Resweber v. Haroil Const. Co.

• Decision Date: 05 September 1995
• Citation: 660 So.2d 7
• Parties: 94-2708 La
• Court: Louisiana Supreme Court

Page 7

660 So.2d 7

94-2708 La. 9/5/95

Chene RESWEBER v. HAROIL CONSTRUCTION COMPANY and Louisiana Construction &

Industry Self Insurers Fund.

Roderick STORKS v. MANPOWER TEMPORARY SERVICES, et al.

Nos. 94-C-2708, 94-C-3138.

Supreme Court of Louisiana.

Sept. 5, 1995.

Steven C. Judice, Baton Rouge, Wayne H. Carlton, Jr., Bendana, Carlton & Sharp, New Orleans, for applicant.

Randy P. Angelle, Lawrence K. Burleigh, Jr., Lafayette, John E. Cox, Keogh, Cox & Wilson, Ltd., Baton Rouge, for respondent.

[94-2708 La. 1] KIMBALL, Justice ^*.

We granted writs in these consolidated cases to consider the appropriate interpretation and application of the anti-fraud provisions of the Louisiana Workers' Compensation Act, La.R.S. 23:1208 and 1208.1. We hold that each of these anti-fraud provisions serves a specific purpose and applies to different situations. Louisiana Revised Statutes 23:1208 applies to any false statement or misrepresentation, including one concerning a prior injury, made specifically for the purpose of obtaining workers' compensation benefits and therefore generally becomes applicable at the time of an employee's accident or claim. This broadly worded statute encompasses false statements or misrepresentations made to anyone, including the employer, [94-2708 La. 2] physicians or insurers, when made willfully or deliberately for the purpose of obtaining benefits. It contains no requirement that an employee be put on notice of the consequences of making such false statements or misrepresentations. The purpose of La.R.S. 23:1208.1, however, is to allow the employer to ask prospective or current employees about prior injuries. It applies to employment-related questioning of an employee or prospective employee, by an employer, concerning a prior injury, when there is no pending workers' compensation claim. The statute results in the forfeiture of a claimant's workers' compensation benefits when that claimant made false statements concerning a prior injury in response to such an inquiry. For Section 1208.1 to be enforceable, written notice must be given to the employee that giving false statements may result in the forfeiture of workers' compensation benefits.

Because the two statutes serve separate purposes and apply to different situations, the requirements of each statute should not be imposed on the other, and more specifically, the notice requirement of La.R.S. 23:1208.1 should not be judicially engrafted into La.R.S. 23:1208. We further hold there need be no showing of prejudice on the part of the employer prior to the forfeiture of an employee's benefits under Section 1208. Accordingly, we reverse the third circuit court of appeal decision in Resweber v. Haroil Construction Co., 94-297 (La.App. 3d Cir. 10/5/94), 644 So.2d 423, and affirm the fifth circuit court of appeal decision in Storks v. Manpower Temporary Servs., 94-142 (La.App. 5th Cir. 11/29/94), 646 So.2d 1191.

I. FACTS AND PROCEDURAL HISTORY

A. RESWEBER

Chene Resweber, an employee of Haroil Construction Company, which is owned by his father, Paul Resweber, alleged that he was injured in the course and scope of his employment in an unwitnessed accident on July 17, 1991, when he slipped and fell at a tank farm. Resweber allegedly sustained herniated discs in his lower back. Louisiana Construction and Self Insurers Fund (Louisiana Insurers), [94-2708 La. 3] which provided worker's compensation coverage for Haroil, paid benefits to Resweber through its third party administrator, Associated Risk Management Services (ARMS), through March of 1993, when it discontinued compensation benefits, alleging Resweber had made false statements in relation to his claim and thereby forfeited his rights to benefits pursuant to La.R.S. 23:1208.

The alleged misrepresentations were made in a recorded statement on August 21, 1992, pursuant to an investigation conducted by Louisiana Insurers into Resweber's entitlement to workers' compensation benefits. In this statement, Resweber denied any history of back injuries except for a minor muscle pull. He also made similar statements on June 8, 1993 to Dr. Franklin, one of Resweber's treating physicians. However, subsequently, Louisiana Insurers and ARMS discovered that Resweber had received medical treatment in 1989 for a lower back injury. The medical reports on this previous injury suggested Resweber had suffered from a herniated disc in his lower back.

Section 1208, as it existed at the time of Resweber's alleged false statements ¹, provided:

[94-2708 La. 4] § 1208. Misrepresentations concerning benefit payments; penalty

A. If, for the purpose of obtaining or defeating any benefit or payment under the provisions of this Chapter, any person, either for himself or any other person, willfully makes a false statement or representation, he shall be fined not more than five hundred dollars or imprisoned for not more than twelve months, or both.

B. In addition to the criminal penalties provided for in Subsection A of this Section, any person violating the provisions of this Section may be assessed civil penalties by the director of not less than one hundred nor more than five hundred dollars.

C. Any employee violating this Section shall, upon determination by a hearing officer, forfeit any right to compensation benefits under this Chapter.

The hearing officer found Resweber knew he had a possible herniated disc in July of 1989 and willfully and deliberately made false statements to Mr. Desselle, the investigator, and to Dr. Franklin. The hearing officer also concluded Resweber made these statements for the purpose of obtaining workers' compensation benefits. Accordingly, the hearing officer held Resweber was disqualified, under Section 1208, from receiving benefits for the alleged accident.

On appeal, the third circuit reversed the ruling of the hearing officer, relying on Section 1208.1. Section 1208.1 provides § 1208.1 Employer's inquiry into employee's previous injury claims; forfeiture of benefits

Nothing in this Title shall prohibit an employer from inquiring about previous injuries, disabilities, or other medical conditions and the employee shall answer truthfully; failure to answer truthfully shall result in the employee's forfeiture of benefits under this Chapter, provided said failure to answer directly relates to the medical condition for which a claim for benefits is made or affects the employer's ability to receive reimbursement from the second injury fund. This Section shall not be enforceable unless the written form on which the inquiries about previous medical condition are made contains a notice advising the employee that his failure to answer truthfully may result in his forfeiture of worker's compensation benefits under R.S. 23:1208.1. Such notice shall be prominently displayed in bold faced block lettering of no less than ten point type.

The court of appeal rejected Louisiana Insurers' and ARMS' reliance on Section 1208 to discontinue payments, instead holding that [94-2708 La. 5] Section 1208 applies to fraudulent claims which are based on staged injuries or accidents, and that Section 1208.1 is the only means by which an employee could forfeit workers' compensation benefits based solely on false statements relating to a prior injury. Since there was no written notice as required by Section 1208.1, the court of appeal held defendants could not avail themselves of the forfeiture provisions of Section 1208.1 and remanded the case for a hearing on the merits of Resweber's claim for workers' compensation benefits. We granted Louisiana Insurers' application for writ of certiorari. 94-2708 (La. 2/9/95), 649 So.2d 413.

B. STORKS

Roderick Storks suffered a lower back injury in June of 1992 while employed by Coastal Ventures, Inc. Storks was treated by Dr. Poche on June 16, 1992 and again on June 23, 1992, at which time Storks was discharged to return to regular work. Storks subsequently acquired new employment with the defendant, Manpower Temporary Services (Manpower), in late August or early September, 1992, and on his employment application for Manpower, Storks indicated he had no physical or health conditions which would prevent him from performing any specific types of work. Storks continued receiving benefits from Coastal Ventures after obtaining employment with Manpower.

On September 3, 1992, while working for Manpower, Storks allegedly injured his back while lifting oxygen bottles. He was treated at River Parishes Hospital that same day. The next day, Storks returned to the emergency room at River Parishes Hospital and was sent to East Jefferson General Hospital where he was hospitalized for four days. After being discharged from East Jefferson, Storks remained under the care of Dr. Miranne until October of 1992, when Manpower's workers' compensation insurer refused to pay any further medical bills.

Manpower alleges Storks misrepresented his medical history in two recorded statements given to a claims adjuster for Continental Casualty Company, Manpower's workers' compensation insurer. In the first statement, given September 14, 1992, Storks denied having any [94-2708 La. 6] prior workers' compensation accident or prior lower back injury. Continental Casualty then commenced paying workers' compensation benefits. On October 10, 1992, the insurance adjuster took a second statement in which Storks again denied having any prior back injuries and also denied having ever been employed by Coastal Ventures, Inc. Subsequently, upon discovering these misrepresentations, Continental Casualty terminated Storks' workers' compensation benefits and filed a motion to disqualify Storks from benefits under Sections 1208 and 1208.1. ²

The hearing officer dismissed Storks' claim, finding he had made misrepresentations as set forth in La.R.S. 23:1208. ³ The fifth circuit affirmed, rejecting Stork's argument that because Section 1208 and 1208.1 are penal in nature, they apply only when an employer suffers...