95 0787 La.App. 1 Cir. 6/28/96, Varnado v. Department of Employment and Training

• Decision Date: 28 June 1996
• Citation: 687 So.2d 1013
• Parties: 95 0787 La.App. 1 Cir
• Court: Court of Appeal of Louisiana — District of US

Page 1013

687 So.2d 1013

95 0787 La.App. 1 Cir. 6/28/96

Robert VARNADO, Jr., and Edgar K. Corey v. DEPARTMENT OF EMPLOYMENT AND TRAINING, OFFICE OF WORKERS'

COMPENSATION, State of Louisiana.

No. 95 CA 0787.

Court of Appeal of Louisiana,

First Circuit.

June 28, 1996.

Order Granting Rehearing in Part

and Denying Rehearing in Part

Dec. 30, 1996.

Writ Denied March 27, 1997.

J. Arthur Smith, III, Baton Rouge, for Plaintiffs/Appellees, Robert Varnado, Jr. and Brenda Allen.

Daniel K. Rester, Baton Rouge, John S. Coulter and L'Reece D. Levine, Baton Rouge, for Defendant/Appellant, Department of Labor, Formerly the Department of Employment and Training, Office of Worker's Compensation, State of Louisiana.

Dele Adebamiji, Baton Rouge, for Defendant/Appellant, Billy Walsh, et al.

Before CARTER and PITCHER, JJ., and KLINE ¹, J. Pro Tem.

[95 0787 La.App. 1 Cir. 2] CARTER, Judge.

This is an appeal from a trial court judgment in an action for damages under 42 U.S.C. § 1983.

FACTS

In 1990, Robert Varnado, Jr., was appointed as an administrative hearing officer for District 6 of the State of Louisiana, Department of Employment and Training, Office of Workers' Compensation (Workers' Compensation Office). Brenda Allen was Varnado's secretary.

Initially, the Workers' Compensation Office for District 6 was located in Varnado's private legal office in Franklinton, Louisiana. Moreover, Varnado used his personal equipment in the exercise of his duties as a workers' compensation hearing officer. Thereafter, District 6 acquired its own offices and equipment from which Varnado carried out his duties as a hearing officer. In addition to his duties as a hearing officer, Varnado performed work for the district attorney's office and maintained a private legal practice.

Prior to 1992, Alvin J. Walsh served as statewide claims manager for the Workers' Compensation Office. In January, 1992, Walsh was appointed as Assistant Secretary of the Labor Department and Director of the Workers' Compensation Office. Sometime thereafter, Walsh informed the hearing officers that they must cease any private practice of law during regular office hours and that state personnel and equipment should not be used for any purpose not related to state business.

On November 17, 1992, Walsh and Nancy Griswold, chief administrative hearing officer for the Workers' Compensation Office, sent a letter to all hearing officers, advising them that hearing officers would not be permitted to maintain an outside legal practice while in state service. The hearing officers were further advised that all ongoing private legal matters should be concluded or referred to other counsel by December 15, 1992. The letter also warned the hearing officers that state civil service employees and state equipment could not be used in their outside practices.

[95 0787 La.App. 1 Cir. 3] On November 30, 1992, Varnado, Allen, Edgar K. Corey (another hearing officer) and Corey's secretary were notified of a meeting to be held in Baton Rouge on the following day. Present at the December 1, 1992, meeting, were Gayle Truly, Secretary of the Department of Labor, Walsh, Griswold, and human resource personnel, Kathleen Kennedy and Trella Bennett. At the meeting, Walsh advised Varnado, Allen, and Corey of the proper procedure for filing a grievance regarding the prohibition against the private practice of law by hearing officers.

On December 14, 1992, Robert Varnado, Jr., and Edgar K. Corey filed an action for declaratory judgment and injunctive relief in the 19th Judicial District Court against the Workers' Compensation Office. In their petition, Varnado and Cory alleged that, although they are prohibited by LSA-R.S. 23:1310.1B from practicing workers' compensation law while employed as a hearing officer, there is no statutory requirement that they cease all outside practice of law. Varnado and Corey requested that the court issue a temporary restraining order, and an injunction thereafter, prohibiting the Workers' Compensation Office from discharging them because of their outside legal practices and for declaratory relief, entitling them to maintain an outside legal practice that does not include workers' compensation law.

On that date, the trial judge issued a temporary restraining order to the Workers' Compensation Office, prohibiting them from discharging Varnado and Corey for continuation of their outside legal practices, which do not involve workers' compensation law. ² A copy of the temporary restraining order was hand-delivered to Walsh on December 15, 1992.

On December 16, 1992, Walsh directed "audits" of the offices of Varnado and Corey. On the morning of December 17, 1992, Walsh assembled his audit teams and dispatched them with instructions to look at every file in the offices and to download all computer information onto diskettes. Pursuant to these instructions, the audit teams presented themselves at Varnado's office (as well as at Corey's office) and searched [95 0787 La.App. 1 Cir. 4] the desks, file cabinets, credenzas, and other furniture located on the premises and retrieved information from the computers located in the offices. The audit teams reported the presence of private client files in the offices and the presence of non-workers' compensation material on the computers. On February 2, 1993, Varnado and Allen were discharged based on the results of the December 17, 1992, search. ³

Thereafter, on March 3, 1993, Varnado amended his petition, adding Brenda Allen as a party plaintiff and naming Alvin J. Walsh as an additional defendant. The plaintiffs also alleged that the searches of their offices were unconstitutional under the federal and state constitutions and that, as such, the Workers' Compensation Office and Walsh were liable to them for damages under 42 U.S.C. § 1983. Varnado and Allen also alleged that they had been discharged based upon the fruits of the unconstitutional searches. The amended petition also alleged that the unconstitutional searches were conducted in retaliation for Varnado's exercise of his constitutional right of access to the courts. Accordingly, the plaintiffs requested compensatory damages for mental anguish, humiliation, and damage to reputation, punitive damages pursuant to 42 U.S.C. § 1983, and attorney's fees and litigation expenses pursuant to 42 U.S.C. § 1988. Varnado and Allen amended their petition again on January 18, 1994, to amend their damage claim to include lost wages.

The Workers' Compensation Office and Walsh filed an exception pleading the objection of no cause of action. In their exception, the Workers' Compensation Office and Walsh alleged that they could not be prohibited from using the evidence obtained at the audit in any civil proceeding, that plaintiffs had no cause of action for compensatory damages, punitive damages, and/or attorney's fees, and that plaintiffs did not have an action against the Workers' Compensation Office. Walsh also filed a motion for summary judgment, alleging that he is entitled to qualified immunity from all claims under 42 U.S.C. § 1983 and under the state constitution. After a hearing, the [95 0787 La.App. 1 Cir. 5] trial court, by judgment, dated May 21, 1993, denied defendants' exception pleading the objection of no cause of action and the motion for summary judgment. ⁴

After a hearing on the merits, the trial court determined that the plaintiffs had a reasonable expectation of privacy in their offices and that the search of those offices authorized by Walsh was unreasonable at its inception. The trial court further determined that Walsh's actions were specifically designed as retaliation for the filing of the lawsuit. The trial court also determined that Walsh was not entitled to qualified immunity. However, the trial court refused to reinstate Varnado and Allen, citing Moore v. Board of Supervisors of Louisiana State University and Mechanical College, 559 So.2d 548 (La.App. 2nd Cir.1990). The trial court determined that Varnado and Allen were entitled to compensatory damages, attorney's fees, and litigation expenses, but refused to award punitive damages. Accordingly, the trial court rendered judgment in favor of Varnado and against the Workers' Compensation Office and Walsh for $90,000.00, together with legal interest from date of judicial demand until paid. Judgment was also rendered in favor of Allen and against the Workers' Compensation Office and Walsh for $60,000.00, together with legal interest from date of judicial demand until paid. Plaintiffs were also awarded attorney's fees in the amount of $56,552.00 and litigation expenses in the amount of $7,678.03. Plaintiffs' claims for punitive damages were dismissed, with prejudice, and plaintiffs' claims for reinstatement and back pay were dismissed, without prejudice to their rights to seek this relief before the Louisiana Civil Service Commission. The judgment was signed on November 15, 1994. The Workers' Compensation Office and Walsh were cast with all costs.

[95 0787 La.App. 1 Cir. 6] From this adverse judgment, the Workers' Compensation Office and Walsh filed a petition for a suspensive appeal, ⁵ assigning the following errors:

1. The trial court erred in holding that Varnado's and Allen's Fourth Amendment constitutional rights were violated.

2. The trial court erred in holding that Varnado's and Allen's First Amendment rights of access to the courts were violated.

3. The trial court erred in holding that Walsh was not entitled to qualified immunity.

4. The trial court erred in awarding compensatory damages, attorney's fees, and litigation expenses to Varnado and Allen.

5. The trial court erred in holding the Workers' Compensation Office liable.

Varnado and Allen answered the appeal, assigning as error the trial court's failure to assess punitive damages against Walsh, failure to award sufficient compensatory damages to Varnado, failure to reinstate Varnado and Allen, and failure to award Varnado and Allen back...