Smith v. Quarles Drilling Co.

885 So. 2d 562, 2004 La. LEXIS 3157, 2004 WL 2416155
Supreme Court of Louisiana·Decided October 29, 2004·No. 2004-C-0179·Published·Cited by 38 cases

Opinion

885 So.2d 562 (2004)

Lester SMITH
v.
QUARLES DRILLING COMPANY.

No. 2004-C-0179.

Supreme Court of Louisiana.

October 29, 2004.

*563 Degan, Blanchard & Nash, Sidney W. Degan, III, Foster P. Nash, III, Travis L. Bourgeois, New Orleans, for Applicant.

Miller & Miller, Michael B. Miller, Crowley, for Respondent.

WEIMER, Justice.

This matter is before us for consideration of whether judicial interest[1] automatically attaches to attorney fees awarded in a workers' compensation judgment. For reasons that follow, we reverse the court of appeal opinion, reinstate the judgment rendered by the workers' compensation judge, and hold judicial interest does not accrue on an attorney fee award because interest was not "prayed for" or "allowed by law." LSA-C.C.P. art. 1921.

FACTS AND PROCEDURAL HISTORY

Lester Smith was injured on the job on November 4, 1994. He filed a disputed *564 claim seeking compensation benefits, penalties, and attorney fees. Following extensive litigation, Smith obtained an award for compensation benefits. In addition, the employer was ordered to pay $2,000 in penalties for failure to pay benefits promptly, $2,000 in penalties for failure to provide medical treatment promptly, and $6,000 in attorney fees. The judgment was silent with regard to interest. Smith appealed, contesting only the amount awarded for attorney fees. The court of appeal increased the award of attorney fees from $6,000 to $29,000. Smith v. Quarles Drilling Company, 01-251 (La.App. 3 Cir 10/3/01), 801 So.2d 1128.[2] That judgment was also silent as to interest. Both parties filed for a writ of certiorari to this court; both applications were denied. Smith v. Quarles Drilling Company, 02-0080, 02-0123 (La.3/28/02), 811 So.2d 943, 945.

The employer paid the additional award of attorney fees on May 7, 2002. On May 9, 2002, Smith filed a motion seeking additional penalties and attorney fees alleging the amount paid did not include judicial interest accrued on the previously paid attorney fees. Without payment of the judicial interest accrued on the attorney fee award, Smith alleged the judgment was not fully paid within thirty days of becoming final. Smith argued judicial interest automatically attaches to an award for attorney fees whether stated in the judgment or not. He further argued the "award payable" under the terms of the final judgment was not paid within thirty days as provided by LSA-R.S. 23:1201(G), thus entitling him to additional penalties and attorney fees.

Quarles Drilling Company (Quarles) opposed the motion, arguing that neither the Office of Workers' Compensation judgment nor the court of appeal judgment provided for interest. Quarles filed a motion for sanctions. Following a hearing, the workers' compensation judge denied Smith's motion for additional penalties and attorney fees and denied Quarles' motion for sanctions. Both parties appealed; however, Quarles dismissed its appeal.

The court of appeal reversed the workers' compensation judgment, determined Smith was owed interest on the attorney fee award, and pursuant to LSA-R.S. 23:1201(G) awarded Smith an additional $3,000 in penalties and $2,500 in attorney fees. Smith v. Quarles Drilling Company, 03-795 (La.App. 3 Cir. 12/17/03), 865 So.2d 123. Quarles applied for a writ of certiorari to this court which was granted. Smith v. Quarles Drilling Company, 04-0179 (La.4/2/04), 869 So.2d 864.

DISCUSSION

Quarles advances three arguments before this court — the court of appeal lacked jurisdiction to amend a final judgment to add an award for interest; the court of appeal erred in holding interest automatically attaches to an award for penalties and attorney fees as a matter of law; and the court of appeal erred in failing to apply Fallen v. New Orleans Police Department, 01-0544 (La.App. 4 Cir. 2/6/02) 812 So.2d 692, writ denied, 02-0702 (La.5/3/02), 815 So.2d 823, to the facts of this case.

We begin by examining the holding of the court of appeal. The single issue on appeal was whether the workers' compensation judge erred in failing to award penalties and attorney fees pursuant to LSA-R.S. 23:1201(G)[3] for the failure of

*565 Quarles to pay the "award payable," including interest on attorney fees, within thirty days after it became due. Smith, relying on George v. Guillory, XXXX-XXXXX(La.App. 3 Cir. 11/2/00), 776 So.2d 1200, argued that interest was due on the increase in the attorney fees awarded by the court of appeal in the October 2001 judgment from the date of the judgment until paid. His contention was that interest automatically attached to an award for penalties and attorney fees whether prayed for in the petition or provided by judgment. Smith further argued the payment made by Quarles on May 7, 2002, did not include interest on the attorney fee award; therefore, the payment did not satisfy the entirety of the award payable and he was entitled to an additional penalty and attorney fee.

Quarles argued the George case was wrongly decided, citing Sharbono v. Steve Lang & Son Loggers, 97-0110 (La.7/1/97), 696 So.2d 1382. In Sharbono, this court was called upon to determine at which point an award for interest on attorney fees begins to accrue — from the date of judicial demand or from the date of the judgment. The Sharbono court concluded interest was due from the date of the judgment awarding interest.

The court of appeal agreed with Smith. Relying on its opinion in George wherein the court cited Kortz v. Colt Energy Services, Inc., 97-159 (La.App. 5 Cir. 7/29/97), 698 So.2d 460,[4] the court of appeal found that legal interest is mandatory under the workers' compensation statute. The George case also cited Crooks v. Town of Ball, 94-466 (La.App. 3 Cir. 11/2/94), 649 So.2d 597, for the proposition that interest automatically attaches whether prayed for in the petition or mentioned in the judgment. The court acknowledged that judicial interest on attorney fees is due from the date of the judgment in workers' compensation cases. Sharbono, 97-0110 at 10, 696 So.2d at 1388-89.

Following the reasoning of George, Kortz, and Crooks, the court of appeal found that interest on the award for attorney fees in this case was mandatory and automatic although not prayed for and that Quarles failed to pay that interest. The court further reasoned the tender of $23,000 on May 7, 2002, did not satisfy the judgment because the payment did not include interest on that amount from the date of the judgment. The court of appeal held plaintiff was not only entitled to interest on the award for the additional attorney fees, but also an award for penalties and attorney fees provided under the mandatory provision of LSA-R.S. 23:1201(G).

We disagree with the reasoning of the court of appeal. In order to obtain *566 interest on an award, a litigant must pray for interest unless interest is allowed by law. Louisiana Code of Civil Procedure article 1921 provides: "Interest in the judgment shall be awarded as prayed for or as allowed by law."[5] The "as allowed by law" language has been frequently interpreted to refer to judicial interest in tort cases. See LSA-R.S. 13:4203.[6]

Similarly, the workers' compensation law provides that an award for compensation carries with it an award for interest due from the date of each installment payment. LSA-R.S. 23:1201.3(A).[7] Thus, under the statute,

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Smith v. Quarles Drilling Co., 885 So. 2d 562, 2004 La. LEXIS 3157, 2004 WL 2416155 (La. 2004).

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