Opinion
No. 5574.
May 21, 1962. On Rehearing November 9, 1962. Rehearing Denied December 14, 1962. Certiorari Denied January 14, 1963.
APPEAL FROM EIGHTEENTH JUDICIAL DISTRICT COURT, PARISH OF POINTE COUPEE, STATE OF LOUISIANA, HONORABLE R. NOLAN MOOSA, J.
Percy, Macmurdo Gray, by Edward W. Gray and J.H. Percy, Jr., Baton Rouge, for appellant.
Clint L. Pierson, Baton Rouge, for appellee.
Before ELLIS, HERGET and MILLER, JJ.
Before ELLIS, LOTTINGER, HERGET, LANDRY and REID, JJ.
The plaintiff filed this suit for Workmen's Compensation benefits for total and permanent disability allegedly resulting from a heart attack he suffered on or about May 27, 1959. The plaintiff was paid compensation from the date he suffered the attack for 34 weeks at the maximum amount allowed by law, together with $2191.96 medical at the time of the trial.
After trial on the merits, judgment was rendered by the District Court in favor of the plaintiff and against the defendant, Globe Indemnity Company, at the rate of $35.00 per week, not to exceed 400 weeks, beginning May 27th, 1959, and granting to plaintiff the maximum of $2,500.00 for all medical expenses. The District Court also found that the discontinuance of the payments of Workmen's Compensation by the defendant and their refusal to reinstate such payments upon demand, was arbitrary, capricious and without probable cause and plaintiff was awarded attorney's fees in the sum of $1,000.00 to be paid by the defendant, Globe Indemnity Company. The doctors, as expert witnesses, who appeared and testified in the trial were allowed fees of $50.00 each for Dr. R.K. Vidrine and Dr. John M. Mosely, and $150.00 for Dr. James E. Toups.
From this judgment the defendants have appealed.
Plaintiff filed an answer to the appeal seeking statutory damages for a frivolous appeal, together with mandatory statutory damages allowed under LSA-R.S. 22:658. In a supplemental answer to the appeal, plaintiff sought to have the award of $1,000.00 as the fee of the attorney increased to $2,000.00, and in a third supplemental answer to the appeal plaintiff had made an error in seeking to have Royal Indemnity Company held in judgment rather than Globe Indemnity Company and prayed for such correction.
The defendants specify two errors that are the issues in this appeal, to-wit:
"I. The plaintiff completely failed to prove that anything he did while acting in the course of his employment or anything that happened to him while he was acting in the course of his employment, caused, precipitated, brought on or otherwise contributed to his alleged coronary thrombosis."
"II. Alternatively, the Trial Court erred in refusing to recognize defendant-appellant's right to credit for the wages that the plaintiff's employer has paid the plaintiff since May 27, 1959."
Defendants argue that the plaintiff bears the burden of proof and cite the well settled principle in Workmen's Compensation cases that the plaintiff in a Workmen's Compensation case carries the burden of proof as in other civil cases and is required to establish his claim by a reasonable preponderance of the evidence, citing Fontenot v. Camden Fire Insurance Association, La.App., 124 So.2d 640, and other cases cited therein.
Counsel for defendant argues that the plaintiff must prove the fact that he had a coronary thrombosis and further that it was actually caused or was contributed to by excessive heat, heavy lifting, strain, trauma, fright, etc., while acting in the course of his employment. In support of this argument he cites the case of Nickelberry v. Ritchie Grocer Co., 196 La. 1011, 200 So. 330; Hemphill v. Tremont Lumber Co., 209 La. 885, 25 So.2d 625; Waller v. Stone Webster Engineering Corporation, La.App., 42 So.2d 872, 874, and Malone, Louisiana Workmen's Compensation Law and Practice, p. 261, which is quoted as follows:
"In some of the cases it is stated that although the disabling event need not be different in kind or intensity from the regular work of the employee, yet it must appear that the employee's regular work was physically strenuous in character or that he was regularly required to work in excessive heat. The reason for this apparent qualification is obvious: The fact that the event need not be unusual or unexpected does not obviate the fundamental requirement that the claimant must show a causal relationship between his disability and the conditions under which he performed his work. Where the regular duties are not of a sufficiently strenuous character to cause injury even to persons of weak constitutions, the Courts properly insist on a showing of some special event which could account for the disability."
The next question is whether, under the evidence in the record, the plaintiff satisfied the legal requirements set forth above. Defendants have ably urged that the evidence did not support plaintiff's claims for total and permanent disability or that the resulting heart attack was caused by any strenuous physical activities on the day he suffered the heart attack. In this particular case we are primarily concerned with the activities of the plaintiff shortly before, or on, the date that he actually suffered the heart attack. The activities he performed on that date were substantially as follows:
On the morning in question the plaintiff picked up several Negro workers and took them to the cottonfields, where he sharpened hoes for them with which they were to weed the cotton. After that, he went to the pasture, assisted one of the hands in repairing a tractor, and in doing so they had to take apart the hydraulic pump, place new parts therein, and reassemble it. Shortly after that another worker confronted him with a problem of a disk with a bent axle. The disk weighed approximately 200 pounds and plaintiff and a helper lifted the disk, placed it in the truck and took it to the welding shop in nearby Innis, Louisiana. Plaintiff testified that it was little before 11:30 when the repairs were completed on the disk and he helped reload it and brought it back to the plantation, unloaded it again and reassembled the disk. He went back to check on the tractor that he had repaired earlier and found it in good running condition. He became aware of feeling ill, which was just around noon. Plaintiff told his family that he did not feel good and got his son to take his truck, pick up the hands and bring them back to the store. From there plaintiff took the truck and the hands back to the field. He started to sharpen some hoes for the workers and while working on the third hoe his left arm commenced to hurt and he discontinued his work, got into his truck and started home. As he came into the yard he waited for his wife to come to his assistance and he staggered into the house and apparently fell. He was taken to St. Joseph's hospital in New Roads and treated by Dr. Mosely.
While on the subject of plaintiff's duties, it is shown that he did strenuous, manual labor along with his over-seeing or supervisory work. He attended to the cattle, which included riding a horse and feeding them during the winter months, drove tractors, sawed down trees, built and repaired fences, barns, houses, made hay and hauled it in, repaired tractors, hired and discharged workers, paid them off and kept their time.
Dr. Mosely did not have the hospital records available so as to testify to the length of time plaintiff remained in the hospital originally, however, he stated that plaintiff returned to the hospital on June 9, 1959 and on admission his blood pressure "was 80/60 and he was again in shock, very badly in shock." He remained in the hospital until July 16, 1959. Dr. Mosely was definitely of the opinion, although he frankly admitted that he could not substantiate that opinion, that plaintiff on May 27, 1959 had suffered a coronary thrombosis. On plaintiff's first or original admission, the day he suffered the first attack, he was in shock "with precardial pain — pain in the chest, radiating down the left arm." This doctor continuously treated plaintiff for a coronary thrombosis. Dr. Mosely at no time told the plaintiff that he could go back to hard, manual labor, but that he could return to work in a strictly supervisory capacity. The doctor wrote a letter on February 10, 1960 to this effect to the Baton Rouge Claims Service in which he specifically stated that "* * * Mr. Jere Howard may return to work in a supervisory capacity. Mr. Howard should not attempt any hard, physical labor at any time." It was also shown that plaintiff evidently had angina and had gone to Dr. Mosely several years prior to his serious attack on May 27, 1959. Dr. Mosely had prescribed nitroglycerin pills. It is also shown by the medical testimony that a person subject to angina is more likely to have a coronary attack than one without angina.
The plaintiff was referred to Dr. J.E. Toups by Dr. Mosely and the former examined the cardiograms and the patient, first seeing him on September 15, 1959. This doctor did not at first think that plaintiff had suffered a coronary thrombosis, however, after certain tests testified that "we would be willing to accept the diagnosis of coronary thrombosis without electrocardiographic evidence of infarction." This doctor stated that he would have no reason to believe that the plaintiff would not have been able to do supervisory work when he first saw him on March 7, 1960. He distinguished this kind of work from manual labor.
On August 14, 1960 plaintiff suffered another heart attack and due to the absence of Dr. Mosely, Dr. Vidrine made an emergency call to his home. Plaintiff was unable to talk to the doctor when he arrived. Plaintiff was again taken to the hospital in New Roads where he remained seven days. Dr. Vidrine diagnosed this heart attack as coronary thrombosis and was of the positive opinion that "He should not do any manual labor at all", and that he was totally and permanently disabled from the performance of such labor.
We are of the opinion that the District Judge did not commit any manifest error in concluding that the plaintiff had proven by a preponderance of the evidence a connection or contributing cause due to the manual labor he performed in his employment and particularly on the date of his first attack, May 27, 1959, and also that as a result of the attack of coronary thrombosis the plaintiff was and still is permanently and totally disabled within the meaning and intent of the Compensation Act.
The plaintiff's original answer to the appeal contains a prayer for an increase in the award for the attorneys fees allowed from $1,000.00 to $2,000.00 and for statutory penalties as well as damages for a frivolous appeal. Plaintiff is clearly not entitled to damages for a frivolous appeal and we find nothing in the record to justify an increase in the attorney fees from $1000.00 to $2000.00. The judgment of the District Court in this respect is not manifestly erroneous.
We are of the opinion, however, that the District Court should have awarded the plaintiff the 12% statutory damages provided for in LSA-R.S. 22:658, for the record is convincing that defendant's failure to continue the payment of compensation to the plaintiff was arbitrary or without probable cause. Their refusal and discontinuance of payment of plaintiff's compensation was based upon the contents of a letter addressed to plaintiff on February 11, 1960 by the Baton Rouge Claims Service Inc., which read as follows:
"February 11, 1960
"Mr. Jere Howard "Batchelor, Louisiana
"re: H.O. Claim No. 04-487-10880 "Insured — Walter H. Claiborne "Claimant — Jere Howard "D/A 5-27-59
"Dear Mr. Howard:
"According to the information we have including recent medical report, you are now able to return to your regular duty as a supervisor which does not involve hard physical labor. Therefore, compensation payments have been discontinued as of January 19, 1960.
"Yours very truly,
"BATON ROUGE CLAIMS SERVICE, INC. "WPA/mf s/Wm. P. Adams, Sr.
"cc: Royal Indemity Company "New Orleans, Louisiana"
In addition to the above letter the defendants rely upon the medical testimony and particularly that of Dr. Toups, that as of the date of the discontinuance of the payments to plaintiff this doctor had informed them that plaintiff could return to his supervisory duties and also that they believed those were the only duties which plaintiff had formally performed. This defense is not borne out by the record, for a thorough investigation was shown to have been made on behalf of the defendants as to the duties of the plaintiff, and in addition there are letters from counsel and from plaintiff's wife which refute this contention of defendants. There was never any question but that the plaintiff's duties consisted not only of supervisory work but of hard manual labor. The judgment of the District Court in failing to award the statutory penalties is manifestly erroneous. In this respect the judgment will be amended and plaintiff will be awarded 12% statutory damages provided for in LSA-R.S. 22:658.
The defendant-appellant contends that the District Court erred in refusing to recognize its right to credit for the wages plaintiff's employer has paid the plaintiff since May 27, 1959. Plaintiff's employer testified that at the time of the trial he was paying plaintiff as shown by his testimony as follows:
"Well, Mr. Howard is getting a hundred dollars a month in cash, plus a free — free lot for his store building and a free lot for his saloon and free rent — cattle rent — on a pasture for about twenty head of cattle."
He further testified that he owned the house in which plaintiff lived and that the latter was getting free rent. It is not shown in the record the value that should be attached to each of these gratuities, however, the District Judge found that "the things Mr. Claiborne did for the plaintiff after May 27, 1959 were purely gratuitous * * *", and concluded that no credits should be allowed. We are in accord with the finding of the trial court that the $100.00 per month and other free benefits furnished plaintiff should be considered as gratuitous, for the record reveals that the employer testified that the plaintiff was like a son to him, very loyal, and that a very close friendship existed between the two and that he continued paying the plaintiff because he considered it a moral obligation. It is further shown that although the plaintiff was presumed to be doing his former supervisory work that he was really unable to perform the duties ordinarily expected of him in this capacity and he made no attempt to perform the duties when he was feeling bad or sick, and that his employer did not expect it.
Counsel for the defendant relies upon the case of Walters v. General Accident Fire Assur. Corp. Ltd., 119 So.2d 550, decided by this Court and in which Judge Landry as the organ of this Court, fully covered the rule applicable to the question of credits. In this case we held:
"The question of whether wages paid subsequent to injury are earned or paid gratuitously in lieu of compensation has been considered by the appellate courts of this state on many occasions and under circumstances involving different legal principles, namely, pleas of prematurity and prescription, exceptions of no right and no cause of action and with respect to allowance of credit to employers for such payments as an off-set to compensation due employees. We believe the jurisprudence of this state settled to the effect that payment of unearned wages in lieu of compensation (unaccompanied by concurrent payment of compensation as such) is considered a gratuity intended by the employer and employee as a substitute for compensation benefits and the employer entitled to credit for one week of compensation for each week during which such unearned wages paid equal or exceed the compensation rate of the employee. Mottet v. Libbey-Owens-Ford Glass Co., 220 La. 653, 57 So.2d 218; White v. Calcasieu Paper Co., La.App., 96 So.2d 621; Myers v. Jahncke Service, Inc., La.App., 76 So.2d 436; Pohl v. American Bridge Division U.S. Steel Corp., La.App., 109 So.2d 823. These same cases also recognize and hold that if wages paid a disabled employee subsequent to injury are earned by the employee in the performance of work of a character different from that in which the employee was engaged at the time of injury, such wages are considered earned in a different occupation consequently there is no implied agreement they are paid in lieu of compensation and the employer may not receive credit therefor against compensation payable."
Plaintiff was not employed in any different occupation or capacity as his former employment included supervisory duties. However, it is clearly shown in this case that he was not expected and did not fully perform these duties and that compensation paid or other benefits furnished were gratuitous on the part of his employer, and the defendant would be entitled to such credits.
We do not believe, however, that we can finally dispose of this feature of the case in view of the fact that the Lower Court sustained an objection by counsel for plaintiff to questions propounded by counsel for defendant seeking to find out the amount paid to the plaintiff by his employer which would necessarily include the value of the free services or benefits furnished to him. It would also be necessary for the record to show exactly how long plaintiff's employer paid him subsequent to May 27, 1959 in order to arrive at the proper credit on behalf of the defendant.
For the above and foregoing reasons it is ordered, adjudged and decreed that the judgment of the District Court be amended and the plaintiff is now awarded the statutory penalties provided for in LSA-R.S. 22:658 and as thus amended the judgment of the District Court is affirmed in all other respects except:
It is hereby ordered that the case be remanded to the District Court for the purpose of ascertaining the amount of credit due to the defendant because of the gratuitous payments to plaintiff subsequent to May 27, 1959.
Judgment amended and affirmed in certain respects and remanded for further evidence.
ON REHEARING
In this suit for workmen's compensation benefits we initially rendered judgment herein in favor of plaintiff-employee decreeing said employee totally and permanently disabled and entitled to the maximum benefits provided by the workmens compensation laws of this state. In addition we held that following the disabling accident sustained by plaintiff-appellee the duties performed for his employer were the same as those in which plaintiff was engaged prior thereto but that since plaintiff-appellee did not fully perform the duties of his position, compensation and other benefits furnished and paid him by his employer following the accident were gratuities for which defendant-insurer was entitled to credit against compensation due. We further held that because of the failure of the trial court to permit the introduction of evidence regarding the remuneration paid plaintiff prior to his injury as well as the failure of the record to show precisely how long plaintiff's employer remunerated plaintiff following the accident, we were unable to determine the exact credit due appellant and, therefore, remanded the case to the trial court for the purpose of ascertaining the amount of credit due appellant-insurer.
Upon the application of both appellant and appellee a full and unlimited rehearing was granted herein so that we might further consider the several issues presented in the instant matter.
Appellant urges first that we erred in finding for appellee despite the alleged lack of showing of causal relation between appellee's disability and his employment and secondly, that error was committed in awarding plaintiff statutory penalties and attorney's fees. On the other hand, appellee maintains we were remiss in permitting appellant credit against compensation due for wages paid appellee by his employer subsequent to the disabling accident and in addition urges that the awar of attorney's fees initially made herein be increased.
Considering first appellant's contention that the judgment previously rendered herein in favor of appellee should be annulled and set aside because of the averred failure of the record to establish causal connection between plaintiff's disability and his employment by appellant's insured, we find appellant's position, in essence, to be that the trial court made no express mention of the fact of causal relation in its reasons for judgment, consequently, the issue was never adjudicated and we, therefore, committed error in sustaining the decision of the lower court on the "manifest error doctrine". The conclusion drawn by able counsel is not substantiated by the record. We note that our brother below concluded that plaintiff had proved his case "by overwhelming preponderance of the evidence" and in our original decree we reviewed the testimony at length and found no palpable error in the trial court's judgment.
In his brief and argument before this court learned counsel for appellant presents for our consideration the same arguments advanced on appeal with regard to the issue of causal relation or connection with plaintiff's disability and employment. We believe said issue was fully and adequately discussed in our original opinion and feel that the views expressed therein answer all arguments tendered by appellant on rehearing. We likewise feel that no useful purpose would be served by reiterating those views herein.
We deem of considerable importance, however, the question whether defendant-insurer is entitled to credit as an offset against compensation due or to become due appellee by virtue of certain alleged unearned wages or gratuitous payments reputedly made appellee by his employer subsequent to appellee's injury on May 27, 1959.
In the original decree rendered herein the following conclusion was reached:
"Plaintiff was not employed in any different occupation or capacity as his former employment included supervisory duties. However, it is clearly shown in this case that he was not expected and did not fully perform these duties and that compensation paid or other benefits furnished were gratuitious (sic) on the part of his employer."
In so holding we now feel that we fell into error for the reason that the record as presently constituted is devoid of certain vital evidence necessary to substantiate the conclusion reached.
In dealing with the perplexing problem thus presented for determination we must proceed in the light of certain principles which appear well established in our jurisprudence. It seems well settled that unearned wages paid a disabled employee in lieu of compensation are considered a gratuity intended by both employer and employee as a substitute for compensation benefits due the employee thereby entitling the employer for credit for one week of compensation for each week during which such wages paid equal or exceed the employee's compensation rate. Mottet v. Libbey-Owens-Ford Glass Co., 220 La. 653, 57 So.2d 218; Walters v. General Accident and Fire Assur. Corp., Ltd., La.App., 119 So.2d 550. The Mottet and Walters cases, supra, (as well as those others cited in the original decree herein) also establish the rule that an employer is not entitled to credit for wages fully earned by an employee in work of a nature and kind different from that in which the employee was engaged prior to the disabling accident. See also Gaudet v. Hartford Accident Indemnity Company, La.App., 143 So.2d 252, and cases therein cited.
The most perplexing cases are those wherein the employee continues to perform some but is unable to fully discharge all of the duties of his former employment. The Walters case and the authorities therein cited establish the principle that if, following an accident, an employee is paid full wages for discharging only a portion of his former duties, such wages are considered as unearned or a gratuity entitling the employer to credit therefor. There is, however, authority for the proposition that if the employee is paid less wages for performing only a portion of his former duties, such wages are considered fully earned and the employer is not entitled to credit under such circumstances. Woodson v. Southern Farm Bureau Casualty Ins. Co., La.App., 121 So.2d 571.
In discussing the general issue under consideration and more particularly the decision rendered by this court in Walters v. General Accident Fire Assur. Corp., Ltd., La.App., 119 So.2d 550, Professor Wex S. Malone in Louisiana Workmen's Compensation Law and Practice (1962 pocket part, p. 196) states the problem in the following words:
"It may be difficult to determine whether the retained employee is performing only a part of his former duties (in which case the employer is entitled to credit for the wage so paid) or is performing the duties of a different job for which the wage paid cannot be considered in the nature of compensation. The difficulty is apparent in situations where the duties performed prior to the accident were of two easily severable kinds — one being arduous, the other being light.
"* * * In such situations, matters entitled to consideration should be the relative importance to the totality of the job of the functions which can no longer be performed and also the question as to whether the wage paid thereafter appears to be earned or largely unearned.
* * * * * *
"One decision [Woodson v. Southern Farm Bureau Casualty Ins. Co., 121 So.2d 571] indicates a tendency to refuse credit for wages paid for performing only the lighter parts of the former duties where the wage paid is less. The court suggested that such a situation is to be distinguished from the payment of the same wage for performance of the same work under pain and suffering (in which case of course, credit for wage paid is allowed)."
We are in accord with the decision in the Woodson case, supra, for the reason that it appears logical to hold that where less wages are paid for the partial performance of one's former duties, said wages can only be said to be fully earned and consequently neither employer nor insurer are entitled to credit therefor as against compensation benefits due.
Astute counsel for plaintiff-employee seeks to bring the instant case under the rule established in Gaudet v. Hartford Accident Indemnity Co., supra, by contending the record in the instant case establishes that subsequent to the accident appellee herein has been engaged in work of a nature and character different from that performed prior to the occurrence of the disabling injury. In this regard able counsel for appellee vigorously contends the record shows that subsequent to plaintiff's injury, plaintiff's employer materially changed the nature of his operations by greatly reducing his farming and other enterprises (excepting that of cattle raising) to such extent that plaintiff's employer is in fact presently engaging in work of an entirely different nature. Counsel further maintains that the character of said employer's present operations is such that the duties of a foreman or a supervisor no longer require the performance of hard manual labor or extreme physical exertion but consist principally and primarily of his supervising and directing the work of subordinates. From this premise counsel for appellee reasons that because of the change thusly effected in the employer's business, plaintiff is in truth engaged in supervisory work of a different class and nature, namely, one that does not require manual labor as a materially important incident thereto or aspect thereof, consequently, plaintiff is fully performing work of different nature and character thereby bringing the case under the rule of the Gaudet case, supra.
We concede the ingenuity of the argument thus advanced by esteemed counsel for appellee but find that it is not supported by the evidence of record. Although it does appear that the plaintiff's employer has somewhat altered the scope and extent of his farming and other operations since plaintiff's injury, it is not shown that the duties required of plaintiff since the accident can be said to constitute work of a different nature and character. The record establishes that plaintiff's employer has reduced his farming activities in favor of an increase in his cattle raising enterprise which change was dictated partially due to business and economic reasons as well as in part by plaintiff's physical condition. In this connection it is established that plaintiff is no longer able to ride a horse and assist in the handling of cattle as he did prior to the accident and it must be recalled that cattle raising (according to plaintiff's own contention) has now become his employer's principal occupation. It also must be recalled that since plaintiff's injury plaintiff has neither been required nor has attempted to perform any services for his employer when plaintiff was feeling ill or indisposed and furthermore, that plaintiff's employer expects no services from him under such circumstances. In addition, it is not disputed that whereas plaintiff continues to perform services of a supervisory nature for his employer since the accident, his employer has been compelled on numerous occasions to engage extra help to perform services which plaintiff would have otherwise performed as a part of his present duties. Plaintiff's employer testified as follows:
"* * * he just can't get out there any more and do all that stuff for me. I mean, and I'm not going to hire another man — he's been there for years, and I guess he will be there until he dies."
Upon further reflection and review of the record we are impelled to the conclusion that the issue before the court is simply whether or not the case at bar falls within the rule of the Woodson case, supra, that is whether plaintiff is performing the lighter aspects of his former employment, or employment substantially similar thereto, and therefore appellant is not entitled to credit for said remuneration paid because said wages are fully earned or whether plaintiff receives the same wages for performing lighter duties, therefore, said wages are considered a gratuity and appellant is entitled to credit therefor under the rule of the Mottet and Walters cases, supra. We find that the issue cannot be resolved on the evidence before us. As previously stated herein during the trial below defendant attempted to adduce evidence regarding plaintiff's wages prior to the accident but objection thereto by counsel for appellee was sustained by the trial court and such evidence excluded. As a consequence the record is silent as to plaintiff's earnings prior to his injury. It follows, therefore, that under such circumstances we are unable to determine whether the wages paid plaintiff following the accident constitute reduced wages for the performance of lighter duties (in which event his wages would be considered fully earned and appellant would not be entitled to credit therefor) or whether said wages are in fact full wages for the performance of lighter duties (in which latter event they would be deemed gratuitous and credit allowed appellant therefor).
Considering the views herein expressed, the award of statutory penalties and attorney's fees hereinbefore allotted plaintiff must be reversed and set aside as plaintiff's entitlement thereto is dependent upon the outcome of the issue of credit claimed by defendant insurer which latter question can only be adjudicated in the light of the evidence adduced on the remand of this matter.
As herein previously shown the evidence reveals that since plaintiff's injury his work has not, as contended, been of an entirely different nature and character but rather the performance of "light duty", or partial performance of his former duties. The sole question on remand, therefore, is whether, since his injury, plaintiff has been paid full wages for light duty (gratuities) or whether his wages have been fully earned. The determination necessary can only be made after full consideration and evaluation of all remuneration paid appellee by his employer both prior and subsequent to plaintiff's injury including, of course, by way of extension, the value of all rent free properties and facilities made available to appellee by his employer as well as all cash, wages or remuneration received.
Should it be ultimately established that appellee's wages after the accident were fully earned in the performance of his lighter duties, appellant may not receive credit therefor and appellee would be entitled to the statutory penalties and attorney's fees claimed because of appellant's arbitrary failure to pay compensation due. If it be established that appellee was paid the same wages following his injury as he received previously thereto, in such event, appellant is entitled to credit for all such wages paid because full wages for partial performance of one's prior occupation is deemed a gratuity tendered in lieu of compensation due. Should appellant be eventually deemed entitled to credit for wages paid by plaintiff's employer subsequent to plaintiff's injury, such finding will relieve appellant of any liability for penalties and attorney's fees (except under circumstances hereinafter shown). To hold otherwise subjects the insurer to penalties for failure to pay benefits not due a result which (excepting the instances herein subsequently related) would be patently harsh and inequitable.
We are, however, equally firm in the conviction that there are instances wherein an insurer may be held responsible for penalties and attorney's fees notwithstanding its entitlement to credit for gratuitous payments made by the employer.
There can be no serious questioning of the proposition that it is the clear and unmistakable obligation of the insurer to pay all benefits due the employee promptly when same become exigible and to continue such payments so long as the disabled employee is entitled thereto. It is well established jurisprudence that the provisions of LSA-R.S. 22:658 are applicable to insurers only. Thomas v. Crown-Zellerbach Corporation, 101 So.2d 478. The statute in question is without application to employers. Ernest v. Martin Timber Company, La.App., 124 So.2d 205. While an uninsured employer may incur penalties under R.S. 23:1201.2, the employer herein being insured is not amenable to penalties or attorney's fees because of his failure, neglect or refusal to pay compensation due. The insured employer, however, has every right and reason to expect and demand that his insurer will commence payments to his disabled employees promptly when due and continue payment thereof until the legal obligation to do so has terminated.
The insurer's liability for penalties and attorney's fees attaches upon the insurer's arbitrary, unreasonable or capricious failure, neglect or refusal to commence compensation payments due or prematurely discontinue payment thereof, subject, of course, to the provisions, terms and conditions of LSA-R.S. 22:658. Once incurred, the insurer's liability for penalties therein provided, cannot be affected by subsequent payment of gratuities by the employer. Upon the attachment of such liability on the part of the insurer he cannot be relieved thereof by any act or conduct of the employer. It follows, therefore, that the insurer who has incurred liability for penalties and attorney's fees may not escape the alternative prescribed for his violation of the statute on the ground that the act which he has failed, neglected or refused to perform is being fulfilled by another. In these latter circumstances the insured employer is compelled to discharge an obligation which his insurer has assumed in consideration of premiums paid by the former to the latter. While credit must be given the insurer for benefits thusly paid by the employer considering equity will neither countenance nor support dual payment of benefits to the employee, nevertheless, such payments will not relieve the insurer of liability for penalties incurred by virtue of its failure to comply with the controlling statute. In such circumstances the fact remains that the insurer is not making the payments as required by the statute and such remission on its part subjects it to the penalties stipulated irrespective of whether the payments, which should be made by the insurer, are being made by a third party.
In view of the foregoing, therefore, we are of the opinion that should it be established that plaintiff's employer paid plaintiff full wages for the performance of less work (gratuities) in lieu of weekly payments due plaintiff and which payments defendant insurer arbitrarily failed and neglected to pay, under circumstances which subjects defendant to penalties, in such event defendant insurer, though entitled to credit for payments so made by plaintiff's employer, is nevertheless liable for penalties and attorney's fees.
For the reasons hereinabove set forth, it is ordered, adjudged and decreed that our original decree amending the judgment of the trial court and awarding plaintiff statutory penalties be and the same is hereby annulled, reversed and set aside and judgment rendered herein affirming the judgment of the trial court insofar as it decrees plaintiff's right to compensation but reversing said judgment insofar as it decrees plaintiff entitled to attorney's fees and penalties pursuant to LSA-R.S. 22:658.
It is further ordered, adjudged and decreed that this cause be and the same is hereby remanded to the trial court for further proceedings consistent with the views herein expressed.
Amended and remanded.