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MICHAEL STANICH VERSUS CANAL ENTERTAINMENT

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NO. 2009-CA-0707

COURT OF APPEAL * FOURTH CIRCUIT * STATE OF LOUISIANA *******

APPEAL FROM THE OFFICE OF WORKERS' COMPENSATION NO. 07-8905, DISTRICT "8" Honorable Diane R. Lundeen, Workers' Compensation Judge ****** Judge Edwin A. Lombard ****** (Court composed of Judge Charles R. Jones, Judge Terri F. Love, Judge Edwin A. Lombard)

William R. Mustian III STANGA & MUSTIAN, P.L.C. 3117 22nd Street Suite 6 Metairie, LA 70002 COUNSEL FOR PLAINTIFF/APPELLEE Raymond S. Maher, Jr. BASTIAN & ASSOCIATES 909 Poydras Street Suite 3000 New Orleans, LA 70112

COUNSEL FOR CANAL ENTERTAINMENT AND AMERICAN INTERNATIONAL GROUP CLAIM SERVICE, INC. CONSTRUCTORS, LTD.

AFFIRMED

Canal Entertainment, and its workers' compensation carrier, American International Group Claim Service, Inc., ("defendants") appeal the judgment of the Office of Workers' Compensation ("OWC"), finding that Michael Stanich did not commit fraud in violation of La. Rev. Stat. 23:1208, and further finding that defendants are not entitled to an offset or credit pursuant to La. Rev. Stat. 23:1225. For the reasons set forth below, we affirm. Relevant Facts On April 15, 2003, Mr. Stanich injured his back, hip, and elbow in the course and scope of his employment with Canal Entertainment. As a result, Mr. Stanich received $412.00 per week in temporary total disability benefits from May 11, 2005, through January 7, 2009, the date the present matter was brought before the OWC. On May 14, 2003, Mr. Stanich suffered a second accident, a hernia, while in the course and scope of his employment with the New Orleans Opera Association ("Opera Association"). In connection with this injury, Mr. Stanich received

workers' compensation benefits from September 27, 2003 until November 30,

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2005. On November 30, 2005, Mr. Stanich received a lump sum settlement from the Opera Association in the amount of $40,000.00. On July 28, 2008, defendants filed a 1008 Disputed Claim for Compensation, alleging that Mr. Stanich committed fraud under La. Rev. Stat. 23:1208 due to the fact that he received duplicate compensation benefits. Additionally, defendants made a demand for an offset or credit pursuant to La. R.S. 23:1225 for the duplication of benefits received by Mr. Stanich from May 11, 2005, through November 30, 2005. Mr. Stanich answered the Disputed Claim for Compensation, denying that he made any misrepresentations as defined in La. Rev. Stat. 23:1208. Mr. Stanich further responded that the claims for offset or credit pursuant to La. Rev. Stat. 23:1225 had prescribed. Following a hearing on January 7, 2009, the OWC rendered judgment on March 2, 2009, denying both of defendants' claims.1 followed. Assignments of Error Defendants assert two assignments of error on appeal: 1) the trial court erred in concluding that Mr. Stanich did not violate La. Rev. Stat. 23:1208, and 2) the trial court erred in determining that defendants were not entitled to an offset or credit. Standard of Review The issue of whether an employee has forfeited his right to workers' compensation benefits is a factual question that should not be disturbed on appeal This devolutive appeal

Other aspects of the March 2, 2009 judgment, regarding Mr. Stanich's claims for mileage reimbursement, penalties, and attorneys' fees, are not at issue in this appeal.

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absent manifest error. Ocon v. Regency Motors of Metairie, L.L.C., 06-0834, p. 5 (La. App. 5 Cir. 4/11/07), 957 So. 2d 816, 820. Statutory forfeiture is a harsh remedy and must be strictly construed. Herrera v. Cajun Co., 06-1627, p. 7 (La. App. 4 Cir. 6/6/07), 960 So. 2d 1161, 1166. Discussion 1. Violation of La. Rev. Stat. 23:1208 Misrepresentation and forfeiture under the Workers' Compensation Act are regulated by La. Rev. Stat. 23:1208 which states, in pertinent part: A. It shall be unlawful for any person, for the purpose of obtaining or defeating any benefit or payment under the provisions of this Chapter, either for himself or for any other person, to willfully make a false statement or representation. *** E. Any employee violating this Section shall, upon determination by [the] workers' compensation judge, forfeit any right to compensation benefits under this Chapter. In determining whether a statement is willful, the courts have considered whether statements made by a claimant are merely inadvertent or inconsequential. Inadvertent or inconsequential statements will not give rise to a finding of willful misstatement, triggering statutory penalties. Hernandez v. ESKCO, Inc., 00-0174, p. 3 (La. App. 4 Cir. 11/15/00), 773 So. 2d 865, 867. The three requirements for forfeiture of benefits under La. R.S. 23:1208 are (1) a false statement or representation, (2) that is willfully made, (3) for the purpose of obtaining or defeating any benefit or payment under the workers' compensation law. Resweber v. Haroil Const. Co., 94-2708, 94-3138, p. 11 (La. 9/5/95), 660 So. 2d 7, 14; Ravy v. Bridge Terminal Transport, 04-0134, p. 3 (La. App. 4 Cir. 9/29/04), 883 So. 2d 1139, 1142.

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In the present case, the OWC judge determined that defendants "failed to carry [their] burden to show the requisite intent necessary to implicate section 1208 and to impose the forfeiture of benefits commanded by section 1208." We agree. The only witness called to testify in support of defendants' forfeiture claim was John Ellinghausen, the attorney who handled the workers' compensation claim on behalf of the Opera and its workers' compensation carrier. Mr. Ellinghausen testified that his file contained an earnings form from Mr. Stanich, dated May 31, 2005, which represented that Mr. Stanich denied getting any type of payments from May 1, 2005, through May 31, 2005. When asked whether the form was signed by Mr. Stanich or his previous attorney, Mr. Ellinghausen responded that Mr. Stanich's name was only printed on the form. The record reveals that Mr. Stanich was present at the hearing, but was not called to testify. Therefore, there was no testimony from Mr. Stanich as to what he represented in connection with his workers' compensation claims. Likewise, there was no testimony or statements from Mr. Stanich's previous attorney that handled his compensation claim against the Opera. It is clear that defendants presented nothing to show that Mr. Stanich made any intentional or willful misrepresentations for the purpose of obtaining workers' compensation benefits. Accordingly, the ruling of the OWC is neither manifestly erroneous nor clearly wrong. This assignment is without merit. 2. Offset or Credit Pursuant to La. Rev. Stat. 23:1225 La. Rev. Stat. 23:1225 provides for an offset of workers' compensation benefits when other specified benefits are also being received by the employee. The statute provides, in pertinent part: C. (1) If an employee receives remuneration from:
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(a) Benefits under the Louisiana Workers' Compensation Law. (b) Repealed by Acts 2003, No. 616,

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