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Brister v. Sears Authorized Retail Dealer12/8/1999
claimant that was not offered in the spirit of rehabilitation), writ denied, 95- 2939 (La. 2/9/96); 667 So.2d 532; Joiner v. Newberg Venture, 94-1533 (La.App. 3 Cir. 5/3/95); 657 So.2d 206 (holding that there was no error in the award of penalties and attorney fees where temporary total disability benefits were reclassified as supplemental earnings benefits, albeit without reduction in the amount of benefits, based on an inadequate investigation); and White v. Louisiana State Penitentiary, 93-770 (La.App. 3 Cir. 3/2/94); 634 So.2d 1271 (holding that there was no error in the award of penalties and attorney fees where temporary total disability benefits were reclassified as supplemental earnings benefits, albeit without reduction in the amount of benefits, where there was no reasonable basis given for the reclassification). Thus, we reject the defendants' assertion that penalties and attorney fees are not owed where there is merely a reclassification of benefits without a reduction in the amount of the benefits. Rather, the issue is whether there was sufficient justification for the reclassification of the benefits.
However, before reviewing the issue of justification, we find that the award of penalties should be reversed, but for a different reason. Specifically, this case involves a discontinuance of temporary total disability benefits rather than a failure to timely pay them. In Williams v. Rush Masonry, Inc., 98-2271 (La. 6/29/99); 737 So.2d 41, the supreme court explained that La.R.S. 23:1201.2, as amended by Acts 1995, No. 1137, ยง 1, effective August 15, 1995, rather than La.R.S. 23:1201, now governs the discontinuance of payment of claims due and arising under the Workers' Compensation Act.
La.R.S. 23:1201.2, as amended, provides in relevant part:
Any employer or insurer who at any time discontinues payment of claims due and arising under this Chapter, when such discontinuance is found to be arbitrary, capricious, or without probable cause, shall be subject to the payment of all reasonable attorney fees for the prosecution and collection of such claims. . . . The provisions of R.S. 22:658(C) shall be applicable to claims arising under this Chapter.
In other words, as explained by the supreme court in Williams, only attorney fees, and not penalties, are now recoverable under La.R.S. 23:1201.2 if the employer or insurer arbitrarily discontinues payment of benefits due, except that penalties may be assessed against only the insurer under La.R.S. 22:658(C), which is not applicable under the facts of this case. Because this case involves the discontinuance of the payment of temporary total disability benefits, penalties are not available to Brister for the defendants' actions in that regard.
Rather, the inquiry is whether the defendants acted arbitrarily, capriciously, or without probable cause in discontinuing the payment of benefits so as to warrant the imposition of attorney fees. "Arbitrary and capricious behavior consists of willful and unreasoning action, without consideration and regard for facts and circumstances presented, or of seemingly unfounded motivation." Brown v. Texas-LA Cartage, Inc., 98-1063, p. 8-9 (La. 12/1/98); 721 So.2d 885, 890. "The employer must adequately investigate the claim, and the crucial inquiry is whether the employer had an articulable and objective reason for denying or discontinuing benefits at the time it took that action." Williams, 737 So.2d at 46.
LWCC's claims adjuster, Julie Justice, testified that benefits were reclassified based on Dr. Steiner's report of October 28, 1997, in which he placed Brister at maximum medical improvement and stated he could do sedentary work. However, Ms. Justice indicat
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