An orthopedic surgeon and his office manager are now considered fugitives. The Los Angeles County District Attorney’s office refiled criminal charges against a dozen people accused of being involved in one California’s biggest health fraud schemes, led by orthopedic surgeon Dr. Munir Uwaydah, and his office manager, Wendee Luke. The conspiracy involved paying lawyers and marketers as much as $10,000 per month for illegal patient referrals. Nearly two dozen patients were deceived into having surgeries that they thought were being performed by Dr. Uwaydah, but were actually performed by his physician’s assistant. Many of these surgeries were extremely invasive and entirely unnecessary. Tens of millions of dollars were billed to insurance companies for fraudulent surgeries, prescription medications and fake MRIs based upon falsified medical reports and office visits. The case remains under investigation.
The U.S. Justice Department in Washington and U.S. attorneys in New Orleans and Lafayette, Louisiana, announced that Houston-based Wood Group PSN will pay $9.5 million in penalties for Gulf of Mexico safety violations and pollution from a 2012 offshore platform fire that killed three workers on an offshore platform owned by Black Elk Energy Offshore Operations, LLC. Wood Group will pay $7 million for falsely reporting that safety inspections were performed on Gulf of Mexico facilities over several years, another $1.8 million for discharging oil into the gulf in the November 2012 explosion, and $700,000 for community service projects.
A 2013 report by federal regulators identified a several safety lapses that led to the fatal blast, and the penalties are the result of plea agreements in civil and criminal proceedings playing out in Louisiana.
Claimant, Darline Broussard, filed a workers’ compensation claim against her Employer, Dillard Department Stores, Inc., where she had been working. On April 8, 2014, Claimant slipped on a substance on the floor and fell. She sustained an injury to her back and was advised by her treating physician to remain off of work.
Carrier for Employer began paying Claimant temporary total disability benefits as a result of her injury. Thereafter, Employer’s physician opined that Claimant was capable of sedentary work. Employer offered Claimant a part-time sedentary position. Carrier then converted Claimant’s TTD benefits to supplemental earnings benefits, to which Claimant objected and filed a claim, seeking reinstatement of benefits in addition to attorney’s fees and penalties. In response, Employer and Carrier filed and answer and also requested a preliminary determination hearing pursuant to La. R.S. 23:1201.1(H). Claimant moved to strike the preliminary determination hearing. Following a Rule to Show Cause, the workers’ compensation court denied Claimant’s motion to strike and found that Employer was entitled to a preliminary determination hearing. Claimant sought review of that finding.
Simultaneously, Claimant had also sought to have Employer and Carrier appoint a claims adjuster in the State of Louisiana, pursuant to La. R.S. 23:1161.1. The adjuster who was administering the claim worked out of a Tennessee office and was not licensed in Louisiana. After a hearing on the matter, the workers’ compensation court concluded that it does not have subject matter jurisdiction because such issues are more properly decided upon but the Louisiana Commissioner of Insurance. Claimant seeks a review of this finding as well.
The Louisiana Third Circuit Court of Appeal decided the issues in two independent decisions. First, the Court examined whether the issue of a preliminary determination had been properly decided. Claimant specifically argued that Employer had an affirmative duty, pursuant to La. R.S. 23:1201.1(I)(1), to comply with the notice requirements involving a suspension, modification, or termination of benefits, and to also initially accept the claim as compensable. La. R.S. 23:1201(I)(1) provides: “[a]n employer or payor who has not complied with the requirements set forth in Subsection A though E of this Section or has not initially accepted the claim as compensable, subject to further investigation and subsequent controversial shall not be entitled to a preliminary determination.” The Third Circuit was not persuaded by Claimant’s argument. Rather, it agreed that Employer and Carrier had complied with the statutory prerequisites necessary for a preliminary determination hearing. Even assuming Claimant was correct in her argument that the statute imposes upon Employer and Carrier the addition requirement (as opposed to the alternative requirement) of having to prove they accepted the claim as compensable, the Third Circuit found that voluntary payment of compensation and medical benefits was sufficient as acceptance of the claim. The Court declined to interpret the statute to require an admission of liability in order to qualify as acceptance of the claim. The Third Circuit upheld the workers’ compensation court’s denial of Claimant’s Motion to Strike and thereafter denied Claimant’s writ application.
In a separate proceeding, the Louisiana Third Circuit Court of Appeals granted Claimant’s supervisor writ application and remanded the claim back to the workers’ compensation court for a determination of whether a Louisiana adjuster should be assigned to the claim. Claimant argued that, pursuant to La. R.S. 23:1161.1(A), if a workers’ compensation insurer opts not to maintain a claims office in Louisiana, then the insurer must retain a licensed Louisiana claims adjuster. Further, Claimant argued that the workers’ compensation court would not be infringing on the insurance commissioner’s authority, under La.R.S. 22:337, to suspend or revoke a foreign insurer’s certification of authority. The Court looked to the Louisiana Fifth Circuit Court of Appeals for guidance: “LSA-R.S. 22:337 provides a proper basis for the trial court’s conclusion that LSA-R.S. 23:1161.1 requires the insurer to either establish and maintain a claims office within the state of Louisiana or retain a Louisiana licensed claims adjuster.” Duarte-Ortega v. Disaster Recovery Services, L.L.C., 12-883 (La.App. 5 Cir. 12/27/12), 118 S.3d 1126. The Court held that the workers’ compensation court erred in denying Claimant’s motion to compel Employer and Carrier to retain a claims adjuster in Louisiana and that it had jurisdiction over the matter.
Broussard v. Dillard Department Stores, Inc.
On February 17, 2017, different panels of the Louisiana Second Circuit Court of Appeal decided two separate appeals involving the same injured concrete pump truck operator, Hurchel Kendrick (“Kendrick”), and his employer, Hercules Concrete Pumping Services of Mississippi, Inc. (“Hercules”).
One appeal was in connection with a workers’ compensation claim that was filed after Kendrick fell from his work truck on January 28, 2015 and alleged injuries to his back and right knee. Kendrick began receiving indemnity and medical benefits as a result. In the course of his medical treatment, a lumbar MRI and total knee replacement were performed. Kendrick’s treating neurosurgeon also requested authorization from Hercules’ workers’ compensation carrier to have a CT myelogram with 3-D reconstruction. The request for authorization was denied by the carrier as not “medically necessary.” This decision was appealed to the Medical Director, a physician appointed by the Office of Workers’ Compensation Administration to settle disputes, and again denied. The denial was also reviewed by a Workers’ Compensation Judge (“WCJ”) who affirmed the Medical Director’s denial, finding that Kendrick failed to show that the testing was medically necessary.
On appeal to the Second Circuit, the court agreed with the determinations below that Kendrick failed to prove the testing was medically necessary. However, it concluded that a variance from the Medical Treatment Guidelines might be appropriate and remanded the case to allow Kendrick the opportunity to request a variance and provide scientific medical evidence as to why the variance was necessary.
Kendrick’s other Second Circuit appeal involved a related tort claim that he filed against Hercules for wrongful termination. Kendrick had a prior workers’ compensation claim from 2013 that was in the process of being settled. A lump-sum settlement was agreed to by the parties and was set for hearing to be approved by the Office of Workers’ Compensation on January 29, 2015, the day after the January 28, 2015 work-related injury at issue in Kendrick’s other appeal. As part of the settlement of the 2013 claim, which was approved by a WCJ, Kendrick agreed to voluntarily resign from his employment. Hercules subsequently told Kendrick that his service with the company would no longer be needed.
Kendrick filed a tort suit for wrongful termination, alleging he was fired for exercising his right to workers’ compensation. Hercules moved for summary judgment, arguing that Kendrick had no wrongful termination claim because he had voluntarily resigned as part of his settlement. Kendrick opposed the motion, arguing that voluntary resignation was never part of the negotiation of his settlement. The trial court found that Kendrick was bound by the terms of the settlement and was unable to pursue a claim of wrongful termination.
On appeal, the Second Circuit concluded that the case could not be disposed of on summary judgment. The court noted that, standing alone, the agreement would justify the termination, but the agreement was not the stated reason that Kendrick was terminated. Rather, Kendrick testified that Hercules told him he would be let go if he filed another workers’ compensation claim. Accordingly, there was a dispute of fact as to the explanation for the termination. The trial court’s decision was reversed and remanded for further proceedings.
Kendrick v. Hercules Concrete Pumping Services of Mississippi, Inc.
Kendrick v. Hercules Concrete Pumping Services, Inc.
Earlier this month, the Third Circuit Court of Appeals had the opportunity to see a man about a horse [and alleged fraud.] The Court’s unanimous opinion in Charlie Johnson v. A.W. Chesterton, et al. centered around an appeal from the Office of Workers’ Compensation Court in Calcasieu Parish. In that matter, Employer, Chesterton, and its workers’ compensation insurance carrier, CNA, terminated benefits to Claimant, Charlie Johnson, based upon Johnson’s failure to note the proceeds from the sale of a horse on his monthly 1020 forms. Chesterton alleged that Johnson’s failure to note the proceeds from the sale as income constituted, fraud pursuant to La. R.S. 23:1208. Chesterton averred that in preparing his monthly 1020 form, Johnson marked “No” next to the following questions:
- For the period covered in this report, did you receive salary, wage, sales commission, or payment, including cash of any kind?
- For the period involved in this report were you self-employed or involved in any business enterprise? These include but are not limited to farming, sales work, operating a business (even if the business lost money), child care, yard work, mechanical work, or any type of family business?
The record shows that Chesterton discovered that in December of 2014, Johnson had sold a horse for $3,500.00. Subsequently, Chesterton terminated Johnson’s benefits on the basis that the sale was part of a business enterprise, and therefore, Johnson had committed fraud when he denied being a part of any business on his 1020 forms. Following the termination of his benefits, Johnson instituted the proceedings which lead to the appeal.
In the lower court proceeding, judgment was entered in favor of Johnson because it was determined that Chesterton failed to carry its burden of proof to support a fraud defense. As a result, Johnson was awarded supplemental benefits at a zero rate of earnings, awarded penalties in the amount of $8,000.00 for the termination of benefits, as well as attorney’s fees in the amount of $10,000.00.
The Court cited the Louisiana Supreme Court’s decision in Resweber v. Haroil Constr. Co., 94–2708 (La. 9/5/95), 660 So.2d 7,16, which held that in order for false representations in workers’ compensation proceedings to be considered fraud, the false statements must be more than inadvertent or inconsequential. This statement must be made willfully or for the purpose of obtaining benefits, and an inadvertent or inconsequential false statement should not result in the forfeiture of benefits.
The Court went on to note that a decision to impose or deny forfeiture under La. R.S. 23:1208 is a factual finding and would not be disturbed on appeal absent manifest error. Brooks v. Madison Parish Serv. Dist. Hosp., 41,957 (La.App. 2 Cir. 3/7/07), 954 So.2d 207, writ denied, 2007–0720 (La. 5/18/07), 957 So.2d 155. To reverse a fact finder’s determination under the standard of review, an appellate court must undertake a two part inquiry: (i) the court must find from the record that a reasonable factual basis does not exist for the finding of the trier of fact; and (ii) the court must further determine the record establishes the findings clearly wrong. Stobart v. State, Dep’t of Transp. and Dev., 617 So.2d 880 (La.1993). Holding that “when there are two permissible views of the evidence, the workers’ compensation judge’s choice between them can never be manifestly erroneous or clearly wrong,” Id., the Court affirmed that its job was not to determine whether or not the trier of fact was right or wrong, but to determine whether the fact finder’s conclusion was a reasonable one. That is, if the factual findings are reasonable in light of the record reviewed in its entirety, a reviewing court may not reverse, even if convinced that if it had been sitting as a trier of fact, it would have weighed the evidence differently. Id.
Here, the Court reviewed trial testimony from Johnson that he had owned horses his entire life, and had done so as a hobby, even while employed by Chesterton. Johnson admitted that he did sell a horse in 2014, but stated that the sale of the horse, which he had owned for 19 years, was also part of his hobby, rather than a business (though he did admit to using the horse as a tax write off.) Testimony of a Carrier’s representative, who conceded that if Mr. Johnson had held a garage sale and sold personal property, the proceeds from that garage sale would not be material to his worker’s compensation claim, was also factored into the decision.
Ultimately, it was determined that there existed a reasonable factual basis for the workers’ compensation judge’s finding that Chesterton failed to carry its burden of proof with regard to the fraud allegation. Concluding their review of the record, the Court found that Johnson had not willfully made false statements for the purposes of obtaining workers’ compensation benefits, that there was no manifest error in the worker’s compensation judge’s findings, and a determination that the sale of the horse was similar to the sale of a personal asset, and thus immaterial to any worker’s compensation proceedings, was deemed reasonable under the facts.
In addressing whether or not Johnson’s counsel was entitled to penalties and attorney’s fees the Court found that there was no error in such an award. It was noted that “an increase in [attorney] fees is awarded on appeal when the defendant appeals, obtains no relief, and the appeal is necessitated more work on the part of the plaintiff’s attorney, provided that the plaintiff requests such an increase.” McKelvey v. City of Dequincy, 07–604, pp. 11–12 (La.App. 3 Cir. 11/14/07), 970 So.2d 682, 690. Because Johnson’s counsel had been forced to do more work, and had requested additional attorney’s fees, the award of additional fees was proper.
Based upon the foregoing, the decision of the workers’ compensation judge was affirmed as amended. The Court amended the judgment in favor of Mr. Johnson to award an additional $2,500.00 in attorney’s fees with costs of the appeal assessed against Chesterton.
Chesterton v. Johnson