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Fee v. Pineville Forest Products, Inc.

Court of Appeals of Louisiana, First Circuit

May 24, 2019

WALTER FEE
v.
PINEVILLE FOREST PRODUCTS, INC., CAPITAL CITY INSURANCE CO.

          On Appeal from the Office of Workers' Compensation, District 5 In and for the Parish of East Baton Rouge State of Louisiana Docket Nos. 15-07015 c/w 15-07759 Honorable Pamela A. Moses-Laramore, Workers Compensation Judge Presiding

         Ted Williams Baton Rouge, Louisiana Ted Williams Baton Rouge, Louisiana Counsel for Plaintiff/ Appellant and Appellee, Walter Willard Fee Counsel for Plaintiff/ Appellant and Appellee, Walter Willard Fee

          Lindsay F. Louapre New Orleans, Louisiana Lindsay F. Louapre New Orleans, Louisiana Counsel for Defendant/ Appellant, Southern Packaging, Inc. Counsel for Defendant/ Appellant, Southern Packaging, Inc.

          Jason E. Wilson Jessica P. Marsh Lafayette, Louisiana Jason E. Wilson Jessica P. Marsh Lafayette, Louisiana Counsel for Defendants/ Appellees, Pineville Forest Products, Inc. and Capital City Insurance Co. Counsel for Defendants/ Appellees, Pineville Forest Products, Inc. and Capital City Insurance Co.

          BEFORE: WHIPPLE, C.J., McCLENDON, AND HIGGINBOTHAM, JJ.

          McCLENDON, J.

         This matter is before us on consolidated appeals filed by plaintiff, Walter Fee, and defendant, Southern Packaging, Inc., from an April 25, 2018, judgment of the Office of Workers' Compensation ("OWC"). The workers' compensation judge ("WCJ") issued a judgment finding that defendant, Pineville Forest Products, Inc., was not Mr. Fee's statutory employer pursuant to LSA-R.S. 23:1061 A(2). Mr. Fee appeals this portion of the judgment. Conversely, the WCJ found that Southern Packaging, Inc., was Mr. Fee's statutory employer pursuant to LSA-R.S. 23:1061 A(2). Southern Packaging appeals this portion of the judgment. For the reasons set forth below, we affirm the portion of the judgment dismissing all claims against Pineville Forest and Capitol Insurance Co., reverse the portion of the judgment that held Southern Packaging was Mr. Fee's statutory employer at the time of the accident, and render judgment in favor of Southern Packaging and against Mr. Fee.

         FACTS AND PROCEDURAL HISTORY

         Mr. Fee was injured on May 2, 2007, while in the course and scope of employment with B & W Logging Company, LLC. Mr. Fee was struck in the head by a tree limb that allegedly resulted in permanent and disabling injuries to his head, brain, and neck. At the time of the accident, Mr. Fee was cutting and hauling timber to Southern Packaging's mill from a timber tract owed by the Pourciau family in New Roads, Louisiana.

         Southern Packaging manufactures and sells wooden pallets and, in conjunction with these operations, buys timber or lumber from third parties. Southern Packaging entered into a timber deed with members of the Pourciau family in October 2006 wherein Southern Packaging purchased timber on the Pourciau tract for the sum of $50,000.00. Pursuant to the timber deed, Southern Packaging had the option to harvest the timber within two years; otherwise, the timber rights would revert back to the Pourciau family.

         On the date of Mr. Fee's accident, B & W Logging had workers' compensation insurance through Timberman's Self Insurers' Fund. Timberman's accepted and paid medical and indemnity benefits arising from Mr. Fee's injuries from the date of the accident until Timberman's "went bankrupt" on September 16, 2015. B & W Logging subsequently ceased doing business and was dissolved in December 2010.

         In November 2015, Mr. Fee filed a Form 1008/Disputed Claim for Compensation with the OWC against Southern Packaging, asserting that Southern Packaging was his statutory employer at the time of the accident such that Southern Packaging was responsible for the payment of workers' compensation benefits. In December 2015, Mr. Fee filed a separate Form 1008/Disputed Claim for Compensation with the OWC, alleging that Pineville Forest was his statutory employer and, thus, responsible for the payment of his workers' compensation benefits.[1] Mr. Fee contends that Southern Packaging hired Pineville Forest, a timber dealer, to harvest the timber from the Pourciau tract and that Pineville Forest then subcontracted the work to B & W Logging.

         The matter proceeded to trial on the merits before the WCJ on April 4, 2018. Prior to trial, the parties stipulated that: (1) Mr. Fee was injured in an accident in the course and scope of his employment as a logger for B & W Logging on May 2, 2007, on land owned by the Pourciau family in New Roads, Louisiana; (2) Mr. Fee's average weekly wage at the time was $750.00, providing the maximum compensation rate of $478.00; (3) on the date of the accident, B & W Logging had workers' compensation insurance through Timberman's, which accepted the claim and paid medical and indemnity benefits to Mr. Fee until it "went bankrupt" on September 16, 2015; and (4) no indemnity or medical benefits have been paid to Mr. Fee since that date. The issues to be resolved at trial were: (1) whether Southern Packaging and/or Pineville Forest were Mr. Fee's statutory employers; (2) the nature (causation) and extent of Mr. Fee's disability; and (3) whether any penalties or attorney's fees were owed to Mr. Fee, along with interest and costs. The parties further agreed that, if either Southern Packaging or Pineville Forest were found to be Mr. Fee's statutory employer, it would get the benefit of all payments made by Timberman's through September 16, 2015.

         No witnesses were called to testify at trial; instead, the matter was submitted to the WCJ via depositions and documentary evidence. Thereafter, the WCJ ruled that Southern Packaging was Mr. Fee's statutory employer pursuant to LSA-R.S. 23:1061 A(2), the "two contract theory." The WCJ concluded that Southern Packaging contracted with the Pourciau family, via a timber deed, to harvest timber on the Pourciau land, then contracted with B & W Logging, Mr. Fee's employer, to perform the work, thus satisfying the two contract requirement of LSA-R.S. 23:1061 A(2). Conversely, the WCJ found that Pineville Forest was not Mr. Fee's statutory employer but, instead, functioned only as a "middle man" to facilitate the movement of funds between Southern Packaging and Mr. Fee.

         The WCJ further found Mr. Fee to be permanently and totally disabled as a result of injuries sustained in the May 2, 2007, accident. Southern Packaging was ordered to pay permanent and total disability benefits to Mr. Fee from September 17, 2015, to the present and continuing at the maximum weekly compensation rate of $478.00 with four percent judicial interest. Southern Packaging was further ordered to reimburse Mr. Fee's out-of-pocket medical expenses and costs in the amount of $270.22. The WCJ denied Mr. Fee's request for attorney's fees but awarded costs in his favor and against Southern Packaging.

         A final judgment in accordance with the WCJ's oral reasons for ruling was signed on April 25, 2018. Mr. Fee and Southern Packaging appeal from this judgment.[2] Mr. Fee asserts that the WCJ erred in finding that Pineville Forest was not his statutory employer at the time of the May 2, 2007, accident. In its appeal, Southern Packaging argues that the WCJ erred by going outside the "four corners" of a contract of sale, i.e., the timber deed, to find that an obligation to harvest trees existed and in concluding that this made the timber deed a contract to perform work. According to Southern Packaging, this determination resulted in an erroneous finding that it was Mr. Fee's statutory employer under the two contract theory set forth in LSA-R.S. 23:1061 A(2). No appeal has been taken to challenge the WCJ's finding that Mr. Fee is totally and permanently disabled, the award of benefits or costs, or the denial of Mr. Fee's request for attorney's fees.

         DISCUSSION

         The ultimate determination of whether a principal is a statutory employer is a question of law for the court to decide. Mitchell v. Southern Scrap Recycling, L.L.C., 11-2201 (La.App. 1 Cir. 6/8/12), 93 So.3d 754, 758, writ denied, 12-1502 (La. 10/12/12), 99 So.3d 47. When addressing legal issues, the appellate court gives no special weight to the findings of the WCJ, but exercises its constitutional duty to review questions of law de novo, after which it renders judgment on the record. Louisiana Workers' Compensation Corp. v. Landry, 11-1973 (La.App. 1 Or. 5/2/12), 92 So.3d 1018, 1021, writ denied, 12-1179 (La. 9/14/12), 99 So.3d 34.

         Conversely, the WCJ's factual findings are subject to the manifest error standard of review; therefore, in order for a reviewing court to reverse a WCJ's factual findings, it must find that a reasonable factual basis does not exist and the record establishes that the factual findings are clearly wrong. Lafayette Bone & Joint Clinic v. Louisiana United Business SIF, 15-2137, 15-2138 (La. 6/29/16), 194 So.3d 1112, 1123. In applying the manifest error-clearly wrong standard, the appellate court must determine whether the fact finder's conclusions are reasonable, not whether the trier of fact was right or wrong. Guichard Operating Co., LLC v. Porche, 15-1942, 15-1943 (La.App. 1 Cir. 1/5/17), 212 So.3d 701, 706. However, where one or more legal errors on the part of the WCJ interdicts the fact-finding process, and the record is otherwise complete, the reviewing court should make an independent de novo review of the evidence, giving no deference to the WCJ's factual findings, and render judgment. Truitt v. Temp Staffers, 04-0590 (La.App. 1 Cir. 4/6/05), 915 So.2d 786, 792-93, writ denied, 05-1162 (La. 6/24/05), 904 So.2d 742.

         As the party asserting that a statutory employer relationship existed, Mr. Fee bore the burden of proof at trial.[3] See Daigle v. McGee Backhoe & Dozer Service, 08-1183 (La.App. 5 Cir. 4/28/09), 16 So.3d 4, 8, writ denied, 09-1372 (La. 10/2/09), 18 So.3d 113, affirming the trial court's finding that the plaintiff failed to prove, by a preponderance of evidence, that the defendant was his statutory employer under the two contract theory.

         The doctrine of "statutory employer" is codified in LSA-R.S. 23:1061. Specifically, LSA-R.S. 23:1061 A(1) provides that when a " 'principal'... undertakes to execute any work, which is a part of his trade, business, or occupation and contracts with any person, in this Section referred to as the 'contractor', for the execution by or under the contractor of the whole or any part of the work undertaken by the principal, the principal, as a statutory employer, ...shall be liable to pay to any employee employed in the execution of the work or to his dependent, any compensation under this Chapter which he would have been liable to pay if the employee had been immediately employed by him...." Under LSA-R.S. 23:1061 A(1), "work shall be considered part of the principal's trade, business, or occupation if it is an integral part of or essential to the ability of the principal to generate that individual principal's goods, products, or services." See also Labranche v. Fatty's, LLC, 10-0475 (La.App. 1 Cir. 10/29/10), 48 So.3d 1270, 1272-73.

         The doctrine of statutory employer was amended in 1997 by La. Acts 1997, No. 315, § 1 to provide two bases for finding statutory employment: first, when the principal is in the middle of two contracts, referred to as the "two contract theory," see LSA-R.S. 23:1061 A(2); and second, when there is a written contract recognizing the principal as the statutory employer, see LSA-R.S. 23:1061 A(3). See alsoLabranche, 48 So.3d at 1272-73. In the instant case, there were no written contracts by and between Southern Packaging, Pineville Forest, or B & W Logging, Mr. Fee's immediate employer. Therefore, Mr. Fee acknowledges ...


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