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FOR IMMEDIATE NEWS RELEASE NEWS RELEASE # 71 FROM: CLERK OF SUPREME COURT OF LOUISIANA The Opinions handed down on the 21st day of October, 2003, are as follows: BY WEIMER, J.: 2003-C -0136 NABORS DRILLING USA v. DAVID DAVIS (Office of Workers' Compensation, District No. 4) The judgment of the court of appeal is therefore reversed and the judgment of the workers' compensation judge dismissing Nabors' demand seeking to terminate benefits pursuant to LSA-R.S. 23:1208.1 is hereby reinstated. REVERSED.

10/21/03 SUPREME COURT OF LOUISIANA No. 03-C-0136 NABORS DRILLING USA v. DAVID DAVIS
ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, THIRD CIRCUIT OFFICE OF WORKERS' COMPENSATION, DISTRICT NO. 4

WEIMER, Justice We granted certiorari in this case to review the correctness of the court of appeal's ruling ordering workers' compensation benefits forfeited for a claimant's failu re to answer truthfully the employer's medical history questionnaire concerning a prior injury. After carefully reviewing the record and the ap p licable law, we

conclude that un d er t h e circumstances of this case, the court of appeal erred in ord ering the forfeiture because there was no proof the employer suffered any prejudice as statutorily required. Accordingly, we rev ers e the judgment of the court of appeal and reinstat e t h e ju dgment of the workers' compensation judge dismissing the deman d o f t h e employer seeking to terminate benefits pursuant to LSA-R.S. 23:1208.1. FACTS AND PROCEDURAL HISTORY On January 18, 1994, claimant, David Davis, was working for Petro Star Co rporation when he injured his right shoulder and right knee while lifting 100 pound mud sacks. He began treatment with Dr. Jo h n Co bb, an orthopedic surgeon, who diagnosed him with impingement tendinitis of the rotator cuff with hypertrophy of

t h e d istal clavicle and the acromion. Surgery was recommended, and in Septemb er 1994, Dr. Cobb performed a partial acromionectomy, a resection of the distal clavicle, a resection of the coracoacromial ligament and an exploration of the cuff. Davis eventually ret urned to work, but not, apparently, without difficulty. In a

fo llo w-u p examination on November 20, 1995, Dr. Cobb noted that Davis had returned to performing fairly substantial work with his shoulder. Accordin g t o Dr. Cobb: "[Davis] says he has been p u llin g slips and trying to work, but based on his p ro b lem with the clavicle and the pin that he has, I don't think that this is a reasonable thing for him to be doing. I think it is aggravating his pain and he may even be getting some degree of scaline spasm, which is causing the paresthesias. He is going to have to resolve to do primarily light type work activities and not return to this unrestricted work that he is doing at the present time." When Davis reported for a furt h er examination on March 6, 1996, Dr. Cobb remarked: "[Davis] is going to try to do some shrimping, get his o wn b o at . I think this is reasonable, where he doesn't have to overuse his shoulder and his arm, where h e can actually rest it. I think he can do the work sat is fact o rily. I think working on the rigs, primarily

handling the slips was what was causing his problem." In May 1996, Dr. G. Gregory Gidman, an orthoped is t , rendered a second medical opinion, in which he assigned Dav is a 10% impairment of the upper extremity, which equates to a 6% impairment of the whole p ers o n , and

recommended that Davis restrict his lifting to a medium level, performing heavy lifting occasionally, but not on a repetitive basis. Approximately four y ears later, on September 28, 2000, Davis began working for Nabors Drilling USA as a floor hand on a Nabors drilling rig. As part of his

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employment with Nabo rs, Davis was asked to complete a medical history questionnaire. The questionnaire contained the following: NOTICE: YOUR FAILURE TO ANSWER TRUTHFULLY ANY QUESTIONS ABOUT PREVIOUS INJURIES, DISA BILITIES OR OTHER MEDICAL CONDITIONS MAY RESULT IN FORFEITURE OF WORKERS' COMPENSATION BENEFITS UNDER LSA R.S. 23:1208.1. In answering the inquiries posed by the questionnaire, Davis responded negatively to the questions "Have you ever had surgery?" and "Hav e you ever had an injury or illness as a result o f y o u r job or work?" untruthful. Davis worked for Nabors fro m Sep t ember 28, 2000, until November 14, 2000, without incident. On the latter date, Davis was performing his reg u lar duties, pulling drill slips, when he felt a pop in his back an d experienced a burning and pulling sensation in his low back radiating into the right leg. When the sit u at io n d id not res o lve itself by the next day, he reported the incident and sought medical treatmen t . He began seeing Dr. Cobb, among other physicians. Dr. Cobb requested an M RI and EMG. The MRI of the lumbar spine revealed a disc herniation at the L5-S1 level, an d t h e EM G revealed right L5 radicular changes. Dr Cobb recommended surgery. In addition, he spoke to Davis "about the implications of him returning to the oil field, that he would have to get something lighter." On August 6, 2001, Nabors filed a disputed claim for compensation seeking a determin ation that, pursuant to LSA-R.S. 23:1208.1, Davis has forfeited his right to workers' compensation benefits for his failure to an s wer truthfully the medical history questio n n aire (commonly referred to in the workers' compensation arena as the "second injury fund ques t io nnaire") regarding his prior shoulder injury. According to Nabors, Davis' failure to disclose his preexisting medical condition
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These responses were, obviously,

p reju d iced Nabors' right to receive Second Injury Fund reimbursement for Davis' current inju ries , resulting in the forfeiture of his right to benefits under the Louisiana Workers' Compensation Act. The matter was tried on stipulations and d ocumentary evidence on April 4, 2002. At the conclusion of the hearing, the wo rkers' compensation judge determined t h at Nabors failed to prove a merger between the two work injuries and, as a res u lt , failed to prove prejudice to t h e emp loyer's right to receive reimbursement from the Second Injury Fund. Accord in g ly, the workers' compensation judge signed a

judgment dismissing Nabors' demand s eekin g to terminate benefits under LSA-R.S. 23:1208.1. Nabors appealed, and the court of appeal reversed. Nabors Drilling USA v. Davis , 02-0751 (La.App. 3 Cir. 12/11/02), 833 So.2d 534. In an opinion issued

December 11, 2002, the court of appeal first determined that t h e workers' compensation judge was clearly wrong in her factual conclusions with respect to the issue of merger. The court found that the evidence introduced by Nabors established a sufficient merger between Davis' prior and current injuries to satisfy the requirements of LSA-R.S. 23:1371(C)(2). The court of appeal then determined that because Nabors had no knowledge of the preexisting permanent partial disabilit y , it could not seek reimbursement from t h e Second Injury Fund and thus has been prejudiced by Davis' failure to answer truthfully the medical history questionnaire. Under these circumstances, the court of appeal held that Nabors is entitled to have Davis' workers' compensation benefits forfeited. Up on claimant's application, we granted certiorari to review the correctnes s of the ruling of the court of appeal ordering the forfeiture of Davis' rig ht to receive

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workers' compensation benefits. 4/4/03), 840 So.2d 1209.

Nabors Drilling USA v. Davis , 03-0136 (La.

LAW AND DISCUSSION In order "to encourage the employment of phys ically handicapped employees who have a permanent, partial disability by protecting emp lo yers ... from excess liability for workers' compen sation for disability [which may result] when a subsequent injury to such an employee merges with his preexisting p ermanent physical disability to cause a greater disability than would have resulted from the subsequent injury alone," the legislature created the Second Injury Fund. LSA-R.S. 23:1371(A). An emp lo y er who "knowingly employs or knowingly retains in his

employment " an emp loyee who suffers from a permanent partial disability as defined by the statute is entitled to be reimbursed from the fund if that employee "incurs a sub s eq u en t in jury arising out of and in the course of his employment resulting in liability for disability due to the merger of the subsequent injury with the p reexis ting permanent partial disability." LSA-R.S. 23:1378(A)(1). In order to assist the employer in meetin g it s s tatutory burden of establishing that it "knowingly" hired a wo rker with a preexisting permanent partial disability so as to qualify for reimbursemen t from the second injury fund, LSA-R.S. 23:1208.1 permits the employ er to obtain medical information from an employee or job applicant concerning preexisting conditions. The same statute that permit s t h is inquiry also states that the employee's failure to answer the employer's inquiry truthfully shall result in the forfeiture of workers' compensation benefits provided certain enumerated circumstances are met. Louisiana Revised Statute 23:1208.1 states: No t h in g in this Title shall prohibit an employer from inquirin g about previous injuries, disabilities , o r other medical conditions and the employee shall answer truthfully; failu re t o answer truthfully shall result
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in the employee's forfeiture of benefits under this Chap t er, provided said failure to answer directly relates to the medical condition for which a claim fo r b en efits is made or affects the employer's ability to receive reimbursement from the second injury fu n d . This Section shall not be enforceable unless the written form on which the inquiries about previous med ical conditions are made contains a notice advising the employee that his failure to answer truthfully may result in his forfeit u re of worker's compensation benefits under R.S. 23:1208.1. Such notice shall be prominently displayed in bold faced b lo ck lettering of no less than ten point type. [Emphasis added.] Forfeiture is a harsh remed y ; t h erefore, statutory forfeiture provisions such as LSA-R.S. 23:1208.1 must be strictly construed. Wise v. J.E. Meri t Constructors, Inc., 97-0684 (La. 1/21/98), 707 So.2d 1214, 1218. By its express terms, LSA-R.S. 23:1208.1 provides for forfeiture under t h ree circumstances. There must be (1) an untru t h ful statement; (2) prejudice to the employer; and (3) compliance with the notice requirements of t h e statute. Id., citing Resweber v. Haroil Const. Co., 942708, 94-3138 (La. 9/5/95), 660 So.2d 7. The employer has the burden of pro v ing each o f t h e elements required by the statute. Wise, 707 So.2d at 1218. The lack of any one of the elements is fatal to the emplo y er's av o idance of liability under the statute. Id . As we noted in Wise, 707 So.2d at 1219, untruthful answers alo n e do not resu lt in t h e forfeiture of benefits under LSA-R.S. 23:1208.1. The employer must also prove t h at it provided the employee with notice comporting with the dictates of the statute.1 Notice is not an issue in this case. In addition to t he notice requirement, the legislature has decided to specifically impose a requirement that the untruthful statement concerning a prior injury will result in forfeiture of benefits only when t h e fals e s tatement causes prejudice to the

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We address the notice requirement of LSA-R.S. 23:1208.1 in a separate opinion issued this date, S tiner v. Antoni's Italian Caf

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