Shirley DUFOUR v. RIVER CITY MANAGEMENT, INC., 970 So. 2d 1233

EZELL, Judge. |, After the claimant and the insurer in this workers’ compensation case executed a full and final settlement of the dispute, the claimant’s attorney filed several motions, all of which were found to be without merit. Consequently, the workers’ compensation judge determined the attorney had filed frivolous pleadings and assessed him with a $500.00 attorney fee to be paid to the Defendants. When the fee was not paid timely, the Defendants filed a motion for penalties under La.R.S. 23:1201(

G) which was granted by the workers’ compensation judge, and the attorney was assessed with a $3,000.00 penalty and $2,000.00 in attorney fees, in addition to the original $500.00 judgment. The attorney, George Flournoy, appeals. For the following reasons, we reverse. The facts of this case were set forth in a previous opinion of this court wherein we denied the Defendants’ motion to dismiss Flournoy’s appeal. In Dufour v.

River City Management, 06-1408, pp. 1-2 (La.App. 3 Cir. 1/17/07), 947 So.2d 234, we explained: [T]he plaintiff filed a disputed claim for workers’ compensation against her former employer, River City Management. On August 22, 2005, the Office of Workers’ Compensation (OWC) approved a compromise settlement between the parties. On November 17, 2005, the plaintiff filed another disputed claim for workers’ compensation against River City Management, claiming that mileage expenses had not been reimbursed.

The defendants filed a Motion for Sanctions, stating that the full and final settlement of all the plaintiffs workers’ compensation claims was executed by the OWC on August 22, 2005. The Motion for Sanctions sought to have the plaintiffs current workers’ compensation claim dismissed with prejudice and attorney fees awarded. Following a hearing on January 9, 2006, the OWC granted the motion, assessed $500.00 in attorney fees, and dismissed the plaintiffs claim with prejudice. The OWC signed the written judgment on January 11, 2006.

On July 14, 2006, the defendants filed a Motion for Penalties and a Motion for Expedited Hearing, claiming that they had not received the court ordered attorney fees. I ¿The OWC held a hearing on August 7, 2006 and granted the Motion for Penalties, ordering the plaintiffs attorney to pay the previous $500.00 assessed in attorney fees, as well as $3,000.00 [szc ] in attorney fees, and a penalty of $3,000.00 for failure to pay the previous judgment. The workers’ compensation judge signed the written judgment on- August 18, 2006. Notice of the judgment was sent to the plaintiff on August 18, 2006.

The plaintiff filed a Motion and Order for New Trial which was denied by OWC on August 25, 2006. In the present appeal, Flournoy argues that the provisions of La.R.S. 23:1201(

G) do not apply to a sanction against an attorney. He contends that the penalties and attorney fees under the Workers’ Compensation Act apply only to unpaid judgments of compensation benefits. By contrast, the Defendants contend that the provisions apply to any unpaid judgment in a workers’ compensation case. The pertinent judgment in this case is the $500.00 assessment made against the Appellant under the authority of La.Code Civ.P. art. 863(D). A workers’ compensation judge is authorized to impose sanctions under

Article 863. See Clophus v. Taco Bell Corp./Hot ‘N’ Now, Inc., 98-1794 (La.App. 3 Cir. 3/31/99), 732 So.2d 692. There is nothing in the jurisprudence to indicate, and indeed the Appellant does not suggest, that an

Article 863 sanction imposed by a workers’ compensation judge is somehow unenforceable or entitled to less weight than any other judgment of a workers’ compensation judge. In this case, the judgment imposing the sanction was not appealed, and it is now final. The validity of that judgment is not before us. To the contrary, what is before us is the sanction imposed on the Appellant for failing to pay the original sanction. The workers’ compensation judge relied on the provisions of the Workers’ Compensation Act to penalize the failure to pay a judgment of his court. Louisiana Revised Statutes 23:1201(

G) provides as follows: If any award payable under the terms of a final, nonappealable judgment is not paid within thirty days after it becomes due, there shall be added to such award an amount equal to twenty-four percent thereof | aor one hundred dollars per day together with reasonable attorney fees, for each calendar day after thirty days it remains unpaid, whichever is greater, which shall be paid at the same time as, and in addition to, such award, unless such nonpayment results from conditions over which the employer had no control.

No amount paid as a penalty under this Subsection shall be included in any formula utilized to establish premium rates for workers’ compensation insurance. The total one hundred dollar per calendar day penalty provided for in this Subsection shall not exceed three thousand dollars in the aggregate. “Awards of attorney fees in workers’ compensation cases are essentially penal in nature, and are intended to deter indifference and undesirable conduct by employers and insurers toward injured employees.” Smith v. Quarles Drilling Co., 04-179, p. 6 (La.10/29/04), 885 So.2d 562, 566.

Penal statutes are to be strictly construed even though the benefits provisions of the Workers’ Compensation Act is to be liberally construed. Id. Louisiana Revised Statutes 23:1201(

G) is a penal statute which must be strictly construed. Id. While La.R.S. 23:1201(

G) does apply to “any award,” it further provides that an “employer” is not responsible for the penalties when nonpayment was due to something the employer had no control over. Clearly, the statute, when read as a whole, was intended to apply to nonpayment of a judgment by employers and their insurers. Further evidence is found in the fact that La.R.S. 23:1201(

G) also provides that amounts paid as penalties and attorney fees pursuant to the statute cannot be used to determine workers’ compensation premiums. This is because the scheme of penalties and attorney fees in the workers’ compensation arena are directed at employers and their insurers. Other means were available to enforce the judgment. For these reasons, the judgment of the workers’ compensation court is reversed. Costs of this appeal are assessed to River City Management, Inc. and the Louisiana Workers’ Compensation Corporation. REVERSED. DECUIR, J., dissents and assigns written reasons.