ZINN v. ZAGIS USA (2021)

Application for rehearing denied.

It is well settled that “[a]wards of penalties and attorney's fees in workers' compensation are essentially penal in nature, being imposed to discourage indifference and undesirable conduct by employers and insurers.” Williams v. Rush Masonry, Inc., 98-2271 (La. 6/29/99), 737 So.2d 41, citing Sharbono v. Steve Lang & Son Loggers, 97-0110 (La. 7/1/97), 696 So.2d 1382. Moreover, “[a]lthough the Workers' Compensation Act is to be liberally construed in regard to benefits, penal statutes are to be strictly construed.” Williams, supra, citing International Harvester Credit v. Seale, 518 So.2d 1039, 1041 (La.1988) (emphasis added). This Court has also held that the Legislature intended both the penalties and the attorney fees authorized by La. R.S. 23:1201 as a means of deterring arbitrary conduct by the employer or the employer's insurer. McCarroll v. Airport Shuttle, Inc., 00-1123, p. 5-6 (La. 11/28/00), 773 So.2d 694, 698. The majority's per curiam in this case does not indicate there was any arbitrary conduct, nor there was a delay in the initial tender of funds. As the appellate court pointed out, the checks were forwarded to plaintiff's counsel in this case three days after the workers’ compensation judge approved the settlement. The placement of conditional language on the release appears to have been inadvertent, and thus, I do not find any evidence of arbitrary conduct by the defendant in the record before us.

In my view, as I stated previously, the majority's December 22, 2020, per curiam runs afoul of the spirit of the Workers’ Compensation Act, which 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). The imposition of penalties by this Court condones a type of gaming of the system in which a claimant can refuse to sign a previously agreed upon settlement which may contain an easily fixable mistake (without any effort to rectify such a situation) and benefit from a self-imposed delay by claiming alleged arbitrary conduct warranting penalties and attorney's fees. While it is certainly not the responsibility of a claimant or his or her counsel to carry out the duties of the employer in a workers’ compensation case, it is also not the purpose of the Workers’ Compensation Act to “catch” purported bad actor employers and abuse the regime meant to help injured employees ultimately return to the workforce.

Accordingly, I would grant the defendant's rehearing application and reinstate the rulings of the lower courts.

Weimer, C.J., would grant and docket. Crichton, J., would grant rehearing and assigns reasons.