One Particular Mosquito: West Nile Virus Found to be a Compensable Workers’ Compensation Claim

In a very important ruling by the Louisiana Supreme Court, a tort defendant is no longer liable for any “actual charges” by medical providers above the amount paid by a Workers Compensation insurer pursuant to promulgated Workers Compensation fee schedule . In Simmons v. Cornerstone Investments, LLC, 2018-cc-0735 (La. 5/18/19), the court concluded:

“…the amount of medical expenses charged above the amount actually incurred is not a collateral source and its exclusion from the purview of the jury was proper.” See http://www.lasc.org/opinions/2019/18-0735.CC.OPN.pdf

The court conducted a detailed analysis of the development of the collateral source rule under applicable jurisprudence noting that the genesis of the collateral source rule:

“Under the collateral source rule, a tortfeasor may not benefit, and an injured plaintiff’s tort recovery may not be reduced, because of monies received by the plaintiff from sources independent of the tortfeasor’s procuration or contribution. Under this well-established doctrine, the payments received from the independent source are not deducted from the award the aggrieved party would otherwise receive from the wrongdoer.” See Louisiana Dept. of Transp. & Dev. v. Kansas City Southern Railway Co., 02-2349, p. 6 (La. 5/20/03), 846 So.2d 734, 739.

Essentially, the court asks two questions when assessing whether the collateral source rule should apply. First, does the claimed benefit arise from some payment, wage deduction or other contribution by the Plaintiff that would diminish the plaintiff’s patrimony? Second, will the goal of tort deterrence be promoted by allowing the windfall? In a series of cases culminating in the case at bar, the court has been limiting the application of the collateral source rule in a number of contexts.

The court in Bozeman v. State, 03-1016 (La. 7/2/04), 879 So.2d 692, found that the collateral source rule did not apply when Medicaid was the payor such that the defendant could not be responsible for any amounts above what Medicaid paid to the provider. The court reasoned that it would be “unconscionable” to require taxpayers to pay the bills and then let a plaintiff recover the full undiscounted medical expenses and “pocket the windfall.” The court continued by noting in “Cutsinger v. Redfern, 08-2607 (La. 5/22/09), 12 So.3d 945, this court found the collateral source rule did not apply to prevent the plaintiff’s uninsured motorist carrier from receiving a credit for workers’ compensation benefits paid by her employer, even though the plaintiff paid for the UM coverage herself.” In Hoffman v. 21st Century North American Ins. Co., 14-2279 (La. 10/2/15), 209 So.3d 702, the court held that the collateral source rule does not apply to attorney-negotiated medical discounts. The court also looked at the US 5^th Circuit in Deperrodil v. Bozovic Marine, Inc., 842 F.3d 353 (5th Cir. 2016), that the collateral source rule does not apply above any amounts actually paid by the employer in the context of the LHWCA.

In each of the instances outlined, the court noted that the patrimony of the plaintiff was not impacted by limiting recovery to the amount of medical bills actually paid. Moreover, the court noted that the goal of tort deterrence is not negatively impacted, and that allowing a plaintiff to recover a windfall in this context is tantamount to an award of punitive damages that are not recoverable absent statutory authority which is not present in this context. The Simmons decision now extends that same logic to cases where a Workers Compensation insurer has paid the medical benefits pursuant to the Louisiana Workers Compensation Law.

This ruling will have significant impact on the evaluation, settlement and trial of tort cases that have corresponding Workers Compensation claims.

Submitted by John P. Wolff, III (Partner)

Historians call it "The Grand Bargain." At its heart, the workers’ compensation law is a bargain, an exchange between the employer and the employee. In this bargain, the employee without having to prove his employer's negligence receives the benefit of continued income and medical treatment. In return, the employer, even if it is at fault, receives protection from tort suits. However, for this bargain to apply, the accident must have occurred within the "course and scope" of employment. But the question of when an accident is considered to have occurred in the "course and scope" is not always as simple to answer as it might otherwise appear.

The issue of course and scope has been litigated many times, in many forums. The recent decision in Jackie Holden v. Mike’s Catfish Inn, Inc. and Massachusetts Bay Insurance Company, 2017 CA 1056 (La. App. 1 Cir. 2/27/18) explores course and scope in the context of an employee who was on break.

In Holden, the plaintiff was "clocked in" and on the premises of her employer. When her daughter called and asked to meet her outside, the plaintiff took an employer-sanctioned work break, walked outside, and fell on the steps, causing injury to her left knee. She filed a tort suit against her employer alleging negligence for failing to remove a foreign substance which allegedly caused her to fall. The employer sought to dismiss the suit under the contention that the plaintiff’s exclusive remedy for the fall was workers’ compensation.

The trial court dismissed the suit as barred by the employer's workers’ compensation protections and plaintiff appealed. The sole issue before the appellate court was whether the plaintiff was in the course and scope. Plaintiff argued that she was on break and had left her designated work duties to speak with her daughter such that her activities at the time of the fall were not work-related. The employer countered that plaintiff remained on the clock during her break and was on the employer’s premises when she fell.

In assessing course and scope, courts consider the time of the accident, the place where the accident occurred, and the employee’s activities at the time of the accident. “An accident occurs in the course and scope of employment when the employee sustains an injury while actively engaged in the performance of her duties during work hours, either on the employer’s premises or at other places where employment activities take the employee.” Holden at p. 6, citing, McLin v. Industrial Specialty Contractors, Inc., 02-1539 (La. 7/2/03), 851 So. 2d 1135.

In ruling against the plaintiff, the Holden court colorfully concluded:

"An employee who is getting paid, is on her employer’s premises, and is on an approved work break is in the course and scope of her employment whether she is visiting her daughter, getting a breath of fresh air, smoking a cigarette, or walking outside to drink a diet coke."

While workers’ compensation is a bargain, Holden reminds that it is a bargain workers will continue to try to escape.

Virginia “Jenny” McLin is a partner at Keogh Cox who practices in the fields of corporate litigation, insurance defense, and workers' compensation defense. When she is not practicing law, Jenny can be found volunteering with the Junior League of Baton Rouge; cheering for the LSU Tigers with her husband, Ryan; or shuffling her two kids to and from dance practice.

In a case handled by Keogh Cox lawyers Steve Whitlow and Jenny McLin, a Louisiana court of appeal has affirmed the ruling of a Workers Compensation Judge holding that an employee who made misrepresentations about his claim forfeited his right to workers compensation benefits. Arguello v. Brand Energy, 13-CA-990 (La. App. 5th Cir. 5/21/14), ___ So. 3rd ___.

In ruling for the employer, the trial court found that the claimant had committed three separate violations of La.R.S. 23:1208. The claimant was also assessed with a $500 civil penalty payable to the Kids Chance Scholarship Program.