Court Opinion

ID: 8212411
Source: CourtListenerOpinion
Date Created: 2022-10-06 20:05:06.133832+00
Date Added: 2024-06-11T16:42:10.215250
License: Public Domain

STATE OF LOUISIANA

                             COURT OF APPEAL

                               FIRST CIRCUIT

UZozz                                CA 0052

CN                     STRATEGIC MEDICAL ALLIANCE II

                                   VERSUS

     STATE OF LOUISIANA, OFFICE OF RISK MANAGEMENT AND
           SEDGWICK (EMPLOYEE: DEREK CARPENTER)

                             DATE OF JUDGMENT.          QCT 0 $ 2022
 ON APPEAL FROM THE WORKERS' COMPENSATION ADMINISTRATION,
                        BATON ROUGE DISTRICT OFFICE S
           PARISH OF EAST BATON ROUGE, STATE OF LOUISIANA
                               NUMBER 18- 07980

            HONORABLE PAMELA A. MOSES- LARAMORE, JUDGE

 Seth Mansfield                           Counsel for Plaintiff A
                                                                - ppellant
 Lafayette, Louisiana                     Strategic Medical Alliance 11, LLC

 Scott M. Mansfield
 Kelley R. Dick, Jr.
 Baton Rouge, Louisiana

 Collin R. Melancon
 Brad W. Cramer
 New Orleans, Louisiana

 Marcus J. Plaisance
 Mark D. Plaisance
 Prairieville, Louisiana

 Virginia J. McLin                        Counsel for Defendant -Appellee

 Kirk L. Landry                           State of Louisiana
 Baton Rouge, Louisiana

                  BEFORE: THERIOT, CHUTZ, AND NESTER, JJ.

 Disposition: AFFIRMED. MOTION TO STRIKE DENIED AS MOOT.
CHUTZ, J.

        Claimant -appellant, Strategic Medical Alliance II, LLC ( SMA),               appeals the

judgment of the Office of Workers' Compensation ( OWC), which dismissed with

prejudice SMA' s claims against employer -appellee, the State of Louisiana ( State),

based on a finding that SMA does not have a right of action under the Louisiana

Workers' Compensation Law. We affirm.

                FACTUAL AND PROCEDURAL BACKGROUND

        SMA initiated this litigation on November 28, 2018, by filing a disputed

claim for compensation ( Foran 1008) with OWC, contending it was a health care

provider entitled to recover the costs of implants provided to Dr. Eric Oberlander

of The Spine Hospital of Louisiana during an authorized surgery of employee
Derek Carpenter.'     By an amended disputed claim for compensation pleading, filed
on February 1, 2019, SMA named Carpenter' s employer, the State, as a defendant

and sought reimbursement for the materials it had provided.2

        In a single document, the State filed several exceptions and answered

SMA' s lawsuit.'     At a hearing on the exceptions held on December 13, 2019, the

State argued, among other things, that SMA was not a health care provider as set

    The record indicates that Dr. Oberlander performed a three- level transforaminal lumbar
interbody fusion from L3 to S1. The materials allegedly supplied by SMA consisted of rods,
screws, cages, and other medical hardware.

a Although SMA initially named " Sedgwick" as a defendant whom it identified as Carpenter' s
    INSURER," Sedgwick Claims Management Services, Inc. filed a peremptory exception raising
the objection of no cause of action in which it asserted that it was a third -party administrator for
employers and workers' compensation insurers and, therefore, not a proper party defendant.
Subsequently, SMA filed its amended disputed claim for compensation pleading in which, in
addition to adding the State as Carpenter' s employer, SMA named as a defendant the Office of
Risk Management, identifying it as the State' s insurer. The Office of Risk Management was later
dismissed from this litigation by judgment dated February 26, 2020.
3
    Among the exceptions was a declinatory exception objecting based on improper venue. By
consent judgment, the parties agreed to transfer the matter from one OWC district to another.
The State subsequently tiled a motion to reset the remaining exceptions for hearing, and the
parties were given a hearing date. At SMA' s request, OWC twice granted continuances of the
hearing.

                                                  2
forth in the Louisiana Workers' Compensation Act (LWCA)'                and, therefore, could

not recover reimbursement payments for the materials that Dr. Oberlander had

implanted during Carpenter' s surgery. SMA' s responsive assertion was that, on the

face of the Request for Authorization ( Form 1010), SMA' s role, the items it

supplied, and its relationship with the treating physician and the facility at which
the   surgery    was   performed     were "   obvious   and   apparent."    As   such,   SMA

maintained that it was entitled to reimbursement from the State for the implanted

materials.     After   arguments,    OWC      determined   that   the   disputed   claim   for

compensation pleading was insufficient to establish SMA' s relationship with Dr.
Oberlander. On February 26, 2020, OWC signed a judgment that " granted [ SMA]

thirty ...   days from the date of judgment to amend the suit to specifically outline
facts to support its claim," subject to dismissal.

         On July 21, 2020, SMA filed the OWC- ordered amended disputed claim for

compensation pleading to            which   it attached the affidavit of its corporate

representative.5 The State filed a motion to have SMA' s matter dismissed, which

was set for a hearing. At the conclusion of the hearing, held on March 26, 2021,

OWC determined that SMA failed to allege sufficient facts to establish that Dr.

Oberlander had turned over to SMA his right to collect payment for the supplies he

used during Carpenter' s surgery and, therefore, had no right of action against the

State.   OWC subsequently issued a judgment dismissing SMA' s claims for

reimbursement with prejudice. SMA appeals.

                                        DISCUSSION

         Preliminarily, we note that the record does not contain a written exception

filed by the State raising the objection of no right of action on the basis that SMA

was not a health care provider entitled to recover reimbursement payments under

  The LWCA is set forth in La. R.S. 23: 1021 et seq.

5 Although the State challenged the timeliness of SMA' s amended pleading, OWC found it was
timely filed, and the State has not appealed that determination.
                                                3
the LWCA.G The record does show, however, that the parties argued the merits of

the no right of action at both the initial December 13, 2019 hearing, which gave

rise to OWC' s order directing SMA to amend its pleading, and again at the March
26, 2021 hearing at which SMA' s claims were dismissed.

       While an exception is a pleading that must be made in writing, making the
oral urging of the exception improper, either the OWC or appellate court may, on
its own motion, notice that the claimant does not have a right of action. See La.
C. C. P. arts. 852 and 927( B).     Consequently, OWC did not abuse its discretion in

addressing the exception, and the ruling is properly before this court for review.?

See Three Rivers Commons Condo. Assn v. Grodner, 2016- 0067 ( La. App.                          1st

Cir. 5110117), 220 So. 3d 776, 779, writ denied, 2017- 0974 ( La. 412118), 248 So. 3d

315.

       Except as otherwise provided by law, an action can only be brought by a
person having a real and actual interest that he asserts. La. C. C. P. art. 681.              The

peremptory exception raising the objection of no right of action tests whether the

claimant has any interest in judicially enforcing the right asserted. See La. C. C.P.

art. 927( A)( 6).   Simply stated, the objection of no right of action tests whether this

particular claimant, as a matter of law, has an interest in the claim sued on. The

party raising a peremptory exception bears the burden of proof. To prevail on a

6 The peremptory exceptions that the State filed when it answered SMA' s claims included an
objection of no right of action directed at SMA' s claims naming Sedgwick as a defendant. See
n. 3, supra. The State also raised two separate objections of no cause of action. In the first one,
the State asserted that under the LWCA, any reimbursement that may be owed to SMA was
capped at $ 750. 00 if SMA did not seek preauthorization as required under La. R. S. 23: 1142; the
other alleged that because SMA was not a physician, it was not entitled to the 20% markup
permitted under LAC 40: 1. 5115. The record is devoid of a pleading filed by the State asserting a
no right of action based on SMA' s failure to include facts establishing its relationship with Dr.
Oberlander that permits SMA to assert his reimbursement claim for the materials he used in
Carpenter' s surgery.

7 Because we find the propriety of whether SMA has a right of action is correctly before us in
this appeal whether we consider the determination as a review of OWC' s action of having raised
the objection on its motion or in conjunction with our raising the objection on appeal, we deny as
moot the State' s motion to strike SMA' s complaint pointing out for the first time in its appellate
reply brief the lack of a written pleading supporting the exception of no right of action.
                                                 4
Peremptory exception pleading the objection of no right of action, the defendant

must show that the claimant does not have an interest in the subject matter of the

suit or legal capacity to proceed with the suit. Pearce a Lagarde, 2020- 1224 ( La.

App.   1st Cir. 10/ 7/ 21),    330 So. 3d 1160, 1167, writ denied, 2022- 00010 ( La.

2/ 22/ 22), 333 So. 3d 446.

       On the trial of a peremptory exception pleaded prior to the trial of the case,

like the objection of no right of action before us, evidence may be introduced to
support or controvert any of the objections pleaded, when the grounds thereof do

not appear from the petition. See La. C. C. P. art. 931. Generally, in the absence of

evidence, the objection of no right of action must be decided upon the facts alleged

in the petition, and those alleged facts are accepted as true. For purposes of the

exception, all well -pleaded facts in the petition must be taken as true. Miller v.

Thibeaux, 2014- 1107 ( La. 1/ 28/ 15), 159 So. 3d 426, 430. But the latter principle

applies only to properly -pleaded material allegations of fact,                   as   opposed    to

allegations   deficient   in    material   detail,     conclusory       factual   allegations,    or

allegations of law. See Rushing v. Succession of Graves, 2008- 1997 ( La. App. 1st
Cir. 3/ 27/ 09),   2009WL2855736,      at *   2(    unpublished) (
                                                                     reviewing a peremptory

exception raising the objection of prescription).

       Where, as here, no evidence was admitted at the hearing, whether a claimant

has a right of action is a question of law and is, therefore, reviewed de novo on

appeal. Appellate review of questions of law is simply to determine whether the

OWC was legally correct. On legal issues,              an   appellate    court gives    no   special

weight to the findings of OWC and, instead, exercises its constitutional duty to

review questions of law and render a judgment on the record. See Nu -Lite Elec.

Wholesalers, LLC v. Axis Constr.              Grp.,   LLC, 2017- 1204 ( La.        App.      1st Cir.

4/ 9/ 18), 249 So. 3d 10, 14, writ denied, 2018- 0914 ( La. 9/ 28/ 18), 253 So. 3d 142.

                                                E
       For purposes of review of whether SMA has a right of action for

reimbursement for the materials Dr.             Oberlander utilized during Carpenter' s

surgery, we presume a cause of action exists as the State did in its arguments to

OWC. See La. R.S. 23: 1142 ( addressing the approval of health care providers and

the fees charged by thein);     La. R.S. 23: 1205( B) ( providing for health care benefits

reimbursement).     See also La. R.S. 23: 1021( 6) ( defining a health care provider

under the LWCA$);       Rebel Distributors Corp., Inc. v. LUBA Workers' Camp.,

2013- 0749 ( La. 10/ 15/ 13),    144 So. 3d 825, 841 ( concluding that an assignment

between a physician and a third -party medical supplies distributor, which created

an agency relationship that allowed the distributor to collect assigned workers'

compensation medication claims for the physician, was permissible under LWCA,

and, therefore, the distributor, as the physician' s agent, fell within the statutory
definition of health care provider under the La. R.S. 23: 1021( 6)). Thus, in this

appeal it is undisputed that a cause of action exists in favor of Dr. Oberlander, the

health care provider to whom any reimbursement may be owed.

       SMA urges that its allegations and the exhibits attached to its pleading
demonstrate its status as an agent for Dr. Oberlander. SMA reasons that because

the State did not produce any evidence to controvert the allegations set forth in the

disputed claim for compensation form,            OWC erred first by ordering SMA to

amend its pleading and again, after SMA filed the OWC- ordered amendment, by

dismissing its claims against the State, finding SMA had no right of action against

the State.

S
  Specifically, La. R.S. 23: 1021( 6) defines a health care provider as " a hospital, a person,
corporation, facility, or institution licensed by the state to provide health care or professional
services as a physician, hospital, dentist, registered or licensed practical nurse, pharmacist,
optometrist, podiatrist, chiropractor, physical therapist, occupational therapist, psychologist,
graduate social worker or licensed clinical social worker, psychiatrist, or licensed professional
counselor, and any officer, employee, or agent thereby acting in the course and scope of his
employment."

                                                Cn
        An agency relationship is a contract of mandate. Rebel Distributors Corp.,
Inc.,
        144 So. 3d at 832 n.5. According to La. C. C.                   art. 2989, " A mandate is a

contract by which a person, the principal, confers authority on another person, the
mandatary, to transact one or more affairs for the principal." La. C. C. art. 2990

states, "   In   all   matters    for     which      no      special   provision   is   made   in [ the

 Representation and Mandate"]                 Title, the contract of mandate is governed by the
Titles of " Obligations in General"              and "   Conventional Obligations or Contracts."

Thus, in matters relative to contract formation, La. C.C. arts. 1927- 1947 apply. See
Wendell H. Holmes &              Symeon C. Symeonides, . Representation, Mandate, and

Agency; A Kommentar on Louisiana' s New Law, 73 Tul. L. Rev.                              1087, 1119

 1999).

        A contract is formed by the consent of the parties established through offer

and acceptance. La. C. C.          art.   1927. Thus, it was incumbent of SMA to allege

properly -pleaded material allegations of fact -- rather than allegations deficient in

material detail, conclusory factual allegations, or allegations of law --                 sufficient to

aver that Dr. Oberlander,           as    a    principal,    conferred authority on SMA,        as the

mandatary,       to transact his affairs relative to the collection of reimbursement

payments for the materials used during Carpenter' s surgery.

        Based on our review of the amendments to SMA' s disputed claim for

compensation, including the attached exhibits, we can identify no facts that detail

Dr. Oberlander' s consent to a verbal agreement conferring authority on SMA to

collect reimbursement payments due to him under the LWCA for the materials

used in Carpenter' s surgery. In its February 1, 2019 amendment, SMA identified

itself as a health care provider and designated its attorney as the attorney for a

health care provider. Review of the attachments shows that none are signed by Dr.

Oberlander, and none allege that Dr. Oberlander offered as principal to confer

authority to SMA as a mandatary to collect reimbursement payments for the
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surgical      materials     Dr,   Oberlander    used       on   Carpenter.   The   Request      for

Authorization ( Form 1010),
                                     apparently submitted by Dr. Oberlander,            does not

mention SMA in any capacity.' And the remaining documents do not show any

expressed or implied conduct, representations, or statements by Dr. Oberlander

conferring authority to collect reimbursement under the LWCA in favor of SMA.

Thus, OWC did not err in ordering an amendment to SMA' s pleading."
        In its OWC--ordered amendment, SMA attached the affidavit of Rachel

McEnary, SMA' s corporate representative, " who testifies to the close relationship

of [ SMA] and the [ health care] provider." The amended pleading also "                 retained"

all prior pleadings. Because the amended pleading contains no other averments, we

turn our attention to the factual allegations as set forth in McEnary' s affidavit.

        According to McEnary,             SMA " works with doctors to provide supplies,

devices, or implantation during surgeries." She stated, that " now and in the past,"

SMA "        has   agreed    to   associate    or   contract    with   medical     providers,    to

deliver/ provide      some    supplies,    devices,   or    implantation,"   which    have   been

determined as medically necessary. McEnary explained that " when                     a doctor has

selected supplies, devices, or implantation to be used in his surgeries, subject to the

agreement with [      SMA], the medical provider has allowed [           SMA] to bill directly

 Neither copy included in the appellate record is clear.

  Although the first amended disputed claim for compensation pleading, filed on February 1,
2019, did not include any attachments, SMA annexed them to its original Form 1008 filed on
November 29, 2018. On appeal, SMA maintains the later -filed pleading related back to and
incorporated the earlier -filed pleading including the attachments, which was sufficient to
establish a prima facie case for reimbursement in its favor. See La. C. C.P. art. 1153 (" When the
action ...   asserted in the amended petition or answer arises out of the conduct, transaction, or
occurrence set forth or attempted to be set forth in the original pleading, the amendment relates
back to the date of filing the original pleading."). Thus, SMA suggests OWC erred in ordering an
amendment of its pleading at the conclusion of the December 13, 2019 hearing. Since the
attachments were entered into evidence at the March 26, 2021 hearing that resulted in the
dismissal of SMA' s claims, and SMA timely filed the amended pleading as directed by OWC, in
our review of the dismissal of SMA' s claims we have examined the February 1, 2019 amended
pleading including the attachments and concluded there were insufficient allegations of fact
necessary to establish SMA' s mandatary/ agent status with Dr. Oberlander as its principal.
Therefore, we find it unnecessary to address whether the February 1, 2019 pleading related back
and incorporated the attachments annexed to the November 29, 2018 pleading and pretermit such
a discussion.
for any good or service rendered and avail [ itself ofJ any legal right or remedy

therein to the maximum extent of the law."          She attested that the general standard

practice was "
                 for the insurer or responsible party to make timely payment after

having received [ an] invoice for the goods provided by [ SMA]." Lastly, McEnary

stated that the contract between the health care provider and SMA was not in

written form.

       We find these allegations woefully short to constitute allegations of a

contract of mandate between Dr. Oberlander and SMA for the surgical supplies

used in Carpenter' s surgery. Specifically, SMA has failed to allege any facts

averring that Dr. Oberlander as a principal conferred authority on SMA as his

mandatary to collect reimbursement payments for the surgical materials he used on

Carpenter. Mindful that under the LWCA it is a health care provider to whom

reimbursement payments are statutorily due, and that SMA does not fall within the

express definition of a health care provider absent a showing of a mandate/ agency

relationship,   even taking as true all the allegations of fact set forth in SMA' s

pleadings,
              SMA has simply failed to allege the requisite mandate/ agency

relationship with Dr. Oberlander necessary to support a right of action in its favor.

Therefore, OWC correctly dismissed SMA' s claims.' I

                                          DECREE

       For these reasons, the OWC judgment is affirmed. Appeal costs are assessed

against claimant -appellant, Strategic Medical Alliance II, LLC.

       AFFIRMED. MOTION TO STRIKE DENIED AS MOOT.

   Since SMA failed to aver facts to supports its right of action after OWC permitted an
amendment of its pleading, we find no error in the dismissal of SMA' s claims. See La. C. C.P.
art. 934 ("When the grounds of the objection pleaded by the peremptory exception may be
removed by amendment of the petition, the judgment sustaining the exception shall order such
amendment within the delay allowed by the court.... [ I] f the plaintiff fails to comply with the
order to amend, the action, claim, demand, issue, or theory shall be dismissed.").
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