The following summaries of recent noteworthy cases were written by Roland Legal PLLC.
Howard v. Basin Energy Company: WCB gets this one wrong
Howard v. Basin Energy Company, et al, 2006-84485 (WCB 2013). Boiler plate language in an order approving a settlement agreement overrides the specific terms set forth in the agreement.
This is a Kentucky Workers’ Compensation Board (WCB) decision regarding a medical fee dispute. The dispute and motion to reopen was brought by the employer to contest the reasonableness and necessity of specific medical treatment. The Chief ALJ allowed the dispute to proceed , and after the taking of proof and a hearing, the ALJ ruled in favor of the employer. Plaintiff appealed.
Instead of addressing the issues presented on appeal, the WCB focused on boiler plate language in the order approving the original settlement agreement, the specific terms of which left open plaintiff’s right to future medical benefits. The specific language of the agreement provided:
Settlement is for complete and total dismissal with prejudice of any and all claims, except that Plaintiff preserves and does not waive his right to future medical expenses that are reasonable and necessary and for his physical injuries. The open medical obligation of the Defendant/Employer is defined as a cervical and lumbar strain and right shoulder impingement syndrome.
There is a partial waiver of future medical expenses in connection with the psychological/psychiatric claim. Plaintiff preserves and does not waive his right to future medical expenses for an open medical obligation of the Defendant/Employer which is defined as cervical and lumbar strain and right shoulder impingement syndrome. Medical expenses for any other medical conditions are waived, and $1,000.00 of the settlement proceeds constitutes consideration for this partial waiver of future medical expenses.
Due to the risks and costs of further litigation, Plaintiff and the Defendant/Employer have agreed to compromise and settle this claim for a complete and total dismissal with prejudice of all claims including a waiver of medical expenses, a waiver of vocational rehabilitation and a waiver of the right to reopen; except that Plaintiff preserves and does not waive his right to future medical expenses that are reasonable and necessary and for the following defined open medical obligation; cervical and lumbar strain and right shoulder impingement syndrome. In consideration of the payment of $85,000.00 in a lump sum all claims are waived except that Plaintiff preserves and does not waive his right to future medical expenses covered under the open medical obligation as described above.
The Plaintiff acknowledges the effects of the settlement. The Plaintiff has been advised that a dismissal with prejudice of all claims for indemnity means that he shall have no right to further payment of any income benefits whatsoever as a result of the work accident referenced herein. Plaintiff understands that he shall receive no further income benefits; vocational rehabilitation; or TTD benefits at anytime [sic] in the future. Plaintiff has been warned of the effects of this settlement agreement; Plaintiff desires to go forward with the settlement agreement due to the risk of loss and costs of further litigation.
The language of the order approving the agreement, however, contained broader, boilerplate language:
This matter is before the Administrative Law Judge on motion of the Defendant-Employer to approve a Form 110-I settling the above-captioned claim. The Administrative Law Judge having reviewed the motion and being fully advised; IT IS HEREBY ORDERED that the Plaintiff’s claim will be and the same is hereby ordered DISMISSED, with prejudice, as SETTLED.
Despite the very specific delineation of future medical benefits as not being waiver, the WCB apparently focused on the ALJ’s order approving the agreement and found that the entire claim was dismissed with prejudice (even though there was no consideration for a waiver of the future medical benefits and the agreement specifically provided for continued payment of future medical benefits) and held the Chief ALJ was without jurisdiction to rule on the motion to reopen in the first place. Therefore, the board dismissed the appeal and remanded to the Chief ALJ with instructions to deny the motion to reopen.
COMMENTARY: This was the wrong decision on various grounds and likely will not withstand an appeal. The WCB ignored the very specific language of the agreement, the lack of consideration for any alleged waiver of future medical benefits, the understanding of the parties and the fact subject matter jurisdiction was not preserved (although arguably they could have addressed that issue sua sponte). If anything, they should have remanded for clarification of the intent of the parties or to allow the motion to reopen to be amended to also allege mistake.
Barker v. W.A. Kendall & Co.: IME No-show not necessarily the ultimate no-no
Barker v. W..A. Kendall & Co., 2011-78928 (WCB 2013): KRS 342.205(3) does not permit the ALJ to dismiss a claimant’s claim for failure to attend a medical examination.
This is an opinion of the Kentucky Workers’ Compensation Board (WCB). On four separate occasions during the course of litigation, Claimant Barker (Barker) failed to attend a properly scheduled independent medical examination. Following the forth failure, the ALJ dismissed the claim, relying in part on CR 37.02, a general rule of procedure pertaining to a party’s failure to comply with discovery orders or to permit discovery, with sanctions including dismissal; and 803 KAR 25:010, Sections 8 (dealing with discovery, evidence and the exchange of records), 17 (taking of discovery and depositions), and 24 (prosecuting or defending without reasonable grounds). The Board found that none of the sections relied upon by the ALJ spoke to sanctions for a missed medical examination. It found, specifically, that KRS 342.205(3) unambiguously sets out the appropriated sanction, which provides:
If an employee refuses to submit himself to or in any way obstructs the examination, his right t o take or prosecute any proceedings under this chapter shall be suspended until the refusal or obstruction ceases. No compensation shall be payable for the period during which the refusal or obstruction continues.
The Board further noted that under rules of statutory construction, a specific statute (KRS 342.205(3)) controls over a general statute (CR 37.02). Thus, the Board vacated the order dismissing with prejudice and remanded for the ALJ to enter an amended order imposing only sanctions under KRS 342.205.
Ashlock v. Commonwealth of Kentucky: The fee or not the fee
Ashlock v. Commonwealth of Kentucky, Claim No. 201096674 (Ky. WCB 2013) (slip opinion): For an attorney to be successful in a motion to reopen to contest an attorney fee, he must first be a party.
This is a decision of the Kentucky Workers’ Compensation Board (WCB). Claimant Sipes (Sipes) sustained an injury to her right shoulder on February 4, 2010 while participating in Aikido training in the course of her employment as a Youth Worker II. She subsequently underwent surgery. On February 28, 2011, Sipes hired Attorney Ashlock (Ashlock) to represent her in her workers’ compensation claim. Ashlock subsequently placed the third party administrator (TPA) for the employer on notice of his representation. While the fee agreement between Ashlock and Sipes contained a provision for an attorney’s lien, the evidence did not establish that the TPA was aware of the lien. Sipes became dissatisfied with Ashlock’s representation and eventually discharged him in May of 2011. Several months later, the TPA, unaware of Ashlock’s termination, forwarded a settlement offer to him. Sipes advised the TPA she was no longer represented by Ashlock and that the TPA could deal directly with her for settlement. At no time did Ashlock advise Sipes or the TPA he wished to assert a lien.
Sipes eventually settled her claim directly with the TPA, and the settlement agreement was approved in August of 2011. Ashlock wrote Sipes on three separate occasions in 2012 inquiring as to the status of her claim. On July 27, 2012, he filed a motion to reopen the claim, alleging fraud and mistake in the entry of the Form 110 Settlement Agreement relying on KRS 342.125(a). Ashlock also sought sanctions against the TPA and the employer for improperly settling the claim. Additionally, Ashlock filed a motion for attorney fees, requesting a fee of $6,161.35 based upon twenty hours of work representing Sipes, and later amended the motion to request $7,521.32. However, Ashlock did not move to be joined as a party to the action. The matter was transferred to an ALJ for further adjudication. After the taking of proof, the ALJ awarded Ashlock a fee, but reduced the fee to $3,000, based on an hourly rate of $150, reasoning that the hourly rate alleged in Ashlock’s motion for attorney fee was too high. Ashlock appealed that award.
On appeal, the WCB found the motion to reopen invalid, vacated the ALJ’s award of attorney fees and dismissed the appeal holding that Ashlock did not have standing as he failed to move to have himself joined as a party to the claim. He, therefore, received nothing.
Jackson Purchase Medical Assoc. v. Crossett: Parking lots and the going-and-coming rule
Jackson Purchase Medical Assoc. v. Crossett, 2012-SC-000436-WC (Ky. 2013) (To be published). A worker traveling between a parking lot not owned by his employer and his place of employment may be compensated for an injury occurring on the trip.
Crossett parked her car in a space designated as employee parking and walked along a sidewalk which ran to the main entrance of the work complex. Before reaching the main entrance, which would have taken her to her office, she slipped and fell on ice, injuring her ankle. She filed a workers’ compensation claim and her employer denied it, arguing the injury did not occur on its operating premises pursuant to the going and coming rule. The ALJ disagreed and awarded benefits. The Supreme Court affirmed the ALJ’s award of benefits. Despite the fact the employer had no responsibility or direct control over the clearing of snow and ice from the parking lots or sidewalks surrounding the office complex, the Court held that it had sufficient control over the area by virtue of its lease with the owner of the parking premises and could have pressured the property owner to keep the area in a safe condition. The Court further found Crossett was designated a parking area by her employer and she was walking from that designated area when she fell. Therefore, she is entitled to compensation.
Morris v. Owensboro Grain: Rock, Paper, Scissors…KRS 342.650(4)
Morris v. Owensboro Grain, 2012-SC-000435-WC (Ky. 2013) (Designated to be published): Under KRS 342.650(4) the General Assembly intended to exempt any worker from Kentucky’s Workers’ Compensation Act when his injury is covered by a federal workers’ compensation scheme, unless the employer provides voluntary coverage.
Morris was injured in 2008 and the injury was reported under the Longshore and Harbor Workers’ Compensation Act (LHWCA), a federal statutory scheme providing compensation for injured maritime employees. He later filed a Kentucky state workers’ compensation claim. Owensboro Grain denied the claim and the ALJ found that the LHWCA was a rule of liability for injury or death provided by the laws of the United States under KRS 342.650(4) and that since Morris’s injury fell under the LHWCA, Kentucky had no subject matter jurisdiction over the claim. She also found Owensboro Grain provide no voluntary coverage to Morris under KRS Chapter 342. Accordingly, the ALJ dismissed the claim.
The Supreme Court affirmed the ALJ’s denial finding that the General Assembly intended to exempt any worker from Kentucky’s Workers’ Compensation Act when his injury is covered by a federal workers’ compensation scheme, unless the employer provides voluntary coverage. See KRS 342.660. Since Morris was covered under the LHWCA, he was exempt from Kentucky’s workers’ compensation laws unless Owensboro Grain provided him voluntary coverage.
The Court further held that even though Owensboro Grain maintained state workers’ compensation coverage, the record was absent a copy of the policy, and there was no indication Owensboro Grain provided the notice required by KRS 342.660(2) to the Commissioner of the Department of Workers’ Claims to show it intended to cover all of its employees under Kentucky’s state workers’ compensation laws regardless of whether they were covered by a federal rule of liability. Merely maintaining workers’ compensation insurance does not, according to the Court, create a presumption of coverage, which would shift the burden of proof to the employer to show a lack of coverage for employees exempted under KRS 342.650.
Kentucky State Police v. McCray: The COA clarifies the compensibility of psychiatric claims … again
Kentucky State Police v. McCray, No. 2013-CA-000857-WC (Ky..App. 2013): PTSD is compensible only if it results from a physically traumatic event to the claimant, and resultant physical manifestations of the stressful event such as high blood pressure or a racing heartbeat do not constitute a causal, physically traumatic event.
On September 25, 2009, McCray, a state trooper, was called to investigate a domestic disturbance. When he arrived, he confronted a man who he believed was armed, and was forced to shoot the man in self-defense. He suffered no physical injuries during the event.The ALJ deemed the claim for PTSD to not be compensible because the PTSD did not directly result from a physically traumatic event. The Workers’ Compensation Board reversed, reasoning that McCray’s testimony that he suffered high blood pressure following the event could constitute evidence that he sustained a physical injury. The Court of Appeals reversed holding that Kubajak v. Lexington-Fayette Urban County Government, 180 S.W.3d 454 (Ky. 2005) was on point and compelled a finding that the claimant was not entitled to benefits because his PTSD was not caused by a physical injury. They further held that resultant physical manifestations (i.e. the high blood pressure or racing heartbeat) did not constitute a causal, physically traumatic event.
Give me a break: US Bank Home Mortgage v. Schrecker
US Bank Home Mortgage v. Schrecker, No. 2011–CA–002253–WC (2012). To be published. The “personal comfort” doctrine covers situations where an employee is injured while taking a brief pause from her work to fulfill various necessities of life, i.e. eating.
While on her paid lunch break, Schrecker was struck by a vehicle and sustained injuries. The employer argued that her break was not in the course of her employment and, thus, she should not be entitled to compensation.
The issue was whether the Board erred in finding that Schrecker was on a paid break at the time of her accident, which put her within the course and scope of her employment to entitle her to benefits for her injuries. The Court held that Schrecker’s employment did not stipulate that she had to take her lunch break on the premises. No Kentucky case specifically addresses accidents occurring off-premises during a break period but the “personal comfort” doctrine covers situations where an employee is injured while taking a brief pause from their work to fulfill various necessities of life. Thirst and hunger situations are appropriate to grant recovery.
The employer has appealed this decision to the Kentucky Supreme Court.
Pro Services, Inc. v. Wilson – An ALJ must make sufficient findings of fact to allow for proper review.
Pro Services, Inc. v. Wilson, NO. 2010-CA-001322-WC (Ky.App. 2013) – TO BE PUBLISHED: An ALJ must make sufficient findings of fact to allow for proper review.
Wilson was injured after he fell through a hole that had been cut for steps leading to the basement in a house he was helping construct. Wilson worked for Tri County Builders at the time, which was subcontracting for Pro Service. Tri County paid him between $10 and $12, in cash, per hour for his approximately eight hour work week. Testimony indicated Wilson also worked for Goff Mobile Homes around the time of his injury. Pro Services accepted “up-the-ladder liability for Wilson’s claim (i.e. serious injuries to his back, neck, head, jaw, chest, ribs, and traumatic brain injury). The ALJ ruled Wilson permanently totally disabled and awarded benefits but did not include wages earned from any other employment. This case hinges on whether Wilson was concurrently employed.
There were five issues in this case. The first issue concerned Pro Service’s petition for review: did the Board invade the ALJ’s province by making its own findings of fact concerning Wilson’s concurrent employment? The Court held that the Board did not substitute its judgment for the ALJ because the ALJ failed to include analysis of the issue; the Board directed the ALJ to consider the evidence presented and make findings.
The second issue also concerned Pro Service’s petition for review: did the Board err in vacating the ALJ’s findings of fact and conclusions of law concerning Wilson’s concurrent employment when supported by substantial evidence? The Court held that the hours worked and for whom are conclusory without any account of testimony given. The Court cannot determine whether the ALJ was unconvinced or merely overlooked the testimony because no analysis was given.
The third issue is the last issue concerning Pro Service’s petition for review: did the Board overlook or misconstrue controlling statutes and/or precedents in making its ruling? The Court held that since the Board did not actually make a ruling (other than the remand to the ALJ) there was nothing construed or overlooked.
The fourth issue concerned Wilson’s cross-petition for review: did the Board err in holding judicial admissions have no place in Workers’ Compensation proceedings? The court held that the Board correctly stated that judicial admissions have no place in Workers’ Compensation proceedings. The absence of KRCP 36 (“Requests for Admission”) and the presence of KAR 25:010 § 16 keep testimony from being a binding judicial admission.
The fifth issue concerned a Board assertion: Is it common knowledge that full-time employment is a 40 hour work week? The court held that “[F]ull-time employment for purposes of state employees is 37.5 hours per week. There is neither ‘common knowledge’ nor a gold standard for determining the number of hours per week to be considered full-time.”
TTD doesn’t end with just any old Thing To Do: Arnold v. NESCO
Arnold v. NESCO Resource, Claim No. 201168484 (Ky. WCB 2013): Menial work does not constitute a “return to employment” under KRS 342.0011(11)(a) and an employer is not entitled to a credit for bona fide wages paid for even menial work in the absence of proof the wages were paid in lieu of workers’ compensation benefits.
Following a work-related injury, Arnold was off work from November 4, 2011 through December 5, 2011 and was also off work from March 27, 2012 through April 12, 2012, although he received salary continuance for both periods. From December 6, 2011 through March 26, 2012 and from April 13, 2012 through July 18, 2012, Arnold was essentially forced to returned to work, prior to attaining MMI, at a modified duty position, a position that found him essentially performing only menial tasks or sitting idle in a room on the employer’s premises. On appeal to the Workers’ Compensation Board, Arnold argued his entitlement to TTD benefits for the continuous period of December 3, 2011 through July 18, 2012.
The Board agreed with him, relying on Central Kentucky Steel v. Wise, 19 S.W.3d 657 (Ky. 2000), and finding the menial work did not constitute a return to customary employment as required by Wise to qualify as a return to employment under KRS 342.0011(11)(a). Therefore, even with the return to work, Arnold was still entitled to TTD benefits.
The employer was equally denied a credit for the salary continuance previously paid during Arnold’s period off work. Deferring to the ALJ’s assessment of the wages earned under the modified duty program as bona fide wages, the Court determined that under Millersburg Military institute v. Puckett, 260 S.W.3d 339 (Ky. 2008) the employer was not entitled to a credit as there was no evidence the employer intended to pay them in lieu of workers’ compensation benefits. The credit for the wage continuation was also denied as KRS 342.730(6) does not provide a credit for such.
COMMENT: The employer should have known better than to attempt a circumvention of KRS 342.0011(11)(a) with a forced return to work in a position that essentially required the claimant to do nothing. That type of return to work is the textbook example Wise sets forth for failing to meet the return to employment requirement for termination of TTD.
The Ups and Downs of Offutt and KRS 338.031: Hornback v. Hardin Memorial Hospital
Hornback v. Hardin Memorial Hospital, 2012 -SC-000195-WC: In determining whether an employer violated the “general duties” provision of KRS 338.031, the four part test of Lexington-Fayette Urban County Government v. Offutt, 11 S.W.3d 598 (Ky. App. 2000) must be applied.
In Hornback, a decision to be published, the claimant, while working as custodian for the employer hospital, became trapped in a stalled elevator. The employer’s safety staff failed in their attempt to rescue the claimant and, as a result, she fell several stories down the elevator shaft causing serious injuries. She filed for workers’ compensation benefits and requested enhancement of benefits by 30% per KRS 342.165(1) (safety violation enhancement provision) and KRS 338.031 (general duties provision of Kentucky’s Occupational Safety and Health Act).
The ALJ, applying Offutt, found (1) the condition or activity in the workplace presented a hazard to employees; (2) the employer or employer’s industry recognized the hazard; (3) the hazard was likely to cause death or serious physical harm and (4) feasible means existed to eliminate or materially reduce the hazard.
The Workers’ Compensation Board affirmed the ALJ, but the Court of Appeals reversed, holding that the record did not support the conclusion that the employer violated the Offutt test, specifically, the first two factors. The Court of Appeals found that the “condition or activity” as contemplated by Offutt does not include the one-time malfunctioning of an elevator, and becoming stuck in an elevator is not a hazard associated with employment in a hospital.
The Supreme Court reversed the Court of Appeals and conducted its own analysis per the Offutt criteria finding that all four factors had been met.
COMMENT: The Court of Appeals was probably right. A one-time malfunctioning of an elevator and a good Samaritan, although failed, attempt at a rescue by fellow employees is not “a condition or activity” as contemplated by Offutt, and becoming stuck in an elevator is probably not a hazard associated with employment in a hospital. The Supreme Court’s determination runs the risk of converting all negligent behavior to intentional behavior subject to the punitive goals of KRS 342.165(1).
J.J.’s Smoke Shop gets smoked
JJ’s Smoke Shop, Inc. v. Mary J. Walker, et al., NO. 2012-CA-000851-WC, Rendered: 2-1-2013
On July 22, 2009, Joshua Pendleton who was employed at JJ’s Smoke Shop closed down the shop after his shift was over and went home. Later that night Pendleton was picked up by Andrew and Samuel Marra for what Penleton thought was to go by drugs. However, the Marra brothers tasered Penleton and held him hostage at knifepoint, informed him that they were going to rob JJ’s and forced him to unlock the door and disable the alarm. In the course of robbing the store, Andrew Marra murdered Pendleton by forcing him into the bathroom and stabbed him sixty-eight times.
Pendleton’s estate filed a claim for death benefits claiming that that Pendleton was killed within the course and scope of his employment. JJ’s denied this claim arguing Pendleton’s death was not work related.
The ALJ applied the presumption set forth in KRS 342.680, a rebuttable presumption which presumes work relatedness “in the absence of substantial evidence to the contrary…” In finding the case compensable, the ALJ initially agreed with JJ’s that Pendleton left the course and scope of his employment when he left the shop after work, but that he was later forced back into the scope of his employment when he was made to reopen the shop and disable the alarm. The ALJ found that there was a “direct relationship between Mr. Pendleton’s knowledge and capability of getting into the store and his murder.”
The ALJ denied JJ’s petition for reconsideration, the Board affirmed the ALJ’s decision on appeal, and a petition to review the Board’s decision followed.
On review, JJ’s first claimed that the ALJ filed to make correct or sufficient findings of fact. The Court disagreed finding that relying on Samuel Marra’s recorded statement in finding Pendleton was murdered during the course of the robbery was sufficient to support the award.
JJ’s argued that the ALJ’s finding that the smoke shop was a business more prone to being robbed than an ordinary retail business was unsupported by the record. The Court disagreed and referenced various facts in the record which would support this finding. However, the Court stated that even if this finding were unsupported by the record, this would be a harmless error. Because there was sufficient evidence to establish a causal connection between Pendleton’s employment and his death, whether or not the shop is more prone to a robbery is insignificant.
Next, JJ’s claimed the ALJ erred by finding Pendleton’s death arose out of and in the course of his employment. Specifically, JJ’s argued that the ALJ never addressed the substantial evidence presented that proved the death was not work related and in effect used the rebuttable presumption in KRS 342.680 as an irrebuttable presumption. The Court acknowledged that the record revealed the ALJ did consider JJ’s evidence and that the ALJ found such evidence to be based on speculation and innuendo, that it was not substantial evidence, and it failed to rebut the presumption. The Court agreed with the ALJ.
Finally, JJ’s argued that Pendleton violated store policy by not calling the store owner and informing him that he was returning to the store after hours. The Court found that this did not have a bearing on whether the KRS 342.680 presumption was rebutted. The Court pointed out that they did not have the insight to determine whether or not Pendleton was going to call the owner. The record indicated that Pendleton did not know he was going to the store before he entered the car with the Marras and that the danger which thereafter ensued would prevent such a call from being made.
The Court affirmed the opinion of the ALJ.
COMMENT: Tragic case where the facts could have leaned in favor of the defense just as easily. Sympathy and a sufficient finding for compensability won out though.
No justice for Justice: Justice v. Kimper Vol. Fire Dept.
Justice v. Kimper Vol. Fire Dept., No. 2012-CA-000417-WC (Ky.App. 2012) (to-be-published): Under KRS 342.140(3), volunteer personnel who have no regular employment at the time of injury are not entitled to an award of income benefits.
David Justice was a volunteer firefighter with the Kimper Volunteer Fire Department. On May 1, 2009, he was injured in a motor vehicle accident while responding to a rescue call. At the time of the accident, Justice was un-employed and was not earning wages, having been laid off from his job as a mechanic in March of 2009.
Workers’ compensation statutes generally do not cover individuals unless they are paid to work under a “contract of hire.” However, KRS 342.140 (3) provides an exception for volunteer fire, police and emergency personnel and provides that any income benefits to which they might be entitled “shall be based on the average weekly wage in their regular employment.”
Though not employed at the time of the injury, Justice argued that his wage could be determined by looking back on his wages for the 52 weeks or 12 months preceding the injury as allowed under KRS 342.140(1) and (2) or in finding he was merely entitled to the minimal TTD rate for purposes of calculating benefits in the absence of an actual average weekly wage.
The ALJ, the Workers’ Compensation Board and the Court of Appeals all determined that since Justice was not employed at the time of his injury, an average weekly wage could not be calculated from “regular employment.” The Court of Appeals, though sympathetic, felt that to “look back” at the 52 weeks or 12 months preceding the injury and compute an average weekly wage as provided for under KRS 342.140(1) and (2), would require them to read language and meaning into the KRS 342.140(3) ”that simply are not there.”
COMMENT: This was certainly an inequitable and unfair result given plaintiff was injured while voluntarily placing himself in hazardous conditions. On the one hand, the court was correct in that they are confined to the statutory language of KRS 342.140(3) ; however, the court could easily have looked at the language and intent of KRS 342.140 as a whole and determined that based on the provisions set forth in KRS 342.140(1) and (2), which allow for arriving at an average weekly wage based on the wages for the 52 weeks or 12 months prior to the injury, the legislature intended the same rules to apply to the calculation of wages under KRS 342.140 (3). It will be interesting to see if the Supreme Court agrees if the claimant appeals.
It depends whether it’s pending if you’re required to append: St. Joseph Hospital v. Frye, et al.
St. Joseph Hospital v. Frye, et al, No. 2011-CA-001797-WC (Ky. App. 2012): KRS 342.270 (1) does not apply and, therefore, a claimant is not required to join all causes of action against a named employer if a subsequent injury occurs after the hearing in the original claim has taken place.
In Frye, a case to be published, the Kentucky Court of Appeals confronted KRS 342.270 (1) which states in pertinent part that:
When the application is filed by the employee or during the pendency of that claim, he shall join all causes of action against the named employer which have accrued and which are known, or should reasonably be known, to him. Failure to join accrued causes of action will result in such claims being barred under this chapter as waived by the employee.
In Frye plaintiff had filed a claim for an injury occurring in 2008. That claim was completely litigated and a final hearing took place on April 9, 2009. However, on April 23, 2009, plaintiff suffered an additional work-related injury with the same employer. After the original claim on the 2008 injury had been decided by the ALJ, she filed a new claim for benefits arising from the 2009 injury. The ALJ found that the plaintiff should have merged the second injury with the first and, therefore, dismissed her claim for benefits arising from the second injury. The Workers’ Compensation Board reversed the ALJ relying on the case of T.J. Maxx v. Blagg, 274 S.W.3d 436 (Ky. 2008).
The Court of Appeals affirmed the Workers’ Compensation Board, agreeing with the Board that there are no regulations governing the reopening of a case after a hearing has been concluded, and a case that has been heard and concluded is not considered to be “pending” within the meaning of KRS 342.270.
COMMENT: This is an issue of first impression in the Commonwealth and it is likely the correct decision. Workers’ compensations litigants now have a clear definition for what “pendency” means under KRS 342.270 (1) and the decision may prove helpful and applicable to other issues that might arise regarding the development of proof after a final hearing has taken place.
Kentucky Workers' Compensation Board Opinions for August 2012
The Kentucky Workers' Compensation Board rendered 52 decisions for the month of August, 2012. Summaries regarding opinions of note are set forth below.
Bush v. Jack Cooper Transport, et al, Claim No. 2007-7362 (August 9, 2012): This is the claimant's appeal stemming from the ALJ's decision to award benefits based on a left foot injury but dismissal of the claim for a low back injury. The Board found that the ALJ's dismissal of claimant's low back claim based solely on the finding that claimant suffered from no permanent impairment was in error. Despite this, the plaintiff could still under relevant law be found entitled to medical benefits. The claim was remanded to the ALJ for this determination.
Falkenstein, et al v. West Breck Corp., et al, Claim No. 2005-72577 (August 6, 2012): This is an interesting appeal regarding denial of plaintiff's attorney fees stemming from a medical fee dispute and reopening filed by the employer. The fee was originally denied because there was no recovery of additional income benefits as the post-reopening settlement merely involved a buyout of plaintiff's remaining permanent partial disability benefits. The Board found that attorney fees were warranted; it reversed, reasoning that since the claimant was responding to the employer 's motion to reopen, Plaintiff's counsel was entitled to an attorney fee based on the work performed in representing claimant on the reopening. The Board relied heavily on Duff Truck Lines v. Vezolles, 999 S.W.2d 224 (Ky. App. 1999), reasoning that a failure to award attorney fees in such situations "would place the employee in the position of being virtually unable to obtain legal representation in post-award proceedings initiated by the employer or party similarly situated."
McClure v. Irving Materials, Inc., et al Claim No. 2011-00016 (August 20, 2012): The claimant here appealed the ALJ's decision to apportion 6% of a total 23% impairment rating to a pre-existing active impairment. Claimant argued the ALJ should have apportioned the dollars and not the impairment percentage. Claimant's argument had no basis in law and the Board, relying upon Tudor v. Industrial Mold & Machine Co., 2011-CA-000580-WC, (rendered September 2, 2011) and Roberts Bros. Coal Co. v. Robinson, 113 S.W.3d 181, 183 (Ky. 2003), found the ALJ properly relied upon the actual impairment rating attributable to claimant's work-related injury in computing benefits.
Stevens v. AMS Temporaries, Inc., et al, Claim No. 2010-00096 and 2007-83466 (August 20, 2012):This is a rather convoluted set of procedural facts, which basically involved a traumatic hearing loss claim where claimant first filed a form 101 application for resolution of injury claim and then moved to amend the claim by filing a form 103 application for resolution of hearing loss claim. The defendant challenged the filing of the form 103 based on the statute of limitations since more than two years had passed since the termination of benefits. The ALJ granted the motion to dismiss. On appeal, the Board found that the filing of the form 103 related back to the initial filing of the form 101 and, therefore, was not barred by the statute of limitations. In support of its holding, the Board relied upon civil rule 15.01 which allows the amendment of pleadings "shall be freely given when justice so requires," as well as noting the hearing loss claim was sufficiently pled as such in the form 101, despite not having been filed as a form 103.
Hernandez v. UPS, et al, Claim No. 2008-90251 (August 24, 2012): The issue on this appeal was whether the ALJ properly granted the employer a credit for the payment of short-term disability benefits under KRS 342.730 (6). The problem with the evidence before the ALJ supporting the award of a credit to the employer for the payment of short-term disability benefits, as the Board observed, was that essentially there was none. The only document UPS filed in support of its claim for a credit was a mere printout of benefits which was attached to a post-BRC motion to allege entitlement to a credit for the payment of short-term disability benefits. An affidavit of defense counsel was made part of the motion which claimed the short-term disability benefits were paid to plaintiff, that the disability plan was fully funded by the employer and that there was no internal offset provision. No copy of the plan was introduced and there was no testimony offered from any employee of the short-term disability carrier or the employer confirming the contents of the printout or confirming that the plan satisfied the requirements of KRS 342.730 (6). The Board also pointed out that the employer did not discuss its entitlement to the credit in its brief to the ALJ, but merely requested such in its conclusion. The Board also noted that the statements made in the motion filed by counsel for the employer could not support the ALJ's decision to grant the offset under KRS 342.730 (6) as counsel offered no basis for the statement and, most importantly, the rules of professional conduct prohibited him from testifying in the preceding.
Bill Church Painting Co. Inc. v. Blankenship, et al, Claim No. 2008-74367 (August 20, 2012): The primary import of this opinion is regarding the ALJ's award of attorney fees under KRS 342.040(2). Under that provision:
If overdue temporary total disability income benefits are recovered in a proceeding brought under this chapter by an attorney for an employee, or paid by the employer after receipt of notice of the attorney's representation, a reasonable attorney's fee for these services may be awarded. The award of attorney's fees shall be paid by the employer if the administrative law judge determines that the denial or delay was without reasonable foundation. No part of the fee for representing the employee in connection with the recovery of overdue temporary total disability benefits withheld without reasonable foundation shall be charged against or deducted from benefits otherwise due the employee.
While the fee was not properly contested by the employer, the Board felt compelled under KRS 342.285(2)(c) to vacate the award concluding the ALJ's determination was not supported by any findings of fact regarding the "without reasonable foundation" element of the provision. The Board further held that the KRS 342.040 fee should be calculated per the formula set forth in KRS 342.320(2)(a) and subject to the $12,000 cap. Board Member Stivers dissented (and wisely so) claiming the provisions were not to be read in concert, that the plain meaning of the statute does not provide for calculation of the KRS 342.040 "reasonable fee" per the formula of KRS 342.320 and that, similarly, the $12,000 cap should not apply to any fee awarded under KRS 342.040 since the fees awarded under that provision are separate and distinct from the fee to be awarded under KRS 342.320 .
The Board also addressed the employer's argument that the claim was barred under the going and coming rule. While it determined the ALJ was compelled to find the claim compensable based on previous findings of fact set forth in an interlocutory order, the Board nonetheless set forth a very instructive discussion on the going and coming rule in Kentucky.
Estate of Joseph Hayward Parks v. Wallace Cotton, et al, Claim No. 2011-00013 (August 27, 2012): The Board avoided addressing the facts of claimant's appeal involving an alleged work-related death by determining the matter was not properly before it because the petitioner was identified only as "the Estate of Joseph Hayward Parks" and not the personal representative of the claimant's estate. As such, the Board found that an indispensable party to the claim had not been named and, therefore, it was without jurisdiction to hear the appeal. On this point, the Board found the case of Harrison v. Park Hills Bd. of Adjustment, 330 S.W.3d 89 (Ky. App. 2011) controlling.
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Schmidt v. South Central Bell: Back to the Future. Schmidt v. South Central Bell, No. 2010-CA-000986-WC (Ky. App. 2011).The statutory amendments removing the medical expenses cap in place under KRS 342.020 as enacted in 1962 were remedial, rendering the amendments retroactive.
In Schmidt, a to-be-published Kentucky Court of Appeals decision, Schmidt v. S. Cent. Bell, 2011 Ky. App. LEXIS 88 (Ky. Ct. App. May 13, 2011), claimant was injured at a time when KRS 342.020 imposed a $3,500 cap on the amount of medical expenses an employer was required to pay in a workers' compensation claim. The cap was later removed by subsequent legislative amendments.
Schmidt's employer later raised the cap as a defense in the context of a medical fee dispute, arguing the amendments were not retroactive and Schmidt's medical expenses remained subject to the cap in effect at the time of his injury. In a unanimous decision, the Court found against the employer, concluding the subsequent amendments to KRS 342.020 were retroactive in nature because they were remedial in that they expanded an existing remedy without affecting the substantive basis, prerequisites or circumstances precipitating the remedy and did not create new nor deny vested rights.
COMMENT: This was the proper result. The case, in and of itself, contains an instructive discussion of when a statute is considered retroactive. The Court relied heavily on its holding in the earlier decision of Kentucky Insurance Guaranty Association v. Conco, Inc., 882 S.W.2d 129 (Ky. App. 1994).
UPS v. West: Now That's a Bargain! UPS Airlines v. West, No. 2010-CA-001433-WC (Ky. App. 2011): A benefit plan as identified under KRS 342.730(6) is not "exclusively employer funded" if it is the product of collective bargaining.
In this to-be-published decision, UPS Airlines v. West, 2011 Ky. App. LEXIS 76 (Ky. Ct. App. Apr. 22, 2011), the Kentucky Court of Appeals addressed an issue of first impression in KRS 342.730(6) to determine if a benefit plan as defined under that statuary provision is considered "exclusively employer funded," entitling the employer to a credit against any workers' compensation benefits paid, if it is negotiated through the collective bargaining process.
Under KRS 342.730(6):
All income benefits otherwise payable pursuant to this chapter shall be offset by payments made under an exclusively employer-funded disability or sickness and accident plan which extends income benefits for the same disability covered by this chapter, except where the employer-funded plan contains an internal offset provision for workers' compensation benefits which is inconsistent with this provision.
Regarding the benefit plan before it, the Court concluded such was not an exclusively employer-funded plan, reasoning that the collective bargaining process was contractual in nature and different from non-negotiated employee benefit plans. In forming its holding the Court relied specifically upon GAF Corp. v. Barnes, 906 S.W.2d 353 (Ky. 1995), as well as various rulings from foreign jurisdictions.
COMMENTARY: This was an exceedingly thoughtful and carefully considered opinion by the Court of Appeals, hinging ultimately on the Court's determination (borrowed from a Utah court) that "The workers' compensation system . . . was not designed or intended to free an employer from performing its contractual promises to produce specific benefits to its employees."
The Going and Coming Rule and The Tragedy of Flight 5191 — Fortney v. AirTran Airways, Inc. Fortney v. AirTran Airways, Inc., 2009-SC-000429-WC (Ky. 2010). Whether an employer uses transportation or transportation expense as an inducement for an employee to accept or continue employment is material to supporting compensability, particularly when the journey is sizeable and when the employer pays all or substantially all of the expense.
On Sunday, August 27, 2006, 49 of the 50 people aboard Comair Flight 5191 died when the plane crashed after taking off from the wrong runway at Blue Grass Airport in Lexington, Kentucky. Clarence Fortney, an employee of AirTran Airways was on that flight. Fortney, who lived in Lexington, Kentucky but worked for AirTran in Atlanta, was flying to work via another carrier (Comair) under a reciprocal agreement (AirTran did not fly into nor out of Kentucky).
The ALJ deemed the injury non-compensable based on the going-and-coming rule, finding AirTran received no benefit of Fortney’s traveling from Lexington to Atlanta and thus the employer convenience/benefit doctrine did not operate as an exception.
The case eventually came before the Kentucky Supreme Court who, in a 5 to 2 decision, determined the facts fell under the service/benefit to the employer exception to the going-and-coming rule. The Court explained even if the travel inducement benefitted the worker but placed a financial burden on the employer, the inducement still benefitted the employer when its purpose was accomplished. As the Court observed, “An employer is unlikely to provide such an inducement unless it views the resulting benefit as outweighing the burden.”
COMMENT: The Supreme Court relied heavily on the body of law involving work injuries incurred as a result of an employee’s use of a company vehicle or in performance of duties in the course of employment yet off the employer’s premises. It also found Larson’s Workers’ Compensation Law, § 14.06 – 14.07 (2009) particularly instructive, and it was the concept of “transportation expense as inducement” which was key in the Court’s ruling.
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