Court Addresses Requirements for a Preliminary Determination Hearing and Requirement for Louisiana Licensed Adjusters

Claimant, Darline Broussard, filed a workers’ compensation claim against her Employer, Dillard Department Stores, Inc., where she had been working. On April 8, 2014, Claimant slipped on a substance on the floor and fell. She sustained an injury to her back and was advised by her treating physician to remain off of work.

Carrier for Employer began paying Claimant temporary total disability benefits as a result of her injury. Thereafter, Employer’s physician opined that Claimant was capable of sedentary work. Employer offered Claimant a part-time sedentary position. Carrier then converted Claimant’s TTD benefits to supplemental earnings benefits, to which Claimant objected and filed a claim, seeking reinstatement of benefits in addition to attorney’s fees and penalties. In response, Employer and Carrier filed and answer and also requested a preliminary determination hearing pursuant to La. R.S. 23:1201.1(H). Claimant moved to strike the preliminary determination hearing.  Following a Rule to Show Cause, the workers’ compensation court denied Claimant’s motion to strike and found that Employer was entitled to a preliminary determination hearing. Claimant sought review of that finding.

Simultaneously, Claimant had also sought to have Employer and Carrier appoint a claims adjuster in the State of Louisiana, pursuant to La. R.S. 23:1161.1. The adjuster who was administering the claim worked out of a Tennessee office and was not licensed in Louisiana. After a hearing on the matter, the workers’ compensation court concluded that it does not have subject matter jurisdiction because such issues are more properly decided upon but the Louisiana Commissioner of Insurance. Claimant seeks a review of this finding as well.

The Louisiana Third Circuit Court of Appeal decided the issues in two independent decisions. First, the Court examined whether the issue of a preliminary determination had been properly decided. Claimant specifically argued that Employer had an affirmative duty, pursuant to La. R.S. 23:1201.1(I)(1), to comply with the notice requirements involving a suspension, modification, or termination of benefits, and to also initially accept the claim as compensable. La. R.S. 23:1201(I)(1) provides: “[a]n employer or payor who has not complied with the requirements set forth in Subsection A though E of this Section or has not initially accepted the claim as compensable, subject to further investigation and subsequent controversial shall not be entitled to a preliminary determination.” The Third Circuit was not persuaded by Claimant’s argument. Rather, it agreed that Employer and Carrier had complied with the statutory prerequisites necessary for a preliminary determination hearing. Even assuming Claimant was correct in her argument that the statute imposes upon Employer and Carrier the addition requirement (as opposed to the alternative requirement) of having to prove they accepted the claim as compensable, the Third Circuit found that voluntary payment of compensation and medical benefits was sufficient as acceptance of the claim. The Court declined to interpret the statute to require an admission of liability in order to qualify as acceptance of the claim. The Third Circuit upheld the workers’ compensation court’s denial of Claimant’s Motion to Strike and thereafter denied Claimant’s writ application.

In a separate proceeding, the Louisiana Third Circuit Court of Appeals granted Claimant’s supervisor writ application and remanded the claim back to the workers’ compensation court for a determination of whether a Louisiana adjuster should be assigned to the claim. Claimant argued that, pursuant to La. R.S. 23:1161.1(A), if a workers’ compensation insurer opts not to maintain a claims office in Louisiana, then the insurer must retain a licensed Louisiana claims adjuster. Further, Claimant argued that the workers’ compensation court would not be infringing on the insurance commissioner’s authority, under La.R.S. 22:337, to suspend or revoke a foreign insurer’s certification of authority. The Court looked to the Louisiana Fifth Circuit Court of Appeals for guidance: “LSA-R.S. 22:337 provides a proper basis for the trial court’s conclusion that LSA-R.S. 23:1161.1 requires the insurer to either establish and maintain a claims office within the state of Louisiana or retain a Louisiana licensed claims adjuster.” Duarte-Ortega v. Disaster Recovery Services, L.L.C., 12-883 (La.App. 5 Cir. 12/27/12), 118 S.3d 1126. The Court held that the workers’ compensation court erred in denying Claimant’s motion to compel Employer and Carrier to retain a claims adjuster in Louisiana and that it had jurisdiction over the matter.

Broussard v. Dillard Department Stores, Inc.