author: AMY, Judge.

text:
    Michael J. LEGER, II v. Danielle Gotreaux LEGER
    17-270
    Court of Appeal of Louisiana, Third Circuit.
    December 6, 2017
    Lynette Young Feucht, Lynette Young Feucht, LLC, 440 North Second Street, Eunice, LA 70535, (337) 550-1115, COUNSEL FOR PLAINTIFF/APPELLEE: Michael J. Leger, II
    Alexander T. Reinboth, Emily G. Andrews, Assistant Attorneys General, Louisiana Department of Justice, Post Office Box 94005, Baton Rouge, LA 70804, (225) 326-6000, COUNSEL FOR AMICUS CURIAE: Attorney General of the State of Louisiana
    Dona Kay Renegar, G. Andrew Veazey, Bradford H. Felder, Veazey, Felder & Renegar, L.L.C., 2 Flagg Place, Lafayette, LA 70508, (337) 234-5350, COUNSEL FOR INTERVENOR/APPELLANT: John Jerome Fontenot
    Viel P. Caswell, Jr., Post Office Box 1700, Eunice, LA 70535-1700, (337) 457-2855, COUNSEL FOR DEFENDANT/APPELLEE: Danielle Gotreaux Leger
    Court composed of Marc T. Amy, D. Kent Savoie, and Van H. Kyzar, Judges.
   AMY, Judge.

The appellant intervened in the underlying divorce proceeding, seeking a determination of paternity of a minor child born during the marriage. As the matter was filed more than one year after the child's birth, the trial court sustained the legal father's exception of peremption pursuant to La.Civ.Code art. 198. Although that ruling was affirmed by prior appeal, the appellant thereafter filed a petition in which he challenged Article 198 on constitutional grounds. The trial court denied the appellant's claim. He filed the present appeal. For the following reasons, we affirm.

Factual and Procedural Background

As discussed in a previous proceeding before this court, the minor child who is the subject of these proceedings was born on August 21, 2012, during the marriage of Danielle Gotreaux Leger and Michael J. Leger, II. See Leger v. Leger , 15-151 (La.App. 3 Cir. 9/30/15), 215 So.3d 773. However, after Mr. Leger commenced divorce proceedings in May 2016, the appellant, John Jerome Fontenot, filed a June 17, 2014 "Petition of Intervention, for Paternity, Custody, and Alternatively, Visitation[.]" Alleging that DNA testing established that he was the biological father of the minor child, he asserted that he had been unable to timely file the avowal action pursuant to La.Civ.Code art. 198, which provides:

A man may institute an action to establish his paternity of a child at any time except as provided in this Article. The action is strictly personal.
If the child is presumed to be the child of another man, the action shall be instituted within one year from the day of the birth of the child. Nevertheless, if the mother in bad faith deceived the father of the child regarding his paternity, the action shall be instituted within one year from the day the father knew or should have known of his paternity, or within ten years from the day of the birth of the child, whichever first occurs.
In all cases, the action shall be instituted no later than one year from the day of the death of the child.
The time periods in this Article are peremptive.[ ]

Acknowledging the passage of more than one year since the birth of the minor child, Dr. Fontenot suggested that the "bad faith" exception was applicable to the matter due to his concerns for the safety of both Ms. Leger and the child if paternity was revealed. While the trial court permitted Dr. Fontenot's intervention, the trial court granted Mr. Leger's exception of peremption on the avowal action. That determination was affirmed in the initial appeal of this matter. Leger , 215 So.3d 773. However, the panel declined to rule on Dr. Fontenot's claim that La.Civ.Code art. 198 is unconstitutional as the claim was not previously raised in his pleadings, nor had the trial court ruled on any such claim. Id.

Subsequently, and under the same docket number as the underlying matter, Dr. Fontenot filed a "Petition to Declare Louisiana Civil Code Article 198 Unconstitutional." He named Mr. and Ms. Leger, as well as the State of Louisiana, through the Attorney General, as defendants. Dr. Fontenot claimed therein that although he was the biological father of the minor child, he "was precluded from bringing an action to establish paternity pursuant to Civil Code article 198" as Ms. Leger advised him that she was abused by her husband and that if Dr. Fontenot "took action to establish paternity" that she "feared for her life." However, the trial court denied his prior claim that the "bad faith" exception to La.Civ.Code art. 198"should be interpreted to include a mother's plea for the physical protection of herself and her child from a physically abusive husband." Dr. Fontenot asserted that, as a result, his ability to establish paternity "was precluded by the application of the one-year peremptive period contained within Louisiana Civil Code article 198."

Referencing the " 'fundamental right of parents to make decisions concerning the care, custody, and control of their children[,]' " Dr. Fontenot alleged in his petition that "[t]he one-year peremptive period contained within Louisiana Civil Code article 198 is unconstitutionally short and an undue interference with [his] constitutionally protected rights as the parent" of the minor child. Citing Troxel v. Granville , 530 U.S. 57, 120 S.Ct. 2054, 147 L.Ed.2d 49 (2000) ; Stanley v. Illinois , 405 U.S. 645, 92 S.Ct. 1208, 31 L.Ed.2d 551 (1972).

Furthermore, and by comparison, Dr. Fontenot explained in his petition that La.Civ.Code art. 193"allows a mother to institute an action to disavow a presumed father and establish the paternity of the biological father as long as she institutes the action within two years of the date of the birth of the child." This disparity, he alleged, violated his rights of equal protection of both La.Const. art. 1, § 3, and U.S. Const. amend. XIV, § 1. Recognizing the attendant evaluations for such a complaint, Dr. Fontenot asserted that "[t]here can be no justification for granting an extra year for the mother of a child to bring an action to establish the paternity of the biological father than for the biological father himself." Therefore, he "pray[ed] that the one-year peremptive period contained in Louisiana Civil Code article 198 be declared unconstitutional, and that he be afforded the right to establish his paternity and legal custody" of the minor child.

Following the filing of the petition, the trial court granted Dr. Fontenot's motion to voluntarily dismiss the State as a defendant. The matter was submitted to the trial court on memoranda, with the State joining in Mr. Leger's memorandum to the trial court. Thereafter, the trial court denied Dr. Fontenot's claim, "finding that Louisiana Civil Code Article 198 is constitutional."

Dr. Fontenot appeals and, as his sole assignment of error, alleges that: "The trial court erred in holding Louisiana Civil Code article 198 constitutional."

Discussion

Due Process

As he did before the trial court, Dr. Fontenot contends that the peremptive period of La.Civ.Code art. 198 is unconstitutional as applied under the facts attendant to his claim. In doing so, he references United States Supreme Court jurisprudence addressing the rights of parents. See, e.g. , Troxel, 530 U.S. at 66, 120 S.Ct. 2054 (wherein the Court explained that its jurisprudence "recognized the fundamental rights[ ] of parents to make decisions concerning the care, custody, and control of their children."). See also Stanley , 405 U.S. at 651, 92 S.Ct. 1208 (wherein the Court stated that it had "frequently emphasized the importance of the family. The rights to conceive and to raise one's children have been deemed 'essential,' 'basic civil rights of man,' and '[r]ights far more precious than property rights[.]' " (citations omitted ed) ). Certainly, the import of such rights is unquestioned.

Yet, in order to establish such parentage, La.Civ.Code art. 198 provides that "[i]f the child is presumed to be the child of another man, the [alleged father's] action shall be instituted within one year from the day of the birth of the child." Dr. Fontenot argues that application of this peremptive period to him is an unconstitutional limitation on his rights as a biological father.

In support of his argument, Dr. Fontenot references La.Civ.Code 198, cmt. (e)

which addresses the underlying policy of the limitation period as follows:

(e) The time period of one year from the child's birth imposed upon the alleged father if the child is presumed to be the child of another man requires that the alleged father act quickly to avow his biological paternity. Requiring that the biological father institute the avowal action quickly is intended to protect the child from the upheaval of such litigation and its consequences in circumstances where the child may actually live in an existing intact family with his mother and presumed father or may have become attached over many years to the man presumed to be his father.

However, he contends that the above policy does not apply to the present situation since his avowal action was filed within the context of the Legers' divorce proceeding and, furthermore, that he had a "much closer relationship" with the young child than did Mr. Leger. Thus, because the expressed policy of the State cannot be fulfilled, Dr. Fontenot claims, the one-year period "is unconstitutionally short and undue interference on his constitutionally protected rights as the parent" of the minor child.

We find no merit in that contention. Rather, La.Civ.Code art. 198, when reviewed in full, specifically addresses Dr. Fontenot's situation. Generally, it provides that: "A man may institute an action to establish his paternity of a child at any time except as provided in this Article. " Id. (emphasis added). Thus, La.Civ.Code art. 198 recognizes an open ended period for recognition of the personal right now cited by Dr. Fontenot. However, La.Civ.Code art. 198 provides two time limitations to that cause of action: 1) in the event the child is presumed to be that of another man or 2) in the event of the death of the child. In this case, Mr. Leger's exception of peremption was maintained, and affirmed on appeal, as the minor child was "presumed to be the child of another man" and Dr. Fontenot's action was not "instituted within one year from the day of the birth of the child."

His delay in filing that action was very clearly at odds with the policy statement contained in La.Civ.Code art. 198, cmt. (e). First, Dr. Fontenot did not assert his claim as the alleged father until the child was nearing two years of age, despite his knowledge of paternity. Further, such a delay in the institution of the action is contrary to the intent of protecting "the child from the upheaval of such litigation and its consequences in circumstances where the child may actually live in an existing intact family with his mother and presumed father or may have become attached over many years to the man presumed to be his father." Id. (emphasis added).

Dr. Fontenot's argument in this regard is seemingly circular, as he did not file this avowal action until after the filing of the petition for divorce, despite his ability to have done so. Thus, at the time the action was filed, and notwithstanding the fact that Mr. Leger's work took him away from home for periods of time, the minor child lived in an "intact family structure" with Mr. Leger as the presumptive father. To suggest that the minor child did not or could not have become attached to Mr. Leger between the August 2012 birth and the filing of the avowal action in June 2014 is conclusory in nature on the part of Dr. Fontenot and is not otherwise established in the record.

Accordingly, we find no merit in the claim that application of the peremptive period of La.Civ.Code art. 198 does not further the expressed policies of the legislation and, as a result, unconstitutionally terminates Dr. Fontenot's right to establish paternity and custodial rights.

Equal Protection

Neither do we find merit in Dr. Fontenot's claim that comparison of the one-year peremptive period of La.Civ.Code art. 198 (applicable to an alleged father's action to establish paternity) to the two-year period of La.Civ.Code art. 193 (applicable to a mother's contestation and establishment of paternity), evidences violation of an alleged father's equal rights to establish paternity.

Louisiana Constitution Article 1, § 3 provides, in pertinent part, that: "No person shall be denied the equal protection of the laws. No law shall discriminate against a person because of race or religious ideas, beliefs, or affiliations. No law shall arbitrarily, capriciously, or unreasonably discriminate against a person because of birth, age, sex, culture, physical condition, or political ideas or affiliations."

This "state constitutional guarantee of equal protection[,]" the supreme court has explained, "mandates that state laws affect alike persons and interests similarly situated. This guarantee does not, however, take from the legislature all power of classification." Beauclaire v. Greenhouse , 05-0765, p. 5 (La. 2/22/06), 922 So.2d 501, 505. Rather, "[i]t is possible for parties to be treated differently without violation of equal protection rights. Equal treatment of all claimants in all circumstances is not required. The law merely requires equal application in similar circumstances." Id. See also City of Baton Rouge/Parish of East Baton Rouge v. Myers , 13-2011, 13-2036 (La. 5/7/14), 145 So.3d 320.

In this instance, Dr. Fontenot lodges a gender discrimination claim insofar as he suggests that alleged fathers and mothers are treated differently in their respective claims for paternity. In the event that a "statute classifies persons on the basis of birth, age, sex, culture, physical condition, or political ideas or affiliations, its enforcement shall be refused [pursuant to La.Const. art. 1, § 3,] unless the state or other advocate of the classification shows that the classification has a reasonable basis." Beauclaire , 922 So.2d at 505 (quoting Sibley v. Board of Supervisors of Louisiana State Univ. , 477 So.2d 1094, 1107 (La.1985) ). As statutes are presumed valid, their constitutionality "should be upheld whenever possible." Id.

In pursuit of this claim, Dr. Fontenot contrasts the one year period applicable to him under La.Civ.Code art. 198 with the period provided by La.Civ.Code art. 193. Entitled "Contestation and establishment of paternity; time period[,]" La.Civ.Code art. 193 provides that: "The action by the mother shall be instituted within a peremptive period of one hundred eighty days from the marriage to her present husband and also within two years from the day of the birth of the child, except as may otherwise be provided by law." Dr. Fontenot argues that the "disparity in which the mother of a child has a statutorily available method to establish paternity of a child's biological father as long as the action is instituted within two years of the birth of the child, but a father is limited to bringing an action within only one year of the birth of the child" reveals an equal protection violation.

We reject that claim, noting that the alleged father, as described in La.Civ.Code art. 198, and the mother, as described in La.Civ.Code art. 193, are not presented with similar circumstances. Rather, and although he is subject to the peremptive period applicable in instances where the child is presumed to be the child of another man, La.Civ.Code art. 198 relates solely to the establishment of paternity. La.Civ.Code art. 193, however, addresses the time period applicable to a larger contestation claim and, in turn, the establishment of paternity. Reference to the surrounding articles reveals the disparity in the circumstances of the mother and the alleged father.

At the time the instant matter was filed, La.Civ.Code art. 191 (emphasis added), described the claim for contestation and establishment of paternity as follows:

The mother of a child may institute an action to establish both that her former husband is not the father of the child and that her present husband is the father. This action may be instituted only if the present husband has acknowledged the child by authentic act or by signing the birth certificate.[ ]

The burden of proof for such an action is contained within La.Civ.Code art. 192 (emphasis added), which provides that: "The mother shall prove by clear and convincing evidence both that her former husband is not the father and that her present husband is the father. The testimony of the mother shall be corroborated by other evidence." As for the time limitation applicable to such an action, La.Civ.Code art. 193 provides that the mother's claim "shall be instituted within a peremptive period of one hundred eighty days from the marriage to her present husband and also within the two years from the day of the birth of the child, except as may otherwise be provided by law." Thus, the Article addresses, in part, the child's age, but further focuses on the date of the marriage to the present husband. The subsequent article, La.Civ.Code art. 194 provides that: "A judgment shall not be rendered decreeing that the former husband is not the father of the child unless the judgment also decrees that the present husband is the father of the child."

It is by reference to this larger span of legislation on the mother's actions for contestation and establishment of paternity that the different circumstances surrounding a mother's claim under La.Civ.Code arts. 191 - 194 and those surrounding a father's claim of paternity under La.Civ.Code art. 198 become apparent. Further, the Revision Comment to La.Civ.Code art. 192 illuminates the consideration of whether any disparity of classification has a reasonable basis in law:

Under this Article the mother must prove by clear and convincing evidence that her present husband is the father of the child and that her former husband is not. The reason for requiring clear and convincing proof that her present husband is the father (compare Civil Code Article 195 ) is that there is a legal presumption that the mother's former husband is the father, which the mother is also seeking to rebut. The consequences of the contestation action differ significantly from the actions permitted the child or the biological father under Civil Code Articles 197[ ] and 198 (rev. 2005): in a contestation action, the former husband will no longer be considered by law as the child's father; instead, only the mother's present husband will be considered the legal father. Under Civil Code Articles 197 and 198, the child or the father is seeking to establish paternity without affecting in any way the child's established filiation to another man.

Given the fact that the actions pointed to by Dr. Fontenot differ in nature, interests, and consequences, we find no merit in his claim that a reasonable basis for the lengthier period applicable to a mother's claim has not been established.

We similarly reject Dr. Fontenot's corresponding claim under the Equal Protection Clause of the United States Constitution. See U.S. Const. amend. XIV, § 1 (providing, in pertinent part, that: "No State shall ... deny to any person within its jurisdiction the equal protection of the laws."). In challenges involving an allegation of state-sponsored gender discrimination, the United States Supreme Court has explained that "gender-based discriminations must serve important governmental objectives and that the discriminatory means employed must be substantially related to the achievement of those objectives." Wengler v. Druggists Mut. Ins. Co. , 446 U.S. 142, 150, 100 S.Ct. 1540, 1545, 64 L.Ed.2d 107 (1980). Again, and in consideration of the differing positions of the parties involved in the distinct claims under La.Civ.Code arts. 191 - 194 and La.Civ.Code art. 198, as well as the differing consequences at issue in those actions, we do not find a gender-based discrimination suggestive of a violation of equal protection principles.

Finding no merit in the assignment of error, we leave the trial court's judgment undisturbed.

DECREE

For the foregoing reasons, the judgment of the trial court is affirmed. Costs of this proceeding are assessed to the Intervenor-Appellant, John Jerome Fontenot.

AFFIRMED.

      The present record indicates that, prior to the intervention, and in a separate trial court proceeding, Dr. Fontenot filed a "Rule for Joint Custody and For Child Support to Be Established" in February 2014.

      Louisiana Civil Code Article 3458 explains that: "Peremption is a period of time fixed by law for the existence of a right. Unless timely exercised, the right is extinguished upon the expiration of the peremptive period."

      The record indicates that Dr. Fontenot is a veterinarian.

      The trial court further entered a preliminary default against Ms. Leger, who did not file responsive pleadings as to the paternity matter. Additionally, Mr. Leger obtained a preliminary default against Ms. Leger in the underlying divorce proceeding and was subsequently granted a judgment of divorce in the underlying matter.

      The State has filed an amicus curiae brief with this Court.

      The Supreme Court explained that the Due Process Clause of U.S. Const. amend. XIV, " 'guarantees more than fair process.' The Clause also includes a substantive component that 'provides heightened protection against government interference with certain fundamental rights and liberty interest.' " Troxel , 530 U.S. at 65, 120 S.Ct. 2054 (citations omitted). Citing its jurisprudence in that regard, the Court stated that "it cannot now be doubted that the Due Process Clause of the Fourteenth Amendment protects the fundamental right of parents to make decisions concerning the care, custody, and control of their children." Id. at 66, 120 S.Ct. 2054.

      We note here, that notwithstanding Dr. Fontenot's claim, his parental status has not been established by the court. Rather, the initial court proceeding considered the application of the peremptive period and, in this proceeding, the constitutionality of that limitation is now considered.

      Dr. Fontenot has exercised periods of visitation with the child.

      And, in fact, the Louisiana Supreme Court has determined that even the retroactive application of a limitation period in such context is not an unconstitutional abridgement of a biological father's rights. See W.R.M. v. H.C.V. , 06-0702 (La. 3/9/07), 951 So.2d 172.

      Recall that the child was born in August 2012 and the underlying avowal action was filed in June 2014.

      Louisiana Civil Code Article 191 was amended by 2016 La. Acts No. 309, § 1, deleting the phrase "or by signing the birth certificate" from the end of the Article.

      The Revision Comment of La.Civ.Code art. 193 similarly confirms the multiple interests at issue in the mother's claim thereunder:
      The contestation action must be instituted within one hundred eighty days of the marriage of the mother to her present husband and before the child has attained the age of two years. This short time period encourages the mother to act expeditiously in the interest of all of the affected parties, in particular the child. The time period for instituting this action is similar to that of French Civil Code Article 318.1 in that both actions must be brought within six months of the inception of the marriage. This Article departs from the French article, however, in requiring that the action be instituted before the child has attained the age of two years. Under French Civil Code Article 318.1 the action must be instituted before the child has reached the age of seven years.

      Louisiana Civil Code Article 197 provides a child's action to establish paternity as follows:
      A child may institute an action to prove paternity even though he is presumed to be the child of another man. If the action is instituted after the death of the alleged father, a child shall prove paternity by clear and convincing evidence.
      For purposes of succession only, this action is subject to a peremptive period of one year. This peremptive period commences to run from the day of the death of the alleged father.


source: Caselaw Access Project

author: CONERY, Judge.

license: Public Domain

text:
    Norman Lee FRED v. DRILL CUTTINGS DISPOSAL COMPANY, LLC
    CA 17-627
    Court of Appeal of Louisiana, Third Circuit.
    December 6, 2017
    Joseph L. Lemoine Jr., Lemoine & Associates, LLC, 1018 Harding Street, Suite 102 B, Lafayette, Louisiana 70503, (337) 303-5685, COUNSEL FOR DEFENDANT/APPELLANT: Drill Cuttings Disposal Company, LLC
    G. Andrew Veazey, Bradford H. Felder, Veazey, Felder & Renegar, LLC, Post Office Box 80948, Lafayette, Louisiana 70598, (337) 234-5350, COUNSEL FOR PLAINTIFF/APPELLEE: Norman Lee Fred
    Court composed of Ulysses Gene Thibodeaux, Chief Judge, Billy Howard Ezell, and John E. Conery, Judges.
   CONERY, Judge.

Drill Cuttings Disposal Company, LLC (DCDC) appeals the trial court's February 22, 2017 judgment granting plaintiff Norman Lee Fred's rule for judgment on the pleadings and awarding Mr. Fred his past due salary and expenses, penalties and attorney fees. For the following reasons we affirm.

FACTS AND PROCEDURAL HISTORY

The underlying facts of this case are undisputed. Mr. Fred, a resident of Lafayette Parish, Louisiana was hired by DCDC, a limited liability company domiciled in Lafayette, Louisiana. He was terminated from his employment on November 3, 2016, and was instructed to immediately leave the job site located in McKenzie County, North Dakota.

On November 4, 2016, Mr. Fred contacted Mr. Jeffrey Reddock Sr., a principal with DCDC, via both telephone and text message, seeking the amount of salary due for his prior employment with DCDC. According to the pleadings, Mr. Reddock told Mr. Fred that he was not going to be paid his past due salary and expenses. On November 16th and 23rd, 2016, Mr. Reddock again allegedly refused to pay Mr. Fred his past due salary and expenses.

In his petition, Mr. Fred claimed that he was owed compensation for work done from October 16, 2016 to October 29, 2016, and from October 30, 2016 to November 3, 2016, the date of his termination by DCDC. Additionally, Mr. Fred claims that DCDC refused to reimburse him $509.87 in business expenses incurred during the course of his employment with DCDC. He claimed that pursuant to La.R.S. 23:631(A)(1)(a), he was entitled to his past due salary and expenses in the amount of $5,110.51.

Mr. Fred's counsel made a formal written demand on DCDC through its registered agent for service of process seeking payment for Mr. Fred's past due salary and expenses in the amount of $5,110.51, as well as penalties pursuant to La.R.S. 23:632(A). The three day grace period provided by La.R.S. 23:632(A) lapsed without payment by DCDC to Mr. Fred. Thus, DCDC's failure to pay the total amount of $5,110.51 to Mr. Fred also entitled Mr. Fred to possible penalties pursuant to La.R.S. 23:632(B), in addition to possible reasonable attorney fees and costs in accordance with La.R.S. 23:632(C).

Pursuant to La.R.S. 23:631(B), Mr. Fred then filed a summary proceeding by way of a rule for past due salary and expenses, penalties, and attorney fees, which was fixed for hearing by the trial court on February 6, 2017. DCDC answered the rule and filed an opposition. DCDC admitted that Mr. Fred was owed his past due salary and expenses in the amount of $5,110.51. However, in its answer and opposition to Mr. Fred's rule, DCDC alleged that as a result of Mr. Fred's willful negligence, he had done substantial damage to DCDC's well site. DCDC also alleged that Mr. Fred had committed a possible environmental violation which could result in a fine against DCDC from the North Dakota Environmental Agency. Therefore, DCDC claimed it was entitled to an offset for the alleged damages to its equipment and/or potential fine it might incur that far exceeded any amount owed to Mr. Fred for his past due salary and expenses.

At the hearing, DCDC was prepared to put on witnesses in order to prove that it was entitled to an offset, which the trial court properly refused to allow in a hearing on a judgment on the pleadings. "It is well settled that consideration of a motion for judgment on the pleadings must be based upon the pleadings alone and that supporting evidence is not to be considered." Gibbens v. Wendy's Foods, Inc. , 31,487, p. 4 (La.App. 2 Cir. 1/20/99), 729 So.2d 629, 631-32 (citations omitted).

The trial court found in favor of Mr. Fred and awarded him $5,110.51 in past due salary and expenses on the basis that DCDC was not entitled to an offset against their former employee. The trial court additionally awarded Mr. Fred $23,543.10 in penalties, which represented Mr. Fred's daily salary of $261.59 multiplied by ninety days in accordance with La.R.S. 23:632(A), plus stipulated attorney fees in the amount of $7,038.00. The trial court's judgment reflecting its ruling was signed on February 24, 2017. DCDC sought written reasons for ruling from the trial court, which request was denied as untimely.

DCDC filed a suspensive appeal. The validity and sufficiency of DCDC's suspensive appeal was challenged by Mr. Fred in the district court at a hearing fixed for October 16, 2017, just prior to oral argument in this case scheduled for October 26, 2017. No mention was made of the outcome of the hearing held in the district court at oral argument. However, despite any dispute over the validity of DCDC's suspensive appeal, DCDC's appeal was timely filed as a devolutive appeal. Accordingly, this court chooses to maintain its jurisdiction over DCDC's appeal as a devolutive appeal. Martinez v. Rivet , 16-100 (La. App. 3 Cir 4/13/16), 190 So.3d 461. Mr. Fred has answered the appeal and seeks additional attorney fees for work done in response to the appeal of DCDC.

ASSIGNMENT OF ERRORS

DCDC asserts the following assignment of errors on appeal:

ASSIGNMENT OF ERROR # 1
By granting judgment on the pleadings in favor of Mr. Fred, based solely on DCDC's admission that it had declined to pay Mr. Fred's last paycheck the trial court deprived DCDC opportunity to establish setoff or compensation that DCDC may have against wages Mr. Fred might have been otherwise entitled (but for his negligent, willful, illegal and damaging performance of his job with DCDC.)
ASSIGNMENT OF ERROR # 2
By granting judgment on the pleadings in favor of Mr. Fred, based solely on DCDC's admission that it had declined to pay Mr. Fred's last paycheck the trial court deprived DCDC an opportunity to prove that Mr. Fred had performed his work for DCDC in a negligent manner and his doing so caused DCDC to suffer damages far in excess of wages Mr. Fred would have otherwise been entitled to receive.
ASSIGNMENT OF ERROR # 3
By granting judgment on the pleadings in favor of Mr. Fred, based solely on DCDC's admission that it had declined to pay Mr. Fred's last paycheck the trial court deprived DCDC an opportunity to prove that Mr. Fred had performed his work for DCDC in a manner which constituted willful violation of North Dakota environmental laws and that illegal conduct on Mr. Fred's part caused DCDC to suffer damages far in excess of wages Mr. Fred would have otherwise been entitled to receive.
ASSIGNMENT OF ERROR # 4
By granting judgment on the pleadings in favor of Mr. Fred, based solely on DCDC's admission that it had declined to pay Mr. Fred's last paycheck the trial court deprived DCDC an opportunity to establish equitable defenses it may have to Mr. Fred's claim for penalties.
ASSIGNMENT OF ERROR # 5
By granting judgment on the pleadings in favor of Mr. Fred, based solely on DCDC's admission that it had declined to pay Mr. Fred's last paycheck the trial court deprived DCDC a right to fine Mr. Fred for negligent or willful acts in the performance of his duties for DCDC which caused damage to DCDC as authorized by La.R.S. 23:635.
ASSIGNMENT OF ERROR # 6
Whether La.R.S. 9:3921 bars, as Mr. Fred argued to the trial court, DCDC from asserting any defenses to Mr. Fred's claim for wages.

LAW AND DISCUSSION

Standard of Review

"A motion for judgment on the pleadings presents solely a question of law." Dragon v. American Bank & Trust Co. , 205 So.2d 473, 474 (La.App. 3 Cir. 1967). A panel of this court in LDK Investments, LLC v. Amons , 11-1076, pp. 4-5 (La.App. 3 Cir. 3/7/12), 86 So.3d 95, 99, succinctly summarized the standard of review applicable in a judgment on the pleadings, and stated:

Questions of law are reviewed de novo. Domingue v. Bodin , 08-62 (La.App. 3 Cir. 11/5/08), 996 So.2d 654. In conducting a de novo review, appellate courts "determine whether the trial court was legally correct or legally incorrect. If the trial court's decision was based on its erroneous interpretation of application of the law, rather than a valid exercise of discretion, such incorrect decision is not entitled to deference by the reviewing court." Id. at 657 (quoting Citgo Petroleum Corp. v. Frantz , 03-88, pp. 3-4 (La.App. 3 Cir. 6/4/03), 847 So.2d 734, 736, writ denied , 03-1911 (La. 10/31/03), 857 So.2d 484 ). Further, appellate courts do not assign special weight to the trial court when conducting a de novo review of legal questions before rendering judgment based on the record. Id.

Past Due Salary And Expenses

A motion for judgment on the pleadings is regulated by La.Code Civ.P. art. 965, which provides:

Any party may move for judgment on the pleadings after the answer is filed, or if an incidental demand has been instituted after the answer thereto has been filed, but within such time as not to delay the trial. For the purpose of this motion, all allegations of fact in mover's pleadings not denied by the adverse party or by effect of law, and all allegations of fact in the adverse party's pleadings shall be considered true. (Emphasis added).

"A motion for judgment on the pleadings is submitted on the pleadings which may include attached exhibits made a part of the pleadings." Canal Motors, Inc. v. Campbell , 241 So.2d 5, 5 (La.App. 4 Cir. 1970). In this case, Mr. Fred attached three exhibits to his pleadings:

Exhibit "A" (in globo)
a. Terms of Employment Notice
b. Authorization for Direct Deposit-Employee Form
c. Form I-9, Employment Eligibility Verification
d. Form W-4, Employees Withholding Allowance Certificate
e. Form L-4, Employees Withholding Allowance Certificate
f. Post Offer-of-Employment Medical Inquiry Louisiana Form
g. Substance Abuse Policy of DCDC
Exhibit "B"
May 25, 2016 "Gmail" giving details of the breakdown of the salary and expenses that were to be paid to Mr. Fred when he accepted employment with DCDC
Exhibit "C"
December 12, 2016 demand letter to Steven C. Lanza, DCDC's registered agent for service of process, demanding payment for past due wages and expenses pursuant to La.R.S. 23:632.

In Stonebridge Dev., LLC v. Stonebridge Enter., LLC , 42,039 (La.App. 2 Cir. 4/4/07), 954 So.2d 893, a panel of our sister circuit stated that a judgment on the pleadings is proper when the plaintiff's allegations clearly establish a right to relief, and the defendant admits each allegation. "[The jurisprudence] favor[s] giving a party his day in court; hence, judgment on the pleading[s] is granted only when the legal right is clearly established." Canal , 241 So.2d at 6 (citing Brown v. B & G Crane Serv., Inc. , 172 So.2d 708 (La.App. 4 Cir. 1965).

Louisiana Revised Statutes 23:631(A)(1)(a) creates liability for an employer who fails to timely pay wages owed to an employee after his discharge:

Upon the discharge of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday or no later than fifteen days following the date of discharge, whichever occurs first.

DCDC admitted in its answer to Mr. Fred's pleadings that on or about April 30, 2016, Mr. Fred was hired as a Field Supervisor with DCDC. DCDC also admitted that Mr. Fred executed the employment related documents previously listed as Exhibit "A" (in globo) and incorporated into Mr. Fred's pleadings. DCDC admitted the terms of his employment and salary listed as Exhibit "B," which was also incorporated into his pleadings. DCDC further admitted Mr. Fred was paid in "two-week increments," six days following the end of each pay period, and was paid a car allowance in the middle of the month. Finally, DCDC admitted Mr. Fred was terminated on November 3, 2016, and at his termination DCDC owed Mr. Fred $5,110.51 in past due salary and expenses.

On or about December 12, 2016, Mr. Fred, through his counsel, made demand on DCDC for his past due salary, expenses, and penalties via correspondence to DCDC's registered agent for service of process, as referenced in Mr. Fred's pleadings as Exhibit "C." DCDC admitted the existence and receipt of the letter in paragraph 17 of its answer to Mr. Fred's pleadings.

Therefore, it is undisputed that DCDC timely failed to pay the $5,110.51 in past due salary and expenses owed to Mr. Fred pursuant to La.R.S. 23:631 (A)(1)(a). In its assignments of error, DCDC urges as a defense to its failure to pay Mr. Fred that it is entitled to a setoff against the amount of past due salary and expenses owed due to the negligence and damages done to DCDC property and possible environmental fines connected with the cleanup of the DCDC well site.

DCDC's Assignments of Error Numbers One and Two

DCDC's assignments of error one and two basically state the same objection to the trial court's ruling granting Mr. Fred's motion for judgment on the pleadings and awarding Mr. Fred $5,110.51 in past due salary and expenses. DCDC argues it was not allowed to show that it was entitled to an offset based on Mr. Fred's "negligent, willful, illegal, and damaging performance of his job."

DCDC intended to present four witnesses at the hearing held in conjunction with Mr. Fred's motion for judgment on the pleadings and have them testify about Mr. Fred's activities at DCDC's well site. However, as previously stated, when a motion for judgment on the pleadings is before a trial court, only the pleadings can be considered, along with any exhibits attached and incorporated into the pleadings. Canal , 241 So.2d at 5. DCDC did not incorporate any exhibits into its answer that supported its claims against Mr. Fred. Gibbens , 729 So.2d at 631-632. Therefore, we find no error on the part of the trial court in denying DCDC the opportunity to put on witnesses during the hearing and find DCDC's assignments of error one and two to be without merit.

DCDC's Assignments of Error Numbers Three, Five, and Six

La.Code Civ.P. art. 965, which governs motion for judgment on the pleadings, provides in pertinent part, "[A]ll allegations of fact in mover's pleadings not denied by the adverse party or by effect of law, and all allegations of fact in the adverse party's pleadings shall be considered true."

It is undisputed that DCDC admitted in its pleadings that it failed to timely pay the past due salary and expenses of $5,110.51 owed to Mr. Fred under La.R.S. 23:631(A)(1)(a) upon his termination on November 3, 2016. DCDC seeks to support its failure to pay Mr. Fred based on Mr. Fred's alleged destruction of DCDC's property and a possible environmental fine imposed by the North Dakota Environmental Agency for an unlawful discharge at the DCDC well site allegedly caused by Mr. Fred. However, Mr. Fred argues that despite the allegations in DCDC's answer, it is barred from disputing the payment of the past due salary and expenses owed Mr. Fred by seeking an offset, as no specific, liquidated offset was supported by an appropriate exhibit properly attached to DCDC's answer.

Louisiana Revised Statutes 23:635 provides, "No person, acting either for himself or as agent or otherwise, shall assess any fines against his employees or deduct any sum as fines from their wages." DCDC claims that Mr. Fred performed his work "in a manner which constituted [a] willful violation of North Dakota environmental laws." Therefore, even if DCDC was charged with a violation and a fine by the North Dakota Environmental Agency, it could not use any action by Mr. Fred resulting in a fine as an offset or defense to the failure to pay his past due salary and expenses.

DCDC argues that La.R.S. 23:635 also provides in pertinent part, "This Section shall not apply in cases where the employees wilfully or negligently damage goods or works, or in cases where the employees wilfully or negligently damage or break the property of the employer ... but in such cases the fines shall not exceed the actual damage done." DCDC has alleged that there was "willful damage to their property" by Mr. Fred that far exceeded the amount owed to him as past due salary and expenses. Therefore, if DCDC's allegations are taken as true, they would not be barred from offsetting the past due salary and expenses they owed to Mr. Fred by the "effect of law," under La.Code Civ.P. art. 965.

Mr. Fred argues that by failing to state a specific amount of any possible fine by the North Dakota Environmental Agency or a specific amount of damages allegedly caused by Mr. Fred's willful and negligent actions at DCDC's well site, that La.Civ.Code art. 1893 would bar any offset by DCDC.

Louisiana Civil Code Article 1893 provides, "Compensation takes place by operation of law when two persons owe to each other sums of money or quantities of fungible things identical in kind, and these sums or quantities are liquidated and presently due." (Emphasis added). This court in Hebert v. Ins. Center, Inc. , 97-298, p. 8 (La. App. 3 Cir. 1/7/98), 706 So.2d 1007, 1012, writ denied , 98-353 (La. 3/27/98), 716 So.2d 888, stated, "The defense of setoff requires mutual obligations whereby each obligor owes an equally liquidated and demandable debt to the other." (Citations omitted). Black's Law Dictionary defines a "liquidated debt " as "A debt whose amount has been determined by agreement of the parties or by operation of law." BLACK'S LAW DICTIONARY 433 (8th ed. 2004). Since DCDC has not established the amount of a liquidated offset claim pursuant to La.Civ.Code art. 1893, its claim for an offset was properly rejected by the trial court.

In its assignment of error number six, DCDC raises the issue of whether La. R.S. 9:3921 actually bars "DCDC from asserting any defenses to Fred's claim for wages." DCDC claims that it does not. La.R.S. 9:3921 states in pertinent part:

A. Notwithstanding any provision in Title III of Code Book III of Title 9 of the Louisiana Revised Statutes of 1950 to the contrary, every master or employer is answerable for the damage occasioned by his servant or employee in the exercise of the functions in which they are employed. Any remission, transaction, compromise, or other conventional discharge in favor of the employee, or any judgment rendered against him for such damage shall be valid as between the damaged creditor and the employee, and the employer shall have no right of contribution, division, or indemnification from the employee nor shall the employer be allowed to bring any incidental action under the provisions of Chapter 6 of Title I of Book II of the Louisiana Code of Civil Procedure against such employee.

We do not find that La.R.S. 9:3921 would be applicable to this case, as there is nothing in the record to support that a specific liquidated third party claim has been made against DCDC by the North Dakota Environmental Agency, or any other party. We find that the trial court was not clearly wrong and assignment of errors three, five, and six are without merit.

Assignment of Error Number Four

DCDC also claims the trial court erred in failing to allow it "an opportunity to establish equitable defenses it may have to Fred's claim for penalties." La.R.S. 23:632 states:

A. Except as provided for in Subsection B of this Section, any employer who fails or refuses to comply with the provisions of R.S. 23:631 shall be liable to the employee either for ninety days wages at the employee's daily rate of pay, or else for full wages from the time the employee's demand for payment is made until the employer shall pay or tender the amount of unpaid wages due to such employee, whichever is the lesser amount of penalty wages.
B. When the court finds that an employer's dispute over the amount of wages due was in good faith, but the employer is subsequently found by the court to owe the amount in dispute, the employer shall be liable only for the amount of wages in dispute plus judicial interest incurred from the date that the suit is filed. If the court determines that the employer's failure or refusal to pay the amount of wages owed was not in good faith, then the employer shall be subject to the penalty provided for in Subsection A of this Section.
C. Reasonable attorney fees shall be allowed the laborer or employee by the court which shall be taxed as costs to be paid by the employer, in the event a well-founded suit for any unpaid wages whatsoever be filed by the laborer or employee after three days shall elapsed from time of making the first demand following discharge or resignation.

The Louisiana Supreme Court in Becht v. Morgan Bldg. & Spas, Inc. 02-2047, p. 4 (La. 4/23/03), 843 So.2d 1109, 1112, stated, "In order to recover penalty wages and attorney's fees under La. R.S. 23:632, the claimant must show that (1) wages were due and owing; (2) demand for payment was made where the employee was customarily paid; and (3) the employer did not pay upon demand." (Citations omitted).

In Harvey v. Bass Haven Resort, Inc. , 99-909, pp. 5-6 (La.App. 3 Cir. 2/2/00), 758 So.2d 264, 268, this court discussed the remedies available to the employer in defense of a claim for penalties and stated:

Although the statutory language provides for an award of penalty wages upon nonpayment, our jurisprudence has allowed the employer to assert equitable defenses to such a claim. Id. But see Domite v. Imperial Trading Co., Inc. , 94-16 (La.App. 3 Cir. 8/3/94), 641 So.2d 715.1 Relying on the Louisiana Supreme Court case of Carriere v. Pee Wee's Equip. Co. , 364 So.2d 555 (La.1978), this court in Hebert, 97-298, at [p]p. 9-10, 706 So.2d at 1013, explained:
[B]ecause the statute [ La.R.S. 23:632 ] is penal and therefore must be strictly construed, the jurisprudence has almost uniformly imposed a requirement that penalties not be imposed on the employer when it presents a good faith, non-arbitrary defense to its liability for unpaid wages. Carriere v. Pee Wee's Equip. Co. , 364 So.2d 555 (La.1978) ; Jones v. Hebert & LeBlanc, Inc. , 499 So.2d 1107 (La.App. 3 Cir.1986). This is an equitable defense which is not provided for in the statute. "Where there is a bona fide dispute over the amount of wages due, courts will not consider failure to pay as [an] arbitrary refusal and generally will refuse to award penalties." Barrilleaux [v. Franklin Foundation Hospital], 96-343 [ (La.App. 1 Cir. 11/8/96) ] at p. 17, 683 So.2d [348,] at 360. A trial court's determination concerning whether a defendant employer is in bad faith is a factual question subject to the manifest error/clearly wrong standard of review. Id. at p. 18, 360.
1 In Domite, a panel of this court held that the award of penalty wages against an employer who fails to timely pay wages owed an employee was mandatory according to the statutory language of La.R.S. 23:632, and, therefore, not susceptible to an equitable defense by the employer. The Domite court, reasoned that: "To allow such defenses is contrary to and makes less effective, if not ineffective, the obvious intent of the legislature in adopting this statute." Domite, 94-16, p. 6, 641 So.2d at 719. However, a panel of this court in Hebert v. Insurance Center, Inc. , 97-298 (La.App. 3 Cir. 1/7/98); 706 So.2d 1007,, writ denied , 98-0353 (La.3/24/98); 716 So.2d 888, determined that even though the reasoning set forth in Domite was statutorily correct, the supreme court had previously allowed equitable defenses against the payment of penalty wages to be raised by an employer, and, accordingly, was required to follow this jurisprudence. In our discussion of the merits of the instant matter, we rely on the jurisprudence established by the supreme court in Carriere v. Pee Wee's Equip. Co. , 364 So.2d 555 (La.1978) and followed by this court in Hebert.

The trial court awarded penalty wages in the amount of $23,543.10, which represents Mr. Fred's daily wage rate of $261.59 multiplied by ninety days, in accordance with the provisions La.R.S. 23:632. At the hearing on Mr. Fred's motion for judgment on the pleadings, after hearing argument from counsel on the issue of offset and DCDC's ability to withhold Mr. Fred's salary and expenses, the trial court stated, "Well, I don't agree. I don't agree. I'm going to grant judgment on the pleadings. I don't think that was the intent of the law that you can just simply hold an employee's wages because you claim that he is causing damages. All right?"

The trial court's ruling on this issue is subject to a manifest error standard of review. Barrilleaux , 683 So.2d at 348. We find that the trial court was not manifestly erroneous or clearly wrong and therefore we also affirm the trial court's ruling awarding Mr. Fred $23,543.10 in penalty wages pursuant to La.R.S. 23:632. The parties stipulated that if attorney fees are due, the amount of attorney fees incurred at the trial court level is $7,038.00, which amount has not been appealed by DCDC. We affirm the trial court's ruling awarding attorney fees in that amount.

Mr. Fred answered the appeal pursuant to La.Code Civ.P. art. 2133 and is seeking attorney fees for work performed in connection with this appeal, which we grant in the amount of $5,000.00.

CONCLUSION

For the foregoing reasons, the February 24, 2017 judgment of the trial court is affirmed in its entirety as against Drill Cuttings Disposal Company, LLC. Attorney fees associated with appeal of this matter are awarded to Norman Lee Fred in the amount of $5,000 and assessed against Drill Cuttings Disposal Company, LLC, as well as all costs of this appeal.

AFFIRMED.

      "La. C.C.P. 1031 et seq. [A. A demand incidental to the principal demand may be instituted against an adverse party, a co-party, or against a third person. B. Incidental demands are reconvention, cross-claims, intervention, and the demand against third parties.]"


author: KEATY, Judge.

text:
    Cynthia Anne COLE v. SABINE BANCSHARES, INC.
    17-272
    Court of Appeal of Louisiana, Third Circuit.
    December 6, 2017
    Jacques F. Bezou, Sr., Stacy R. Palowsky, Matthew L. Devereaux, The Bezou Law Firm, 534 East Boston Street, Covington, Louisiana 70433, (985) 892-2111, Counsel for Plaintiff/Appellant: Cynthia Anne Cole
    David S. Rubin, Julie M. McCall, George P. Holmes, Kantrow, Spaht, Weaver & Blitzer, Post Office Box 2997, Baton Rouge, Louisiana 70821-2997, (225) 383-4703, Counsel for Defendant/Appellee: Sabine Bancshares, Inc.
    John L. Whitehead, Attorney at Law, Post Office Box 1127, Natchitoches, Louisiana 71458-1127, Counsel for Defendant/Appellee: Sabine Bancshares, Inc.
    Court composed of John D. Saunders, Billy Howard Ezell, and Phyllis M. Keaty, Judges.
   KEATY, Judge.

Plaintiff/Appellant, Cynthia Anne Cole, appeals the trial court's judgment granting a Peremptory Exception of No Cause of Action in favor of Defendant/Appellee, Sabine Bancshares, Inc. (SBI). For the following reasons, the trial court's judgment is affirmed.

FACTS AND PROCEDURAL HISTORY

This matter arises out of Cynthia's disagreement with her brother, James Robert Cole, Jr. (Jim), over shares of bank stock they inherited from their deceased father, James Robert Cole, Sr. (James). James was the owner, CEO, and majority stockholder of SBI. SBI is a holding company which holds 100% of the stock of Sabine State Bank and Trust Company (SSBTC). Prior to James's death, Cynthia owned 1,406 shares of SBI stock. Upon James's death, Cynthia inherited 3,020.5 shares of his stock, making her an owner of approximately 44% of SBI stock. Litigation subsequently ensued between Cynthia and Jim regarding their father's succession and division of the stock. See Succession of Cole , 12-802 (La.App. 3 Cir. 12/26/12), 108 So.3d 240, writ denied , 13-257 (La. 3/15/13), 109 So.3d 384.

On January 7, 2016, Cynthia filed a Petition for Purchase of Shares against SBI, alleging that she was an oppressed shareholder under La.R.S. 12:1-1435 ("oppressed shareholder statute"). Cynthia sought to have SBI purchase her shares of stock at fair value as defined in the statute. On February 26, 2016, SBI filed a Peremptory Exception of No Cause of Action, arguing that the actions alleged in Cynthia's petition fail to constitute acts of oppression as defined in La.R.S. 12:1-1435. SBI argued that La.R.S. 12:1-1435 does not operate retroactively such that any alleged acts of oppression occurring before January 1, 2015, the date the oppressed shareholder statute became effective, cannot provide a cause of action under the statute. Cynthia filed an opposition memorandum. A hearing on the exception occurred on May 2, 2016, after which the trial court allowed the parties to file post-trial memoranda. On June 30, 2016, the trial court issued an Order with reasons granting SBI's exception, finding that the oppressed shareholder statute constitutes substantive law which can only be applied prospectively. The trial court further ordered Cynthia to file an amended petition, "alleging only those acts of shareholder oppression that have occurred on or after January 1, 2015[.]"

Cynthia filed a Motion to Certify Judgment as Final and Memorandum in Support, which was granted by the trial court on August 3, 2016. She, thereafter, filed a devolutive appeal, which the trial court granted on August 17, 2016. That record was lodged in this court under Docket Number 16-976. The trial court, however, issued a subsequent Order on October 4, 2016, instructing Cynthia to show cause why the appeal "should not be dismissed as having been taken from a non-appealable, interlocutory judgment and/or a judgment lacking proper decretal language." In response, Cynthia filed a brief with this court on October 18, 2016. On November 16, 2016, this court, on its own motion, dismissed her appeal and held that the trial court's interlocutory ruling was "incapable of being designated as final pursuant to La.Code Civ.P. art. 1915(B)." Cole v. Sabine Bancshares, Inc. , 16-796, p. 2 (La.App. 3 Cir. 11/16/16), 205 So.3d 995, 996.

On December 14, 2016, Cynthia filed with the trial court a Motion for Clarification of Judgment, Alternatively, Motion to Amend Judgment with a supporting memorandum. On January 17, 2017, the trial court issued an Amended Judgment granting the peremptory exception in part, dismissing Cynthia's claims for actions prior to January 1, 2015, pursuant to the oppressed shareholder statute, ordering her to amend her petition to allege acts occurring on or after January 1, 2015, and certifying it as a final and appealable judgment. Cynthia appeals that judgment.

On appeal, Cynthia asserts the following assignments of error:

[1.] The trial court erred by finding that La.R.S. 12:1-1435, the oppressed shareholder statute, cannot apply to pre-2015 acts, thereby sustaining SBI's exception of no cause of action with respect to alleged acts of oppression which took place prior to 2015 and dismissing Ms. Cole's claims arising from same with prejudice.
[2.] The trial court erred by ordering Ms. Cole to amend her petition to include only those alleged acts of oppression which took place after January 1, 2015, even though said acts should be admissible under Code of Evidence article 404(B) even if the oppressed shareholder statute does not specifically apply to them.

STANDARD OF REVIEW

An appellate court's "standard of review for sustaining or denying a peremptory exception of no cause of action is de novo because it raises a question of law." Hebert v. Shelton , 08-1275, p. 3 (La.App. 3 Cir. 6/3/09), 11 So.3d 1197, 1201.

The function of the peremptory exception of no cause of action is to question whether the law extends a remedy to anyone under the factual allegations of the petition. The peremptory exception of no cause of action is designed to test the legal sufficiency of the petition by determining whether [the] plaintiff is afforded a remedy in law based on the facts alleged in the pleading. No evidence may be introduced to support or controvert the objection that the petition fails to state a cause of action. The exception is triable on the face of the papers and for the purposes of determining the issues raised by the exception, the well-pleaded facts in the petition must be accepted as true.

Id. at 1202. "Simply stated, a petition should not be dismissed for failure to state a cause of action unless it appears beyond doubt that the plaintiff can prove no set of facts in support of any claim which would entitle him to relief." Fink v. Bryant , 01-987, p. 4 (La. 11/28/01), 801 So.2d 346, 349.

DISCUSSION

I. First Assignment of Error

In her first assignment of error, Cynthia contends the trial court erred by finding that La.R.S. 12:1-1435, the oppressed shareholder statute, cannot apply to pre-2015 acts. The oppressed shareholder statute protects minority shareholders in closely held corporations from the improper exercise of majority control by compelling the corporation to purchase their shares. Douglas K. Moll, Shareholder Oppression and the New Louisiana Business Corporation Act , 60 Loy. L. Rev. 461 (2014). The pertinent part of La.R.S. 12:1-1435 provides:

A. If a corporation engages in oppression of a shareholder, the shareholder may withdraw from the corporation and require the corporation to buy all of the shareholder's shares at their fair value.
B. A corporation engages in oppression of a shareholder if the corporation's distribution, compensation, governance, and other practices, considered as a whole over an appropriate period of time, are plainly incompatible with a genuine effort on the part of the corporation to deal fairly and in good faith with the shareholder. Conduct that is consistent with the good faith performance of an agreement among all shareholders is presumed not to be oppressive. The following factors are relevant in assessing the fairness and good faith of the corporation's practices:
(1) The conduct of the shareholder alleging oppression.
(2) The treatment that a reasonable shareholder would consider fair under the circumstances, considering the reasonable expectations of all shareholders in the corporation.

The lengthy statute further explains the term "fair value," the context of a transaction requiring appraisal, and the procedure that must be utilized when asserting a cause of action under the statute. La.R.S. 12:1-1435.

In this case, the trial court found that the oppressed shareholder statute cannot apply to pre-2015 acts because, in accordance with La.Civ.Code art. 6, it is a substantive law which operates prospectively. In explaining the substantive nature of the statute, the trial court noted in its written June 30, 2016 Order that prior to the enactment of La.R.S. 12:1-1435, "the legislature had not provided a remedy for shareholder oppression." The trial court concluded that the statute constituted a substantive change "because it created a new right of action by a shareholder against a closely held corporation that engages in oppressive conduct not previously forbidden by statute."

On appeal, Cynthia contends that the oppressed shareholder statute is a procedural law which operates retroactively to acts of oppression which occurred prior to January 1, 2015. SBI opposes, arguing that the statute is a substantive law which operates prospectively to acts of oppression occurring after January 1, 2015. As such, we must determine whether the trial court correctly held that La.R.S. 12:1-1435 is a substantive law which operates prospectively rather than a procedural law which operates retroactively.

In Louisiana, "substantive laws create and/or change rights, duties, and rules, while procedural laws provide the avenue by which those rights, duties, and rules are enforced. Further, interpretative laws clarify the meaning of a statute." Hixson Autoplex of Alexandria, Inc. v. Lewis , 08-1142, p. 5 (La.App. 3 Cir. 4/1/09), 6 So.3d 423, 426, writ denied , 09-955 (La. 5/29/09), 9 So.3d 170. Louisiana Revised Statutes 1:2 provides: "No section of the Revised Statutes is retroactive unless it is expressly so stated." Louisiana Civil Code Article 6"codifies the general rule against retroactive application of legislative enactments and the exceptions jurisprudentially engrafted onto it." State Farm Mut. Auto. Ins. Co. v. Noyes , 02-1876, p. 7 (La.App. 1 Cir. 2/23/04), 872 So.2d 1133, 1138. Louisiana Civil Code Article 6 provides: "In the absence of contrary legislative expression, substantive laws apply prospectively only. Procedural and interpretative laws apply both prospectively and retroactively, unless there is a legislative expression to the contrary." Louisiana Civil Code article 6 allows retroactive application of a procedural or interpretative law without legislative consent while La.R.S. 1:2 does not. Louisiana Revised Statutes 1:2 has been limited to apply only to substantive rather than procedural or interpretive laws. St. Paul Fire & Marine Ins. Co. v. E.R. Smith , 609 So.2d 809, 816 (La.1992).

In order to determine whether La.R.S. 12:1-1435 can be applied retroactively, we must engage in a two-part test. Manuel v. La. Sheriff's Risk Mgmt. Fund , 95-406 (La. 11/27/95), 664 So.2d 81. "The first step involves determining whether the Legislature expressed an intent concerning the retroactive or prospective application of the law. If the Legislature did express such an intent, the process is at an end and the law must be characterized as the Legislature intended." Id. at 86. If the Legislature was silent with respect to intent, "we must discern the Legislature's intent and ourselves classify the law as either substantive, procedural or interpretive." Id.

The oppressed shareholder statute is part of the Louisiana Business Corporation Act (LBCA), La.R.S. 12:1-101 through 1-1705, which the Legislature adopted pursuant to 2014 La. Acts No. 328, § 1, and which became effective on January 1, 2015. The LBCA repealed and reenacted Chapter 1 of Title 12 to make the former Louisiana business law consistent with the American Bar Association Model Business Corporation Act (MBCA). La.R.S. 12:1-101 ; 2014 La. Acts No. 328, § 1. Neither the oppressed shareholder statute nor the LBCA have expressed an intent regarding the retroactive or prospective application of the law. Therefore, we must employ the second part of the two-part test and determine whether La.R.S. 12:1-1435 was intended to be substantive or procedural.

Based upon our interpretation of the definition of procedural laws, the oppressed shareholder statute is procedural if a remedy for shareholder oppression existed prior to the statute's enactment. In that regard, Cynthia has not cited jurisprudence wherein a shareholder previously enjoyed the right to be paid the value of his or her shares upon proof of oppression, i.e., the right granted by La.R.S. 12:1-1435. Accordingly, that right did not exist prior to the LBCA's enactment because "the corporation had no obligation to buy back the minority investor's shares." Glenn G. Morris, Model Business Corporation Act As Adopted In Louisiana , 75 La. L. Rev. 983, 1059 (2015) ; La.R.S. 12:1-1435. Moreover, the term "oppression" is not defined in the MBCA, upon which the LBCA is based. Id. Comment (d) to the 2014 Revision of La.R.S. 12:1-1435 explains:

The [MBCA] does not define the term "oppression." This Section [of the LBCA] defines the term in Subsection B [of the oppressed shareholder statute] in a way that combines the two leading tests of oppression used in the case law of other states, the "reasonable expectations" test and the "departure from standards of fair dealing" test. Those two tests have been incorporated into this Section to permit comparisons between cases arising under this Section and those in other jurisdictions in which oppressive behavior has been considered as grounds for relief in favor of a minority shareholder.

Louisiana's failure to previously recognize shareholder oppression was further noted in a law review article which was cited by the trial court in its reasons for judgment in this matter, as follows:

Times, however, have changed. With the passage of the new Louisiana Business Corporation Act (LBCA), Louisiana becomes the fortieth state in the country to provide statutory relief for oppressive conduct. Effective January 1, 2015, minority shareholders in Louisiana closely held corporations who are unjustifiably denied their participatory and financial rights can seek an escape from their "trapped" status by compelling the corporation to purchase their shares.

Douglas K. Moll, 60 Loy. L. Rev. at 462-63 (footnotes omitted).

Similarly, in Krebs, Lasalle, Lemieux Consultants, Inc. v. G.E.C., Inc. , 16-24 (La.App. 5 Cir. 7/27/16), 197 So.3d 829, ( Krebs I ), the fifth circuit affirmed the trial court's grant of G.E.C., Inc.'s exception of no right of action based upon application of a section of the present-day LBCA regarding the effect of corporate dissolution. La.R.S. 12:1-1405. The fifth circuit explained:

KLL, Inc. contends that La.R.S. 12:1-1405 should apply to its corporation that was dissolved by affidavit in 2012. [Louisiana Revised Statutes] 12:1-1405 became effective January 1, 2015, more than two years after KLL, Inc. was dissolved by affidavit under La.R.S. 12:142.1 and after KLL, Inc. filed its original petition to enforce the promissory note. [Louisiana Revised Statutes] 12:1-1405 changed the fundamental rights of the parties concerning the dissolution of corporations. Therefore, the present statute qualifies as a substantive enactment and is applied prospectively under La.[Civ.Code] art. 6 and La.R.S. 1:2. Accordingly, La.R.S. 12:1-1405 is not applicable to the present case[,] and we must determine whether KLL, Inc. has a right of action against G.E.C., Inc. on the promissory note under La.R.S. 12:142.1, which was effective at the time KLL, Inc. dissolved its corporation by affidavit.

Id. at 832 (footnote omitted).

After Krebs I was decided, KLL, Inc. sought review of the trial court's order denying its petition for reinstatement of corporate status. In In Re: Krebs Lasalle Lemieux Consultants, Inc. , 16-586, p. 3 (La.App. 5 Cir. 3/15/17), 215 So.3d 939, 941, ( Krebs II ), the fifth circuit vacated and remanded the matter, explaining:

Recognizing that the district court did not have the benefit of Krebs I when it issued its order denying KLLC's petition for reinstatement, we find that Krebs I instructs our decision in this matter. Having previously determined in Krebs I that the newly enacted provisions of the Business Corporation Act do not apply when determining the effects of KLLC's pre-enactment dissolution, we find that these newly enacted provisions also do not apply to limit KLLC's capacity to seek reinstatement, which is governed by La.R.S. 12:142.1, the law in effect at the time the corporation was dissolved by affidavit. Therefore, we find that KLLC has a right to pursue reinstatement. In this regard, KLLC has the burden of producing sufficient evidence that there is a valid and lawful purpose for reinstating KLLC.

Although Krebs I and Krebs II concern application of the effect of corporate dissolution under La.R.S. 12:1-1405 whereas the instant matter concerns application of the oppressed shareholder statute pursuant to La.R.S. 12:1-1435, both statutes are part of the LBCA, La.R.S. 12:1-101 through 1-1705. As such, "the newly enacted provisions of the [LBCA] do not apply when determining the effects of" SBI's alleged oppressive conduct prior to the enactment of the LBCA. In Re: Krebs Lasalle Lemieux Consultants, Inc. , 215 So.3d at 941.

Accordingly, we find that La.R.S. 12:1-1435 is a substantive law because it gives an oppressed shareholder the right to compel a corporation to buy back the minority investor's shares. Because that right was not recognized prior to the LBCA's enactment, we hold that it is not a procedural law.

Cynthia's first assignment of error is without merit.

II. Second Assignment of Error

In her second assignment of error, Cynthia contends that the trial court erred by ordering her to amend her petition to include only those alleged acts of oppression which took place after January 1, 2015. She opines that if the oppressed shareholder statute does not apply retroactively, pre-2015 facts can still be considered under the statute based upon its requirement that acts be considered "over an appropriate period of time." La.R.S. 12:1-1435(B). Cynthia relies upon the supreme court's holding in Walls v. American Optical Corporation , 98-455, p. 4 (La. 9/8/99), 740 So.2d 1262, 1266 (citing 1 M. Planiol, Treatise on the Civil Law , § 243 (La.St.L.Inst.Trans.1959)), that: "[A] law may permissibly change the future consequences of an act and even the consequences of acts committed prior to the law's enactment without operating retroactively." We disagree with Cynthia's contention for the following reasons.

In Walls , the supreme court recognized the difficulty in determining whether a statute operates retroactively when it "must be applied to a case in which some operative facts pre-date the law while others occurred after the law's effective date." Walls , 740 So.2d at 1266. The issue was whether a 1976 amendment to La.R.S. 23:1032, which granted immunity to the employer's executive officers under workers' compensation law, barred a wrongful death action against the executive officers when the decedent's occupational exposures occurred before the statute was amended, although his death from silicosis occurred after the amendment's effective date. The supreme court had to determine whether the statutory amendment, as applied to the facts of the case, operates retroactively. It relied on a formula set out by Planiol for identifying the only two situations when a law applies retroactively as: "[A] law is retroactive when it goes back to the past either to evaluate the conditions of the legality of an act , or to modify or suppress the effects of a right already acquired . Outside of those conditions, there is no retroactivity." Id. at 1267 (quoting 1 M. Planiol, Treatise on the Civil Law , § 243 (La.St. L. Inst.Trans.1959)) (emphasis in original).

The supreme court in Walls held that application of the 1976 amendment to La.R.S. 23:1032 did not "constitute retroactive operation" in that case. Id. at 1270. It reasoned that the immunity provision in La.R.S. 23:1032 was not a law governing conduct and, as such, "does not evaluate the conditions of liability or attach new legal consequences to past acts." Walls , 740 So.2d at 1268. It also found that the amendment "does not go back to the past" to "modify or suppress the effects of a right already acquired." Id. at 1270. The supreme court explained that a wrongful death cause of action did not arise, and, thus, the plaintiffs could not have acquired a "right" in their cause of action for wrongful death until the date of the death, which occurred after the effective date of the statute. Id.

The supreme court further explained:

[W]hat we adopt herein today is a case by case approach to determining, in cases involving facts that span enough legislative sessions to allow for the intervention of new law, whether any intervening statute, if applied to that case, would operate retroactively. If the statute would operate retroactively under Planiol's definition, then, the two-fold analysis from La. C.C. art. 6, with which all courts are familiar, must be made. Making the determination of when the cause of action arose for the various causes of action which might be asserted merely provides the temporal guidepost from which a court may determine whether the intervening statute operates retroactively or prospectively and the consequences that flow from that determination will differ with each case.

Id. at 1271, fn. 8 (emphasis added).

In this case and as detailed above, we performed the two-fold analysis from La.Civ.Code art. 6, and we have determined that the oppressed shareholder statute is a substantive law which should be applied prospectively. We, therefore, must utilize Planiol's formula to determine if retroactive application is at issue by ascertaining whether La.R.S. 12:1-1435"(1) evaluates the conditions of the legality of a past act, or (2) modifies or suppresses the effects of a right already acquired." Walls , 740 So.2d at 1267. If neither of these two consequences results from application of the statute, "then it operates prospectively only[.]" Id.

With respect to the second situation regarding modification of an already acquired right, Walls explains: "If a party acquires a right to assert a cause of action prior to a change in the law, that right is a vested property right" and is "protected by the due process guarantees." Walls , 740 So.2d at 1268. "If retroactive application of the law would divest that party of such a vested right, then retroactive application could be constitutionally impermissible." Id. In this case, Cynthia could not have acquired a right in a cause of action for oppression prior to the statute's effective date since an oppression remedy failed to exist. Thus, the second situation is inapplicable.

With respect to the first situation regarding the evaluation of the conditions of the legality of a past act, we note: "Under Planiol's first situation in which a law operates retroactively, when a[n] intervening new law creates a cause of action, and thus attaches new consequences to past events, the retroactivity event is the conduct or activity regulated." Anderson v. Avondale Indus., Inc. , 00-2799, p. 7 (La. 10/16/01), 798 So.2d 93, 99. In this case, shareholders, such as Cynthia, had no cause of action for acts of oppression prior to January 1, 2015. Thus, the oppressed shareholder statute creates a new cause of action against corporations, such as SBI. Application of the statute to SBI's activities which occurred prior to January 1, 2015, is impermissible under the laws of retroactivity. Consideration of SBI's acts prior to January 1, 2015, would attach new legal consequences to SBI's conduct prior to enactment of the statute. This would operate as an impermissible retroactive application of the statute. We, therefore, find that Cynthia's argument fails in this regard.

Cynthia further contends that motive and intent are relevant factors to be considered when determining whether a shareholder has been oppressed based upon the statute's requirement that a corporation must "deal fairly and in good faith with the shareholder." La.R.S.12:1-1435(B). Notwithstanding the prohibition against retroactive application of substantive laws, she contends that pre-January 1, 2015 facts relating to oppression, such as motive and intent, can be considered in light of La.Code Evid. art. 404(B) (emphasis added), which provides:

Except as provided in Article 412, evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive , opportunity, intent , preparation, plan, knowledge, identity, absence of mistake or accident, provided that upon request by the accused, the prosecution in a criminal case shall provide reasonable notice in advance of trial, of the nature of any such evidence it intends to introduce at trial for such purposes, or when it relates to conduct that constitutes an integral part of the act or transaction that is the subject of the present proceeding.

In support of this argument, Cynthia cites Monroe Medical Clinic, Inc. v. Hospital Corporation of America , 622 So.2d 760 (La.App. 2 Cir.), writ denied , 629 So.2d 1135 (La. 1993), wherein a physician sued a former hospital administrator and the two corporations that controlled the hospital under the unfair trade practices law. The physician plaintiff filed suit on March 5, 1987, and he subsequently resigned as a hospital medical staff member on January 1, 1989. The trial court acknowledged the one-year period for bringing an action for unfair trade practices was peremptive and not subject to prescription. It also addressed the admissibility of events occurring before March 5, 1986, i.e., the beginning of the one-year peremptive period, and after the physician's January 1, 1989 resignation. The trial court held that such events were perempted although they could be introduced into evidence to show motive, intent, or plan under La.Code Evid. art. 404(B)(1). The second circuit affirmed the trial court's holding.

We find that Cynthia's reliance on the second circuit's holding in Monroe Medical Clinic is misplaced because it concerns evidence of acts which were barred by peremption; whereas, the instant matter concerns evidence of acts which are barred by retroactivity. Therefore, we find the trial court in this case correctly ordered Cynthia to amend her petition to include only those alleged acts of oppression which took place after January 1, 2015, the effective date of the statute. Cynthia's second assignment or error is without merit.

CONCLUSION

The trial court's judgment granting a Peremptory Exception of No Cause of Action in favor of Defendant/Appellee, Sabine Bancshares, Inc., is affirmed. All costs associated with this appeal are assessed to Plaintiff/Appellant, Cynthia Anne Cole.

AFFIRMED.


author: EZELL, Judge.

text:
    Lonnie HARPER v. BOISE PAPER HOLDINGS, LLC, et al.
    WCA 17-602
    Court of Appeal of Louisiana, Third Circuit.
    December 6, 2017
    Thomas E. Townsley, 711 Pujo Street, Lake Charles, LA 70601, (337) 430-0994, COUNSEL FOR PLAINTIFF/APPELLANT: Lonnie Harper
    Charles William Farr, 1966 N. Highway 190, Suite B, Covington, LA 70433, (985) 626-3812, COUNSEL FOR DEFENDANTS/APPELLEES: Boise Paper Holdings, LLC, Sedgwick Claims Management Services, Inc.
    Court composed of Ulysses Gene Thibodeaux, Chief Judge, Billy Howard Ezell, and John E. Conery, Judges.
   EZELL, Judge.

Lonnie Harper appeals the decision of the workers' compensation judge below holding that he failed to prove that a radio-frequency ablation procedure ordered by his doctor was in accordance with Louisiana's workers' compensation medical treatment guidelines (MTG). For the following reasons, we hereby reverse the decision of the workers' compensation judge and render judgment.

Mr. Harper was working at Boise Paper Holdings on August 6, 2012, when he was struck in the face with a large pry bar. He was rendered unconscious and airlifted to Lake Charles for treatment for his injuries. Mr. Harper began having severe headaches radiating from the back of his neck to the side of his head. He was eventually diagnosed as having occipital neuralgia and had several nerve blocks to alleviate his pain. Mr. Harper filed a workers' compensation dispute against Boise, seeking to have an occipital nerve stimulator implanted as a longer term solution to his pain than frequent nerve block injections. A prior workers' compensation judge found that he had suffered a workplace injury, that the injury caused him to suffer occipital neuralgia, and found that he was entitled to receive the nerve stimulator, as well as penalties and attorney fees for Boise's refusal to allow the procedure.

After the stimulator was implanted, Mr. Harper developed a severe infection which necessitated its removal. Leery of again undergoing surgery for a stimulator implant, Mr. Harper sought alternative treatment. He was referred to Dr. Sanjiv Jindia. Dr. Jindia gave Mr. Harper another nerve block but recommended a radio-frequency (hereinafter "RF") ablation procedure for longer-term pain relief. Dr. Jindia requested approval for the procedure but was denied by Boise. This decision was appealed to the medical director, who likewise denied the claim, finding it not to be in line with the MTG. Mr. Harper appealed that decision to the workers' compensation judge below, who found that he had not proved by clear and convincing evidence that the medical director's decision was incorrect. The workers' compensation judge denied his request for the RF procedure, as well as his claims for penalties and attorney fees, and dismissed his claims with prejudice. From that decision, Mr. Harper appeals.

On appeal, Mr. Harper asserts two assignments of error. He claims that the workers' compensation judge erred in not granting his treating physician's recommendation for the RF ablation, and that the workers' compensation judge erred in denying his claims for penalties and attorney fees. We agree.

An employer's obligation to furnish medical treatment to its injured employee is governed by La. R.S. 23:1201, et seq. In Church Mut. Ins. Co. v. Dardar , 13-2351 (La. 5/7/14), 145 So.3d 271, the Louisiana Supreme Court discussed the creation of the MTG and stated:
Enacted by the legislature in 2009, La. R.S. 23:1203.1 is the product of a combined endeavor by employers, insurers, labor, and medical providers to establish meaningful guidelines for the treatment of injured workers. Dissatisfied with a process for obtaining needed medical treatment that was cumbersome, uncertain and often fraught with expense, employers and their insurers perceived a need for guidelines that would assure them that the treatment recommended by a medical provider was generally recognized by the medical community as proper and necessary. In a similar vein, labor and their medical providers were concerned about the unreasonable delays regularly encountered in obtaining approval for treatment when disputes arose as to the necessity for the treatment and with having a procedure for obtaining approval for treatment that might vary from established guidelines. Thus, La. R.S. 23:1203.1 was enacted with the express intent "that, with the establishment and enforcement of the medical treatment schedule, medical and surgical treatment, hospital care, and other health care provider services shall be delivered in an efficient and timely manner to injured employees."
(Internal citations omitted).
La. R.S. 23:1203(A) states in 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.

Black v. CenturyLink , 50, 572, pp. 5-6 (La.App. 2 Cir. 4/13/16), 195 So.3d 28, 31, writ denied , 16-905 (La. 9/6/16), 204 So.3d 1000.

A workers' compensation judge may overturn the decision of the medical director if it is shown by clear and convincing evidence that the decision was not in accordance with the provisions of La.R.S. 23:1201, La.R.S. 23:1201.1, and La.R.S. 23:1203.1(K). The decision of the workers' compensation judge is subject to review under the manifestly erroneous/clearly wrong standard. Vital v. Landmark of Lake Charles , 13-842 (La.App. 3 Cir. 2/12/14), 153 So.3d 1017.

However, as discussed by this court in Simmons v. LUBA Workers' Comp. , 16-523, p. 3 (La.App. 3 Cir. 11/2/16), 206 So.3d 397, 401-02 :

When an error of law is alleged on appeal, the appellate court must determine whether the WCJ's ruling was legally correct. Edwards v. Ford Motor Co. , 06-101 (La.App. 3 Cir. 6/21/06), 934 So.2d 221, writ denied , 06-1847 (La. 10/27/06), 939 So.2d 1282. If the appellate court's review reveals a reversible error of law, it must conduct a de novo review of the record and render judgment on the merits if possible. Bridges v. Nelson Indus. Steam Co. , 15-1439 (La. 5/3/16), 190 So.3d 276. "A legal error occurs when a trial court applies incorrect principles of law and such errors are prejudicial." Evans v. Lungrin , 97-541, 97-577, p. 7 (La. 2/6/98), 708 So.2d 731, 735. Such "errors are prejudicial when they materially affect the outcome and deprive a party of substantial rights." Id.

Both the medical director and the workers' compensation judge found that RF ablation was not covered by the guidelines and that Mr. Harper would need a variance under La.R.S. 23:1203.1(M). We disagree, as we find the procedure is covered by the MTG as written. The relevant medical treatment guidelines concerning cervical injuries are found at Louisiana Administrative Code Title 40 Pt. I, § 2003 through § 2011. Section 2009(G)(3)(f), dealing with non-operative therapeutic procedures, states, in relevant part:

f. Occipital Nerve Block
i. Description. Occipital nerve blocks are generally accepted injections used both diagnostically and therapeutically in the treatment of occipital neuralgia. The greater occipital nerve is the target.
ii. Indications. Diagnosis and treatment of occipital neuralgia /cephalgia. Peripheral block of the greater occipital nerve may be appropriate as initial treatment. It may be indicated in patients unresponsive to peripheral nerve block or those patients in need of additional diagnostic information.

A plain reading of this section dealing with occipital neuralgia indicates that the injury is and should be treated under the guidelines dealing with cervical injuries. The immediately preceding section, 40 La.Admin.Code Pt. I, § 2009(G)(3)(e), deals specifically with RF ablation and states, in pertinent part (emphasis ours):

e. Radio Frequency (RF) Medial Branch Neurotomy / Facet Rhizotomy
i. Description. A procedure designed to denervate the facet joint by ablating the corresponding sensory medial branches. Continuous percutaneous radio-frequency is the method generally used.
ii. There is good evidence to support this procedure in the cervical spine but benefits beyond one year are not yet established. Radio-frequency medial branch neurotomy is the procedure of choice over alcohol, phenol, or cryoablation. Precise positioning of the probe under fluoroscopic guidance is required since the maximum effective diameter of the device is a 5 x 8 millimeter oval. Permanent images should be recorded to verify placement of the device.
iii. Indications. Those patients with proven, significant, facetogenic pain. This procedure is not recommended for patients with multiple pain generators or involvement of more than three medial branch nerves.

Additionally, 40 La.Admin.Code Pt. I, § 2021(H)(3)(f), dealing with lumbar injuries notes (emphasis ours): "There is good evidence to support Radio Frequency Medial Branch Neurotomy in the cervical spine but benefits beyond one year are not yet established. Evidence in the lumbar spine is conflicting; however, the procedure is generally accepted. " Radio-Frequency rhizotomy is further discussed in 40 La.Admin.Code Pt. I, § 2113(A)(5), which again states that "[t]here is good evidence to support this procedure for the cervical spine."

The case sub judice presents the very type of dispute that the MTG were designed to prevent. See Black, 195 So.3d 28. That Mr. Harper has occipital neuralgia is not only uncontested, but it is the settled law of this case. A simple reading of the sections above plainly show that RF ablation is an accepted procedure under the MTG for cervical injuries, of which occipital neuralgia is one. 40 La.Admin.Code Pt. I, § 2009(G)(3)(f). Boise's own evidence noted that "[c]ompression and injury of the occipital nerves within the muscles of the neck and compression of the second and third cervical nerve roots are generally felt to be responsible for the symptoms" of occipital neuralgia. Moreover, Dr. Erich Wolf, Mr. Harper's treating neurologist, testified that the most likely site of the injury to Mr. Harper's occipital nerve was at the base of the skull, where "the nerve pierces through the cervical fascia. ... at the junction of the head and the neck."

Although the MTG do not specifically include RF ablation as a non-operative therapeutic procedure for patients with occipital neuralgia directly, the MTG specifically list "Radio Frequency (RF) Medial Branch Neurotomy / Facet Rhizotomy" as an authorized and generally accepted treatment for cervical spine injuries. 40 La.Admin.Code Pt. I, § 2009(G)(3)(e). As occipital neuralgia is specifically discussed under those same guidelines as being a cervical spine injury, it is patently obvious that RF ablation would be an accepted treatment for that injury. Therefore, the workers' compensation judge erred in not finding that the MTG authorized the prescription of the RF ablation to treat Mr. Harper's pain caused by occipital neuralgia. The decision of the workers' compensation judge denying Mr. Harper the RF ablation procedure prescribed by his doctors is, accordingly, reversed.

Mr. Harper next claims that the workers' compensation judge erred in failing to award penalties and attorney fees for Boise's denial of the RF ablation procedure.

An award of attorney fees and penalties is reviewed for manifest error. Baullion v. Old Am. Pottery Co. , 01-0562 (La.App. 3 Cir. 11/21/01), 801 So.2d 567. Thus, we review the record to determine not whether the WCJ was wrong, but rather whether the record, as a whole, reveals a reasonable basis for the WCJ's ruling. Spikes v. Louisiana Commerce & Trade Ass'n , 13-919 (La.App. 3 Cir. 7/2/14), 161 So.3d 755.
Louisiana Revised Statutes 23:1203(A) requires an employer to furnish an injured worker with "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." "It is well settled that the failure to authorize or pay for medical treatment equates to the failure to furnish benefits, which can subject an employer to penalties and attorney fees." Romero v. Garan's, Inc. , 13-482, p. 3 (La.App. 3 Cir. 8/6/14), 145 So.3d 1120, 1122.
The court in Watson v. Amite Milling Co. , 560 So.2d 902, 906 (La.App. 1 Cir.), writ denied , 567 So.2d 614 (La.1990) (quoting Hall v. McDonald , 537 So.2d 328, 332 (La.App. 1 Cir.1988) ), observed:
[G]iven the facts, medical and otherwise, known to the employer or his insurer, did the employer or insurer have a reasonable basis to believe that medical expenses and compensation benefits were not due the employee. Stated another way, did the employer or his insurer have sufficient factual and medical information to reasonably counter the factual and medical information presented by the claimant.
(Emphasis added).
An award of penalties and attorney fees depends on the facts known to the employer at the time of its action. Workers' compensation law provides that an employer may reasonably controvert a disputed claim for medical benefits. La.R.S. 23:1201(F)(2). An "employer must rely on competent medical advice when the decision to deny medical treatment is made." Harrington v. Coastal Constr. & Eng'g , 96-681, p. 3 (La.App. 3 Cir. 12/11/96); 685 So.2d 457, 459, writ denied , 97-0109 (La. 3/7/97); 689 So.2d 1375. Further, while we agree with Harrington, we note that lay evidence is equally compelling in a determination of the need for medical treatment.
Baullion , 801 So.2d at 576-77 (emphasis in original). "To avoid penalties and attorney[']s fees for the nonpayment of benefits, the employer or insurer is under a continuing duty to investigate, to assemble, and to assess factual information before denying benefits." George v. Guillory , 00-591, p. 13 (La.App. 3 Cir. 11/2/00), 776 So.2d 1200, 1209, overruled on other grounds, Smith v. Quarles Co. , 04-179 (La. 10/29/04), 885 So.2d 562.
....
Finally, while a panel of this court concluded that "[a]n employer is entitled to rely upon the decision of the medical director that any treatment proposed is beyond the scope of the [Medical Treatment Guidelines]." Vital v. Landmark of Lake Charles , 13-842, pp. 4-5 (La.App. 3 Cir. 2/12/14), 153 So.3d 1017, 1020, we disagree. We find such an interpretation to be a departure from the long-standing jurisprudence requiring that an "employer must rely on competent medical advice when the decision to deny medical treatment is made." Baullion , 801 So.2d at 576-77 ; E.g. Vital v. Landmark of Lake Charles , 13-842 (La.App. 3 Cir. 2/12/14), 153 So.3d 1017 (Cooks, Judge, concurring); Harrington v. Coastal Constr. & Eng'g , 96-681, p. 3 (La.App. 3 Cir. 12/11/96); 685 So.2d 457, 459, writ denied , 97-0109 (La.3/7/97); 689 So.2d 1375 ; Benandi v. Louisiana Pac. Corp. , 00-21 (La.App. 3 Cir. 5/3/00), 760 So.2d 544, 547, writ denied , 00-1560 (La. 9/15/00), 768 So.2d 1279. Consequently, we decline to adopt such a drastic departure from well-established jurisprudence.

Ardoin v. Calcasieu Parish Sch. Bd. , 15-814, pp. 3-7 (La.App. 3 Cir. 2/3/16), 184 So.3d 896, 899-901, writ denied , 16-641 (La. 5/27/16), 192 So.3d 738 (alterations in original).

The utilization review Boise relied on in denying Mr. Harper's claim stated that an RF ablation procedure "is not medically indicated in general" and that the " 'pulsed' RFA ... is not approved or indicated according to current medical literature." This review is in blatant contrast to the MTG, as discussed above, which notes that the procedure is generally accepted in treating cervical injuries. We find that this utilization review opinion did not constitute competent medical evidence to deny the claim. Moreover, this is in contrast with the opinions of Mr. Harper's treating physicians, who both testified that the procedure was an appropriate treatment for occipital neuralgia. Boise, who has fought treatment of Mr. Harper's neuralgia at every turn, failed in its duty to investigate, assemble, and assess factual information before denying benefits. Therefore, the workers' compensation judge erred in failing to assess Boise penalties and attorney fees. We hereby render judgment awarding Mr. Harper penalties in the amount of $2,000.00 and attorney fees in the amount of $7,500.00.

Mr. Harper also seeks further attorney fees for work done on this appeal. We conclude that an additional award of $2,500 is appropriate to compensate Mr. Harper's counsel for his for the successful prosecution of this appeal.

For the above reasons, the decision of the workers' compensation judge is hereby reversed. We render judgment ordering Boise to approve the RF ablation procedure prescribed by Mr. Harper's doctor. We further render judgment to award Lonnie Harper $2,000.00 in penalties and $7,500.00 in attorney fees for work done at trial, plus an additional $2,500.00 for attorney fees for work done on appeal, for a total attorney fees award of $10,000.00.

Costs of this appeal, the costs of the expert fee of Dr. Jindia, and the transcript charge for the deposition of Dr. Jindia are hereby assessed against Boise Paper Holdings, LLC and Sedgwick Claims Management Services, Inc.

REVERSED AND RENDERED.

      Dr. Wolf also testified that RF ablation was one of the "more modern techniques" to treat occipital neuralgia.