author: | THIBODEAUX, Judge.

text:
    David JOHNSON v. LOUISIANA CONTAINER COMPANY.
    No. 02-382.
    Court of Appeal of Louisiana, Third Circuit.
    Oct. 2, 2002.
    Rehearing Denied Nov. 13, 2002.

      Bradley J. Gadel, Percy, Smith, Foote & Gadel, Alexandria, LA, for Defendant/Appellant Louisiana Container Company.
    W. Jay Luneau, Alexandria, LA, for PlaintiffiAppellee David Johnson.
    Court composed of ULYSSES GENE THIBODEAUX, JOHN D. SAUNDERS, and MARC T. AMY, Judges.
   | THIBODEAUX, Judge.

In this workers’ compensation case, defendants, Louisiana Container Company (Louisiana Container) and Louisiana United Business Association Self Insurer’s Fund (LUBA), appeal the judgment of the Office of Workers’ Compensation in favor of plaintiff, David Johnson, arising out of an accident that occurred on December 27, 1998. The workers’ compensation judge (WCJ) ruled that Mr. Johnson’s back injury of 1999 aggravated the injury he received to his back from a 1997 slip and fall accident in a K Mart store. The WCJ also ruled that Mr. Johnson required back surgery and that his need for surgery was causally related to his on-the-job accident of December 27, 1998. The WCJ also awarded Mr. Johnson $2,000 in penalties and $7,500 in attorney fees because he found that the employer was unreasonable in failing to authorize back surgery. The WCJ also amended Mr. Johnson’s compensation rate and awarded fringe benefits. Additionally, Mr. Johnson was awarded the amount of $2,000 in penalties and $3,500 in attorney fees because the WCJ found that Louisiana Container failed to reasonably controvert the issue of Mr. Johnson’s compensation rate. Lastly, the WCJ found that Mr. Johnson was entitled to temporary total disability (TTD) benefits from the date of loss. The WCJ awarded Mr. Johnson an additional $2,000 in penalties and $4,000 in attorney fees for Louisiana Container’s failure to pay Mr. Johnson TTD benefits.

Mr. Johnson answered Louisiana Container’s appeal seeking an increase in the amount of attorney fees awarded by the WCJ or, in the alternative, an increase in the amount of attorney fees awarded for the work done in the present appeal.

For the following reasons, we affirm the WCJ’s finding that Mr. Johnson’s back injury as a result of his on-the-job accident aggravated a back injury Mr. Johnson suffered in another accident in 1997. In connection with this finding, |2we affirm the WCJ’s ruling that the surgery recommended by Dr. Louis Blanda is related to Mr. Johnson’s workers’ compensation accident. We further affirm the WCJ’s award of penalties and attorney fees to Mr. Johnson due to Louisiana Container’s failure to reasonably controvert Mr. Johnson’s need for surgery. We also affirm the WCJ’s decision that Mr. Johnson was entitled to TTD benefits and the decision to award penalties and attorney fees. The WCJ did not err in increasing the amount of Mr. Johnson’s compensation rate and awarding penalties and attorney fees based on Louisiana Container’s actions with regard to Mr. Johnson’s wage issue.

I.

ISSUES

Louisiana Container presents the following issues for review:

1) whether the trial court erred in ruling that the back surgery recommended by Dr. Louis Blanda is causally related to Mr. Johnson’s workers’ compensation accident of December 27,1998;
2) whether the trial court erred in awarding Mr. Johnson $2,000 in penalties and $7,500 in attorney fees for Louisiana Container’s failure to authorize Mr. Johnson’s back surgery;
3) whether the trial court erred and abused its discretion in ignoring its own scheduling order and allowing prejudicial expansion of the issues on the morning of trial;
4) whether the trial court erred in ruling that Mr. Johnson was entitled to TTD benefits and awarding Mr. Johnson penalties and attorney fees for its failure to award TTD benefits; and,
5)whether the trial court erred in amending Mr. Johnson’s compensation rate, decreeing that Mr. Johnson was entitled to a presumptive forty-hour work week and awarding fringe benefits as well as penalties and attorney fees for Louisiana Container’s failure to reasonably controvert Mr. Johnson’s compensation rate.

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FACTS

In July 1998, Mr. Johnson was hired to work as a welder for Louisiana Container. Mr. Johnson’s duties as a welder for Louisiana Container included building floors for garbage containers. Building floors for garbage containers included loading a table by lifting sheets of metal by crane and putting them on the table. After putting the sheets on the table, Mr. Johnson and other Louisiana Container employees lined the sheets evenly on the table by hand.

When a Louisiana Container painter suddenly resigned his employment, Mr. Johnson stated to his immediate supervisor “I know how to run an airless paint gun.” Mr. Johnson’s immediate supervisor informed the shop foreman that Mr. Johnson could run an airless paint gun. Mr. Johnson was asked to fill in as a painter until they could hire another painter.

Just prior to working for Louisiana Container as a welder and then as a painter, Mr. Johnson was doing heavy construction work. Before doing this work, Mr. Johnson injured his lower back in 1997 when he slipped and fell in K Mart department store. Dr. M. Lawrence Drerup diagnosed a bulging disk. Mr. Johnson testified that he was able to go back to doing construction work without physical problems. Mr. Johnson further testified that Dr. Drerup discussed a microdiskectomy procedure as an option for relieving any pain in his back. Mr. Johnson opted not to have the back surgery performed because the exercises prescribed by his physical therapist alleviated the back pain.

When Mr. Johnson went to work for Louisiana Container, the heaviest thing he carried was the floor sheets as a welder and five gallon buckets of paint from the paint locker into the shop as a painter. Mr. Johnson testified that he was able to |4do those activities without a lot of pain. Mr. Johnson also testified that he had to undergo a physical examination prior to his employment with Louisiana Container. During his physical examination, Mr. Johnson’s back was examined. The examination of his back consisted of bending over and touching his toes and twisting around. He was able to do the things requested. He was also told that he passed the physical examination.

With respect to his wages, Mr. Johnson testified that he was told he would be earning eight dollars and fifty cents per hour and that he in fact earned that amount of money. Mr. Johnson was also told about the company benefits such as group insurance for family coverage, accidental death and disability, life insurance and long and short-term disability. Mr. Johnson testified that he opted to take the health insurance for his family, half of which was paid by Louisiana Container. Mr. Johnson testified that with the exception of a few. personal days off, he generally worked forty hours per week for Louisiana Container.

The parties stipulated that on December 7, 1998, Mr. Johnson was injured while in the course and scope of his employment with Louisiana Container. Following that injury, Mr. Johnson was taken home by a co-worker due to his extreme pain. Mr. Johnson sought medical treatment from several doctors. Mr. Johnson first saw the company doctor, Dr. Darían Slaughter the doctor who performed his physical for employment with Louisiana Container and whom he saw only once for that purpose. Dr. Slaughter referred Mr. Johnson to Dr. Drerup, an expert in the field of neurological surgery. Dr. Drerup sent Mr. Johnson to Dr. Stephen Katz, a specialist in pain management. Dr. Drerup told Mr. Johnson that Dr. Katz would administer three epidural steroid shots and that if the shots did not work, he would discuss other alternatives to alleviate his pain. Mr. Johnson saw Dr. Katz |sthree times, with two week intervals between each visit, for administration of the epidural steroid shots. Mr. Johnson testified that he was to return to Dr. Katz one month after receiving the last shot but that LUBA would not pay for that visit.

Mr. Johnson’s benefits were terminated on July 1, 1999, when settlement of his claim was discussed. Mr. Johnson testified that he discussed a settlement amount of $2,500. Mr. Johnson also testified that he was told by Ms. Lopushansky of LUBA that he could not go back to see Dr. Katz and that LUBA would not pay for a followup visit with Dr. Drerup. Additionally, Mr. Johnson was told that LUBA would pay for one refill of his pain medication. The settlement was never perfected. Thereafter, Mr. Johnson hired an attorney to represent him in his workers’ compensation claim.

Mr. Johnson began treatment with Dr. Blanda on August 17, 1999, and continued treatment with Dr. Blanda until August 30, 2001. In all, Mr. Johnson saw Dr. Blanda ten times. Dr. Blanda recommended that Mr. Johnson undergo several tests and opined that back surgery would relieve about eighty-five percent of Mr. Johnson’s pain. Dr. Blanda was of the opinion that Mr. Johnson aggravated his prior back injury of 1997. Mr. Johnson explained that he did not want surgery after his 1997 accident because his pain got better by just doing exercises, but that he now desired surgery because he has been in pain that has not been alleviated with conservative treatment since his work-related injury of 1998. An MRI taken on March 29, 2001, revealed that Mr. Johnson’s back problems were worse than what previous MRIs revealed. Mr. Johnson further explained that he has problems related to his 1998 Louisiana Container-injury that he did not have after the 1997 accident such as “trouble walking ... have to drag [his] feet to walk ... legs go numb ... feet tingle ... have trouble holding [his] bladder ... sleep on couch mostly because it | fihurts ... to sleep in the bed.” Mr. Johnson further testified that prior to the 1998 accident, he never had trouble with his legs giving out. Dr. Blanda concluded that Mr. Johnson needed surgery.

Mr. Johnson’s back was also evaluated by Dr. Stephen S. Nason, an orthopaedic surgeon, on September 13, 1999 at the request of Louisiana Container’s workers’ compensation insurer for an independent medical examination. Dr. Nason reviewed Mr. Johnson’s medical records, including the MRI conducted after Mr. Johnson’s 1997 accident, and an MRI conducted after Mr. Johnson’s 1998 work-related accident and found no differences in the two MRIs. Dr. Nason found that Mr. Johnson suffered from bulging disks. Dr. Nason further opined that Mr. Johnson was not a candidate for surgery because surgery would not solve Mr. Johnson’s back problems.

After his 1997 accident, Mr. Johnson saw Dr. Drerup, a neurological surgeon. He diagnosed Mr. Johnson as suffering from possible cervical radiculopathy, chronic low back pain with possible lumbar radiculopathy and left hip pathology. By Mr. Johnson’s third visit with Dr. Drerup in January 1998, an MRI showed disk herniation at the L5 SI level of Mr. Johnson’s back. Dr. Drerup discussed Mr. Johnson’s treatment options including the option of disksectomy and fusion surgery. Dr. Drerup testified that disk herniation will not heal on its own and the treatment option a patient chooses is based on the patient’s level of pain.

Ultimately, Mr. Johnson chose not to undergo surgery and testified that his pain had subsided. He did not see Dr. Drerup again until February 23, 1999, after the occurrence of his work-related accident of December 1998. Dr. Drerup opined that Mr. Johnson had gone into remission from the 1997 accident and that a |7subsequent accident caused his back problems to return. Like Dr. Blanda, Dr. Drerup recommended that Mr. Johnson have surgery to relieve his pain.

Louisiana Container, through LUBA, initiated the payment of compensation benefits soon after Mr. Johnson’s accident based on the amount Louisiana Container paid Mr. Johnson per hour which was $8.50. Mr. Johnson’s average weeMy wage rate, used to calculate the amount of workers’ compensation benefits he was to be paid, did not include an amount for fringe benefits. Mr. Sanford Arst, an adjuster with LUBA who handled Mr. Johnson’s claim for workers’ compensation benefits on behalf of Louisiana Container, testified that in determining Mr. Johnson’s average weekly wage rate information regarding Mr. Johnson’s full or part time employee status was not taken into account. Workers’ compensation benefits paid from December 1998, were changed from temporary total disability benefits (TTD) to supplemental earnings benefits (SEB) in June 1999. Thereafter, in July 1999, when settlement talks begun, Mr. Johnson’s workers’ compensation benefits were terminated. The settlement was not approved by the WCJ and on July 14, 1999, Mr. Johnson filed a 1008 Disputed Claim for Compensation against Louisiana Container alleging the failure of Louisiana Container to provide the correct rate of indemnity benefits, failure to provide indemnity benefits, and failure to provide medical benefits. Following a one day hearing on the merits of the case, the WCJ took the matter under advisement. On December 21, 2001, the WCJ found in favor of Mr. Johnson on all issues and awarded penalties and attorney fees. This appeal by Louisiana Container followed.

_k.ni.

STANDARD OF REVIEW

The standard of review in a workers’ compensation hearing was set out in Banks v. Industrial Roofing & Sheet Metal Works, Inc., 96-2840, pp. 7-8 (La.7/1/97); 696 So.2d 551, 556 as follows:

Factual findings in workers’ compensation cases are subject to the manifest error or clearly wrong standard of review. Smith v. Louisiana Dep’t of Corrections, 93-1305, p. 4 (La.2/28/94), 633 So.2d 129, 132; Freeman v. Poulon/Weed Eater, 93-1530, pp. 4-5 (La.1/14/94), 630 So.2d 733, 737-38. In applying the manifest error-clearly wrong standard, the appellate court must determine not whether the trier of fact was right or wrong, but whether the factfinder’s conclusion was a reasonable one. Freeman, 93-1530 at p. 5, 630 So.2d at 737-38; Stobart v. State, 617 So.2d 880, 882 (La.1993); Mart v. Hill, 505 So.2d 1120, 1127 (La.1987). Where there are two permissible views of the evidence, a factfinder’s choice between them can never be manifestly erroneous or clearly wrong. Stobart, 617 So.2d at 882. Thus, “if the [factfinder’s] findings are reasonable in light of the record reviewed in its entirety, the court of appeal may not reverse, even if convinced that had it been sitting as the trier of fact, it would have weighed the evidence differently.” Sistler v. Liberty Mut. Ins. Co., 558 So.2d 1106, 1112 (La.1990).

IV.

LAW AND DISCUSSION Need for Surgery in Connection with the December 1998 Accident:

Louisiana Container argues that the WCJ erred by finding that the back surgery recommended by Dr. Blanda is causally related to Mr. Johnson’s work-related accident of December 27, 1998. Louisiana Container claims that this ruling was in error because Mr. Johnson injured his back in 1997 and back surgery was recommended for that injury by Dr. Drer-up. Further, Louisiana Container asserts that 19based on the testimony of Drs. Blan-da and Dr. Nason, the MRI taken prior to the 1998 accident and the one taken after the accident were virtually identical.

Dr. Nason testified that Mr. Johnson suffered from bulging disks; however, in the first MRI the radiologist, Dr. Carl Schofield, found that the disks at the L5-S1 and L4-5 area of Mr. Johnson’s back were herniated. Dr. Blanda agreed with the radiologist’s assessment of the MRI taken after the 1997 accident. Dr. Nason further testified that he would not recommend surgery because surgery would not solve a bulging disk problem. Dr. Nason admitted that Mr. Johnson’s subjective complaints of pain was consistent with the MRI findings. Dr. Nason wrote a letter to Mr. Buster Fontenot, a vocational rehabilitation consultant, where he stated that he did not feel Mr. Johnson could return to full duties and that Mr. Johnson would have limitations and restrictions on his physical capabilities. Dr. Nason also noted that Mr. Johnson would have to undergo a functional capacity evaluation (FCE) in order to determine his exact limitations. Dr. Nason also felt that Mr. Johnson would be unable to do light-duty carpentry, sheet rock hanging or painting. Thus, Dr. Nason agreed that Mr. Johnson suffered with back problems and was in pain. Dr. Nason disagreed that Mr. Johnson’s problems were associated with his work-related accident of December 1998.

Dr. Blanda’s first examination of Mr. Johnson in August 1999, revealed a spasm in Mr. Johnson’s lower back. Dr. Blanda explained that the spasm is an objective sign of pain because it is an involuntary muscle contraction that comes about in response to pain. Dr. Blanda further explained that the spasm is the body’s way of limiting movement of the painful area. Dr. Blanda reviewed the MRI dated February 2, 1999, that said Mr. Johnson had both degenerative changes in his disks at the L4-5 and L5-S1 levels of his back as well as signs of herniation in those areas. Im Dr. Blanda recommended that Mr. Johnson undergo a myelogram, a CT scan and an EMG test. Dr. Blanda testified that he needed those tests because Mr. Johnson showed symptoms of having two abnormal disks. Dr. Blanda also testified that further testing can narrow down the symptoms to reveal that the problems are with only one disk. Moreover, Dr. Blanda testified that a Myelogram can help to further identify where a nerve is being compressed. With respect to performing a CT scan, Dr. Blanda testified that a CT scan makes a diagnosis more definitive by revealing a cross sectional view of a patient’s back structure. None of the tests ordered by Dr. Blanda were approved by LUBA.

Ultimately, by March 8, 2001, with Mr. Johnson complaining of increasing pain and additional problems with bladder control, Dr. Blanda requested, and LUBA approved, another MRI test. Mr. Johnson had the MRI performed on April 5, 2001. Dr. Blanda testified that the MRI revealed that Mr. Johnson’s condition was worse. The radiologist report accompanying the MRI revealed that the smaller disk at the L5-S1 level of Mr. Johnson’s back was a large, left-sided herniation. Dr. Blanda testified that the April 2001 MRI confirmed that Mr. Johnson’s condition was getting worse. Dr. Blanda opined that Mr. Johnson needed surgery.

The WCJ found that Mr. Johnson began working for Louisiana Container after his 1997 accident and that he performed heavy physical labor. The WCJ further found that Mr. Johnson was able to do the work required of him at Louisiana Container without complaints of pain or problems until Mr. Johnson’s December 7, 1998, work-related accident. A 1999 MRI ordered by Dr. Drerup after the December 1998 accident, revealed “mild radiculopa-thy secondary to disk pathology at L4-5.” The WCJ noted that the 1999 MRI showed problems with Mr. |n Johnson’s back in an area not revealed on the 1998 MRI taken subsequent to Mr. Johnson’s 1997 accident.

Mr. Johnson saw Dr. Slaughter for epidural steroid injections to alleviate his pain. Dr. Slaughter did not release Mr. Johnson to go back to work and opined that Mr. Johnson needed a follow-up appointment with Dr. Drerup to determine if he was a candidate for surgery. Dr. Slaughter noted that physical therapy had not helped. Dr. Nason admitted in his recommendation to LUBA that Mr. Johnson’s most recent injury perhaps aggravated his pre-existing condition. Dr. Nason thought it inadvisable for Mr. Johnson to return to a job involving frequent bending and lifting. Dr. Nason also advised that these restrictions were permanent. Dr. Nason did not rule out a myelogram, or an EMG; he merely testified that those tests should be done if Mr. Johnson was a candidate for surgery.

An MRI taken in March 2001 that revealed the smaller disk problem at the L5-S1 level was now a large left-sided herniation. The WCJ found that although the employer knew of the information revealed in the March 2001 MRI, Louisiana Container failed to redepose Drs. Nason or Drerup. All of the doctors agreed that Mr. Johnson’s injury in December 1998 was an aggravation of his pre-existing back problem of 1997. The law is settled that a preexisting disease or infirmity of the employee does not disqualify the workers’ compensation claim if the work injury aggravated, accelerated or combined with the disease or infirmity to produce the disability for which compensation is claimed. Robinson v. Travelers Ins. Co., 619 So.2d 1261 (La.App. 3 Cir.1993).

Ultimately, the WCJ concluded that Mr. Johnson’s need for surgery was related to his work-related accident of December 7, 1998. We find no error in this finding. Mr. Johnson was injured in a slip and fall accident in 1997. He was seen by | ^several doctors. Dr. Drerup presented the option of surgical treatment for his back problems as well as conservative treatment consisting of physical therapy and steroid injections. Mr. Johnson chose the latter option. Conservative treatment was successful and Mr. Johnson remained pain free, engaging in heavy labor type work until his accident of December 7, 1998. All of Mr. Johnson’s MRIs revealed disk herniation as opposed to mere bulging. Dr. Blanda, Mr. Johnson’s treating physician, testified that surgery is necessary to alleviate pain due to herniated disks. This assignment of error is without merit.

Penalties and Attorney Fees — Failure to Authorize Medical Tests and Surgery

Louisiana Container asserts that the WCJ erred in awarding penalties and attorney fees for its failure to authorize Mr. Johnson’s back surgery and diagnostic tests associated with performing the surgery. The law governing the refusal to authorize medical treatments arises from La.R.S. 23:1201 and 23:1203. Louisiana Revised Statutes 23:1203(A) states in pertinent part:

In every case coming under this Chapter, the employer shall furnish all necessary drugs, supplies, hospital care and services, medical and surgical treatment, and any nonmedical treatment recognized by the laws of this state as legal, and shall utilize such state, federal, public, or private facilities as will provide the injured employee with such necessary services.

Louisiana Revised Statutes 23:1201(E) requires that “[m]edical benefits payable under this Chapter shall be paid within sixty days after the employer or insurer receives written notice thereof.” Subsection (F) further states that failure to comply with this Section “shall result in the assessment of a penalty ... together with reasonable attorney fees for each disputed claim.”

The decision to impose penalties is a factual question, which will not be disturbed on appeal in the absence of manifest error. Spencer v. Gaylord Container Corp., 96-1230 (La.App. 1 Cir. 3/27/97); 693 So.2d 818. Louisiana courts have consistently held that failure to authorize a medical procedure for an employee eligible to receive workers’ compensation is deemed to be a failure to furnish compensation benefits, thereby triggering the penalty provisions of the Louisiana Workers’ Compensation Act. Gay v. Georgia Pacific Corp., 32,653 (La.App. 2 Cir. 12/22/99); 754 So.2d 1101. Penalties and attorney fees shall be awarded if the employer or the insurer fails to timely pay benefits due claimant, unless the claim is reasonably controverted or such nonpayment results from conditions over which the employer or insurer had no control. La.R.S. 23:1201(F); Brown v. Texas-LA Cartage, Inc., 98-1063 (La.12/01/98); 721 So.2d 885. The supreme court in Brown went on to state that:

[I]n order to reasonably controvert a claim, the defendant must have some valid reason or evidence upon which to base his denial of benefits. Thus, to determine whether the claimant’s right has been reasonably controverted, thereby precluding the imposition of penalties and attorney fees under La. R.S. 23:1201, a court must ascertain whether the employer or his insurer engaged in a nonfrivolous legal dispute or possessed factual and/or medical information to reasonably counter the factual and medical information presented by the claimant throughout the time he refused to pay all or part of the benefits allegedly owed.

Brown, 721 So.2d at 890.

The WCJ held that Louisiana Container failed to reasonably controvert Mr. Johnson’s claim for medical testing and surgery. There is nothing in the record to suggest that this finding is manifestly erroneous. Therefore, the award of penalties and attorney fees is affirmed as against Louisiana Container.

|14WCJ Scheduling Order and WCJ’s Expansion of Issues at Trial

Louisiana Container asserts that at trial, the WCJ improperly expanded the issues as presented in Mr. Johnson’s petition and as determined at a pretrial conference to include the issue of Mr. Johnson’s fringe benefits. Louisiana Container further asserts that the WCJ improperly allowed Mr. Johnson to file an untimely pretrial statement and pretrial memorandum in violation of the WCJ’s previously set pretrial schedule.

Louisiana Code Civil Procedure Article 1551 provides as follows with respect to pretrial and scheduling conference orders:

A. In any civil action in a district court the court may in its discretion direct the attorneys for the parties to appear before it for conferences to consider any of the following:
(1) The simplification of the issues, including the elimination of frivolous claims or defenses.
(2) The necessity of desirability of amendments to the pleadings.
(3) What material facts and issues exist without substantial controversy, and what material facts and issues are actually and in good faith controverted.
(4) Proof, stipulations regarding the authenticity of documents, and advance rulings from the court on the admissibility of evidence.
(5) Limitations or restrictions on or regulation of the use of expert testimony under Louisiana Code of Evidence Article 702.
(6) The control and scheduling of discovery.
(7) The identification of witnesses, documents, and exhibits.
(8) Such other matters as may aid in the disposition of the action.
|1BB. The court shall render an order which recites the action taken at the conference, the amendments allowed to the pleadings, and the agreements made by the parties as to any of the matters considered, and which limits the issues for trial to those not disposed of by admissions or agreements of counsel. Such order controls the subsequent course of the action, unless modified at trial to prevent manifest injustice.
C. If a party’s attorney fails to obey a pretrial order, or to appear at the pretrial and scheduling conference, or is substantially unprepared to participate in the conference or fails to participate in good faith, the court, on its own motion or on the motion of a party, after hearing, may make such orders as are just, including orders provided in Article 1471(2), (3), and (4). In lieu of or in addition to any other sanction, the court may require the party or the attorney representing the party or both to pay the reasonable expenses incurred by noncompliance with this Paragraph, including attorney fees.

The WCJ’s scheduling order stated that pretrial statements were due thirty days prior to trial. The order also stated that failure to submit documentary evidence prior to trial “shall result in its exclusion.” There is no corresponding consequence in the order with respect to the failure to submit pretrial statements timely. Trial in this matter was held on November 6, 2001. Louisiana Container submitted its pretrial statement on June 4, 2001, well within the time limit set by the scheduling order. Mr. Johnson submitted his pretrial statement on November 1, 2001, well outside of the time limit set by the scheduling order, but prior to trial. The WCJ allowed the submission of Mr. Johnson’s pretrial statement.

Louisiana Code Civil Procedure Article 1551(B) gives the trial court discretion to modify a pretrial order if modification will prevent manifest injustice. Apparently, the WCJ determined that to disallow Mr. Johnson’s submission of his pretrial statement before trial but after the time limit set by his pretrial order would cause manifest injustice. We find no abuse in the WCJ’s exercise of his discretion.

IB In connection with Mr. Johnson’s submission of his pretrial statement, Louisiana Container asserts that the WCJ improperly expanded the issues to be litigated at trial. Specifically, Louisiana Container asserts that issues regarding Mr. Johnson’s wage rates should be disallowed. However, it is within the trial court’s discretion to admit or disallow evidence subject to an objection based upon the scope of the issues and pleadings. Brannon v. Boe, 569 So.2d 1086 (La.App. 3 Cir.1990). Furthermore, it is within the trial court’s discretion to determine whether evidence is encompassed by the general issues raised in the pleadings. Id. In his answer to Louisiana Container’s interrogatories regarding his wages, Mr. Johnson stated that his “indemnity benefits from December 1998 to July 1999 were figured incorrectly.” Louisiana Container contends that Mr. Johnson’s wage rate calculation dispute should be limited to the aforementioned time period. The WCJ noted that Mr. Johnson’s 1008 form raised an issue of the “correct calculation of Mr. Johnson’s average weekly wage, stated that he was a full-time employee, that he had some benefits, fringe benefits, may be entitled to, used in calculation of his average weekly wage.” The WCJ also concluded that Mr. Johnson’s demand against Louisiana Container for failure to approve surgery encompassed Mr. Johnson’s disability status with respect to whether he was temporary totally disabled or whether at any time his status was appropriately changed to supplemental earnings benefit status. We agree with the WCJ. Evidence of Mr. Johnson’s need for diagnostic medical tests and surgery is relevant to the question of whether he should receive TTD benefits or SEB. This was one of the issues raised in his pleadings. Further, whether Louisiana Container provided Mr. Johnson fringe benefits is relevant to the issue of the proper calculation of his wage rate, another issue raised by the pleadings. We find no abuse of the WCJ’s decision to include evidence of the type and amount of fringe benefits |17Mr. Johnson received as an employee of Louisiana Container, nor do we find abuse of the WCJ’s discretion with respect to allowing evidence of Mr. Johnson’s disability status. Thus, this assignment of error is without merit.

Temporary Total Disability Benefits, Supplemental Earnings Benefits

Louisiana Container asserts that Mr. Johnson was not entitled to TTD benefits from the date of his work-related accident on December 7, 1998 to the present. Louisiana Container argues that Mr. Johnson worked several months after his on-the-job injury and submitted Form 1020 indicating the amount of wages he earned; therefore, Louisiana Container was not in error when in July 1999 it converted Mr. Johnson’s benefits from TTD to SEBs. On the other hand, Mr. Johnson asserts that his TTD benefits should not have been switched to SEB; and that he was totally temporarily disabled from the time he was injured in December of 1998 to the present.

The benefits to which a particular claimant is entitled are clearly determined by the application of La.R.S. 23:1221. When a statute is clear and free of ambiguity, the letter of it shall not be disregarded under the pretext of pursuing its spirit. La.R.S. 1:4. “The law is to be applied as written and no further interpretation may be made in search of the intent of the legislature.” Thibodeaux v. Stapp Towing Co., Inc., 96-1514 (La.App. 3 Cir. 8/27/97); 702 So.2d 693. Louisiana Revised Statutes 23:1221(1)(a) states that a person who is- temporarily totally disabled is entitled to TTDs and La.R.S. 23:1221(l)(b) states that a person who works at all is not entitled to TTDs; whereas, La.R.S. 23:1221(3)(a) provides for SEBs equal to the difference between the average monthly wages at the time of injury and average monthly wages earned or average monthly wages the employee is able to earn and that a claimant must be capable of working in order to be eligible for SEBs. We | lsconclude, therefore, that a person who is temporarily totally disabled and not able to work is entitled to TTD benefits. Thus, the issue is whether Mr. Johnson was temporarily totally disabled and unable to work when his TTD benefits were converted to SEBs.

The WCJ gave the following reasons for finding that Mr. Johnson’s benefits should not have been converted from TTD to SEB:

The court finds that because Doctor Slaughter in July of 1999 stated that Mr. Johnson was not at maximum medical improvement, needed to follow up to see if he was a surgical candidate, needed work hardening physical therapy, needed an FCE, that a-a need for an FCE was confirmed by Doctor Nason in September of 1999. [sic] The continuing medical treatment of Doctor Blanda which disabled Mr. Johnson, that the employer unreasonably failed to pay Mr. Johnson temporary total disability benefits as opposed to SEB benefits.

Louisiana Container supports its conversion of Mr. Johnson’s TTD benefits to SEBs by pointing to the fact that Mr. Johnson worked for “Carpet Care,” a business owned by Mr. Johnson’s father-in-law. Mr. Johnson testified that he worked for his father-in-law because during the time that he was out of work, his father-in-law helped him pay bills, paid his rent, bought his groceries and gave him cash. Mr. Johnson further testified that his father-in-law “created” a job for him in his carpet business. Mr. Johnson testified that his job at Carpet Care involved riding with a carpet technician, talking to the customer while the technician cleaned the carpet and collecting the money from the customer. Mr. Johnson also plugged and unplugged the carpet cleaning machines. Mr. Johnson did report his income from this job to the workers’ compensation carrier. Mr. Johnson described his work for Carpet Care as “just — doing something to have something to do.” It appears from the record that Mr. Johnson’s father-in-law allowed Mr. Johnson to work for Carpet Care so that he could give Mr. Johnson money from his business account as opposed to his Impersonal account. Mr. Johnson testified that he stopped working for Carpet Care because at the end of the day he was in pain. At the time of the hearing, Mr. Johnson was not engaged in any type of work.

Although Mr. Johnson’s father-in-law benevolently hired Mr. Johnson to work in his carpet cleaning business, the record reflects that Mr. Johnson was unable to continue even the light duty work to which he was assigned. The medical evidence corroborates Mr. Johnson’s allegation that he is unable to engage in any type of work. Thus, we find no error in the WCJ’s ruling that Mr. Johnson’s benefits should not have been converted to SEBs and that he is entitled to receive TTD benefits from the date of his injury to the present.

Louisiana Container also contests the WCJ’s award of penalties and attorney fees. Louisiana Revised Statutes 23:1201(B) and (F)(2) provides for the assessment of penalties and attorney fees for the failure to timely pay all compensation that is then due, unless the claim is reasonably controverted. In Brown, 721 So.2d at 890, the supreme court defined “reasonably controverted as follows:

[I]n order to reasonably controvert a claim, the defendant must have some valid reason or evidence upon which to base his denial of benefits.... [A] court must ascertain whether the employer or his insurer engaged in a nonfrivolous legal dispute or possessed factual and/or medical information to reasonably counter the factual and medical information presented by the claimant throughout the time he refused to pay all or part of the benefits allegedly owed.

The WCJ further ruled that the medical evidence revealed that Mr. Johnson was not at maximum medical improvement. The WCJ further noted that even Dr. Na-son, a doctor Mr. Johnson saw at the request of Louisiana Container, concluded that an FCE was necessary before he would release Mr. Johnson to work, and that if Mr. Johnson was a candidate for surgery, further medical testing would be J^necessary. Drs. Blanda and Slaughter concluded that Mr. Johnson was a candidate for surgery. For these reasons, the WCJ found that Louisiana Container improperly converted Mr. Johnson’s TTD benefits to SEBs because it did not have a valid reason for the conversion based on the medical evidence. Therefore, the WCJ awarded Mr. Johnson penalties and attorney fees. We find no error in the WCJ’s decision.

Calculation of Wages; Fringe Benefits

Louisiana Container asserts that the value of the fringe benefits it provided to Mr. Johnson should not be considered part of his wages, and that Mr. Johnson was not entitled to a presumptive forty-hour work week. We disagree.

With respect to fringe benefits, Louisiana Container relies upon La.R.S. 23:1021(10)(f) that provides as follows with respect to income tax:

In the determination of “wages” and the average weekly wage at the time of the accident, no amount shall be included for any benefit or form of compensation which is not taxable to an employee for federal income tax purposes; however, any amount withheld by the employer to fund any non-taxable or tax deferred benefit provided by the employer and which was elected by the employee in lieu of taxable earnings shall be included in the calculation of the employee’s wage and average weekly wage.

Louisiana Container admits that it did not include the value of the fringe benefits in calculating Mr. Johnson’s average weekly wage rate. Act 751 of 1999, effective on August 15, 1999, amended La.R.S. 23:1021(10)(f) and precluded the value of Mr. Johnson’s fringe benefits after August 15,1999. We disagree.

The value of fringe benefits, if proven, will be included in the calculation of weekly wages for the purpose of determining the compensation rate if such benefits were fairly contemplated by the parties to the contract of employment. Transportation Ins. Co. v. Pool, 30,250, 30,253, 30,252, 30,251 (La.App. 2 Cir. 5/13/98); 714 So.2d 153, writ denied, 98-1566, 98-1616 (La.9/25/98); 725 So.2d 486, 488. We recognize that La.R.S. 23:1021was amended by Acts 1999, No. 751 to add subparagraph 10(f), concerning the exclusion of nontaxable benefits from the determination of average weekly wages. However, since claimant was injured in 1998, this section is not applicable to the present case. See Moses v. Grambling State University, 33,185 (La.App. 2 Cir. 5/15/00); 762 So.2d 191, writ denied, 00-1769 (La.9/22/00); 768 So.2d 1285. In Burge v. Louisiana Ins. Guaranty Ass’n., 02-33, p. 3 (La.App. 3 Cir. 5/15/02); 819 So.2d 1098, 1100 we stated, “[i]t is well settled in workers’ compensation cases that generally the law governing an action for benefits is the law that was in effect at the time of the injury.” We further quoted from Skipper v. Acadian Oaks Hospital, 00-67, p. 4 (La.App. 3 Cir. 5/3/00); 762 So.2d 122, 124-25 the following:

We have reviewed the workers’ compensation jurisprudence of the supreme court and found that beginning with Boyer v. Crescent Paper Box Factory, 143 La. 368, 78 So. 596 (La.1917), the cases in which the supreme court has held that “[t]he law applicable in a worker’s compensation case is the one in effect at the time of the injury” have been cases where the issue was an employee’s entitlement to benefits or the amount of benefits an employee was entitled to receive. See Craver v. Gillespie, 148 La. 182, 86 So. 730 (La.1920); Leon v. Crowell & Spencer Lumber Co., 151 La. 932, 92 So. 389 (La.1922); Nelson v. Roadway Express, Inc., 588 So.2d 350 (La.1991); Bruno v. Harbert Int’l, Inc., 593 So.2d 357 (La.1992); Freeman v. Poulan/Weed Eater, 93-1530 (La.1/14/94); 630 So.2d 733; Coates v. Byrd Constr. Serv., Inc., 94-2989 (La.2/9/95); 650 So.2d 237; Daugherty v. Domino’s Pizza, 95-1394 (La.5/21/96); 674 So.2d 947; Chevalier v. L.H. Bossier, Inc., 95-2075 (La.7/2/96); 676 So.2d 1072.

Louisiana Revised Statutes 23:1021(10)(f) addresses the amount of benefits an employee is entitled to receive. Hence, its version at the time Mr. Johnson sustained his injury must be applied. The 1998 version of La.R.S. 23:1021 did not provide for the exclusion of the value of fringe benefits when calculating an | ^employee’s average weekly wage rate. The trial court found that the weekly value for Mr. Johnson’s health insurance was $39.84; the weekly value for Mr. Johnson’s family health insurance coverage was $39.47; the weekly value of Mr. Johnson’s short-term disability coverage was $2.19; the weekly value of Mr. Johnson’s long-term disability coverage was $2.19; and the weekly value of Mr. Johnson’s life insurance coverage was $1.71. For the above reasons, these fringe benefit values should have been made a part of Louisiana Container’s calculation of Mr. Johnson’s average week wage rate.

Further, in determining Mr. Johnson’s average weekly wage rate, the WCJ gave Mr. Johnson the benefit of a presumptive forty-hour work week. Louisiana Container asserts that this was error. Louisiana Container does not dispute Mr. Johnson’s full-time employment status. In fact, Mr. Cecil Holden, the vice-president in charge of finance for Louisiana Container, testified that they hired Mr. Holden as a full-time employee. Louisiana Container argues, however, that he did not work a full forty-hour week because Mr. Johnson was absent from work when work was available and that these absences were discretionary. Mr. Johnson admits that in the four full weeks prior to his injury, he worked less than forty hours a week due to illness and car problems. Louisiana Revised Statutes 23:1021(10)(a) with respect to hourly wages provides in pertinent part as follows:

(i) If the employee is paid on an hourly basis and the employee is employed for forty hours or more, his hourly wage rate multiplied by the average actual hours worked in the four full weeks preceding the date of the accident or forty hours, whichever is greater; or
(ii) If the employee is paid on an hourly basis and the employee was offered employment for forty hours or more but regularly, and at his own discretion, works less than forty hours per week for whatever reason, then, the average of his total earnings per week for the four full weeks preceding the date of the accident;

gc¡ There being no issue regarding Mr. Johnson’s full time employment status, it appears that the WCJ based his opinion on La.R.S. 23:1021(10)(a)(i) when he gave Mr. Johnson the benefit of the presumption that he worked forty hours per week, the greater of the actual number of hours Mr. Johnson worked. A full time employee is entitled to the forty-hour per week presumption. See Leger v. A-1 Nursing Registry, 98-1731 (La.App. 3 Cir. 4/28/99); 737 So.2d 142, writ denied, 99-1555 (La.9/24/99); 749 So.2d 633.

However, Louisiana Container’s argument seems to be based on La.R.S. 23:1021(10)(a)(ii) where it notes that Mr. Johnson was absent from work for personal reasons and actually worked less than forty hours per week due to his absences. Louisiana Container does not dispute that Mr. Johnson’s absences for illness and car problems and the repair of his car were excused absences. Further, Louisiana Container admits that Mr. Johnson made up the missed time. Finally, although Mr. Johnson worked less than forty hours in the four weeks preceding the accident due to his illness as well as the need to repair his transportation, we do not find that there is sufficient evidence to show that Mr. Johnson “regularly and at his own discretion, worked less than 40 hours per week”, as envisioned by the statute. See Price v. Fireman’s Fund Ins. Co., 502 So.2d 1078 (La.1987). Consequently, we find that the wage rate should have been calculated as provided for in La.R.S. 23:1021(10)(a)(i). Thus, the WCJ did not err in using the forty hour presumption in calculating Mr. Johnson’s weekly wage rate at $340.00. Therefore, the WCJ calculated Mr. Johnson’s total average weekly wage rate (average weekly wage based on forty hours per week at $8.50 per hour plus the value of the fringe benefits) at $425.15 and held that his corresponding workers’ compensation benefit rate should be $283.58.

m In connection with Louisiana Container’s failure to properly calculate and pay Mr. Johnson TTD benefits, the WCJ awarded penalties in the amount of $2,000 and attorney fees in the amount of $3,500. In accordance with the law at the time of Mr. Johnson’s injury, we have already determined that Mr. Johnson was entitled to have the value of his fringe benefits included in the calculation of his average weekly wage rate. Mr. Arst of LUBA admitted that in calculating Mr. Johnson’s weekly wage rate, he did not include the value of the fringe benefits even though the law at the time of Mr. Johnson’s injury required that he do so. It appears that Louisiana Container deliberately chose to remain ignorant of law with respect to the valuation of fringe benefits in the calculation of an injured worker’s wage rate, and ignored the mandate of La.R.S. 23:1021(10)(a)(i) as well as the jurisprudence interpreting that provision. Thus, it did not reasonably controvert Mr. Johnson’s claim that his fringe benefits be included in a determination of his average weekly wage because it relied on a 1999 amendment to La.R.S. 23:1021(10)(f) that is inapplicable to Mr. Johnson. Furthermore, Louisiana Container failed to reasonably controvert the applicability of the forty hour work week presumption. Therefore, we find that the WCJ’s award of penalties and attorney fees in this instance was not in error.

Request for Increase in Attorney Fees for Work on Appeal

In his answer to Louisiana Container’s appeal, Mr. Johnson requests an increase in attorney fees awarded for work done defending the present appeal. In Sinegal v. Able Glass Co., Inc., 95-10, p. 5 (La.App. 3 Cir. 10/11/95); 663 So.2d 393, 396, we stated:

An increase in attorney’s fees is awarded on appeal when the defendant appeals, obtains no relief, and the appeal has necessitated more work on the part of the | ¡.¡¡plaintiffs attorney, provided that the plaintiff requests such an increase. Pitcher v. Hydro-Kem Services, Inc., 551 So.2d 736 (La.App. 1 Cir.), writ denied, 553 So.2d 466 (La.1989).

In the present case, a review of the additional work necessitated by this appeal reveals that an award of $3,000 in attorney fees is warranted. See Poirrier v. Otis Engineering Corp., 602 So.2d 207 (La.App. 3 Cir.1992).

V.

CONCLUSION

For the foregoing reasons, the judgment of the Office of Workers’ Compensation is affirmed. We award plaintiff, David Johnson, $3,000 in attorney fees for all work performed on appeal. Costs of this appeal are assessed against Louisiana Container Company.

AFFIRMED.


source: Caselaw Access Project

author: h COOKS, Judge.

license: Public Domain

text:
    STATE of Louisiana v. Clifford WILLIAMS.
    No. 02-938.
    Court of Appeal of Louisiana, Third Circuit.
    Oct. 23, 2002.

      David L. Carriere, Opelousas, LA, Counsel for Defendani/Appellee: Clifford Williams.
    J. Nolan Sandoz, Jeffery L. Brunson, Lafayette, LA, Counsel for Plaintiff/Appellant: State of Louisiana.
    Court composed of ULYSSES GENE THIBODEAUX, SYLVIA R. COOKS, and GLENN B. GREMILLION, Judges.
   h COOKS, Judge.

The Defendant-Appellee, Clifford Williams, moves to dismiss, as untimely perfected, the appeal filed by the Plaintiff-Appellant, the State of Louisiana. Alternatively, Williams filed an Answer to the appeal. For the reasons discussed below, we hereby grant the motion and dismiss the appeal.

The State of Louisiana initiated this paternity and child support action against the Defendant. On August 26, 1996, the trial court signed a judgment in accordance with the recommendation of the hearing officer against the Defendant finding that the Defendant was the natural father of the minor child involved. In addition to disposing of other ancillary matters, this judgment also cast the Defendant in judgment for monthly child support of $250.00 and required him to maintain health insurance on the child.

Subsequently, the State filed a motion to increase the child support award. The hearing officer assigned this matter issued a recommendation on October 1, 2001, that the child support be increased to $300.00 per month. The Defendant timely objected to the hearing officer’s recommendation. The Defendant also filed a motion to reduce the child support obligation which, in addition to asking for a reduction in the $250.00 monthly child support award, included a request that the Defendant be relieved of being required to maintain health insurance on the child. The hearing officer recommended the rejection of the Defendant’s motion to reduce the child support in the recommendation signed on February 4, 2002.

The Defendant objected to the recommendation. On February 21, 2002, the trial court held a hearing on the Plaintiffs motion to increase the child | ?,support and the Defendant’s motion to decrease the child support. By judgment signed on April 1, 2002, the trial court ordered that the Defendant’s child support obligation be increased from $250.00 to $290.29 per month. However, the trial court rescinded the requirement that the Defendant maintain health insurance on the minor child.

The district court clerk’s office mailed notice of the signing of the April 1 judgment to all counsel of record on April 5, 2002. The State filed a motion and order for a devolutive appeal with the trial court on May 30, 2002. The order granting the appeal was signed on June 6, 2002. The record in this appeal was lodged in this court on August 7, 2002. On August 13, 2002, the Defendant filed the motion to dismiss the appeal sub judice.

The pertinent portion of La.Code Civ.P. art. 3943 states, “An appeal from a judgment awarding custody, visitation, or support of a person can be taken only within the delay provided in Article 3942.” In La. Code Civ.P. art. 3942, the legislature has provided, “An appeal from a judgment granting or refusing an annulment of marriage or a divorce can be taken only within thirty days from the applicable date provided in Article 2087(A)(l)-(3).” The jurisprudence has long held that the time delay set by Article 3943 applies to judgments awarding, denying, modifying, or terminating alimony or custody. Malone v. Malone, 282 So.2d 119 (La.1973).

No motion for new trial was filed following the trial court’s judgment of April 1, 2002. Therefore, the State had thirty days from the mailing of the notice of judgment to file the motion and order for appeal with the trial court. As stated above, the motion and order for appeal were not filed’ until May 30, |32002, which date was well beyond this thirty day time period. Accordingly, we hereby grant the motion to dismiss the appeal. Costs of this appeal are assessed to the Plaintiff-Appellant, the State of Louisiana.

APPEAL DISMISSED.


author: 11 COOKS, Judge.

text:
    Loyal C. HOBBS and Jannifer Hobbs, d/b/a Taylor Nursery v. IGF INSURANCE COMPANY, et al.
    No. 02-26.
    Court of Appeal of Louisiana, Third Circuit.
    Oct. 23, 2002.
    Writ Denied Jan. 31, 2003.

      Victor H. Sooter, Elizabeth Brown Hil-burn, Sooter & Associates, A Limited Liability Company, Alexandria, LA, Counsel for Plaintiffs/Appellee: Loyal C. Hobbs and Jannifer Hobbs, d/b/a Taylor Nursery.
    Russell L. Potter, Andrew P. Texada, Stafford, Stewart & Potter, Alexandria, LA, Counsel for Defendants/Appellants: IGF Insurance Company and Betty Hawthorne.
    Elizabeth T. Bufin, Henke-Bufkin, Clarksdale, MI, Counsel for Defendants/Appellants: IGF Insurance Company and Betty Hawthorne.
    Court composed of NED E. DOUCET, JR., Chief Judge, ULYSSES GENE THIBODEAUX, and SYLVIA R. COOKS, Judges.
   STATEMENT OF THE CASE

11 COOKS, Judge.

This case began as a suit for crop damage following the drought of 1998. On September 24,1997, plaintiff-farmers, Loyal C. Hobbs and Jannifer Hobbs d/b/a/ Taylor Nursery purchased a multiple peril crop insurance (MPCI) policy from IGF insurance company through its agent, Betty Hawthorne. The MPCI policy issued by IGF is federally reinsured through the Federal Crop Insurance Corporation (FCIC) and contains the following arbitration clause which is the subject of the present appeal:

20. ARBITRATION
(a) If you and we fail to agree on any factual determination, the disagreement will be resolved in accordance with the rules of the American Arbitration Association. Failure to agree with any factual determination made by the FCIC must be resolved through the FCIC appeal provisions published at 7 CFR part 11.

In the spring and summer of 1998 severe drought conditions caused catastrophic crop and nursery loss to the Hobbs and other area farmers. On August 6, 1998, Rapides Parish was declared a natural disaster area. Immediately thereafter, the Hobbs allege they made several unsuccessful attempts to process their claim for crop loss with IGF through its agent, Ms. Hawthorne. A claim form was finally filed with IGF on February 24,1999.

In May 1999, IGF denied the claim alleging the Hobbs’ did not file a timely claim form. On October 29, 1999, the Hobbs filed suit in the 9th Judicial District Court, Parish of Rapides against IGF and its agent Betty Hawthorne. The petition advanced state law claims for breach of the duty of good faith and fair dealings, failure to adjust claims fairly and promptly and failure to make a reasonable effort to settle the claim. The petition further alleged IGF breached its duty to adjust and pay | pdaims within thirty days after receipt of proof of loss and demand.

On March 15, 2000, IGF filed a Motion to Compel Arbitration under the terms of the MPCI policy and obtained an ex parte Stay Order pending a ruling on the Motion to Compel Arbitration. IGF argued that the arbitration clause in the federally rein-sured MPCI policy preempted La.R.S. 22:629 and Louisiana jurisprudence prohibiting arbitration clauses in contracts of insurance. The Hobbs filed a Motion to Set Aside the ex parte Stay Order.

The district judge eventually found in favor of the Hobbs, denying IGF’s Motion to Compel Arbitration and Motion to Stay.

In written Reasons for Judgment the district court held:

This is clearly an action based on a contract of insurance, and enforcement of the arbitration clause would deprive the courts of this state of the jurisdiction of the action against the insurer. Classification of the contract at issue as an insurance contract renders the arbitration provision of that contract unenforceable under LSA RS 22:629.

For the reasons stated below we affirm the judgment of the trial court and remand the case for trial on the merits.

LAW AND ARGUMENT

The issue presented for our review is whether Louisiana’s statutory prohibition against mandatory arbitration clauses in contracts of insurance applies to a federally reinsured crop insurance policy issued and managed in Louisiana and sold to a Louisiana farmer when the plaintiffs claims against the insurer and its agent are based solely on state law. There is no question the Hobbs did not sue the FCIC, nor is the FCIC a party to this litigation; and they are not seeking relief under any federal statute. The claims alleged in the Hobb’s petition against IGF and its agent are based solely on state statutes and co- ^ PrOTisions.

In answering the question posed, our attention is directed to La.R.S. 22:629 Lwhich provides in relevant parts:

A. No insurance contract delivered or issued for delivery in this state and covering subjects located, resident, or to be performed in this state, shall contain any condition, stipulation or agreement
(2) Depriving the courts of this state of the jurisdiction of action against the insurer.
B. Any such condition, stipulation or agreement in violation of this Section shall be void, but such voiding shall not affect the validity of the other provisions of the contract.

Louisiana courts have consistently held that compulsory arbitration clauses in contracts of insurance are unenforceable under this statute because they operate to deprive Louisiana courts of jurisdiction of the action against the insurer. See Doucet v. Dental Health Plans Management Corporation, 412 So.2d 1383 (La.1982); see also, Macaluso v. Watson, 171 So.2d 755 (La.App. 4 Cir.1965) which applied the prohibition against arbitration clauses retroactively to a claim against an insurance company under the uninsured motorist provision and Spillman v. U.S. Fidelity and Guaranty Company, 179 So.2d 454 (La.App. 3 Cir.1965).

It is clear, in .Louisiana, arbitration clauses in contracts of insurance are prohibited as a matter of public policy because if enforced would deny Louisiana citizens free access to its courts — a right guaranteed by the state’s constitution.

Nonetheless, IGF argues the MPCI policy at issue should be treated differently from other insurance policies because it is federally reinsured pursuant to the Federal Crop Insurance Act, 7 U.S.C. § 1501 et seq. IGF contends that the policy provisions, including the federal arbitration scheme (codified in the Code of Federal Regulations) have the force and effect of federal law and Congress intended these provisions to preempt all state laws, including La.R.S. 22:629. As a consequence, IGF maintains the Hobbs are precluded from bringing their state law cause of action in state court and are required instead to subject the claim to arbitration under the terms of the Federal Arbitration Act. Finding IGF’s argument meritorious would in effect deprive 14a Louisiana farmer, forced to purchase crop insurance as a condition to securing a crop loan, of his right to litigate state claims in state court against the insurer and its agent who sold him the policy. We find neither the provisions of the FCIA nor federal jurisprudence mandates such a result.

First, the FCIA does not specifically preclude a cause of action in state court against an insurer and its agent for its own emors and omissions. We note as well, while the FCIC provides indemnity for the errors and omissions of the FCIC, it does not provide indemnity for the errors and omissions of the reinsurance company and its agent. IGF alternatively argues even if the FCIA does not preclude the Hobbs from advancing state law based claims against it, they must do so by arbitration. We find IGF’s argument is premised on a distinction without a difference and avoids the substantive issue presented. The result is the same — if a Louisiana farmer is required to litigate state based claims by arbitration, his constitutionally guaranteed access to Louisiana courts would be denied.

Second, federal courts have consistently held they possess no federal subject matter jurisdiction to entertain state law claims against an insurer and its agent even though the policy sued on is one reinsured by the FCIC. Absent diversity jurisdiction or the FCIC as a defendant, federal courts have routinely ruled state, not federal court, is the proper venue for a state law claim against the insurer. Additionally, federal courts have held the Federal Arbitration Act, on which IGF relies, does not provide federal jurisdiction absent an underlying civil action that is properly in federal court.

Third, a review of the provisions of the FCIA and jurisprudence does not support a finding that Congress intended to completely preempt this field leaving an insured farmer with no remedy in state court. We find Louisiana’s prohibition against arbitration clauses is not inconsistent with the intent and purpose of the FCIALas it was originally envisioned.

The Federal Crop Insurance Act which authorizes the Federal Crop Insurance Corporation was a product of the Roosevelt New Deal. Enacted in 1938 its purpose is “to promote the national welfare by improving the economic stability of agriculture through a system of crop insurance and providing the means for the research and experience helpful.in devising and establishing such insurance.” 7 U.S.C. § 1502. Creation of the federal corporation was necessary because the nation’s farmers were unable to obtain catastrophic loss crop insurance in the general insurance market as a result of the volatile nature of farming. “Congress wanted to avoid building another huge federal agency when the private sector would help, with the encouragement of federal reinsurance contracts”. State of Kansas, ex rel. Todd v. United States of America, 995 F.2d 1505, 1508 (10th Cir.1993). The FCIA authorized the FCIC to provide multiple peril crop insurance through several means. Either directly with producers of agricultural commodities, or indirectly through a system of reinsurance between farmers and private insurance companies. 7 U.S.C. § 1508(a)(1). Congress recognized, in order to “make the increased crop insurance program financially stable, federal crop insurance [would] have to be aggressively marketed” and it elected, for the first time, to use private independent insurance agents for this purpose. Holman v. Laulo-Rowe Agency, 994 F.2d 666, 669 (9th Cir.1993). The marketing program was successful and in fact today “this system of crop insurance is so widespread that 85% of the federal insurance for producers of commodities is through reinsurance contracts.” Todd at 1508.

We note further, the FCIA provides United States district courts with exclusive original jurisdiction for suits brought against the FCIC and provides a one year limitation statute for instituting same. 7 U.S.C. § 1506(d). With respect to indemnification to insurers and agents the FCIA provides:

IfiThe Board shall provide such agents and brokers with indemnification, including costs and reasonable attorney fees, from the Corporation for errors or omissions on the part of the Corporation or its contractors for which the agent or broker is sued or held liable, except to the extent the agent or broker has caused the error or omission. 7 U.S.C. § 1507(c) (emphasis added).

There is no indication in the legislative history nor statute that the FCIC is responsible for indemnifying an insurer or its agents for its own errors and omissions. The intent of the statute and its statutory scheme was designed to increase farmer participation in the insurance program while indemnifying insurers, who were marketing, selling and servicing FCIC policies, for the errors and omissions of the FCIC. Neither the legislative history predating adoption of the FCIA nor the language found in the Act indicates Congress intended to preclude suits against insurers and its agents for their own errors and omissions. Our conclusion is confirmed by the United States 10th Circuit holding in Meyer v. Conlon, 162 F.3d 1264 (10th Cir.1998).

Meyer, a Wyoming farmer, obtained insurance for his bean crop through Rain and Hail, a foreign corporation, and its agent Jay Conlon. When Meyer’s crop was damaged by hail, Meyer notified Rain and Hail. A dispute ensued regarding whether the adjuster told Meyer the bean crop was a total loss. Meyer harvested the beans by extraordinary means and incurred additional costs. When Rain and Hail learned Meyer was bringing his crop to market, it sought to collect the premium under an assignment and sued Meyer in an Iowa state court. The Iowa court entered a default judgment which was later set side. Meyer filed in federal district court under diversity jurisdiction against Rain and Hail and its agent Jerry Conlon alleging several state law claims including breach of contract, negligent document preparation, negligent misrepresentation and bad faith/breach of duty of good faith. Rain and Hail asserted that a state cause of action against a reinsured company is inconsistent with |7the FCIC regulations and that federal law preempted all state law causes of action pertaining to FCIC insurance contracts.

The court in Meyer disagreed. The court found federal law does not preempt state causes of action against the insurer. In fact, the court reasoned the indemnity scheme of the FCIC contemplates that insurers and their agents will be sued and will have to pay when they are at fault. Meyer at 1268-69. The court further observed:

[I]f the FCIC created alternative causes of action, then state law might not be the method by which the agent is ‘sued or held liable’. However, the FCIA [is] barren of language regarding suits against private companies reinsured by the FCIC.... Therefore, were we to accept the defendants’ argument, we would make 1507(c) meaningless because indemnification would never be necessary: No plaintiff could sue because the FCIA preempts state law causes of action but does not create federal causes of action to replace them. This is not the intent of Congress, as the statute’s plain language shows.... In fact, because contract suits advance the purpose of the FCIA by ensuring that farmers are paid and because, as we have already concluded, the FCIA and FCIC regulations contemplate such suits ... federal law has not preempted such state law causes of action. Meyer at 1269.

In, Williams Farms of Homestead, Inc. v. Rain and Hail Insurance Services, Inc., 121 F.3d 630 (11th Cir.1997), the United States 11th Circuit also held that the FCIA does not preclude suits by farmers against reinsurers noting:

Congress did not draft the FCIA to expressly preempt state law claims, nor does the wording of the statute or its legislative history evidence an intent to preempt state law claims ... We thus infer that Congress intended to leave insured with their traditional contract remedies against their insurance companies. Such remedies include a state law breach of contract claim. Williams at 634-35.

IGF contends since the policy is one issued pursuant to the FCIC program, the claim is one that arises under federal law and federal, not state law should apply. However, federal courts have consistently held there is no federal question jurisdiction and no federal law involved, even though the policy is one reinsured through the FCIC program.

In Holman v. Laulo-Rowe Agency, 994 F.2d 666 (9th Cir.1993), plaintiffs, Montana farmers, Hugh and Gayle Holman insured their crop against catastrophic loss under the FCIC which policy was obtained from the Laulo-Rowe Agency. When a drought destroyed their crop they filed suit in state district court. The Holman’s suit contained no federal claims, named no federal defendants and lacked diversity jurisdiction. The Montana state district court dismissed finding the suit was governed by the FCIA which, the court reasoned by its terms, established exclusive jurisdiction in federal courts. The Holmans refiled in federal district court based on federal question jurisdiction although their petition contained only state law claims. Lau-lo-Rowe Agency then filed a motion to dismiss the federal court action “on the ground that FCIA preempts all state law claims and required the Holmans to go before an administrative agency, not a court, to obtain relief.” Holman, 994 F.2d at 667.

The United States 9th Circuit Court of Appeal held although Congress could have allowed claims against an insurer to be pursued in federal court under the FCIA, it elected not to do so. Therefore, the court concluded, the Holmans’ claims did not arise under federal law for jurisdictional purposes and cited: 7 U.S.C. § 1506(d) which provides:

The Corporation ... may sue and be sued in its corporate name ... The district courts of the United States ... shall have exclusive original jurisdiction, without regard to the amount in controversy, of all suits brought by or against the Corporation.

The court found a “review of the FCIA and its legislative history uncovers no congressional intent that claims against insur-anee agents for the agents’ own errors or omissions are to be deemed to create federal question jurisdiction.” Holman, 994 F.2d at 669. It noted the original FCIA passed in 1938 allowed suit against the FCIC to be brought in state court. However, this provision was amended in 1980 to give federal district courts exclusive jurisdiction of all suits against the FCIC. These 1980 |9amendments did not require that suits against insurance agents for their own errors and omissions be brought in federal court although Congress could have provided so.

IGF poses yet another alternative asserting federal jurisdiction is vested through the Federal Arbitration Act. 9 U.S.C. § 2. IGF contends the district court erred in failing to hold the arbitration clause in the MPCI policy must be enforced pursuant to the Federal Arbitration Act (FAA). However, federal courts have held the provisions of the FAA only apply if the court would have had subject matter jurisdiction over the underlying civil action. The FAA is not an independent source of jurisdiction. Rio Grande Underwriters, Inc. v. Pitts Farms, 276 F.3d 683 (5th Cir.2001).

Having determined the FCIA does not preclude a state cause of action by an insured against the reinsurer and the FCIC policy confers no federal question jurisdiction, we conclude the Hobbs state claim is properly in state court and is governed by state law. We wholly reject IGF’s contention that Congress intended to completely preempt this field thereby making Louisiana laws inapplicable.

The courts have identified two areas where Congress has expressed an intent to completely preempt state law. One is found in the Labor Management Relations Act (LMRA)and the other in the Employee Retirement Income Security Act (ERISA). See Holman v. Laulo-Rowe, 994 F.2d 666 (9th Cir.1993). We have reviewed the United States Fifth Circuit holding in Rio Grande Underwriters, Inc.v. Pitts Farms, Inc., 276 F.3d 683 (5th Cir.2001) and find it is both instructive and controlling on this issue.

In Rio Grande, Pitt Farms, a Texas onion grower, filed suit in state court alleging state law claims against Rio Grande for failure to procure the correct crop insurance coverage on its behalf. When Pitt Farms sustained loss to its crop, it found |inthe policy in effect failed to designate its red and yellow onions into separate insurable units to permit it to fully recover. Rio Grande sought to avoid litigation in state court by enforcing arbitration provisions in its contract with Pitt Farms. Unable to obtain relief in state court, Rio Grande filed a petition in federal court requesting a stay order and seeking to compel arbitration under the Federal Arbitration Act. Rio Grande, as does IGF, asserted federal jurisdiction through the interstate commerce clause and the Federal Arbitration Act. Alternatively, Rio Grande argued the FCIC completely preempts state law claims against insurers and agents who sell federally reinsured crop insurance policies. The court found that the Federal Arbitration Act is not an independent source of jurisdiction, then, relying on the wisdom of three other circuits, Meyer v. Conlon, 162 F.3d 1264 (10th Cir.1998); Holman v. Laulo-Rowe Agency, 994 F.2d 666 (9th Cir.1993); Williams Farms of Homestead, Inc. v. Rain and Hail Insurance Services, Inc., 121 F.3d 630 (11th Cir.1997), developed a three prong test to determine whether federal law preempts a state statute:

The Fifth Circuit will not find a congressional intent to “occupy the field” and completely displace state law unless the statute
(1) contains a civil enforcement provision,
(2) includes a specific grant of federal subject matter jurisdiction, and
(3) reflects “a clear manifestation of congressional intent to make preempted state-law claims removable to federal court. Rio Grande at 685.

Addressing whether the statute contains a civil enforcement provision, the Rio Grande court found neither the FCIA nor the regulations issued by the FCIC under its authority contained any civil enforcement provisions that would create a federal cause of action against crop insurance agents. It specifically noted “the absence of a federal remedy makes it difficult to conclude that Congress intended to displace state law.” Rio Grande, 276 F.3d at 686. Moreover, we note the FCIA does not provide for the adoption of regulations establishing procedures for resolving such disputes by In arbitration and the FAA, as the federal courts have ruled, does not apply absent underlying federal jurisdiction.

Second, the Rio Grande court held, “the FICA’s express grant of federal jurisdiction is limited to suits by and against the FCIC, not independent insurers and its agents.” Rio Grande, 276 F.3d at 686. The Fifth Circuit reasoned, thus, Congress envisioned that suits against insurers and its agents would be brought in state court applying state law.

Turning to the final prong, the court observed, “the statute does not contain a clear manifestation of congressional intent to displace all state law claims by insured against crop insurance agents” and it found “no evidence that Congress intended to so displace state law claims against agents who sell policies reinsured by the FCIC as to convert them to federal claims and subject them to federal jurisdiction.” Rio Grande, 276 F.3d at p. 686-87.

Applying the test delineated in Rio Grande, we likewise find Congress did not intend that a Louisiana farmer suffer the loss of his right to litigate a cause of action in a Louisiana state court against the insurer and its agents for their own errors and omissions. Louisiana’s prohibition against arbitration clauses in contracts of insurance is not so inconsistent with the purpose of the FCIA as to warrant complete preemption. The FCIC is not a party to the suit nor does the FCIC have indemnity liability for the errors and omissions of the insurer and its agent. Absent any claim against the FCIC directly, the Hobbs’ claim is properly filed in state court and Louisiana law applies.

We have examined the holding in State of Kansas ex rel. Todd v. United States of America, 995 F.2d 1505 (10th Cir.1993) cited by IGF and find the facts in that case distinguishable from the present suit. In Todd, the state of Kansas was requiring that the FCIC pay taxes on the premiums of reinsured contracts and was garnishing, | ^placing crop liens on and attaching crop indemnities. The court held that Kansas could not interfere in the business of the FCIC. It does not follow that Congress, by prohibiting state taxing interference in the business of the FCIC, intended to limit a Louisiana farmers access to the courts of Louisiana for claims against an insurer and its agents, when the FCIC is not involved, has no relationship with the farmer and is not a party to the suit.

IGF also references Nobles v. Rural Community Ins. Services, 122 F. Supp 2d 1290 (M.D.Al.2000). The issue presented in Nobles focused on “whether a provision in a federally-authored insurance contract preempts all of Plaintiffs state law claims, limits the remedies available to Plaintiffs, and subjects all of Plaintiffs claims to binding arbitration.” Nobles at 1292. The court divided the plaintiffs claims into two categories, “factual determinations” (whether the farm land at issue was covered by the policy) and state claims for tortuous conduct by the insurer. Citing the arbitration clause found in the FCIC contract, the court held only factual determinations were subject to arbitration while the state claims for tortious conduct by the insurer were not. The Court declared once the factual “dispute [was] resolved, and in keeping with the arbitrator’s findings and awards that are entitled to pre-clusive effect, Plaintiff may then elect to pursue their common law claims in this forum pursuant to the court’s jurisdictional grant under 28 U.S.C. § 1332.

“Using its rulemaking powers, [FCIC] has dictated the terms of the insurance contracts issued by Defendant and other companies ... At the same time, however, [FCIC] has never intended to extinguish state law causes of action that may arise from tortious conduct by private companies selling [FCIC]-approved reinsurance contracts.” Nobles at 1293-94.

Both parties rely on the McCarran-Fer-guson Act, 15 U.S.C. § 1012 to support their position. McCarran-Ferguson provides in relevant part:

l13(a) State regulation
The business of insurance, and every person engaged therein, shall be subject to the laws of the several States which relate to the regulation or taxation of such business.
(b) Federal regulation
No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance.

In the area of insurance regulation, McCarran-Ferguson permits state laws to preempt a federal statute when:

(1) The federal statute does not specifically relate to the “business of insurance”;
(2) The state law was enacted for the “purpose of regulating the business of insurance”; and
(3) The federal statute operates to “invalidate, impair, or supercede the state law”. Munich American Reinsurance Company v. Crawford, 141 F.3d 585, 590 (5th Cir.1998).

IGF argues that the FCIA is a federal statute which specifically relates to the “business of insurance”, therefore, McCar-ran-Ferguson is inapplicable and the arbitration provisions in the FCIC preempt La.R.S. 22:629. On the other hand, the Hobbs contend that the Federal Arbitration Act is not a federal statute relating to the “business of insurance,” McCarran-Ferguson applies and La.R.S. 22:629, enacted for the “purpose of regulating the business of insurance,” should govern.

We need not reach the question of whether McCarran-Ferguson applies because we find Congress, by enacting the FCIA, did not intend to limit a Louisiana farmer’s right to litigate in the courts of this state against an insurer and its agent for errors and omissions committed by that insurer. Therefore, we hold Louisiana’s statutory prohibition against mandatory arbitration clauses in contracts of insurance applies to a federally reinsured crop insurance policy issued and managed in Louisiana and sold to a Louisiana farmer when plaintiffs claims against the insurer and its agent are based solely on state law.

For the reasons given, the judgment of the trial court is affirmed and the matter |uis remanded for further proceedings.

AFFIRMED AND REMANDED.


author: SULLIVAN, Judge. | WOODARD, J.,

text:
    Wayne and Priscilla ROYER v. V.P. PIERRET CONSTRUCTION COMPANY, INC., et al.
    No. 02-263.
    Court of Appeal of Louisiana, Third Circuit.
    Oct. 28, 2002.
    Writ Denied Jan. 31, 2003.
    Gary McGoffin, Jacques E. deMoss, Du-rio, McGoffin & Stagg, Lafayette, LA, for Plaintiffs/Appellants Wayne and Priscilla Royer.
    Charles M. Rush, Rush, Rush & Caloge-ro, Lafayette, LA, for Defendant/Appellee K.O.O.L. Partnership.
    Court composed of BILLIE COLOMBARO WOODARD, OSWALD A. DECUIR, and MICHAEL G. SULLIVAN, Judges.
   SULLIVAN, Judge.

Wayne and Priscilla Royer appeal the trial court’s dismissal of their redhibition suit after finding that the New Home Warranty Act, La.R.S. 9:3141-3150, provided their exclusive remedy against the remaining party in this litigation. For the following reasons, we affirm.

Facts and Procedural History

On May 31, 1996, the Royers executed an agreement with V.P. Pierret Construction Company (Pierret) and K.O.O.L. Partnership (K.O.O.L.) to purchase a home being constructed by Pierret on land owned by K.O.O.L. Rae Elaine Pierret Maeso signed the purchase agreement as agent for both Pierret and K.O.O.L. On Line 78 of the agreement, the parties checked that the sale was to be with redhibition warranty, as opposed to “as is,” but an addendum to the agreement provided that “New Home Warranty will be given by Builder.” On September 3, 1996, an act of cash sale was executed between the Royers and K.O.O.L. only, who was the record owner of the land. Mrs. Maeso again signed, but only on behalf of K.O.O.L.

In the summer of 1997, the Royers discovered several cracks in the masonry and fireplace tiles and on the patio slab of their home. After assuring the Royers that the cracks were caused by common settlement conditions in Louisiana, Pierret performed some repairs. Notwithstanding these repairs, additional cracks began appearing throughout the home, prompting the Roy-ers to consult two foundation repair experts in the fall of 1998. The experts concluded that the home’s foundation had failed after they located a sheer crack approximately 1/4" wide that ran the from lathe front to the back of the slab. In February or March of 1999, Pierret had some soil samples taken, but thereafter attempted no further repairs.

On December 17, 1999, the Royers filed suit against Pierret, its insurer, and K.O.O.L. After settling their claims under the New Home Warranty Act against Pier-ret and its insurer, the Royers proceeded in redhibition against K.O.O.L., as the vendor, for general damages, moving expenses, temporary housing expenses, and attorney fees. After trial on the merits, the trial court found the relationship between Pierret and K.O.O.L. was a joint venture. Because the New Home Warranty Act defines “builder” to include a joint venture, the trial court found that the Act provided the exclusive remedy to the Roy-ers. The Royers appeal, assigning four errors.

Opinion

In their first two assignments of error, the Royers contend that the trial court erred in finding (1) that the purchase agreement did not provide them with a remedy in redhibition against the seller and (2) that the identity of ownership between K.O.O.L. and Pierret relieved K.O.O.L. of its redhibition obligations. Because these two assignments are interrelated, we will discuss them together.

The New Home Warranty Act provides “the exclusive remedies, warranties, and prescriptive periods as between builder and owner relative to home construction and no other provisions of law relative to warranties and redhibitory vices and defects shall apply.” La.R.S. 9:3150 (emphasis added). The New Home Warranty Act, however, is only exclusive between an “owner” and a “builder.” Squyres v. Nationwide Hous. Sys., Inc., 98-8 (La.App. 3 Cir. 6/3/98); 715 So.2d 538. Under La.R.S. 9:3143(1), a “builder” is defined as “any person, corporation, partnership, limited liability company, joint venture, or other entity which constructs a home, or ^addition thereto, including a home occupied initially by its builder as his residence.” (Emphasis added.)

In finding that K.O.O.L. met the definition of a “builder” because of its joint venture status with Pierret, the trial court summarized the facts in the record as follows:

V.P. Pierret Construction Company, Inc. is a closely held corporation engaged primarily in the business of constructing residential housing. The sole shareholders of this corporation have always been members of V.P. Pierret’s family. He is now deceased, and his children run the business. K.O.O.L. Partnership is also comprised of the late Mr. Pierret’s children. This entity was organized for the sole purpose of holding real estate that was acquired by V.P. Pierret. and transferred to his children.
One such acquisition was the Golden Meadow Subdivision in Scott, Louisiana, which had been partially developed in the 1960’s as a residential neighborhood. V.P. Pierret acquired the land in the late 1970’s, re-subdivided it and transferred it to the K.O.O.L. Partnership. Later, V.P. Pierret Construction Company, Inc. began building houses on the lots in the subdivision and selling them. Testimony at trial showed that K.O.O.L. Partnership has sold fifty lots with homes on them in that subdivision and that V.P. Pierret Construction has always been the contractor who constructed the homes.
For the following reasons the court agrees with the defendant that the relationship between K.O.O.L. Partnership and V.P. Pierret Construction Company was a joint venture. The testimony of Rae Elaine Pierret Maeso clearly established the close relationship between the two entities and the joint venture status. Maeso testified that the K.O.O.L. Partnership was formed to gain the greatest tax advantage for the transfer of property from V.P. Pierret to his children. The evidence presented at trial also established that the three partners of K.O.O.L. Partnership, the late V.P. Pier-ret’s children, were also salaried employees of V.P. Pierret Construction Company.
The Agreement to Purchase and Sell and the addendum thereto also illustrate K.O.O.L. and V.P. Pierret Construction’s joint venture status. Rae Elaine Pierret Maeso signed these documents and, underneath her signature she added the words, “K.O.O.L. Partnership/V.P. Pier-ret Const.” Additionally, the check written by the Royers to K.O.O.L. Partnership in connection with the sale was Lendorsed by K.O.O.L. and then deposited into V.P. Pierret Construction’s bank account.

Mrs. Maeso further explained that her family’s “main goal” was to build homes for sale on the lots in Golden Meadow subdivision. To this end, K.O.O.L. owned the land and paid property taxes, while Pierret obtained construction permits and built the homes. According to Mrs. Mae-so, all of KO.O.L.’s activities flowed through Pierret, as K.O.O.L. did not sell any land unless a Pierret home had been constructed on it.

“A joint venture results from the undertaking by two or more persons to combine their efforts, knowledge, property or labor to engage in and carry out a single business venture for joint profit.” Riddle v. Simmons, 589 So.2d 89 (La.App. 2 Cir.1991), writ denied, 592 So.2d 1316 (La.1992). Whether a joint venture exists is a question of fact to be decided according to the facts and circumstances of each case. Id. In the present case, we find no error in the trial court’s decision that both K.O.O.L. and Pierret, as joint venturers, were “builders” under the New Home Warranty Act.

The Royers also argue that Line 78 of the purchase agreement indicates that the parties intended to provide a redhibition warranty. However, the addendum to the purchase agreement states that “New Home Warranty will be given by Builder.” As comment (e) of La. Civ. Code art. 2520 provides: “The Articles on redhibition do not apply to hidden defects discovered in a new home governed by the New Home Warranty Act, R.S. 9:3141-3150.” (Emphasis added.) See also Rodriguez v. Sunrise Homes, Inc., 532 So.2d 952 (La.App. 5 Cir.1988), in which the court suggested, in dicta, that the New Home Warranty Act would supersede a contractual provision for redhibition. In Rodriguez, the act of sale provided for the redhibitory action between the seller and the builder. Although the document was executed before the New Home Warranty Act’s effective date, the plaintiffs did not discover the defects in the home until after the Act was in effect. The court found that the plaintiffs’ cause of action came into existence when the home was constructed; therefore, the provisions of the Act could not be applied retroactively “because they change the substantive provisions incorporated into the contract of sale, i.e., (1) the right to a reeision of the sale under a proper set of facts, and (2) the right to a reeision without first giving an opportunity to seller to repair the defects.” Id. at 955 (emphasis added). The court suggested that the result would have been different, had the plaintiffs’ cause of action arisen after the Act’s effective date.

The Royers also argue that, by checking the box for redhibition on the purchase agreement, the parties intended to provide for additional warranties as authorized by the New Home Warranty Act. La.R.S. 9:3144(B) provides that, unless the parties otherwise agree in writing, the builder’s warranty shall exclude a list of eighteen items that follow. Item fifteen is “any cost of shelter, transportation, food, moving, storage, or other incidental expense related to relocation during repair,” which is one element of damages in the Royers’ suit. Further, La.R.S. 9:3144(C) provides that the Act “established minimum required warranties” that “shall not be waived by the owner or reduced by the builder[.]” (Emphasis added.) Although the parties may agree to expand the builder’s warranty, we do not find that checking one box on a standard form purchase agreement is sufficient to include all the items in La.R.S._[£9:3144(B)(l)-(18). We agree with K.O.O.L. that the Act contemplates a specific agreement as to what items will be added to the builder’s warranty.

Because we agree with the trial court that the New Home Warranty Act applies, we do not reach the Royers’ remaining assignments of error concerning damages.

Decree

For the above reasons, the judgment of the trial court is affirmed at Appellants’ cost.

AFFIRMED.

WOODARD, J., dissents and assigns written reasons.

| WOODARD, J.,

dissenting.

I respectfully dissent from the majority’s decision and reasoning in the instant matter for two reasons: (1) I believe that applying The New Home Warranty Act to K.O.O.L. was, both, legal and manifest error, since K.O.O.L. was not a builder, within the Act’s definition, either, singularly or as part of a joint venture; and (2) even if it had been, the Act would not exclude the parties’ right to contract for an additional warranty/remedy under red-hibition. In other words, The New Home Warranty Act, which is specific and express, was enacted to supplant the nebulous and ambiguous redhibition laws. Both apply, by operation of law, to protect the consumer. Neither provides that parties cannot contract for more, but The New Home Warranty Act prohibits purchasers from waiving, and builders from reducing, the warranty. The Legislature’s clear mandate, in enacting the Act, is to ensure the consumer’s protection against defective home construction. There is nothing in the Act to warrant an interpretation that the Legislature intended to take protection away from consumers by prohibiting them from contracting for more protection. In fact, in section C. of the Act, the Legislature states that “The provisions of Subsection A of |2this Section establish minimum, required warran-ties_” (Emphasis added.) This suggests that the consumer may contract for greater protection but that the law provides for, at least, this much.

Notwithstanding, to support its position that K.O.O.L. is relieved of liability under redhibition, the majority relies on the Act’s language that the Act “ ‘provides the exclusive remedies, warranties, and prescriptive periods as between builder and owner relative to home construction and no other provisions of law relative to warranties and redhibitory vices and defects shall apply.” ’ However, under the instant case’s facts, there are two problems with this reliance; namely, the Act is definitive that it is to be applied, only, to disputes between builders and owners of the home’s construction and, impliedly, only, when the parties have not contracted, otherwise. If either of these requirements is not met, the Act should not be applied as an exclusive remedy. Neither was met in the case sub judiee.

Regarding the former requisite-between builder and owner-under La.R.S. 9:3143(1), a “builder” is defined as “any person, corporation, partnership, limited liability company, joint venture, or other entity which constructs a home, or addition thereto, including a home occupied initially by its builder as his residence.” (Emphasis added.) The only constructor of the Royer’s home was Pierret. Nevertheless, the majority advances the lower court’s finding that K.O.O.L. and Pierret constituted a joint venture, and, therefore, the Act would apply as the Royers’ exclusive remedy against K.O.O.L. The record does not support this finding.

In order for a joint venture to exist, the parties must intend to enter into one. To the contrary, KO.O.L.’s counsel argued, during the trial, that KO.O.L.’s relationship with Pierret was not a joint venture, and Mrs. Maeso, both entities’ representative, confirmed this and made it clear that the parties had no intent to have that legal relationship. She explained that K.O.O.L. was strictly the landowner and did not have any control over the builder’s business, negating another essential element required to establish a joint venture.

The following exchanges at the trial, unequivocally, demonstrate that K.O.O.L. was not a joint venture, and, therefore, under these facts, not a builder:

| qMR- MCGOFFIN (the Royers’ attorney).
Q. Prior to the sale of the home to the Royers, do you recall how many homes would have been sold by the V.P. Perret (sic) Construction/KOOL Partnership venture?
MR. RUSH (KOOL’s attorney). I object to the use of the term V.P. Per-ret(sie)/KOOL Partnership venture, since there was no evidence that there was any venture between the two entities.
MR. MCGOFFIN.
Q. I’ll ask the question. Was there a joint venture or agreement between the V.P. Perret (sic) Construction and KOOL Partnership to sell the property, and construct the home jointly?
MR. RUSH. Pm going to object to the use of the term jointly, as it implies it establishes some legal relationship between the parties.
THE COURT. I agree.
MR. MCGOFFIN.
Q. What was your agreement between KOOL Partnership and V.P. Perret (sic) for the construction and sale of the homes on the lots owned by KOOL Partnership?
A. Well, KOOL Partnership was strictly the land oimer. KOOL Partnership did not control V.P. Perret (sic) Construction. V.P. Perret (sic) Construction solely built the improvements.
MR. RUSH.
Q. What business was KOOL formed to be in?
A. Basically, real estate, sell land, and we did have some renters.
Q. At that time, did it ever perform any construction services?
A. No. We’re not licensed to that.

(Emphasis added.)

The Act is explicit, in its last sentence of (1) under “Definitions,” that, to qualify as a builder, the person or entity must actually construct the home, and the owner of the underlying land is irrelevant to the definition. Ms. Maeso emphatically stated that the only entity, which constructed homes was Pierret, not K.O.O.L, and that the two did not have a joint venture to do so. Therefore, the record does not 14support a finding that K.O.O.L was part of a joint venture, “which constructs a home.... ” Accordingly, it is not a builder, under the Act’s definition, and to so find, was manifest error. Since K.O.O.L was not a builder, the Act cannot be applied to it and is not the Royers’ exclusive remedy against K.O.O.L.

Notwithstanding, even if, arguendo, K.O.O.L had been a builder, the Act, would not have prohibited it from contracting with the Royers for additional remedies under Redhibition; it, only, would have prohibited it from reducing the warranty, which the Act provides. Nevertheless, the majority supports its contrary position with commentary, stating, “The Articles on redhibition do not apply ... in a new home governed by the New Home Warranty Act.” (Emphasis added.)

However, when the Act specifies, under its “Exclusiveness” provision that “no other provisions of law relative to warranties and redhibitory vices and defects shall apply” (emphasis added), the Legislature contemplates this Act’s application to be by operation of law, just as it did with redhibition before the Act’s enactment. As such, it designed the Act to give the unsuspecting consumer, at least, this minimum protection. If it had intended to prohibit the consumer’s ability to contract for more, it would have stated, no other provisions of law or contract relative to warranties and redhibitory vices and defects shall apply.

The majority concedes that the Act allows parties to expand the builder’s warranty, as long as they specifically state the additional item(s) to be protected and as long as the stated item is among the eighteen, which Section B. of the Act lists.

I disagree. Section B. says, “Unless the parties otherwise agree in writing, the builder’s warranty shall exclude the following items:” However, the eighteen items, listed, do not concern the home’s construction, per se, or items, which the original builder constructed, that are part of the home. Instead, they pertain to items extraneous to the home’s construction, such as landscaping, fencing, land movement, and the like. Obviously, by these exclusions, the Legislature was, simply, narrowing the Act’s warranty to be for the home, which the original builder constructed, unless the parties desired to include the extraneous items, which they could do by a written contract. Thus, this section applies to extraneous items, not to the warranties related to the home, itself. And, there is nothing to suggest that, because it allowed the | Kparties to contract for a warranty to protect extraneous items, which the Act, by operation of law, did not include, that it intended to prohibit the parties from contracting for additional warranties involving the home’s construction.

Finally, the majority maintains that, by checking a box on a standard form, the parties did not sufficiently express an intention to expand the warranty; however, the parties, also, included an addendum, consisting of handwritten provisions, to the standard form contract. There are several sections of the standard form that are, neither, checked nor filled in but, rather, say “see addendum.” Thus, clearly, the parties took the time to put, in writing in the standard form, any provisions which they felt were not specifically expressed to their satisfaction. They checked the red-hibitory warranty provision on the standard form and without reference to the addendum. Accordingly, they must have agreed that this provision, as it was represented on the form, adequately expressed their intention.

While warranties, under The New Home Warranty Act and redhibition, are similar, having some overlapping protections, they are, in no way, conflicting or mutually exclusive, requiring a choice to be made. Redhibition, simply, provides additional remedies, which the New Home Warranty Act does not. And, one can assume that receiving this additional warranty was added incentive to and consideration for the Royers to consummate this purchase.

It is well settled that parties can contract for anything that is not contra bonos mores. Accordingly, these parties’ contract should be honored, as the law between them and, as such, applied to K.O.O.L., providing the Royers their rights under redhibition.

      . At the time the contract was signed, the slab for the home had been poured and some of the wooden framing had been erected. The home was located in Golden Meadow subdivision in Scott, Louisiana.

      . K.O.O.L.'s status as a "builder” would not conclusively establish the New Home Warranty Act as tire Royers' exclusive remedy, if the defects complained of were unrelated to the builder’s actions in the construction of the home. See Melancon v. Sunshine Constr., Inc., 97-1167 (La.App. 1 Cir. 5/15/98); 712 So.2d 1011 (where plaintiffs were afforded additional remedies for defects caused by acts of vandalism that occurred prior to the sale). In the present case, however, all of the Roy-ers’ complaints concern the construction of the home.

      . LaFleur v. Manuel, 97-587 (La.App. 3 Cir. 4/1/98), 712 So.2d 541; Guillory v. Hayes, 576 So.2d 1136 (La.App. 3 Cir.1991).

      . Id.

      . La.Civ.Code art. 2520 cmt. (e).

      . Smith v. Moncrief, 421 So.2d 1127 (La.App. 3 Cir.1982), writ denied, 426 So.2d 177 (La.1983).

      . Id.