text:
    Adrian BROUSSARD v. LAFAYETTE PARISH SCHOOL BOARD.
    No. WCA 05-575.
    Court of Appeal of Louisiana, Third Circuit.
    April 5, 2006.

      Dawn L. Morris, Preis, Kraft & Roy, Lafayette, LA, for Defendant/Appellant: Lafayette Parish School Board.
    Richard E. Smith, The Glenn Armentor Law Corporation, Lafayette, LA, for Plaintiff/Appellee: Adrian Broussard.
    Court composed of JOHN D. SAUNDERS, MICHAEL G. SULLIVAN, and J. DAVID PAINTER, Judges.
   SAUNDERS, Judge.

| ^his is a workers’ compensation case. Claimant Adrian Broussard was injured on August 13, 2001 while employed as a custodian with the Lafayette Parish School Board. The workers’ compensation judge held that Claimant was entitled to supplemental earnings benefits (SEBs) from the date of the accident. The court further held that Appellant, Lafayette Parish School Board, provided Claimant with “sham” rehabilitation. Claimant was awarded $2,000.00 in penalties for improper conversion of his temporary total disability (TTD) benefits to supplemental earnings benefits (SEBs) and $2,000.00 for providing inadequate rehabilitation. In addition, attorney fees in the amount of $8,500.00 were awarded to Claimant.

FACTS AND PROCEDURAL HISTORY

Claimant, Adrian Broussard, a custodian employed by the Lafayette Parish School Board, injured his lower back on or about August 13, 2001 while moving furniture and weight equipment at Edgar Martin School. Initially, Mr. Broussard was evaluated at the emergency room at Medical Center of Southwest Louisiana. He was then referred to Dr. J. Hugh Larriviere, who treated him conservatively. Dr. Lar-riviere ordered an MRI of the lumbar spine due to Mr. Broussard’s continued complaints of pain. The MRI showed disc bulges at L3^i, L4-5, L5-S1 with associated spinal stenosis. Subsequently, Dr. Lar-riviere referred Mr. Broussard to neurosurgeon, Dr. Ricardo Leoni, who, in turn, referred him to orthopedic surgeon, Dr. John P. Schutte.

On December 12, 2001, Dr. Leoni and Dr. Schutte performed a laminectomy and posterior fusion of three of the affected levels. Nearly two months after the surgery, on February 7, 2001, Dr. Leoni released Mr. Broussard from his care to be seen on an as-needed basis only. On July 9, 2002, Dr. Schutte released Mr. Brous-sard | ¡.to light duty work with restrictions. At this time, Dr. Schutte found him to be at maximum medical improvement and turned his care over to Dr. Gerald Nicker-son for pain management and work hardening.

Licensed physical therapist, Craig Broussard, attempted to perform a functional capacity examination of Mr. Brous-sard on August 8, 2002. However, Mr. Broussard terminated the testing early, fearing he would re-injure his back. Therefore, the examination results were inconclusive. On August 15, 2002, Dr. Nickerson found Mr. Broussard to be at maximum medical improvement and released him to light duty work to be increased to medium duty work as tolerated. He further concluded that Mr. Broussard needed vocational rehabilitation.

The licensed vocational rehabilitation counselor assigned to Mr. Broussard’s case was Ms. Karen Herron, an employee at F.A. Richard & Associates. On September 10, 2002, Ms. Herron met with Mr. Broussard and conducted an interview. She met with him again on October 22, 2002 to administer reading, arithmetic, and intelligence tests. Based on the results of the tests, she found that Mr. Broussard read at a fifth grade level, had third grade level math skills, and was “borderline mentally handicapped.” At no time thereafter did Ms. Herron meet with Mr. Broussard in person, nor did she speak with him on the telephone.

In order to find a job for Mr. Broussard, Ms. Herron conducted a labor market survey on January 15, 2003 and located four potential job opportunities for him. The first was a position as a retail sales person with Cingular Wireless in the Mall of Aca-diana. The sales representative would assist new and existing customers with the purchase of wireless equipment and services. The second job position was as a driver for a glass company. The third position Ms. Herron located was as a fuel desk 1 scustomer service representative. The job description included assisting in completing cash transactions for gas and other purchases. The final job located by Ms. Herron was the position of armed security guard and driver for Intertrust. The next day, Ms. Herron sent Mr. Brous-sard a letter advising him of these available positions. The same day, she sent a letter to Dr. Nickerson outlining the positions and requesting his approval. Two weeks later, Dr. Nickerson’s office approved the job as a security guard at Intertrust, the cashier position, and the Cingular Wireless job. After receiving the approval, Ms. Herron sent Mr. Broussard a letter informing him that the jobs had been approved by Dr. Nickerson and that his workers’ compensation benefits would be reduced based on the potential earnings capacity in the area.

On February 3, 2003, Mr. Broussard’s TTD benefits were converted to SEB benefits. Adjuster, Aaron Johnston, calculated the SEB rate to be $92.33, based on a pre-accident average weekly wage of $418.49, considering a $7.00 an hour earning capacity. On February 26, 2003, Mr. Broussard disputed the conversion of his benefits from TTD benefits to SEBs, as none of the jobs proposed by Ms. Herron were available when he inquired about them. Subsequently, on March 24, 2003, Mr. Broussard’s benefits were re-classified to TTD benefits retroactive to February 3, 2003, the date they had originally been converted.

Ms. Herron re-opened Mr. Broussard’s file and again began performing labor market surveys on April 30, 2003. However, she did not meet with or speak to Mr. Broussard concerning his vocational rehabilitation. On June 2, 2003, she located a position as a telephone operator through Louisiana Works. The next day, she wrote to Mr. Broussard advising him of the position. At the same time, she wrote to Dr. Nickerson, requesting his approval of the position. On June 10, 2003, Dr. Nickerson | ¿returned the form, however, he did not indicate whether Mr. Broussard was capable of the job. Based on the June 2, 2003 survey, Aaron Johnston reclassified the SEBs at the rate of $138.99 a week.

On July 29, 2003, Ms. Herron advised Mr. Broussard of several other positions that she had located. One was a job opportunity as a security guard at a mental health clinic. She also found a cashier position at a local convenience store as well as a position as a delivery driver for Camellia Cleaners. Ms. Herron did not seek approval for any of these positions, as she believed them to be similar in nature to the positions she had previously gotten approved by Dr. Nickerson in January.

On August 18, 2003, Claimant filed a disputed claim for compensation. The trial was held on June 23, 2004. The case was taken under advisement, and on December 7, 2004, oral reasons for judgment were assigned. The trial court ruled that Claimant was entitled to SEBs at the rate of $278.99 per week beginning August 14, 2001, the date after the work-related injury. The court held that Mr. Broussard was entitled to penalties in the amount of $2,000.00 for Lafayette Parish School Board’s failure to provide adequate vocational rehabilitation. The court further held that Mr. Broussard was entitled to penalties of $2,000.00 for Lafayette Parish School Board’s unreasonable conversion of benefits from TTD benefits to SEBs. Additionally, the court found that Claimant was entitled to reasonable attorney fees in the amount of $8,500.00. The judgment was signed on January 18, 2005. Lafayette Parish School Board now appeals from said judgment.

ASSIGNMENTS OF ERROR

1) The trial court erred in ruling that SEBs were due to plaintiff retroactive to the date after the work-related accident.

| s2) The trial court erred in ruling that plaintiff was entitled to SEBs based on a rate of zero.

3) The trial court erred in ruling that the School Board provided “sham” rehabilitation.

4) The trial court erred in awarding $2,000.00 in penalties for the provision of inadequate rehabilitation.

5) The trial court erred in awarding $2,000.00 in penalties for the improper conversion of TTDs to SEBs.

6) The trial court erred in awarding $8,500.00 in attorney fees.

7) The trial court erred in applying the “reasonably controverted” standard rather than the “arbitrary and capricious” standard.

8)- The trial court erred in applying La. R.S. 23:1201, or, alternatively, erred in awarding penalties under La.R.S. 23:1201.2.

STANDARD OF REVIEW

In workers’ compensation cases, the factual findings of the trial court are subject to the manifest error standard of review. Smith v. La. Dep’t of Corrs., 93-1305(La.2/28/94), 633 So.2d 129; Freeman v. Poulan/Weed Eater, 93-1530, pp. 4-5 (La.1/14/94), 630 So.2d 733. In applying the standard, the appellate court must not determine whether the trier of fact’s conclusion was right or wrong, but that it was reasonable. Id; Stobart v. State, 617 So.2d 880 (La.1993); Mart v. Hill, 505 So.2d 1120 (La.1987). Where there are two permissible views of the evidence, a factfinder’s choice between them can never be manifestly erroneous. Stobart, 617 So.2d at 880. Therefore, “if the [factfin-der’s] findings are reasonable in light of the record reviewed in its entirety, the court of appeal may not reverse, even though 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).

|fiLAW AND ANALYSIS

Assignment of Error 1: The trial court erred in ruling that SEBs were due to plaintiff retroactive to the date after the work-related accident.

Appellant agrees that Claimant is entitled to SEBs. However, it is appealing the date the SEBs were first due. The trial court awarded Claimant SEBs retroactive to August 14, 2001, the day after the accident. ' Appellant paid TTD benefits to Claimant while he was temporarily disabled from any work. In order for a claimant in a workers’ compensation case to receive benefits for temporary total disability, he must prove by clear and convincing evidence that he is physically unable to engage in any employment or self-employment due to his injury. Veazie v. Gilchrist Const. Co., 04-118 (La.App. 3 Cir. 6/2/04), 878 So.2d 742, writ denied, 04-1692 (La.10/8/04), 883 So.2d 1018. In order for a claimant to establish by clear and convincing evidence that he is unable to engage in any type of employment, he must introduce objective medical evidence. Ratliff v. Brice Bldg. Co., 03-624 (La.App. 5 Cir. 11/12/03), 861 So.2d 613.

In this case, there is no dispute that Mr. Broussard injured himself during the course and scope of his employment with the Lafayette Parish School Board. Claimant’s injury required him to undergo back surgery on December 12, 2001, leaving him temporarily disabled from any kind of work. On February 7, 2002, his neurosurgeon, Dr. Leoni released him, stating, “[f]rom my standpoint, I will see him back as needed and I will leave his final disposition up to Dr. Nickerson and Dr. Schutte.”

Dr. Schutte, an orthopedic surgeon, determined that Mr. Broussard had reached maximum medical improvement on July 9, 2002, and could return to light duty work. He then referred Mr. Broussard to Dr. Nickerson for pain management. On January 1723, 2003, Dr. Nickerson determined, from a physiatric point of view, that Mr. Broussard could physically return to work as a cashier, cellular service representative, or a security guard.

Appellant argues that the trial court erred in awarding Claimant SEBs from the date of the accident. In Claimant’s reply brief to this court, he asserts that he is entitled to TTD benefits from August 13, 2001 through January 22, 2003, and SEBs from January 23, 2003 through the time of trial and continuing. We find this award of the trial court to be an inadvertence. We believe that the trial court was simply attempting to ensure that Claimant was awarded all SEBs owed to him from the time of the accident that may not have been paid by Appellant. However, if SEBs were awarded to Claimant from the date of the accident, the result would be double recovery for the Claimant, which would amount to reversible error. Claimant is correct in asserting that he was entitled to SEBs beginning January 23, 2003, as TTD benefits are proper only when a claimant is unable to engage in any self-employment or occupation for wages. Vermilion Parish Police Jury v. Williams, 02-12 (La.App. 3 Cir. 7/3/02), 824 So.2d 466. Once an injured employee reaches maximum medical improvement, and he is able to return to work, he is no longer eligible for TTD benefits. Id. In this case, all of Mr. Broussard’s treating physicians had found him at maximum medical improvement and had released him to light duty work. Instead, he may recover SEBs. An employee is entitled to SEBs where he is unable to earn 90% or more of his pre-injury wage. La.R.S. 23:1221(3)(a). It is undisputed that Mr. Broussard is unable to earn 90% or more of his pre-injury wage. Therefore, we agree with Claimant’s position that he was entitled to TTD benefits from August 13, 2001 through January 22, 2003, and SEBs from January 23, 2003 through the time of trial [sof and continuing. Accordingly, we find that the trial court inadvertently erred in awarding Claimant SEBs from the date of the accident.

Assignment of Error No. 2: The trial court erred in ruling that plaintiff was entitled to SEBs based on a rate of zero.

In its second assignment of error, Appellant argues that the trial court erred in ruling that Claimant was entitled to SEBs based on a rate of zero. As stated earlier, in order to be entitled to receive supplemental earnings benefits, a claimant must prove by a preponderance of the evidence that he is unable to earn wages equal to 90% or more of the wages he earned before the accident. La.R.S. 23:1221(3)(a). In this case, Mr. Broussard earned an average weekly wage of $418.49 per week with a compensation rate of $278.99 per week. Once the claimant proves this, the burden shifts to the employer to prove that the employee is physically able to perform a certain job, that the job was offered to the employee, or that it was available, and that it was in the employee’s or employer’s community or reasonable geographic region. La.R.S. 23:1221(3)(c)(i); Daigle v. Sherwin-Williams Co., 545 So.2d 1005 (La.1989).

The Louisiana Supreme Court established the minimum burden for employers to prove job availability in Banks v. Industrial Roofing & Sheet Metal Works, Inc., 96-2840 (La.7/1/97), 696 So.2d 551. An employer may meet its burden of proof by providing competent evidence of:

1. the existence of a suitable job within the claimant’s physical capabilities and within claimant’s or employer’s community or reasonable geographic region;
2. the amount of wages that an employee with claimant’s experience and training can be expected to earn in that job; and
3. an actual position available for that particular job at the time that the claimant received notification of the job’s existence.

19Id. at 557.

The court further explained:

By “suitable jobs”, we mean a job that claimant is not only physically capable of performing, but one that also falls within the limits of claimant’s age, experience, and education, unless, of course, the employer or potential employer is willing to provide any additional training or education.

Id.

Appellant argues that it provided “competent evidence” of the above minimum requirements, stating that a claimant need not be particularly suited for a post-injury job; he need only be capable of performing it. Clearly, Mr. Broussard was not capable of performing any of the jobs identified by Ms. Herron. Mr. Broussard read on a fifth grade level, performed arithmetic on a third grade level, and was “borderline mentally challenged”. Obviously, with his mathematics skills, it would have been difficult for Mr. Broussard to complete cash sales as a cashier or to assist customers with wireless service and sales at Cin-gular. In addition, none of the jobs provided by Ms. Herron made reference to the standing or sitting requirements, even though she testified that she knew standing and sitting were particularly difficult for Mr. Broussard. She also never took into account that Mr. Broussard was taking medication that could impair his mental and physical faculties, although Dr. Nickerson took great strides to warn everyone involved about the effects of the medication. However, Ms. Herron suggested positions such as armed guard and driver.

In Pinkins v. Cardinal Wholesale Supply, Inc., 619 So.2d 52 (La.1993), the Louisiana ■ Supreme Court stated that we should consider a totality of factors to determine a realistic appraisal of access to employment. The factors include work-related disability, age, literacy level, race, and the claimant’s overall ability to perform. The employer must consider all factors that limit the employee’s real access to the job market. Id. Appellant did not show any credible evidence that Mr. Broussard could have returned to any position thus far. Although Ms. Herron identified jobs that were shown to be available through the Louisiana Department of Labor Louisiana Works computer systems, she never contacted the employer directly to verify that the jobs were available. When Mr. Broussard applied for the position of cashier, identified as Job Service Office No. 72067 in January of 2003, he was told the position had already been filled.

Further, once the positions were approved by Dr. Nickerson, Ms. Herron did not contact the employer to ensure that the positions were still available. Again, Mr. Broussard attempted to apply for employment, yet was told that the position was no longer available. Therefore, we find that Appellant has not shown that any potential job was available to Mr. Brous-sard.

Appellant has also failed to show that Mr. Broussard was physically and mentally able to perform any of the jobs identified. Ms. Herron admitted during cross-examination that no steps were taken to determine the physical requirements of the jobs identified, even though she knew that standing and sitting for long periods of time were particularly difficult for Mr. Broussard. Appellant argues that all of the positions identified by Ms. Herron were approved by Dr. Nickerson. However, Ms. Herron never advised Dr. Nicker-son, or any potential employers that Mr. Broussard was “borderline- mentally challenged”.

Additionally, Mr. Broussard was prescribed medications that Dr. Nickerson specifically stated could impair his mental and physical capabilities. Ms. Herron did | unot inquire whether he could safely perform the job requirements while under the influence of the prescribed medication. Several of the identified job opportunities required Mr. Broussard to drive for a substantial part of the day. Dr. Nickerson’s report specifically admonished Mr. Brous-sard not to drive while taking the medications. Clearly, it was not appropriate for Mr. Broussard to be driving, much less, carrying a loaded weapon while under the influence of the prescribed medications.

Ms. Herron identified another job opportunity as a cellular telephone representative who “would be expected to advise customers on rate plans, suggesting selections that meet customers’ needs, emphasizing selling points of articles, such as quality and utility, preparing sales slips, preparing and explaining sales contracts, receiving payment and obtaining credit authorizations”. Obviously, this job, as well as the others identified by Ms. Herron, are not “suitable” for Mr. Broussard, considering his mental and physical abilities.

Mr. Broussard proved his inability to earn 90% of his pre-injury wages. Appellant, on the other hand, fell short of proving that he was physically able to perform a certain job and that the job was offered or available to him. The amount of SEBs is based on the difference between the average weekly wage earned by the employee before the accident and the employee’s earning capacity after the accident. La.R.S. 23:1221(3)(a). We find that the trial court was correct in finding that Adrian Broussard was entitled to SEBs based upon zero, as none of the positions identified by Ms. Herron were suitable.

Assignment of Error No. 3: The trial court erred in ruling that the School Board provided “sham” rehabilitation.

|12In its third assignment of error, Appellant argues that the trial court erred in ruling that the School Board provided “sham” rehabilitation. The Standards and Ethics Handbook issued by the Board of Examiners for licensed professional vocational rehabilitation counselors recognizes the need to assess the client’s education and training, as a part of the first step in the process of evaluation. Section B(7) requires the determination of the client’s interests, reading skills, intelligence, academic achievement, primary aptitude, and transferable skills. Maxie v. Brown Indus., Inc., 95-19 (La.App. 3 Cir. 5/31/95), 657 So.2d at 447, writ denied, 95-1630 (La.10/6/95), 661 So.2d 469. Appellees counter, stating that although Ms. Herron determined the client’s skills and aptitude, she ignored the physical, mental, and educational limitations of Mr. Broussard. We agree. When identifying available positions for Mr. Broussard, Ms. Herron never inquired into the physical demands of the job, although she had reviewed Mr. Brous-sard’s medical records and knew that he had trouble sitting or standing for extended periods of time. Further, she knew that he was taking prescription medication that could impair his mental and physical capabilities, yet she neglected to take that into account when identifying jobs for him. She administered the basic skills test to determine Mr. Broussard’s capabilities in the areas of reading, writing, and arithmetic and found him to be “borderline mentally challenged”. However, she identified jobs in which he would have to make cash transactions and explain wireless contracts to customers.

The trial court found that Appellant provided “sham” rehabilitation to Mr. Brous-sard. Based on the evidence in the record, we do not find this ruling to be erroneous. Accordingly, we affirm the finding of the trial court.

11sAssignment of Error Nos. 4, 5, 6, 7, and 8: Penalties and Attorney Fees The trial court erred in awarding $2,000.00 in penalties for the provision of inadequate rehabilitation.

Appellant urges that the trial court erred in awarding $2,000.00 in penalties for the provision of inadequate rehabilitation. The award of penalties and attorney fees will not be disturbed upon appeal absent manifest error. Comeaux v. Grey Wolf Drilling, 93-1289 (La.App. 3 Cir. 5/4/94), 640 So.2d 532, writ denied, 94-1339 (La.9/16/94), 642 So.2d 193. Under La. R.S. 23:1201 and La.R.S. 23:1201.2 a workers’ compensation claimant is entitled to penalties and attorney fees if his employer withholds or terminates his benefits arbitrarily, capriciously, or without probable cause. In order to avoid the imposition of penalties and attorney fees, the employer must reasonably controvert the employee’s right to compensation. La. R.S. 23:1201(F).

The two statutes relevant to the imposition of penalties and attorney fees are La.R.S. 23:1201 and 23:1201.2. The Louisiana Supreme Court has distinguished the two statutes in Williams v. Rush Masonry, Inc., 98-2271 (La.6/29/99), 737 So.2d 41. The court explained that penalties are assessed under La.R.S. 23:1201 for the untimely payment of benefits, whereas penalties for the arbitrary and capricious discontinuance of payment of benefits are assessed under La.R.S. 23:1201.2. Id.

Appellant argues that in matters arising after the 1995 amendments, but prior to the 2003 repeal of Section 1201.2, Section 1201.2 does not apply to provide attorney | ufees for failure to provide vocational rehabilitation. In a footnote in Maynard v. Grey Wolf Drilling, 04-431 (La.App. 3 Cir. 10/20/04) 885 So.2d 1277, the court stated:

The workers’ compensation judge referenced the failure to provide appropriate vocational rehabilitation as a possible basis for awarding attorney’s fees. Although the supreme court has found attorney’s fees appropriate in cases involving an improper discontinuation of vocational rehabilitation, see Haynes v. Williams Fence and Aluminum, 02-442 (La.4/21/03), 851 So.2d 917 (wherein the supreme court explained that vocational rehabilitation is a “claim due” under then existing La.R.S. 1201.2), the supreme court subsequently found that an award of penalties or attorney’s fees for failure to provide rehabilitation is not available under La.R.S. 23:1201(F). See Chelette v. Riverwood Intern. USA Inc., 03-1483 (La.10/17/03), 858 So.2d 412.
Note, however, that subsequent to Chelette, La.R.S. 1201.2 was repealed pursuant to 2003 La. Acts No. 1204, § 2. Pursuant to the same Act, La.R.S. 23:1201 was amended to provide for penalties and attorney’s fees for failure to pay “claims due.” The subsequent amendment is inapplicable to the present case, however, as the law in effect at the time of the violation is the law applicable to the issue of penalties and attorney’s fees. See Skipper v. Acadian Oaks Hosp., 00-67 (La.App. 3 Cir. 5/3/00), 762 So.2d 122. Thus, although we have concluded that the award of attorney’s fees for violations of La.R.S. 23:1201 was not an abuse of discretion, the failure to provide appropriate rehabilitation is not one of those which we have considered to be a suitable basis for the award.

Id. at 1289.

Appellant argues that because Claimant’s TTD benefits were converted to SEBs on July 9, 2003, and because Section 1201.2 was repealed by an Act that went into effect on August 15, 2003, the 1995 version of Section 1201.2 applies in this case, and Claimant cannot recover penalties or attorney fees. Appellant contends that Section 1201.2 does not permit the award of penalties in matters regarding the reduction or discontinuance of benefits.

| -^Appellees, on the other hand, argue that where a claimant receives deficient rehabilitative efforts and inadequate assessment of capabilities, he is entitled to statutory penalties and attorney fees. They cite two cases, Maxie 657 So.2d at 448, and Hopes v. Domtar Industries, 627 So.2d 676 (La.App. 3 Cir.1993), to support their position. In both cases, the claimant was awarded penalties and attorney fees for insufficient rehabilitation and subsequent termination of benefits. However, in Maxie and Hopes, neither of the claimants was awarded separate penalties and attorney fees for insufficient rehabilitation. We find that the Maynard case is controlling and that the trial court erred in awarding penalties for insufficient rehabilitation. Accordingly, we reverse the decision of the trial court in its imposition of penalties against Appellant for the provision of improper rehabilitation.

Assignment of error no. 5: The trial court erred in awarding $2,000.00 in penalties for the improper conversion of TTDs to SEBs.

The trial court awarded Claimant penalties for Appellant’s improper conversion of TTD benefits to SEBs. An employer may only reduce an employee’s temporary total benefits to supplemental earnings benefits when the employee is released by his treating physician. La. R.S. 23:1201; 23:1201.1. Claimant’s TTDs were converted to SEBs first on February 3, 2003. However, the SEBs were converted back to TTDs when Mr. Brous-sard informed Ms. Herron that none of the positions identified were available. The TTDs were permanently re-classified to SEBs on July 9, 2003. Claimant admits that his TTDs should have been converted to SEBs as of January' 23, 2003, the date his physicians released him to light-duty work. Therefore, his TTDs were permanently reduced to SEBs six months after Mr. Broussard was released by hfihis treating physicians. Therefore, Appellant argues that the trial court erred in awarding penalties for the improper conversion of TTDs to SEBs.

However, Appellant re-classified Mr. Broussard’s benefits based on unsuitable and unavailable jobs. Under La.R.S. 1201.2, an employee may recover penalties and attorney fees if an employer discontinues his benefits arbitrarily, capriciously, or without probable cause. Appellant argues that it did not act arbitrarily and capriciously in its reduction of Claimant’s benefits, as he was released to work six months before his benefits were re-classified. The trial court found that Claimant was not capable of performing any of the jobs provided to him. We find that Appellant was arbitrary and capricious in its re-classification and calculation of Claimant’s benefits. Accordingly, we do not find that the trial court erred in assessing penalties to Appellant for the improper reduction of benefits. Accordingly, we affirm the decision of the trial court.

Assignment of Error No. 6: The trial court erred in awarding $8,500.00 in attorney fees.

Appellant argues that the award of attorney fees must be reversed, as Claimant did not prove that the it was arbitrary, capricious or that it acted without probable cause in reducing Claimant’s benefits. Appellant claims that it was up to the Claimant to prove that they took “willful and unreasoning action, without consideration and regard for the facts and circumstances presented, or of seemingly unfounded motivation” in converting Claimant’s TTD benefits to SEBs. The imposition of attorney fees by the trial court is a question of fact and is subject to the manifest error standard of review. Given the evidence in the record that Appellant provided Claimant with “sham” rehabilitation and improperly reduced his benefits, calculating |17them based upon unsuitable and unavailable job positions, we do not find that the trial court committed manifest error in awarding attorney fees to Claimant. Accordingly, this assignment of error has no merit.

Assignment of Error No. 7: The trial court erred in applying the “reasonably controverted” standard rather than the “arbitrary and capricious” standard.

Appellant argues that the trial court erred in applying the “reasonably controverted” standard rather than the “arbitrary and capricious” standard in determining whether its actions warranted the imposition of attorney’s fees. The relevant statute to this case is La.R.S. 23:1201.2, which stated that in order to recover penalties and attorney fees, an employee must prove that his employer acted “arbitrarily, capriciously, and without probable cause in discontinuing the payment of compensation and medical benefits ...” Williams, 737 So.2d at 45. Therefore, we find that the trial court erred in applying the “reasonably controverted” standard. Appellant did not provide Mr. Broussard with any suitable job opportunities and reduced and recalculated his disability benefits based on these clearly unsuitable positions. Accordingly, we find this error to be harmless, as we find the actions of Appellant to rise to the level of being arbitrary and capricious.

Assignment of Error No. 8: The trial court erred in applying La.R.S. 23:1201, or, alternatively, erred in awarding penalties under La.R.S. 23:1201.2.

Appellant asserts that the trial court erred in its application of La.R.S.23:1201 rather than La.R.S. 23:1201.2. As stated earlier, the applicable statute is La.R.S. 1201.2 dealing with the discontinuance of payment of claims due. Williams, 737 So.2d at 41. We find that the trial court erred in applying 23:1201 to the instant case. Louisiana Revised Statute 23:1201 applies when an employer fails to eom-mence 11spayment of benefits. Chelette v. Riverwood Intern. USA, Inc., 03-1483 (La.10/17/03), 858 So.2d 412. However, the record does show that there was an improper discontinuance or reduction of Claimant’s benefits by Appellant. Therefore, La.R.S. 23:1201.2 is applicable. Having determined that Appellant’s actions rise to the level of “arbitrary and capricious,” we do not find that the trial court erred in awarding penalties to Claimant under La.R.S. 23:1201.2.

CONCLUSION

We find that the trial court inadvertently erred in awarding Claimant SEBs from the date of the accident, August 13, 2001, and should have awarded them from January 23, 2003. We affirm the ruling of the trial court that Claimant is entitled to SEBs based upon zero. We find that the trial court did not err in its finding that Appellant provided “sham” rehabilitation to Claimant. Further, we hold that the trial court erred in awarding $2,000.00 in penalties for the provision of inadequate rehabilitation. We affirm the award of $2,000.00 in penalties for the improper conversion of TTD benefits to SEBs and the award of $8,500.00 in attorney fees to Claimant. Additionally, we find that the trial court erred in applying La.R.S. 23:1201 and the “reasonably controverted” standard to this case. However, we find these errors to be harmless, as the applicable statute is La.R.S. 23:1201.2 and actions of Appellant rise to the level of being arbitrary and capricious. Therefore, penalties may be assessed under La.R.S. 23:1201.2. The judgment of the trial court is affirmed in part and reversed in part. Costs of the appeal are assessed against Appellant.

AFFIRMED IN PART; REVERSED IN PART.

      . La.R.S. 23:1201.2 was repealed by Act 2003, no.1204 § 2, which went into effect August 15, 2003. The substance of former La.R.S. 23:1201.2 is now found in La.R.S 1201(F), (I), and (J).


source: Caselaw Access Project

author: PICKETT, J.

license: Public Domain

text:
    WHITNEY NATIONAL BANK v. Randy J. HEBERT, et ux.
    No. 05-1202.
    Court of Appeal of Louisiana, Third Circuit.
    April 5, 2006.
    Clay J. LeGros, Wayne A. Maiorana Jr., Newman, Mathis, Brady & Spedale, Me-tairie, LA, for Plaintiff/Appellee, Whitney National Bank.
    Silas B. Cooper Jr., Cooper & Woodruff, Abbeville, LA, Robert H. Cooper, Pellet-eri, Wiedorn & Cooper, LLC, New Orleans, LA, for Defendants/Appellants, Randy J. Hebert and Pamela S. Hebert.
    Court composed of MARC T. AMY, ELIZABETH A. PICKETT, and J. DAVID PAINTER, Judges.
   PICKETT, J.

|aThe defendants, Randy J. Hebert and Pamela S. Hebert, appeal a judgment of the trial court in favor of the plaintiff, Whitney National Bank (Whitney), awarding the plaintiff a deficiency of $12,715.36, plus interest at the rate of 9.5% accrued through November 6, 2002, in the amount of $486.49, plus interest on the unpaid principal balance from November 6, 2002, until paid, at the rate of 9.5% per annum, plus late charges in the amount of $228.83 and all costs of court. We affirm the judgment of the trial court.

FACTS

On November 20, 2002, Whitney filed a deficiency judgment suit on a promissory note executed by Randy J. Hebert and Pamela S. Hebert seeking to collect the principal balance remaining due of $12,715.36, plus interest, late charges', attorney’s fees, and costs. A bench trial on the matter took place on August 2, 2004. Judgment was rendered in favor of Whitney on October 1, 2004, and this appeal followed.

The following facts are undisputed. The defendants, Randy J. Hebert and Pamela S. Hebert, purchased a 1996 Terry travel trailer from Dixie Motors, Inc., on September 30, 1995. In connection with the sale, they executed a note and chattel mortgage (hereinafter referred to as the contract) for $29,528.58. As specified therein, the note was assigned to First National Bank of Houma, Louisiana. Thereafter, effective August 15, 1997, Whitney acquired all the assets of First National Bank of Hou-ma via a merger. The contract contained an acceleration clause in the case of default, insolvency, or if the creditor “reasonably believe[d][it]self to be insecure in the repayment of this Note.” It also provided for attorney’s fees in the |4amount -of 25% of the unpaid balance of the note. Further, the note contained a confession of judgment and a waiver of notice, demand, or placing in default.

In December 1997, the Heberts defaulted on the loan. A petition for executory process was filed some time early in 1998, and the trailer was seized by the sheriff in preparation for sale. The Heberts’ attorney contacted the bank and arranged to have the loan reinstated upon the payment of $5,000.00, which covered the costs of the pending sale (approximately $1,100.00), the arrearage, and some prepayment.

In 2001 the note, once again went into default. The defendants started missing payments with the payment due December 1, 2001. In June 2002, Louis Marascalso, the “work out officer” for Whitney, who had been assigned the Heberts’ loan when they first defaulted, contacted Mr. Hebert and told him that if the loan was not brought up to date, Whitney was going to have the trailer seized and sold at auction.

From this point on, there is some dispute as to what took place. Mr. Marascal-so testified that he suggested to Mr. Hebert that the defendants would come out better if they found a private buyer for the trailer as they would be spared the expense of a seizure and sale. Mr. Marascal-so stated that he told Mr. Hebert that if they could find a buyer who offered a price satisfactory to the bank, he would release the title to that buyer and work with the Heberts to refinance the balance of the loan at a lower interest rate with lower payments. According to Mr. Marascalso, he and Mr. Hebert had discussed the sale of the trailer many times over the preceding three years and Mr. Hebert had tried to sell it several times, but couldn’t find a buyer willing to pay him the outstanding balance, of the loan. In a conversation early in June 2002, Mr. Hebert told Mr. Marascalso that he had found someone who was willing to pay $10,000.00 for the trailer. According to Mr. Marascalso, he told Mr. |sHebert that the bank would be willing to release the title to the buyer for the payment of $10,000.00. Mr. Marascal-so also stated that Mr. Hebert told him that the seller was in a hurry to make the purchase, so Mr. Marascalso told Mr. Hebert that he would arrange to have one of the bank officers in one of Whitney’s Lafayette branches execute the act of sale and receive the proceeds. That officer could then fax confirmation to him, and he would send the title for the trailer to the buyer.

According to Mr. Hebert, Mr. Marascal-so contacted the buyer and arranged the sale after Mr. Hebert supplied the name of the buyer. Mr. Hebert testified that after giving the buyer’s name, Greg Smith, to Mr. Marascalso, the next thing he heard was “we [were] supposed to go to the bank.” He stated that he was under the impression that when Mr. Marascalso told him the bank would release the title for $10,000.00, that he (Mr. Hebert) thought he would be released along with the title. At trial, Mr. Hebert testified that by getting Mr. Smith to buy the trailer, “It means it was over with. My problem— problems was over with. I had nothing to do with it no more.” He also stated that no one at the bank told him he would be responsible for paying the remaining balance due on the note.

Mrs. Hebert also testified at the trial. She stated that she went with her husband to the bank on June 7, 2002, but that the “conversation was with Mr. Wade [Meaux, the bank officer], my husband, and Mr. Smith.” She stated that she requested and was supplied with a copy of the act of sale before she and her husband left the bank. That act of sale, which was admitted into evidence, shows Randy and Pamela Hebert as the sellers and Gregory Smith as the purchaser. Also admitted into evidence was a copy of Mr. Smith’s cashier’s check drawn on IBERIABANK, payable to Randy J. Hebert and Whitney Bank, for $10,000.00. Mrs. Hebert testified | fithat Mr. Meaux didn’t say anything to them at the time which would indicate that Whitney was going to pursue a deficiency judgment.

At the close of testimony, the Heberts, relying on former La.R.S. 10:9-505(3), argued that since they were not notified in writing within twenty days of the bank’s intention to seek a deficiency judgment, Whitney was precluded from doing so. The trial judge disagreed finding that Whitney had never taken possession of the trailer and, thus, La.R.S. 10:9-505(3) was inapplicable.

In Ford Motor Credit Co. v. Arnold, 04-0042, p. 6 (La.App. 1 Cir. 12/17/04), 897 So.2d 705, 709 (emphasis ours), our colleagues of the first circuit considered a case wherein the plaintiff sought a deficiency judgment:

The Contract executed by the Arnolds and Ford Motor constitutes a secured transaction under the current version of La. R.S. 10:9-102 et seq. Louisiana law defines a “security agreement” as “an agreement which creates or provides for a security interest.” See former La. R.S. 10:9-105 (currently La. R.S. 10:9-102(a)(73)). As set forth in former La. R.S. 10:9-505(3) (currently at La. R.S. 10:9-620), when a secured party accepts the voluntary surrender of collateral subject to a security agreement, he is presumed to accept in full satisfaction of the underlying obligation unless he notifies the debtor, in writing or otherwise, of his intention to reserve in full his right to a deficiency judgment. Former Louisiana Revised Statutes 10:9-505(3) provided as follows:
The debtor’s abandonment or surrender to the secured party of consumer goods subject to a security agreement, that is made after or in contemplation of the debtor’s default shall be deemed to be a surrender for purposes of sale in accordance with the provisions of this Part 5. The secured party shall be presumed to have accepted the goods without the right to pursue a deficiency judgment unless he sends written notice or otherwise notifies the debtor within twenty days after he takes actual possession, to the effect that he is accepting possession of the goods with full reservation of deficiency rights.
Thus, in order to pursue a deficiency judgment, a secured party bears the burden of proving that he notified the debtor, within twenty days of taking actual possession of the collateral, of his intention to [ ^accept possession of the collateral with full reservation of his rights to a deficiency judgment.

In the case sub judice, the trial court found that Whitney (the secured party) had not taken possession of the Terry travel trailer (the collateral). We agree. The Heberts found the buyer; they set the price; and the bill of sale recites a sale from the Heberts to Gregory Smith. Although Whitney was threatening to seize the trailer, it had not done so at the time the sale was perfected. What the Heberts thought is of no consequence. We note they did not ask either Mr. Marascalso or Mr. Meaux if the sale of the trailer and the payment of the proceeds therefrom would release them from their entire debt. Clearly, it did not.

Accordingly, for the reasons stated above, the judgment of the trial court is affirmed. All costs of this appeal are assessed to the defendants, Randy J. Hebert and Pamela S. Hebert.

AFFIRMED.


author: DECUIR, Judge.

text:
    DELANO PLANTATION, et al. v. June Amy LOWREY.
    No. 05-1337.
    Court of Appeal of Louisiana, Third Circuit.
    April 5, 2006.

      Stan Gauthier, II, Stan Gauthier, II, A Law Corporation, Lafayette, LA, for Plain-tiffAppellant, Alice Ann Lowrey Robinson.
    Leslie J. Schiff, Schiff Law Corporation, Opelousas, LA, for Plaintiff/Appellant, Alice Ann Lowrey Robinson.
    Douglas C. Longman, Jr., Perret Doise, Lafayette, LA, for Appellee, Charles A. Going, CPA.
    G. Frederick Seemann, Lafayette, LA, for Secondary Defendants/Appellants, Brandon Lowrey, Lainnie Lowrey, Alice Lowrey, June Amy Lowrey.
    Otis Eugene Lomenick, Jr., Opelousas, LA, for Secondary Defendant/Appellant June Amy Lowrey.
    Court composed of JOHN D. SAUNDERS, OSWALD A. DECUIR, and BILLY HOWARD EZELL, Judges.
   DECUIR, Judge.

hOn appeal before us is an ongoing dispute among the shareholders of Delano Plantation, Inc. A permanent receiver was appointed in 1998 to take control of Delano’s property and affairs, and the Receiver filed a rule to show cause in 2003 asking the court to adopt his proposed financial statement (referred to in this litigation as a “restatement”) of the corporation’s financial condition. The trial court revised the Receiver’s proposed restatement and thereafter adopted it as the judgment of the court. Both the minority shareholder, Plaintiff Anne Robinson, and the opposing majority shareholders, the Lowrey Defendants, have appealed the trial court’s judgment. The Receiver, Charles Going, advocates affirming the judgment. After due consideration of the evidence, we affirm the judgment rendered below.

BACKGROUND

Delano Plantation encompasses a 1700 acre tract of low lying farmland and timberland located in the West Atchafalaya Floodway in St. Landry Parish. The land, site improvements, and timber had an appraised value of slightly over $1.6 million in 2004.

The plantation was incorporated in 1960 by Bessie Nicholson Clopton who is now deceased. At the time of trial, shares in the corporation were owned by siblings Brandon, Lainnie, and Alice Lowrey, their mother, June Amy Lowrey, and their aunt, Anne Lowrey Robinson. In 1990, Plaintiff, Anne Robinson, and 'her mother, Clementine Lowrey, also now deceased, filed a derivative action against June and her children, alleging mismanagement of the corporation by its officers. The allegations included the personal use of corporate assets, excessive officers’ salaries, unrecorded shareholder loans, and inefficient spending on farming operations.

Six years later, the Plaintiff filed a supplemental petition seeking the appointment of a receiver to handle the affairs of the corporation pursuant to La.R.S. | ¡,12:151. The trial court granted the request and appointed Charles Going temporary receiver in 1996. He was appointed permanent receiver in 1999 after the .trial court found waste and misuse of corporate assets. The appointment was affirmed by this court in the opinion entitled In re: Delano Plantation, Inc. v. Lowery, 99-1752 (La.App. 3 Cir. 6/7/00), 770 So.2d 798, writ denied, 00-2564 (La.11/13/00), 774 So.2d 149, which contains a review of the procedural background and facts pertinent to the matters now before us.

At the time of trial, Brandon Lowrey was primarily responsible for the Delano land, overseeing the tenant farmers and maintaining the property, as he has done since his father’s death in 1979 when Brandon was seventeen years old. During the course of this litigation, however, the Receiver has handled all business affairs of the corporation, from paying bills to negotiating leases. Testimony from the Receiver shows that he has been in constant contact with the shareholders. He was given access to numerous records, primarily from the 1980s, which detailed the operations of the plantation under the leadership of June Lowrey. The Receiver’s opinion was that, due to acrimony among the shareholders, it will be necessary to liquidate the corporation and divide the assets. Accordingly, pursuant to the powers vested in him by virtue of La.R.S. 12:152, the Receiver prepared a draft restatement of Delano’s financial statement which suggested a valuation of the corporation had it not been mismanaged during the 1980s by the Lowrey Defendants.

The Receiver’s proposal was submitted to the attorneys for the shareholders in early 2002. After considering commentary from the parties, the Receiver revised his proposal. In November of 2003, the Receiver moved the trial court to adopt his proposal as the financial statement of Delano, and the matter was eventually set for trial in August of 2004. The Lowrey Defendants filed numerous exceptions, all of Iswhich were denied by the trial court. After two days of testimony, the trial court instructed the Receiver to make certain revisions to his evaluation, and the restatement was then adopted as the judgment of the court. The trial court stated in part:

THE RECEIVER’S EVALUATION AND RESTATEMENT
The Court has mixed emotions with regards to the proposal submitted by the Receiver. In this connection, the Court agrees that there was obviously a significant amount of mismanagement by the defendants, and the Court, in effect, agrees in concept with the Receiver’s methodology of restating the financial statements of the corporation. Additionally, the Court concurs in the Receiver’s ability to rely upon the evidence submitted which has as its basis statistics from LSU. On the other hand, the Court also believes, at least in part, the testimony of Brandon Lowrey which was basically uncontradicted and which alluded to the unique problems with this farm regarding such things as drainage, weed infestation, et cetera. Unfortunately for the defendants, even taking that testimony into consideration, the Court is still convinced that the defendants must be held accountable for their actions. That having been said, the Court is going to adopt the Amended Restatement Proposal as attached to the Receiver’s Post Trial Memorandum, a copy of which is attached hereto and made a part hereof, subject to the hereinafter “refinements.”
REFINEMENTS
The restatement of the Receiver shall be adjusted to reduce by forty (40%) percent the variances as set forth therein. In this connection, the Court notes that the “summary” reflects a variance of $1,713,887.49 [in excess farming expenses]. Thus, same shall be adjusted by reducing that amount by forty (40%) percent. Secondly, the calculations of the Receiver shall be made in such a way as to ensure that the expenses of the corporation in connection with the entirety of this litigation and the receivership in whole are calculated so as not to reduce the value of the plaintiffs interest in the corporation. In this connection, the Court is of the opinion that the plaintiff should not be required to bear any costs incurred in “righting the wrong.” Finally, the Court specifically concludes that it is appropriate for the Receiver to adjust his calculations pursuant to these directions charging the defendants with the interest on the shareholder loans as recommended. It is also appropriate for the Receiver to give the defendants reasonable credit for the taxes that the corporation did not have to pay based on the appropriate calculations as required by this decision.

| thereafter, the Receiver submitted a revised restatement to the court in accordance with the instructions set forth in the reasons for judgment. The trial court then rendered judgment in favor of the Receiver, incorporating his revised restatement into a judgment.

The judgment included the following amounts which must be added to the present value of the corporation: $1,028,332.00 in excess farming expenses, $272,015.00 in excess officers’ salaries, $16,984.00 in legal fees unrelated to the corporation, a $136,848.00 judgment paid to Anne Robinson with interest of $13,146.00, and shareholders’ loans totaling $78,603.00 with interest of $88,642.00. Additionally, the value of the corporation must reflect a “tax effect” of $627,225.00, to be subtracted from the stated assets. Although not before us in this litigation, it was acknowledged at trial that these amounts will be added to the corporation’s stated value for the advantage of the Plaintiff. They will either be charged against the capital accounts of the Defendants proportionate to their ownership interests or will be paid proportionately by the Defendants to the Plaintiff outside of any future liquidation proceeding that may take place. Finally, the trial court specified that under no circumstances will the Plaintiff bear any costs of these proceedings.

In this appeal, the Plaintiff, Anne Robinson, contends the trial court erred in making a forty percent revision in the restatement originally filed by the Receiver. She alleges error in the trial court’s decisions to include an income tax deduction in the final valuation and to exclude life insurance premiums as an improper expense. She also argues the trial court erred in determining that all pre-1980 claims have prescribed. The Lowrey Defendants have alleged error in the overruling of their exceptions and in the conclusion that the Receiver met his burden of proof. The Receiver contends the trial court’s judgment should be affirmed.

| .EXCEPTIONS

The Lowrey Defendants contend the Receiver’s proposed restatement is vague as it did not give sufficient information for them to present an appropriate defense. They also contend the restatement was improperly presented to the trial court as a rule to show cause, a summary proceeding, rather than as a petition, which would have necessitated an ordinary proceeding. The Defendants next argue the proposed restatement does not state a cause of action because it does not allege wrongdoing on the part of the shareholders or any other basis for a reorganization of the corporation. Finally, the Defendants urge this court to reverse the trial court’s ruling on prescription. The Defendants argue the claims for misuse of corporate funds are governed by a two-year prescriptive period which would have tolled in the 1980s. Other claims which may be governed by a ten-year prescriptive period, they argue, do not relate back to the filing of the derivative action in 1990 and were therefore untimely filed by the Receiver in 2002.

We find no error in the trial court’s ruling on the Defendants’ exception of vagueness. The restatement proposed by the Receiver was fully detailed and focused on issues previously litigated in the proceeding to appoint the permanent receiver. The proposal was circulated to all parties two years before trial, and the Defendants were given the opportunity to comment and advise on the proposal prior to its submission to the court. The exception was properly overruled.

A summary proceeding is described in the Code of Civil Procedure as one “conducted with rapidity, within the delays allowed by the court, and without citation and the observance of all the formalities required in ordinary proceedings.” La. Code Civ.P. art. 2591. While this proceeding may have been initiated by the filing of a rule |fito show cause, the proceedings themselves have been conducted as ordinary proceedings, with sufficient time afforded all parties to gather and review evidence, conduct discovery, and mount defenses. The record reveals that both pretrial and trial procedures were conducted with all the formalities of an ordinary proceeding. Further, even if we were to conclude that this matter has been conducted as a summary proceeding, La.Code Civ.P. art. 2592(5) specifically allows for the ho-mologation of a report submitted by a court-appointed accountant to be by summary proceeding. Accordingly, we find no error in the trial court’s ruling on the exception of unauthorized use of summary procedure.

The Lowrey Defendants also urged an exception of no cause of action and claimed a denial of due process. Essentially, they contend the Receiver has exceeded his authority by proposing, on his own motion, a restatement of the value of Delano Plantation. They argue that the Receiver’s motion, if granted, has the effect of altering the ownership interests of the corporation without any allegations of wrongdoing and without setting forth any facts to support the Receiver’s claims. We find this argument belies the fact that the Defendants’ wrongdoing has previously been adjudicated. See In re: Delano Plantation, Inc., 770 So.2d 798. Further, it ignores the broad powers vested in a receiver by the provisions of La.R.S. 12:152. Finally, as the facts have been fully developed throughout this litigation, the Defendants have been afforded ample opportunity to defend themselves. The trial court found the Receiver’s rule “clearly” stated a cause of action, and we find no error in this conclusion.

Both sides to this controversy have raised the exception of prescription. The trial court determined the claims raised herein are governed by the ten-year statute of limitations governing personal actions. La.Civ.Code art. 3499. The court further pfound that prescription was interrupted by the filing of the original derivative action on January 31, 1990. La.Code Civ.P. art. 1153. Therefore, any claims for mismanagement arising before January 31, 1980 which may have affected the present value of the corporation have prescribed. We find no error in this conclusion. The Plaintiff, as a minority shareholder, could have brought her claims for mismanagement earlier, and we find the doctrine of contra non valentem does not apply in this case. In response to the arguments raised by the Defendants, we find the petition which was filed in 1990 gave the Defendants fair notice of the facts out of which the subsequent receivership proceedings arose. The same parties are before the court, with the Receiver standing in the shoes of the corporation. The matter before us is merely an interim proceeding, the Receiver’s request for confirmation of, or the homologation of, an accounting in the form of a financial statement. Therefore, both the pleadings seeking the appointment of a receiver, as well as the subsequent pleadings filed by the Receiver seeking to restate the value of the corporation, relate back to the original petition filed by the Plaintiff in 1990. The trial court’s ruling on prescription is affirmed.

MERITS

The trial court issued written reasons for judgment wherein he determined the Receiver’s proposal was essentially correct but required certain revisions which served to decrease the value of the corporation from $3,508,008.00 as proposed to $3,093,618.00. The shareholders disagree with both the original proposal of the Receiver and the trial court’s revised valuation.

The factual conclusions of the trial court are subject to the manifest error standard of review. A trial court’s findings of fact may not be reversed absent manifest error or unless they are clearly wrong. Stobart v. State, Through Dept. of Transp. and Dev., 617 So.2d 880 (La. 1993). Evaluations of credibility and reasonable inferences of fact will not be disturbed on review. In re: Delano, Id. Rather, the appellate court must review the entire record to determine whether the trial court’s conclusion was a reasonable one. Stobart, 617 So.2d 880. If the trial court’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.” Id. at 882-83, quoting Housley v. Cerise, 579 So.2d 973, 976 (La.1991).

In his testimony, the Receiver stated that ill will among the parties has convinced him that Delano Plantation should be liquidated. Before the assets can be divided among the shareholders, and considering that final judgment has been rendered against the Defendants on the question of mismanagement, the Receiver needed to determine the current value of the corporation if it had been properly managed. This required the Receiver to determine the value of assets and deduct excess expenses and improper charges. The record indicates the Receiver made his evaluation based on a review of corporate records, discussions with the parties, his experience in managing Delano as Receiver since 1996, the advice of consultants, experts, and appraisers, and a review of statistics published by LSU regarding average farming costs in Louisiana.

The first issue raised by the Plaintiff in this appeal concerns the excess farming expenses incurred by Delano from 1980 through 1987 when the Defendants were farming the property themselves. According to the annual financial statements prepared for Delano, the Defendants recorded approximately $8,074,000.00 in farming expenses between 1979 and 1987. Conversely, the statistical analysis compiled by LSU shows that, on average, a similarly located farm growing the same | gcrops during the same years would have incurred expenses of $1,300,000.00. The Receiver recommended categorizing $1,754,000.00 as “disallowed” expenses and adding that figure to the present value of Delano. Based primarily on the testimony of Brandon Lowrey, who actually farmed the land during the period at issue, the trial court determined the property had unique problems requiring above average expenses. Consequently, he reduced the amount of disallowed expenses by forty percent. The Plaintiff complains of the forty percent reduction, while the Defendants contend the LSU statistical analysis was not competent evidence.

We have reviewed the evidence in detail and find no error in the trial court’s conclusion. The testimony from Brandon reveals ongoing problems with the farm, from weed and insect control, to an oil well blowout which required years of cleanup, to limestone roads which to this day cause frequent tire blowouts. The Defendants themselves were inexperienced, Brandon being only eighteen years old when he undertook this farming endeavor, and they inherited a farm which all parties agreed was in poor physical and financial shape in 1980. Our review of the evidence reveals no manifest error in the conclusion reached by the trial court regarding the excess expenses incurred by the Defendants.

The second issue raised by the Plaintiff is the trial' court’s decision to allow a “tax effect” reduction in the value of Delano. In calculating his restatement, the Receiver attempted to restate taxable income as it would have been reported to the IRS but for the Defendants’ mismanagement. The Receiver subtracted the income tax Delano would have paid on the restated taxable income had it been properly managed and had it not reported and deducted such a large amount of farming expenses. The trial court found this calculation reasonable because the corporation would have paid substantially more in federal and state corporate income taxes. We, likewise, find the [inaddition of a “tax effect” reasonable, as the payment of income taxes is a valid consideration in the valuation of a corporation.

The third argument raised by the Plaintiff in this appeal refers to life insurance premiums paid by the corporation. From 1981 through 1983, Delano paid $99,000.00 in life insurance premiums on behalf of the Defendants. The corporation was not the beneficiary on any of the policies, but the siblings were the beneficiaries on each other’s policies. In her testimony, June Lowrey explained that the policies were recommended to them so each Defendant could purchase the other’s share in the corporation in the event of one’s untimely death. The trial court did not specifically list the payment of these premiums as an improper expense or as a shareholder loan on which interest would be due. In his testimony, the Receiver indicated that the premiums were probably listed on the corporate books as a regular expense, and as such, are part of the “disallowed expenses” previously discussed. The trial court agreed. We find no error in this conclusion. The disallowed expenses are not itemized; rather, they are an in globo amount meant to include a variety of items the Defendants should not have listed in their books as corporate expenses and should not have been incurred by the corporation.

We find the Receiver presented sufficient evidence to support his restatement proposal, as refined by the trial court. Accordingly, the judgment of the trial court is affirmed. Costs of this appeal are assessed equally between the Plaintiff and the Defendants.

AFFIRMED.


author: PETERS, J.

text:
    Daniel A. HARDEE, III, et al. v. ATLANTIC RICHFIELD, et al.
    No. 05-1207.
    Court of Appeal of Louisiana, Third Circuit.
    April 5, 2006.

      Donald T. Carmouche, Victor L. Marcel-lo, John H. Carmouche, Kenneth Jay De-Louche, William R. Coenen, III, Talbot, Carmouche & Marcello, Gonzales, LA, Grady J. Abraham, Attorney at Law, Lafayette, LA, Harry T. Lemmon, New Orleans, LA, John R. DeRosier, DeRosier Law Firm, Lake Charles, LA, for Plaintiffs/Appellants, Daniel A. Hardee, III, et al.
    Richard E. Gerard, Jr., Scofield, Gerard, Singletary & Pohorelsky, Lake Charles, LA, for Defendants/Appellees, Appearing by consent on behalf of Marathon Oil, Company and the following Defendants/Appellees: Union Oil Company of California, Triumph Energy, Inc., Petroleum Engineers, Inc., Proton Energy, L.L.C., Siesta Oil and Exploration Company, Inc., BP America Production Successor in Interest to Atlantic Richfield Company Saxon Energy, Inc., Great Southern Oil & Gas Company, Inc., Billingsley Engineering Company.
    Court composed of JIMMIE C. PETERS, MICHAEL G. SULLIVAN and GLENN B. GREMILLION, Judges.
   PETERS, J.

_JjThe plaintiffs are property owners in the Gueydan Oil Field in Vermilion Parish, Louisiana. They filed suit to recover damages from seventeen oil companies who operate well sites in that field and have appealed a trial court judgment granting exceptions of prematurity filed by some of the defendant oil companies. In granting the exceptions, the trial court dismissed all of the plaintiffs’ claims against all of the defendants, but without prejudice. For the reasons that follow, we reverse the judgment granting the exceptions and remand the matter to the trial court for further proceedings.

DISCUSSION OF THE RECORD

On April 8, 2004, the plaintiffs filed this suit in Calcasieu Parish, Louisiana, seeking to recover damages they claim to have suffered as a result of the named defendants’ operation of over one hundred well sites on several tracts of land located in the Gueydan Oil Field. They claimed damages under several theories of recovery, including contract, tort, and the Louisiana Mineral Code, and asserted that the defendants were solidarity liable.

In their petition, the plaintiffs alleged that they “own[,] reside [on] and/or use” their individual property and that they derive their individual rights in the litigation | j&om “certain oil, gas and mineral leases between plaintiff and defendants, or own[ ] property contaminated by the oil and gas activities conducted or controlled by one or more of the defendants.” The petition further asserted that, by their conduct or control pursuant to the mineral leases at issue, the defendants had contaminated or otherwise damaged the property belonging to the plaintiffs. According to the plaintiffs’ pleadings, the contamination or damage was caused by the improper disposal of oilfield wastes and this conduct caused the soil, surface water, and groundwater on their individual properties to be contaminated. Furthermore, the plaintiffs asserted that “Mather than remove these substances during and after oil and gas exploration and production activities” the defendants “chose to conceal and cover up this contamination.” The defendants’ actions and inactions, according to the plaintiffs, have allowed the contamination to migrate and spread throughout the properties at issue and the contamination will continue to occur in the future absent remedial action. In pleading the conduct of the defendants and the damage sustained as a result thereof, the plaintiffs used such terms and phrases in their pleadings as “contamination,” “pollution,” “knew or should have known,” “actively concealed from plaintiffs,” and “ongoing migration of this oilfield waste.”

The plaintiffs based their right of recovery on both contract and tort theories. Specifically, in support of their claims, they point to the language of the mineral leases; the 'provisions of the Louisiana Mineral Code, particularly the “prudent operator” requirement of La.R.S. 31:122; the Louisiana Civil Code articles dealing with leases, particularly La.Civ.Code arts. 2719 and 2720; and La.Civ.Code art. 2315 as it relates to their claim in tort.

|sThe various defendants individually responded to the petition by filing either answers or exceptions, with some of the defendants filing dilatory exceptions of prematurity. On October 12, 2004, the trial court held a hearing on, among other matters, the exceptions of prematurity. With regard to that exception, most of the defendants sought relief on two specific grounds: First, they asserted that the plaintiffs had failed to exhaust their administrative remedies before the Louisiana Office of Conservation or the Department of Environmental Quality, and, second, they asserted that the plaintiffs’ rights will arise only upon termination of the mineral leases at issue. At the hearing on the exceptions, those defendants abandoned the first ground, but argued the second.

On November 10, 2004, the trial court filed written reasons for judgment granting the exceptions of prematurity and on December 17, 2004, executed a judgment to that effect, dismissing the plaintiffs’ demands against all the defendants. In its judgment, the trial court specifically found that, because of its ruling on the exceptions of prematurity, “all remaining motions and exceptions are moot.” After the trial court rejected the plaintiffs’ request for a new trial, they perfected this appeal. The primary issue on appeal involves determining the point at which a property owner can bring an action against a mineral lessee to recover for property damages caused by the actions or inactions of the mineral lessee.

OPINION

The dilatory exception of prematurity provided for in La.Code Civ.P. art. 926(A)(1) raises the question of whether the cause of action has matured to the point where it is ripe for judicial determination. Williamson v. Hosp. Serv. Dist. No. 1 of Jefferson, 04-0451 (La.12/1/04), 888 So.2d 782. Its function is to assert that a | ¿judicial cause of action does not yet exist because of some unmet prerequisite condition. Steeg v. Lawyers Title Ins. Corp., 329 So.2d 719 (La.1976). The action is premature when it is brought before the right to enforce it has accrued. La.Code Civ.P. art. 423.

When a dilatory exception is tried, “evidence may be introduced to support or controvert any of the objections pleaded, when the grounds thereof do not appear from the petition.” La.Code Civ.P. art. 930. The defendant pleading the exception of prematurity has the burden of establishing that the action is premature. Cook v. AAA Worldwide Travel Agency, 360 So.2d 839 (La.1978).

In the matter now before us, the defendants introduced no evidence in support of their exception. Therefore, we must look to the petition alone to determine whether the objection of prematurity was properly granted. See Williamson, 888 So.2d 782; Dore Energy Corp. v. Carter-Langham, Inc., 04-1202, 04-1233, 04-1373, 05-0006 (La.App. 3 Cir. 5/4/05), 901 So.2d 1238, writs denied, 05-1484, 918 So.2d 1042, 05-1493, 918 So.2d 1043, 05-1496, 918 So.2d 1043, 05-1492, 918 So.2d 1043, 05-1503, 918 So.2d 1044, 05-1521, 918 So.2d 1045, 05-1576, 918 So.2d 1046, 05-1577, 918 So.2d 1047, 05-1582 (La.1/9/06), 918 So.2d 1047. Based on our review of the record before us, we conclude that an examination of the petition alone does not establish that the action is premature.

We first note that, although the petition does not allege that the mineral leases at issue were terminated before the plaintiffs filed suit, neither does it allege that the leases are still in effect. The petition does, however, routinely allege that the damages were caused by past operations. The petition’s regular use of the past tense in its allegations of damage indicates that the activities causing the damage are no longer taking place. While there are allegations that “the continuous and ongoing migration 15of this oilfield waste is causing new and ever increasing damage to plaintiffs’ property, and such damages will continue until such time as these wastes are removed and remediat-ed,” these allegations pertain to activities originating in the past and cannot be construed to mean that there is current lease activity on the property. The tenor of the petition is that all operations have ceased, but the issue is not entirely free from doubt. Thus, the petition being unclear on the prematurity issue of whether the leases have terminated, “the grounds thereof do not appear from the petition,” and the defendants had the burden of introducing evidence to support their position. See La.Code Civ.P. art. 9S0.

While they did not introduce any evidence at the hearing on the exceptions, the defendants point to an attachment to their joint memorandum filed in opposition to the plaintiffs’ motion for new trial as evidence of the continued operations on the property at issue. The attachment is a downloaded list of wells from a website posted by the Louisiana Department of Natural Resources which purports to show eleven of the 102 wells identified in the plaintiffs’ petition as still producing. However, the defendants did not introduce this at the hearing on the exceptions, and its belated appearance as an attachment to a brief is not evidence. In any event, the list is unreliable as it is not identified by website citation, including its dates of posting or last revision.

Even assuming that some wells subject to the leases at issue are still producing, we find no merit in the defendants’ primary argument that the plaintiffs’ cause of action does not arise in any event until after the leases are terminated. The trial court | ^agreed with the defendants, relying on the following language from the supreme court’s decision in Corbello v. Iowa Production, 02-826, p. 23 (La.2/25/03), 850 So.2d 686, 703, to the effect that “[t]he duty to repair the leased premises does not arise until the lease expires, at which time the lessee must return the property in good order.” We find that the trial court erred in its reliance on the language in Corbello as it applies to the matter now before us. Instead, we find that our recent decision in Dore Energy Corp., 901 So.2d 1238, is dispositive of the issues now before us.

The Dore litigation arose in Cameron Parish, Louisiana, and involved claims for damage associated with mineral operations. The plaintiff asserted in its petition that the defendants (seventeen corporations and one individual) had conducted oil and gas exploration and production operations on its property consisting of 18,000 acres of land under one mineral lease and that their operations had caused damage to the property. The plaintiff sought damages based on negligence, breach of contract, restoration under the Louisiana Mineral Code, exemplary damages, trespass, and maritime tort.

When the plaintiff in Dore filed its suit, mineral operations were continuing on a portion of the property, and, as in the case presently before us, some of the defendants filed exceptions of prematurity, raising the same argument now before us in the instant litigation. They too relied on the supreme court’s language in Corbello, 850 So.2d 686, and the trial court agreed. The plaintiff appealed the grant of the exception, assigning essentially the same errors that are before us in the instant litigation.

This court reversed the trial court’s grant of the exception of prematurity, but only in part. In doing so, this court noted that the language cited above from | '¡Corbello was dicta and further noted that the supreme court clarified that statement in Terrebonne Parish School Board v. Caste Energy, Inc., 04-968, p. 13 (La.1/19/05), 893 So.2d 789, 798 (quoting Corbello, 850 So.2d at 694), by explaining that the Cor-bello decision “involved an express lease provision obligating the lessee, upon termination of the lease, to ‘reasonably restore the premises as nearly as possible to their [condition at the beginning of the lease].’ ” In other words, the Corbello decision was based on “general principles of contract interpretation.” Id.

Finding no allegation in the plaintiffs petition suggesting that the mineral lease contained any contractual language regarding a duty to restore the property, this court in Dore then turned its attention to the duties statutorily imposed by La. R.S. 31:122, which provides as follows:

A mineral lessee is not under a fiduciary obligation to his lessor, but he is bound to perform the contract in good faith and to develop and operate the property leased as a reasonably prudent operator for the mutual benefit of himself and his lessor. Parties may stipulate what shall constitute reasonably prudent conduct on the part of the lessee.

In considering the duty imposed by La. R.S. 31:122, this court stated the following:

Regarding an implied duty in La.R.S. 31:122 to restore the surface of the leased premises, the supreme court stated in Terrebonne Parish School Board, 893 So.2d at 799, that [the] court, in
Rohner v. Austral Oil Exploration Co., 104 So.2d 253 (La.App. 1 Cir. 1958), properly articulated the rule concerning the scope of any implied duty to restore the surface. The plaintiff in Rohner sought damages of $250 per acre to four acres of his property that he claimed were damaged by the defendant lessee’s placement of a drilling rig and turnaround, and the digging of pits necessary to drill a well. Id. at 255. The court stated the relevant rule governing a lessee’s obligation to restore the surface as follows:
Unless provided for in the lease, the lessee is not responsible for damages which are inflicted without negligence upon the lessor’s property in the course |sof necessary drilling operations. Moreover when the damaging of the lessor’s property by the mineral lessee is not negligent per se, the lessor must prove that the injury was caused by unreasonable or negligent operations of the lease.
Id. (citing William 0. Bonin, Comment, Mines and Minerals-Oil and Gas-Surface Rights of Lessor and Mineral Lessee, 26 TUL. L.REV. 522, 523 (1952)). Applying this rule, the court denied recovery, finding that the plaintiff had not shown that his land was damaged due [to] any negligent or unreasonable operations by the defendant. Id. Rather, the damage to the plaintiffs land was attributable solely to “the ordinary, customary, and necessary acts which must be done by a drilling company in order to put down a well.” Id.
Ultimately, the supreme court held that “in the absence of an express lease provision, Mineral Code article 122 does not impose an implied duty to restore the surface to its original, pre-lease condition absent proof that the lessee has exercised his rights under the lease unreasonably or excessively.” Terrebonne Parish School Board, 893 So.2d at 801.

Dore Energy Corp., 901 So.2d at 1241-42 (alteration in original).

This court in Dore then proceeded to the procedural issue before it, i.e., the determination of when the lessor could sue to enforce the lessees’ obligation to restore the land under the pleadings in that case. With regard to that issue, this court acknowledged that the Louisiana Mineral Code does not provide a specific answer. However, this court concluded that, while the duty of the lessee to restore the land to its former state, reasonable wear and tear excepted, was an obligation not due until completion of operations, the claims for negligence, breach of contract, exemplary damages, damages for trespass, and maritime tort arising from the lessee’s obligation to maintain the leased land as a reasonably prudent operator as required under La.R.S. 31:122 did not have to wait until completion of operations to be heard.

lflWe agree with this court’s decision in Dore in its application of the jurisprudence to the pleadings before it. Applying that law to the pleadings now before us, we too advert to Terrebonne Parish School Board for guidance and quote again from that case its holding relied on by Dore that, “in the absence of an express lease provision, Mineral Code article 122 does not impose an implied duty to restore the surface to its original, pre-lease condition absent proof that the lessee has exercised his rights under the lease unreasonably or excessively.” Terrebonne Parish Sch. Bd., 893 So.2d at 801.

Applied to the petition before us, this means that if the defendants have exercised their rights under the leases unreasonably or excessively, La.R.S. 31:122 impliedly imposes the duty of restoration even if there is no express lease provision requiring restoration. This has two consequences in the present case. First, because the petition alleges that the defendants exercised their rights under the lease unreasonably and excessively, the petitioners have alleged a violation of the implied statutory obligation of the defendants under that statute. Second, having alleged specific conduct that violates the lease obligation, the plaintiffs have the right to proceed to trial and prove, if they can, that the defendants have in fact violated the terms of the lease, as well as their statutory obligations under the Louisiana Mineral Code and the Louisiana Civil Code. It is a matter of a defense on the merits, and not an objection to the petition as being prematurely filed, that by the terms of. the lease and whatever specific rights may have been granted to the lessees therein, the petitioners gave their assent to the alleged changes in the property or that it was “ ‘worn and torn’ ” in the manner the parties’ contemplated. See Terrebonne Parish Sch. Bd., 893 So.2d at 800. If such a defense exists, however, it is not the [^responsibility of the plaintiffs to anticipate that defense and plead against it at the risk of the petition being found premature for failure to so plead.

For these reasons, we reverse the exceptions of prematurity in their entirety. The Dore panel, which affirmed the exception only in part, was faced with the formidable task of framing an appellate response to one appeal and three writ applications, each presenting common legal questions; however, in only one, the appeal, did the court mention the allegations of fact — and those only to the extent necessary to make its ruling. The opinion does not state the pleaded facts in the writ cases. This court in Dore decided that, to the extent the claims involved either a prayer to maintain the leased land as a reasonably prudent operator as required under La.R.S. 31:122, or to restore land upon which operations had been completed to the extent that the use of such land was negligent, the exceptions of prematurity should be overruled. This overruling applied to the plaintiffs claims for both negligence and breach of contract. This court felt that the only claims that were premature were those that involved the obligation of the defendants-lessees to restore lands on which operations were ongoing. While this was technically an affirmation of the prematurity finding as to a non-specific part of the plaintiffs demands in the consolidated matters, it perhaps had little practical significance, as the affected parts of the demands might have to await a merits evaluation to ascertain to what extent any claim was premature. The only one of the two rulings of the court in Dore having practical application was the overruling of the exception of prematurity.

In our present case, we deem it unnecessary to rule that the trial court might have been correct to some extent in sustaining the exceptions. As a practical matter, the extent to which the trial court may have been correct can be determined only by l^a trial on the merits because the full facts necessary for such a determination can be revealed only by a trial on the merits. We accordingly reverse the judgment in its entirety and remand the matter for further proceedings.

DISPOSITION

For the foregoing reasons, the judgment of the trial court is reversed, the exceptions of prematurity are overruled, and the case is remanded to the trial court for further proceedings. The defendants-ap-pellees will pay the costs of this appeal.

REVERSED AND REMANDED.

      . The plaintiffs were originally six in number: Daniel A. Hardee, III, Velma Humble Hebert, Doris M. Humble, Margaret Humble Lantz, David Simon, and Stansel Properties L.L.C. However, after the appeal was filed, three of the plaintiffs (Velma Humble Hebert, Doris M. Humble, and Margaret Humble Lantz) moved to have the appeal dismissed as to themselves. Pursuant to that request, this court executed a judgment of partial dismissal.

      . The seventeen defendants were Atlantic Richfield Company, B.M. Oil, Inc., Triumph Energy, Inc., Petroleum Engineers, Inc., Siesta Oil and Exploration Company, Inc., Bill-ingsley Engineering Company, Great Southern Oil & Gas Company, Inc., Fortune Gas and Oil, Inc., Devon Louisiana Corporation, Proton Energy, L.L.C., Pharaoh Oil & Gas, Incorporated, Union Oil Company of California, Kaiser-Francis Oil Company, The Exploration Company of Louisiana, Inc., Saxon Energy, Inc., Marathon Oil Company, and Vincent & Welch, Inc. Two defendants, Fortune Gas and Oil, Inc. and Devon Louisiana Corporation (identified also as Devon Energy Production Company, L.P. in the record), have been dismissed from the litigation.

      . Vagueness was among the exceptions filed. At the hearing, the defendants argued vagueness as vigorously as they did the exception of prematurity. However, the trial court’s ruling mooted the vagueness exception.


author: PER CURIAM.

text:
    Joel TYLER v. Shawn BART.
    No. WCA 05-1348.
    Court of Appeal of Louisiana, Third Circuit.
    April 5, 2006.
    Stephen E. Everett, Attorney at Law, Alexandria, LA, for Plaintiff/Appellee, Joel Tyler.
    Barry Ray Laiche, Jeremy C. Cedars, Provosty, Sadler, deLaunay, Fiorenza & Sobel, Attorney at Law, Alexandria, LA, for Defendant/Appellant, Shawn Bart.
    Court composed of JOHN D. SAUNDERS, OSWALD A. DECUIR, and BILLY HOWARD EZELL, Judges.
   PER CURIAM.

An appeal from a default judgment in a workers’ compensation case entered in favor of Joel Tyler was filed by Shawn Bart. As indicated by the briefs, there is actually no person or entity known as “Shawn Bart.” Mr. Tyler was employed by Shawn Barton Masonry, L.L.C., a Louisiana limited liability company with only one member, Shawn Barton. The appeal raised the issue that default judgment was entered without any evidence that a mediation conference had been noticed or scheduled pursuant to La.R.S. 28:1310.3. Another issue concerned whether there was proper service of process.

In his reply brief, Mr. Tyler observes that notices of mediation were sent to the correct address of the employer under the name “Shawn Bart,” and no one appeared on behalf of the employer. Mr. Tyler states that he had no knowledge of the correct facts of his employment until the appeal was taken and the Appellant’s brief was filed. However, in brief Mr. Tyler agrees that, in the interests of justice, the default judgment should be vacated and the case remanded for further proceedings.

Therefore, the judgment in these proceedings, rendered on July 25, 2005, is vacated. This case is remanded to the Office of Workers’ Compensation for further proceedings. Costs of this appeal are assessed equally among the parties.

JUDGMENT VACATED; REMANDED.