This is a compensation suit. On October 14, 1958, the plaintiff sustained an accident at work, as a result of which the index finger of his left hand was amputated. He was awarded 30 weeks' compensation for the loss of this specific member (LSA-R.S. 23:1221(4) (b)), medical expenses, and costs.
The sole issue raised by this appeal by plaintiff concerns whether the trial court erred in refusing to award him also penalties and attorney's fees under Act 432 of 1958, LSA-R.S. 23:1201.2,
The undisputed facts show: On October 14, 1958, the plaintiff's left hand was injured. He was brought to the doctor, and his left index finger was amputated the same date. For five weeks, commencing with October 31st and terminating on November 28th, the plaintiff was paid compensation without incident at a weekly rate of $26. The rate was based upon a computation of 65% of weekly wages for a 40-hour week at wages of $1 per hour. In accordance with the customary manner of making wage payments, the employer's office sent these compensation checks to the plaintiff by handing them to his foreman, along with the pay checks of the other employees of the crew, and the foreman would then transmit same through co-employees to plaintiff at his home.
Following a conference with his employer, at which he was dissatisfied with the amount tendered in settlement of his claim, the plaintiff retained a lawyer, who on December 4, 1958, sent the defendant by unregistered mail a demand that the plaintiff's compensation be brought "up to date." The defendant and his office staff denied having received this letter; we are unable to say that the trial court committed manifest error in such finding. In any event, however, the compensation payment for December 4, 1958, in the amount of $26 was not given to an employee to be delivered to the plaintiff, but was held in the defendant's office until some time after this suit was filed on December 16th.
After the suit was filed, compensation payments of the rate of $26 per week were tendered to the plaintiff up through January 16, 1959, at which date an additional $26 compensation payment was also tendered, to cover the first week after the injury.
Trial was had on May 7, 1959, at which time the issue of plaintiff's residual disability disappeared from the case. It was then stipulated that the sole remaining issue concerns whether the plaintiff is entitled to recover penalties for the arbitary non-payment of compensation at the weekly rate of $35 admittedly due by his employer during the period it was unpaid prior to trial.
However, we must respectfully disagree with our learned brother's failure to award penalties for the arbitrary and capricious non-payment or non-tender to or for the employee of (a) compensation at the correct weekly rate of $35 and (b) a medical bill of $12.75 for treatment of the plaintiff on the day of the accident.
I. Tender of compensation at an insufficient weekly rate.
The trial court disallowed penalties for the payment of compensation at an insufficient weekly rate because no specific request was made before the suit for compensation at the correct rate and because, in paying or tendering compensation at the incorrect rate of $26, the employer testified that he was relying upon the advice of counsel.
The evidence shows that at all times the defendant employer had conducted his operations on a 5-day work week; that he usually has maintained an 8-hour work-day, but that a few months before the present accident the customary work-day of his employee was increased to 9 hours. The defendant employer testified that the compensation rate of $26 (65% of a $40 weekly wage) had been established because "on previous occasions in talking to my attorney I had learned from him that where you are working a 5-day week that compensation would be paid on the basis of 40 hours, not necessarily on any overtime that might have applied." (Tr. 131-132; see also Tr. 141.)
Plaintiff was tendered compensation at the weekly rate of $26 for the remaining period of the employer's compensation liability. In the defendant employer's formal answer, filed after an exception of prematurity was overruled, he admitted that he was liable for compensation at the weekly rate of $30.88 (which is computed as 65% of the wages, including overtime, for a 5-day work week, with a 9-hour work day), although he did not tender compensation at this rate. Thus the employer's position was that he was entitled to tender compensation based on the rate of pay for a five-day work week.
However, as the trial court noted, allthough earlier jurisprudence may have permitted the computation of compensation on the basis of a five-day work week (see Malone, Louisiana Workmen's Compensation, Section 323), the Supreme Court in Carrington v. Consolidated Underwriters, 1956, 230 La. 939, 89 So.2d 399, reiterated and clarified earlier pronouncements and held flatly that, for purposes of computing the compensation rate of an injured employee, the six-day work week must be employed. This ruling has been consistently adhered to thereafter. Malone, Louisiana Workmen's Compensation Law, Section 323.
We do not think that the circumstance that an employer may have been in good faith initially, prior to judicial demand, can justify his stubborn and blind refusal thereafter to pay compensation undoubtedly owed.
Thus, that the refusal to pay compensation became arbitrary after suit was filed did not defeat the imposition of penalties in Fruge v. Pacific Employers Ins. Co., 226 La. 530, 76 So.2d 719; La.App. 1 Cir., 71 So.2d 625. There, suit was filed on April 9, 1952, and thereafter payment of compensation was initially resumed and continued until March 30, 1953. On this latter date the defendant again discontinued compensation payments on the ground that current medical reports showed a partial rather than a permanent disability—a defense found to be totally without merit. The termination of compensation on March 30, 1953, was found to be arbitrary, and the insurer was assessed with the statutory penalties even though the arbitrary refusal had occurred after suit was filed.
Even assuming that the employer resisted payment of compensation at the correct rate upon advice of counsel received subsequent to suit
II. The employer's non-payment of a $12.75 medical bill.
Insofar as the employer failed to pay (until cast for it by the judgment below) the $12.75 medical expenses incurred on the date of the accident, his sole excuse tendered through an office employee was that such failure was an "oversight". The uncontradicted evidence in the record shows that the employer was billed in October, 1958 for this amount, and that the collection department of the hospital telephoned his office to again request payment of this medical bill in January, 1959. In addition, Article 10 of the plaintiff's petition expressly alleges that such medical bill owed by the employer was due and unpaid (Tr. 8), and the defendant's answer denied this allegation (Tr. 51). In view of the above cited jurisprudence, and under these circumstances, the employer's continued nonpayment of the medical expenses demanded both by plaintiff's petition and by the hospital was arbitrary so as to subject him to penalties. See also Hale v. Republic Drilling Company, La.App., 1 Cir., 109 So.2d 268.
The final question before us in this appeal is raised by the defendant's contention that, in any event, statutory penalties cannot be assessed against him because the statute specifically provides that such penalties do not accrue unless the employer has arbitrarily failed to pay compensation benefits "within sixty days after receipt of written notice", which must be sent by registered mail. LSA-R.S. 23:1201.2. (See footnote 1 above.) The defendant then points out that no notice by registered mail was ever sent to him; that prior to suit he never refused to pay compensation (even though it was concededly paid at an incorrect rate); and that prior to suit no period of 60 days elapsed following the last payment of compensation received by the plaintiff.
However, the pleadings reflect that the claimant specifically alleged that compensation was due at the rate of $35 rather than $26 (Article 7, Tr. 6) and that the medical bill of $12.75 was due and unpaid (Article 10, Tr. 8), and the defendant expressly denied these allegations (Tr. 50, 51.) Under similar circumstances, this court has rejected similar contentions advanced by a defendant attempting to exculpate itself from penalties for arbitrary non-payment of compensation imposed by a parallel statute, LSA-R.S. 22:658, penalizing insurers for the arbitrary non-payment of compensation in wording almost identical to the statute with which we are presently concerned.
In the cited case, where the employee's industrial injury and initial disability was acknowledged by the initial payments of compensation and where the defendant's answer expressly denied liability for the compensation benefits sought, and where the court found after a trial upon the merits that the defendant's formal denial of liability and continued refusal to pay compensation benefits was without legal basis, the statutory notice and delay provided by the penalty statute were specifically
Able counsel for the defendant-appellee argues that the notice and delay provisions were designed to protect from penalty an employer's inadvertent good faith non-payment of compensation benefits. It is to be observed that this is not the situation presently before us with regard to non-payment of the compensation benefits for which penalties are being assessed herein. Despite formal judicial demand in December for compensation at the correct weekly rate of $35 and for payment of the $12.75 medical expenses, the defendant employer formally denied liability therefor and failed to pay or even to tender such amounts until after judgment, following trial on the merits, was rendered against him on June 19, 1959—even though all the while there was no legal justification whatsoever for his failure or refusal to pay such undoubted compensation liability.
Under LSA-R.S. 23:1201.2, above, if an arbitrary non-payment of compensation is found, penalties must be allowed of 12% of the difference between the amount tendered and the amount found to be due, together with reasonable attorney's fees.
The defendant employer tendered compensation at the rate of $26 per week, although he was undoubtedly liable for compensation for amputated index finger for 30 weeks at $35 per week. Thus he arbitrarily refused to pay or to tender $270 of compensation, plus $12.75 medical expense, or a total of $282.75. The plaintiff is entitled to penalties of 12% of this amount ($33.93), together with reasonable attorney's fees to the extent that they assisted in the recovery of this portion of the compensation benefits owed to the plaintiff. These fees, under all the circumstances of this case, we fix at $75.
For the foregoing reasons, the trial court judgment is amended so as to additionally award to the plaintiff penalties of $33.93 and attorney's fees of $75 under LSA-R.S. 23:1201.2, and as thus amended, it is affirmed in all other respects.
Amended and affirmed.