Fontenot v. Goldenstern Pipe & Supply Co.

• Decision Date: 08 February 1951
• Docket Number: No. 3310,3310
• Citation: 50 So.2d 484
• Court: Court of Appeal of Louisiana — District of US
• Parties: FONTENOT v. GOLDENSTERN PIPE & SUPPLY CO. et al.

Page 484

50 So.2d 484

FONTENOT v. GOLDENSTERN PIPE & SUPPLY CO. et al.

No. 3310.

Court of Appeal of Louisiana, First Circuit.

Feb. 8, 1951.

Seth Lewis, Opelousas, E. Herman Guillory, Ville Platte, for appellant.

Tate & Fusilier, Ville Platte, for appellee.

LOTTINGER, Judge.

On January 23, 1947, the plaintiff in this suit, Shearn Fontenot, was employed by the defendant, Goldenstern Pipe and Supply Company. Plaintiff, who was cutting stakes to mark a pipe line, in swinging his axe hit some overhanging branches which deflected the axe causing him to cut his left foot near the ankle joint. He was given first aid in Eunice, Louisiana, and later placed himself under Dr. Arthur Vidrine of Ville Platte, Louisiana.

The Standard Accident Insurance Company of Detroit, Michigan, the other defendant herein and compensation insurer of plaintiff's employer, began paying compensation soon thereafter at the maximum rate, and these payments continued until July 2, 1947, a period of twenty-three weeks, when a report was received by the insurer's adjuster from Dr. Vidrine that plaintiff had been discharged by him as being able to resume light work. On August 11, 1947, plaintiff had a letter written to the insurer demanding further compensation. Later he went to the office of the adjuster in Baton Rouge, and on August 20, 1947, at the request of the adjuster, submitted to an examination by Dr. George, an orthopedic surgeon.

Subsequent to the examination on offer was made to plaintiff by the adjuster in the sum of $150.00 in full settlement of all claims. This amount was later increased to $250.00 and judicial proceedings were instituted in the lower court to effect the settlement. An attorney was appointed by the trial judge to represent plaintiff and on September 5, 1947, judgment was rendered approving the settlement in the sum of $250.00

The present action was instituted by plaintiff against the same defendants named above, on May 27, 1949. In his petition plaintiff alleges that the settlement referred to above was a lump sum settlement and that he is entitled to have same set aside and annulled because of it having been discounted at a rate greater than 8% per annum, in contravention of the applicable section of our Workmen's Compensation Law, now LSA-RS 23:1274. In the alternative he avers that even if the settlement was a compromise that it should be annulled because: (a) there was no bona fide dispute, (b) the defendants did not verify the petition and (c) his consent thereto was induced by fraud and misrepresentations on the part of the defendants.

The defendants, after filing a plea of res adjudicata which was referred to the merits, filed an answer in which they denied any fraud or misrepresentation and claimed that the settlement was a valid compromise. After trial on the merits the lower court found the agreement to have been a lump sum settlement at a discount greater than 8%, and accordingly annulled the previous judgment. The lower court also found the plaintiff to be permanently and totally disabled and rendered judgment as prayed for, except that it denied the penalty provided in LSA-RS 23:1274. From this judgment both parties have appealed, the defendants asking for a reversal and the plaintiff asking that compensation be awarded at one and one-half times that which would have been due, as provided in the above mentioned section of the statute.

The initial question for determination, therefore, is the correctness of the trial judge's findings relative to the type of settlement which was entered into between the parties. The trial judge fully analyzed the facts in this case and we adopt his opinion, which is as follows:

'This is a suit by an injured employee to recover additional compensation and penalty payments under the Louisiana Compensation Act and to set aside a compromise or lump sum settlement previously executed.

'The plaintiff, Shearn M. Fontenot, suffered an injury on January 23, 1947, while employed by defendant, Goldenstern Pipe & Supply Co., the compensation insurer of which is co-defendant, Standard Accident Insurance Company of Detroit, Michigan.

'He was treated and paid compensation up until July 2, 1947, only, when he was discharged by Dr. Arthur Vidrine of Ville Platte, Louisiana, as ready for 'light duty'.

'On September 5, 1947, a lump sum settlement or a compromise was presented to the trial Court for approval in the amount of Two Hundred Fifty and No/100 ($250.00) Dollars. Attached to and made a part of this settlement was a report by Dr. I. L. George, orthopedist, indicating a minimum period of partial total disability for six months.

'Plaintiff testified that he attempted to go back to work, but that due to the injury to his left foot he was unable to work without pain or to work efficiently. He attempted again to work in the fall of 1949 at an occasional job with the same results.

'In March, 1948, plaintiff broke his left leg about two-thirds from the top, and after considerable and successful treatments was discharged as completely cured insofar as this second fracture was concerned.

'Suit was filed in May, 1949, for the additional compensation and penalties. The first and main issue in this case is whether the settlement of September 5, 1947, is a compromise or a lump sum settlement. If it is a compromise and there is no fraud alleged and proved to set it aside, plaintiff's suit must be dismissed. On the other hand, if it is a lump sum settlement and it was discounted at a rate greater than eight (8) per cent, the said lump sum settlement can be disregarded by this court.

'This court is of the opinion that the alleged settlement is not a 'compromise' as defined by the Workmen's Compensation Act, but is a lump sum settlement.

'Section 8(9) and 17 of the Louisiana Compensation Act is as follows:'

'Lump sum settlements'

'Section 8(9). The amounts payable as compensation may be commuted to a lump sum settlement by agreement of the parties after having been approved by the court as reasonably complying with the provisions of this act; provided, that in making such lump sum settlement, the payments due the employee or his dependents, under this act, shall not be discounted at a rate greater than eight per centum per annum; if such lump sum settlement be made without the approval of the court, or at a discount greater than eight per centum per annum, even if approved by the court, the employer shall be liable for compensation at one and one-half times the rate fixed in this act, and the employee or his dependants shall, at all times within two years after date of the payment of the lump settlement and notwithstanding any other provisions of this act, be entitled to demand and receive in a lump sum from the employer such additional payment as together with the amount already paid will aggregate one and one-half times the compensation which would have been due under this act, but for such lump sum settlement. But upon the payment of a lump sum settlement commuted on a term agreed upon by the parties, discounted at not more than eight per centum per annum and with the approval of the court, the liability under this act of the employer making such payment shall be fully satisfied; provided, that for injuries scheduled in paragraphs 1-d and 2 of this section, no shorter term than therein set forth have been agreed upon.' (Dart's 4398(9). Section 8 of Act No. 20 of 1914 as amended [LSA-RS 23:1274].) (Italics by Trial Court.)

'Bona fide disputes may be compromised and settled--Approval by court--Attorney.--Whenever a bona fide dispute exists between the employee or his dependants on the one hand, and the employer or his insurer on the other, as to liability or coverage under the act, whether the injuries complained of are compensable, the existence, nature, extent or duration of the injury or disability involved, the amount of compensation due the injured employee, or his dependants, or any other matter or thing affecting the right of the employee or his dependants to recover compensation under this act, the interested parties shall have the right to compromise and settle such bona fide dispute, including the manner in which compensation is to be paid, by agreement to be approved by the Court having competent jurisdiction.

'The agreement entered into between the employee or his dependants and the employer or his insurer, shall be presented to the Court for its approval upon a joint petition verified by all parties thereto. The Judge to whom the petition is presented shall, in every case, discuss the settlement and its terms with the employee or his dependants. When the employee or his dependants are not represented by a lawyer the Judge shall appoint one to advise said parties relative to the proposed compromise settlement. A reasonable fee for such services shall be fixed by the Court and when taxed as costs it shall not exceed the sum of fifteen dollars. The Judge shall require such proof of the dispute between the parties, and of the other facts set out in the joint petition as he thinks proper.

'If the Court, in its discretion, believes the compromise agreed upon to be fair and equitable, and that it was entered into primarily to avoid or to end litigation, it shall approve said compromise, and immediately enter it as the judgment of court, and said judgment shall not thereafter be set aside except for fraud or misrepresentation made or induced by the employer or its insurer. The Judge may, however, refuse to approve said settlement if he does not believe that it does substantial justice to the parties.' (Dart's 4407 Section 17, Act No. 20 of 1914 as amended particularly by Act 96 of 1942 [LSA-RS 23:1271 to 23:1273].)' (Italics by Trial Court.)

'There is an abundance of jurisprudence distinguishing and interpreting the lump sum settlement and the compromise provisions of the Compensation Act.

'In the main, the lump sum settlement provisions of Section 8 are...