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Shelton v. Smitty's Supply, Inc.

Court of Appeals of Louisiana, First Circuit

June 12, 2018

LANCE SHELTON
v.
SMITTY'S SUPPLY, INC.

          ON APPEAL FROM THE OFFICE OF WORKERS' COMPENSATION ADMINISTRATION, DISTRICT 6, NUMBER 16-01800 STATE OF LOUISIANA HONORABLE GWENDOLYN F. THOMPSON, WORKERS' COMPENSATION JUDGE

          Craig B. Mitchell Kiana M. Mitchell Michael S. Rodriguez David M. Williams New Orleans, Louisiana Counsel for Claimant -Appellee Lance Shelton

          Frank R. Whiteley Robert J. May Megan M. Richardson New Orleans, Louisiana Counsel for Defendant -Appellant Smitty's Supply, Inc.

          BEFORE: WHIPPLE, C.J., McDONALD, AND CHUTZ, JJ.

          CHUTZ, J.

         In this workers' compensation case, defendant-appellant, Smitty's Supply, Inc. (Smitty's), appeals a judgment awarding claimant-appellee, Lance Shelton, total temporary disability (TTD) benefits, medical expenses, penalties, and attorney fees. For the following reasons, we reverse in part, amend in part, and affirm in part.

         FACTUAL AND PROCEDURAL BACKGROUND

         Mr. Shelton began working at Smitty's, a packaging facility for automotive products and oils, on a prison work-release program in 2009. Following his release from incarceration, he continued working at Smitty's and was promoted to "line leader." In that position, he was responsible for maintaining proper production and quality on his production line. The production line overseen by Mr. Shelton consisted of a conveyer belt carrying empty bottles forward to be filled with oil products. The filled bottles were then carried under a hopper through which bottle caps were automatically fed and mechanically placed on the bottles by a "cap machine." A metal ladder with hand rails was located next to the hopper. In order to periodically refill the hopper, an employee was required to climb the ladder with a large box of bottle caps and dump them into the top of the hopper. Mr. Shelton testified the ladder was also used to check on the caps, which occasionally became "jammed" and had to be pushed down in order to flow freely.

         On February 17, 2016, Mr. Shelton was descending the ladder when he missed a step and fell to the floor. The accident was recorded by a surveillance camera.[1] Mr. Shelton testified at trial he had climbed the ladder either to dump caps into the hopper or to check whether it needed to be refilled or had any obstructions. Shortly after the accident, he reported the fall to his supervisor and completed a written accident report. In the report, Mr. Shelton described the accident as follows: "Come Down from Stairs dumping caps in capper foot slipped and i [sic] fell on my knees and side." Mr. Shelton completed his shift, but sat down for the remainder of the day while supervising the production line.

         Two days later, on February 19, Mr. Shelton spoke to his supervisor about obtaining medical treatment and was directed by Smitty's personnel to the Amite Rural Health Clinic (ARHC). Mr. Shelton complained of pain in both knees and was diagnosed with sprains in both knees. He was placed on light duty for the next three days. When he returned to ARHC on February 24, he was given a Medrol dose pack and continued on light duty.

         On February 25, Smitty's terminated Mr. Shelton's employment for reasons ostensibly unrelated to the accident. The stated reason was that Mr. Shelton falsified company records on the date of the accident by indicating he made weight checks on the products for the entire shift, which was contradicted by the surveillance video. At trial, Mr. Shelton explained that, although he did sit down for most of the remainder of the shift following his accident, he had tried to keep the production line moving and had one of his subordinates perform the weight checks.

         On March 4, 2016, Mr. Shelton filed a disputed claim for compensation seeking indemnity benefits. He later amended the claim to also request physical therapy and surgery expenses, as well as penalties and attorney fees due to the denial of his claims for indemnity and medical benefits. As his choice of physician, Mr. Shelton designated Dr. Brett Chiasson, an orthopedic surgeon he had seen on two prior visits, approximately seven months earlier, concerning longtime pain (two years) in his left knee. In August 2015, an MRI was performed on Mr. Shelton's knee on Dr. Chiasson's orders. After Dr. Chiasson gave Mr. Shelton an injection in his left knee on August 28, 2015, he did not seek further treatment from Dr. Chiasson until after his February 2016 accident.

         Following the accident, Mr. Shelton was examined by a nurse practitioner in Dr. Chiasson's office on March 11, 2016. Although he complained of bilateral knee pain, he was experiencing more significant pain and mechanical symptoms in his left knee, including difficulty bearing weight, inability to climb stairs, and giving way of his knee. An MRI of Mr. Shelton's left knee taken on March 16 indicated a "possible contusion and degeneration of the ACL with a ganglion cyst and edema noted." On a return visit on March 18, Mr. Shelton reported significant pain "with ambulation" to his left knee. He was given an injection in the left knee and a referral for physical therapy. His right knee continued to improve. Following both office visits, Mr. Shelton's work status was classified as "presently unable to work."

         The request for physical therapy was denied on March 23 by Jim Nowak, an adjuster with Veritas Claims, who was assigned to handle Mr. Shelton's workers' compensation claim. The stated reason for the denial was that "[t]he request, or a portion thereof, is not related to the on-the-job injury."

         At a May 16 office visit with Dr. Chiasson, Mr. Shelton complained of an inability to walk on stairs without difficulty and a buckling sensation in his left knee. Dr. Chiasson's physical examination revealed "palpable tenderness along the medial and lateral jointline" and "decreased range of motion, secondary to pain." Because Mr. Shelton had not improved with conservative treatment, Dr. Chiasson recommended proceeding with an arthroscopic evaluation of his left knee, as well as an ACL reconstruction, if indicated.

         On May 18, Mr. Nowak denied approval for the arthroscopic procedure on the same grounds that he denied the request for physical therapy. In his deposition, Mr. Nowak did not deny that an accident had occurred. However, he indicated he believed Mr. Shelton's condition was degenerative in nature and unrelated to his work accident. On this basis, as well as the fact that Mr. Shelton had been released to light duty by ARHC, Mr. Nowak also denied Mr. Shelton's claim for indemnity benefits.

         Mr. Shelton filed a motion for partial summary judgment on the issue of his entitlement to temporary total disability (TTD) benefits. At a hearing on the motion held on August 24, 2016, defense counsel argued Mr. Shelton "staged" the accident. The workers' compensation judge (WCJ) denied the motion for summary judgment, finding that the "existence of an accident" as well as whether Mr. Shelton's disability "was related to a 'work accident' or if it was a 'staged' event" presented genuine issues of material fact. On December 15, 2016, Smitty's filed an amended answer in which it alleged fraud by Mr. Shelton, asserting he "made willful misrepresentations for the purpose of obtaining compensation."

         Following a trial held on January 30 and April 5, 2017, the WCJ rendered a written judgment rejecting Smitty's contention that Mr. Shelton had committed fraud in order to obtain workers' compensation benefits. The WCJ concluded Mr. Shelton was injured in a work accident that aggravated the pre-existing condition in his left knee and awarded him TTD benefits in the amount of $673.23 per week from March 11, 2016, until the judgment was modified. The WCJ also awarded Mr. Shelton all medical bills and expenses at issue, including the costs of the physical therapy and arthroscopic surgery recommended by Dr. Chiasson. Additionally, the WCJ imposed costs, penalties of twelve percent of the unpaid compensation, and two awards for attorney fees in the amount of $20, 000.00 each on Smitty's due to its failure to timely pay and/or approve indemnity benefits and medical expenses. Smitty's appealed, raising five assignments of error. Mr. Shelton answered the appeal and requested additional attorney fees for the work necessitated by the appeal.

         ASSIGNMENTS OF ERROR

         1. The WCJ legally erred in finding Mr. Shelton did not violate La. R.S. 23:1208 by making willful misrepresentations for the purpose of obtaining workers' compensation benefits.

         2. The WCJ legally erred in awarding Mr. Shelton TTD benefits as a result of finding he suffered a work accident that injured his left knee.

         3. The WCJ legally erred in awarding penalties and attorney fees based on her finding that Smitty's did not reasonably controvert Mr. Shelton's entitlement to workers' compensation benefits.

         4. The WCJ legally erred in making two awards for attorney fees ($20, 000.00 each) in violation of La. R.S. 23:1201 (J).

         5. The WCJ legally erred in awarding Mr. Shelton weekly indemnity benefits in an amount greater than the maximum weekly indemnity amount allowed by La. R.S. 23:1202.

         STANDARD OF REVIEW

         Factual findings in a workers' compensation case are subject to the manifest error or clearly wrong standard of appellate review. Angelo Iafrate Construction Co. v. Herring, 05-1461 (La.App. 1st Cir. 9/1/06), 943 So.2d 487, 489-90, writ denied, 06-2365 (La. 12/8/06), 943 So.2d 1097. An appellate court cannot set aside the factual findings of the WCJ unless it determines there is no reasonable factual basis for the findings and the findings are clearly wrong (manifestly erroneous). Angelo Iafrate Construction Co., 943 So.2d at 489-90. If the WCJ's findings are reasonable in light of the record reviewed in its entirety, an appellate court may not reverse even though convinced that had it been sitting as the trier-of-fact, it would have weighed the evidence differently. Furthermore, when factual findings are based on the credibility of witnesses, the factfinder's decision to credit a witness's testimony must be given "great deference" by the appellate court. Thus, when there is a conflict in the testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon review, although the appellate court may feel its own evaluations and inferences are as reasonable. Angelo Iafrate Construction Co., 943 So.2d at 490.

         ASSIGNMENT OF ERROR NUMBER ONE

         Smitty's contends the WCJ erred in failing to find Mr. Shelton violated La. R.S. 23:1208 by willfully making false statements and misrepresentations for the purpose of obtaining workers' compensation benefits. Smitty's argues the evidence proved not only that Mr. Shelton lied about how the ...


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