In a recent workers’ compensation case, Martin v. Doerle Food Services, LLC., 2021 La. App. LEXIS 866, 21-94 (La. App. 3 Cir. 6/2/21), the Louisiana Third Circuit Court of Appeal declined to award penalties and attorney’s fees for the employer’s termination of benefits after relying upon an IME report that recommended video surveillance of the employee.

Martin v. Doerle Food Services, LLC. – Background

The employee, Billy Martin, was injured in a forklift accident while in the course and scope of his employment with employer, Doerle Food Services, LLC. His claim was accepted as compensable. A dispute thereafter arose as to the employee’s work capacity.

In early 2019, the Office of Workers’ Compensation scheduled the employee for an independent medical examination with Dr. Wayne Lindermann. Following examination and review of the pertinent medical records, Dr. Lindermann concluded that the employee could return to work with no restrictions and was no longer in need of further treatment. He further opined that the employee’s complaints exceeded the objective findings to such an extent that he recommended video surveillance of the employee. Relying on the report, the employer subsequently terminated indemnity benefits.

The employee filed a Form 1008/Disputed Claim for Compensation, alleging entitlement to indemnity benefits, as well as penalties and attorney’s fees for the employer’s arbitrary and capricious termination of benefits. In response, the employer requested a preliminary hearing, to which the employee moved for a motion to strike the IME report. Following the hearing, the workers’ compensation judge struck the IME report and reinstated benefits. However, the employee’s claim for penalties and attorney’s fees was denied, as it was not arbitrary, capricious, or without probable cause.

Third Circuit Decision

On appeal, the Louisiana Third Circuit Court of Appeal affirmed the decision of the Workers’ Compensation Judge. The court noted that an award of penalties and attorney’s fees for discontinuance of penalties must be found to be “arbitrary, capricious, or without probable cause.” This standard turns upon whether the employer can articulate an objective reason for terminating benefits.

In support of his appeal, the employee argued that reliance upon Dr. Lindermann’s report was arbitrary and capricious given that it went beyond scope of a typical IME. The court rejected this argument, noting that Dr. Lindermann was a board-certified physician and conducted a thorough review of all pertinent medical information, which included employee’s medical records, employee’s oral history, and a full physical examination. The court found that despite Dr. Lindermann’s “overzealous” opinion, the report was based on a comprehensive examination. Therefore, the employer’s termination of indemnity benefits was objectively reasonable and was not arbitrary or capricious.