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Orozco v. Filser Construction & Aries Building Systems, Inc.

Court of Appeals of Louisiana, Fourth Circuit

October 3, 2018


          APPEAL FROM THE OFFICE OF WORKERS' COMPENSATION NO. 14-05423, DISTRICT "1" Honorable Shannon Bruno Bishop, Workers Compensation Judge

          Roberto L. Costales Jonathan M. Kirkland William H. Beaumont COUNSEL FOR PLAINTIFFS/APPELLANTS


          Court composed of Chief Judge James F. McKay, Judge Terri F. Love, Judge Roland L. Belsome, Judge Rosemary Ledet, Judge Tiffany G. Chase

          Rosemary Ledet, Judge

         This is a workers' compensation case arising out of the death of Filiberto Serna, Jr. ("Serna Jr."). This case has been before this court on two prior occasions;[1] this is the third appeal by the plaintiffs, Serna Jr.'s alleged dependents-Mariana Orozco ("Ms. Orozco") and Aggie Filiberto Serna Orozco ("Aggie") (collectively, the "Claimants"). The defendants are Filiberto Serna, Sr. ("Serna Sr."), doing business as Filser Construction ("Filser"), and Aries Building Systems, Inc. ("Aries") (collectively the "Defendants").

         In this appeal, the Claimants contend that the Office of Workers' Compensation Judge (the "OWC") erred in determining that the Defendants rebutted the presumption of employment set forth in La. R.S. 23:1044. Alternatively, the Claimants contend that the OWC erred in failing to find that Serna Jr.'s work fell within the exception set forth in La. R.S. 23:1021(7) for an independent contractor performing manual labor.

         Finding the OWC manifestly erred in failing to find the manual labor exception applies, we reverse and remand.


         On September 21, 2013, Serna Jr. was killed in a construction accident while attempting to move a series of trailers located at the United States Navy facility in Belle Chasse, Louisiana. At that time, Serna Jr. was working for Filser, an unincorporated construction company owned and operated by Serna Jr.'s father, Serna Sr. Filser was performing work for Aries; Aries, in turn, was performing work for the United States Navy.[2]

         The Claimants filed a disputed claim for compensation, seeking death benefits, against the Defendants.[3] The Claimants alleged that Filser was Serna Jr.'s employer and that Aries was his statutory employer. Filser and Aries separately answered. Both Filser and Aries contended that Serna Jr. was working as an independent contractor at the time of the accident and that he was not an employee of either company. Aries additionally contended that Serna Jr. was a partner of Filser.

         A one-day trial was held before the OWC. Serna Sr. and Ms. Orozco were the only two witnesses who testified.[4] Following the trial, the OWC, agreeing with Aries, classified Serna Jr. as a partner and rendered judgment in Aries' favor. On the Claimants' first appeal, we reversed, as manifestly erroneous, the OWC's finding that Serna Jr. was a partner of Filser. Orozco I, supra.[5]

         In Orozco I, we further found that the OWC erred, as a matter of law, in failing to determine whether the statutory presumption of employment under La. R.S. 23:1044 was rebutted. We observed that "[h]aving failed to determine under the correct standard of law whether Decedent was an employee, the OWC did not properly reach the issues of whether Decedent was an independent contractor performing manual labor, borrowed employee, or statutory employee or any other employment status that would entitle the Claimants to workers' compensation benefits, if any." Id., 16-0187 at pp. 12-13, 202 So.3d at 1026. We remanded for a new trial to determine two issues: (i) Serna Jr.'s employment status-employee, independent contractor performing manual labor, borrowed employee, or statutory employee-as to both Filser and Aries; and (ii) whether the Claimants were entitled to benefits as a result of the particular circumstances of Serna Jr.'s work. Id., 16-0187 at p. 15, 202 So.3d at 1028.[6]

         On remand, the OWC, over the Claimants' objection, conducted an "arguments-only" new trial. Following the hearing, the OWC rendered judgment finding that Serna Jr. was an independent contractor and that the manual labor exception did not apply.

         On the Claimant's second appeal, this court held that the OWC's second judgment made findings of fact with respect to Serna Jr.'s status, yet failed to "spell out in lucid, unmistakable language" what relief was granted-a requirement for proper decretal language. Orozco II, 17-0656 at pp. 2-3), ___ So.3d at ___. Given the lack of proper decretal language, we remanded this case for a second time.

         On the second remand, the OWC issued an amended judgment (the third judgment), making the same factual findings as to Serna Jr.'s status as an independent contractor and adding the following decretal language:

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that judgment is hereby rendered against Claimants and in favor of defendants/alleged employers, Aries Building Systems, Inc. and Filiberto Serna, Sr. and Filser Construction. This matter is dismissed with prejudice, each party to bear its own costs.

         The Claimants' third appeal to this court followed.


         The manifest error standard of review applies to factual findings in workers' compensation cases. Gordon v. A-1 St. Bernard Taxi & Delivery, 17-0048, pp. 4-5 (La.App. 4 Cir. 8/9/17), 226 So.3d 494, 497 (citing Orozco I, supra). "'When legal error interdicts the fact-finding process in a workers' compensation proceeding, the de novo, rather than the manifest error, standard of review applies.'" Orozco I, 16-0187 at p. 5, 202 So.3d at 1023 (quoting MacFarlane v. Schneider Nat'l Bulk Carriers, Inc., 07-1386, p. 3 (La.App. 4 Cir. 4/30/08), 984 So.2d 185, 188).


         As noted at the outset, we frame the issues before us on appeal as two-fold: (i) whether the Defendants rebutted the statutory presumption of employment; and (ii) assuming that the presumption was rebutted, whether the manual labor exception applies.[7]

         Presumption of employment

         The statutory presumption of employment is codified in La. R.S. 23:1044, which provides that a "person rendering service for another in any trades, businesses or occupations covered by this Chapter is presumed to be an employee." The presumption is rebuttable. Wilfred v. A. Serv. Cab Co., 14-1121, p. 3 (La.App. 4 Cir. 5/27/15), 171 So.3d 1007, 1010. An alleged employer has the burden of proof in rebutting the presumption and establishing that a worker was not working as his employee for workers' compensation purposes. Id. "An alleged employer can rebut this presumption by either (i) establishing that the services were not 'pursuant to any trade, business, or occupation (e.g., construction of one's private residence);' or (ii) establishing that "the individual was performing services but was doing so as an independent contractor.'" Hillman v. Comm-Care, Inc., 01-1140, p. 6 (La. 1/15/02), 805 So.2d 1157, 1161 (quoting 1 Denis Paul Juge, LOUISIANA WORKERS' COMPENSATION § 7:6 (2001)).

         Here, the OWC found the Defendants rebutted the presumption by establishing that Serna Jr. was performing services as an independent contractor. In its reasons for judgment, the OWC enumerated the following factors that it relied upon in classifying Serna Jr. as an independent contractor:

• Serna Jr. was paid a specific price for the overall undertaking of a j ob;
• There was no evidence to show that Filser had any control or direction over the method by which Serna Jr. worked, only that he was to perform a specific job, removing the trailers;
• Serna Sr. testified that Serna Jr. was not his employee; and
• Serna Jr.'s own tax returns indicated that he was the owner of ...

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