ZINN v. ZAGIS USA LLC (2020)

Writ application granted. See per curiam.

Writ granted. In this workers’ compensation case, claimant Walter Zinn (“Zinn”) settled his claim against his employer, Zagis, USA, LLC (“Zagis”) for $40,000 on January 14, 2019, which payment was disbursed through two checks. These checks contained the following language on the backs:

DO NOT SIGN/WRITE/STAMP BELOW THIS LINE.

Notice to Injured Workers Being Paid Disability or Supplemental Benefits

By endorsing this check, I certify that I have not worked fororearned wages from any business or individual during the period covered by this check, or that I have reported any earnings to the employer/carrier paying me workers' compensation benefits. I understand that making a false statement by endorsing this benefit check may result in civil or criminal penalties.

Zagis also sent Zinn a release, and demanded Zinn execute and return same as a condition of the settlement.

Zinn's counsel held the two checks for thirty days and then filed a motion for penalties and attorney fees, based upon Zagis' failure to unconditionally tender the amount due under the settlement within thirty days. She did not notify Zagis's counsel that her client was not going to negotiate the checks because they were conditional.

Given the particular facts of this case, we find the lower courts erred in denying the motion for penalties and attorney fees and finding Zinn's counsel was responsible for notifying Zagis of the conditional tender. La. R.S. 23:1201(G) states:

G. If any award payable under the terms of a final, nonappealable judgment is not paid within thirty days after it becomes due, there shall be added to such award an amount equal to twenty-four percent thereof or one hundred dollars per day together with reasonable attorney fees, for each calendar day after thirty days it remains unpaid, whichever is greater, which shall be paid at the same time as, and in addition to, such award, unless such nonpayment results from conditions over which the employer had no control. No amount paid as a penalty under this Subsection shall be included in any formula utilized to establish premium rates for workers' compensation insurance. The total one hundred dollar per calendar day penalty provided for in this Subsection shall not exceed three thousand dollars in the aggregate.

Because Zagis failed to tender the settlement funds unconditionally within thirty days as required by LSA 23:1201(G), an award of penalties and attorney's fees was mandatory. Thus, the rulings of the lower courts are reversed and the matter is remanded to the Office of Workers’ Compensation Judge for a determination of appropriate penalties and attorney fees pursuant to the statute.

The purpose of the Louisiana Workers’ Compensation Act is to provide benefits to injured workers who suffer an injury or disease in the course and scope of their employment and to return those workers to the workforce when possible. See La. R.S. 23:1020.1(B). Although the workers’ compensation legislative scheme does provide for penalties that “shall” be imposed if an employer does not tender a payable award under La. R.S. 23:1201(G), in my view, those circumstances are not present here. Specifically, it appears that the employee's attorney in this matter strategically failed to contact her client's employer to request objectionable conditions be removed from the settlement check, despite the attorney having made such a request in a previously mediated case with the same conditional endorsements on a check for another client. Thus, I find counsel's seemingly intentional delay should not trigger the penalties in this instance, and I agree with the lower courts’ findings in that regard. As such, I dissent.

I agree Zagis did not tender an unconditional payment as required and, consequently, Louisiana Revised Statute 23:1201G mandates an award of penalties and attorney fees. While counsel's holding of the check without objection for thirty days, ostensibly to trigger the penalty provision, appears unprofessional, it does not negate application of the express mandate of the statute.

PER CURIAM

Weimer, J., dissents. Hughes, J., would grant and docket. Crichton, J., dissents and assigns reasons. Crain, J., concurs and assigns reasons.