon the

employer. The case is also instructive in regard to timing of payment and

when it might still be found to have been made in good faith. In Dyke, the

parties began to negotiate payments after the appeal delay had run, even

though eight weeks had passed since the judgment and payments were made

in full prior to institution of the lawsuit. This court found the actions in

payment were proof of good faith by the employer, not a willful refusal to

pay.

In the case at bar, the City’s attorney stated that his client’s failure to

pay was a result of negligence and was not intentional in the normal sense of

the word. Plaintiff’s attorney sent the City “reminders” that his client’s

judgment had not been paid, but whether these reminders qualify as

demands is an issue we need not reach. When Plaintiff filed his motion to

accelerate the payments, the City immediately responded by paying the

amount due with penalties and attorney fees, as calculated by Plaintiff’s

attorney, and it also began paying the SEBs. These actions indicate that the

City was not willful in its actions, but simply grossly negligent.

With regard to the assessment of costs of this appeal, La. C.C.P.

art. 1920 states that unless the judgment provides otherwise, costs shall be

paid by the party cast; however, it also states, except as otherwise provided

by law, that the court may render judgment for costs, or any part thereof, 7 against any party, as it may consider equitable. See Commodore v. City of

New Orleans, 19-0127 (La. App. 4 Cir. 6/20/19), 275 So. 3d 457. Thus, it is

within the discretion of the trial court, and this court, to assess costs against

the parties in an equitable manner.

In this case, we find it inequitable for the Plaintiff to have to pay the

City’s cost of appeal when the ruling was reversed only because the law is

amorphous or subject to broad interpretation by the courts. For that reason,

all costs will be assessed to the City of Bastrop in accordance with law. La.

C.C.P. art. 1920.

CONCLUSION

For the foregoing reasons, we find that acceleration of the payments is

a remedy not favored by the courts and the judgment of the Office of

Workers’ Compensation judge in favor of Plaintiff Richard McDonald and

against the City of Bastrop accelerating the payments is hereby reversed.

All costs of the appeal are assessed to Defendant/Appellant, the City of

Bastrop.

REVERSED.

8 McCALLUM, J., concurring.

The majority opinion astutely observes that “the law is amorphous or

subject to broad interpretation by the courts,” as concerns the forfeiture

penalty provision of La. R. S. 23:1333. Indeed, a survey of the applicable

cases on the issue reveals a patchwork approach that may appear to be more

a product of improvisation than deliberate planning. This state of affairs

creates no mere inconvenience or talking point for legal academicians.

Practical and substantive implications are a result for citizens and

practitioners alike.

Employees, employers, and those who counsel them are without clear

guidance to direct them in their relationships with each other. In this area of

the law, they are left to something approaching divination in any effort to

arrange and govern their affairs. The economic viability of our state

depends, in no small measure, on the ability of employees and employers to

understand the mutual, corresponding rights and responsibilities they enjoy

and owe. This may seem to be a small and incidental point in the broader

spectrum of employment law, but one may rest assured that the parties

involved in this specific case give great importance to the matter under

consideration.

The majority opinion appropriately pretermits as unnecessary a

discussion of whether the “reminders” given by Petitioner were sufficient for

triggering the forfeiture penalty of La. R. S. 23:1333. Nonetheless, if one

were to speculate, it is unlikely that these reminders, arising incidentally

during the course of settlement negotiations, would be adequate for the

imposition of the punitive provisions of the statute in light of judicial

pronouncements requiring a “demand.” Even had this Court made such a 1 determination it would offer no dependable basis for future actions or

decisions because the weight of one court’s announced rule is dependent on

another court’s willingness to follow it.

The majority opinion is also correct in pointing out that

“jurisprudential interpretation of the statute has added two more

requirements which must be met before the penalty can be invoked.” Absent

legislative intervention, the courts of our state will be obliged to continue to

fashion case-by-case remedies as they arise. This in turn subverts a

foundational precept in the civil law tradition of this state: laws should be

made by the people through their elected legislators and not by judges.

Contrary to the common law, our civilian tradition, often castigated by those

not familiar with it, vouchsafes the right of citizens to write the law and

delegates to judges the more limited responsibility of applying the written

law to the facts of particular cases. To do otherwise would transform our

civil law tradition into one that is common.