FRAUD / WORKERS’ COMPENSATION: Johnson v. A.W. Chesterton

In Johnson v. A.W. Chesterton, 16-807 (La. App. 3d Cir. 2/1/17), the Louisiana Third Circuit was faced with the issue of whether a workers’ compensation claimant committed fraud under La. R.S. 23:1208 when he sold a horse but failed to report the earnings. No fraud was identified because horses were a hobby for claimant and the sale of the horse was the sale of a personal asset immaterial to the workers’ compensation claim.

The workers' compensation judge found that the defendants failed to prove requirements of La. R.S. 23:1208, that claimant willfully made a misrepresentation for the purpose of obtaining workers’ compensation benefits. The trial court ordered the employer/carrier to reinstate weekly benefits at the full rate, and awarded Johnson $8,000 in penalties and $10,000 in attorney’s fees.

On appeal, the Third Circuit affirmed the ruling and awarded the claimant an additional $2,500 in attorney’s fees “for work performed on appeal.” The appellate court noted that Johnson “had owned horses as a hobby since he was 5 years old;” was 76 years old at the time of the trial; and, “had owned as many as 42 horses in the past but had decreased that number to 7 after the accident.” Further, claimant testified that the horse he sold for only $3,500 “was purchased for $20,000 nineteen years prior.”