In workers compensation cases, the awarded money benefits can be offset in court to account for other benefits being received by the employee for the same injury like social security disability benefits. If the employer seeks to have the workers compensation benefits offset to account for social security disability they will need to file a “Motion for Recognition of Right to Social Security Offset” pursuant to La. R.S. 23:1225(A). The Louisiana First Circuit Court of Appeal was recently faced not only with a motion to offset due to social security disability but whether or not to include attorneys fees in the pre-offset amount or not. These particular issues arose out of a lawsuit brought by Stephanie Nitcher against Northshore Regional Medical Center (Northshore) for compensation for temporary or permanent total disability benefits, medical treatment and attorney fees.
On October 30, 2012, Ms. Nitcher was awarded workers compensation benefits including $86,871.84 in past due indemnity, $13,181.13 in interest and $550.47 in appeals costs all from Northshore. In addition, Northshore was ordered to pay Ms. Nitcher permanent total disability benefits in the amount of $329.96 per week from the date of the judgment forward. Ms. Nitcher in addition to the workers compensation benefits being paid by Northshore was receiving social security disability benefits pursuant to 42 U.S.C. § 423. On December 19, 2013, Northshore filed its motion for recognition of the offset of the social security disability benefits, which serves the purpose to allow an employer to offset the amount of money it’s paying out when the employee is essentially receiving payment for the same disabilities from both state and federal entities. The offset sought by Northshore would reduce their weekly payments to Ms. Nitcher by $115.52. Prior to the hearing on Northshore’s motion, Ms. Nitcher filed to have her attorney’s fees taken out of her weekly workers compensation benefits, resulting in $65.81 coming out of the previously awarded $329.96. Northshore’s offset calculation did not deduct the $65.81 prior to calculating the $115.52 offset which resulted in their motion being denied and the judge ordering that Northshore’s offset amount be $49.71 a week lowering the original $329.96 to $279.35.
On appeal Northshore contends that the judge erred in denying the offset amount of $115.52, claiming that pursuant to La. R.S. 23:1225(A) the attorney’s fees did not need to be deducted prior to the offset calculation. The First Circuit Court of Appeal in determining the social security offset first looked to La. R.S. 23:1225(A) which states that the benefits provided for injuries resulting in permanent total disability will be reduced when the person is also receiving benefits under 42U.S.C. Chapter 7 (42 U.S.C. 423) which applies in this case since Ms. Nitcher is receiving benefits both from workers compensation as well as social security disability. From here the appeals court went on to determine how the offset should actually be calculated, the specific issue here being whether or not to calculate pre or post attorney fee deduction. The prior judgment approved the attorney fees deduction from the calculation referring to statutory attorneys fees which do allow for deduction prior to offset calculations, the fees at issue are however not statutory attorneys fees. The attorney’s fees, in this case, are limited by statute but not authorized by statute which would make them statutory attorney fees. The court went further to determine that since there is no Louisiana law that requires an employer to pay attorneys fees in connection with a workers compensation claim, that the only way to do so would be if it were a punitive order. That is however not the case here and since Ms. Nitcher does owe the attorneys fees it was properly deducted from her disability benefits, but Northshore was improperly made responsible for the fees by including the deduction in their offset assessment.