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NOT DESIGNATED FOR PUBLICATION

RAYMOND HARRISON NO. 03-CA-600
VERSUS FIFTH CIRCUIT
LABOR READY SOUTHEAST, INC. AND COURT OF APPEAL DAVID MAINTENANCE & REPAIR SERVICE D/B/A MUD HOG SAND STATE OF LOUISIANA PUMPING AND MUD HOG DUMP TRUCK CO.
ON APPEAL FROM THE OFFICE OF WORKERS' COMPENSATION
DISTRICT 7, STATE OF LOUISIANA
NO. 00-00508
HONORABLE SYLVIA STIEB, JUDGE PRESIDING

OCTOBER 28, 2003 0CT 28 2003
THOMAS F. DALEY
JUDGE

Panel composed of Judges James L. Cannella,
Thomas F. Daley, and Clarence E. McManus

WANDA ANDERSON DAVIS
LEEFE, GIBBS, SULLIVAN, DUPRE & ALDOUS 3900 North Causeway Boulevard, Suite 1470 Metairie, Louisiana 70002 COUNSEL FOR PLAINTIFF/APPELLEE-3" APPELLANT
JOHN J. RABALAIS,
JANICE B. UNLAND,
ROBERT T. LORIO,
BRENT MICHAEL STEIER
RABALAIS, UNLAND & LORIO

5100 Village Walk, Suite 300
Covington, Louisiana 70433
COUNSEL FOR DEFENDANT/APPELLANT,

LABOR READY SOUTHEAST, INC.
AFFIRMED IN PART; REVERSED IN PART
Raymond Harrison, a temporary worker, was irijured while working on a construction site on March 12, 1999. At the time of the accident he claimed he was employed by a temporary agency, Labor Ready Southeast, Inc. (Labor Ready), and was assigned by Labor Ready to work at a job site for David Maintenance and Repair Service, Inc. d/b/a Mud Hog Sand Pumping. Labor Ready denied that Raymond Harrison was working at the job site on their behalf. The worker's compensation judge found that Raymond Harrison was employed by Labor Ready and was a borrowed employee of Mud Hog at the time of the accident and that both companies were solidarily liable for all of his worker's compensation benefits. Labor Ready has appealed the worker's compensation court judgment in favor of Raymond Harrison. For the reasons that follow, we affirm.
FACTS: Raymond Harrison was a musician, but performed casual labor during the day to help support himself. He began working for Labor Ready as a temporary
worker in February 1999. He worked at different locations for Labor Ready and
was first sent to work for Mud Hog on February 17, 1999. On the morning of March 8, 1999 a girl at Labor Ready told him there was a job for him at Mud Hog. He did not recall if he signed in at the Labor Ready office on March 8, 1999, stating that he did not always sign in. He testified that he was given a work ticket by the girl at Labor Ready and he proceeded to the job site on Transcontinental. He later gave his work ticket to Mr. David, but Mr. David told him to put it in his car and he would take care of it at the end of the week. At the end of that day, Mr. David stated that he would call Labor Ready to tell them that Raymond Harrison was going to work for Mud Hog for the rest of that week. Because he was unaware of the procedure for working at a job site on behalf of Labor Ready for more than one consecutive day, Raymond Harrison relied on Mr. David to follow the correct procedure.
Raymond Harrison testified that this job entailed pumping sand under the slab of a house. His job was to shovel sand into a tub that mixed with water and pumped the sand through a hose. The hose was stretched across a street. While shoveling the sand, a car ran over the hose, the hose struck him and he was thrown into the air. He was unable to get up after falling to the ground. He was taken to the hospital where he had surgery on his neck a few days later. He sustained an injury to his spinal cord. Raymond Harrison was unable to move any extremities immediately following the accident, but after extensive therapy has developed limited use of his arms and legs.
While he was in the hospital recovering from his injuries, his car was "taken." The work ticket was never recovered. Raymond Harrison explained that he was unsure who was gong to pay him for the work he performed the week of March 8, 1999 since he did not bring the ticket back to Labor Ready.
Kenneth David owned and operated David's Maintenance and Repair
Service, Inc. d/b/a Mud Hog Sand Pumping (Mud Hog). When Mr. David needed extra labor, he called Labor Ready. Mr. David testified that Mud Hog called Labor Ready and asked them to provide an employee for the week of March 8, 1999. Labor Ready responded by sending Mr. Harrison to work. Mr. David explained that Raymond Harrison gave him a ticket to sign at the job site. Raymond Harrison had to return this ticket to Labor Ready in order to be paid. He told Mr. Harrison to put the ticket back in his car and he would take care of it at the end of the day. Kenneth David acknowledged that while working for Mud Hog on March 12, 1999, Raymond Harrison, became entangled in a hose, was drug behind a car, and suffered serious bodily injuries.
Jean David testified that she operated Mud Hog along with her husband. Mrs. David explained that Mud Hog first obtained workers from Labor Ready in February 1999. She was informed of plaintiff's accident by her husband. Shortly afterwards she went to the Labor Ready office in New Orleans East to report the accident.
While Raymond Harrison was being rehabilitated at Touro Infirmary, he was told that no one had come forward to pay his bill, so he had to be discharged and he either had to find a place to live or be put in a home. Raymond Harrison explained that he received Social Security Income for a while and he sought treatment at Charity Hospital. He then went to the Veterans Administration hospital for treatment. Raymond Harrison never received any workers' compensation benefits.
The deposition of Karen Houston, a District Manager for Labor Ready, was admitted into evidence. Ms. Houston testified that a computer search of Labor Ready's records indicated that the first date Raymond Harrison worked for Labor Ready was February 4, 1999 and the last day he worked for Labor ready was
February 18, 1999. Documentation produced at her deposition indicates that
Raymond Harrison did not work for Labor Ready on March 12, 1999. She explained that Mud Hog's customer file shows every worker, ticket number, name, date, what they paid, and what they were billed. The file did not show Raymond Harrison working at Mud Hog for Labor Ready at any time in March 1999. She produced another document purportedly showing all of the jobs that were filled by Labor Ready on March 12, 1999. Mud Hog did not appear on this list. Ms. Houston produced sign in sheets for the Kenner branch of Labor Ready for March 8, 9, 10, and 11, 1999. Raymond Harrison's name did not appear on these documents. Ms. Houston testified that no work tickets were issued for the Kenner office for Mud Hog in March 1999.
Ms. Houston verified that Mud Hog obtained workers through both the Kenner and New Orleans East offices of Labor Ready. Ms. Houston explained that Labor Ready's procedure was for a worker to report to the Labor Ready office and sign in. If an employee was "predispatched" to a job site, they did not have to sign the sign in sheet. A computer entry was made and the worker was given a computer generated work ticket. In order to write a check for that employees work that day, the ticket number had to be entered into the computer. Ms. Houston admitted that there were occasions where work tickets were written by hand and not entered into the computer.
Ms. Houston explained that a worker had to return a signed work ticket to Labor Ready in order to get paid. Ms. Houston testified that an employee going back to the same job site must return to the Labor Ready office at the end of the day to turn in his work ticket. Ms. Houston explained that if the customer told the employee that they would handle the paperwork for an employee working the same job site on consecutive days, so the employee did not have to show up at Labor Ready to sign in, Labor Ready would still pay the employee. She explained that a
work ticket could be made out by a branch manager or a customer service

representative. Ms. Houston testified that the managers of Labor Ready's two offices, one in Kenner and one in New Orleans East, no longer worked for the company and so she did not speak to either of them or other office personnel working at those offices on March 12, 1999 about Mr. Raymond Harrison's employment. Ms. Houston did not recall if she searched for a physical file on Raymond Harrison. She explained that it should exist at the New Orleans East office.
After hearing testimony, the trial judge took the case under advisement. She later rendered judgment in favor of plaintiff finding that he was employed by Labor Ready and was a borrowed employee of Mud Hog at the time of the accident. Labor Ready and Mud Hog were found to be solidarily liable and Raymond Harrison was awarded temporary total disability benefits from March 12, 1999 and continuing. Additionally, both defendants were found to be arbitrary and capricious in failing to pay benefits and medical expenses. Sanctions and attorney fees were awarded. Labor Ready filed a suspensive appeal. Mud Hog has not appealed. The plaintiff also filed an appeal alleging the trial court erred in calculating the compensation rate.
COMPENSATION BENEFITS:
On appeal, Labor Ready argues the trial court erred in finding plaintiff was in the course of his employment with Labor Ready at the time of the March 12, 1999 accident. Appellate courts review the factual findings in a workers' compensation case using the manifest error or clearly wrong standard of appellate review. Romero v. Northrop-Grumman, 2001-0024 (La. App. 3 Cir. 5/30/01), 787 So.2d 1149, writ denied, 01-1937 (La. 11/26/01), 799 So.2d 1144. In order to reverse a trial court's factual finding, the appellate court must find that a reasonable
factual basis does not exist in the record to support the finding of the trial court and

that the record establishes that the finding is clearly wrong. Mart v. Hill, 505 So.2d 1120, l 127 (La.1987). If the trial court's findings are reasonable in light of the record reviewed in its entirety, an appellate court may not reverse even though convinced that had it been sitting as the trier of fact, it would have reached a different conclusion. When factual findings of the trial court are based on the credibility of witnesses, the appellate court must give the fact finder's decision to credit a witness's testimony "great deference". Rosell v. ESCO, 549 So.2d 840, 844 (La.1989). When faced with conflicting testimony, reasonable evaluations of credibility and reasonable inferences of fact should not be disturbed upon appellate review. Id.
Raymond Harrison testified that he was contacted by Labor Ready on Monday March 8, 1999 and told there was work available for him with Mud Hog. He testified that he went to the Labor Ready office and received a work ticket, but did not sign in. Raymond Harrison explained that he gave the ticket to Mr. David to sign that day, but was told to keep the ticket and that Mr. David would take care of it at the end of the week. Raymond Harrison testified that he was told by Mr. David that he wanted Raymond Harrison to work at this job site for the remainder of the week and that Mr. David would contact Labor Ready to make these arrangements. Mr. David testified that Raymond Harrison was at the job site on March 12, 1999 because Mud Hog contacted Labor Ready to supply workers. While the testimony was unclear as to who from Mud Hog contacted Labor Ready to supply workers on the date of the accident, there were several people associated with Mud Hog who had authority to contact Labor Ready on behalf of Mud Hog to request workers. While no documents were produced to show that Raymond Harrison was at the Mud Hog job site on behalf of Labor Ready on the date of the accident, Ms. Houston testified that there were occasions where work tickets were written by hand and information was not entered into the computer. She admitted that if that had taken place in Raymond Harrison's case, there would be no documents to show that he was sent to Mud Hog by Labor Ready.
While we recognize that the testimony as to how Raymond Harrison came to be at the Mud Hog job site on the day of the accident is conflicting and there is no written documentation supporting Labor Ready assigned him to work for Mud Hog on March 12th, the trial judge obviously believed plaintiff's version of events. Given the standard of appellate review when faced with conflicting testimony, our job upon appellate review is not to reweigh the testimony of the witnesses. The trial judge's finding is supported by evidence in the record. We acknowledge that there is contradictory evidence that the trial judge could have accepted as a basis to deny Raymond Harrison's claim; however, we find no manifest error in the trial court's finding that plaintiff was employed by Labor Ready at the time of the accident.
PENALTIES AND ATTORNEY FEES:
Labor Ready also argues that the trial court erred in casting Labor Ready in judgment for penalties and attorney fees. In its Reasons for Judgment, the trial court stated that the defendants failed in their duty to investigate and reasonably controvert the claim. Labor Ready contends that it conducted a "massive search" for documents to determine whether plaintiff was working for them at the time of the accident. In her deposition, Ms. Houston produced several documents purportedly showing that no one from Labor Ready was working for Mud Hog on the date of the accident.
R.S. 23:1201 provides for penalties and attorney fees against an employer for failing to timely pay compensation and medical benefits. The employer has an obligation to investigate and assess factual information before denying benefits in order to avoid the imposition of penalties. Romero v. Northrop-Grumman, supra. Penalties and attorney's fees will not be assessed when the employee's entitlement to benefits has been reasonably controverted. Haws v. Professional Sewer Rehabilitation, Inc., 1998-2846 (La. App. 1 Cir. 2/18/00), 763 So.2d 683. An employer will not be assessed penalties and attorney's fees for litigating a "close issue." Fontenot v. J.K. Richard Trucking, 97-220 (La. 3 Cir. 6/4/97), 696 So.2d
176.
In Fontenot, the employer refused to pay the injured employee benefits based in part on the employer's assertion that the employee was an independent contractor. The Third Circuit found that the issue of whether the employee was an independent contractor was "a sufficiently close issue for which Richard Trucking should not be penalized for bringing to court for resolution." Id. at 183.
In order to reasonably controvert a claim, the employer or insurer must have a valid reason or evidence to base its denial of benefits. Brown v. Texas-LA Cartage, Inc. 98-1063 (La. 12/01/98) 721 So.2d 885. In deciding whether a claim has been reasonably controverted, a court must determine whether the employer or its insurer "engaged in a nonfrivolous legal dispute or possessed factual and/or medical information to reasonably counter the factual and medical information presented by the claimant." M. at 890.
Our review of the record fails to support the trial court's assessment of penalties and attorney's fees. Rather, our review of the record as a whole indicates that Labor Ready reasonably controverted Raymond Harrison's claim for benefits. Labor Ready employees searched for documentation that Raymond Harrison was working at the Mud Hog site on behalf of Labor Ready and were unable to find such documentation. Raymond Harrison's benefits were denied on that basis. Accordingly, we reverse the trial judge's award of penalties and attorney's fees.
PLAINTIFF'S APPEAL:

Raymond Harrison has appealed claiming the trial court erred in calculating his weekly compensation rate. Raymond Harrison's contention that his rate of pay was $5.70 per hour is supported by the check stubs for the checks he received from Labor Ready. He contends that his weekly compensation rate should be based on his testimony that he worked 37.5 hours the week of March 8-12. However, this argument fails to take into account Raymond Harrison's testimony that he did not routinely work five days a week at Labor Ready. In fact, Raymond Harrison testified that he liked the fact that he could refuse work assignments from Labor Ready ifhe so desired.
Additionally, Raymond Harrison argues the trial court failed to take into account his earnings as a musician in establishing the compensation rate. He testified that he played music at various locations and taught music lessons. However, his testimony regarding his earnings as a musician was vague. He did not specifically name any venues where he played music or identify any people who hired him to play music. He did not establish that he played music or taught music lessons with any regularity. Accordingly, we find the trial court correctly computed Raymond Harrison's compensation rate.
CONCLUSION: For the foregoing reasons, the judgment of the trial court is affirmed in part and reversed in part. Appellant is to pay all costs of this appeal.
AFFIRMED IN PART; REVERSED IN PART
EDWARD A. DUFRESNE, JR CHIEF JUDGE  PETER J. FITZGERALD, JR. CLERK OF COURT  
SOL GOTHARD  
JAMES L. CANNELLA  GENEVIEVE L. VERRETTE  
THOMAS F. DALEY  FIFTH CIRCUIT  CHIEF DEPUTY CLERK  
MARION F. EDWARDS  GLYN RAE WAGUESPACK  
SUSAN M. CHEHARDY  STATE OF LOUISIANA  FIRST DEPUTY CLERK  
CLARENCE E. MCMANUS  
WALTER J. ROTHSCHILD  101 DERBIGNY STREET (70053)  JERROLD B.  PETERSON  
JUDGES  POST OFFICE BOX 489  DIRECTOR OF CENTRAL STAFF  
GRETNA,  LOUISIANA 70054  (504) 376-1400  
(504) 376-1498 FAX  

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