Mid-Winter Meeting

The Kentucky Bar Association Workers’ Compensation Law Section presents:

2012 Mid-Winter Meeting & CLE Seminar

This program has been approved in Kentucky for 12.00 CLE Credits including 1.00 Ethics Credit.

Compiled and Edited by: The Kentucky Bar Association Office of Continuing Legal Education for Kentucky Bar Association Workers’ Compensation Law Section

© 2012 All Rights Reserved Published and Printed by: The Kentucky Bar Association, January 2012. Editor’s Note: The materials included in this Workers’ Compensation Law Section MidWinter Meeting seminar book are intended to provide current and accurate information about the subject matter covered. The program materials were compiled for you by volunteer authors. No representation or warranty is made concerning the application of the legal or other principles discussed by the instructors to any specific fact situation, nor is any prediction made concerning how any particular judge or jury will interpret or apply such principles. The proper interpretation or application of the principles discussed is a matter for the considered judgment of the individual legal practitioner. The faculty and staff of the Kentucky Bar Association disclaim liability therefor. Attorneys using these materials or information otherwise conveyed during the program, in dealing with a specific legal matter, have a duty to research original and current sources of authority.

2012 Mid-Winter Meeting & CLE Seminar Table of Contents Agenda ............................................................................................................................... i Speakers ........................................................................................................................... iii Requests for Production in the Workers' Compensation Claim ........................................ 1 Ethical Issues in Deposition Practice .............................................................................. 23 Calculating Benefits on Reopening: Real Case Scenarios ............................................. 33 Crittenden County Health & Rehab v. Sisco ................................................................... 39 Shaw v. Jane Todd Crawford Hospital ............................................................................ 49 Statute of Limitations for Original Claims and Claims on Reopening: Don't Get Caught SOL .................................................................................................... 55 Effectively Presenting "Substantial" Medical Evidence ................................................... 61 Communicable Diseases and Compensability Issues .................................................... 73 Dealers Transport Co. v. Thompson ............................................................................... 79 Barren River District Health Dept. v. Hussey .................................................................. 87 Kentucky Employers Safety Ass'n. v. Lexington Diagnostic Center................................ 95 Crunching the Numbers: Is the Recession Killing Comp in Kentucky? ........................... 99 Affirmative Defenses in Workers' Compensation .......................................................... 125 To Be or Not to Be: Is Interlocutory Relief the Question? ............................................. 135 Commuting Is (Usually) Not Compensable: The "Coming and Going" Rule in Kentucky ........................................................................................................... 155 Significant Decisions of the Workers' Compensation Board -- 2011 ............................. 165 2011 Kentucky Court Published Decisions on Workers' Compensation Issues ............................................................................................................................ 183 2011 Kentucky Court Decisions on Workers' Compensation Issues to Be Published ...................................................................................................................... 197

2012 Workers’ Compensation Law Section Mid-Winter Meeting & CLE Seminar February 2-3, 2012 Majestic Elegance Resort Hotel Punta Cana, Dominican Republic

THURSDAY, FEBRUARY 2ND 8:30-9:00 a.m.

Discovery of Documents in the Workers' Compensation Claim (0.50 CLE credit) Johanna Frantz Ellison Ferreri & Fogle, PLLC

9:00-10:00 a.m.

Ethical Issues that Arise during Depositions (1.00 Ethics credit) Bonnie Hoskins Hoskins Law Firm, PLLC

10:00-10:15 a.m.

Break

10:15-10:45 a.m.

Calculating Benefits on Reopening: Real Case Scenarios (0.50 CLE credit) Denise Davidson Denise Davidson & Associates, PSC

10:45-11:45 a.m.

Limitations on Original Filing and Reopening: Don't Get Caught SOL (1.00 CLE credit) Paul Jones Jones, Walters, Turner & Shelton, PLLC

11:45 a.m.-1:00 p.m.

Lunch (on your own)

1:00-2:00 p.m.

Communicating with Your Medical Expert to Ensure a BombProof Report (1.00 CLE credit) Christopher P. Evensen Evensen Law Office

2:00-3:00 p.m.

Communicable Diseases and Compensability Issues (1.00 CLE credit) Ward Ballerstedt Ferreri & Fogle, PLLC

3:00-3:15 p.m.

Break

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3:15-4:15 p.m.

Crunching the Numbers: Is the Recession Killing Comp in Kentucky? (1.00 CLE credit) Stephanie D. Ross Ferreri & Fogle, PLLC

FRIDAY, FEBRUARY 3RD 8:30-9:30 a.m.

Brush Up on Affirmative Defenses (1.00 CLE credit) Scott Mitchell Burns Brown Ferreri & Fogle, PLLC

9:30-10:30 a.m.

Strategic Considerations in Requesting and Opposing Interlocutory Relief (1.00 CLE credit) Timothy J. Wilson Wilson, Polites & McQueen

10:30-10:45 a.m.

Break

10:45-11:45 a.m.

Recent Developments in Coming & Going (1.00 CLE credit) Matthew D. Ellison Fowler, Measle & Bell, PLLC Johanna Frantz Ellison Ferreri & Fogle, PLLC

11:45 a.m.-1:00 p.m.

Lunch (on your own)

1:00 p.m.-2:30 p.m.

Notable Board Opinions from 2011 (1.50 CLE credit) Pierre J. Coolen Ferreri & Fogle, PLLC

2:30-2:45 p.m.

Break

2:45-4:15 p.m.

Notable Court of Appeals and Supreme Court Cases from 2011 (1.50 CLE credit) Sherri P. Brown Ferreri & Fogle, PLLC

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SPEAKERS

Johanna Frantz Ellison Ferreri & Fogle, PLLC 300 East Main Street, Suite 400 Lexington, KY 40507 859.253.4700 Johanna Frantz Ellison is a member of Ferreri & Fogle, PLLC in Lexington, where she practices workers' compensation defense, federal black lung, and insurance defense. She received her B.A., summa cum laude, from the University of Kentucky in 2001 and her J.D. from the University of Kentucky College of Law in 2005. Ms. Ellison served as managing editor of the Kentucky Law Journal from 2004-2005 and as a board member of the Kentucky Law Journal Association from 2005-2006. She is a member of the Kentucky Bar Association and its Workers' Compensation Law Section and the Fayette County Bar Association.

Bonnie Hoskins Hoskins Law Offices, PLLC Post Office Box 24564 Lexington, KY 40524-4564 859.271.3665 Bonnie Hoskins is the founding member of Hoskins Law Offices, PLLC in Lexington, where she primarily practices workers' compensation defense. Ms. Hoskins received her B.S., with honors and high distinction, in 1978 from the University of Kentucky and studied at the Centre for Renaissance Studies in Oxford, England, before entering law school. She received her J.D. from the University of Kentucky College of Law in 1982, where she was a member of the National Moot Court Team. Ms. Hoskins clerked with Kentucky's Special Fund while in law school and then practiced with the Special Fund for a short time after completing her law degree. She engaged in private practice in Eastern Kentucky representing clients in the coal industry from 1983-1986 and practiced with Stoll, Keenon & Park from 1987-2001. Ms. Hoskins is a member of the Kentucky Bar Association and its Workers' Compensation Law (Chair, 2004) and Civil Litigation Sections.

Denise M. Davidson Davidson & Associates, PSC 264 East Main Street Hazard, KY 41701 606.436.1930 Denise M. Davidson is a solo practitioner in Hazard, where she primarily practices federal black lung and workers' compensation law. She received her undergraduate degree from the University of Kentucky in 1981 and her J.D. from the University of Louisville Louis D. Brandeis School of Law in 1984. She is a member of the Kentucky Bar Association and its Workers' Compensation Law Section and the Perry County Bar Association.

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Paul E. Jones Jones, Walters, Turner & Shelton, PLLC Post Office Box 1167 Pikeville, KY 41501 606.433.1167 Paul E. Jones is a founder of the firm Jones, Walters, Turner & Shelton PLLC in Pikeville, where he practices workers’ compensation law, federal black lung, and medical/legal litigation. He received his B.A. from Eastern Kentucky University in 1976 and his J.D. from the Northern Kentucky Salmon P. Chase College of Law in 1979. Mr. Jones has served as an adjunct professor at each of the Kentucky law schools, the University of Cincinnati, Appalachian College of Law in Grundy, West Virginia and Pikeville College. He was recently inducted into the College of Workers’ Compensation Lawyers by the American Bar Association. Mr. Jones serves on the Board of Directors of Chase College Foundation, is a Life Fellow of the Kentucky Bar Foundation, and is a member of the American, Kentucky, West Virginia, Georgia and Pike County Bar Associations.

Christopher P. Evensen Evensen Law Office 6011 Brownsboro Park Boulevard, Suite A Louisville, KY 40207 502.719.3145 Christopher P. Evensen is a solo practitioner in Louisville, where he represents injured people in workers' compensation claims, claims arising from automobile, truck and motorcycle accidents, and other personal injury claims. He received his bachelor's degree, cum laude, from Wake Forest University in 1996 and his J.D., cum laude, from the University of Louisville Louis D. Brandeis School of Law in 1999. Mr. Evensen was selected by his peers for inclusion in the 2009 edition of The Best Lawyers in America® in the field of workers' compensation law. He is a member of the Kentucky and National Work Injury Litigation Group (WILG), the Kentucky Justice Association, and the Kentucky and Louisville Bar Associations.

Ward Ballerstedt Ferreri & Fogle, PLLC 203 Speed Building 333 Guthrie Green Louisville, KY 40202 502.582.1381 Ward Ballerstedt is an associate with Ferreri & Fogle, PLLC in Louisville, where he practices workers' compensation defense and federal black lung litigation. He received his B.B.A. from the University of Kentucky in 2002 and his J.D. from the University of Louisville Louis D. Brandeis School of Law in 2006. He is a member of the American and Kentucky Bar Associations.

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Stephanie D. Ross Ferreri & Fogle, PLLC Building 300, Suite 26 7000 Houston Road Florence, KY 41042 859.980.1573 Stephanie D. Ross is a member of Ferreri & Fogle, PLLC in Florence, where she practices workers' compensation law. She received her B.A., with distinction, from the University of Kentucky in 1992 and her J.D. from the University of Kentucky College of Law in 1995. Ms. Ross currently serves as Chair of the Kentucky Bar Association's Workers' Compensation Law Section. She is also a member of the Rivers Unlimited Board of Directors (2007-present) and is a committee member for the Women Leaders in Insurance Conference Luncheon (2011).

Scott Mitchell Burns Brown Ferreri & Fogle, PLLC 300 East Main Street, Suite 400 Lexington, KY 40507 859.253.4700 Scott Mitchell Burns Brown is a member of Ferreri & Fogle, PLLC in Lexington, where he practices workers' compensation defense, contract law and corporate law. He received his B.A. from the University of Kentucky in 1994 and his J.D. from the University of Kentucky College of Law in 1998. During law school, Mr. Brown was a staff member of the Kentucky Law Journal, serving as business manager from 1997-1998. He lectured for Lorman Education Services on workers' compensation law in 2005 and 2006. Mr. Brown is a member of the Kentucky Bar Association and its Workers' Compensation Law Section.

Timothy J. Wilson Wilson, Polites & McQueen 309 North Broadway Lexington, KY 40508 859.253.2373 Timothy J. Wilson is a senior and managing partner with Wilson, Polites & McQueen in Lexington, where he practices workers' compensation law. He received his B.A. in 1977 and his M.A. in 1978 from Morehead State University and his J.D. from the University of Kentucky College of Law in 1982. Mr. Wilson is a member of the Kentucky Bar Association and its Workers' Compensation Law Section.

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Matthew D. Ellison Fowler Measle & Bell, PLLC 300 West Vine Street, Suite 600 Lexington, KY 40507-1660 859.252.6700 Matthew D. Ellison is an associate with Fowler Measle & Bell, PLLC in Lexington, where he is a member of the firm's litigation and bankruptcy & creditors' rights groups. He practices employment law, bankruptcy and creditors' rights, insurance coverage analysis, workers' compensation defense and appellate practice. Mr. Ellison received his B.A. from the University of Kentucky in 2000 and his J.D. from the University of Kentucky College of Law in 2005. Prior to practicing law, Mr. Ellison worked as a journalist and publications editor. He is a member of the Kentucky Bar Association (Labor & Employment Law and Young Lawyers Sections) and the Fayette County Bar Association and its Young Lawyers Section.

Pierre J. Coolen Ferreri & Fogle, PLLC 300 East Main Street, Suite 400 Lexington, KY 40507 859.253.4700 Pierre J. Coolen is an associate with Ferreri & Fogle, PLLC in Lexington, where he practices workers' compensation law and insurance defense. He received his B.S. from the University of Kentucky in 2002 and his J.D. from the University of Kentucky College of Law in 2006. He is a member of the Kentucky Bar Association and its Workers' Compensation Law Section.

Sherri P. Brown Ferreri & Fogle, PLLC 300 East Main Street, Suite 400 Lexington, KY 40507 859.253.4700 Sherri P. Brown is a member/owner of Ferreri & Fogle, PLLC in Lexington, where she practices workers' compensation defense, federal black lung and employment law. She received her B.S. from Murray State University in 1989 and her J.D. from the University of Louisville Louis D. Brandeis School of Law in 1992. Ms. Brown served as a lawyer reviewer of the AMA Guides to the Evaluation of Permanent Impairment, Sixth Edition. In addition, she serves as a board member for the Kentucky Workers' Compensation Education Association and is a member of the Kentucky Bar Association and its Workers' Compensation Law Section (Chair, 2007-2008).

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REQUESTS FOR PRODUCTION IN THE WORKERS’ COMPENSATION CLAIM Johanna F. Ellison, Esq.

In many instances, the discovery process is the most adversarial part of a claim, particularly in the realm of civil practice. Despite its generally collegial nature, the same can be true of practice before the workers’ comp bar. In Cox v. Peabody Coal Co., 357 S.W.2d 878 (Ky. 1962), the then-highest court in the Commonwealth made the following instructive statement concerning the purpose of the discovery process in the workers’ comp claim: The adversary nature of our practice sometimes leads us to forget that a trial is not a game, but is a quiet search for the truth. (citation omitted) There can be no justification for playing hide-and-seek with records that may be of assistance in that process. In keeping with this observation, the purpose of this presentation is to assist members of the bar in obtaining information relevant to any claim in as efficient and correct a manner as is possible. I.

PART I – PRIVILEGES TO DISCOVERY There are, in reality, many fewer recognized objections to discovery requests than what most counsel assert. The most developed reasons to withhold requested information are either a) the attorney-client privilege or b) the workproduct doctrine. A.

Attorney-Client Privilege 1.

Kentucky Rules of Evidence a.

KRE 503 – Lawyer-Client Privilege. i.

Definitions. (1) “Client” -- a person, including a public officer, corporation, association, or other organization or entity, either public or private, who is rendered professional legal services by a lawyer, or who consults with a lawyer with a view to obtaining professional legal services from a lawyer. (2)

“Representative of the client” means: (A) A person having authority to obtain professional legal services, or to act on advice thereby rendered on behalf of the client; or

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(B) Any employee or representative of the client who makes or receives a confidential communication: (i) In the course or scope of his/her employment; (ii) Concerning the subject matter of his/her employment; and (iii) To effectuate representation for the client.

legal

(3) “Lawyer” means a person authorized, or reasonably believed by the client to be authorized to engage in the practice of law in any state or nation. (4) “Representative of the lawyer” means a person employed by the lawyer to assist the lawyer in rendering professional legal services. (5) A communication is “confidential” if not intended to be disclosed to third persons other than those to whom disclosure is made in furtherance of the rendition of professional legal services to the client or those reasonably necessary for the transmission of the communication. ii.

General Rule of Privilege. A client has a privilege to refuse to disclose and to prevent any other person from disclosing a confidential communication made for the purpose of facilitating the rendition of professional legal services to the client: (1) Between the client or a representative of the client and the client’s lawyer or a representative of the lawyer; (2) Between the lawyer and a representative of the lawyer; (3) By the client or a representative of the client or the client’s lawyer or a representative of the lawyer representing another party in a pending action and concerning a matter of common interest therein;

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(4) Between representatives of the client or between the client and a representative of the client; or (5) Among lawyers and their representatives representing the same client. iii.

Who may claim the privilege. The privilege may be claimed by the client, the client’s guardian or conservator, the personal representative of a deceased client, or the successor, trustee, or similar representative of a corporation, association, or other organization, whether or not in existence. The person who was the lawyer or the lawyer’s representative at the time of the communication is presumed to have authority to claim the privilege but only on behalf of the client.

b.

KRE 509 – Waiver of Privilege by Voluntary Disclosure. A person upon whom these rules confer a privilege against disclosure waives the privilege if he or his predecessor while holder of the privilege voluntary discloses or consents to disclosure of any significant part of the privileged matter. This rule does not apply if the disclosure itself is privileged. Disclosure of communications for the purpose of receiving third party payment for professional services does not waive any privilege with respect to such communications. 

2.

While not set forth in any rule or statute, the privilege can occasionally be waived by a party’s conduct, including inadvertent production of privileged information.

Cases re: the attorney/client privilege. a.

The St. Luke Hospitals, Inc. v. Kopowski, 160 S.W.3d 771, 777 (Ky. 2005) – In contrast to communications (including documents) governed by the work-product doctrine, communications protected by the attorney client privilege are "absolutely protected" and thus disclosure of such communications cannot be compelled upon a showing of need by the opposing party.

b.

Asbury v. Beerbower, 589 S.W.2d 216 (Ky. 1979) – Plaintiff sought to discover, by deposition, the contents of a statement given by defendant to her insurance carrier before counsel had been retained for defendant and before 3

 

the filing of the lawsuit. Regardless, the statement was held to be within the scope of the attorney-client privilege: 

c.

“[A] report or other communication made by an insured to his liability insurance company, concerning an event which may be made the basis of a claim against him and which is covered by the policy is a privileged communication, as being between attorney and client.” The insurance policy required the defendant to cooperate with the insurer, and obligated the insurer to provide counsel for the defendant. “The insured is ordinarily not represented by counsel of his own choosing either at the time of making the communication or during the course of litigation. Under such circumstances we believe that the insured may properly assume that the communication is made to the insurer as an agent for the dominant purpose of transmitting it to an attorney for the protection of the interests of the insured.”

Haney v. Yates, 40 S.W.3d 352 (Ky. 2000) -- Yates was a cab driver and an independent contractor of Yellow Cab. He collided with pedestrian Emmons, causing her death. Days before the accident, Yellow Cab had become selfinsured. Yates gave a written statement to Yellow Cab’s safety department. Emmons’ administratrix, Haney, sought discovery of the written statement. Yates argued his statement either fell within the attorney/client privilege or was work product. The Court of Appeals held the statement fell within the insured-insurer extension of the attorney/client privilege; the Supreme Court reversed, finding it fell under neither provision: 

Yates’ statement to Yellow Cab’s safety department was not made in “furtherance of the rendition of professional legal services”, as no attorney was yet involved. In Asbury the court extended the scope of the attorney/client privilege to include communications between an insured and a representative of his insurer. In so holding, the Court relied upon a provision in the defendant’s insurance policy (a contract between insured/insurer) which required the defendant to cooperate with the insurer, and obligated the insurer to provide counsel. Yates produced no formal contract or policy between Yellow Cab and himself to support the assumption that a duty to cooperate or defend existed between them.

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B.

Work-Product Doctrine The intent and spirit of this rule is to afford the greatest latitude possible in discovery; however, discovery cannot encroach upon the attorney's work product or the attorney's or other representative's mental impressions, conclusions, opinions or legal theories concerning the litigation. Newsome by and through Newsome v. Lowe, 699 S.W.2d 748 (Ky. App. 1985). 1.

Kentucky Rules of Civil Procedure a.

Ky.R.C.P. 26.02. Scope of Discovery is the modern codification of the attorney work product doctrine. CR 26.02(1) In General. Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party… . It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence. 

b.

A VERY broad standard.

CR 26.02(3) Trial preparation: materials. (a) Subject to the provisions of paragraph (4) of this rule [regarding discovery of expert opinions], a party may obtain discovery of documents and tangible things otherwise discoverable under paragraph (1) of this rule [general scope of discovery, discussed above] and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including his attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of his case AND that he is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation. (b) A party may obtain without the required showing a statement concerning the action or its subject matter previously made by that party…

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

Put another way, if the requesting party wants a document that was prepared in anticipation of litigation or for trial, they must show “substantial need” and that they are unable to obtain the information or its equivalent another way without “undue hardship.”

A party is always entitled to a copy of a statement made by that party. 

2.

Under this rule, written post-injury statements and/or transcripts of recorded statements given by a plaintiff to the employer or the carrier are always discoverable.

Cases re: work product doctrine. a.

Haney v. Yates, 40 S.W.3d 352 (Ky. 2000) – see facts, above. After finding that the attorney/client privilege did not protect Yates’ statement to Yellow Cab, the Court also disagreed with Yates’ work product argument: 

b.

The statement at issue was not made by an attorney. Thus, it was not absolutely protected, but a factual statement entitled only to qualified protection. Plaintiff showed both substantial need and undue hardship. Substantial need existed as the only other witness to the accident, Emmons, was dead. Undue hardship existed because the plaintiff has no other recourse to obtain the same information.

Morrow v. Brown, Todd & Heyburn, 957 S.W.2d 722, 725 (Ky. 1997) – CR 26.02(3)(a) distinguishes between "ordinary" and "opinion” work product. i.

Ordinary work product is privileged unless the requestor can make the requisite showing of need or hardship; if they can it is discoverable.

ii.

However, even in cases where ordinary work product must be produced, the court must protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation." In other words, “opinion” work product is absolutely privileged.

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c.

d.

Transit Authority of River City (TARC) v. Vinson, 703 S.W.2d 482 (Ky. App. 1985) – Plaintiff, a passenger on a city bus, was injured when his bus was rear-ended by another city bus. TARC employed a private investigator (Dawson) to perform surveillance, which was conducted over six months. Plaintiff learned of Dawson’s activities through discovery, took his deposition, and called him to testify at trial. TARC objected to Dawson’s proposed testimony and the introduction of his photographs and reports into evidence, arguing that his findings and reports were exempt from discovery because they were prepared in anticipation of litigation and, by extension, that he should not be compelled to testify. The trial court permitted the investigator to be compelled to testify, and the Court upheld the decision: i.

The policy of protecting counsel’s work product prior to litigation applies with equal force to the work product of the party’s other representatives, including private investigators. However, after the case is brought to trial, it becomes less important to protect “documents and tangible things…prepared in anticipation of litigation” and more important to place the relevant facts before the court or jury. Consequently, there is no statutory evidentiary privilege for work product, and CR 26.02(3)(a) does not purport to operate beyond discovery.

ii.

Importantly, the Court noted that work product immunity protects only the documents themselves and not the underlying facts. While the investigator’s disputed reports and photographs are within the work product exemption, the investigative results do not reflect Dawson’s “mental impressions, conclusions, opinions, and legal theories.” Instead, that material simply documents certain events; it is a written record of plaintiff’s life over a six-month period following the accident, compiled by a surreptitious observer. Work product which is primarily factual in nature is not absolutely immune from discovery. At best, it receives a qualified protection which is overcome if the opposing party shows substantial need of the material and inability to obtain it elsewhere without undue hardship. It would be impossible for the plaintiff to duplicate that information.

Duffy v. Wilson, 289 S.W.3d 555 (Ky. 2009) – Ryan Owens died after participating in football practice with his high school team. Chris Hogg, insurance adjuster, took statements from players, manager, parents and bystanders 7

 

who were present at the football practice. Present during the interviews were Byrd, the school board’s attorney, and Wilson, an attorney hired by the Board’s superintendent to investigate the death. During the interviews, Wilson told witnesses that he was not hired to sue or defend anyone. He stated that the point of the interviews was to see if anything was “preventable.” The plaintiffs filed a motion to compel the defendant to turn over in discovery the statements taken by Hogg. The trial court ruled that the statements, with certain parts redacted, were discoverable. The defendants argued that the trial court’s order violated the work product privilege.

e.

II.

i.

“In anticipation of litigation” – A document need not be created by a party’s attorney to be work product. “The policy of protecting counsel’s work product prior to litigation applies with equal force to the work product of the party’s other representatives, including private investigators.” (See Vinson, above) Here, the statements taken from the witnesses were prepared in anticipation of litigation and thus constitute work product. It is not unreasonable to believe that these interviews were taken not only to investigate the circumstances surrounding the death, but also to enable the insurance company to defend any litigation that arose from it. The seeds of prospective litigation have been sown, and the prudent party will begin to prepare his case.

ii.

“Substantial equivalent” without “undue hardship.” – Mental impressions have complete protection, but documents which are mostly factual in content have only qualified protection. Here, the plaintiffs have made no attempt to take depositions of any of the witnesses, all of whom are still available. They have not shown they are unable to obtain a “substantial equivalent” without “undue hardship.”

Shobe v. EPI Corp., 815 S.W.2d 395, 397 (Ky. 1991) – The burden of proving the applicability of a privilege under CR 26.02(1) falls on the party asserting it.

PART II – DISCOVERY PURSUANT TO KRS 342 A.

Applicable Discovery Rules The regulations associated with the practice of claims under KRS 342 (laid out at 803 KAR 25:010) have virtually nothing to say about discovery, except the following:

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Section 17. Discovery and Depositions. (1) Discovery and the taking of depositions shall be in accordance with the provisions of Civil Rules 26 to 37, inclusive, except for Civil Rules 27, 33, and 36, which shall not apply to practice before the administrative law judges or the board. 

The excluded civil rules pertain to depositions before action or pending appeal (CR 27), interrogatories (CR 33) and requests for admissions (CR 36). These types of discovery are not permitted in workers’ compensation practice. o

Keep this in mind, as this can form the basis for an objection to another party’s discovery, depending on the wording of a request.

For purposes of our discussion, the focus is upon CR 34 CR 34 – Production of Documents and Things… CR 34.01. Scope -- Any party may serve on any other party a request: (a) to produce and permit the party making the request, or someone acting on his behalf, to inspect and copy any designated documents (including writings, drawings, graphs, charts, photographs, phone-records, and other data compilations from which information can be obtained, translated, if necessary, by the respondent through detection devices into reasonably usable form), or to inspect and copy, test, or sample any tangible things which constitute or contain matters within the scope of Rule 26.02 and which are in the possession, custody or control of the party upon whom the request is served; OR (b) to permit entry upon designated land or other property in the possession or control of the party upon whom the request is served for the purpose of inspection and measuring, surveying, photographing, testing, or sampling the property or any designated object or operation thereon, within the scope of Rule 26.02. B.

Extent of the Duty to Produce An objection sometimes arises that because the documents are not in the actual control of the party at the time they are requested, they do not need to be produced. The rule states “possession, custody or control,” which implies more than mere physical possession. Unfortunately, Kentucky case law provides no actual guidance. But federal court cases interpreting F.R.C.P. 34 (virtually identical to Ky. CR 34) are replete with statements that construe the direction broadly: 1.

Party may be required to produce documents that are under his control without having actual possession of them. United

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Mercantile Agencies v Silver Fleet Motor Express, Inc., 1 F.R.D. 709 (D.C. Ky. 1941). 2.

In context of Fed. R. Civ. P. 34(a), so long as the party has the “legal right or ability” to obtain documents from another source upon demand, that party is deemed to have “control” sufficient to require him to obtain the documents. Mercy Catholic Med. Ctr. v Thompson, 380 F.3d 142 (3d. Cir. 2004).

3.

"Control" under FRCP 34 is to be broadly construed so that party may be obligated to produce documents requested, even though the party does not actually possess them. As long as party has legal right or ability to obtain documents from another source on demand, that party is deemed to have "control." Poole ex rel. Elliott v Textron, Inc., 192 F.R.D. 494 (D.C. Md. 2000). 

C.

While this is not technically the law in WC cases, if the issue should arise the argument can be made that the party refusing to produce the item should be compelled to do so under this reasoning.

Practical Methods of Getting What You Need KRS 342.260 states that “processes and procedure under this chapter shall be as summary and simple as reasonably possible.” In order of simplicity, the best options are: 

Request for Production (see rules, above) o

What if the opposing party refuses to produce the documents, citing either privilege or non-possession?

THEN FILE… 

Motion to Compel – Make a motion to the ALJ requesting that he or she order production of the documents in question. Make your argument concerning the relevance of the information and its availability to the opposing party, also highlighting why their objection (if any was given) is unwarranted.

And if all else fails… SUBPOENA. The authority to use subpoenas in the workers’ comp claim is also found in KRS 342.260(3-5), which discusses the powers and process of issuance: (3) …The board or any member thereof or any administrative law judge for the purpose of this chapter, may subpoena witnesses, administer or cause to have administered oaths, and examine or cause to have examined those parts of the books and records of the parties to a proceeding as relate to questions in dispute. 10  

(4) The sheriff shall serve all subpoenas of the board and administrative law judges and shall receive the same fee as provided by law for like service in civil actions. Each witness who appears in obedience to the subpoena of the board or any administrative law judge shall receive for attendance the fees and mileage for witnesses in civil cases in the Circuit Courts. (5) The Circuit Court shall, on application of the board, any member thereof, or any administrative law judge, enforce by proper proceedings the attendance and testimony of witnesses and the production and examination of books, papers, and records. In Cox v. Peabody Coal Co. (cited above), the Court interpreted KRS 342.260 as granting “broad powers” to ensure the discovery of necessary information, including not only the ability to subpoena witnesses to testify, but also the ability to issue subpoenas duces tecum and/or to order a party to produce documents. D.

Practical Pointers for Getting What You Want 1.

The adjuster’s claim file. a.

Production of these materials is often a point of contention between the parties, and often results in objections to discovery and motions to compel. Most defense attorneys will not easily surrender a carrier’s entire claim file. However, such resistance must be analyzed from a legal standpoint, to determine whether the attorney-client and/or work-product privileges would apply to prevent production, or if certain portions of the file are discoverable and therefore must be produced.

b.

As with many things, the carrier’s file is made up of many parts, some discoverable, some (probably) privileged.

c.

i.

Some innocuous materials (UR denials, TTD/medical ledgers, witness statements, first reports, etc.), which the opposing party cannot obtain from another source, should be provided.

ii.

The objections usually arise with regard to the adjuster’s notes, which contain privileged mental impressions, etc. concerning the claim, and the “investigative file” for the claim.

The party from whom documents are being requested is the employer; thus, the attorney/client privilege technically covers only the employer.

11  

d.

i.

However, KRE 503(a)(2) defines "representative of the client" and broadens this privilege to include any person having authority to obtain the legal services or to act on legal advice. This covers insurance adjusters.

ii.

There is a valid argument for producing the “investigative file.” Work injuries are investigated as part of the usual course of insurance companies’ business. Files concerning injuries are created and monitored daily; many, many of them do not turn into litigation. Therefore, an objection that any and all “investigative materials” were created in anticipation of litigation is not entirely accurate.

iii.

“Documents…prepared in anticipation of litigation…by or for [the] other party’s representative (including his…insurer…)” appears to protect the adjuster log/claim notes from discovery, except “upon a showing that the party seeking discovery has substantial need” of them and is unable without undue hardship to obtain the substantial equivalent, which seems unlikely to happen (absent an express alleged UCSP violation)

BUT…When does “anticipation” of litigation begin in a comp claim? 

One would argue that “anticipation” of litigation, from the adjuster’s perspective, begins when that adjuster (a “representative” of the employer for purposes of retaining legal advice) receives a letter of representation from an attorney for the injured worker, or some other communication establishing that an attorney is in the picture. o

e.

After that date, it is reasonable to argue that documents were prepared “in anticipation of litigation” (unless otherwise discoverable).

Production of the adjuster’s claim file when there is an allegation of bad faith. i.

This is a much more likely scenario for the ALJ to override objections to production of the file, particularly the adjuster’s notes, as they may contain the adjuster’s thought process for decisionmaking on the file, which may form the basis for plaintiff’s claim that there was no “reasonable

12  

foundation” for a denial of benefits or another such action. ii.

2.

Even in this instance, the ALJ would still be required to protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of the attorney or representatives of the employer.

Surveillance and reports of other parties (prepared prior to litigation). a.

Pre-litigation consultants. A pre-litigation consultant has a qualified privileged status the same as counsel's partners, associates, paralegals and other staff. When a consultant is hired for the purpose of evaluating claims and preparing consultative evaluation reports, those reports are certainly within the orbit of privileged matters; and where the physician became expert for trial purposes, his protective shield as an evaluation consultant with a privileged status was not destroyed and his consultation reports were privileged. Newsome by and through Newsome v. Lowe, 699 S.W.2d 748 (Ky. App. 1985).

b.

3.

Private investigators. i.

Always a subject of controversy: should an investigator’s video and/or reports be discoverable, even if the party by whom the investigator was retained does not intend to use the material during litigation and/or as evidence?

ii.

Reports and photographs made by a private investigator employed by defendants to observe plaintiff were work product which was discoverable, as the material represented a written record of plaintiff's life over the six-month period of observation, compiled by a surreptitious observer, where the results were relevant unstaged evidence of plaintiff’s activities which it would be impossible to duplicate. Transit Authority of River City (TARC) v. Vinson, 703 S.W.2d 482 (Ky. App. 1985) (see further discussion, above)

Medical records. Obviously, production of relevant medical records is one of the most basic (and often the first) requests made by any attorney upon entering an appearance in a workers’ comp claim. But once 13

 

available records are obtained from the opposing party, there may be others that are necessary. a.

Request necessary records using plaintiff’s Form 106.

b.

Allow reasonable time for response; follow up by phone or by second request.

c.

If no response is had from provider, or there is refusal for some reason, obtain a subpoena from the ALJ (see above). 

4.

Note that a subpoena, not a Motion to Compel, is necessary to obtain this information, as the provider is not a party to the claim. This would be different if the provider was made a party for another reason (e.g., a medical dispute).

Wage records/personnel files from employers other than the defendant. It is often necessary to obtain information from an employer for whom the plaintiff worked after his or her injury (e.g., for purposes of determining post-injury job duties or earnings) or from past employers (e.g., for purposes of determining concurrent wages at the time of the injury). While this information can be requested from plaintiff, technically it is not in the possession or control of that party and they can refuse to produce it on that ground. 

However, as previously discussed, plaintiff may not be able to sidestep production on this basis.

In lieu of requesting production of the documents directly from plaintiff, a release can be presented for execution which authorizes release of relevant information. 

5.

A sample release is attached. The non-party employer does not have to honor the release (though most will); some may require their own release.

Social Security information. This is fairly straightforward. Plaintiffs should be expected to produce this information under the principles set forth above. In instances where this is not done or is not feasible, an SSA release can be executed and used to request the necessary documents. a.

The release, SSA-3288, can be obtained at the following link: http://www.ssa.gov/online/ssa-3288.pdf. 14

 

b.

6.

Once the release is executed, a version of the attached request letter can be used to obtain records from the local Social Security office.

Educational records. Though such information is rarely at issue, in the event that the plaintiff cannot recall (or defendant requests confirmation), transcripts or proof of graduation can be requested from schools. 

7.

A sample release is attached.

Cell phone records. This type of request, though rare, is likely to draw a vehement objection. However, there are instances where such records can be very relevant. a.

For example, if a plaintiff claims a hand/wrist injury such as carpal tunnel syndrome, yet is a heavy user of text messaging, it may be very relevant to determine how much they use their phone to do this activity, and how this level of activity affects the condition.

b.

Motions to compel are likely to be quite prevalent with this type of request; granting of same by an ALJ will hang on the type of injury and the facts that exist to justify production.

15  

16  

EMPLOYMENT WAIVER AND CONSENT

I, [PLAINTIFF], having filed a claim for workers' compensation benefits in Kentucky, do hereby waive any privilege I may have and hereby authorize any and all past, present or future employers to furnish to [REQUESTING PARTY, LAW FIRM], any information or written material related to my work duties, wage information, etc. This authorization shall remain valid for One Hundred Eighty (180) days following its execution. A photocopy of the authorization may be accepted in lieu of the original. Signed at _____________, Kentucky, on this the ___ day of _____________, 2012.

[PLAINTIFF] [Name]

Social Security Number: ______________________

WITNESS (alternatively, release may be notarized)

17  

18  

SAMPLE LANGUAGE -- SSA REQUEST

Social Security Office ATTN: Records Custodian [Address] RE:

[Plaintiff Name] SSN: XXX-XX-XXXX DOB: XX-XX-XX

To Whom It May Concern: Please be advised that we represent [party] in the above-referenced Kentucky workers’ compensation claim. Enclosed please find an SSA-3288 authorization executed by the above-mentioned claimant. We request that you provide us with a complete copy of the requested file information on CD, if possible. We appreciate your cooperation and prompt attention to this request. If you should have any questions, please do not hesitate to contact us. Best regards,

[Requesting Party]

Enclosure:

SSA-3288

19  

20  

AUTHORIZATION FOR RELEASE OF SCHOOL RECORDS

I, ____________________________, the undersigned, hereby authorize any official, employee or agent of any educational and/or vocational institution which I have attended to release any and all records relating to my school grades, attendance, performance and medical history or condition at said school or at any school within said school system to [REQUESTING PARTY, ADDRESS, PHONE] This authorization shall remain valid for One Hundred Eighty (180) days following its execution. A photocopy of the authorization may be accepted in lieu of the original. Signed at _____________, Kentucky, on this the ___ day of _____________, 2012.

[Name]

Social Security Number: ______________________

Date of Birth: ______________________________

__ WITNESS (alternatively, release may be notarized)

21  

22  

ETHICAL ISSUES IN DEPOSITION PRACTICE Bonnie Hoskins

________________________ THE RULES 803 KAR 25:010 SECTION 17

________________________ ________________________

 Discovery

and the taking of depositions shall be in accordance with the provision of Civil Rules 26 to 37, inclusive, except for Civil Rules 27, 33, and 36, which shall not apply to practice before the Administrative Law Judges or the Board.

________________________ ________________________ ________________________ ________________________

________________________ THE RULES: CIVIL RULE 26.02(1)

________________________

 Civil





Rule 26.02(1) “Parties may obtain discovery regarding any matter not privileged which is relevant to the subject matter involved in the pending action whether it relates to the claims or defense of the party seeking discovery to the claim or defense of any other party. Relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead the discovery of admissible evidence.”

23

________________________ ________________________ ________________________ ________________________ ________________________

________________________ PURPOSES OF DEPOSITION

________________________



Gather information about what you don’t know

________________________



Add detail to what you do know

________________________



Clarify issues

________________________



Rule out defenses

________________________



Fully investigate

________________________



Lock in claimant’s testimony to support theory

________________________ ________________________

WITNESS PREPARATION  Explain

________________________

process

________________________

 Explain

how to answer questions, with examples

 Explain

the issues

 Explain

the importance of listening

 Explain

what do to when objections are

________________________ ________________________ ________________________

made

________________________ ________________________

WITNESS PREPARATION  Instruct

how and when to explain answers

 Review

exhibits and potential exhibits

________________________ ________________________ ________________________

 Practice

questions and answers

 Practice

cross-examination

________________________ ________________________

 Explain

style points, such as who to look at and how to dress

24

________________________ DEPOSITIONS ON CROSS-EXAMINATION 



________________________ ________________________

Do you understand your answers must be verbal? If you answer, I assume you understand

________________________

Ascertain competence  



Court reporter will write down questions & answers

Explain how answers must be given 



________________________

Explain how a deposition works 



________________________

Are you taking any medications? Are you under any emotional distress?

________________________

Explain how the deposition will be used.  

As discovery At hearing or trial

________________________ WITNESS RESPONSES APPROPRIATE FOLLOW-UP QUESTIONS

________________________ ________________________

Yes (Why? How? When? What?)  No ( Why not?)  I don’t know (Who would know? How can we find out?)  I don’t remember (What would help you remember?)  I don’t understand the question (I’ll rephrase, again and again, if necessary)  I’m not sure (Why aren’t you sure?)  I need a break (Can we finish this line of Q’s?) 

________________________ ________________________ ________________________ ________________________

________________________ OBJECTIONS

________________________

 Rule

32.04(3)  Objections to the competency, relevancy, or materiality of testimony are not waived by failing to make them at the deposition unless the grounds for the objection could have been obviated or removed if presented at the time

25

________________________ ________________________ ________________________ ________________________ ________________________

________________________ OBJECTIONS

________________________ ________________________

 Rule

32.04(3)  Curable objections are waived by failing to make them

________________________ ________________________ ________________________ ________________________

________________________ NECESSARY OBJECTIONS (MAY BE WAIVED)  All

________________________ ________________________

objections as to form. Vague Argumentative Compound Question Mischaracterizing prior witness testimony Leading Legal conclusion Speculation 

________________________ ________________________ ________________________ ________________________

________________________ NO REQUIREMENT FOR OBJECTION (MAY NOT BE WAIVED)

________________________ ________________________

 Relevance  Prejudicial

impact outweighs probative value  Hearsay  Cumulative  Confusion of the issues  Competency  Foundation  Assuming facts not in evidence

________________________ ________________________ ________________________ ________________________

26

________________________ ________________________

INSTRUCTION NOT TO ANSWER  Privilege

________________________

-- Rule 30.03(3)

Must be your client Must preserve a legitimate privilege To enforce a limitation on evidence directed by the Court Or to make a motion, under Rule 30.04 

________________________ ________________________ ________________________ ________________________

________________________ MOTION TO TERMINATE OR LIMIT EXAMINATION

________________________ ________________________

Rule 30.04  At any time  During the taking of the deposition,  On motion of a party or the deponent  And upon a showing that the examination is being conducted in bad faith  Or in such manner as unreasonably to annoy, embarrass, or oppress the deponent or party  The court may order the deposition to cease or may limit the scope and manner of the taking of the deposition  The provision of Rule 37.04 apply to the award of expenses incurred in relation to the motion 

________________________ ________________________ ________________________ ________________________

________________________ RULE 37.04 COSTS AND SANCTIONS 

________________________ ________________________

If a party or properly designated officer, director, or managing agent of a party fails to appear for deposition

________________________



after being served with proper notice

________________________



the court shall require the party failing to act or the attorney advising him, or both, to pay the reasonable expenses, including attorney’s fees incurred as a result of the failure to attend

________________________



________________________

Unless the Court finds that that the failure to attend was substantially justified .

27

________________________ ABUSES 



________________________

Coaching prior to the deposition to limit opposing party’s access to information SCR 3.130(3.4) Fairness to opposing party and counsel provides: A lawyer shall not: (a) unlawfully obstruct another party's access to evidence. A lawyer shall not counsel or assist another person to do any such act; (b) knowingly falsify evidence, counsel or assist a witness to testify falsely,

________________________ ________________________ ________________________

Objecting to suggest answers or impede the deposition process “An objection must be stated concisely in a nonargumentative and non-suggestive manner.” Rule 30.03(3)



Conferring



Attorney Testifying



Stopping Deposition to “Discuss” off the record

________________________ ________________________

________________________ RULE 30.02(6) DEPOSITIONS 

________________________ ________________________

In a Deposition Notice, a party: May name a corporation, partnership, or other entity  And must describe with reasonable particularity the matters on which examination is requested 

________________________ ________________________



In response:

________________________

The named entity must designate one or more people who consent to testify • The named entity may set out the matters upon which each person will testify • The person(s) testifying do so on behalf of the entity and bind the entity •

________________________

________________________ 30.02 DEPOSITIONS OBLIGATIONS OF COUNSEL  Sending 

________________________ ________________________

Counsel

Notice may not be overbroad

 Receiving

________________________

Counsel

Review to look at scope of notice Work with client to identify proper persons  Counsel must satisfy herself that those identified are in fact the proper people  Prepare for appropriate objections

________________________

 

________________________ ________________________

28

WHAT IF YOU KNOW YOUR CLIENT HAS LIED DURING THE DEPOSITION?

________________________ ________________________ ________________________



What do you do if you know your client has deliberately lied or misled?



What is your ethical obligation?

________________________ ________________________ ________________________ ________________________

________________________ SCR 3.130(3.3) 





________________________ ________________________

SCR 3.130(3.3) Candor toward the tribunal (a) A lawyer shall not knowingly:… offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence, … that the lawyer reasonably believes is false.

________________________

(b) A lawyer who represents a client in an adjudicative proceeding and who knows that a person intends to engage is engaging or has engaged in criminal or fraudulent conduct related to the proceeding shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal.

________________________

________________________ ________________________

________________________ PRACTICE TIPS

o

o

o

o

________________________ ________________________

Interrupt witness and ask for a recess • Advise client that the truth must be told At next recess  Advise client the testimony must be corrected After Deposition  Again advise client of your ethical duties What if client refuses to correct  Tell the other side?  Withdraw?

________________________ ________________________ ________________________ ________________________

29

________________________

IF QUESTION TO WITNESS CALLS FOR DISCLOSURE OF PRIVILEGED INFORMATION 

________________________

Interrupt witness and explain to opposing counsel that a recess must be taken to consult with client to avoid a potential “ethical” dilemma

________________________ ________________________ ________________________



If opposing counsel objects, ask that the line of questioning be ceased until after the next recess



If opposing counsel still objects, and witness is your client, instruct the witness not to answer and advise opposing counsel he/she may return to the line of questioning after you have had an opportunity to consult with your client regarding the potential ethical dilemma

________________________ ________________________

________________________ DEPOSITION IN STATES IN WHICH YOU ARE NOT ADMITTED

________________________ ________________________

Know the rules in the state which you are licensed Check the rules in the state where the deposition is to take place  Check State Code of Professional Responsibility and its associated Ethical Considerations and Disciplinary Rules regarding “unauthorized practice of law” in the state where the deposition is to take place  Consider Pro Hac Vice  

________________________ ________________________ ________________________ ________________________

________________________ GIVING PROFESSIONAL CONTROL OF LEGAL WORK TO ANOTHER 

What if an insurance company has “management guidelines” that require the lawyer to obtain approval before taking a deposition?  “A lawyer shall not aid a non-lawyer in the unauthorized practice of law.”  Any Person who engages in the practice of law in the Commonwealth of Kentucky without a license issued by the Supreme Court of Kentucky to do so may be subject to an injunction or a finding of contempt by the Supreme Court.  Under SCR 3.460 the Kentucky Bar Association is authorized to initiate an investigation into any report of unauthorized practice of law.  The unauthorized practice of law is also a misdemeanor criminal offense in violation of KRS 524.130, and can be the subject of a criminal complaint issued by the county attorney of the county where it occurs.

30

________________________ ________________________ ________________________ ________________________ ________________________ ________________________

________________________ GIVING PROFESSIONAL CONTROL OF LEGAL WORK TO ANOTHER

________________________

Majority Opinion

________________________





You may enter into an agreement that gives insurance carrier the right to control the defense of the insured but the agreement may not direct or regulate your professional judgment. Contract should not require approval before conducting discovery, taking a deposition, or consulting with an expert witness.

31

________________________ ________________________ ________________________ ________________________

32

CALCULATING BENEFITS ON REOPENING: REAL CASE SCENARIOS Denise Davidson, Esq.

I.

THE STATUTE KRS 342.125. Reopening and review of award or order -- Grounds -Procedures -- Time limitations -- Credit for previously-awarded retraining incentive benefits or income benefits awarded for coal-related pneumoconiosis. **** (4) Reopening and review under this section shall be had upon notice to the parties and in the same manner as provided for an initial proceeding under this chapter. Upon reopening, the administrative law judge may end, diminish, or increase compensation previously awarded, within the maximum and minimum provided in this chapter, or change or revoke a previous order. The administrative law judge shall immediately send all parties a copy of the subsequent order or award. Reopening shall not affect the previous order or award as to any sums already paid thereunder, and any change in the amount of compensation shall be ordered only from the date of filing the motion to reopen. No employer shall suspend benefits during pendency of any reopening procedures except upon order of the administrative law judge. **** (6) In a reopening or review proceeding where there has been additional permanent partial disability awarded, the increase shall not extend the original period, unless the combined prior disability and increased disability exceeds fifty percent (50%), but less than one hundred percent (100%), in which event the awarded period shall not exceed five hundred twenty (520) weeks, from commencement date of the original disability previously awarded. The law in effect on the date of the original injury controls the rights of the parties. (7) Where an agreement has become an award by approval of the administrative law judge, and a reopening and review of that award is initiated, no statement contained in the agreement, whether as to jurisdiction, liability of the employer, nature and extent of disability, or as to any other matter, shall be considered by the administrative law judge as an admission against the interests of any party. The parties may raise any issue upon reopening and review of this type of award which could have been considered upon an original application for benefits.

33

II.

CASE LAW A.

Period of prior award measured from date of injury or manifestation, extended by periods of TTD payable as a result of permanently disabling injury, and not TTD payable as a result of temporary exacerbations. Crittenden County Health & Rehab v. Sisco, Claim No. 2008-01130 & 2005-71525 (11/7/11). Claimant sustained a low back injury on 9/14/05. She settled that claim on 3/14/08 for a lump sum equivalent to weekly benefits of $103.68. In the meantime, she sustained a second low back injury on 9/23/07. She filed a claim for benefits as a result of this second injury on 9/11/08 and on 12/15/08, filed a Motion to Reopen the 2005 claim. On 4/8/09, ALJ Joiner issued an interlocutory award of TTD and medical benefits related to the 2007 injury. Claimant was paid TTD through 2/8/10 and the ALJ eventually issued a final opinion and award on 5/23/11, relating to both the reopening and the 2007 injury claim. The ALJ concluded that the 2007 incident was merely a temporary exacerbation of the earlier injury and that claimant’s ongoing impairment was due entirely to the 2005 injury. The ALJ found a permanent impairment rating yielding a PPD benefit of $198.72, from which he subtracted the $103.68 weekly benefit paid pursuant to the earlier settlement. He awarded this increased PPD benefit to run from 2/9/10 (conclusion of TTD payable as a result of the 2007 injury), for a period ending 425 weeks from and after 3/14/08 (date of settlement of the 2005 injury). The Board vacated and reversed, holding: 1.

Benefits on reopening were payable from and after the date of reopening, 12/15/08;

2.

Benefits on reopening were payable through a period ending 425 weeks after PPD benefits commenced with respect to the 2005 injury, extended by any periods of TTD payable as a result of that injury. Citing Sweasy v. Wal-Mart, 295 S.W.3d 835 (Ky. 2009), the Board held that PPD benefits commence on the date permanent impairment or disability arises, which is the date on which the work-related trauma produces the harmful change to the human organism; i.e., the date of injury, unless there is evidence of a period of latency before the injury became manifest. Thus, benefits on reopening were payable for a period ending 425 weeks from and after 9/14/05, extended by any intervening periods of TTD benefits payable as a result of the 2005 injury;

3.

The period of PPD benefits payable as a result of the 2005 injury was not to be extended by TTD benefits payable as a result of the

34

2007 injury, inasmuch as the ALJ determined that said injury resulted in no PPD; and 4.

B.

The ALJ was required to compare the claimant’s actual disability at the time of settlement with her disability at the time of reopening. In this case, the ALJ had merely subtracted from the weekly benefit calculated upon reopening the amount of weekly benefit represented by the lump sum settlement, without making a finding as to her permanent impairment rating and disability at the time of settlement. However, a settled award is the product of compromise, and no statement contained therein is binding upon reopening.

ALJ must make a finding as to both impairment and disability existing at time of prior award and at time of reopening. Dunn v. Slater, 2008 WL 2484933, 2-3 (Ky. June 19, 2008). This unpublished decision of the Supreme Court illustrates that the ALJ’s obligation to render an independent finding as to the claimant’s actual disability at the time of settlement extends not only to the permanent impairment rating, but also to the multipliers. The claimant crushed the middle three fingers of his left hand on November 7, 2001, while working for the defendant-employer as a heavy equipment operator. Dr. Wolff treated the injury and performed surgery. He released the claimant to return to work on April 1, 2002, and released him from treatment in December 2002. At that time, he assigned a 4.5 percent permanent impairment rating but failed to address the claimant's physical capacity to return to work as a heavy equipment operator. The claimant found work in a cabinet-making business and did not return to coal mining. The claimant settled his claim without legal representation based on the 4.5 percent, with no multiplier. His condition deteriorated and he filed a motion to reopen. Now represented by counsel, the claimant secured an IME report, in which his impairment was rated at 16 percent. The employer secured a report from Dr. Wolff opining that the claimant’s permanent impairment at the time of reopening was 7 percent. The claimant testified that he experienced more difficulty performing tasks and all physicians agreed he was not capable of performing his pre-injury work. The ALJ made a specific finding that the claimant’s rating at the time of settlement was 4.5 percent and that his rating at reopening was 16 percent. The ALJ further found that the claimant had never been capable of returning to his pre-injury work. The ALJ awarded increased benefits from the date of reopening, based on the 16 percent with the 3-multiplier, initially crediting the employer for only the 4.5 percent with no multiplier. However, on reconsideration, the 35

ALJ corrected this to provide for a credit based on the 4.5 percent with the 3-multiplier. Noting that the employer was entitled to the benefit of its bargain at the time of settlement, Supreme Court affirmed, citing Whittaker v. Rowland, 998 S.W.2d 479 (Ky. 1999), Beale v. Faultless Hardware, 837 S.W.2d 893 (Ky. 1992), and Newberg v. Davis, 841 S.W.2d 164 (Ky. 1992). C.

Motion to Reopen to conform award under KRS 342.730(1)(c)2 – date upon which modification of award commences. Muthler v. Climate Control of Ky., 2011 WL 1642447 (Ky. Apr. 21, 2011). In this unpublished opinion, the Supreme Court held that although KRS 342.125(4) requires "any change in the amount of compensation" to be ordered "only from the date of filing the motion to reopen," KRS 342.730(1)(c)(2) states unequivocally that weekly benefits for partial disability "shall be" twice the amount otherwise payable "[d]uring any period of cessation" of employment at the same or a greater wage. Mindful that KRS 342.730(1)(c)(2) is a more specific provision that applies only to a discrete class of awards entered at reopening, the court concluded that the legislature intended by its unequivocal language to exempt from the limitation imposed by KRS 342.125(4) those awards entered for the purpose of conforming the payments ordered previously with the requirements of subparagraph 2. of KRS 342.730(1)(c). In other words, KRS 342.125(4) does not govern the date for commencing such an award. KRS 342.730(1)(c)(2) generally requires the award to commence with the cessation of employment at the same or a greater wage. The facts were highly complicated, but essentially involved a finding by the original ALJ that the claimant would be entitled to the 2-multiplier during any period of cessation of employment at equal or greater wages, with a later Order on Reconsideration directing the claimant to file evidence of his post-injury earnings in self-employment. The employer argued that he was not entitled to the double benefit until the date of filing the motion to reopen. The claimant argued he was entitled to the double benefit from the date of his original cessation of employment at equal or greater wages. However, the ALJ’s later Order was considered res judicata as to the claimant’s failure up to that point to submit substantial evidence of such cessation. Thus, the appellate court held that the 2multiplier could not pre-date that Order, even though it could pre-date the motion to reopen. The Court of Appeals had observed, “Were we to adopt the statutory construction asserted by Climate Control, this would leave claimants no option but to file a motion to reopen immediately upon cessation of qualifying employment in order to ensure that they received the full benefit provided by the statute. This would serve not only to create excessive and potentially unnecessary litigation, but would also

36

discourage those claimants who might otherwise make a good faith attempt to resolve these issues informally with their employers.” It remains an open question whether it would be considered bad faith for an employer/carrier to compel an employee to file a motion to reopen upon cessation of employment at equal or greater wages in order to obtain the double benefit. However, this case certainly suggests that such a practice would be highly discouraged. Moreover, it removes any incentive for the employer/carrier to force the employee to file, since the double benefit will be retroactive to the date of cessation of employment and not merely the date of filing the motion to reopen. D.

Recalculation of weekly benefit appropriate even where reopening of settlement agreement is solely for purpose of conforming award to KRS 342.730(1)(c)2 following cessation of employment at equal or greater wages. Shaw v. Jane Todd Crawford Hosp., 2010 WL 174088 (Ky. App. Jan. 15, 2010). The claimant was a nurse with two separate work-related injuries that were settled in a single Form 110 agreement, approved on 1/13/03. Under the agreement, she received benefits based on a 10 percent for one injury and 25 percent for the other injury, for a total weekly benefit of $107.59, paid in a lump sum. The claimant had returned to her usual work at equal or greater wages at the time of settlement, but shortly thereafter was placed on restricted duty. She ultimately left her employment with the hospital on 4/28/06, and died of non work-related causes on 6/11/08. In the meantime, on 1/23/06, she had filed a motion to reopen the earlier settlement, based on a worsening of condition. Following her death, and a convoluted procedural course, the claimant’s estate was ultimately substituted, but there was no evidence of any survivors to whom survivor benefits might be paid. For this reason, the claimant’s argument that the 425-week period represented by the settlement should be measured from the date of the settlement rather than the date TTD benefits terminated, was deemed moot. Recall that this is the argument lost by the claimant in Crittenden County Health & Rehab v. Sisco, supra. In this case, the argument was moot because whether the PPD period began on the date TTD benefits terminated or the date the settlement agreement was approved, the 425-week period encompassed by the lump sum settlement would still extend beyond the claimant’s date of death. Since there were no survivors to receive any such benefits, the point was moot. The claimant further argued, however, that the ALJ erred in analyzing her permanent impairment rating and recalculating the weekly benefit payable at the time of settlement. The claimant’s argument was an interesting one. She argued that because her motion to reopen was merely to 37

conform the weekly benefit to KRS 342.730(1)(c)2 during her cessation of employment at equal or greater wages, and did not allege a worsening of impairment, it was error for the ALJ to look beyond the weekly benefit stated in the agreement. At the time of the settlement, there was evidence from Dr. Lowe of a 4 percent rating for the first injury and a 25 percent rating for the second, which the ALJ found persuasive on the issue of claimant’s impairment at the time of settlement. These ratings combined to yield a weekly benefit rate of $90.02. Thus, the ALJ on reopening awarded an additional $90.02 per week to be paid from 4/28/06, the date of cessation of employment at equal or greater wages, through 6/11/08, the date of claimant’s passing. This award was affirmed by the Court of Appeals. Thus, the claimant did not receive twice the weekly benefit agreed to by the parties during settlement, but only an additional amount matching the weekly benefit to which she would have been entitled had the claim been decided rather than settled.

38

CRITTENDEN COUNTY HEALTH & REHAB V. SISCO

OPINION ENTERED: November 7, 2011 CLAIM NOS. 200801130 & 200571525 CRITTENDEN COUNTY HEALTH & REHAB VS.

PETITIONER

APPEAL FROM HON. RICHARD M. JOINDER, ADMINISTRATIVE LAW JUDGE

PATRICIA SISCO, EMILY RAYES-PRINCE, M.D., INJURED WORKERS' PHARMACY, and HON. RICHARD M. JOINER, ADMINISTRATIVE LAW JUDGE

RESPONDENTS

OPINION VACATING IN PART, REVERSING IN PART, AND REMANDING ****** BEFORE:

ALVEY, Chairman; COWDEN and STIVERS, Members.

ALVEY, Chairman. Crittenden County Health and Rehab ("Crittenden County") appeals from the opinion and award rendered May 23, 2011, by Hon. Richard M. Joiner, Administrative Law Judge ("ALJ") awarding temporary total disability ("TTD") benefits, an increase in permanent partial disability ("PPD") benefits, and medical benefits to Patricia Sisco ("Sisco"). Crittenden County also appeals from the order ruling on the petition for reconsideration entered June 29, 2011. Sisco sustained a low back injury on September 14, 2005, which was resolved by settlement agreement approved March 14, 2008. As a result of that injury, Sisco was paid TTD benefits from September 15, 2005 through November 30, 2005, and again from March 9, 2006, through January 29, 2007. Sisco sustained a second low back injury on September 23, 2007. We will not engage in a lengthy discussion of the facts and will only review the relevant procedural history. Periods of PPD benefits and TTD benefits are also relevant to this appeal and will be discussed below. On March 14, 2008, a Form 110-I settlement agreement was approved by Chief Administrative Law Judge, Sheila Lowther. By virtue of this agreement, the parties settled PPD benefits for the claim stemming from the September 14, 2005, injury for a lump sum of $37,299.26 based upon a 15% impairment rating. On September 11, 2008, Sisco filed a claim for benefits stemming from her second injury which occurred on September 23, 2007. On April 8, 2009, the ALJ rendered an opinion and award wherein he determined Sisco had sustained a second injury on September 23, 2007. The ALJ awarded TTD benefits beginning January 28, 2008, due to the 2007 injury, and provided Crittenden County a credit in the amount of $103.68 for the PPD benefits paid pursuant to the [sic] in the settlement of the 2005 injury. Sisco was paid TTD benefits from January 28, 2008 through February 8, 2010, minus the $103.68 credit. Sisco also filed a 39

motion to reopen the 2005 claim on December 15, 2008,1 alleging a worsening of her condition and entitlement to an increase in disability benefits. In an opinion and award on the bifurcated issues of compensability and liability for the medical benefits stemming from the September 23, 2007, injury rendered April 8, 2009, the ALJ ruled as follows: The award of temporary total disability benefits will produce a period of overlapping disabilities between the award for permanent partial disability relating to the September 15[sic], 2005, injury and the award of temporary total disability relating to the September 23, 2007, injury. Cabe v. Skeens, 422 S.W.2d 884 (Ky. 1967). The injury of September 23, 2007, was not entirely independent of the injury of September 15[sic], 2005. Therefore, there should be a deduction for the income benefits that have been paid on the permanent partial disability award from the income benefits awarded herein for temporary total disability. ... 2. The plaintiff, Patricia Sisco, shall recover of the defendant/employer, Crittenden County Health and Rehab, and/or its insurance carrier with respect to the injury of September 23, 2007, temporary total disability benefits at the rate of ($240.00 – $103.68) equals [sic] $136.32 per week from January 28, 2009, through the present and continuing until further order of the administrative law judge, together with interest at the rate of 12% per annum on all past and unpaid installments of compensation and defendant shall take credit for any compensation heretofore paid. As it pertains to this appeal, in the opinion and award rendered May 23, 2011, the ALJ found: Was there an injury as defined by the Act? This threshold issue is whether Patricia Sisco had an injury as defined in the Workers' Compensation Act. Under the Kentucky Workers' Compensation Act, "injury" means, in part: …any work-related traumatic event or series of traumatic events, including cumulative trauma, arising out of and in the course of employment which is the proximate cause producing a harmful change in the human organism evidenced by objective medical findings. "Injury" does not include the effects of the natural aging process, and does not include any communicable disease unless the risk of contracting the disease is increased by the nature of the employment.... Here, I previously found: 1

Although the motion to reopen was dated September 12, 2008, it was not filed until September 15, 2008.

40

Here, the employer stipulated that there was an injury on September 15[sic], 2005. The employer disputes that there was a new injury in September 2007. What has happened here is that Ms. Sisco was employed by Crittenden County Health and Rehab for a long time. On September 15[sic], 2005, while assisting a patient, Ms. Sisco injured her back. This resulted in two low back surgeries performed by Dr. Davies. After Ms. Sisco was released to return to work, she did return to work, and in September 2007 she slipped and fell. Following this fall there were minor changes on physical examination, but Dr. Davies was not able to get requested imaging studies to be able to definitively state his opinion on the question of whether the new traumatic event caused a change in physical condition. While Dr. Travis did not think the September 2007 fall constituted an injury, Dr. Guarnaschelli stated, after having done a record review and physical examination of Ms. Sisco: Clinically and by history, the patient has undergone two operative procedures and an extensive amount of conservative medical management following her 2005 injuries, and has been capable of returning to limited duty to work as of the time of her 2007 injury. Since her subsequent 2007 injury until the present time however, this patient continues with an exacerbation of her low back, mid axial and overall regional complex pain syndrome, for which she is not functioning either with routine activities at home or at work. Although examination and radiographic studies do not allot or clarify the proximate cause of her current pain syndrome, it is apparent that the initial injury of 2005, followed by two major operative procedures and adjunctive conservative measures has served as the main, although not necessarily the sole, [sic] cause of her current pain syndrome. The subsequent age-related changes in the most recent slip and fall of 2007 have served as an aggravating event, but I believe by history alone, and by review of her medical evolution and history, that the 2005 workrelated injury has been the major and/or proximate cause of her current symptoms. I believe that the current recommendations by Dr. Davies and by Dr. Prince are 41

appropriate, and in addition to a medical protocol, hopefully without narcotic medications, but with the use of words and other conservative measures provided by the pain management, this overall pain syndrome can be managed, and that any subsequent surgical intervention is best avoided. I find Dr. Guarnaschelli's opinion to be well informed and reasoned. What he describes is a significant injury in 2005 followed by what we hope will be a minor injury in 2007. However, the diagnostic testing has not been done to determine what the extent of the injury might be. Whether it is called an exacerbation or an aggravation, the fall in September of 2007 was an injury. It carries with it the obligation to provide medical treatment and paid [sic] temporary total disability benefits if applicable. I find nothing in the newly adduced evidence to change this conclusion that there was an injury in September 2007. Therefore my final finding and conclusion is that there were injuries both in September 2007 and on September 15[sic], 2005. What is the appropriate period of Temporary Total Disability? Temporary total disability is defined in the Act as "the condition of an employee who has not reached maximum medical improvement from an injury and has not reached a level of improvement that would permit a return to employment." KRS 342.0011(11)(a). I previously concluded that the appropriate period of temporary total disability was: The employer concedes temporary disability from September 15, 2005, through November 30, 2005, and March 9, 2006, through January 29, 2007. These periods relate to the September 2005 injury. Following the September 2007 injury, Ms. Sisco continued to work on limited duty until she was taken off work entirely in January 2008 by Dr. Davies. She has not worked since then. I conclude that during the time from January 28, 2008, until the present and continuing, Patricia Sisco has not reached maximum medical improvement and has not reached a level of improvement that would permit a return to employment. This latter period of time was attributed to the September 2007 injury. That period of temporary total disability has now ceased. It ceased with Ms. Sisco achieving maximum medical improvement on February 8, 2010, when Dr. Davies placed her at maximum medical improvement. Therefore, the final determination with respect to temporary total disability 42

is that Ms. Sisco was temporarily totally disabled as a result of the September 2005 injury from September 15, 2005, through November 30, 2005, and then from March 9, 2006, through January 29, 2007. This is assessable against the September 2005 injury. Following the September 2007 injury Ms. Sisco was temporarily totally disabled from January 15, 2008, through February 8, 2010. This is assessable against the September 2007 injury. ... Is the disability or impairment proximately caused by the injury? This is a thornier question. It is apparent to me that the entire impairment is caused by one or the other of the injuries or by a combination of both. After considering the evidence of causation, particularly the report of Dr. Travis, I believe that it is appropriate to assess the entire permanent impairment against the injury of September 15[sic], 2005. ... Should any benefits be apportioned between parties or causes? Apportionment is appropriate when there are multiple causes of disability. In this case, the ultimate cause of permanent disability is primarily the injury of September 15[sic], 2005, with the September 23, 2007, incident being a temporary aggravation of that condition. ... 8. The benefits shall be calculated based on a 27.60% disability rating subtracting the weekly amount previously paid on the settlement. The permanent partial disability benefits shall be suspended during the period of temporary total disability attributable to the injury on September 23, 2007. 9. The settlement with respect to the September 14, 2005, provides for a lump-sum payment as of March 14, 2008, at the rate of $103.68 per week [sic] AWARD It is hereby ORDERED AND ADJUDGED by the Administrative Law Judge as follows: 1. The plaintiff Patricia Sisco, shall recover of the defendant/employer, Crittenden County Health and Rehab, and/or its insurance carrier with respect to the September 15[sic], 2005, injury, temporary total disability benefits at the rate of $230.40 per week from September 15, 2005, through November 30, 2005, and March 9, 2006, through January 29, 2007.

43

2. The plaintiff, Patricia Sisco, shall recover of the defendant/employer, Crittenden County Health and Rehab, and/or its insurance carrier with respect to the September 23, 2007, injury, temporary total disability benefits at the rate of $240.00 per week from January 15, 2008, through February 8, 2010. 3. The plaintiff, Patricia Sisco, shall recover of the defendant/employer, Crittenden County Health and Rehab, and/or its insurance carrier with respect to the September 15[sic], 2005 injury permanent partial disability benefits at the rate of $198.72 beginning February, 2010 for a period which extends for 425 weeks from the date the settlement was approved, March 14, 2008 as extended by the period of temporary total disability benefits relating to the second injury of September 23, 2007, together with interest at 12% per annum on all past due and unpaid installments of compensation. The employer may take credit for compensation at the rate of $103.68 for the period which overlaps the period of the above award. In its petition for reconsideration, Crittenden County asked the ALJ to make certain corrections of typographical errors. In the same petition for reconsideration, Crittenden County also asked the ALJ to correct pages 25 and 26 of the opinion and award to reflect "[t]he permanent partial disability benefits shall not be suspended during the period of temporary total disability benefits attributed to the September 23, 2007, injury." Crittenden County also requested the third paragraph on page 26 be amended to read: The plaintiff, Patricia Sisco, shall recover from the defendant/-employer, Crittenden County Health and Rehab, and/or its insurance carrier with respect to the September 15[sic], 2005, injury permanent partial disability benefits at the rate of $190.87 beginning December 12, 2008, [sic] until December 16, 2014, (the date upon which the 425 week award terminates), together with interest at 12% per annum on all past due and unpaid installments of compensation. The employer may take credit for compensation at the rate of $103.68 per week for permanent partial disability benefits previously paid pursuant to the March 14, 2008, order approving settlement. In the June 29, 2011, order on reconsideration, the ALJ corrected the typographical errors pointed out by Crittenden County. Regarding the third issue raised in the petition for reconsideration, the ALJ ruled as follows: The employer's third contention is that the benefits for which credit was granted should terminate on December 16, 2014. The evidence of benefits paid comes from the settlement agreement. It shows that the payment made was a lump sum payment discounted as of the date of approval of the agreement. Therefore it is a payment of a stream of benefits that begin on the date of approval of the agreement. The parties, by agreement, altered the payment period. This distinguishes this case from the Sweasy case. See Sweasy v. Walmart[sic] Stores, Inc., 295 S.W.3d 835 (Ky. 2009). Had the parties wanted to reflect that the payments began as asserted by the employer on some date prior to the 44

approval of the agreement, the agreement would have reflected a pastdue amount with interest. Since no past-due amount or interest was mentioned, I inferred that the period for which payments were actually made began on the date of the approval of the agreement. I find no error in this inference. On appeal, Crittenden County argues the ALJ misapplied the law with respect to the credit for payment of PPD benefits and the proper period for which increased PPD benefits are payable. Specifically, Crittenden County argues pursuant to Sweasy v. WalMart Stores, Inc. #1269, 295 S.W.3d 835 (Ky. 2009), and KRS 342.730(1)(d), PPD benefits are to be paid from the date the impairment rises, which is when the workrelated injury produces a harmful change in the human organism. Sisco argues the ALJ improperly applied Sweasy to the claim sub judice, and his opinion and award should be affirmed. We disagree. It is undisputed Sisco is entitled to increased PPD benefits beginning December 15, 2008, through the date the 425 week award stemming from the September 14, 2005, injury date terminates. While we understand the ALJ's concern with Crittenden County receiving a greater discount than that to which it would appear to be entitled based upon the fact the 2008 settlement provided for no interest and assessed a discount on past due benefits, we are constrained by Sweasy. We must respectfully reverse the ALJ's opinion and award regarding the appropriate date for determining the beginning of the disability award period as a matter of law. In Sweasy, the Kentucky Supreme Court held: This appeal concerns KRS 342.730(1)(d), which provides compensable periods of 425 weeks for disability ratings of 50% or less and of 520 weeks for disability ratings that exceed 50%. KRS 342.730(1)(d)'s failure to specify when the period of a 425-week award begins may be read to imply legislative intent to permit such an award to begin on a date other than when the permanent impairment or disability of 50% or less arises. Yet, mindful of the policy and purpose for which KRS 342.730(1)(b)-(e) were enacted, we conclude that the legislature intended no such absurdity. Neither the Court of Appeals nor the employer points to a reasonable basis for an ALJ to commence benefits on a date other than the date that the permanent impairment or disability arises. Perceiving there to be no reasonable basis, we turn to the question of when permanent impairment or disability arises for the purpose of commencing partial disability benefits. A condition "arises" when it comes into being, begins, or originates. Thus, impairment arises for the purposes of Chapter 342 when workrelated trauma produces a harmful change in the human organism. That usually occurs with the trauma but sometimes occurs after a latency period. In either circumstance the authors of the American Medical Association's Guides to the Evaluation of Permanent Impairment consider the amount of impairment that remains at MMI to be "permanent." The fact they direct physicians to wait until MMI to assign a permanent impairment rating does not alter the fact that the permanent impairment being measured actually originated with the harmful change. We 45

conclude, therefore, that the compensable period for partial disability begins on the date that impairment and disability arise, without regard to the date of MMI, the worker's disability rating, or the compensable period's duration. The evidence compelled a finding that the claimant's injury produced permanent impairment and disability from the outset. Thus, it also compelled a partial disability award in which the compensable period began on the date of injury. The claim must be remanded for that purpose. Sweasy, 840, 841 (footnotes omitted). Based upon the foregoing, it was error for the ALJ to determine the 425 week payment period of PPD benefits did not begin until March 14, 2008, when the settlement agreement was approved, rather than commencing on September 14, 2005, when the injury and resulting disability occurred. No period of latency as discussed in Sweasy is present here. Specifically, Sisco began receiving TTD benefits immediately after her injury. It cannot be said that Sisco had any delay in onset of her disability. On remand, the ALJ shall determine the compensable period began commensurate with the September 14, 2005 injury date, extended by periods of TTD benefits pursuant to KRS 342.730(1). In rendering a decision, KRS 342.285 grants an ALJ, as fact-finder, the sole discretion to determine the quality, character, and substance of evidence. Square D Co. v. Tipton, 862 S.W.2d 308 (Ky. 1993). An ALJ may draw reasonable inferences from the evidence, reject any testimony, and believe or disbelieve various parts of the evidence, regardless of whether it comes from the same witness or the same adversary party's total proof. Jackson v. General Refractories Co., 581 S.W.2d 15 (Ky. 1977). An ALJ may reject any testimony and believe or disbelieve various parts of the evidence, regardless of whether it comes from the same witness or the same adversary party's total proof. Magic Coal Co. v. Fox, 19 S.W.3d 88 (Ky. 2000). In that regard, an ALJ is vested with broad authority to decide questions involving causation. Dravo Lime Co. v. Eakins, 156 S.W.3d 283 (Ky. 2003). Although a party may note evidence that would have supported a different outcome than that reached by an ALJ, such proof is not an adequate basis to reverse an appeal. McCloud v. Beth-Elkhorn Corp., 514 S.W.2d 46 (Ky. 1974). Rather, it must be shown there was no evidence of substantial probative value to support the decision. Special Fund v. Francis, 708 S.W.2d 641 (Ky. 1986). That said, we note KRS 342.285(2)(c) provides the Board may determine on appeal whether an order, decision, or award is in conformity to the provisions of KRS Chapter 342, and KRS 342.285(3) provides, in relevant part, the Board may "in its discretion" remand a claim to an ALJ "for further proceedings in conformity with the direction of the board." These provisions permit the Board to sua sponte reach issues even if unpreserved in order to properly apply the law. George Humfleet Mobile Homes v. Christman, 125 S.W.3d 288 (Ky. 2004). It is noted the parties resolved PPD benefits relating to the September 14, 2005, injury by agreement on March 14, 2008. It is important to note no statement in a settlement agreement is binding in future actions. Beale v. Faultless Hardware, 837 S.W.2d 893 (Ky. 1992). The claimant did not litigate her initial claim to completion. 46

Rather, she agreed to settle it based upon a 15% impairment enhanced by the 3.0 multiplier as set forth in KRS 342.730(1)(c)1. Sisco filed a motion to reopen the 2005 claim on December 15, 2008. A settled award is the product of a compromise. Therefore, the disability or permanent impairment rating contained in this agreement may or may not be accurate. Whittaker v. Rowland, 998 S.W.2d 479 (Ky. 1999), Beale v. Faultless Hardware, supra, and Newberg v. Davis, 841 S.W.2d 164 (Ky. 1992), explain that the parties to a settlement are entitled to the benefit of their bargain and that KRS 342.125(7) prohibits any statement contained in a settlement agreement from being considered as an admission against interest if the claim is reopened. As a consequence, the ALJ is required to compare the worker's actual disability at settlement with that at the time of reopening. If it has increased, the worker receives additional benefits for the difference. In this instance, the ALJ failed to make that assessment. Specifically, the ALJ failed to make a determination as to her occupational disability and the PPD benefits to which she is entitled prior to the date Sisco moved to reopen her claim for a worsening of her condition and increase, if any, of PPD benefits. The ALJ merely found Sisco to be entitled to benefits based upon a 24% impairment rating. In addition to assessing the correct date for onset of disability as discussed above, the ALJ shall determine the extent of Sisco's occupational disability immediately prior to December 15, 2008, whether she had an increase in disability as she alleged, and the extent of the worsening of her occupational disability. The award of PPD benefits shall not be extended by the period of TTD benefits due to the September 23, 2007, injury which the ALJ determined resulted in no permanent partial disability. Accordingly, the opinion and award rendered on May 23, 2011, by Hon. Richard M. Joiner, Administrative Law Judge, and the order ruling on the petition for reconsideration dated June 29, 2011, are hereby VACATED IN PART, REVERSED IN PART, AND REMANDED for further findings and entry of an amended opinion and award in conformity with the views expressed herein. ALL CONCUR. COUNSEL FOR PETITIONER: HON. SHARLOTT K. HIGDON P.O. BOX 995 PADUCAH, KY 42002 COUNSEL FOR RESPONDENTS: HON. GEORGE GARATT P.O. BOX 1196 PADUCAH, KY 42002 HON. BONNIE HOSKINS P.O. BOX 24564 LEXINGTON, KY 40524

47

RESPONDENTS: EMILY RAYES-PRINCE, M.D. 3025 CLAY STREET PADUCAH, KY 42001 INJURED WORKERS' PHARMACY P.O. BOX 338 METHUEN, MA 01844 ADMINISTRATIVE LAW JUDGE: HON. RICHARD JOINER 145 EAST CENTER STREET MADISONVILLE, KY 42431

48

SHAW V. JANE TODD CRAWFORD HOSPITAL 2010 WL 174088 (KY. APP. JAN. 15, 2010)

COUNSEL: BRIEF FOR APPELLANTS: Larry D. Ashlock, Elizabethtown, Kentucky. BRIEF FOR APPELLEES: Anthony K. Finaldi, Ward Ballerstedt, Louisville, Kentucky. JUDGES: BEFORE: CAPERTON AND DIXON, JUDGES; HENRY,1 SENIOR JUDGE. ALL CONCUR. OPINION BY: CAPERTON OPINION The Estate of Patricia Shaw (Shaw) appeals an August 1, 2008, Opinion of the Workers' Compensation Board affirming the decision rendered by Administrative Law Judge Howard Frasier, Jr. (ALJ) on February 27, 2008, reversing in part, and remanding. After a thorough review of the record, the arguments of the parties, and the applicable law, we affirm. Shaw is a former licensed practical nurse who worked for the Appellee, Jane Todd Crawford Hospital, for almost twenty years. On August 7, 2000, Shaw was working on the psychiatric unit when one of the residents grabbed and jerked her right arm, and kicked her in the right shoulder, resulting in a torn labrum and accompanying impingement syndrome for which she underwent arthroscopic surgery on October 24, 2000. Following physical therapy, Shaw returned to work at the hospital in early 2001, with no restrictions. Thereafter, on May 15, 2001, Shaw sustained a second injury after slipping on a freshly mopped bathroom floor. Shaw apparently reinjured her right shoulder and also sustained a cervical injury, resulting in a right C5-C6 herniation with a contusion of the right C6 nerve root. Conservative treatment was attempted, but Shaw ultimately underwent a C56 discectomy and fusion with bone bank graft under the direction of Dr. Christopher Shields. Following another round of physical therapy, Shaw again returned to her previous job at the hospital. On the dates of the aforementioned injuries, Jane Todd Crawford Hospital was insured by Kentucky Insurance Guaranty Association (KIGA). Those claims were resolved by way of a settlement agreement entered into by the parties and approved by the ALJ on January 13, 2003. Pursuant to the terms of the settlement agreement, Shaw received a total of $38,265.30, which included a lump sum payment of $9,000.70, representing 425 weeks of permanent partial disability (PPD) benefits for a 10 percent whole person impairment rating on the 2000 right shoulder injury, as well as a lump sum payment in the amount of $29,264.60, representing 425 weeks of PPD benefits for a 25 percent whole person impairment rating for the 2001 cervical injury. 1

Senior Judge Michael L. Henry sitting as Special Judge by assignment of the Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes (KRS) 21.580.

49

Although at the time of settlement, Shaw was performing the same type of work as at the time of her injuries, shortly following the settlement, she was advised by her supervising physician that it was no longer safe for her to remain in the psychiatric unit. Accordingly, Shaw was placed into a coding position. Shaw apparently performed the coding duties for several months until she began experiencing numbness in her fingers and a proclivity to drop things. Accordingly, Shaw filed a Form 101 Application for Resolution of Claim on October 11, 2005, alleging that she had developed carpal tunnel syndrome as the result of cumulative trauma on November 11, 2003, at which time Jane Todd Crawford Hospital was insured by Kentucky Workers' Compensation Fund (KESA). In addition, Shaw filed a January 23, 2006, motion to reopen the January 13, 2003, settlement based upon an alleged increase in impairment. All of these claims were consolidated before the ALJ for decision. Thereafter, on April 28, 2006, Shaw ended her employment with the hospital, and has not returned to work since that time. We further note that unfortunately, Shaw has since passed away for reasons unrelated to the work injury. In an opinion and order dated October 31, 2006, the ALJ dismissed Shaw's claim for carpal tunnel syndrome, as well as her claim for permanent total disability benefits and additional benefits for a 2x multiplier pursuant to KRS 342.370(1)(c)2 and 4. Shaw appealed that decision. On April 6, 2007, the Board affirmed the decision of the ALJ with respect to the carpal tunnel claim, as well as with respect to the claim for an award based on an increase in occupational disability. The case was remanded, however, for additional findings addressing the application of KRS 342.730(1)(c)(1), (2) and 4,2 using an analysis under Fawbush v. Gwinn, 103 S.W.3d 5 (Ky. 2003).3 2

KRS 342.730(1)(c), in pertinent part, provides as follows: (1) Except as provided in KRS 342.732, income benefits for disability shall be paid to the employee as follows: (c) 1. If, due to an injury, an employee does not retain the physical capacity to return to the type of work that the employee performed at the time of injury, the benefit for permanent partial disability shall be multiplied by three (3) times the amount otherwise determined under paragraph (b) of this subsection, but this provision shall not be construed so as to extend the duration of payments; or 2. If an employee returns to work at a weekly wage equal to or greater than the average weekly wage at the time of injury, the weekly benefit for permanent partial disability shall be determined under paragraph (b) of this subsection for each week during which that employment is sustained. During any period of cessation of that employment, temporary or permanent, for any reason, with or without cause, payment of weekly benefits for permanent partial disability during the period of cessation shall be two (2) times the amount otherwise payable under paragraph (b) of this subsection. This provision shall not be construed so as to extend the duration of payments. 4. Notwithstanding the provisions of KRS 342.125, a claim may be reopened at any time during the period of permanent partial disability in order to conform the award payments with the requirements of subparagraph 2. of this paragraph.

3

In Fawbush v. Gwinn, 103 S.W.3d 5 (Ky.2003), the Kentucky Supreme Court addressed the application of KRS 342.730(1)(c)1 and (c) 2. The Court concluded that, in circumstances where both subsections apply, the ALJ has the authority to choose which benefit is most appropriate under the facts of the case. Id. at 12. Specifically, the Court noted, “[i]f the evidence indicates that

50

In a November 2, 2007, opinion, this Court affirmed the decision of the Board regarding the carpal tunnel claim, as well as with respect to the claim alleging an increase in occupational disability. However, this Court disagreed with the ALJ and the Board, finding that there was an independent right to reopen for consideration of the 2x multiplier pursuant to KRS 342.730(1)(c)(4), and that findings pursuant to Fawbush were not required. Accordingly, this Court affirmed in part, vacated in part, and remanded the claim to the ALJ with instructions to consider the application of the 2x multiplier pursuant to KRS 342.730(1)(c)(2) and (4). On February 27, 2008, the ALJ issued an opinion upon remand in which he awarded Shaw additional PPD benefits in the amount of $90.02 per week, effective July 28, 2006, and to continue for the remainder of the 425-week period, which began on February 1, 2002, plus interest of 12 percent per annum on any past and unpaid installments of compensation. The ALJ arrived at the weekly amount of $90.02 based upon an independent review of the impairment ratings provided in the claim. The opinion upon remand was appealed to the Board by Shaw, who asserted that statutory and caselaw required an additional award of benefits of $107.59 per week from April 26, 2006, through the remaining 425 weeks, which she asserts began on January 14, 2003, the day the settlement agreement was approved. Shaw passed away on June 11, 2008. On August 1, 2008, the Board reversed the ALJ and instructed him to enter an order for additional benefits to be paid to Shaw beginning April 26, 2008, but did uphold the ALJ's decision as to the date on which the 425-week disability period began, as well as his determination that the weekly benefit amount was $90.02 pursuant to KRS 342.730(1)(c)(2). Following the issuance of the Board's opinion in this regard, Shaw appealed to this Court. On January 23, 2009, this Court issued an opinion vacating the August 1, 2008, opinion of the Board due to the fact that the Estate of Patricia Shaw had not been substituted as a party. The matter was remanded to the Board for consideration of whether or not Shaw's motion to substitute a party was sufficient to revive the action. The Board issued an opinion on March 31, 2009, granting Shaw's motion to substitute party, and deemed that the action had been revived. Shaw's estate now appeals to this Court, asking this Court to review the portion of the Board's decision relating to the issue of the beginning date for the 425-week period of PPD and the correct benefit rate pursuant to KRS 342.730(1)(c)(2). Shaw asserts that the 425-week period of PPD should have commenced on January 14, 2003, the day following approval of the settlement agreement, as opposed to the February 1, 2002, date determined by the ALT, which was the date following the January 31, 2002, termination of temporary total disability benefits which the Hospital had previously been paying to Shaw. She also asserts that the ALJ should have used a $107.59 weekly benefit rate, as opposed to a weekly benefit rate of $90.02. On appeal, Shaw isolates the issues as being whether or not a date different than the date of the entry of the settlement agreement can be used to begin weekly benefits a worker is unlikely to be able to continue earning a wage that equals or exceeds the wage at the time of injury for the indefinite future, the application of paragraph (c)l is appropriate.” Id.

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when the reopening is made pursuant to KRS 342.730(1)(c)(2) and (4), and whether a change in impairment rating can be made on a claim resolved by settlement upon reopening pursuant to KRS 342.730(1)(c)(2) and (4). At the outset, we note that when reviewing a decision of the Workers' Compensation Board, the function of the Court of Appeals is to correct the Board only where it perceives the Board has overlooked or misconstrued controlling statutes or precedent, or committed an error in assessing the evidence so flagrant as to cause gross injustice. Western Baptist Hospital v. Kelly, 827 S.W.2d 685, 687-88 (Ky.1992). We review this matter with that standard in mind. On appeal to this Court, the Hospital contends that Shaw's argument concerning the starting date for the 425-week period of PPD benefits is moot. In so arguing, the Hospital correctly notes that Shaw passed away on June 11, 2008, due to nonwork-related causes. Thereafter, on July 22, 2008, her counsel filed a motion to substitute her estate as a party, and continue benefits. The Hospital now argues that there is no evidence in the record showing that Shaw had any dependents who would qualify for benefits under KRS 342.730, and that accordingly, the only benefits to which she would be entitled would be those which would have accrued prior to her death. The Hospital asserts, and we believe correctly in this instance, that the only reason why the proper start date for the PPD benefits is an issue is in order for the correct end date to be determined. However, in light of Shaw's death, the Hospital asserts that this issue is moot, regardless of the date on which the increased benefits would have begun, they would have ceased long after her death. Having reviewed the record, we are compelled to agree with the Hospital with respect to this issue. In her brief to this Court, Shaw argues that her 425-week benefit period should have begun on January 14, 2003, the date following approval of her settlement agreement, as opposed to the February 1, 2002, date determined by the ALJ. Were we to rely upon the date determined by the ALJ, Shaw's benefits would expire approximately one year earlier than if we relied upon the date asserted by Shaw. As the Hospital correctly notes, the end date of the PPD benefits in the matter sub judice is now moot, in light of Shaw's passing. Certainly, we are aware that KRS 342.730 provides survivor's rights in instances where a claimant who has received an award of income benefits passes away for causes unrelated to the injury prior to such time as the award has been paid in full. Unfortunately, our review of the record in this instance reveals that Shaw's estate has failed to establish the existence of any survivors qualified to receive these benefits, as is required by KRS 342.730(3). Accordingly, we are compelled to find that the issue raised by Shaw concerning the appropriate start date for benefits is moot, for regardless of whether the benefits were to end on the date resulting from the ALJ's determination or the date asserted by Shaw, she received all benefits which had accrued prior to her death. Having so found, we refrain from issuing a prospective opinion on that issue at this time, and turn now to the second issue raised by Shaw's estate on appeal. As her second basis for appeal to this Court, Shaw is requesting additional monetary benefits pursuant to KRS 342.730(1)(c)(2) and (4), for which she asserts she does not need proof of an increase in impairment rating, but simply a finding that the employee returned to work at a weekly wage equal to or greater than the average weekly wage at 52

the time of the injury and that the employment ceased. Shaw asserts that those findings have been made in this claim, and that accordingly, she is entitled to additional benefits at two times the amount otherwise payable. Shaw asserts that since the settlement agreement has not been reopened for an increased impairment, the agreed upon settlement computation of 10 percent impairment for the right shoulder injury and 25 percent for the cervical injury are the fixed rates in this claim, and must be used as the basis for the additional monetary benefits. Shaw notes that the settlement agreement provided for Shaw to receive an agreed upon weekly amount of $107.59, which was discounted pursuant to the regulatory rate and paid in a lump sum. Shaw now argues that the Board misconstrued statute and caselaw in not directing the ALJ to award additional benefits to Shaw pursuant to KRS 342.730(1)(c)(2) and (4) in the amount of $107.59 per week from April 26, 2006, for the remaining 425 weeks after January 14, 2003, with interest at the rate of 12 percent per annum on all past and unpaid installments of compensation. In response, the Hospital notes that during the course of litigation of the claim below, Dr. Lowe assigned impairment ratings of 4 percent for the 2000 right shoulder injury, and 25 percent for the 2001 cervical spine injury. In determining the benefit amount of $90.02 per week to which he found Shaw to be entitled, the ALJ relied upon the ratings assigned by Dr. Lowe, which he found to be the most credible. As the Hospital correctly notes, KRS 342.125(7) clearly provides that where an award is the product of a settlement, no statement contained in the agreement is considered binding on the parties. As Shaw reopened this claim pursuant to KRS 342.730(1)(c)(1), the ALJ was free to assign a new impairment rating on reopening, and was thus required to issue a finding as to what the impairment ratings would have been at the time of the original settlement, which he did. As our Supreme Court has previously held, the figures for impairment or disability contained in a settlement agreement represent a compromise, and might or might not equal the worker's actual impairment or disability at the time of settlement. Whitaker v. Roland, 998 S.W.2d 479 (Ky.1999). In the ALJ's analysis, he noted that had no settlement agreement occurred, the actual payable rate of weekly benefits would have been $7.74 per week for benefits arising from the 2000 injury to the shoulder, and $82.28 per week for the May 21, 2001, cervical injury, for a combined value of $90.02 for all relevant weeks, based upon the rating of Dr. Lowe. Having reviewed the record and applicable law, we affirm the Board, which held that the ALJ separately determined the impairment ratings for the 2000 and 2001 injuries based on substantial evidence, and then calculated the appropriate disability rating pursuant to KRS 342.730(1)(b), and combined the amounts accordingly. It was the ALJ's duty, in a situation involving reopening after a prior settlement, to make a determination as to the claimant's actual impairment and disability rating at the time of settlement prior to deciding the merits of the reopened cased. Newberg v. Davis, 841 S.W.2d 194 (Ky.1992). Our review of the record reveals that the ALJ did so in this instance and that his findings, based upon the opinions of Dr. Lowe, were supported by substantial evidence. Accordingly, we affirm. 53

Wherefore, for the foregoing reasons, we affirm the opinion of the Workers' Compensation Board, holding that additional compensation is payable at a rate of $90.02 per week from April 28, 2006, for as long as Shaw's average weekly wage was below that which it was at the time of her original injures, and not to extend past the date of Shaw's passing, for reasons previously set forth herein. ALL CONCUR.

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STATUTE OF LIMITATIONS FOR ORIGINAL CLAIMS AND CLAIMS ON REOPENING: DON’T GET CAUGHT SOL Paul Jones, Esq.

I.

THE STATUTE – ORIGINAL CLAIMS KRS 342.185. Notice of accident -- Claim for compensation -- Limitation. (1) Except as provided in subsection (2) of this section, no proceeding under this chapter for compensation for an injury or death shall be maintained unless a notice of the accident shall have been given to the employer as soon as practicable after the happening thereof and unless an application for adjustment of claim for compensation with respect to the injury shall have been made with the department within two (2) years after the date of the accident, or in case of death, within two (2) years after the death, whether or not a claim has been made by the employee himself or herself for compensation. The notice and the claim may be given or made by any person claiming to be entitled to compensation or by someone in his or her behalf. If payments of income benefits have been made, the filing of an application for adjustment of claim with the department within the period shall not be required, but shall become requisite within two (2) years following the suspension of payments or within two (2) years of the date of the accident, whichever is later. (2) The right to compensation under this chapter resulting from work-related exposure to the human immunodeficiency virus shall be barred unless notice of the injurious exposure is given in accordance with subsection (1) of this section and unless an application for adjustment of claim for compensation shall have been made with the commissioner within five (5) years after the injurious exposure to the virus.

II.

THE STATUTE -- REOPENING KRS 342.125. Reopening and review of award or order -- Grounds -Procedures -- Time limitations -- Credit for previously-awarded retraining incentive benefits or income benefits awarded for coal-related pneumoconiosis. (1) Upon motion by any party or upon an administrative law judge's own motion, an administrative law judge may reopen and review any award or order on any of the following grounds: (a) Fraud; (b) Newly-discovered evidence which could not have been discovered with the exercise of due diligence; (c) Mistake; and (d) Change of disability as shown by objective medical evidence of worsening or improvement of impairment due to a condition caused by the injury since the date of the award or order. 55

(2) No claim which has been previously dismissed or denied on the merits shall be reopened except upon the grounds set forth in this section. (3) Except for reopening solely for determination of the compensability of medical expenses, fraud, or conforming the award as set forth in KRS 342.730(1)(c)2., or for reducing a permanent total disability award when an employee returns to work, or seeking temporary total disability benefits during the period of an award, no claim shall be reopened more than four (4) years following the date of the original award or order granting or denying benefits, and no party may file a motion to reopen within one (1) year of any previous motion to reopen by the same party. **** (8) The time limitation prescribed in this section shall apply to all claims irrespective of when they were incurred, or when the award was entered, or the settlement approved. However, claims decided prior to December 12, 1996, may be reopened within four (4) years of the award or order or within four (4) years of December 12, 1996, whichever is later, provided that the exceptions to reopening established in subsections (1) and (3) of this section shall apply to these claims as well. III.

TOLLING OF THE STATUTE Tim Jones v. Ken Builders Supply, Claim No 2005-63853 (6/16/11). Claimant's original claim settled by order dated 7/18/06. Claimant filed a motion to reopen on 3/27/08 asserting a worsening of impairment and requesting approval of a recommended surgical procedure. A response to the motion averred that the surgery had been approved and TTD benefits voluntarily reinstated. Accordingly, the motion to reopen was denied as moot. Some months later, the employer filed a motion to reopen and medical fee dispute over a diagnostic study. Claimant responded with a request that the medical fee dispute be resolved in his favor and requesting clarification of the original order dismissing his own motion to reopen as moot, noting that he continued to assert an increase in impairment. The employer later filed a motion to dismiss the medical fee dispute as moot, inasmuch as the treater had abandoned the request for the diagnostic study and was now recommending a fusion. A show cause order was issued, to which no response from the claimant was filed. No order dismissing the medical fee dispute was entered. On 11/10/08, the claimant filed a renewed motion to reopen, asserting an increase in impairment following the fusion. The employer objected, noting that this motion had been filed within one year of the claimant's original motion to reopen for an increase in benefits. The motion to reopen was ultimately denied, as filed within one year of the original motion. This order became final. On 11/12/10, more than four years after the original settlement, the claimant filed another motion to reopen, asserting an increase in impairment. Claimant cited to 56

Hall v. Hospitality Resources, Inc., 276 S.W.3d 775 (Ky. 2008), as authority for his argument that some or all of the various orders above-mentioned constituted orders "granting or denying benefits," thereby extending the four-year deadline for reopening under KRS 342.125. ALJ Swisher ultimately ruled against the claimant, and two of three Board members affirmed. Pursuant to Hall, a claim may be reopened within four years of the original order or award and also "any subsequent order granting or denying benefits." This means income benefits and not medical benefits. Thus, an order granting or denying a medical fee dispute will not serve to extend the four-year period. Moreover, the voluntary payment of TTD benefits also will not extend the four-year period. Kendrick v. Toyota, 145 S.W.3d 422 (Ky. App. 2004). Board Member Cowden dissented, on grounds that the claimant had tried really hard and the decision was unfair. Rule: A claim may be reopened within four years of any order granting or denying income benefits, but an order granting or denying medical benefits will not toll the statute. ***** Tim Jones v. Ken Builders Supply is really just a fact-specific case at the intersection of the two earlier court decisions cited by the Board. Recall that the rule in Kendrick v. Toyota, 145 S.W.3d 422 (Ky. App. 2004), was that the voluntary payment of TTD benefits post-award does not serve to toll the four-year period of limitations for reopening under KRS 342.125(3). Rule: The voluntary payment of TTD benefits post-award does not serve to toll the statute for reopening. ***** Hall v. Hospitality Resources, Inc., 276 S.W.3d 775 (Ky. 2008), on the other hand, provides that an order of TTD issued subsequent to the original award resets the four-year period of limitations for reopening under KRS 342.125(3). The court’s rationale was that the reference in KRS 342.125(3) to the “original award or order granting or denying benefits” really means “original award and any subsequent order granting or denying benefits.” The court noted that this holding would not lead to abuse and a never-ending stream of reopenings, since a premature motion to reopen is barred by KRS 342.320, and because KRS 342.310 and CR 11 deter frivolous motions. “Nor do we agree that a medical fee dispute encompasses benefits, as benefits relate only to ‘income’ benefits.” Rule: Any order awarding or denying income benefits will reset the fouryear period for reopening. *****

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In Radco Asbestos Specialists, Inc. v. Lyons, 295 S.W.3d 75 (Ky. 2009), the Supreme Court determined that as used in KRS 342.125(3), the period of "an award" included the period of any medical and income benefits awarded. The employee's award included both income and future medical benefits. Thus, his motion to reopen seeking TTD was timely because although the period of partial disability benefits had expired, the period of medical benefits had not expired. An “award” may include either type of compensation or both. Had the legislature intended to limit the time for seeking TTD to the period that income benefits were awarded, it would have stated so explicitly. Rule: A claimant may reopen to seek TTD anytime, even years after her PPD award has expired, so long as she is still entitled to medical benefits pursuant to an award. ***** With the foregoing cases in mind, consider this unpublished decision of the Court of Appeals floating around out there, Clayton & Lambert Manufacturing Company v. Kelley, 1998-CA-001292-WC (3/26/99), in which the court held that the filing by the claimant of a medical fee dispute within the two year period of limitations was the equivalent of filing an “application for adjustment of claim for compensation with respect to the injury.” The rationale was that “compensation” as used in KRS 342.185 refers to both income and medical benefits. Therefore, filing a medical fee dispute before the statute of limitations expires “authorizes a subsequent filing for income benefits, be it by motion to reopen or otherwise.” This holding opens a Pandora’s box full of further questions. Fortunately, it is unpublished. IV.

REOPENING TO REDUCE BENEFITS Pepsi Cola General Bottlers, Inc. v. Murrell, 2010 WL 1851385, 1-2 (Ky. App. May 7, 2010). On November 4, 2003, an ALJ approved the parties' Form 110, settling the claim based on a 21 percent permanent impairment rating, with the 3-multiplier, based on the claimant’s inability to return to his pre-injury employment or other work at equal or greater wages. The agreement contained the following statement: “Defendant reserves the right to reopen this claim pursuant to the provisions of KRS 342.125 and KRS 342.730 should Plaintiff return to work at the same or greater wages.” Nearly five years later, in August 2008, Pepsi moved to reopen the settlement to reduce the claimant's benefits. Pepsi asserted that Murrell was no longer entitled to a triple income benefit because he had a new job earning a greater wage than at the time of his injury. Murrell objected to reopening and contended Pepsi's motion was untimely. Pepsi cited to the language in the reopening statute, which excepts from the fouryear SOL motions to reopen for the purpose of “conforming the award as set forth in KRS 342.730(1)(c)(2).” Pepsi further cited to KRS 342.730(1)(c)(4), which states, “Notwithstanding the provisions of KRS 342.125, a claim may be 58

reopened at any time during the period of permanent partial disability in order to conform the award payments with the requirements of subparagraph 2. of this paragraph.” The ALJ permitted the reopening, but was reversed by the Board and Court of Appeals, which held, “Although KRS 342.730(1)(c)(4) provides an additional ground for reopening, it mentions only subparagraph 2. It evinces a legislative intent to permit an award made under subparagraph 2 to be reopened and amended to reflect the cessation or resumption of employment at the same or a greater wage, regardless of whether KRS 342.125 would permit reopening. Nothing in subparagraph 4 evinces the intent to affect awards made under subparagraph 1.” Furthermore, later in its opinion, the Court of Appeals cites to the principle that the parties cannot extend the SOL by way of agreement. In other words, it seems that there are no circumstances under which an employer can settle with a 3multiplier in place and preserve its right to reopen to reduce that benefit if the claimant becomes employed at equal or greater wages more than four years beyond the date of settlement. V.

THE CURIOUS CASE OF CUMULATIVE TRAUMA Consol of Kentucky, Inc. v. Sparks, Claim No. 2010-00773 (11/4/11). ALJ Hays found that notice of a cumulative trauma injury was timely despite the claimant’s admission that his treating physician had informed him four years before giving notice and filing his claim that his symptoms of pain in his neck, back and knees were due to working in low coal. The Board affirmed, citing Hill v. Sextet Mining Corp.,1 for the proposition that a claimant is not required to selfdiagnose the cause of the pain and reoccurring symptoms in his neck, back, and knees. Moreover, according to the Board, “[T]he fact Dr. Gish informed Sparks his symptoms over the years were due to his work in the mines did not create an obligation to notify his employer of a work-related injury and file his workers’ compensation claim. Dr. Gish’s records do not reflect she ever advised Sparks he had sustained a work-related injury. . . . Although Sparks was told by Dr. Gish the symptoms she treated were probably due to his work, it is certainly a far cry from diagnosing specific work-related injuries. The fact Sparks had complaints or symptoms which Dr. Gish informed him were related to his work does not establish work-related injuries that have been specifically identified and diagnosed; thus, the obligation to notify Consol of an injury and to file a claim was not triggered.” Rule: There is no SOL for cumulative trauma claims in Kentucky. *****

1

65 S.W.3d 503 (Ky. 2001).

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Quebecor Book Co. v. Mikletich, 322 S.W.3d 38, 39 (Ky. 2010). The claimant sustained an injury that produced a 6 percent impairment rating as of May 26, 2006 and knew that it was work-related but continued to be exposed to workplace hazardous noise when he filed his claim. He had no claim based on trauma incurred when the 6 percent impairment was assigned. Unlike KRS 342.730(1), KRS 342.7305(2) imposes an 8 percent threshold for awarding income benefits, and no medical evidence indicates that his injury warranted treatment at that time. Disability resulting from the 6 percent impairment that was inadequate to be compensable as of two years before he filed his claim need not be excluded when calculating his award of income benefits. The court acknowledged that Alcan Foil Products, a Div. of Alcan Aluminum Corp. v. Huff2 defines the “date of accident” in cumulative trauma claims for purposes of the statute of limitations as the “date of manifestation.” Also, according to Hill v. Sextet Mining,3 the notice requirement arises and the twoyear limitations period begins to run when a physician informs the worker of the injury and its cause. Lastly, in Special Fund v. Clark,4 the court held that KRS 342.185(1) bars compensation for impairment due to trauma incurred more than two years before a claim is filed if an individual continues to incur cumulative trauma after being informed of the injury and its cause. The court in Quebecor simply dismissed Clark as inapplicable, inasmuch as it did not involve a hearing loss claim or address the implications of the threshold requirement of KRS 342.7305(2). Rule: There is no SOL for cumulative trauma claims in Kentucky.

2

2 S.W.3d 96 (Ky. 1999).

3

65 S.W.3d 503 (Ky. 2001).

4

998 S.W.2d 487 (Ky. 1999).

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EFFECTIVELY PRESENTING “SUBSTANTIAL” MEDICAL EVIDENCE Christopher P. Evensen

I.

WHAT NEEDS TO BE FILED 803 KAR 25:010 §10(1) states “A party shall not introduce direct testimony from more than two (2) physicians by medical report except upon a showing of good cause and prior approval by an administrative law judge.” Claimant is required to prove all elements of the claim. A.

Occurrence of an Injury If “occurrence” is at issue, claimant should file initial EMS/E.R./Company physician notes to document the injury occurred.

B.

Injury as Defined by the Act KRS 342.0011(1) defines “injury” as a work-related traumatic event or series of events including cumulative trauma, arising out of and in the course of employment which is the proximate cause producing a harmful change in the human organism evidenced by objective medical findings. Thus, to prove a claim, claimant must file “objective medical findings” such as diagnostic test results showing pathology or treatment notes with physical examination findings of abnormality. In Gibbs v. Premier Scale Company/Indiana Scale Co., 50 S.W.3d 754 (Ky. 2001), the Court noted “objective medical findings,” as set forth in KRS 342.0011(33), refers to information gained by direct observation and testing applying objective or standardized methods. The Court held a patient’s complaints of symptoms, alone, is not an objective medical finding. Id. at 762. However, there is no requirement for a positive diagnostic test to find a claimant has a work-related injury based on objective medical findings. Id. Instead, an “objective medical finding” can be a standardized test of physical function which can confirm the existence and extent of reported symptoms. Id. Further, the existence of a harmful change can be established through information gained by direct observation and/or testing, applying objective or standardized methods that demonstrate symptoms of an injury/harmful change. Id. (Emphasis added)

C.

TTD If denied, the claimant must file all off work slips to confirm time periods restricted from work.

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D.

Causation If not in the treating physician’s records, may need a report from the treating physician or an IME to address this question. 1.

However, in some circumstances, an ALJ can infer causation from the circumstances surrounding the injury. In Wilson v. Thyssenkrupp Budd Co., et al., 2005 WL 3116045 (Ky. App. Nov. 23, 2005) (Designated not to be published) the Court of Appeals reversed the finding of the Board which had affirmed an Administrative Law Judge’s dismissal of the Plaintiff’s claim for benefits arising from a cumulative trauma injury. The Administrative Law Judge found the claimant was suffering from carpal tunnel syndrome, but did not find the claimant had proven his condition was caused by the work he had performed for the Employer. The Administrative Law Judge found a condition like carpal tunnel syndrome is not the type of condition for which causation can be inferred, such as an amputation. Because no physician could state within reasonable medical probability the work claimant performed for the Employer was the direct and proximate cause of the diagnosed condition, the Administrative Law Judge dismissed the claim. The Board affirmed and the case was appealed to the Kentucky Court of Appeals which reversed and remanded to the Administrative Law Judge for further findings. The Court of Appeals found the Administrative Law Judge limited himself to considering only medical evidence of causation and improperly discounted inferences from the medical and lay testimony which would support a finding of work-relatedness. Id. In so doing, the Court of Appeals noted the case of Union Underwear Co., Inc. v. Scearce, 896 S.W.2d 7 (Ky. 1995) in which the Supreme Court affirmed a decision by an ALJ who relied on a combination of medical testimony and the work history provided by the injured worker. The Court noted: The ALJ’s decision was affirmed as being supported by substantial evidence, even though the uncontradicted medical opinion was that the condition was not work-related. Although the ALJ must consider the worker's medical condition when determining the extent of his occupational disability at a particular point in time, the ALJ is not required to rely on the vocational opinions of either the medical experts or the vocational experts. A worker's testimony is competent evidence of his physical condition and of his ability to perform various activities both before and after being injured. Wilson v. Thyssenkrupp Budd Co., et al., at p. 5) (Emphasis added) 62

The Court of Appeals also noted Dravo Lime Co., Inc. v. Eakins, 156 S.W.3d 283 (Ky. 2005), in which the Kentucky Supreme Court, again, emphasized that a finding of causation need not to be based solely on a physician’s opinion. Rather, an ALJ has the authority to infer causation based upon all properly admitted evidence. Wilson v. Thyssenkrupp Budd Co., et al., at p. 5 (Emphasis added) 2.

The physician should state his/her opinion is within reasonable medical probability.

E.

Impairment – see below.

F.

KRS 342.730(1)(c)(1)/The (3) Factor If the claimant is requesting benefits enhanced by the (3) factor because he/she lacks the physical capacity to return to the type of work performed when injured, it is good practice, but not necessary, for the claimant to file medical restrictions/limitations to prove this element of the claim. In Hush v. Abrams, 584 S.W.2d 48, 49 (Ky. 1979), the claimant/employee testified regarding his memory problems and neck pain which radiated down his shoulder and into his right hip. The Court held: In the instant case, what we have is lay testimony descriptive of and supportive of a permanent disability, together with medical testimony that is not in conflict with lay testimony. Id. at 50. Further, citing Walker v. Porter Product Finishers, Division of Porter Paint Co., 505 S.W.2d 178 (Ky. 1974); ‘we are unaware of any requirement that the Board need consider only medical evidence in making its determination. As we have stated before: … as the basis for an award…there must be some evidence showing to what extent the claimant is ‘disabled.’ This is not always exclusively a matter of medical testimony… In many cases, particularly those involving internal injuries, medical evidence may be the only competent evidence to prove the actual bodily condition of the employee…; but once the bodily condition has been established, lay testimony may be competent on the question of the extent of the disability that has resulted from the bodily condition.’ Id. (emphasis added) (italics original) Thus, having established a bodily condition, claimant’s testimony regarding the extent of her disability, (i.e. her ability to return to the same 63

job she was performing on her date of injury) is descriptive of and supportive of her disability and is not in conflict with the medical evidence. Lay testimony is competent, being descriptive and supportive of a finding of disability, when not in conflict with medical evidence. II.

DECIDING TO OBTAIN AN IMPAIRMENT RATING A.

Taking into Account Cost and Credibility 1.

2.

B.

Treating physician. a.

Request a report.

b.

Request a conference.

c.

Are they really familiar with the AMA Guides? – The Distal Clavicle Excision rating for example.

IME physician. a.

Credibility: What will the Judge think of your evidence?

b.

Cost. i.

For Plaintiff, does the injury/case justify the cost? It is the catch 22: the claimant needs an impairment rating to move forward with a claim, but the cost to obtain the impairment rating may be more than/a majority of the potential recovery.

ii.

For Defendant, if it is a compensable claim, but a low value claim (Low Wage earner, 1-2 percent, no enhancement factors), is it better to spend $1,000$3,000 for an IME, put that money towards settlement?

Time Constraints IME physicians are booked for months and proof deadlines are tight.

III.

EDUCATE THE IME PHYSICIAN/TREATING PHYSICIAN ON THE LAW A.

Pre-injury Conditions/Prior Injuries Advising the evaluator how Kentucky law deals with pre-existing conditions/impairments.

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1.

Finley v. DBM Technologies, 217 S.W.3d 261, 265 (Ky. App. 2007). The burden of proving the existence of a pre-existing condition falls upon the Employer. Finley v. DBM Technologies, 217 S.W.3d 261, 265 (Ky. App. 2007), citing Wolf Creek Collieries v. Crum, 673 S.W.2d 735, 736 (Ky. App. 1984). To be characterized as active, an underlying pre-existing condition must be symptomatic and impairment ratable pursuant to the AMA Guidelines immediately prior to the work-related injury. (Italics original).

2.

McNutt Construction/First General Services v. Scott, 40 S.W.3d 854, 859 (Ky. 2001). “[D]isability which results from the arousal of a prior, dormant condition by a work-related injury remains compensable under the 1996 Act.” Where work-related trauma causes a dormant degenerative condition to become disabling and to result in a functional impairment, the trauma is the proximate cause of the harmful change; hence, the harmful change comes within the definition of injury.

3.

Bright v. American Greetings Corp., 62 S.W.3d 381 (Ky. 2001). When a work-related injury makes symptomatic an underlying dormant, preexisting condition, the total impact of the injury is compensable, including the residual effect of the underlying condition and the associated medical treatment necessary to address that condition.

4.

B.

Haycraft v. Corhart Refractories Co., 544 S.W.2d 222, 225 (Ky. 1976), the Court held the Employer is responsible for hastened development of degenerative changes.

Natural Consequences In Addington Resources, Inc. v. Perkins, 947 S.W.2d 421 (Ky. App. 1997), the Supreme Court adopted the natural consequences rule. Professor Larson has described the rule as follows: "The basic rule is that a subsequent injury, whether an aggravation of the original injury or a new and distinct injury, is compensable if it is the direct and natural result of a compensable primary injury." Larson, Workmen's Compensation Law §13.11 (1996); See also McClendon v. Lumber King, Inc. No 98-90286 (2005).

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IV.

MAKE SURE THE EVIDENCE YOU FILE IS IN ACCORDANCE WITH THE AMA GUIDES AND WILL STAND UP ON APPEAL A.

The impairment rating should be based on the most recent Edition (5th Edition) of the AMA Guides adopted for use in Kentucky. George Humfleet Mobile Homes v. Christman, 125 S.W.3d 288 (Ky. 2004), the Court held in the event a physician derives his impairment rating from an incorrect version of the American Medical Association, Guides to the Evaluation of Permanent Impairment (“AMA Guides”), the ALJ is not permitted to rely upon such an impairment rating, [W]e are convinced that although an ALJ is free to choose among impairments that were assigned under the latest edition available at the closing of proof, an ALJ is not free to rely upon an impairment that was assigned under an earlier edition. Id. at 294.

B.

The impairment rating should conform to the directives of the AMA Guides. In Jones v. Brasch-Barry General Contractors, 189 S. W.3d 149, 153 (Ky. App. 2006), the Court of Appeals held the ALJ could not rely upon an impairment rating assessed by Dr. Gary Reasor as it did not fall within the range of impairment in DRE lumbar Category III, the injury category in which Dr. Reasor placed the claimant. The Court held, “an ALJ cannot choose to give credence to an opinion of a physician assigning an impairment rating that is not based upon the AMA Guides.” Further, “a physicians’ opinion must be grounded in the AMA Guides … And any assessment that disregards the express terms of the AMA Guides cannot constitute substantial evidence.” Id. at 154. (Emphasis added)

V.

RECENT BOARD OPINIONS SEEM SPLIT ON THIS ISSUE The Medical Evidence must absolutely be grounded in the directives of the Guides. Jason Justice v. Mountain Enterprises, WCB Claim #2010-00253, (Opinion Rendered 11/7/11), Claimant claimed a psychological condition. Defendant’s expert (Dr. Ruth) correctly stated a practitioner is instructed to place the claimant in a proper “Class” of impairment, pursuant to Table 14-1 on P. 363 of the 5th Edition of the AMA Guides. Then, because the 5th Edition of the AMA Guides does not provide for numerical values within each class, the practitioner is instructed to look to the Second Edition of the AMA Guides to determine a numeric whole-person impairment rating. Dr. Ruth placed claimant in Class 2, (which in the Second Edition of the AMA Guides carrier a 10-20 percent wholeperson impairment rating), yet assigned a 6 percent rating. Plaintiff’s expert assessed 17 percent whole-person impairment, yet failed to reference the Second Edition of the AMA Guides.

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The ALJ relied on Dr. Ruth’s 6 percent impairment rating as most credible because he referenced use of the Second Edition of the AMA Guides. The Board vacated in part and remanded, based on George Humfleet Mobile Homes v. Christman, supra and Jones v. Brasch-Barry General Contractors, supra, holding an impairment rating must be both (1) based on the correct Edition of the AMA Guides and (2) within the range of impairment for the appropriate Class/Category set forth in the AMA Guides. Or, maybe not. Sharon Stacy v. Martin County Board of Education, WCB Claim #2009-85505 (Opinion Rendered 11/7/11), Claimant claimed a work-related back and shoulder injury with psychological sequelae. Based on the Defendant’s IME report (Dr. David Muffly), the ALJ found claimant suffered “temporary” physical injuries (strains) which did not result in permanent partial disability. The ALJ also found the claimant suffered only a temporary work-related exacerbation of a preexisting active psychological condition. The ALJ awarded medical and psychological coverage for a closed time period subsequent to the injury. Regarding the back injury, the Defendant’s expert (Dr. Muffly) referenced a DRE I Category in finding 0 percent impairment; regarding the shoulder, he stated claimant had 0 percent impairment, but did not specifically state the ratings were pursuant to the “Fifth Edition of the AMA Guides.” Claimant appealed arguing Dr. Muffly’s opinions did not constitute substantial evidence because he did not identify which edition of the AMA Guides upon which he relied. The Board affirmed the ALJ’s opinion holding the fact Dr. Muffly failed to identify the edition of the AMA Guides he relied upon goes to the weight and credibility of his report, not its admissibility; and the ALJ has sole authority to determine the weight and credibility of the evidence. Central Baptist v. Theresa Hayes, WCB Claim #2009-79544 (Opinion Rendered 10/31/11), Claimant suffered a knee injury and the treating physician (Dr. Nichols) assessed 10 percent whole-person impairment by combining 7 percent whole-person impairment for gait derangement (Table 17-5) with 3 percent whole-person impairment for arthritis/decreased cartilage levels on x-ray (Table 17-31). Defendant argued pursuant to Table 17-2, those two methods of impairment cannot be combined. ALJ found 10 percent impairment. WCB affirmed: We are cognizant of the fact the Guides provide the lower limb impairment percentages shown in Table 17-5 stand alone and are not to be combined with any other impairment evaluation method. Notwithstanding this fact, the ALJ had the authority to choose the combined impairment rating assessed by Dr. Nichols.

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EXHIBIT #1

February 2, 2012

Dr. IME Physician Address Louisville, Kentucky 402__ Re: DOB: SSN:

My Client, Mr. X 1/1/75 XXX-XX-XXXX

Dear IME physician: I have scheduled my client, Mr. X, for an Independent Medical Evaluation with you on April 1, 2012, at 12:00 noon. Enclosed please find medical records documenting Mr. X’s work injury. Mr. X began working as a “Job title” for Employer (a Widget company) in January 2001. Prior to the injury for which I represent Mr. X, he did have some significant medical history. Pursuant to notes of Dr. Treating Physician, Mr. X had a remote history of Right Knee injury including two surgeries, with the last surgery being performed in 1999. Despite these prior surgeries, Mr. X was working without restriction prior to January 1, 2010. On or about January 1, 2010, Mr. X sustained a work-related injury to his Right Knee when Description of Injury. Mr. X gave notice of his injury. On January 2, 2010, Mr. X presented to Dr. Provider for medical care who noted a history of his work-related injury, diagnosed Condition and referred to Dr. Treating Physician for further evaluation. On January 5, 2010, Dr. Treating Physician referred for Diagnostic Test, performed January 11, 2010, which showed, Pathology. On January 13, 2010, Mr. X returned to Dr. Treating Physician who noted the Diagnostic Test results, and recommended surgery. On January 20, 2010, Dr. Treating Physician performed surgery: Surgical Procedure (Meniscectomy/Arthroscopic surgery). Mr. X continued to present to Dr. Treating Physician for post-operative care through April 20, 2010, at which time Dr. Treating Physician assessed 1% whole-person impairment pursuant to the 6th Edition of the AMA Guides.1

1

Please note Kentucky does not utilize the 6th Edition of the AMA Guides and a Judge cannot rely on any impairment rating assessed pursuant to any Edition other than the 5th Edition of the AMA Guides.

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Mr. X’s Right Knee remained symptomatic and, on June 20, 2010, he presented to Dr. Second Physician who diagnosed Right Knee arthritis, near bone-on-bone and recommended Right Total Knee Replacement. Mr. X underwent a Right Total Knee Arthroplasty on July 5, 2010. Postoperatively, Mr. X continued to present to Dr. Second Physician through July 10, 2011, at which time Dr. Second Physician opined Mr. X had reached MMI. Dr. Second Physician’s office reports he does not perform impairment ratings. ______________________________________________________________________ Under Kentucky Workers’ Compensation law, McNutt Const./First Gen. Services v. Scott, 40 S.W.3d 854, 859 (Ky. 2001), “disability which results from the arousal of a prior, dormant condition by a work-related injury remains compensable under the 1996 Act.” Where work-related trauma causes a dormant degenerative condition to become disabling and to result in a functional impairment, the trauma is the proximate cause of the harmful change; hence, the harmful change comes within the definition of injury. McNutt, supra. Under Kentucky Workers’ Compensation law, to be characterized as active, an underlying pre-existing condition must be symptomatic and impairment ratable pursuant to the AMA Guidelines immediately prior to the work-related injury. Finley v. DBM Technologies, 217 S.W.3d 261, 265 (Ky. App. 2007), citing Wolf Creek Collieries v. Crum, 673 S.W.2d 735, 736 (Ky. App. 1984). (Italics original) Further, when a work-related injury makes symptomatic an underlying dormant, preexisting condition, the total impact of the injury is compensable, including the residual effect of the underlying condition and the associated medical treatment necessary to address that condition. Bright v. American Greetings Corporation, 62 S.W.3d 381 (Ky. 2001). ______________________________________________________________________ By this letter I request you examine Mr. X and issue a report addressing the following questions: 1. What is Mr. X’s diagnosis(ses)? 2. Is Mr. X’s diagnosis(ses) supported by objective medical findings/examination findings? Please list said findings. 3. What, within reasonable medical probability, is the cause of Mr. X’s diagnosed condition? If the diagnosed condition involves a preexisting/degenerative condition, please report whether said condition was dormant prior to the work-related injury and whether the work-related injury aggravated/aroused a preexisting, dormant, non-disabling condition into symptomatic and disabling reality? 4. Has the medical treatment provided to Mr. X been reasonable and necessary for the cure and/or relief of the effects of his work-related injury? Specifically:

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(a) Within reasonable medical probability, was Mr. X’s January 1, 2010, work-related injury the cause which necessitated he undergo a Right Total Knee Arthroplasty? (b) Was the Right Knee Arthroplasty performed by Dr. Second Physician reasonable and necessary for the cure and/or relief of the effects of Mr. X’s January 1, 2010, work-related injury? 5. Please list Mr. X’s whole-person impairment rating, pursuant to the 5th Edition of the AMA Guides, as a result of his work-related injury. Please list impairment ratings for each body part or condition which is ratable and a combined whole-person impairment rating. Please reference the appropriate charts and tables from the Guides. 6. If an impairment rating for any particular body/condition (i.e. Right Knee) is due to a combination of both preexisting factors and the January 1, 2010, work-related injury, please list what portion of the impairment is due to the January 1, 2010, work-related injury. 7. Please list any restrictions/limitations you would advise for Mr. X as a result of his work- related injury. A signed medical authorization is enclosed for your records. Thank you in advance for your assistance in this matter.

Very truly yours,

_______________________ Christopher P. Evensen Enclosures

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COMMUNICABLE DISEASES AND COMPENSABILITY ISSUES Ward Ballerstedt

I.

HISTORICAL CONTEXT Historically, Kentucky law provided that only those diseases that were the natural and direct result of a traumatic injury by accident were compensable. The statute provided that “personal injury by accident as herein defined shall not include diseases except where the disease is the natural and direct result of a traumatic injury by accident.” Thus, where an employee contracted typhoid from contaminated drinking water provided to him by his employer, the court held that the disease was not compensable under the Workers’ Compensation Act. It was not the result of a traumatic injury by accident, but was instead introduced to his body through normal channels of entry and in the absence of any trauma. Thus, his civil suit against the employer could proceed. Mills v. Columbia Gas Constr. Co., 55 S.W.2d 394 (Ky. App. 1932). In 1944, Kentucky’s legislature made the first strides toward coverage of occupational diseases, extending coverage for silicosis. In 1962, the General Assembly enacted KRS 342.316, providing compensation benefits for occupational diseases generally.

II.

DISTINGUISHING “OCCUPATIONAL DISEASE” In simple terms, and despite the disclaimer found in the statute cited immediately below, an occupational disease can be thought of as one that is anticipated as a consequence of the given employment, whereas a communicable disease is accidental. This is the primary distinction drawn in Professor Larson’s treatise, discussed further herein below. “Occupational disease” is defined in KRS 342.0011, as follows: (2) "Occupational disease" means a disease arising out of and in the course of the employment; (3) An occupational disease as defined in this chapter shall be deemed to arise out of the employment if there is apparent to the rational mind, upon consideration of all the circumstances, a causal connection between the conditions under which the work is performed and the occupational disease, and which can be seen to have followed as a natural incident to the work as a result of the exposure occasioned by the nature of the employment and which can be fairly traced to the employment as the proximate cause. The occupational disease shall be incidental to the character of the business and not independent of the relationship of employer and employee. An occupational disease need not have been foreseen or expected but, after its contraction, it must appear to 73

be related to a risk connected with the employment and to have flowed from that source as a rational consequence; The line between a communicable disease and an occupational disease in Kentucky is blurred, indeed. Despite the fact that “communicable disease” appears to fall under the definition of “injury” found in KRS 342.0011(1) and not “occupational disease” found in KRS 342.0011(2) and (3), adjudicators and appellate courts in Kentucky have repeatedly categorized communicable diseases as occupational diseases. In each instance, we see bad facts making bad law. Consider the more stringent requirements associated with proving an “injury” versus “occupational disease.” An “injury” requires proof of a work-related traumatic event, traceable to a particular time and place. Also, the statute of limitations is much less forgiving than in the case of an occupational disease. These are two considerations that were clearly at work in the Barren River Health Department case discussed below. One practical point to bear in mind is that if the employee files a communicable disease claim on a Form 101-OD, alleging an occupational disease, it will be automatically referred out for a 315 university evaluation. III.

DEFINING “COMMUNICABLE DISEASE” As part of the sweeping 1972 amendments, Kentucky dispensed with the requirement that a communicable disease be the result of a traumatic injury by accident and has broadened the scope of compensable diseases. “Injury” is defined in KRS 342.0011 as follows: (1) "Injury" means any work-related traumatic event or series of traumatic events, including cumulative trauma, arising out of and in the course of employment which is the proximate cause producing a harmful change in the human organism evidenced by objective medical findings. "Injury" does not include the effects of the natural aging process, and does not include any communicable disease unless the risk of contracting the disease is increased by the nature of the employment. "Injury" when used generally, unless the context indicates otherwise, shall include an occupational disease and damage to a prosthetic appliance, but shall not include a psychological, psychiatric, or stress-related change in the human organism, unless it is a direct result of a physical injury. . . . In commenting on the legislative intent behind this statute, the Supreme Court in Haycraft v. Corhart Refractories Co., 544 S.W.2d 222, 224 (Ky. 1976), wrote, “Though we are not in this case concerned with a communicable disease, we think that the statutory exclusion of such a disease unless the nature of the work has increased the risk of contracting it reflects a definite legislative policy to the effect that although a particular affliction is of common occurrence among the population in general, it may nevertheless be found work-connected, hence 74

compensable, when the nature of the victim's occupation has increased the victim's susceptibility to it.” IV.

THE CASE LAW A.

Dealers Transport Co. v. Thompson, 593 S.W.2d 84, 88 (Ky. App. 1979). Here, it could not be determined whether the decedent employee contracted viral pneumonia at work or elsewhere. However, the administrator presented expert medical testimony that the decedent employee’s work outside on a loading dock in severe, cold weather could have lowered his resistance to pneumonia or could have caused a mild viral infection to become much more severe -- even fatal. The employer argued that the communicable disease coverage exception represents a legislative policy decision that the employer should not be held liable for disability caused by a communicable disease where the probability of contracting that disease is no greater for the worker because of his job situation than it is for him as a member of the general public. The court noted, however, that “the statute does not rule out coverage for communicable diseases where the risk of contracting such disease is increased by the nature of the employment.” Moreover, the court advised, “From a strict legal standpoint, this case is not a disease case. The pneumonia and death were resultant effects of a work-related injurious cause which was the outside exposure which contributed to deceased resistance and exacerbation, to the point of death, of a normally nondisabling common illness. Our decision is basically that the working conditions were a substantial factor causing Mr. Thompson's death. Exactly where and when he was originally exposed to the virus is immaterial under this approach. Stated another way, the compensable injury of this case is not the viral infection per se, but the work-related aggravation of it which resulted in death. By that standard this is not an actual exposure to disease case and no precedent in that regard.” This case offers a good practice pointer for the plaintiff’s bar. Even if you can’t establish that the disease was contracted at work, if you can establish that the nature of the employment lowered the employee’s resistance to the disease, you may yet prevail.

B.

Barren River Dist. Health Dept. v. Hussey, 2000 WL 377497 (Ky. App. Apr. 14, 2000). This case was the first in Kentucky to address whether AIDS contracted by a health department nurse would be considered an occupational disease or an accidental injury. The deceased, a registered nurse, was employed to treat HIV patients. While drawing a blood sample from an infected patient, she sustained a needle prick. Several witnesses indicated that they recalled the incident, but no incident report could be located in the employer's files. There was a notation in the records of her 75

psychiatric healthcare provider that the decedent was suicidal and reported intentionally sticking herself with the infected needle. Several years later, the employee died as a result of AIDS complications. The employer argued that the condition should be treated as an injury and that the employee’s administrator had the burden to prove when and where the injury occurred. The ALJ treated the condition as an occupational disease, awarding benefits, and was affirmed on appeal. Explaining its rationale, the court wrote: There is no dispute that AIDS is a disease. It is not sudden in onset and the victim's physical condition progressively deteriorates as the disease destroys the body's immune system. In the earliest development of workers' compensation law, occupational and other diseases were not compensable except those resulting from a traumatic injury received in the course of employment. Diseases not traceable to such injuries were excluded. Subsequently, the legislature recognized there were diseases so common to certain occupations that those so engaged were exposed to the risk of the disease simply by reason of their employment and, thus, enacted the occupational disease statute. Referencing the Dealers Transport, supra, case, the court continued: Pneumonia, like AIDS, is a communicable disease, which under KRS 342.0011(1), is compensable if the probability of contracting the disease is greater for the worker because of his job situation than it is for him as a member of the general public. In Dealers Transport, the decedent was at a greater risk than the general public for the "simple reason that the general public was not working on a loading dock with a viral infection in cold and damp December weather." During Rebecca's employment she was obviously at a higher risk of contracting AIDS than was a member of the general public simply because she was handling body fluids of HIV patients. We agree with the Board that this case is properly an occupational disease claim. Although there is no evidence that healthcare workers as a class are exposed to the disease as an incident of their employment, there is sufficient evidence that Rebecca was specifically affected in a manner causing her to contract the disease. (emphasis added) Recall our definition of occupational disease requires that it be seen to have followed as a “natural incident to the work as a result of the exposure occasioned by the nature of the employment” and that it be 76

“incident to the character of the business.” It’s difficult to square the court’s acknowledgement in the italicized passage above with this definition of occupational disease. V.

WWLD? (WHAT WOULD LARSON DO?) Observing that many jurisdictions continue to exclude accidental diseases contracted at work from coverage, Professor Larson opines that the distinction between communicable diseases and occupational diseases contracted at work creates unnecessary paradox and confusion in the state of workers’ compensation law. He would propose that all occupational diseases – both expected and unexpected – be covered, so long as the test of causation is met. Professor Larson cites the draft Workmen's Compensation and Rehabilitation Law produced under the auspices of the Council of State Governments as the gold standard. “It achieves inclusiveness of diseases generally by defining injury as ‘any harmful change in the human organism arising out of and in the course of employment.’ It then, however, goes out of its way to allay the apprehensions of those who suspect that this could lead to indiscriminate inclusion of everyday ailments by adding the statement that injury ‘does not include any communicable disease unless the risk of contracting such disease is increased by the nature of the employment.’” Sound familiar? Right. Kentucky can proudly proclaim to be among the jurisdictions that, according to Professor Larson, have gotten it right. At least the legislature has. In terms of judicial interpretation and application of the statute, the following recitation by Professor Larson from the section-by-section commentary in the model law is helpful: The reason for this special provision is that the ordinary diseases of life, such as common colds, influenza and like, present a special problem in identifying causation and work connection. A considerable number of states, through their case law, no longer require "increased risk" to establish that an injury arose out of the employment. There is a growing trend to accept "positional risk" or "neutral risk" or "actual risk" as sufficient. However, if these broader concepts such as "positional risk" should begin to be applied to the contracting of influenza, it might be difficult to keep the causal relationship test within proper bounds. Indeed, some courts may be impeded from adopting such broader causal tests as "positional risk" for general purposes if they are told that this broader test might someday be applied to common colds and everyday diseases of life. Therefore, to apply the increased risk test specifically to communicable diseases should have the effect both of making more definite the rule that applies to such diseases and also of permitting needed broadening of the causal relation test in respect to other types of injury and disease where broader tests can be justified. In short, it all comes back to increased risk and causal connection.

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VI.

COMPENSABILITY OF MEDICAL TREATMENT Kentucky Employers Safety Ass'n., v. Lexington Diagnostic Center, 291 S.W.3d 683 (Ky. 2009). A health care worker was splattered in the face and eye with blood and saline while flushing a patient's I.V. line. He sought immediate medical attention, at which point the applicable post-exposure protocol required by OSHA was initiated. That protocol required a series of five office visits that included tests for bloodborne pathogens, for a total cost of about $700.00. The carrier paid for the first two visits, and part of the third, but resisted further payment, stating that its policy was to pay for an initial test and one follow-up "as a matter of custom and practice and a courtesy to its members." The carrier took the position that an exposure has the potential to harm but does not constitute an injury until such time as objective medical findings showed it had produced a harmful change in the human organism. The Supreme Court of Kentucky held that being splattered in the face and eye with foreign blood or other potentially infectious material is a traumatic event for the purposes of KRS 342.0011(1), that the presence of blood in the eye constitutes an exposure as defined in 29 CFR 1910.1030(b), which shows a harmful change in the human organism, i.e., the introduction of foreign blood or potentially infectious material into the worker's body. The court stressed that appropriate medical treatment included not only treatment for the injury's immediate effects, it also included treatment to help determine if the exposure produced harmful changes not evident immediately or to address such changes. Additionally, what treatment was reasonable and necessary depended on the circumstances, said the court. The court concluded that the ALJ did not err in finding that the worker sustained an injury and that the carrier was liable for reasonable and necessary medical treatment, including both the initial treatment and post-exposure prophylaxis.

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DEALERS TRANSPORT CO. V. THOMPSON 593 S.W.2D 84 (KY. APP. 1979)

COUNSEL:

Kenneth J. Tuggle, Charles E. Allen, III, Louisville, for appellant.

Stuart E. Alexander, Louisville, for Marilyn Thompson. Gemma Harding, Deputy Gen. Counsel for Appeals, Dept. of Labor, Louisville, for James R. Yocum. Larry D. Hamfeldt, Louisville, for Special Fund JUDGES:

Cooper, Judge. Wilhoit, J., concurs. Lester, J., dissents.

OPINION BY: COOPER OPINION This is an appeal from a judgment affirming an award of workmen's compensation benefits in accordance with the Kentucky Workmen's Compensation Act contained in KRS Ch. 342 (the Act). The award was made to the widow and minor child of Leo A. Thompson, deceased. Leo A. Thompson (decedent) commenced actual work for the appellant, Dealers Transport Company, (Dealers) on December 27, 1976. His last working day was Friday, December 31, 1976. He was admitted to the hospital on Monday, January 3, 1977, and died there the following Wednesday, January 5. Death was caused by a severe case of viral pneumonia. Thereafter decedent's wife, Marilyn J. Thompson, and one of the appellees, filed a claim for workmen's compensation benefits. The basis for her claim was that her husband's fatal pneumonia arose out of his employment and for that reason was compensable. The following facts were established at the administrative level. Prior to commencing the job with Dealers, Mr. Thompson had been unemployed for approximately 13 months. After a two week training period at minimum wage, he would have been advanced to a pay scale of $7.67 per hour. Since Mr. Thompson became ill and died after working only one week, he never received any wage payment based on the higher scale. Although hired as a truck driver, during his trainee period Mr. Thompson was required to spend most of his morning hours outside on the loading dock, while his afternoons were spent in a classroom situation. The temperature and precipitation data for the week of December 27, 1976, through December 31, 1976, were made a part of the record and are as follows: Monday, high 55, low 22; Tuesday, high 52, low 23; Wednesday, high 26, low 8, some snow; Thursday, high 43, low 8, trace of snow; Friday, high 18, low 2, trace of snow. On December 22, 1976, decedent had undergone a pre-employment physical. No lung disease or condition was discovered at that time.

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The Board decided, and the circuit court affirmed that Marilyn J. Thompson, claimant and appellee, met her burden of proving that her husband's death was work-related and, accordingly, was compensable. If the decision of the Board is supported by substantial evidence, we may not substitute our judgment but must affirm. Substantial evidence is evidence sufficient to enable a reasonable mind to reach a conclusion. Smyzer v. B. F. Goodrich Chemical Co., 474 S.W.2d 367 (Ky. 1971). The overall question presented in this case is whether or not decedent's death as a result of viral pneumonia was work-related. If it was, then the award of benefits was proper. The determination of whether or not Mr. Thompson's death was work-related involves the legal question of coverage and the evidentiary question of causation. While the concepts of causation and coverage are easily enough understood, when stated separately within the context of a given case, they can become elusive. This is because the broad coverage language contained in the Act and the liberal construction we are required to give it must be measured against other statutory language designed to limit coverage and promote apportionment of liability between the employer and the Special Fund in certain disease cases. Our task is made easier by the excellent briefs provided by the parties to this appeal. The result we reach here reflects our opinion of what the coverage of the Act is at the present time, given adequate proof of causation in fact. I. Appellant presents three issues in this appeal. The first issue is actually an umbrella for a number of arguments that it was error for the Board and the reviewing court to find decedent died as a result of pneumonia arising out of and in the course of his employment with Dealers Transport Company. Dealers first argues that the Board failed to consider critical testimony that decedent felt bad and developed a respiratory infection prior to his first day on the job. This contention is based on, and supported by, the notes contained in the hospital admission summary prepared by the attending physician, Dr. Denton. The Board chose to rely on the testimony of Mrs. Thompson that the decedent first complained of catching cold on Tuesday, December 28, 1976, after his second day on the job, and on the testimonial statement of Dr. Denton, equivocal as it was, which contradicted the admission summary and supported Mrs. Thompson's observation. We will not disturb the Board's finding on this point, notwithstanding the fact that records based on statements made by patients to a physician for the purpose of diagnosis and treatment are considered to be reliable because it is in the patient's best interest to be as accurate and truthful as possible. However, in our opinion, this case does not turn on such a narrow evidentiary point. Assuming arguendo that decedent had a viral respiratory infection the day he reported to work, there is no evidence that it could be symptomatically described as anything other than a common cold or its equivalent. Whether it was the natural progression of this disease or the exacerbation of it by his work activities, which ultimately caused Mr. Thompson's death, presents a question of causation not one of coverage. All that is required in Kentucky for an injury or death to be compensable is that it be the result of a work-related injury. In Seventh St. Road Tobacco Warehouse v. Stillwell, 550 S.W.2d 469 (Ky. 1976), the highest Court of the Commonwealth explained the significant impact the introduction of the "work-related injury doctrine" had on Kentucky Workmen's Compensation Law:

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KRS 342.620(1) and KRS 342.610(1) merely state that a compensable injury is any work related harmful change in the human organism. The purpose of this change in the law was to expand workmen's compensation coverage to non-traumatic injuries. Yocom v. Pierce, 534 S.W.2d 796 (Ky. 1976); Haycraft v. Corhart Refractories Company, 544 S.W.2d 222 (Ky. 1976). It is the injury element and not the employment element of a workmen's compensation claim that the legislature meant to expand. "Work related" and "arising out of and in the course of employment" are synonymous terms. Id. at p. 470. Occupational disease is a subcategory within the overall statutory concept of injury which is broadly defined as a work-related harmful change in the human organism. KRS 342.620(1). An occupational disease is for coverage purposes a special category of injury. The distinction between the two becomes significant in determining whether the provisions of KRS 342.316 are to be triggered. This rather complex section is used to determine whether all or part of the monetary liability should be shifted from the employer to the Special Fund in certain cases where the occupational disease criteria are met. See KRS 342.620(2). A communicable disease can be an injury within the meaning of the Act. But, it does not follow that a communicable disease must always meet the occupational disease criteria in order to be covered. Compare KRS 342.620(1) and (2); Also see Haycraft, supra, at p. 224. Given the broad statutory language and the subjective and objective tests provided by the Court in Princess Mfg. Company v. Jarrell, 465 S.W.2d 45 (Ky. 1971), the task of determining whether a disease is an occupational disease as opposed to an injury could be a difficult one. Under the regime of Princess, supra, an occupational disease may be found if there is substantial evidence that either employment conditions specifically affected the employee in a manner resulting in contraction of disease, or employment conditions generally can, to a reasonable medical probability, cause a particular disease or condition in a given class of workers. We think that appellee failed to produce evidence sufficient to meet either of the Princess tests. She failed to prove beyond, at most, a mere possibility that decedent was actually exposed to the ultimately fatal pneumonia virus while at work. The mere possibility of disease exposure is not sufficient to meet the burden of proof as to disease causation. Cf. Marcum v. General Elec. Co., 479 S.W.2d 640 (Ky. 1972). Pneumonia is an ordinary disease of life. No attempt was made to prove that loading dock workers as a class are more likely or are more susceptible to contracting pneumonia than the public at large. Therefore, the objective test of Princess, supra, was not met either. Appellee, however, did produce competent medical testimony by two doctors from which it could be inferred that the conditions under which decedent worked could have lowered his resistance to pneumonia or could have caused a mild viral infection to become much more severe, even fatal. The Board chose to believe this testimony as was its factfinding prerogative. We are of the opinion that this evidence constitutes substantial evidence that a work-related injury occurred which produced, or substantially contributed to, decedent's fatal pneumonia.

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Appellant would disagree with our holding based on the contention that the communicable disease exception in KRS 342.620(1) bars coverage. The communicable disease coverage exception represents a legislative policy decision that the employer should not be held liable for disability caused by a communicable disease where the probability of contracting that disease is no greater for the worker because of his job situation than it is for him as a member of the general public. However, the statute does not rule out coverage for communicable diseases where the risk of contracting such disease is increased by the nature of the employment. Professor Larson discusses the "increased risk" doctrine at some length in his learned treatise. See 1 Larson's Workmen's Compensation Law, Section 8.00 et seq. (Larson). Section 8.41 of Larson at p. 3-36 states: Sunstroke, heat prostration, freezing pneumonia and other effects of exposure to heat and cold arise out of the employment in all jurisdictions if the exposure is accentuated by the nature and conditions of the employment, or, to use a familiar formula, if the exposure is greater than that to which the general public is subject. So if . . . becoming wet and chilled produces pneumonia or other harm the injury may be found to arise out of the employment. At Vol. I A, Ch. 38.50, n. 84, p. 7-94, Larson notes a conflict among jurisdictions as to whether pneumonia, though clearly work-related, was contracted "by accident." However, this need not concern us as under present Kentucky law an award of benefits does not require a showing of accidental cause. See KRS 342.620. 1 Larson at Section 8.42, p. 3-38, recognizes that the main difficulty in utilizing the "increased risk" doctrine lies in defining the general public with which comparison is to be made. The basic error in application lies in making the comparative group too narrow as exemplified by the ruling later overruled in Consumers Company v. Industrial Commission, 324 Ill. 152, 154 N.E.2d 423 (1926), where a worker with frozen hands was denied compensation because five other workers, engaged in the same work at the same place and time, suffered no harm. That, according to the court, showed that by reason of his occupation the employee was not exposed to a special or peculiar danger from freezing greater than that shared by other persons in the same locality. We reject this approach as too narrow. 1 Larson at Section 8.42, p. 3-41 states, and we agree, that: The proper application of the increased risk test is exemplified by the following beautifully blunt statement in a Texas sunstroke case: "In the case before us the very work which the deceased was doing for his employer exposed him to a greater hazard from heat stroke than the general public was exposed to for the simple reason that the general public were not pushing wheelbarrow loads of sand in the hot sun on that day." (American Gen. Ins. Co. v. Webster, 118 S.W.2d 1082 (Tex.Civ.App. 1938).)

82

The other principal respect in which the increased risk has sometimes been unfairly applied is the failure to recognize that the obligations of employment will often not permit the employee to obtain shelter or relief from the elements when such relief is theoretically available to him. The standards implicit in the above quotation can easily be adapted to the facts of this case. Mr. Thompson's work exposed him to a greater risk from pneumonia than the general public was exposed to for simple reason that the general public was not working on a loading dock with a viral infection in cold and damp December weather. The basic obligation and nature of his employment required him to work outside whether he really should have or not. The circumstances of decedent's prior unemployment and the fact that he was a probationary employee would support an inference that decedent's freedom of action for self-preservation was circumscribed by the conditions of his employment. For these reasons it was appropriate to conclude that the risk of injury or death was increased by the nature of his job duties. The resulting death being causally attributable to working conditions is therefore compensable. The result we reach here is in accordance with the liberal construction we are required to give the Act. KRS 342.004. It is not intended to be read as a precedent for a flood of claims based on colds, grippe and endless other common ills allegedly arising out of employment. Many claims of that type would be barred by the durational requirement contained in KRS 342.040. KRS 342.040 would not bar a claim based on a work-related death, duration obviously being irrelevant in such a case. From a strict legal standpoint, this case is not a disease case. The pneumonia and death were resultant effects of a work-related injurious cause which was the outside exposure which contributed to deceased resistance and exacerbation, to the point of death, of a normally nondisabling common illness. Our decision is basically that the working conditions were a substantial factor causing Mr. Thompson's death. Exactly where and when he was originally exposed to the virus is immaterial under this approach. Stated another way, the compensable injury of this case is not the viral infection per se, but the work-related aggravation of it which resulted in death. By that standard this is not an actual exposure to disease case and no precedent in that regard. The decisions in First National Stores v. Hester, 393 S.W.2d 603 (Ky. 1965); and Berry v. Owensboro Ice Cream & Dairy Products, 376 S.W.2d 302 (Ky. 1964), relied upon by appellant need not be read as conflicting with our decision here. For example, Berry, supra, involved a failure to prove causation while the proof presented here was sufficient to establish causation. But to the extent that they might be in conflict, we must be guided by the statutory enactments of 1972 rather than any prior case decisions. II. The second point we must decide is whether or not the Special Fund should bear any liability. We have previously held that KRS 342.316 does not apply, and we will not discuss that point further. We fail to see how the Special Fund has any liability under an "arousal" theory based on KRS 342.120. This is because there is evidence in this record sufficient to enable a reasonable mind to conclude that the working conditions to which decedent was exposed were the single substantial cause of his death. This view is best understood if 83

one considers the injury resulting in death to be the aggravation of the disease rather than the disease itself. Under KRS 342.120(3) liability would be placed on the employer since the work-related injury independently of any other factor was the substantial cause of death. Moreover, we do not think that decedent's disease fell within the operative scope of KRS 342.120. Even if we assume that decedent had a cold prior to beginning work, that would not constitute an active disability. A disease or condition is dormant if it was occupationally nondisabling prior to a subsequent injury. Yocom v. Loy, 573 S.W.2d 645 (Ky. 1978). Also see Haycraft, supra and Yocom v. Spalding, 547 S.W.2d 442 (Ky. 1977). There is no testimony in this case that decedent's cold kept him from performing his work duties. However, not every pre-existing departure from a normal state of health triggers the operation of KRS 342.120. In a studied analysis of the Special Fund concept, this Court in Yocom v. Jackson, 554 S.W.2d 891, 896 (Ky. App. 1977), stated: However, not every departure from the normal state of health constitutes a dormant condition within the meaning of the statute. Considering the purpose of funds such as the Special Fund, this court concludes that it must be reasonably foreseeable that the abnormality may become disabling to some degree as a result of the ordinary stresses of everyday life over the employee's expected work life before it can be considered a dormant condition within the meaning of KRS 342.120. The Court went on to say: It was not the intention of the legislature to relieve employers from the natural consequences of their employees' work related injuries merely because the degree of disability was affected by some physical or mental characteristic which ordinarily would never have affected the employees' ability to work. Id. at 897. Gauged by the above standards, liability rests solely on the employer. Ordinarily, colds do not progress into fatal pneumonia, and ordinarily they do not affect an employee's ability to work except, perhaps, in a temporary manner. In short, we do not believe that the Legislature intended a cold, or other viral infection of a similar nature, to be a dormant nondisabling disease within the meaning of the statute because the potential for occupational disability is not intrinsic to the condition to a reasonably foreseeable degree. The decision in Jackson, supra, was a coverage interpretation based on a determination of legislative intent. It can be translated into a standard governing the determination of causation-in-fact in cases where the Board is faced with the question of apportionment vel non between the employer and the Special Fund. That is, where it is not reasonably foreseeable that a pre-existing disease or condition will of its own natural course result in permanent or lengthy indeterminate bodily functional impairment and if the evidence reasonably shows that the substantial cause of the occupational disability or death arose out of the working conditions, then a finding that all liability rests on the employer is permissible. Applying the foregoing standard in conjunction with the overall substantial evidence test, we conclude the Board did not err in deciding as it did. Although, it is perhaps possible, it is not reasonably expectable that a common cold or equivalent viral infection will develop into fatal viral pneumonia absent some additional causal factor. The evidence clearly 84

demonstrated that decedent's fatal pneumonia arose out of his employment and that the working conditions themselves were the principal and overriding cause of his illness and death. There was no substantial evidence of any other cause. That being the case the employer alone is liable. No other questions are raised which merit our consideration. The judgment appealed from is affirmed. WILHOIT, J., concurs. LESTER, J., dissents. LESTER, Judge, dissenting. The majority opinion concludes that the Special Fund incurs no responsibility for compensation of disability brought on by the work-related aggravation of a viral infection. The evidence did not connect the communicable disease to Thompson's work. But, this employee would not have encountered any greater risk of disability because of his occupation than someone not so employed, if he did not have a cold. The medical experts agreed that exertion in cold damp weather would not cause a virus. The proof shows that Thompson's death resulted because the labor involved in his occupation aroused a dormant nondisabling condition. The condition was dormant and nondisabling because it did not affect Thompson's ability to labor until it was aroused into disabling reality. The majority relieves the Special Fund of liability by determining that viruses are not the sort of conditions embraced by KRS 342.120(b). I would not exclude as a matter of law the broad category of illness, commonly known as the cold, from the ambit of dormant nondisabling conditions, the arousal of which into disabling reality creates a liability of the Special Fund. The majority relies on language in Yocom v. Jackson, 554 S.W.2d 891, 896 (Ky. App. 1977), which limits the dormant conditions of KRS 342.120 to those which satisfy the standard that it must be reasonably foreseeable that the abnormality may become disabling to some degree as a result of the ordinary stresses of everyday life over the employee's expected work life. However, I submit that inclusion of Thompson's condition under KRS 342.120(b) does not violate this test. Within general experience what appears to be an ordinary cold can lapse into a serious sickness due to "stresses of everyday life." We do not have before us a disability increased because of a psychological or physical trait unique to the individual as discussed in Jackson, supra. I perceive no conceptual difference from the standpoint of Special Fund liability between the disability an employee whose vertebra have undergone a degenerative change suffers due to the effect that hard labor has had on his back, and Thompson's death which was produced by the effect that his work had on his cold. Most everyone who catches a cold, even if he works in adverse conditions, recovers without incident. However, a person who has a latent defect in his spine may never have any difficulty doing his job if he does not have to perform arduous tasks. Thompson's work would probably not have caused him any disability if he did not have a cold. His death as a result of the arousal of his virus conclusively demonstrates the grave potential of this dormant condition. The Special Fund was designed to pay the compensation for disability remaining after the employer provides for the compensation for the degree of disability which would have resulted had there been no dormant, but 85

aroused condition. KRS 342.120(3)(4). I would reverse with directions that the circuit court remand to the Board for the assessment of the statutory liability against the Special Fund. See City of Louisville, Division of Police v. Laun, 580 S.W.2d 232 (Ky. App. 1979).

86

BARREN RIVER DISTRICT HEALTH DEPT. V. HUSSEY 2000 KY. APP. LEXIS 39 (APR. 14, 2000)

COUNSEL: BRIEF FOR APPELLANT: William A. Lyons, Louisville, KY. ORAL ARGUMENT FOR APPELLANT: Thomas L. Ferreri, Louisville, KY. BRIEF AND ORAL ARGUMENT FOR REBECCA JANE HUSSEY, Deceased; ANDREW JACKSON HUSSEY, Executor: Kenneth F. Smart, Leitchfield, KY. BRIEF AND ORAL ARGUMENT FOR APPELLEE SPECIAL FUND: Joel D. Zakem, Louisville, KY. JUDGES: BEFORE: BUCKINGHAM, EMBERTON, AND JOHNSON, JUDGES, ALL CONCUR. OPINION BY: EMBERTON OPINION AFFIRMING EMBERTON, JUDGE: Barren River District Health Department appeals from an opinion of the Workers' Compensation Board affirming an award of benefits to Andrew Jackson Hussey, as executor of the estate of his daughter, Rebecca Jane Hussey, under Kentucky Revised Statutes (KRS) 342.720 (now repealed) and KRS 342.750(6). Rebecca's death was caused by Acquired Immunodeficiency Syndrome (AIDS) allegedly contracted while in the Department's employ. Rebecca began working for the Department as a registered nurse in February 1990. Among her duties was the treatment of Human Immunodeficiency Virus (HIV) patients. She previously served as a nurse in the Army Reserve, and from 1987 to 1988 she had worked for Auburn Nursing Home. During her employment with the Department she was, at the same time, employed by the Professional Registry of Nursing and by Life Line Home Health Care. In December 1994, Rebecca developed pneumonia, and while being treated, it was discovered that she was HIV positive. She continued to work for the Department until December 1995, and on February 4, 1996, died as a result of complications related to AIDS. Mr. Hussey testified that Rebecca told him most of the patients she worked with at the Department were AIDS patients and that in early 1994, while drawing a blood sample from an AIDS patient, the needle had pierced her skin. He could not recall that she told him the exact date of the incident. To his knowledge, Rebecca's work at the Professional Registry of Nursing and at Life Line Home Health involved work with elderly patients, none of whom were AIDS patients. He denied that Rebecca used intravenous drugs and testified that she was not sexually active nor had she undergone blood transfusions. 

Ordered not to be published March 23, 2001.

87

Brenda Kimbro, a home health aide who worked with Rebecca at the Department, testified it was common knowledge that Rebecca had been pricked with a needle while working with a HIV positive patient. Although she testified that Rebecca completed an incident report, she acknowledged that she did not see Rebecca complete the report, and that her knowledge of the incident was only through being told by other workers. Rose Basham, a clerical worker for the Department, testified that Rebecca worked with HIV patients, and that she was in the room when Rebecca reported the needle stick incident to a supervisor. She also stated that Rebecca completed an incident report and that it was not uncommon for reports to be missing from personnel files. She testified that Rebecca reported the incident some time prior to 1991, but she was uncertain of the date. Donald Houchin, the Department's Director of Administrative Services, testified that nurses were instructed to report incidents or injuries to their supervisor and that the supervisor would then complete the incident report. He testified that there was no record of Rebecca having reported a needle stick. He was shown an incident report dated February 1, 1994, signed only by Rebecca, describing a needle stick to Rebecca's right thumb. Houchin stated that any employee could obtain such a form. The Director of Nursing, Carol Kersting, testified that Rebecca did not report a needle stick until 1995 when Rebecca told her that she had contracted HIV through a needle stick that occurred in 1992. Joyce Anderson, Rebecca's supervisor in 1993, stated that Rebecca never reported a needle stick to her. Similarly, the affidavit of a co-worker was submitted stating that Rebecca had not reported any needle stick incidents. An affidavit of the Director of Home Health Care for the Department from 1993 through 1995, stated that she had not received, nor found, any reports regarding an alleged needle stick to Rebecca. Rebecca's medical records reveal that she had a history of depression and mental illness, including bipolar disorder and had attempted suicide. Records from the Parthenon Pavilion, dated April 14, 1995, contain the following notation: Pt. in closed seclusion at shift change – out to unit at 1744. Agreed to guidelines set by nursing staff, stated she was in control of her behavior. Has been irritable et easily agitated but directable. States that she 'intentionally got the needle stick,' knowing pt was HIV+. Stated she was tired living et was 'looking for an easy way out.' States needle stick was '91 or 92,' was dx – Jan. 95. . . . Dr. Keith Hewitt, a gynecologist, examined Rebecca on September 1, 1995. He noted that she was virginal but did not exclude the possibility that she had engaged in other forms of sexual activity. Dr. Rebecca Shadowen, an infectious disease specialist, first saw Rebecca in February 1995, and noted that Rebecca had a t-4 count of 23, which is exceedingly low, and she further indicated that Rebecca had been infected for at least two years. Rebecca reported to Dr. Shadowen that she was stuck with a needle used on a HIV positive patient. Dr. Shadowen stated that HIV is transmitted through either sexual intercourse with an infected person; sharing needles with an infected person; childbirth by an 88

infected mother; breast feeding from an infected mother; blood transfusions prior to 1987; or exposure to blood and body fluids of an infected person. She testified that in Rebecca's case the only possible exposure was her occupational exposure to blood or body fluids of an infected person. This claim was filed on October 8, 1996, and AIK, whose coverage became effective October 1, 1994, was named as the responsible carrier. Subsequently, after Dr. Shadowen indicated that Rebecca had been infected before September 1994, the ALJ, upon AIK's motion, joined Liberty Mutual as the appropriate carrier and dismissed AIK. The ALJ denied the Department's motion to join Professional Registry of Nursing and Life Line Home Health Care as parties. The Department's initial argument is that there was uncontradicted evidence that Rebecca intentionally injected herself with the virus, thereby precluding benefits under KRS 342.610(3). However, we find the only indication that Rebecca intentionally stuck herself with a poisonous needle to be her own statement, which was made while she was in a highly emotional state and during the advanced stages of AIDS. Her irrational behavior had been the reason for her in-patient care at the mental facility. The ALJ gave sufficient explanation for his rejection of the Department's evidence and we find no error.1 A more problematic question is whether this claim is one for an occupational disease or one properly characterized as an injury claim.2 A person is infected with HIV from a single event or exposure much like an injury, yet the result of that exposure, AIDS, is gradual in onset. In National Health Laboratory, Inc. v. Hunt,3 the court dealt with a claimant's development of Hepatitis B, a disease similar in transmittal to AIDS, as an occupational disease. Although the court stated in dicta that it was properly considered to be an occupational disease, the issue of whether the condition was an injury or an occupational disease for purposes of the Workers' Compensation Act was not properly raised.4 It appears, therefore, that this is an issue of first impression. The Department argues that the ALJ erroneously treated this case as an occupational disease rather than a traumatic injury, and consequently, did not require proof of when and where the injury occurred. Because of the difficulty in casually relating an occupational disease to a specific date, an employee is required only to prove that there was an exposure to the conditions which caused the disease during the course of employment.5 Yet AIDS is not transmitted by mere exposure to HIV patients, but requires a single event that causes contact with body fluids of an infected person. There is no report in Rebecca's file regarding an incident that exposed her to the disease, and 1

Western Baptist Hospital v. Kelly, 827 S.W.2d 685 (Ky. 1992).

2

Although the Department raises the issue of whether this is an occupational disease claim or a traumatic injury claim, it does not raise the issue of timely notice of the "injurious exposure." KRS 342.185(2). 3

898 S.W.2d 494 (Ky. App. 1995).

4

898 S.W.2d at 495.

5

Gregory v. Peabody Coal Co., 355 S.W.2d 156 (Ky. 1962).

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statements made to witnesses are vague and inconsistent as to when the needle stick occurred. The novel question presented is whether AIDS is an occupational disease whereby the proof presented is sufficient to demonstrate a work-related injury. There is no dispute that AIDS is a disease. It is not sudden in onset and the victim's physical condition progressively deteriorates as the disease destroys the body's immune system.6 In the earliest development of workers' compensation law, occupational and other diseases were not compensable except those resulting from a traumatic injury received in the course of employment. Diseases not traceable to such injuries were excluded.7 Subsequently, the legislature recognized there were diseases so common to certain occupations that those so engaged were exposed to the risk of the disease simply by reason of their employment and, thus, enacted the occupational disease statute.8 An occupational disease is defined as a disease which arises out of and in the course of employment and shall be deemed to arise out of the employment if: There is apparent to the rational mind, upon consideration of all the circumstances, a causal connection between the conditions under which the work is performed and the occupational disease, and which can be seen to have followed as a natural incident to the work as a result of the exposure occasioned by the nature of the employment and which can be fairly traced to the employment as the proximate cause. The occupational disease shall be incidental to the character of the business and not independent of the relationship of employer and employee. An occupational disease need not have been foreseen or expected, but, after its contraction, it must appear to be related to a risk connected with the employment and to have flowed from the source as a rational consequence.9 In Princess, supra, the court interpreted the occupational disease statute and found it applicable to a case where a worker had a work-related allergic reaction. Although not a disease commonly associated with the occupation, the court held it was, nevertheless, compensable because the condition was encountered at work in a far greater degree that it would have been at other employment or outside the employment.10 An occupational disease, the court held, may be found if there is substantial evidence that either employment conditions specifically affected the employee in a manner resulting in contraction of the disease, or employment conditions generally can, to a reasonable medical probability, cause a particular disease or malady in a given class of workers.11

6

Mobile Wash of Louisville, Inc. v. Lovitt, 565 S.W.2d 150 (Ky. App. 1978).

7

Great Atlantic Pac. Tea Co. v. Sexton, 242 Ky. 266, 46 S.W.2d 87 (1932).

8

Princess Manufacturing Co. v. Jarrell, 465 S.W.2d 45 (Ky. 1971).

9

KRS 342.0011(3).

10

Id.at 47.

11

Id. at 48.

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The concept of a compensable disease was later expanded in Dealers Transport Co. v. Thompson.12 There, a worker who worked in cold, damp, winter weather on a loading dock developed pneumonia and died. Recognizing that a communicable disease can be an injury within the meaning of the Act, the court held that a communicable disease does not always have to meet the occupational disease criteria in order to be covered.13 The evidence produced was insufficient to meet either the subjective or objective occupational disease test set forth in Princess, supra. Nevertheless, the court held there was sufficient evidence from which it could be inferred that the conditions of the decedent's employment caused, or substantially contributed, to his pneumonia. Pneumonia, like AIDS, is a communicable disease, which under KRS 342.0011(1), is compensable if the probability of contracting the disease is greater for the worker because of his job situation than it is for him as a member of the general public. In Dealers Transport, the decedent was at greater risk than the general public for the "simple reason that the general public was not working on a loading dock with a viral infection in cold and damp December weather." During Rebecca's employment she was obviously at a higher risk of contracting AIDS than was a member of the general public simply because she was handling bodily fluids of HIV patients. We agree with the Board that this case is properly an occupational disease claim. Although there is no evidence that healthcare workers as a class are exposed to the disease as an incident of their employment, there is sufficient evidence that Rebecca was specifically affected in a manner causing her to contract the disease.14 In so concluding the Board stated: Clearly, all of the evidence in the record regarding how Hussey was exposed to the HIV virus indicates that she was infected as a result of an occupational exposure to contaminated blood or bodily fluids. There is testimony from Mr. Hussey regarding a conversation that he had with his daughter on the night that she received a needle stick while working with an AIDS patient. We believe that the statements made in this conversation would be admissible as an excited utterance pursuant to KRE 803(2). Hussey also made statements to Dr. Shadowen regarding how she contracted HIV. These statements would, of course, be admissible as statements for purposes of medical treatment or diagnosis pursuant to KRE 803(4). Basham testified that she was present when Hussey reported receiving a needle stick while working with an AIDS patient for the Health Department. Kersting testified that Hussey gave her the name of a patient that she was working on when she received the needle stick and verified that the patient was a client of the Health Department. The only incident report regarding a needle stick that was introduced into evidence does not seem to relate to the incident that Hussey reported to Basham and Mr. Hussey. However, there is testimony in the record that record keeping at the Health Department was 12

593 S.W.2d 84 (Ky. App. 1979).

13

Id. at 88.

14

Princess, supra.

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sometimes sloppily done. Certainly, this evidence is somewhat tenuous. However, we believe that taken as a whole, there is substantial evidence in the record to support a finding that Hussey contracted HIV as a result of a needle stick that occurred while she was working for the Health Department. The ALJ's findings are based on substantial evidence which we cannot disturb on appeal.15 During the time of Rebecca's employment, two different insurance companies insured the Department. Liberty Mutual was the carrier until October 1, 1994, when AIK became the carrier. AIK was the carrier in January 1995, when Rebecca discovered she was infected with HIV, and was the carrier on her last date of employment. Although AIK was named as the original carrier, the ALJ found Liberty Mutual to be the appropriate carrier. The Board affirmed, reasoning that: The evidence in the record indicates that merely being in the presence of an HIV positive person does not expose one to the hazards of the disease. As Dr. Shadowen stated, in order to transmit the disease, there must be some break in the skin or contact between infected bodily fluids and mucosal membranes such as in the eyes or mouth. The only evidence of any such exposure in Hussey's case indicates that such an incident occurred, at the latest, in May 1994. "Injurious exposure" is defined as "that exposure to occupational hazard which would, independently of any other cause whatsoever, produce or cause the disease for which the claim is made." KRS 342.0011(4). We do not believe that the mere presence of HIV positive patients would, independently of any other cause whatsoever, produce or cause the disease. The only exposures indicated by the evidence which would qualify as injurious exposures are the needle stick incidents which were alleged to have occurred in 1992 or early 1994. We find no error with the ALJ's determination that Liberty Mutual is the responsible carrier. We agree that, under KRS 342.316(10), the last injurious exposure in this case occurred before October 1994. In the traditional occupational disease case such as pneumoconiosis each exposure to the hazardous condition, to some extent, contributes to the progression of the disease. "Therefore, although a particular employment may not have been the actual cause of a workers' pneumoconiosis, liability flows from the recognition that the injurious exposure received in the employment did, to some extent, contribute to the workers' condition."16 HIV, however, attacks the body in one deadly invasion. Once the body is infected with HIV, further exposure does not contribute to the disease and cannot be considered injurious. In this case, there is medical evidence that Rebecca became infected with the disease at least two years before she saw Dr. Shadowen in 1995. There is substantial evidence, 15

Dealers Transport., 593 S.W.2d at 87.

16

Begley v. Mountain Top, Inc., 968 S.W.2d 91, 96 (Ky. 1998).

92

therefore, that her last injurious exposure occurred before AIK became the insurance carrier and the ALJ properly concluded that Liberty Mutual is the responsible carrier. Rebecca was employed by two other employers while also working for the Department, which the Department argues, were required to be joined as parties. The Department, however, failed to present evidence as to the nature of Rebecca's duties at either employment. There is no evidence that her duties at Professional Registry of Nursing or at Life Line Home Health Care were such that she was in contact with HIV infected patients. Without such evidence of potential liability, the refusal to join either employer was not an abuse of discretion.17 The Department's contention that it could not obtain evidence from Rebecca's concurrent employers without their joinder as parties is meritless. No limitation on the applicable civil discovery rules is imposed by KRS 342.260(3). It permits an ALJ, or the Board, either directly or indirectly, to obtain information. The Department was aware of Rebecca's concurrent employers and simply failed to avail itself of the means to demonstrate why their joinder in the action was warranted. The ALJ apportioned the award 60% to the Department and 40% to the Special Fund. The Board reversed. It found that Rebecca's exposure to HIV occurred in 1992, less than five years prior to the development of AIDS, and therefore, under the effective statute, KRS 342.316(10), there is no Special Fund liability. The liability of the Special Fund was the issue addressed in National Health Laboratory, supra, where the court stated that "key words" in the statute are "which developed to the point of disability only after an exposure of five or more years." In that case, it was conclusively established that the worker developed Hepatitis B after seven to ninety days of exposure, thus, the statute was inapplicable.18 The evidence indicates that Rebecca's earliest exposure to the disease was in 1992, which is less than five years before she died. We find no error in the Board's refusal to apportion any liability to the Special Fund. During the court's discussion of this case, and the writing of this opinion, we have felt the twinge of attempting to fit a square peg into a round hole. Healthcare workers who come in contact with human body fluids of HIV infected patients are at a greater risk of contracting the virus, and ultimately AIDS, than is the general population; but, we clearly distinguish between mere exposure to a general healthcare work environment and a work environment known to have within it patients who are HIV infected. It is the exposure to the virus itself, not the hazard of the employment that causes the injury. Except for the time limitations for filing such a claim referred to in KRS 342.185(2), in which the legislature appears to use language conceptually similar to our occupational disease statute, there is nothing in our statutes specifically addressing the issues associated with HIV or the AIDS disease. We are, however, in agreement with the Board that this is an occupational disease claim, and although the proof is scant as to the precise date of infection, we find there is substantial evidence to reasonably

17

Jackson & Church Division, York-Shipley, Inc. v. Miller, 414 S.W.2d 893 (Ky. 1967).

18

898 S.W.2d at 496.

93

conclude that as a result of the work-related exposure to the disease, Rebecca was infected with, and died from, AIDS. The opinion and order of the Workers' Compensation Board is affirmed. ALL CONCUR.

94

KENTUCKY EMPLOYERS SAFETY ASS'N. V. LEXINGTON DIAGNOSTIC CENTER 291 S.W.3D 683 (KY. 2009)

COUNSEL: FOR APPELLANT, KENTUCKY EMPLOYERS SAFETY ASSOCIATION: Thomas L. Ferreri, Gregory Lonzo Little, Ferreri & Fogle, Louisville, KY. FOR APPELLEE, LEXINGTON DIAGNOSTIC CENTER: Kevin Wayne Weaver, Sturgill, Turner, Barker & Moloney, PLLC, Lexington, KY. JUDGES:

All sitting. All concur. OPINION

This appeal results from a medical fee dispute between an employer and its workers' compensation insurance carrier.1 At issue is whether a healthcare worker who was splattered in the face and eye with blood sustained a compensable injury and, as a consequence, whether the employer or the insurance carrier bears liability for the expense of OSHA-required prophylactic testing. Affirming a decision by the Workers' Compensation Board, the Court of Appeals determined that the worker sustained a compensable injury and, thus, that the carrier was liable. We affirm but our reasoning differs. Being splattered in the face and eye with foreign blood or other potentially infectious material is a traumatic event for the purposes of KRS 342.0011(1). The presence of blood in the eye constitutes an exposure as defined in 29 C.F.R. §1910.1030(b), which shows a harmful change in the human organism, i.e., the introduction of foreign blood or potentially infectious material into the worker's body. KRS 342.0011(1) provides as follows: "Injury" means any work-related traumatic event or series of traumatic events, including cumulative trauma, arising out of and in the course of employment which is the proximate cause producing a harmful change in the human organism evidenced by objective medical findings. "Injury" does not include ... any communicable disease unless the risk of contracting the disease is increased by the nature of the employment." Injury" when used generally, unless the context indicates otherwise, shall include an occupational disease ... but shall not include a psychological, psychiatric, or stress-related change in the human organism, unless it is a direct result of a physical injury[.] The worker was splattered in the face and eye with blood and saline while flushing a patient's I.V. line. He notified the employer and sought medical treatment immediately after the incident occurred, at which point the applicable post-exposure protocol was 1

803 KAR 25:012, §1 permits an employer, carrier, medical provider, or injured worker to file a medical fee dispute regardless of whether the worker has filed an application for workers' compensation benefits.

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initiated. It required a series of five office visits that included tests for bloodborne pathogens, for a total cost of about $700.00. The carrier paid for the first two visits and part of the third but resisted further payment, stating that its policy was to pay for an initial test and one follow-up "as a matter of custom and practice and a courtesy to its members." The carrier asserted that an exposure has the potential to harm but does not constitute an injury until such time as objective medical findings show that it produced a harmful change in the human organism. The carrier supported its position with testimony from Dr. Wolens, who stated that OSHA requires an employer to provide post-exposure prophylaxis for workers who are exposed to blood and certain body fluids. Although he opined that an exposure to the risk of infection is not synonymous with an injury, he did not state that the protocol at issue was unreasonable or unnecessary treatment when foreign blood is spattered into the eye. Likening the present exposure to an exposure to coal dust, he stated that employers pay for tests to determine if employees have developed pneumoconiosis but that the workers' compensation carrier does not become liable until the exposure produces a harmful change that is shown with objective medical findings. Affirming decisions by the Board and the ALJ, the Court of Appeals relied on authority that concerned psychological harm and held that contact with blood and other body fluids constitutes a "physical injury" under KRS 342.0011(1);2 that blood spattered into the worker's eye caused a temporary change in the human organism; and that the purpose of the protocol was to determine if a permanent change occurred. Appealing, the carrier continues to assert that the employer failed to meet its burden of proof. The carrier argues that the Court of Appeals equated mere contact with blood and other body fluids with a physical injury, thereby extending the definition of injury to include a mere exposure to a potentially hazardous substance without regard to whether the exposure produced a harmful change shown by objective medical findings. Stating that the expanded definition would have far reaching impact on Kentucky employers and insurers, the carrier questions whether it would become liable for medical monitoring to determine whether workers' exposure to potentially hazardous substances or to repetitive motion has, in fact, produced a harmful change. Neither an occupational disease, nor a gradual injury, nor any other harmful change in the human organism becomes compensable until it is shown by objective medical findings to exist. Chapter 342 views a sudden, accidental exposure to a substance that produces a harmful change as being an injury.3 The present case concerns a single 2

See Richard E. Jacobs Group, Inc. v. White, 202 S.W.3d 24 (Ky. 2006) (physical exertion from performing CPR and first aid constitutes a physically traumatic event); Lexington-Fayette Urban County Government v. West, 52 S.W.3d 564 (Ky. 2001) (a psychological, psychiatric, or stressrelated change must directly result from a physically traumatic event in order to be compensable as an injury). West and White involved allegations of psychological or psychiatric harm. At issue was the requirement that a psychological, psychiatric, or stress-related change in the human organism must result directly from a "physical injury" to be considered an injury under KRS 342.0011(1). The court construed the term "physical injury" as referring to "a physically traumatic event" rather than to a physical harm. Thus, West and White are instructive but of limited value because the present claim involves a physical harm. Physical harm is compensable under KRS 342.0011(1) without regard to whether the trauma that caused it was physical or emotional. 3

Mobile Wash of Louisville, Inc. v. Lovitt, 565 S.W.2d 150 (Ky. App. 1978).

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traumatic event. The carrier asserts that no objective medical evidence showed a harmful change in the human organism but does not dispute that blood splattered onto the worker's face and into his eye. Contrary to its assertion, the traumatic event produced a harmful change (the introduction of foreign blood into the worker's eye), regardless of whether subsequent objective medical findings showed the presence of an infection or other harmful change. 29 C.F.R. §1910.1030 requires employers to protect all workers whose job duties may be reasonably anticipated to bring them into contact with blood and other potentially infectious materials.4 When a worker is exposed to such materials, the regulation requires post-exposure prophylaxis as indicated by United States Public Health Service recommendations. 29 C.F.R. §1910.1030(b) defines an exposure as being "a specific eye, mouth, other mucous membrane, non-intact skin, or parenteral contact with blood or other potentially infectious materials." Parenteral contact means "piercing mucous membranes or the skin barrier through such events as needlesticks, human bites, cuts, and abrasions." Thus, mere contact with blood or other potentially infectious materials may or may not constitute an exposure. Being splattered in the face and eye with foreign blood or other potentially infectious material constitutes a traumatic event for the purposes of KRS 342.0011(1). Objective medical evidence of a resulting exposure as defined in 29 C.F.R. §1910.1030(b) evidences a harmful change in the human organism because such exposure introduces foreign blood or other potentially infectious material into the worker's body. Thus, KRS 342.020(1) entitles the affected worker to reasonable and necessary medical treatment "for the cure and relief from the effects of an injury."5 KRS 342.020(1) includes treatment for the injury's immediate effects as well as treatment to help determine if it produced harmful changes not evident immediately or to address such changes. What treatment is reasonable and necessary depends on the circumstances. The carrier argues that all medical treatment and testing to date has failed to reveal any objective medical findings of a harmful change in the human organism, but it does not dispute that blood and saline splattered onto the worker's face and into his eye. Thus, the absence of a medical report to confirm that fact does not compel a finding in the carrier's favor. We conclude, therefore, that the ALJ did not err in finding that the worker sustained an injury and that the carrier is liable for reasonable and necessary medical treatment, including both the initial treatment and post-exposure prophylaxis. The decision of the Court of Appeals is affirmed. All sitting. All concur.

4

Secretary of Labor, Commonwealth of Kentucky v. Irvin H. Whitehouse & Sons, 977 S.W.2d 250 (Ky. App. 1998). 5

FEI Installation, Inc. v. Williams, 214 S.W.3d 313 (Ky. 2007).

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CRUNCHING THE NUMBERS: IS THE RECESSION KILLING COMP IN KENTUCKY? Stephanie D. Ross, Esq.

In Kentucky, the recession began to be reflected in the unemployment rate in late 2008, reaching its peak in the summer of 2009.1 As of this writing, we are continuing to see a downward trend in the numbers. As a workers’ compensation practitioner, I’ve fielded a number of inquiries over the last two years concerning the impact of the recession on claims. While I had a vague notion that claims would probably increase temporarily as workers were laid off and had incentive to file both legitimate and fraudulent claims, it also occurred to me that an injured worker who was still employed was less likely to file a legitimate claim, for fear of job loss. Of course, over the long-term, higher unemployment would mean fewer claims, because there were simply fewer workers to be injured. In short, my response to those inquiries has generally been something along the lines of, “It’s complicated.” This seminar seemed like a good opportunity to take a more scientific approach to the question “Is the recession killing comp in Kentucky?” I’ll attempt to answer this question by comparing and analyzing the following statistics:

† Local Area Unemployment Statistics Seasonally Adjusted Unemployment Numbers Seasonally Adjusted Unemployment Rate By: Bureau of Labor Statistics † First Reports of Injury By: Department of Workers’ Claims † Workers’ Compensation Claims Filed By: Department of Workers’ Claims

1

The National Bureau of Economic Research, a private panel of economists, date the onset of the “Great Recession” to December of 2007.

99

Unemployment vs Claims Filed vs FROI 12

10

100

Numbers

8

6

4

2

0 Unemployment Rate

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

5.6

5.5

5.4

4.6

4.6

4.2

5.2

5.7

6.3

5.6

6.0

5.9

5.6

6.6

10.7

10.5

9.8

Claims (x 1,000)

9.184 8.882 8.802 5.215 4.719

FROI (x 10,000)

5.1328 4.4423 4.6538 4.6866 4.7121 4.4092 3.9589 3.6479 3.5016 3.5015 3.6986 3.3633 3.178 3.2446 2.9836 2.9145 3.1162

4.26

6.119 5.317

6.82

7.174 6.064 5.491 5.188 5.386 4.885 5.154 4.779

101

Unemployment

Claims Filed

Claims

FROI

Year 1995 1996 1997 1998 1999

Rate 5.6 5.5 5.4 4.6 4.6

(x 1,000) 9.184 8.882 8.802 5.215 4.719

Filed 9184 8882 8802 5215 4719

(x 10,000) 5.1328 4.4423 4.6538 4.6866 4.7121

FROI 51328 44423 46538 46866 47121

2000 2001 2002 2003

4.2 5.2 5.7 6.3

4.26 6.119 5.317 6.82

4260 6119 5317 6820

4.4092 3.9589 3.6479 3.5016

44092 39589 36479 35016

2004 2005 2006 2007 2008

5.6 6.0 5.9 5.6 6.6

7.174 6.064 5.491 5.188 5.386

7174 6064 5491 5188 5386

3.5015 3.6986 3.3633 3.178 3.2446

35015 36986 33633 31780 32446

2009

10.7

4.885

4885

2.9836

29836

2010 2011

10.5 9.8

5.154 4.779

5154 4779

2.9145 3.1162

29145 31162

9.66% FROI result in claims

20.49% FROI result in claims

16.37% FROI result in claims 17.68% FROI result in claims

102

103

104

Bureau of Labor Statistics

Local Area Unemployment Statistics Original Data Value Series Id: LASST21000004 Seasonally Adjusted Area: Kentucky Area Type: Statewide State/Region/ Kentucky Division: Years: 2001 to 2011

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Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Jan 90885 116098 118251 117363 110826 124917 116506 112833 189435 228119 218499

Feb 92416 114665 120405 115689 114132 123479 115817 113954 202828 227152 218262

Mar 93905 112713 122512 114312 117040 122273 114238 116162 213990 224495 214305

Source: Bureau of Labor Statistics

Apr 95310 110990 124447 112955 119215 121734 112461 119722 222033 220677 211737

May 96778 109892 126059 111280 120481 121506 111273 124394 227207 216589 207013

Jun 98639 109204 127246 109164 121001 121110 110701 129430 230074 213378 202855

Jul 101260 108922 127658 106800 121416 120116 110725 134031 230996 211972 200647

Aug 104838 109203 127154 104770 122040 118664 111302 138264 230256 212080 198157

Sep 108933 110241 125670 103663 122926 117387 111888 143529 228720 212751 202888

Oct 112778 111997 123571 103824 123835 116611 112295 151355 227456 213425 202003

Nov 115405 114078 121337 105162 124576 116409 112429 162117 227117 214028 196809

Generated on: January 3, 2012 (04:03:16 PM)

Dec 116450 116168 119253 107656 124849 116531 112470 175311 227738 214734

Annual 102300 112014 123630 109387 120195 120061 112675 135092 221488 217450 206652

106

107

108

Bureau of Labor Statistics

Local Area Unemployment Statistics Original Data Value Series Id: LASST21000003 Seasonally Adjusted Area: Kentucky Area Type: Statewide State/Region/ Kentucky Division: Years: 2001 to 2011

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Year Jan Feb 4.7 2001 4.6 5.9 2002 6.0 6.1 2003 6.0 5.9 2004 5.9 5.8 2005 5.6 6.1 2006 6.2 5.7 2007 5.7 5.6 2008 5.6 9.8 2009 9.2 2010 11.0 10.9 2011 10.4 10.4

Mar 4.8 5.8 6.2 5.8 5.9 6.1 5.6 5.7 10.3 10.8 10.2

Apr 4.8 5.7 6.3 5.7 6.0 6.0 5.5 5.9 10.7 10.6 10.0

Source: Bureau of Labor Statistics

May Jun Jul Aug Sep Oct Nov Dec Annual 5.0 5.1 5.2 5.4 5.6 5.8 5.9 6.0 5.2 5.7 5.6 5.6 5.6 5.7 5.7 5.8 5.9 5.7 6.4 6.5 6.5 6.5 6.4 6.3 6.1 6.0 6.3 5.7 5.6 5.5 5.3 5.3 5.3 5.3 5.5 5.6 6.1 6.1 6.1 6.1 6.1 6.2 6.2 6.2 6 6.0 6.0 5.9 5.9 5.8 5.7 5.7 5.7 5.9 5.5 5.5 5.5 5.5 5.5 5.6 5.6 5.6 5.6 6.1 6.4 6.6 6.8 7.0 7.4 7.9 8.5 6.6 10.9 11.0 11.1 11.1 11.0 11.0 10.9 11.0 10.7 10.4 10.3 10.2 10.2 10.2 10.2 10.2 10.3 10.5 9.8 9.6 9.5 9.5 9.7 9.6 9.4 Generated on: January 3, 2012 (03:13:44 PM)

110

111

112

113

114

PROGRAM STATISTICS Comparison by County Labor Force, Lost Time First Reports of Injury (FROIs) and Litigated Claims FY 10-11 County

Total Labor FROIs % of FROIs Claims % of Claims to Force to Labor Force FROIs Adair 9,582 49 0.51% 5 10.20% Allen 8,553 67 0.78% 8 11.94% Anderson 11,153 77 0.69% 4 5.19% Ballard 4,158 25 0.60% 8 32.00% Barren 19,311 236 1.22% 19 8.05% Bath 5,068 53 1.05% 3 5.66% Bell 9,390 205 2.18% 46 22.44% Boone 65,211 1022 1.57% 117 11.45% Bourbon 9,557 188 1.97% 16 8.51% Boyd 23,229 420 1.81% 68 16.19% Boyle 12,931 218 1.69% 33 15.14% Bracken 4,348 18 0.41% 1 5.56% Breathitt 5,735 64 1.12% 15 23.44% Breckinridge 9,633 63 0.65% 2 3.17% Bullitt 40,460 397 0.98% 33 8.31% Butler 5,660 28 0.49% 6 21.43% Caldwell 6,952 60 0.86% 11 18.33% Calloway 17,910 197 1.10% 23 11.68% Campbell 45,849 359 0.78% 35 9.75% Carlisle 2,391 9 0.38% 2 22.22% Carroll 5,489 100 1.82% 7 7.00% Carter 13,810 117 0.85% 16 13.68% Casey 7,315 75 1.03% 5 6.67% Christian 30,318 524 1.73% 43 8.21% Clark 17,422 260 1.49% 55 21.15% Clay 7,122 79 1.11% 21 26.58% Clinton 4,914 55 1.12% 7 12.73% Crittenden 4,114 31 0.75% 3 9.68% Cumberland 3,093 49 1.58% 4 8.16% Daviess 48,511 632 1.30% 47 7.44% Edmonson 5,347 30 0.56% 2 6.67% Elliott 3,395 12 0.35% 4 33.33% Estill 6,572 38 0.58% 8 21.05% Fayette 156,851 2,486 1.58% 321 12.91% Fleming 6,633 63 0.95% 2 3.17% Floyd 15,578 345 2.21% 162 46.96% Franklin 24,801 803 3.24% 86 10.71% Fulton 2,707 36 1.33% 13 36.11% Gallatin 4,018 22 0.55% 4 18.18% Garrard 7,865 39 0.50% 6 15.38% Grant 12,940 71 0.55% 12 16.90% Graves 16,427 133 0.81% 16 12.03%

 

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PROGRAM STATISTICS Comparison by County Labor Force, Lost Time First Reports of Injury (FROIs) and Litigated Claims FY 10-11 County

Total Labor FROIs % of FROIs Claims % of Claims to Force to Labor Force FROIs Grayson 11,786 138 1.17% 17 12.32% Green 5,770 35 0.61% 2 5.71% Greenup 18,191 123 0.68% 11 8.94% Hancock 4,312 91 2.11% 8 8.79% Hardin 50,456 583 1.16% 63 10.81% Harlan 11,082 355 3.20% 125 35.21% Harrison 9,533 98 1.03% 11 11.22% Hart 8,552 76 0.89% 8 10.53% Henderson 23,892 344 1.44% 34 9.88% Henry 8,065 86 1.07% 4 4.65% Hickman 2,208 26 1.18% 3 11.54% Hopkins 22,449 516 2.30% 47 9.11% Jackson 4,374 31 0.71% 15 48.39% Jefferson 368,150 6,622 1.80% 824 12.44% Jessamine 23,449 324 1.38% 27 8.33% Johnson 10,050 145 1.44% 41 28.28% Kenton 85,362 1,008 1.18% 94 9.33% Knott 6,288 166 2.64% 75 45.18% Knox 12,768 90 0.70% 21 23.33% Larue 7,233 35 0.48% 5 14.29% Laurel 26,683 380 1.42% 87 22.89% Lawrence 6,406 147 2.29% 33 22.45% Lee 2,792 37 1.33% 4 10.81% Leslie 3,786 47 1.24% 25 53.19% Letcher 8,799 206 2.34% 96 46.60% Lewis 5,514 31 0.56% 4 12.90% Lincoln 10,628 65 0.61% 4 6.15% Livingston 4,816 41 0.85% 9 21.95% Logan 12,883 104 0.81% 18 17.31% Lyon 3,409 43 1.26% 6 13.95% Madison 43,484 591 1.36% 69 11.68% Magoffin 4,542 58 1.28% 19 32.76% Marion 10,373 188 1.81% 16 8.51% Marshall 15,102 139 0.92% 17 12.23% Martin 3,967 130 3.28% 61 46.92% Mason 8,612 108 1.25% 10 9.26% McCracken 31,885 481 1.51% 66 13.72% McCreary 6,100 67 1.10% 10 14.93% McLean 4,657 26 0.56% 2 7.69% Meade 11,743 64 0.55% 8 12.50% Menifee 2,650 15 0.57% 4 26.67% Mercer 10,651 116 1.09% 18 15.2%

 

116

PROGRAM STATISTICS Comparison by County Labor Force, Lost Time First Reports of Injury (FROIs) and Litigated Claims FY 10-11 County

Total Labor FROIs % of FROIs Claims % of Claims to Force to Labor Force FROIs Metcalfe 4,317 19 0.44% 2 10.53% Monroe 4,771 79 1.66% 4 5.06% Montgomery 12,560 205 1.63% 39 19.02% Morgan 5,276 62 1.18% 15 24.19% Muhlenberg 13,565 155 1.14% 22 14.19% Nelson 22,475 291 1.29% 34 11.68% Nicholas 3,244 18 0.55% 3 16.67% Ohio 12,912 115 0.89% 19 16.52% Oldham 28,515 216 0.76% 15 6.94% Owen 5,567 53 0.95% 3 5.66% Owsley 1,631 26 1.59% 3 11.54% Pendleton 7,381 41 0.56% 1 2.44% Perry 11,781 432 3.67% 129 29.86% Pike 26,511 688 2.60% 362 52.62% Powell 5,751 41 0.71% 9 21.95% Pulaski 28,320 483 1.71% 75 15.53% Robertson 1,108 5 0.45% 1 20.00% Rockcastle 7,212 77 1.07% 12 15.58% Rowan 12,525 173 1.38% 17 9.83% Russell 8,768 144 1.64% 10 6.94% Scott 23,515 548 2.33% 93 16.97% Shelby 22,214 243 1.09% 33 13.58% Simpson 9,264 160 1.73% 15 9.38% Spencer 9,430 30 0.32% 2 6.67% Taylor 14,006 157 1.12% 22 14.01% Todd 5,497 45 0.82% 4 8.89% Trigg 6,384 43 0.67% 7 16.28% Trimble 4,418 20 0.45% 7 35.00% Union 8,382 179 2.14% 24 13.41% Warren 55,238 791 1.43% 90 11.38% Washington 5,865 57 0.97% 7 12.28% Wayne 9,109 68 0.75% 4 5.88% Webster 7,423 77 1.04% 14 18.18% Whitley 15,089 319 2.11% 66 20.69% Wolfe 7,295 42 0.58% 7 16.67% Woodford 13,299 277 2.08% 28 10.11% Out-of-State 990 191 19.29% Unknown 62 70 112.90% Grand Total 2,096,393 31,162 1.49% 4,779 15.34% Workforce data provided by the Department of Workforce Investment. Agriculture is included in the total labor force numbers. Unknown numbers are due to insufficient reporting information.

 

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APPENDIX: STUDIES OF RECESSIONS AND WORKERS' COMPENSATION COSTS David Anderson Research and Statistics, Minnesota Department of Labor and Industry Reprinted with permission

Workers' Compensation Costs in New Jersey18 This study examined factors affecting the costs of workers' compensation in New Jersey between 1980 and 1991. It focused on the 1989 to 1991 recession. The average unemployment rate from 1980 to 1991 was 6.0 percent, but unemployment reached 8.5 percent in 1992. Note that the paper did not examine costs in 1992. The number of people employed in New Jersey dropped by 1.5 percent from 1989 to 1990, by 3.7 percent from 1990 to 1991, and by 1.2 percent from 1991 to 1992. In the manufacturing sector, total hours worked declined by 5.8, 6.4 and 4.8 percent, respectively. Total system costs increased by 8.8 percent a year from 1989 to 1991. The cost per claim went up 13.9 percent and the number of claims went down by 4.5 percent. The recession was estimated to have reduced costs by 3.8 percent per year through its effect on employment and to have increased costs by 5.6 percent through other effects. The cost reduction came about because the recession reduced employment and changed the mix of employment. However, the researchers note that some changes in the mix of employment were not due to the recession. These reductions in "natural" cost drivers caused by the recession were almost exactly balanced out by increases in other natural cost drivers. Increased wages drove up costs by 1.7 percent and the increased costs of medical services drove up costs by 1.9 percent. The researchers note that assuming the recession did not affect wages or medical costs is "only a reasonable first approximation" and that there is likely some affect[sic] of recessions on both. Besides the effects on employment, the researchers divided the effects of the recession into five types. All of these factors led to cost increases. 1.

Increased duration of temporary total disability, 1.8 percent – Most of this growth came from the construction industry, but some came from a few manufacturing industries. Average duration in identified industries rose from 8.8 to 23.0 weeks.

2.

Growing medical costs, 1.6 percent – This includes payments for increased medical services, but does not include changes in the price of medical services.

3.

Higher permanent partial disability ratings, 0.9 percent – The recession may have led to a doubling of the average disability rating. The researchers found some evidence that the higher ratings in the industries hardest hit by the recession were not related to increased severity of injuries. This could be because of more sympathetic adjudicators. It could also be due to shifting incentives for workers, employers and insurers.



The appendix was taken from "Will the Recession Affect Workers' Compensation Costs?" by David Anderson, Research and Statistics, Minnesota Department of Labor and Industry.

18

Gardner, Victor, Telles, and Moss, Cost Drivers in New Jersey, Workers Compensation Research Institute, 1994.

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4.

Increased claims for occupational disease or cumulative injury, 0.7 percent – The data supports the theory that the "onset of the recession substantially increases occupational disease and cumulative injury cases." The researchers feel the cases are ones that would not have been filed otherwise. Unlike most other such cases, many of these cases did not name a specific problem.

5.

Other indemnity benefits, 0.6 percent.

The recession led to a 5.6 percent increase in cost per dollar of payroll. Because of reductions in employment, the recession only caused inflation-adjusted cost per worker to rise by 1.8 percent. The researchers felt three things might be done to reduce the impacts of recessions on workers' compensation costs. First, "the compensation of claims for 'general deterioration of the body' is an invitation to make claims during tough economic times." Second, the researchers are "tempted to conclude that workers have a strong incentive to use workers' compensation as income support when jobs are not available." Further, the researchers feel adequate action may not have been taken to counter that incentive. Third, adjudicators may have increased permanent partial disability (PPD) ratings in industries affected by the recession. Effects of System Changes in Massachusetts19 This study examines the effects of changes to the workers' compensation in Massachusetts in 1991. The system changes coincided with the recovery from the 1991 recession, so the researchers attempted to separate the effects of the recession from the effects of the system changes. The researchers concluded the recovery from the recession led to an overall 4.0-percent reduction in costs per year. Cost reductions occurred mainly because of reductions in indemnity benefits. The largest cost savings came in industries where employment was steady or grew slowly. Cost reductions were smaller in industries where employment declined by more than 1.5 percent a year or increased by more than 1.5 percent a year. The researchers felt the thresholds of plus or minus 1.5-percent growth in employment were specific to Massachusetts and to the period studied, and that they might be different in other situations. The researchers hypothesized that costs rise in recessions because of the pressures on businesses and workers. Businesses must cut workers and they find it more difficult to provide light-duty work. Employees worry about not being able to find work and may also resent employers because of layoffs. The researchers state that because more experienced workers are retained, the average injury will be more severe. They do not discuss the possibility that this could be partially explained by a reluctance of workers to file minor claims during recessions. This might occur if workers fear they would be laid off if they filed a claim. 19

Gardner, Telles, and Moss, The 1991 Reforms in Massachusetts: An Assessment of Impact, Workers Compensation Research Institute, May 1996.

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When businesses experience rapid growth in employment, a number of factors combine to increase costs. Workers are in greater demand and may feel they can better afford to file a claim and stay away from work until they fully recover. Businesses hire younger and less experienced workers. An increased pace of operations and longer hours may also increase injury rates. Workers' Compensation Costs in Six States20 This study focuses on factors driving costs in Florida, Georgia, Illinois, Massachusetts, Michigan and Pennsylvania from 1984 to 1988. The researchers state that recessions increase back-end cost drivers (i.e., increase the cost per claim) to a greater extent than they increase front-end cost drivers (i.e., increase the number of claims). They state that recessions are "characterized by increased use of the system, longer duration claims, and more frequent and larger lumpsum settlements." The researchers do not discuss the reason the costs of lump-sum settlements increase. However, it does not seem surprising that workers would have greater incentive to make a quick settlement during a recession, when they likely would have a greater need for money.21 The researchers found higher front-end cost growth in the three "rust-belt" states that were recovering from the recession. Higher claims frequency during boom times are explained because (i) the amount of overtime increased, (ii) the workforce becomes less experienced, (iii) workers who have been recently recalled from layoffs may need time to relearn safe work routines and (iv) managers may find it hard to give workers adequate training during boom times. The researchers note declines in manufacturing industries may lead to increases in back-end cost drivers. This would be at least partly due to the fact that when workers in the manufacturing industries are injured, they may have a tough time finding work in another industry at a similar pay rate. Claim Rates in Ontario22 This study examined the relationship between claim rates and the business cycle in Ontario, Canada. The researchers examined workers' compensation claims for back pain and for sprains and strains in the upper extremities for the years from 1973 to 1993. There were two recessions in Ontario during this period; the unemployment rate peaked at 15 percent in 1982 and at more than 14 percent in 1990 and 1991. 20

Gardner, Victor, Telles, and Moss. Research Institute, December 1992.

Cost Drivers in Six States, Workers Compensation

21

However, this pressure for a quick settlement also could drive down the cost per claim. Insurance companies might be able to exploit a worker's need for a quick settlement by offering less favorable settlement terms. 22

Brooker and Sullivan, "Workers' Comp and the Business Cycle" in On Workers' Compensation, November 1994.

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The researchers' graphs show a fairly clear inverse relationship between unemployment and the claim rates. The researchers did not say if they adjusted the injury rates for hours worked. Making this adjustment would weaken the relationship a little, but the basic results would stay the same.23 One strength of the study is that it includes data from two full business cycles. Another strength is that, because of the Canadian system, the observed relationships were probably not much affected by changes in government policy. A major shortcoming of the study, for someone interested in applying the results to the United States, is that Canada has national health insurance. Because of this, Canadian workers have reduced incentives to file workers' compensation claims for injuries that had allowed them to continue working. In the United States, workers often lose their health insurance when they get laid off and, thus, may file claims for this type of injury when they get laid off. Differences between other aspects of the social safety net in Canada and the United States may present additional problems. Claim Rates in Michigan24 This study discusses the possibility that layoffs lead to a large number of fraudulent workers' compensation claims. Howard says that while many people have the view that fraudulent claims are common, this view is likely distorted because fraud cases usually get more publicity than other cases. Howard examines Michigan data from 1984 to 1993. He examines the relationship between the number of unemployed people and (i) workers' compensation litigation penalties and (ii) new workers' compensation claims. He concludes there is no relationship. He also examines the relationship between employment and new workers' compensation claims. Here he finds there is a positive relationship. This provides some evidence that fraud is not a major problem within the workers' compensation system. Howard's conclusions seem reasonable, but they are not the only reasonable conclusions that can be reached. A positive overall relationship between employment and new claims should be expected – on average, a doubling of employment should lead to a doubling of claims. The more interesting question is whether changing economic circumstances lead workers to file more claims or more expensive claims. About this question, little evidence is provided. There were only two years, 1989 to 1990 and 1990 to 1991, in which employment declined (and unemployment increased). From 1989 to 1990, litigation petitions and new claims both fell. However, from 1990 to 1991, both rose. This discrepancy provides at least some evidence that more claims are filed during a recession. Howard feels that, while overall claims do not increase during recessions, in some cases changes in management or problems with labor relations lead to sharp increases in the number of claims filed for individual firms.

23

A 1- or 2-percent decline in hours worked would be consistent with the U.S. experience.

24

Howard, "Workers' Compensation – Myths and Reality," in On Workers' Compensation, June 1995.

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Recessions and Medical Costs25 This study examines the effects of recessions on medical costs. The researchers state medical costs grow faster during recessions. A 2-percent increase in the unemployment rate leads to a 1-percent increase in medical costs. The researchers feel this increase is likely the result of a change in the rate of use of medical benefits and a change in the mix of claims. If recessions increase the use of workers' compensation in general, then recession should also be expected to increase the use of medical services. This increase could be to establish and maintain entitlement to workers' compensation benefits or could be due to a shift in costs from employer-provided insurance.26 Another factor influencing utilization is that workers with minor injuries may be reluctant to file claims because of fears about losing their job. Recessions may change the mix of claims and lead to higher costs. This is because younger and less experienced workers tend to be injured more often, but less severely, than older and more experienced workers. Examining the effects of a 2-percent increase in the unemployment rate across states, the researchers find that in the United States as a whole, medical costs would increase by 1.2 percent. In seven individual states, a 2-percent increase in the unemployment rate led to increases in medical costs of between 0.2 and 3.1 percent. In the United States as a whole, and in three of the individual states, the relationship was significant at a 95-percent confidence level. However, in the four other states, the relationship was much less significant. Effects of Recessions on Workers27 This study examined the effects of changes in the workers' compensation system in California on injured workers between 1991 and 1993. The researchers found evidence that economic conditions did affect outcomes for injured workers. Injured workers are likely to have particularly high wage-losses during recessions. This is because during recessions employers may not want to find alternative work for an injured person. Also, employers may have more opportunities to hire workers who are not injured. Nondisabled workers were not affected much by economic conditions. The researchers also found that changes to the workers' compensation system were partially responsible for the better outcomes for injured workers. Severity of injury is controlled for because the researchers felt "claims for less-severe injuries may be more likely with poor economic conditions." Recessions may lead to increases in workers' compensation benefits by increasing the time it takes for a worker to find a job. Workers may also simply have difficulty finding a 25

Victor and Fleischman, "How Choice of Provider and Recessions Affect Medical Costs in Workers' Compensation," Workers Compensation Research Institute, June 1990.

26

Note that having workers rehabilitate during a recession may be beneficial both to society and to workers. If some people must be unemployed, it seems best they be people who are recovering from injuries.

27

Reville, Schoeni, and Martin, Trends in Earnings Loss from Disabling Workplace Injuries in California: The Role of Economic Conditions, prepared for the California Commission on Health and Safety and Workers' Compensation, Rand, 2002.

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job or a recession may reduce the wages of the jobs available to workers. This may increase the duration of use of workers' compensation because of moral hazard. Moral hazard problems also tend to become worse as workers' compensation payments rise.

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AFFIRMATIVE DEFENSES IN WORKERS’ COMPENSATION Scott M. B. Brown

Practitioners on both sides of the bar need a working knowledge of the affirmative defenses that an employer might assert. For the Plaintiff’s attorney the identification of these potential issues may make the difference in whether to represent someone or not. From a defense perspective it is an important tool in representing the employer. It is an important consideration for everyone in valuing a claim. What is an affirmative defense? It is an argument against liability in whole or in part. The person asserting the defense carries the burden of proof. There are two sub categories: (1) those that have special time limits to properly assert the same and (2) those that do not. I.

AFFIRMATIVE DEFENSES WITH SPECIAL TIME LIMITS These are all listed in 803 KAR 25:0101, §5(2)(d)4. They may be incorporated in a timely filed Form 111 or else a special answer must be filed.1 Failure to do so results in the defense being waived.2 The time for filing the same is within forty-five days of the issuance of the Scheduling Order or “[t]en days after discovery of facts supporting the defense if discovery could not have been had earlier in the exercise of due diligence.”3 The safest bet for the defense is to have an employer conference and Plaintiff’s deposition within forty-five days of the issuance of the Scheduling Order. The employer does not have to prove all of the elements within this time limit, just assert the defense. There are only seven affirmative defenses with special time limits. They are: A.

Unreasonable Failure to Follow Medical Advice. The requirements to prevail upon this are found at KRS 342.035(3): No compensation shall be payable for the death or disability of an employee if his death is caused, or if and insofar as his disability is aggravated, caused, or continued, by an unreasonable failure to submit to or follow any competent surgical treatment or medical aid or advice. The employer must prove that: (1)

the medical advice was communicated to the patient;

(2)

the patient did not follow the medical advice;

                                                             1

803 KAR 25:0101 §5(2)(d)1 & 2.

2

803 KAR 25:0101 §5(2)(d)3.

3

803 KAR 25:0101 §5(2)(d)2.b.

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(3)

the failure was unreasonable;

(4)

the failure caused TTD, PPD, PTD that would otherwise not have occurred or medical treatment that would not otherwise have been required.

Items three and four require the opinion of a medical expert. No compensation shall be payable to the extent that death occurred or disability was aggravated, caused or continued by the failure to follow medical advice. This is not a “suspension” of benefits; instead that portion of benefits is gone forever. This is a defense that can bar a portion of a claim, or, in some situations, it can bar the entire claim. B.

Safety Violation. This one has a provision to allow for an increase, or decrease, in benefits depending on who has committed the safety violation. The requirements to prevail upon this are found at KRS 342.165: If an accident is caused in any degree by the intentional failure of the employer to comply with any specific statute or lawful administrative regulation made thereunder, communicated to the employer and relative to installation or maintenance of safety appliances or methods, the compensation for which the employer would otherwise have been liable under this chapter shall be increased thirty percent (30%) in the amount of each payment. If an accident is caused in any degree by the intentional failure of the employee to use any safety appliance furnished by the employer or to obey any lawful and reasonable order or administrative regulation of the executive director or the employer for the safety of employees or the public, the compensation for which the employer would otherwise have been liable under this chapter, shall be decreased fifteen percent (15%) in the amount of each payment. KRS 342.165 speaks in terms of the accident being caused by the safety violation. The employee must prove that: (1)

there was an intentional failure of the employer to comply with a specific statute or lawful administrative regulation;

(2)

the statute or regulation was communicated to the employer; and

(3)

the accident was caused to some degree by the intentional failure.

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The employer must prove that: (1)

the employer must have a safety rule;

(2)

that safety rule must be communicated to the employee;

(3)

the safety rule must be one that is actually enforced by the employer; and

(4)

the employee’s violation of the safety rule must have contributed “in any degree” to the cause of the accident.

Does this include medical benefits? This is undecided by our courts. The issue turns on whether medical benefits constitute “compensation” for purposes of KRS 342.165. C.

False Statement on an Employment Application. The requirements for this defense are found at KRS 342.316(7) or 342.335. KRS 342.316(7) holds: No compensation shall be payable for occupational disease if the employee at the time of entering the employment of the employer by whom compensation would otherwise be payable, falsely represented himself, in writing, as not having been previously disabled, laid off, or compensated in damages or otherwise, because of the occupational disease, or failed or omitted truthfully to state to the best of his knowledge, in answer to written inquiry made by the employer, the place, duration, and nature of previous employment, or, to the best of his knowledge, the previous state of his health. [Emphasis added]. An example is Gutermuth v. Excel, 43 S.W.3d 270 (Ky. 2001). Excel’s hiring procedure required Cheryl Gutermuth to undergo a preemployment physical examination, as a part of which she completed a written questionnaire concerning her medical history. In response to a question concerning any prior operations, she listed only a hysterectomy and vein strip. She denied having missed work due to a work-related injury, denied ever having received a full or partial disability, and denied being forced to give up a job for health reasons. Although she did admit to having had joint pains and wrist or hand problems, there is no indication that she revealed the full extent of the problems with her arms. In fact, the claimant had developed work-related gradual injuries to her arms and had undergone six surgical procedures: bilateral carpal tunnel releases, bilateral pronator teres, and bilateral thumb joint replacements. She had been restricted from lifting more than twenty pounds or ten pounds frequently, and from performing repetitive work with her hands, overhead work, or work on ladders or at unprotected heights. A claim for those injuries was settled for 17.5 percent PPD. She also had a longstanding history of problems with her cervical spine. On 6/28/96, four days before

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the pre-employment examination, her treating physician had again diagnosed chronic musculoskeletal pain which was related to her repetitive motion injuries and cervical degenerative disc disease. Gutermuth was cleared by the examining physician to work without restrictions, and was hired as an order picker. On 9/4/97, she injured her neck when she drove a cherry picker over a break in the concrete floor. The employer’s general manager testified that he would not have hired Gutermuth to perform this job without a medical clearance. ALJ dismissed the claim on the grounds of the false representation about her physical condition on the medical history questionnaire. WCB, CA, and SC affirmed. KRS 342.335 (1) holds: No person shall knowingly file, or permit to be filed, any false or fraudulent claim on his behalf to compensation or other benefits under this chapter, or by fraud, deceit, or misrepresentation procure or cause to be made or receive any payments of compensation or other benefits under this chapter to which the recipient is not lawfully entitled, or conspire with, aid, or abet another so to do. No person shall by deceit or misrepresentation or with intent to defraud cause or procure or conspire with, aid or abet another in so causing or procuring any person entitled to compensation or other benefits under this chapter to delay or omit to claim title thereto or to accept the payment of a less sum than that to which he may be lawfully entitled to thereunder. D.

Voluntary Rejection of the Workers’ Compensation Act. The requirements for this defense are found at KRS 342.395. Employee deemed to have accepted provisions of chapter – Employee's written notice of rejection -- Withdrawal of election. (1) Where an employer is subject to this chapter, then every employee of that employer, as a part of his contract of hiring or who may be employed at the time of the acceptance of the provisions of this chapter by the employer, shall be deemed to have accepted all the provisions of this chapter and shall be bound thereby unless he shall have filed, prior to the injury or incurrence of occupational disease, written notice to the contrary with the employer; and the acceptance shall include all of the provisions of this chapter with respect to traumatic personal injury, silicosis, and any other occupational disease. However, before an employee's written notice of rejection shall be considered effective, the employer shall file the employee's notice of rejection with the Office of Workers' Claims. The executive director of that office shall 128

 

not give effect to any rejection of this chapter not voluntarily made by the employee. If an employee withdraws his rejection, the employer shall notify the executive director. (2) An employer shall not require an employee to execute a rejection of this chapter as either a condition to obtain employment or a condition to maintain employment. An employer shall not terminate an employee for refusal to execute a rejection of this chapter. (3) Until notice to the contrary as specified in subsection (1) of this section is given to the employer, the measure of liability of the employer shall be determined according to the compensation provisions of this chapter. Any employee, may, without prejudice to any existing right or claim, withdraw his election to reject this chapter by filing with the employer a written notice of withdrawal, stating the date when the withdrawal is to become effective. Following the filing of that notice, the status of the party withdrawing shall become the same as if the former election to reject this chapter had not been made, except that withdrawal shall not be effective as to any injury sustained or disease incurred less than one (1) week after the notice is filed. [Emphasis added]. I am sure someone has run into this defense, but I have not personally seen it. E.

Voluntary Intoxication or Self-infliction of Injury. The requirements for this defense are found at KRS 342.610(3). As pertains to intoxication, a positive drug screen does provide a reason to further investigate the possibility of an intoxication defense. It does not establish an intoxication defense in and of itself. KRS 342.6103) provides: Liability for compensation shall not apply where injury, occupational disease, or death to the employee was proximately caused primarily by voluntary intoxication as defined in KRS 501.010… [Emphasis added]. KRS 501.010(2) provides: "Intoxication" means a disturbance of mental or physical capacities resulting from the introduction of substances into the body. The employer must present evidence that the claimant (1) was intoxicated and (2) that his intoxication was the primary cause of the injury. A positive drug screen is a start. But did it test for quantity? 129

 

If so, provide it to a medical expert to request an opinion as to whether that level of drug in the blood meets the definition of “intoxication” stated above. This can be done by the employer, or by the Plaintiff to refute the defense. Even if the Employer establishes intoxication they must still establish that the intoxication was the primary cause of the injury. Depending upon the specific facts, this is an opinion that can be made by the medical expert, or it may require an accident reconstructionist or testimony of lay witnesses. If the drug screen showed only presence, not quantity, then it does not establish intoxication. The claimant’s intoxication can be established by other evidence. For example, if a co-worker or supervisor can testify that prior to the injury the claimant appeared to be impaired, was dizzy, was staggering, was slurring his speech, was incoherent, or was otherwise demonstrating indicia of intoxicated behavior, then this evidence may be sufficient to establish intoxication. Most of the litigated claims involving the intoxication defense involve alcohol and blood studies that established the level of intoxication. F.

Refusal to Accept Rehabilitation Services. The requirements for this defense are found at KRS 342.710(5). Refusal to accept rehabilitation pursuant to an order of an administrative law judge shall result in a fifty percent (50%) loss of compensation for each week of the period of refusal. Note that this is not a suspension; it is a loss of compensation.

G.

Statute of Limitations. The requirements for this defense are found at KRS 342.185, 342.270, 343.316 “or other applicable statute.”4 If a claim is barred by limitations, the employee is not entitled to workers’ compensation benefits for that injury or disease. This includes income benefits and medical benefits. For an injury claim, the statute of limitations is two years from the date of injury, or, if TTD was paid, two years from the last payment of TTD benefits.

For an occupational disease claim, the statute of limitations is three years from the date of last injurious exposure or three years after the employee first experiences a distinct manifestation of an occupational disease in the form of symptoms reasonably sufficient to apprise him that he has contracted the disease, whichever shall last occur. There is a five-year “statute of repose” for an occupational disease claim. This means that if the date of “distinct manifestation” occurs after the date of last injurious exposure, the claimant has three years from the date of distinct                                                              4

803 KAR 25:0101 §5(2)(d)4g.

130  

manifestation, but no more than five years from the date of last injurious exposure in which to file the claim. For an asbestos-related disease or radiation disease claim, the statute of limitations is twenty years from the date of last injurious exposure. For an HIV claim, the statute of limitations is five years from the date of last injurious exposure. II.

AFFIRMATIVE DEFENSES WITH NO SPECIFIC TIME LIMIT Effectively, the time limit would be the Employer’s proof time and no special notice is required, even at the final hearing. A.

Overpayment of TTD “It is the holding of the Court that when a claimant's future benefits are not affected, the employer shall be allowed a full dollar for dollar credit on past benefits.”5 “Thus, Triangle Insulation and Sheet Metal Co. v. Stratemeyer, 782 S.W.2d 628 (Ky. 1990), determined that employers are entitled to credit voluntary benefits against past-due income benefits on a dollar-for-dollar basis but that future income benefits must not be affected.”6

B.

Pre-existing and Active. To be characterized as active, an underlying pre-existing condition must be symptomatic and impairment ratable pursuant to the AMA Guidelines immediately prior to the occurrence of the work-related injury. “It is well established that in permanent partial disability cases, before a condition may be characterized as "active" the underlying pre-existing condition must be symptomatic and must be capable of being rated pursuant to the American Medical Association, Guides to the Evaluation of Permanent Impairment ("Guides") immediately prior to the occurrence of the work-related injury.” UPS, Inc. v. Anderson, 2007 WL 2069611, 7 (Ky. App. July 20, 2007), citing to Roberts Brothers Coal Co. v. Robinson, 113 S.W.3d 181 (Ky. 2003). To my knowledge “symptomatic” has not been defined. It certainly does not require pain, and likely does not require treatment.

C.

Carve Out for an Occupational Disability. This may, but does not have to be, a pre-existing and active impairment. Instead it is an occupational limitation before the work injury.

                                                            

5

Triangle Insulation & Sheet Metal Co., Div. of Triangle Enterprises, Inc. v. Stratemeyer, 782 S.W.2d 628, 630 (Ky. 1990). 6

Millersburg Military Institute v. Puckett, 260 S.W.3d 339, 342 (Ky. 2008).

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Impairment and disability are not synonymous. We conclude, therefore, that an exclusion from a total disability award must be based upon pre-existing disability, while an exclusion from a partial disability award must be based upon pre-existing impairment. For that reason, if an individual is working without restrictions at the time a workrelated injury is sustained, a finding of pre-existing impairment does not compel a finding of pre-existing disability with regard to an award that is made under KRS 342.730(1)(a).7 This only applies if the ALJ ultimately awards PTD benefits, but since neither party can know for sure what an ALJ will do, each will need to submit evidence to support, or refute, a carve out. D.

Credit for Long Term Disability (“LTD”) and/or Short Term Disability (“STD”). KRS 342.730(6) provides: 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. If the STD or LTD plan is not entirely employer funded, then the claimant can receive both workers’ compensation and STD or LTD benefits. Numerous STD and LTD plans have an internal offset provision. This does not have to be a total offset; a partial offset is sufficient to meet this statutory language. If there is an internal offset provision in the STD or LTD plan, then the workers’ compensation benefits are not reduced to take credit for the STD or LTD payment. Instead, the claimant can receive both, subject to the specific offset provision in the STD or LTD plan. When applicable, the workers’ compensation benefits are reduced by the amount of the STD/LTD payments. This credit is not limited to past due benefits, and if the STD/LTD payments continue into the future, so does the credit.8 To establish this defense, an employer needs to file the policy to prove there is no offset, and it is employer funded, and something to establish the rate and dates of payment.

                                                            

7

Roberts Brothers Coal V. Robinson, 113 S.W.3d 181, ___ (Ky. 2003).

8

Fuller v. United Parcel Service, 2007 WL 29664 (Ky. App. Jan. 5, 2007).

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E.

Credit for Unemployment Benefits. A person cannot receive both unemployment benefits and TTD/PTD benefits. KRS 342.730(5): All income benefits pursuant to this chapter otherwise payable for temporary total and permanent total disability shall be offset by unemployment insurance benefits paid for unemployment during the period of temporary total or permanent total disability. This is a matter of common sense. One cannot be totally disabled and, at the same time, ready, willing and able to work. Employers receive a dollar for dollar credit against TTD and PTD, but not PPD. The employer needs to establish the start and stop dates of unemployment and the gross rate (that is, before taxes). This can be done with records from the employer or the Office of Employment and Training, but typically can simply be established through the plaintiff’s testimony.

F.

Idiopathic Injury. In Kentucky there is nothing in the Workers’ Compensation Act that directly addresses the question of when a fall at work is compensable, other than the portion from the definition of “injury” requiring that the event arise out of and in the course of employment. Kentucky follows the guidance of Professor Larson on this topic and separates falls into three categories: (1) work-related, (2) unexplained, and (3) idiopathic. A work-related fall and an unexplained fall are compensable. The term “idiopathic fall” means that there is a known cause for the fall and that it is not a work-related cause -- and therefore non-compensable.9 As always in Worker’s Compensation, the Plaintiff bears the burden of proof, but if the Plaintiff establishes that he/she was working within the scope and course of her employment, then there is a rebuttable presumption that the cause of the fall was work-related or unexplained. The Employer must offer “sufficient evidence” to overcome this rebuttable presumption. If not, then it is compensable.10 If the Employer does offer

                                                             9

You will have to specifically explain this to your IME physician. In the medical world “idiopathic” means unknown. Only in legal terms does it mean there is a known cause that is not work related. 10

Sufficient evidence is the term used by the courts, as opposed to substantial evidence. The countervailing defensive evidence need not be "substantial" in that it would support a positive conclusion that the work was not a contributing cause; it need only cast enough doubt on the validity of the initial presumption in the case at hand to justify a reasonable man in disregarding it. Cf. Blankenship v. Lloyd Blankenship Coal Co., 463 S.W. 2d 62 (Ky. 1970). It must, however, when considered together with all the other evidence in the case, have enough substance to satisfy the "reasonable man" test as it has been expressed here and in various precedents discussed and cited in Blankenship.

133  

sufficient evidence demonstrating that there is a known cause and that it was non-work related (a seizure, passing out, etc.), then the rebuttable presumption simply becomes a permissible inference. This leaves the matter solely in the hands of an ALJ. There is an exception to this rule, the Positional Risk Doctrine.11 The positional risk doctrine makes an otherwise idiopathic fall compensable. The doctrine is not specifically addressed by statute or regulation, but has arisen from case law. Positional risk will only become an issue if the ALJ concludes that a fall is idiopathic. If so, then the positional risk doctrine must be considered. The effects of an idiopathic fall are compensable if the employment places the employee in a position of increasing the dangerous effects of such a fall, such as height, near machinery or sharp corners or a moving vehicle. G.

Wages in Lieu of Compensation. You will not find this in a statute or regulation. This is an area of workers’ compensation law that is not well understood. Millersburg Military Institute v. Puckett, 260 S.W.3d 339 (Ky. 2008) concerned the employer attempting to take credit for post-injury wages paid to the employee. The Court stated that Larson12 notes that an employer may be permitted to receive credit for post-injury wages if the facts indicate that it intended to pay them in lieu of compensation.

                                                                                                                                                                                  Workman v. Wesley Manor Methodist Home, 462 S.W.2d 898, 900-901 (Ky. 1971). 11

This section deals solely with the application of the Positional Risk Doctrine in terms of idiopathic falls. The Positional Risk doctrine has also been used in deducing whether someone was acting within the course and scope of their employment. This is also referred to as the Street Risk Doctrine, which is best left to a discussion devoted to course and scope.

12

Larson’s Workers’ Compensation Law, Chapter 82 (2006).

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TO BE OR NOT TO BE: IS INTERLOCUTORY RELIEF THE QUESTION? Tim Wilson

I.

TYPES OF INTERLOCUTORY RELIEF A.

Temporary Total Disability Benefits 1.

KRS 342.730(1)(a).

2.

803 KAR 25:010 Section 12(1)(a).

3.

Procedure.

4.

5.

6.

a.

Motion.

b.

Twenty day response, "thereafter the request shall be ripe for decision." 803 KAR 25:010 Section 12(3).

c.

Motion by any party for an informal conference which may be held telephonically. 803 KAR 25:010 Section 2(2)(a)(b).

Evidence required. a.

Affidavit 803 KAR 25:010 Section 12(4)(a).

b.

Deposition.

c.

Or other evidence.

Standard for entitlement. a.

Is eligible under KRS Chapter 342.

b.

Will suffer irreparable injury, loss or damage pending a final decision on the application. 803 KAR 25:010 Section 12(4)(a)(1)(2).

Ability to recover overpayment. 

B.

Triangle Insulation and Sheet Metal Co., a Div. of Triangle Enterprises, Inc. v. Stratemeyer, 782 S.W.2d 628 (Ky. 1990). Cannot recover from future income benefits.

Medical Benefits 1.

Procedure – interlocutory. 803 KAR 25:010 Section 12. a.

Motion. 135

2.

3.

C.

b.

Twenty day response "ripe for decision."

c.

Motion by any party for an informal conference which may be conducted telephonically.

d.

Is a Hearing authorized?

Evidence required. a.

Affidavit.

b.

Deposition.

c.

Other evidence of record.

Standard for entitlement. a.

Is eligible under KRS Chapter 342.

b.

Will suffer irreparable injury, loss or damage pending a final decision on the application.

Medical Benefits 1.

Procedure – expedited medical dispute. 803 KAR 25:012 Section 3. a.

Form 120 EX with affidavit of employee in support of motion.

b.

Affidavit of physician explaining why failure to obtain or undertake medical care within forty-five days could lead to serious physical or mental disability or death of the employee. 

Must include diagnosis, clinical and diagnostic findings, the proposed treatment, the reason why immediate initiation of the proposed treatment is necessary, and if feasible the estimate of the cost of the proposed treatment

c.

Form 120 EX shall be directed to the ALJ or if no ALJ to the Commissioner in triplicate.

d.

Respondent has ten days to respond.

e.

Matter may be referred by the ALJ to work comp specialist or ombudsman to attempt to resolve the matter.

136

f.

2.

3.

Evidence required. a.

Affidavits of claimant and physician.

b.

Form 120 EX.

Standard for entitlement. 

D.

ALJ shall issue a ruling within seven days after expiration of the response time.

Not totally clear but appears to be an emergency situation.

Rehabilitation Services 803 KAR 25:010(1)(c) 1.

2.

3.

4.

Procedure. a.

Motion.

b.

Twenty day response, "ripe for decision."

c.

Motion by any party for informal conference which may be done telephonically.

Evidence required. a.

Affidavit.

b.

Deposition.

c.

Other evidence of record.

Standard for entitlement. a.

Is eligible under KRS Chapter 342.

b.

Will suffer irreparable injury, loss or damage pending a final decision on the application.

c.

A showing that immediate provision of services will substantially increase the probability that the plaintiff will return to work. 803 KAR 25:010 Section 12(4)(b).

KRS 342.710(1). One of the primary purposes of this Chapter shall be restoration of the injured employee to gainful employment and preference shall be given to returning the employee to employment with the same employer or to the same or similar employment.

137

E.

a.

Edward v. Bluegrass Containers Division of Dura Containers, Inc., 594 S.W.2d 900 (Ky. App. 1980). The invocation of the rehabilitative provisions of the Workers' Compensation Act are mandatory when so requested by the injured employee.

b.

Wilson v. SKW Alloys, Inc., 893 S.W.2d 800 (Ky. App. 1995). Barring a reasonable basis to deny rehabilitation, an employee is entitled to have the ability to perform suitable work through an appropriate rehabilitation plan.

Benefits Pending Appeal – KRS 342.300 1.

2.

Procedure 803 KAR 25:010 Section 21(14)(a)(b)(c). a.

Motion to Board KRS 342.300.

b.

Not required where benefits not contested (Unfair Claims Practice).

c.

Sufficient showing of reason and necessity KRS 342.300.

d.

Adverse party must file a supersedeas bond to Court of Appeals to suspend.

e.

Response must be filed within ten days from the date of the request; thereafter the matter is ripe for decision. KAR 25:010 Section 21(14)(d).

f.

Affidavits or citations to the evidence.

Standard for entitlement. a.

Financial loss.

b.

Privation, suffering or adversity resulting from insufficient income.

c.

Detriment to the moving party's property or health if payment of benefits is not instituted (applies to medical and income benefits).

d.

Reasonable likelihood that the moving party will prevail on appeal. 803 KAR 25:010 Section 21(14)(c)(2).

e.

Board requires very specific documentation of financial hardship. 803 KAR 25:010 Section 21(14)(e)(1) & (2).

138

II.

APPEALS Interlocutory orders are "final" and are not appealable. Transit Authority of River City v. Saling, 774 S.W.2d 468 (Ky. App. 1989); KI USA Corp. v. Hall, 3 S.W.3d 355 (Ky. 1999).

III.

INTERLOCUTORY RELIEF, BIFURCATION V. DECISION ON THE MERITS A.

Are There Legitimate Defenses?

B.

Are the Medical and/or Financial Hardships Secure?

C.

Is the Possibility of Success Outweighed by the Potential Delay?

IV.

PROPOSED CHANGES (SEE ATTACHED)

V.

FORMS (SEE ATTACHED)

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140

PROPOSED CHANGES TO 803 KAR 25:010

Section 12. Interlocutory Relief. (1) [During a claim,] A[a] party may seek interlocutory relief by using Form or by motion requesting [through]: (a) Interim payment of income benefits for total disability pursuant to KRS 342.730(1)(a); (b) Medical benefits pursuant to KRS 342.020; or (c) Rehabilitation services pursuant to KRS 342.710. (2) Upon receipt of a party's request for interlocutory relief in the application or by motion, the commissioner or administrative law judge (if the claim has already been assigned to an administrative law judge) shall within ten (10) days issue an order: (a) requiring a response to the request for interlocutory relief be served within twenty (20) days from the date of the order, and (b) setting a hearing before an administrative law judge on the request for interlocutory relief within thirty-five (35) days of the order. (3) A hearing before an administrative law judge may be held to review the party's entitlement to interlocutory relief. The hearing may be held electronically if the parties agree or a party demonstrates good cause as to why the party cannot appear at the hearing in person. The hearing may be waived by agreement. (4) Upon completion of the hearing, an administrative law judge shall issue a decision within fifteen (15) days. If the hearing is waived, an administrative law judge shall issue a decision within fifteen (15) days after the date of agreed waiver is signed by the administrative law judge. (5)(a) Entitlement to interlocutory relief shall be established by means of affidavit, deposition, hearing testimony, or other means of record demonstrating the requesting party: 1.

is eligible under KRS Chapter 342;

2. will suffer irreparable injury, loss or damage pending a final decision on the application; and 3. the parties.

is likely to succeed on the merits based upon the evidence introduced by

(b) Rehabilitation services may be ordered while the claim is pending upon a showing that immediate provision of services will substantially increase the probability that the plaintiff will return to work.

141

(6) If interlocutory relief is awarded in the form of income benefits, the claim shall be placed into abeyance unless a party shows irreparable harm will result. Plaintiff shall file reports every ninety (90) days, or sooner if circumstances result. Plaintiff shall file reports every ninety (90) days, or sooner if circumstances warrant or upon order by the administrative law judge, updating his current status. Upon motion and a showing of cause, or upon the administrative law judge's own motion, interlocutory relief shall be terminated and the claim removed from abeyance. Failure to file a timely status report shall constitute cause to terminate interlocutory relief. (7) Benefits awarded pursuant to an interlocutory order shall not be terminated except under entry of an order issued by an administrative law judge. Failure to pay benefits under an interlocutory order or termination of benefits ordered pursuant to an interlocutory order, shall constitute grounds for a violation of the Unfair Claims Settlement Practices Act. (8) If a claimant is successful in his/her request for interlocutory relief and, if payment of benefits pursuant to the interlocutory relief order results in an overpayment of benefits, the party making the overpayment shall be entitled to a dollar for dollar credit for such overpayment against past due or future awarded income benefits. (9) If interlocutory relief is requested, no assignment to an administrative law judge shall be made on other issues and no scheduling order issued until a ruling has been made on the interlocutory relief request, unless the requesting party shows that delay will result in irreparable harm. [Upon motion of any party, an informal conference:

142

MIR-1 Motion for Interlocutory Relief May 29, 1997 Edition

COMMONWEALTH OF KENTUCKY OFFICE OF WORKERS CLAIMS CLAIM NO. ________ BEFORE___________________

______________________________ (EMPLOYEE)

VS.

PLAINTIFF

MOTION FOR INTERLOCUTORY RELIEF

_______________________________ (EMPLOYER)

DEFENDANTS

_______________________________ (OTHER DEFENDANTS) _______________________________ (SPECIAL FUND)

*************** The undersigned moves for the following interlocutory relief (check all that apply): Payment of medical expenses while the claim is pending. Payment of temporary total disability income benefits while the claim is pending. Vocational rehabilitation evaluation and services. In support of this motion, the following documents are attached (check all that apply): _____ 1.

Affidavit establishing that the requesting party is eligible for benefits under KRS Chapter 342, and that irreparable injury, loss or damage will result in interlocutory relief of medical expenses is not granted.

_____ 2.

Affidavit establishing that the requesting party is eligible for income benefits under KRS Chapter 342, and that irreparable injury, loss or damage will result if interlocutory relief of temporary total income benefits is not granted.

_____ 3.

If rehabilitation service is requested, an affidavit showing immediate provision of rehabilitation services will substantially increase the probability that the employee will return to work.

143

______ 4.

Medical report of Dr. ____________________ supporting entitlement to benefits.

Based upon the foregoing, _________________ moves for the appropriate relief. (EMPLOYEE) Respectfully submitted,

_________________________________ (Employee's Signature) _________________________________ (Employee's Street Address) _________________________________ (Employee's City/State/Zip Code)

The undersigned, being duly sworn, states the foregoing statements in this motion are true and accurate to the best of my knowledge and belief. _____________________________ (Employee's Signature) Subscribed and sworn to before me this ____ day of _____________ 20___.

______________________________ NOTARY PUBLIC My Commission expires: ___________________ County: ___________________

144

Notice: Any person who knowingly and with intent to defraud any insurance company or other person files a statement or claim containing any materially false information or conceals, for the purpose of misleading, information concerning any material fact commits a fraudulent insurance act, which is a crime.

CERTIFICATE OF SERVICE I certify that the original was mailed to the Office of Workers Claims, Prevention Park, 657 Chamberlin Avenue, Frankfort, Kentucky 40601 and copies of this motion and attachments were mailed to the names and addresses of the parties given below:

Attorney for Employer or Insurance Carrier, if applicable _____________________________________ (Attorney Name or Law Firm) _____________________________________ (Attorney Address or Law Firm Street Address) ______________________________________ (Attorney Address, City/State/Zip)

Employer or Insurance Carrier ______________________________________ (Company Name or Employer Name) ______________________________________ (Company or Employer Street Address) ______________________________________ (Company or Employer City/State/Zip)

Other Parties, if applicable: ______________________________________ (Name of Party) ______________________________________ (Party Street Address) ______________________________________ (Party City/State/Zip)

Special Fund, if applicable: ______________________________________ (Special Fund) ______________________________________ (Special Fund Street Address) ______________________________________ (Special Fund City/State/Zip)

145

This _______ day of __________________, 20___.

______________________________________________ (Employee's Signature)

146

MIR-2 Affidavit for Payment of Medical Expenses May 29, 1997 Edition

COMMONWEALTH OF KENTUCKY OFFICE OF WORKERS CLAIMS CLAIM NO. ________ BEFORE___________________

______________________________ (EMPLOYEE)

PLAINTIFF

VS.

AFFIDAVIT

_______________________________ (EMPLOYER)

DEFENDANT(S)

_______________________________ (OTHER DEFENDANTS) _______________________________ (SPECIAL FUND)

*************** The undersigned, _______________________________ after being duly sworn, (NAME) states that on ________________________, the undersigned sustained a work-related (DATE) injury at __________________________________________________________. (BUSINESS LOCATION AND ADDRESS) Notice was given on _______________ to _______________________________. (DATE) (PERSON AND POSITION) An employment relationship existed between the _____________________ and the employer in this action. (EMPLOYEE) Medical treatment was provided on ___________ and given by ___________________ (DATE) (MEDICAL PROVIDER) ______________________________________________________________________ (MEDICAL PROVIDER ADDRESS)

147

The following medical treatment is immediately required for treatment of the work injury. ______________________________________________________________________ ______________________________________________________________________ ______________________________________________________________________ The medical report of Dr. _____________________ is attached which establishes the (DOCTOR'S NAME) immediate need for the medical treatment.

____________________________________ (EMPLOYEE'S SIGNATURE) Subscribed and sworn to before me by _____________________________________ (EMPLOYEE'S NAME) on this the _____________ day of ____________________, 20_____. (DATE) (MONTH) (YEAR) ________________________________________ NOTARY PUBLIC My Commission expires: ___________________ County: ______________________

148

MIR-4 Affidavit Regarding Rehabilitation Services May 29, 1997 Edition

COMMONWEALTH OF KENTUCKY OFFICE OF WORKERS CLAIMS CLAIM NO. ________ BEFORE___________________

______________________________ (EMPLOYEE)

VS.

PLAINTIFF

AFFIDAVIT REGARDING REHABILITATION SERVICES

_______________________________ (EMPLOYER)

DEFENDANT(S)

_______________________________ (OTHER DEFENDANTS) _______________________________ (SPECIAL FUND)

*************** The undersigned, _______________________________ after being duly sworn, (NAME) states that on ______________________________, the undersigned sustained a work(DATE) related injury at _________________________________________________________. (BUSINESS NAME AND ADDRESS) Notice was given on _______________ to _______________________________. (DATE) (PERSON AND POSITION) An employment relationship existed between the _____________________ and the employer in this action. (EMPLOYEE) Medical treatment was provided on ___________ and given by ___________________ (DATE) (MEDICAL PROVIDER) ______________________________________________________________________ (MEDICAL PROVIDER ADDRESS)

149

The medical report of Dr. ________________________ is attached which shows my restrictions and medical ability to engage in retraining. The employee/plaintiff requests that: An evaluation be performed to determine possible areas of retraining. Rehabilitation training be ordered in the area of _______________________ (OCCUPATION) and the training be conducted ___________________________________________ (FACILITY) at a cost of $________________________ plus estimated travel expenses of $___________________. The estimated length of the training is ____________ weeks. (WEEKS) Documentation from the training facility and costs involved are attached. This training program is accredited by _________________________________________________. (NAME & ADDRESS OF ORGANIZATION WHICH ACCREDITS PROGRAM) The immediate provision for rehabilitation services will substantially increase the probability that the employee/plaintiff will return to work.

_________________________________________ (EMPLOYEE'S SIGNATURE) Subscribed and sworn to before me by ______________________________________ (EMPLOYEE'S NAME) on this the _________ day of _____________, 20______. (DATE) (MONTH) (YEAR) ___________________________________________ NOTARY PUBLIC My Commission expires: ________________________ County: ___________________

150

MIR-3 Affidavit for Payment of Temporary Total Disability May 29, 1997 Edition

COMMONWEALTH OF KENTUCKY OFFICE OF WORKERS CLAIMS CLAIM NO. ________ BEFORE___________________

______________________________ (EMPLOYEE)

VS.

PLAINTIFF

AFFIDAVIT FOR PAYMENT OF TEMPORARY TOTAL DISABILITY

_______________________________ (EMPLOYER)

DEFENDANT(S)

_______________________________ (OTHER DEFENDANTS) _______________________________ (SPECIAL FUND)

*************** The undersigned, _______________________________ after being duly sworn, (NAME) states that on ______________________________, the undersigned sustained a work(DATE) related injury at _________________________________________________________. (BUSINESS NAME AND ADDRESS) Notice was given on _______________ to _______________________________. (DATE) (PERSON AND POSITION) An employment relationship existed between the _____________________ and the (EMPLOYEE) employer in this action. My average weekly wage is $_____________________ and (AMOUNT OF WEEKLY WAGE) supporting documents are attached such as paycheck stub, W-2, etc. Medical treatment was provided on ___________ and given by ___________________ (DATE) (MEDICAL PROVIDER) ______________________________________________________________________ (MEDICAL PROVIDER ADDRESS)

151

The medical report of Dr. ______________________________ is attached to this (DOCTOR'S NAME) affidavit and establishes the inability to perform any work. Moreover, the employee states that irreparable injury as described below will occur if payments of temporary total disability are not immediately started. _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________ _____________________________________________________________________

_____________________________________ EMPLOYEE'S SIGNATURE

Subscribed and sworn to before me by ______________________________________ (EMPLOYEE'S NAME) on this the _________ day of _____________, 20______. (DATE) (MONTH) (YEAR) ___________________________________________ NOTARY PUBLIC My Commission expires: ________________________ County: ___________________

152

Form 120EX Expedited Determination Revised May 1, 2008

COMMONWEALTH OF KENTUCKY DEPARTMENT OF WORKERS’ CLAIMS 657 CHAMBERLIN AVENUE FRANKFORT, KENTUCKY 40601 CLAIM NO. REQUEST FOR EXPEDITED DETERMINATION OF MEDICAL ISSUE MOVANT

RESPONDENT vs.

Name

Name

Street Address

Street Address

City/State/Zip Code

City/State/Zip Code

**********************

PATIENT

EMPLOYER

Name

Date of Injury

Name

Street Address

Social Security #

Street Address

City/State/Zip Code

City/State/Zip Code

INSURANCE COMPANY Name Street Address City/State/Zip Code

Comes the movant and request the Department of Workers’ Claims to assign this request for expedited determination of medical issue to an Administrative Law Judge for a decision. In support of this request, the movant files herewith sworn affidavit(s) showing work relatedness and medical necessity, and setting forth the nature of the dispute and facts sufficient to show that the movant is entitled to the relief sought. This information is true and accurate according to my knowledge and belief.

Attorney for Movant (if represented)

_____________________________________________ Movant's Signature

Name Street Address City/State/Zip Code

Subscribed and sworn to before me this _____ day of ___________________, 20_______ ________________________________________________ Notary Public Signature My Commission Expires: _____________________________County: ___________________

Note: The respondent and all other parties have 10 days in which to file a response pursuant to 803 KAR 25:012.

153

Copies of responses must be delivered to the Department of Workers’ Claim, Attention: Case Files, 657 Chamberlin Avenue, Frankfort, Kentucky 40601 and to all parties. Notice: Any person who knowingly and with intent to defraud any insurance company or other person files a statement or claim containing any materially false information or conceals, for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime.

CERTIFICATE OF SERVICE As required by 803 KAR 25:012, copies must be served on all parties. I certify that true copies of this form and all attachments have been deposited in the United States mail today to the Department of Workers’ Claims, 657 Chamberlin Avenue, Frankfort, Kentucky, 40601, and to the following individuals or entities:

Please list party, name and address Party Name Street Address City/State/Zip Code

Party Name Street Address City/State/Zip Code

Party Name Street Address City/State/Zip Code

Party Name Street Address City/State/Zip Code

Party Name Street Address City/State/Zip Code

_____________________________________________ Date

Movant's Signature

154

COMMUTING IS (USUALLY) NOT COMPENSABLE: THE “COMING AND GOING” RULE IN KENTUCKY Matthew D. Ellison and Johanna F. Ellison

I.

THE “COMING AND GOING” RULE When an employee is in transit to or from his usual place of work, and is injured while in transit, the injury is not considered work-related, and is therefore not compensable under the Act. Most other travel that is “work-related” is compensable, if an injury occurs during such travel. This rule is deceptively simple. What is and is not “work-related” transit or travel has been the subject of extensive litigation and observation by the appellate courts.

II.

III.

GENERAL PRINCIPLES UNDERLYING THE RULE A.

Employers who are in control of the working environment are in the best position to reduce the risks faced by their employees. Many make an effort to minimize those hazards as much as possible. When an injury occurs in this environment, it makes more sense that the injury should be compensable, since it occurred under the eye of the employer.

B.

When the employee steps out into the public, the employer can no longer control the risks. The employee is more or less on his own, both in the risks he takes and in the consequences of that risk-taking. Therefore, resulting injuries are less likely to be compensable.

C.

The employer does not require the employee to live in certain cities or areas, nor take a certain mode of transportation to work.

D.

Sometimes, an employee is “put into harm’s way” by their employer (a.k.a. positional risk) which can turn an otherwise non-compensable trip into one that results in benefits.

WHY ARE THERE SO MANY CASES ADDRESSING THIS DOCTRINE? A.

Employees travel significantly more now than they did eighty years ago; many choose different living situations that place them farther away from their places of work.

B.

Many employers require travel as part of the employee’s job duties, sometimes to remote job sites. Occasionally, additional services may be performed by employees in transit, thus blurring the line between when work stops and the drive home begins.

C.

An employee’s travel arrangements can be of more benefit to the employer than just enabling the employee to show up for work. These “benefits” can also render a travel injury compensable.

155  

IV.

THE (INEVITABLE) EXCEPTIONS TO THE RULE For every rule, there are exceptions. A.

Major Exception No. 1: Employer Conveyance Doctrine (Not Recognized in Kentucky) When the employer furnishes the transportation used by the employee to or from work and an injury occurs, the employer is liable for the injury. According to Larson’s, §15.01, the primary purpose for this doctrine is the employer’s control of the risks associated with that transportation. The “control” required of the transportation can even extend to a third party who provides the transportation; the “control” may come if the employer can dictate certain terms of the transportation. (EXAMPLE: If an employer provided a bus service that picked up employees on a specific route to work – such as often occurs with farm workers.) It would likely not apply to employer-provided public transit passes. Recognized in Michigan, Louisiana, Maryland, Oklahoma, Arkansas, etc… No reported Kentucky case has ever dealt with employer-provided transportation. But if an “employer conveyance” case arose in Kentucky, our best guess is that the courts would adopt a doctrine similar to that of other states. But the degree of “control” is up for debate.

B.

Major Exception No. 2: “Benefit to the Employer” (Recognized in Kentucky) When travel to or from the place of work provides a benefit to, or is of some service to the employer, an injury occurring during such travel is compensable. This is not a weighing of the “employee benefit v. employer benefit” conferred. The cases interpreting this doctrine suggest strongly that if the employer derives any benefit from the travel, then the “benefit to the employer” doctrine applies in favor of compensability. 1.

How tangible must the benefit be? IT DEPENDS. There must be a benefit that is not merely theoretical, but real. Fortney v. AirTran Airways, Inc., 319 S.W.3d 325 (Ky. 2010). Clarence Fortney lived in Kentucky, but accepted a job with AirTran Airways as a pilot. The airline’s hub was located in Atlanta. AirTran had “reciprocal conveyance” agreements with other airlines where, on a space-available basis, pilots could ride 156

 

on the other airline if they so requested. Such travel was permitted for multiple reasons: commuting to the pilot’s hub, travel to a remote location when the flight schedule required, or purely personal reasons. Mr. Fortney was commuting to Atlanta on Comair Flight 5191 from Bluegrass Airport when it crashed immediately after takeoff. He was killed. The ALJ found there to be no “benefit” to the employer in the arrangement or the travel Mr. Fortney was engaged in when he died. The Board reversed. The Court of Appeals reversed the board, reinstating the ALJ’s decision because it found the Board to have improperly usurped the ALJ’s fact-finding duty. (The linchpin, per the Kentucky Court of Appeals, was the Board’s statement that “Moreover, it can also be said that the travel … conferred a benefit to the employer.”) In another reversal, the Kentucky Supreme Court found the claim to be compensable as a matter of law. The court found the evidence to compel a finding that the “reciprocal conveyance” agreements existed in order to induce pilots to accept job offers with AirTran, including Mr. Fortney. Because Mr. Fortney accepted the employment, the travel benefited AirTran because the employer’s purpose in providing such travel arrangements – to induce pilots to accept employment – had been accomplished. 2.

Does the employee just showing up for work constitute a benefit? NO. Olsten-Kimberly Quality Care v. Parr, 965 S.W.2d 155, 158 (Ky. 1998): “Typically, a worker is not performing any service for the employer, or furthering the employer's interests, by merely traveling to and from the job site in order to be part of the work force.” This is the primary justification behind the general rule.

C.

Major Exception No. 3: Positional Risk Doctrine (Recognized in Kentucky) Indian Leasing Co. v. Turbyfill, 577 S.W.2d 24 (Ky. App. 1978). Worker was trying to cover a load of materials with a tarp. He suffered a heart attack (which was not believed to be fatal), and fell off the trailer twelve feet onto concrete, where he suffered a skull fracture. Because the employment required that he be in a place that enhanced the risk of danger, the injury was compensable. This doctrine may have travel-related application. In certain instances, an employee’s travel requires him to be in a particular place or exposed to a specific situation; occasionally while in transit, but sometimes as a result of travel. 157

 

In most instances, this doctrine tends to be subsumed by the “benefit to the employer” doctrine. It is rare that an employee will be put in a position, when travel required by the employer will not also confer some benefit upon the employer. D.

Major Exception No. 4: Traveling Employee Doctrine (Recognized in Kentucky) Larson’s, §25.00: “Employees whose work entails travel away from the employer’s premises are held within the majority of jurisdictions to be within the course of their employment continuously during the trip, except when a distinct departure on a personal errand is shown.” This keeps the travel within the sphere of “work-related,” unless the substantial deviation from the employee’s business purpose is shown. Adopted formally in Kentucky by Black v. Tichenor, 396 S.W.2d 794 (Ky. 1965). Black cited to the Larson’s principle, in the context of an employee who had an office but occasionally had to go out “into the field.”

V.

THE GAME CHANGER: “SUBSTANTIAL DEVIATION” When travel is generally deemed to be work-related or non-work related, a substantial deviation may alter the equation. Key question: Has the character of the travel been changed at the time that the injury takes place? Consider the following: A.

A lawyer, on her way to a motion hour in Paintsville, Kentucky, turns into a supermarket parking lot to pick up a few groceries. After making the turn, she is T-boned by a careless driver in the parking lot.

B.

Same lawyer, but now returning from Paintsville, stops at the mall for a half-hour to shop for some last-minute Christmas presents.

C.

A lawyer, on his way to the office from home, stops by the doughnut shop to pick up some treats for the office. He was not asked to do so by the partners – it was a generous whim on his part.

D.

A lawyer, on his way to the office from home, goes a mile out of his way to stop by the courthouse to look at a file, before going into the office. Before he reaches the courthouse parking lot, he gets into an accident.

E.

Same as D., but the courthouse is on the lawyer’s direct route to work. The accident occurs while driving into downtown, prior to reaching the courthouse.

158  

VI.

CASE STUDIES A.

Driving to/from Lunch on Offsite Premises Baskin v. Community Towel Service, 466 S.W.2d 456 (Ky. 1971). Workers were injured coming back from lunch at a restaurant several blocks away. The court discussed the “positional-risk” approach, which applies “to employees whose work assignment causes them to be exposed to the injury for which compensation is sought.” Compensable?

B.

YES

NO

Checking on an Employee Who Didn’t Show up for Work Palmer v. Main, 272 S.W. 736 (Ky. App. 1925) A man was struck by a car when he was sent into the city to determine why another employee had not reported for duty. Claimed to be an exception to “coming and going” rule under the “positional risk” doctrine. Compensable?

C.

YES

NO

Transporting Materials or Tools for Employer 1.

Lycoming Shoe Co. v. Woods, 472 S.W.2d 257 (Ky. 1971). Man was killed traveling from his home on the weekend back to work, where he had spent the previous week at an undisclosed remote job location. He had on occasion transported work-related materials with him on these trips, and in fact on this occasion, had some shoe parts in his truck. Compensable?

2.

YES

NO

Hall v. Spurlock, 310 S.W.2d 259 (Ky. 1958). Man was injured when his truck, which was driven by his son, ran off a road after he had obtained supplies and was taking them home so that he could have them early Monday morning when he would be returning the to the mill. The court held that it was part of his duties to go the grocery and buy supplies for the men and oil for the week. He was “engaged in a service that was incident to the operation of the sawmill.” Though the supplies were for his use and the other men, the court said that he was doing something for the “mutual benefit of himself and the lumber company.” Compensable?

YES

159  

NO

D.

Picking up One’s Own Paycheck Howard D. Sturgill & Sons v. Fairchild, 647 S.W.2d 796 (Ky. 1983). Man was injured going to pick up his paycheck at employers home. Court held that picking up the check at the employer’s home was of no benefit to the employer. He was not required to pick up his check there and was not paid for doing so, and could have chosen a number of other ways to pick up his check. Compensable?

E.

YES

NO

Picking up Paychecks for a Group of Workers Farris v. Huston Barger Masonry, Inc., 780 S.W. 2d 611 (Ky. 1989). Workers were injured in an accident driving to the home of the corporate secretary to pick up payroll on their way home; the paychecks were to be distributed the next day to other workers. Workers were carpooling together in the vehicle. Compensable?

F.

YES

NO

Traveling to a Trade Association Meeting Spurgeon v. Blue Diamond Coal Co., 469 S.W.2d 550 (Ky. 1971). Man was injured while traveling home from a mine institute meeting. The court noted that in certain circumstances, an employee’s attendance at a convention or program can be regarded as within the scope of his employment, and that it is also sufficient if the attendance is not necessarily compulsory but “definitely urged.” Compensable?

G.

YES

NO

Remote Job Location 1.

Brown v. Owsley, 564 S.W.2d 843 (Ky. App. 1978). Employees traveled from home to a central meeting point each morning, and then carpooled to a designated place of employment. The employees had a fixed start and stop time each day. The accident occurred en route to the designated place of employment. Compensable?

2.

YES

NO

Applegate v. Hord, 373 S.W.2d 430 (Ky. 1963). Coverage was denied where a man took a company truck to his home and kept it over the weekend, and was subsequently injured 160

 

in that truck on the way to work the Monday morning. Hord maintained that the truck was stored at his home for the convenience of the employer, while his employer maintained that depending on whose place the truck was closest to, the truck could be left in either place. Hord had also been allowed to take the truck because he requested to use it to scatter fertilizer on his own land. The compensation board found the benefit of using the truck was with Hord, and that the employer received no benefit from having it at Hord’s over the weekend, and the court found there was enough evidence to support this conclusion. Compensable? 3.

YES

NO

Turner Day & Woolworth Handle Co. v. Pennington, 63 S.W.2d 490 (Ky. App. 1933). Company sent out crews for work from Bowling Green to other locations for the felling of timber. The company paid for oil and gas necessary to make the trips to and from Bowling Green. Sometimes messages would be carried for the company, but on the night of the accident, no such messages were carried when an employee was injured going home to his wife in Bowling Green. The court noted that the employers were anxious to retain men of the injured man’s type, and that the returning home was an inducement to continue in the job. The company regarded him as in their employ during these times, as evidenced by the fact that they would often have him take messages with him. “The course of dealing between these parties established that on these weekend trips the service covered the time in making the trips.” Coverage was allowed because the facts established that “on these weekend trips the appellee was in the service of the appellant.” Compensable?

4.

YES

NO

Black v. Tichenor, 396 S.W.2d 794 (Ky. App. 1965). The claimant had a regular office in Louisville, Kentucky, but was required to travel to Middlesboro, Ky., to conduct a field audit. The audit was supposed to start on Monday; the claimant traveled to Middlesboro on Sunday, where he intended to stay in a hotel so he could begin his job promptly on Monday morning (and avoid what was then a five-hour drive in the pre-dawn hours). The claimant was involved in an auto accident while traveling on that Sunday. Compensable?

YES

161  

NO

H.

Company-owned Vehicles 1.

Port v. Kern, 187 S.W.3d 329 (Ky. App. 2006). Employee was injured while driving home from work in a company owned vehicle. The employee was on call at all times, and would often work nights – sometimes being called back to work before actually reaching home. The employee stored his tools in the company truck, which prevented a stop at the employer’s shop before proceeding on to the particular job site. Compensable?

2.

YES

NO

Receveur Construction Company/Realm, Inc. v. Rogers, 958 S.W.2d 18 (Ky. 1997). Man was killed on-route to his home in Campbellsville, Ky., in a company truck after leaving the employer’s office in Louisville to return home. The project manager said the decedent had a truck with him because the project required a truck, and the truck eliminated the need to first stop at the employer’s business office, thus enabling the employee to begin his work sooner. Compensable?

I.

YES

NO

When the Job Site Changes on a Daily Basis Collins v. Kelley, 2004 WL 1231633 (Ky. App. Jun. 4, 2004). Workers were employed at a remote site, three hours away from their homes. The company paid for a hotel in Georgetown, Ky., near the job site during the week as a place for the workers to stay. Workers were dismissed due to rainy weather, and on their way to the hotel, several employees got in an accident and were injured. The hotel substantially reduced the employees’ commuting times, and enabled the on-site work to start sooner. Compensable?

J.

YES

NO

The “Traveling Salesman” Abbott Laboratories v. Smith, 205 S.W.3d 249 (Ky. App. 2006). A traveling sales representative (he mostly worked from a home office) was killed in an accident after having dinner with his wife. They had met at a restaurant close to his home, as he was getting near home from his sales calls. The sales rep frequently ate meals on the road. They note that to say that he ceased being an employee when he stopped to eat would mean that every time he stopped to eat lunch and got back on the road he was no longer an employee. Compensable?

YES

NO 162

 

Corken v. Corken Steel Products, 385 S.W.2d 949 (Ky. 1964). Traveling salesman was walking on a public street, on a sales call. A stranger suffering from a mental disorder confronted the salesman, and shot him dead. (NOTE: This case was not decided under the “benefit to the employer” test.) Compensable? K.

YES

NO

The “Out of Town” Conference U.S. Airways Group, Inc. v. Barry, 2009 WL 4251863 (Ky. Nov. 25, 2009). A part-time airline employee was required to attend a three-day conference in another state. (She was a customer service representative at Louisville International Airport.) She reported to the airport, flew on her employer’s airplane to reach the conference, and returned three days later. She was injured on her return commute to her home, on the Watterson Expressway, in a car accident. She was not working in any capacity at the airport during the week which encompassed the conference; that is, she did not perform any of her job duties at the airport either before, or after, this particular trip. It was unquestioned that the conference provided a service to her employer, because it made her better trained for her job. Moreover, attending the conference was a requirement of her job. Compensable?

L.

YES

NO

When the Employee Has Reached the Employer’s Premises, but He Hasn’t Put the Car in Park Yet (“Coming and Going” v. “Employer Premises”) Warrior Coal, LLC v. Stroud, 151 S.W.3d 29 (Ky. 2004). Employee was driving to work as an electrician at a coal mine. He was driving on the employer’s property down a mile-long dirt road, but had yet to reach his designated parking lot. He accidentally ran off the road and injured his neck. Compensable?

VII.

YES

NO

WHETHER THE TRAVEL IS WORK-RELATED IS A FACTUAL QUESTION Howard D. Sturgill & Sons v. Fairchild, 647 S.W.2d 796, 798 (Ky. 1983) – Whether the employer benefited from the transportation in question is a question of fact. Pierson v. Lexington Public Library, 987 S.W.2d 316, 318 (Ky. 1999) – The question of “control” over the conveyance (or the premises where the injury occurred) is a question of fact. 163

 

Abbott Laboratories v. Smith, 205 S.W.3d 249 (Ky. App. 2006) – Whether an employee is a “traveling employee” is a factual decision to be made by the ALJ; the decision will be left alone unless it is clearly erroneous. BEWARE: In some instances, however, reviewing courts have engaged in a “reversal” of factual findings under a claimed “misapplication” or “misconstruction” of the applicable law. Briefs and contested issues to the ALJ when travel is an issue should advance arguments on all of the major “exceptions,” so as to eliminate the possibility of a de facto appellate fact finding. Plan from the beginning; map out your discovery plan. For example, to establish the “traveling employee” exception, depose co-workers and company managers, to establish the extent of the employee’s job duties. If it is a “benefit to the employer” case, then be thorough in your examination of every minute detail of the employee’s travel activities.

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SIGNIFICANT DECISIONS OF THE WORKERS’ COMPENSATION BOARD – 2011 Pierre Coolen, Esq.

I.

AMA GUIDES AND ALJ DISCRETION A.

Justice v. Mountain Enterprises, Claim No. 2010-00253, November 7, 2011 Dr. Ruth opined the claimant had a Class 2 psychiatric impairment under the 5th edition AMA Guides. Noting that the 5th edition does not contain percentages for rating psychiatric impairment, he referred to the 2nd edition AMA Guides to find the claimant’s percentage of impairment to be 6 percent. Claimant’s IME, Dr. Miller, assigned a 17 percent rating, referencing only the 5th edition AMA Guides, without reference to the 2nd edition. A Class 2 impairment under the 2nd edition is “plainly associated with a range of impairment from 10 percent to 20%.” Thus, the Board held it was error for the ALJ to adopt the 6 percent rating from Dr. Ruth, citing Jones v. Brasch-Barry General Contractors, 189 S.W.3d 149 (Ky. App. 2006) (error to rely on an impairment rating that is not within the range of percentages associated with the category of impairment into which the physician placed the claimant). Moreover, the ALJ could not rely on the report of Dr. Miller, who referenced the wrong edition of the Guides. George Humfleet Mobile Homes v. Christman, 125 S.W.3d 288 (Ky. 2004) (ALJ may not rely on rating derived from the wrong edition of the Guides). On remand, the ALJ was directed to choose an impairment rating within the 10 percent to 20 percent range associated with a Class 2 impairment, as opined by Dr. Ruth.

B.

Stacy v. Martin County Board of Education, Claim No. 2009-85505, November 7, 2011 The Justice decision is all the more surprising in light of another decision penned by Board Member Stivers and released the very same day. In this decision, the Board affirmed the ALJ’s reliance on the opinions of Dr. Muffly, who assigned a 0 percent impairment rating, concluding the claimant had no permanent work-related injuries, but did not indicate which edition of the AMA Guides upon which he relied. On appeal, the claimant argued it was error for the ALJ to rely on the report of Dr. Muffly, in light of the physician’s failure to specify his reliance on the most recent edition of the Guides. In response to this argument, the Board held that Dr. Muffly’s failure to identify the edition upon which he relied “goes to the weight and credibility of Dr. Muffly’s report, not its 165

admissibility.” Noting the ALJ has the sole authority to determine the weight of the evidence and credibility of testimony, the Board declined to intervene on this issue. C.

Central Baptist Hospital v. Hayes, Claim No. 2009-79544, October 31, 2011 Dr. Nicholls issued a report in which he improperly combined ratings for gait derangement and arthritis in assessing a 10 percent permanent impairment for the lower extremity. The employer rebutted this report with a report from Dr. Primm, in which Dr. Primm assessed a 2-3 percent rating and noted that the AMA Guides specify that a more specific method of rating impairment should be used when available. Further, he found no evidence to indicate that Dr. Nicholls had actually performed weightbearing x-rays, as required for a valid assessment of impairment for arthritis. On deposition, Dr. Primm testified that it made no sense to rate the claimant for both gait derangement and arthritis, since her gait derangement was the result of her arthritis. He noted that one would rate her for gait derangement only if there were no other means available to assess impairment or if her gait derangement was caused by something other than her arthritis, which was not the case. Additionally, the employer submitted the report of Dr. Wolens, who specifically addressed the report of Dr. Nicholls, noting that none of the findings required for rating impairment based on gait derangement were present in the doctor’s notes. Moreover, like Dr. Primm, Dr. Wolens advised that the Guides direct the evaluator to use a more specific method to rate impairment, where possible. The employer argued that Dr. Nicholls’ rating could not be utilized because the AMA Guides expressly prohibit the evaluator from combining ratings for gait derangement and arthritis, which is clearly stated in Section 17.2 and outlined in Table 17-2 of the text. The ALJ relied on Dr. Nicholls and the Board affirmed, noting that “the ALJ, as fact finder, has no responsibility to look behind an impairment rating or meticulously shift [sic] through the AMA Guides to determine whether an impairment assessment harmonizes with that treatise’s underlying criteria.” Further, “Except under compelling circumstances where it is obvious even to a lay person that a gross misapplication of the AMA Guides has occurred, the issue of which physician’s AMA rating is most credible is a matter of discretion for the ALJ.” The Board went on to acknowledge, “We are cognizant of the fact the Guides provide the lower limb impairment percents shown in Table 17-5 stand alone and are not to be combined with any other impairment evaluation method. Notwithstanding this fact, the ALJ had the authority to choose the combined impairment rating assessed by Dr. Nicholls.”

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II.

BENEFITS – CALCULATION OF Hanna Andersson v. Gambrell, Claim No. 2009-76342, October 28, 2011 Claimant sustained two injuries with the employer. After her first injury, she returned to work at light duty, performing multiple different jobs within the warehouse, a distribution center for children’s clothes and toys. After her second injury, she was again released to return to work at light duty, and did so, although there were some aspects of even the light duty job that she was not able to perform. The claimant testified that she was able to work whenever work was available, and was earning a slightly higher hourly rate she was earning at the time of the first injury. However, because of a slow-down in business, she was not working as many hours. She testified that she had lost approximately $12,000 in wages due to the economic down-turn, noting that there had been changes in employee hours “across the board.” A company representative testified that the employer had experienced a downturn in sales in 2008 and 2009. There was a layoff in February 2009. However, by the 2010 holiday season, they had seen an upswing in business. The company representative verified that the claimant had continued to work after her injuries the same or even greater hours that she might have expected performing her pre-injury work. The light duty work she was performing now was not a job created for the claimant, but a necessary position that would have to be filled by someone, if not the claimant. She saw no reason the claimant could not continue performing this work for the indefinite future. The ALJ recognized that the Fawbush v. Gwinn1 analysis applied, given the claimant’s inability to return to her pre-injury work and her concurrent return to work at equal or greater wages, for at least one quarter, following the work injuries. Citing to the various economic factors just discussed, the ALJ concluded that it was reasonable on these facts to believe that the claimant would not be able to maintain employment at equal or greater wages than her pre-injury AWW for the indefinite future. On appeal, the Board agreed with the employer that consistent with Chrysalis House v. Tackett,2 for benefits to be enhanced, “it must also be determined from the facts of this case whether Gambrell’s inability to earn at or better wages for the indefinite future relates to the effects of the disabling 2007 work injury or the effects of the 2007 and 2009 work injuries.” In other words, the Board extended the rationale from Chrysalis House to the Fawbush analysis. The ALJ is now obligated to consider the work-related disability “as the sole factor in determining whether [the claimant] can earn at or better wages for the indefinite future.”

1

103 S.W.3d 5 (Ky. 2003).

2

283 S.W.3d 671 (Ky. 2009).

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III.

BENEFITS – BENEFICIARIES OF Dabney v. Landley & Morgan, Claim No. 1994-52584, December 8, 2011 This one is worth reviewing for the compelling facts alone. Thearn Dabney sustained a work injury in 1994. He received an award of 35 percent PPD in 1996. In 2002, he settled his claim on reopening. The parties agreed he was PTD and the settlement provided for a modest lump sum payment, followed by periodic benefits to be paid by the employer and the Special Fund. The agreement allowed that the employer’s liability would be satisfied through the purchase of an annuity, with benefits payable for life, guaranteed for thirty years. Thearn designated his sister, Debra, with whom he had lived off and on for a number of years, as his beneficiary to the annuity. The agreement expressly provided that any change in this beneficiary designation must be made in writing, delivered to the insurer/reinsurer. In June of 2009, the day before her incarceration, Thearn married his sweetheart, Tina. When Tina was released from prison one year later, she and Thearn stayed with Debra. They remained in her home until September of 2010, when Thearn died of cardiac arrhythmia. In October of 2010, Tina filed a “Motion to Change Beneficiary,” arguing that as Thearn’s widow and dependent, she was entitled to the continuation of benefits payable pursuant to the 2002 settlement agreement. She testified that it was Thearn’s intent for her to be “took care of” and that he had attempted to change his beneficiary designation by writing her a letter in November of 2009, referencing the “money thats left.” Debra testified that Thearn never intended to change his beneficiary designation, inasmuch as he felt indebted to her for her assistance through the years and he “knew what Tina would do with it.” Judge Smith determined that the statutory provisions for continuation of benefits to dependent survivors of a deceased employee did not apply in this case. Rather, the matter was governed by the law of contracts. Because the settlement agreement contained an express directive for how the beneficiary of the annuity might be changed, and Thearn failed to undertake a written change in designation of beneficiary for more than a year after his marriage, the ALJ gave legal effect to the beneficiary designation. The Board affirmed, and further noted that KRS 342.180 did not prohibit the assignment of benefits to Debra, citing KEMI v. Novation Capital, LLC, 2011 WL 832316 (Ky. App. Feb. 25, 2011), rendered February 25, 2011, and designated not to be published. The Board observed that if Tina had been entitled to benefits per KRS 342.730(3), it would have been at only half the rate. However, the settlement agreement reflected the intent of the parties that benefits after Thearn’s death be paid at the same rate and to the beneficiary designated, rather than via KRS 342.730(3).

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Also, though not raised by the parties, the Board observed that the benefits payable by the Special Fund would be payable to Tina pursuant to the statute, since the settlement agreement made no designation as to the recipient of those benefits after Thearn’s death. IV.

COURSE AND SCOPE OF EMPLOYMENT – DUAL PURPOSE DOCTRINE Cumberland River Comprehensive Care v. Deidre Hacker, Deceased, Claim No. 2009-01491, February 25, 2011 The Administrator of the Estate of Deidre Hacker filed a Form 101 alleging Hacker was involved in a work-related motor vehicle accident on August 25, 2009 in which she died at the scene from complications arising from a severe compound skull fracture. Hacker worked for Cumberland River Comprehensive Care as an adult case manager. Part of Hacker’s job duties as an adult case manager involved traveling to clients’ homes to conduct “outpatient caseloads” and to administer to the needs of clients. These duties included reminding clients to keep doctor’s appointments, ensuring clients stayed on their medication, or transferring clients to grocery stores or to doctor’s appointments. Hacker was not transporting anyone from the program when she left the office around lunchtime on the day in question. Hacker was not required to take lunch breaks in the break room or on the premises nor was lunch required to be taken at any particular time. Shortly before noon on the day of the fatal accident, Hacker’s husband testified he had a cell phone conversation with the deceased who informed him she was going to make a home visit. Other evidence demonstrated Hacker worked in her office the morning of the accident and that she was going to conduct outpatient home visits that afternoon. The evidence further reveals that on the day in question, Hacker had finished her work at the center around 11:00 a.m. Hacker’s husband testified that during a cell phone conversation he had with the deceased, she informed him she had already had lunch and also informed him she was going to see a client. Evidence also revealed the deceased had her own personal checking and savings account at National City Bank and was paid on the 10th and 25th of every month. (It is significant to point out the fatal accident occurred on the 25th of the month.) Evidence further reflected when Hacker left her office around noon on the day in question, she informed the intake receptionist she was going to lunch and would be back. This same witness testified, however, the deceased would usually take her work bag with her when visiting clients, but noted on the day in question, the deceased did not take her bag when leaving the treatment center. Another coworker testified on the day in question, the deceased informed her she was going to cash a check, get some lunch and then return. Also introduced into evidence was a payroll check issued by Cumberland River Comprehensive Care made payable to the deceased dated August 25, 2009 which was deposited for processing at National City Bank on August 25, 2009 upon the endorsement of the deceased. Also introduced into evidence was a uniform police traffic collision report which reflected the accident occurred on August 25, 2009 at 12:20 p.m.

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In finding Hacker’s death work-related, the ALJ cited in her opinion to Fortney v. AirTran Airways, Inc., 319 S.W.3d 325 (Ky. 2010), as being dispositive of the issues raised. The ALJ then decided that the “service/benefit to the employer exception” to the going and coming rule applied to the facts of this case. The ALJ noted the rule excluding injuries that occur off the employer’s premises, during travel between work and home, did not apply if the journey is part of the service for which the worker is employed or otherwise benefits the employer. In applying the facts of this case to the above stated legal standard, the ALJ found the deceased was providing a service to her employer at the time of the fatal accident. In so finding, the ALJ relied on the testimony of the husband of the deceased wherein he noted the deceased had informed him immediately before her accident she was going to the bank and then she was going to see a client. In addition, the ALJ relied on the testimony of witnesses who noted the deceased’s job as a caseworker (1) required her to almost daily visit homes of clients; (2) the visits to these outpatient clients would occur at various times during the day but mostly these visits would occur in the afternoon; (3) the deceased would set her own schedule and did not have a supervisor specifically directing her hourly or even daily as to a visit/travel schedule; (4) there was not a “sign-in or sign-out sheet” at the office designating the purpose of the deceased’s travel or her destination; (5) the deceased travelled daily for the purpose of either visiting clients, taking clients to appointments, or grocery shopping either for or with the clients; (6) the deceased would be paid for her travel expenses if she used her own vehicle in the furtherance of her job duties; (7) the deceased would be paid during the time she traveled to clients’ homes, transported the clients or otherwise ran errands for the clients; (8) the travel was an essential element of her job; (9) it was not unusual for caseworkers to combine lunch breaks with visits to outpatient clients; and (10) the deceased was a very conscientious caseworker who frequently and sometimes spontaneously arranged her schedule to accommodate her clients. In affirming the award, the Board first looked at the language contained in KRS 342.0011(1) which defines in part that an “injury” must arise out of and be in the course of employment. Citing to Meredith v. Jefferson Co. Property Valuation Administrator, 19 S.W.3d 106 (Ky. 2000) and Kaycee Coal Co. v Short, 450 S.W.2d 262 (Ky. 1970), the Board noted it is a well-settled principle that when employment requires travel away from the work premises, a worker remains within the course and scope of employment during the entire trip, unless the worker is performing a personal errand that constitutes a distinct and substantial departure from the work-related purpose of the trip. However, application of this basic proposition becomes more complicated when the employee’s trip has a dual purpose, i.e., one business and one personal. The Board then cited the rule enunciated in Larson's Workers Compensation Law, Volume 1, Sections 18.2, 18.3, and 18.4 stating: Therein it is pointed out that when a trip serves both business and personal purposes, it is a personal trip if the trip would have been made in spite of the failure or absence of the job purpose and would have been dropped in event of the failure of the private purpose, though the business errand remains undone; it is a business trip if a trip of this kind would have been made in spite of 170

the failure or absence of the private purpose, because the service to be performed for the employer would have caused the journey to be made by someone even if it had not coincided with the employee’s personal journey. If permission to take a personal trip is made conditional on the performance of the business errand, the trip becomes a business trip. The Board noted substantial evidence supported the ALJ’s findings of compensability which cannot be reversed on appeal. This evidence included testimony elicited from the deceased’s husband who indicated he had a cell phone conversation with the deceased at her office between 10:30 a.m. and 11:00 a.m. on the day in question and at that time she informed him she had already had lunch and also informed him she was going to see a client. Evidence was further elicited from witnesses who indicated it would be common for the deceased to deposit a payroll check and get lunch while traveling to perform a work task. Testimony from other witnesses indicated the deceased had informed them as she was leaving the building that day that she was going to the bank to cash her payroll check and had another home visit to attend. Evidence further revealed the deceased had in fact deposited her payroll check that day and that the collision report reflected the accident occurred on August 25, 2009 at 12:20 p.m. From these facts, the Board determined it would have been reasonable for the ALJ to conclude the deceased had completed her personal errand by cashing her payroll check and was on her way to perform a service for the employer by traveling to a client’s home when the traffic accident occurred. V.

COVERAGE BY WAY OF ESTOPPEL David Durbin v. Lanphear Construction, Inc.; UEF v. KEMI, Claim No. 200900047, June 13, 2011 ALJ Joiner awarded PPD benefits as a result of a work-related elbow injury that occurred on 11/17/08. Claimant appealed from the ALJ's award, arguing that he is permanently and totally disabled. Alternatively, claimant argued the evidence compelled application of the 3-multiplier. The Board affirmed the ALJ's finding of partial disability, but remanded on the issue of the 3-multiplier, noting that the ALJ's conclusory statement regarding claimant's retained physical capacity was insufficient to advise the parties (or the Board) of the basis for that conclusion. The Board's own summary of the record on this issue contains no evidence at all to suggest that the claimant has the physical capacity to return to his pre-injury work. Board Member Stivers would have directed the ALJ to award the 3-multiplier. In his concurring opinion, he notes that in the event the ALJ denies the 3-multiplier, he must state his reasons for rejecting the uncontradicted medical and lay evidence on the issue. Also before the Board was a cross-appeal by the employer and UEF against KEMI, based on a denial of coverage due to non-payment of premium. The record established that the employer's policy for the period 5/17/08 through 5/17/09 was cancelled on 10/7/08 due to non-payment. On 10/30/08, the employer tendered a check in the amount of $2,362.40, which covered the past due premium ($821.11) and the regularly-scheduled monthly 171

payment on the 2008-2009 policy ($1,541.29). The employer testified that a KEMI employee informed him that this payment would bring the policy "up-todate." The check was cashed by KEMI on 11/4/08. Cancellation of the policy had been properly reported to the DWC and the ALJ concluded that there was no coverage in effect on the date of injury. The Board vacated and remanded on the coverage issue, noting that the ALJ failed to address the estoppel arguments forwarded by the employer and UEF. The Board noted evidence of record that would support application of the estoppel doctrine, including the fact that the employer testified that he believed, based on representations by the KEMI employee and the fact that his premium payment was never refunded, that he had coverage on the date of injury. On the other hand, an audit exit form signed by the employer on 11/12/08 specifically referenced a policy period from 5/17/08 through 10/7/08, which would suggest that any such belief on the part of the employer was unreasonable. Because there was evidence on both sides of the argument, the Board determined that the ALJ, as fact-finder, was obliged to make additional findings on the estoppel issue. VI.

IDIOPATHIC VS. UNEXPLAINED INJURIES Laurel Grocery Company, LLC v. Eugene Carpenter, Claim No. 2010-95554, March 23, 2011 The claimant was a delivery truck driver for employer. On February 8, 2010, he had completed his route and returned to the company parking facility, and he had exited the truck to plug it into a heater. He fell as he attempted to climb into the truck to retrieve some items. The claimant lost consciousness at the scene, and he did not specifically recall the details of the fall, but briefly regained consciousness as he lay flat on his back beside the truck. He next regained consciousness in the hospital. There were no witnesses to the fall. The ALJ found the fall was unexplained and therefore work-related. The ALJ also found the claimant to be permanently totally occupationally disabled due to the work injury. The Board affirmed, noting that in Kentucky, there is “a presumption that an unexplained workplace fall arises out of the employment unless the employer presents substantial evidence to show otherwise.” Vacuum Depositing, Inc. v. Dever, 285 S.W.3d 730, 733 (Ky. 2009); Workman v. Wesley Manor Methodist Home, 462 S.W.2d 898, 900 (Ky. 1971). Where an employee sustains an injury at work as a result of a purely individual cause, i.e., such as an internal weakness, and the employee’s position at work does not contribute independently to the effects of the resulting harmful change, the injury as a matter of law is idiopathic in nature and, therefore, not compensable. Workman v. Wesley Manor Methodist Home, supra. By contrast, an unexplained fall is exactly what its designation purports to be. It is a fall, the cause of which cannot be identified sufficiently with any thoroughness of detail. Salyers v. G. & P. Coal Co., 467 S.W.2d 115 (Ky. 1971) and Coomes v. Robertson Lumber Co., 427 S.W.2d 809 (Ky. 1968).

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In this instance, no evidence was presented to contradict claimant sustained an unexplained fall. Likewise, there was no evidence the fall was caused by any active condition or any condition which may have been personal to claimant. VII.

INTOXICATION DEFENSE Williams Contracting v. Eddie King, Claim No. 2008-69255, January 14, 2011 Edward Wayne King fell approximately forty-five to fifty feet on December 8, 2008, while in the course and scope of his employment with Williams Contracting. A urinalysis was positive for morphine, 6-monoacetylmorphine amphetamine, and butalbital. The ALJ determined the defense of intoxication was not available. Analyzing KRS 342.610(3) under the applicable case law, including Campbell v. City of Booneville, 85 S.W.3d 603 (Ky. 2002) and Perdue Farms, Inc. v. Stogner, 2003 WL 22160347 (Ky. Sep. 18, 2003), rendered September 18, 2003, and designated not to be published, the ALJ determined the employer’s burden of proof to establish a voluntary intoxication defense is to prove all three of the following elements: 1.) There has been a disturbance of the mental or physical capacities of the claimant resulting from the introduction of substances into the body; 2.) [T]he claimant knowingly introduces substances into his body, the tendency of which he knows or ought to know causes intoxication, unless he introduces them based on medical advice or under duress; and 3.) The injury was proximately caused primarily by voluntary intoxication. As to the first element, the ALJ determined Williams did not prove the substances found in King’s body subsequent to his work related injury caused a disturbance of the mental or physical capacities of the claimant. Dr. Nichols opined the urinalysis was inconclusive in revealing any kind of impairment on the day of the injury as drugs may be positive in urine for days after active effects have ceased. The ALJ did, however, find Williams succeeded in proving the second element of the three-part test. Regarding the third element, the ALJ concluded voluntary intoxication was not the proximate cause of the injury but, instead, the “loose walk-board” and the failure to properly utilize the “fall protection equipment” were the proximate cause. The Board affirmed.

VIII.

MEDICAL FEE DISPUTE – POST-AWARD REQUIREMENTS Charles Burchett v. Uptown Mining, Claim No. 1988-32477, March 1, 2011 This claim involved a reopening and post-settlement medical fee dispute filed by the claimant to secure payment for medical treatment and out-of-pocket expenses from the employer, who had denied compensability of past, present and future medical treatment. The claimant sustained a low back injury on August 27, 1988, when he was repairing a beltline. He subsequently filed a claim which was resolved by settlement on February 25, 1991. The settlement claimed no waiver of the right to future medical treatment related to the injury. The claimant also concurrently filed a hearing loss claim and coal workers’ pneumoconiosis claim against the same employer, which resulted in separate settlements. 173

Subsequent to the injury settlement, the claimant continued treatment with medication for his low back pain on a regular basis through 2006 with his treating physician. In October 2006, the claimant began treating with a new physician for various conditions including continued treatment for his low back pain. The claimant received a letter dated April 9, 2007, from an adjuster for the employer’s insurer indicating she had been assigned to handle his “Black Lung” claim, and she forwarded a medical questionnaire to him to complete. He did not complete and return the form until October 21, 2008, when he returned the completed form to the adjuster via certified mail. In addition to the completed form, claimant forwarded to the adjuster: 1) a copy of the February 25, 1991, settlement agreement and order of approval by the ALJ; 2) the first report of injury and Form SF3A relative to the 1988 incident; 3) a form 113 designating Dr. Potter as his treating physician; and 4) a form 106 Medical Waiver and Consent. Beginning in January 2009, the claimant started forwarding to the adjuster, by certified mail, Form 114 requests for payment seeking reimbursement for out-ofpocket expenses relative to his mileage, prescription costs and office visits with his new treating physician. By letter dated June 3, 2009, claimant received correspondence from the adjuster stating the insurer would be “unable to make payment on request for medical treatment on injury now or in the future and the file will remain settled/closed.” The insurer did not attempt to reopen the claim to file a medical fee dispute. The claimant then filed a motion to reopen and filed a Form 112 with the appropriate attachments which initiated the reopening of this claim. The ALJ ruled in favor of the employer/insurer and denied payment for the medical treatment subject to the medical fee dispute. The ALJ stated the claimant’s “motion to reopen for the purpose of resolution of a medical fee dispute is DENIED to the extent that the contested medical treatment and expenses, including Plaintiff’s past, present and future medical treatment for low back, cervical spine and shoulder pain, are found to be unreasonable and unnecessary for the cure and/or relief of the effects of the work injury he sustained in August of 1988.” In a post award medical dispute, the burden of proof regarding the reasonableness and necessity of treatment is with the employer, while the burden remains with the employee concerning questions pertaining to the workrelatedness or causation of the condition. See KRS 342.020; Mitee Enterprises v. Yates, 865 S.W.2d 654 (Ky. 1993); Addington Resources, Inc. v. Perkins, 947 S.W.2d 421 (Ky. App. 1997); R.J. Corman R.R. Const. v. Haddix, 864 S.W.2d 915 (Ky. 1993); and National Pizza Co. v. Curry, 802 S.W.2d 949 (Ky. App. 1991). In this claim, the employer failed to file medical fee disputes or contests to those requests for payment/medical bills submitted on January 9, 2009, January 20, 2009, March 13, 2009, and April 8, 2009, within thirty days of their submission. Therefore, as a matter of law, it waived any objection to those requests pursuant to KRS 342.020(1). See also 803 KAR 25:096 §§8 and 11; Phillip Morris, Inc. v. Poynter, 786 S.W.2d 124, 125 (Ky. App. 1990); Westvaco Corp. v. Fondaw, 698 174

S.W.2d 837 (Ky. 1985). The ALJ’s ruling with regard to causation and reasonableness and necessity notwithstanding, the employer should have consequently been found liable for payment to the claimant for the amounts reflected in those Forms 114. IX.

PROCEDURE – ALJ DISCRETION A.

Purchase District Home Health v. Sasseen, Claim No. 2009-96364, December 7, 2011 Claimant sustained a work injury on 2/11/09. She returned to work for the employer on 4/20/09, but found her symptoms unbearable and quit work again on 6/19/09. She did not return to work after that date. The parties stipulated that TTD benefits had been paid from 2/12/09 through 4/19/09. Claimant underwent surgery on 7/26/10. On 11/23/10, claimant family doctor assessed a permanent impairment rating. On 2/3/11, claimant’s IME physician completed a Form 107, opining MMI and assigning a permanent impairment rating. On 3/30/11, claimant deposed her family doctor, who opined he was unsure whether she was at MMI, despite his assignment of a permanent impairment rating. In his original opinion and award, ALJ Borders indicated that the parties had stipulated that claimant was temporarily totally disabled from 2/12/09 through 4/19/09, and awarded TTD benefits for that period only. On reconsideration, the ALJ acknowledged that TTD had been listed as an issue, notwithstanding the stipulation concerning TTD benefits paid, and awarded additional TTD benefits from 6/20/09, the day after she quit working, through 2/03/11, the date of Dr. Byrd’s Form 107. In so ruling, the ALJ observed that although Dr. Butler assessed a rating in November of 2010, his later testimony that he was unsure of whether the claimant was at MMI caused him to discount the earlier assessment. On appeal, the Board held that the ALJ’s Order was an impermissible reconsideration of the case on its merits, inasmuch as the record contained evidence upon which the ALJ could have concluded in his original opinion that claimant was able to continue working after 6/17/09. Dr. Butler had recommended she avoid heavy lifting, but had not indicated she was temporarily totally disabled. The Board observed, “In his order on reconsideration, the ALJ did not admit to making an error or mistake. The order merely reflects a different conclusion. In ruling on a petition for reconsideration, the ALJ is not permitted to reconsider the record and set aside his decision based upon evidence he has already considered.” Nonetheless, the Board concluded “it is reasonable for the ALJ to determine whether Sasseen may be entitled to a period of TTD benefits subsequent to the surgery performed July 26, 2010.” Thus, the Board remanded for a determination as to whether the claimant was entitled to 175

some additional period of TTD after surgery, noting that it would have been appropriate for the ALJ to determine she had reached MMI in either November of 2010 or February of 2011. B.

Riverside Cemetery v. Joslin, Claim No. 2010-00107, November 29, 2011 This was the second time the claim had been brought before the Board. ALJ Davis initially dismissed the claim on grounds that claimant had failed to give due and timely notice of his alleged injury. In reversing the ALJ on that issue, the Board held that there simply was no evidence to rebut the claimant’s testimony that he informed his supervisor of the work injury within three or four days of its occurrence. Moreover, an employer representative had advised the claimant to seek medical treatment. Therefore, there was no evidence upon which to conclude that the delay, if any, of up to four days had caused any prejudice. In remanding the claim to the ALJ, the Board specifically wrote, “While there exist issues including but not limited to whether a work event, or injury occurred, and whether the claim was timely filed, which certainly may exist to support dismissal of this claim, those issues are not before us.” Despite this caveat, on remand, ALJ Davis held, “The Board, in finding that the date of injury is January 7, 2007, as a precursor to finding that notice the next day was adequate, has also made a binding finding that the date of injury is January 7, 2007, for all relevant purposes.” Describing the Board’s finding regarding the date of injury as the “law of the case,” he went on to award PTD benefits. It was ALJ Davis’ belief that it would be entirely inconsistent with the Board’s determination on the issue of notice for him to conclude that there was no work injury on that date. The Board vacated and remanded, observing that the “law of the case” doctrine applied only to the Board’s ruling on the issue of notice, which had not been appealed by the employer. All other issues, including whether a work-related injury occurred, were to be determined by the fact-finder. The Board offered the following succinct explanation of the “law of the case” doctrine: Jurisprudence has long recognized pursuant to the “law of the case” doctrine, an appeal settles all errors that were or might have been relied upon by a reviewing court or administrative appellate tribunal. Under the “law of the case” doctrine, if an appellate body passes on a legal question and then remands the cause to the fact-finder for further proceedings, all outstanding legal questions that formerly might have been appealed in the original decision but were not perfected cannot, as a matter of law, be raised later following remand. Whittaker v. Morgan, 52 S.W.3d 567, 569-570 (Ky. 2001).

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X.

REOPENING A.

Ronnie Fouch v. Excel Mining, LLC, Claim No. 2002-74027, January 14, 2011 On July 16, 2002, the claimant suffered work-related injuries to his neck, left shoulder, and low back when he tripped over a scoop bucket while carrying a box of resin. The claimant subsequently underwent shoulder surgery to repair a torn rotator cuff performed by Dr. Love on February 20, 2003, and a cervical discectomy and fusion at C3-4, C4-5 and C5-6 with anterior cervical plate and allograph insertion at all levels performed by Dr. Boyer on November 11, 2003. The claimant filed an application for workers’ compensation benefits on September 16, 2005. During the course of the original proceedings, the employer submitted the 2006 report of Dr. Travis. Pursuant to the AMA Guides, Dr. Travis assessed the claimant as having 24 percent impairment corresponding to his neck, 2 percent impairment corresponding to his left shoulder and 5 percent impairment corresponding to his low back. Using the Combined Values Chart contained within the Guides, Dr. Travis concluded the claimant suffered from 29 percent whole person impairment due to the injury. Dr. Travis further concluded the claimant no longer retained the physical capacity to return to the type of work he performed at the time of the injury. Concerning restrictions, Dr. Travis stated the claimant “should be able to do at least medium work activity, which includes the ability to sit/stand/walk equally and lift/carry 35 to 50 pounds maximum.” On March 21, 2006, relying on the opinions of Dr. Travis, the ALJ granted the claimant an award of permanent partial disability based upon a 29 percent impairment rating enhanced by the 3-multiplier. The claimant did not return to work following the July 16, 2002 injury. On October 3, 2007, the claimant underwent a second surgery involving his neck performed by Dr. Boyer consisting of: 1) the removal of the anterior instrumentation from C3 through C6 inserted during the original surgery, and 2) an anterior cervical discectomy and autograft fusion with insertion of a Peak interbody prosthesis and plate at C6-7. On January 8, 2010, the claimant filed a motion to reopen alleging a worsening of condition. Updated medical evidence following the second surgery was introduced from Dr. Nadar, who assessed a combined impairment rating pursuant to the AMA Guides of 34 percent, and Dr. Stephens, who assessed a 30 percent impairment rating relative solely to the cervical spine. Dr. Stephens stated he would recommend no restrictions beyond those specified by Dr. Travis in 2006. Dr. Travis performed a second evaluation of the claimant on June 18, 2010. Dr. Travis concluded although the claimant had undergone a second fusion surgery involving the neck, there had been no change in 177

his actual physical condition or complaints of symptoms since 2006. Moreover, Dr. Travis stated he would place the claimant under no additional restrictions beyond those recommended in 2006. Recalculating the claimant’s impairment rating pursuant to the AMA Guides, Dr. Travis admitted the claimant would be entitled to additional impairment simply due to the fact he had undergone a second fusion surgery. Relying strictly on the AMA Guides, with reference to the cervical spine, Dr. Travis assessed 30 percent whole person impairment, as opposed to the 24 percent impairment previously assessed in 2006. In the decision on reopening, the ALJ dismissed the claimant’s case. Despite uncontroverted evidence of a second fusion surgery post-award generating an increased impairment rating pursuant to the AMA Guides, the ALJ was nevertheless persuaded the claimant had experienced no increase in permanent partial disability. In so ruling, the ALJ expressly relied on the testimony of Dr. Travis that the claimant’s symptoms, physical limitations and medical restrictions remained unchanged since the date of the original proceedings. The Board reversed the ALJ, citing uncontradicted evidence on reopening demonstrating the claimant suffered an increased impairment rating in accordance with the AMA Guides that was work-related. Since 1996, the proper calculation of permanent partial disability pursuant to KRS 342.730(1)(b) has been a mathematical function of impairment ratings determined in accordance with the AMA Guides. As the Supreme Court instructed in Roberts Bros. Coal Co. v. Robinson, 113 S.W.3d 181, 182183 (Ky. 2003), “an award of permanent partial disability pursuant to KRS 342.730(1)(b) is based solely on a finding that the injury resulted in a particular AMA impairment rating, with the amount of disability being determined by statute.” For that reason, in deciding a claimant’s entitlement to benefits pursuant to KRS 342.730(1)(b), whether at the time of the original proceedings or on reopening pursuant to KRS 342.125(1)(d), an ALJ has “very limited discretion when determining the extent of a worker’s permanent, partial disability.” Ira A. Watson Dept. Store v. Hamilton, 34 S.W.3d 48, 51 (Ky. 2000). Hence, pursuant to KRS 342.125(1)(d), absent some other defense, a worker who proves an increased impairment rating pursuant to the AMA Guides causally related to the original injury is, by law, entitled to receive an increased award of permanent partial disability benefits on reopening as a function of 342.730(1)(b). Under such circumstances, the claimant qualifies for additional income benefits irrespective of any variation in his physical complaints or medical restrictions, or specific changes altering his work status. B.

Tim Jones v. Ken Builders Supply, Claim No. 2005-63853, June 16, 2011 Claimant's original claim settled by order dated 7/18/06. Claimant filed a motion to reopen on 3/27/08 asserting a worsening of impairment and requesting approval of a recommended surgical procedure. A response to the motion averred that the surgery had been approved and TTD 178

benefits voluntarily reinstated. Accordingly, the motion to reopen was denied as moot. Some months later, the employer filed a motion to reopen and medical fee dispute over a diagnostic study. Claimant responded with a request that the medical fee dispute be resolved in his favor and requesting clarification of the original order dismissing his own motion to reopen as moot, noting that he continued to assert an increase in impairment. The employer later filed a motion to dismiss the medical fee dispute as moot, inasmuch as the treater had abandoned the request for the diagnostic study and was now recommending a fusion. A show cause order was issued, to which no response from the claimant was filed. No order dismissing the medical fee dispute was entered. On 11/10/08, the claimant filed a renewed motion to reopen, asserting an increase in impairment following the fusion. The employer objected, noting that this motion had been filed within one year of the claimant's original motion to reopen for an increase in benefits. The motion to reopen was ultimately denied, as filed within one year of the original motion. This order became final. On 11/12/10, more than four years after the original settlement, the claimant filed another motion to reopen, asserting an increase in impairment. Claimant cited to Hall v. Hospitality Resources, Inc., 276 S.W.3d 775 (Ky. 2008), as authority for his argument that some or all of the various orders above-mentioned constituted orders "granting or denying benefits," thereby extending the four-year deadline for reopening under KRS 342.125. ALJ Swisher ultimately ruled against the claimant, and two of three Board members affirmed. Pursuant to Hall, a claim may be reopened within 4 years of the original order or award and also "any subsequent order granting or denying benefits." This means income benefits and not medical benefits. Thus, an order granting or denying a medical fee dispute will not serve to extend the four-year period. Moreover, the voluntary payment of TTD benefits also will not extend the four-year period. Kendrick v. Toyota, 145 S.W.3d 422 (Ky. App. 2004). Board Member Cowden dissented, on grounds that the claimant had tried really hard and the decision was unfair. Perhaps he also wanted to throw a lifeline to claimant's counsel, who arguably malpracticed the case by failing to file the motion to reopen sometime between 11/11/09 and 7/18/10. C.

Crittenden County Health & Rehab v. Sisco, Claim No. 2008-01130 & 2005-71525 Claimant sustained a low back injury on 9/14/05. She settled that claim on 3/14/08 for a lump sum equivalent to weekly benefits of $103.68. In the meantime, she sustained a second low back injury on 9/23/07. She filed a claim for benefits as a result of this second injury on 9/11/08 and 179

on 12/15/08, filed a Motion to Reopen the 2005 claim. On 4/8/09, ALJ Joiner issued an interlocutory award of TTD and medical benefits related to the 2007 injury. Claimant was paid TTD through 2/8/10 and the ALJ eventually issued a final opinion and award on 5/23/11, relating to both the reopening and the 2007 injury claim. The ALJ concluded that the 2007 incident was merely a temporary exacerbation of the earlier injury and that claimant’s ongoing impairment was due entirely to the 2005 injury. The ALJ found a permanent impairment rating yielding a PPD benefit of $198.72, from which he subtracted the $103.68 weekly benefit paid pursuant to the earlier settlement. He awarded this increased PPD benefit to run from 2/9/10 (conclusion of TTD payable as a result of the 2007 injury), for a period ending 425 weeks from and after 3/14/08 (date of settlement of the 2005 injury). The Board vacated and reversed, holding: 1.

Benefits on reopening were payable from and after the date of reopening, 12/15/08;

2.

Benefits on reopening were payable through a period ending 425 weeks after PPD benefits commenced with respect to the 2005 injury, extended by any periods of TTD payable as a result of that injury. Citing Sweasy v. Wal-Mart Stores Inc., 295 S.W.3d 835 (Ky. 2009), the Board held that PPD benefits commence on the date permanent impairment or disability arises, which is the date on which the work-related trauma produces the harmful change to the human organism; i.e., the date of injury, unless there is evidence of a period of latency before the injury became manifest. Thus, benefits on reopening were payable for a period ending 425 weeks from and after 9/14/05, extended by any intervening periods of TTD benefits payable as a result of the 2005 injury;

3.

The period of PPD benefits payable as a result of the 2005 injury was not to be extended by TTD benefits payable as a result of the 2007 injury, inasmuch as the ALJ determined that said injury resulted in no PPD; and

4.

The ALJ was required to compare the claimant’s actual disability at the time of settlement with her disability at the time of reopening. In this case, the ALJ had merely subtracted from the weekly benefit calculated upon reopening the amount of weekly benefit represented by the lump sum settlement, without making a finding as to her permanent impairment rating and disability at the time of settlement. However, a settled award is the product of compromise, and no statement contained therein is binding upon reopening.

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XI.

SAFETY PENALTY Payne v. Powers Construction Co., Claim No. 2010-00673, December 5, 2011 Claimant fell from the roof of a barn and was injured. He was not wearing a safety harness or utilizing any of the safety equipment available to him. The employer acknowledged that he knew none of the workers were using any of the safety equipment, which was in the work truck. There was no other fall protection in place on the roof. Workers had not been trained in working safely at heights. The fall was not reported to OSHA or KOSHA and so there was no investigation performed within six months of the accident, after which a citation would not issue, regardless of the occurrence of a violation. ALJ Borders determined that KRS 342.165 did not apply to enhance claimant’s award. His findings on this issue were as follows: While the actions of the Defendant Employer were negligent and could have been prevented, the Administrative Law Judge is simply not convinced that the Defendant Employer intentionally violated any known statutes or regulations. It is readily apparent from the testimony of Mr. Powers that he was unaware that he was violating safety regulations if in fact, he was. In addition, the fact that a compliance officer had investigated the scene after the accident and did not recommend the issuance of any citations supports a finding that a safety violation did not occur. The claimant had presented expert testimony as to multiple violations of specific safety regulations, noted above. In view of those violations, the Board held that the ALJ’s conclusion with respect to the employer’s conduct was “misguided and a complete misstatement of the law regarding Powers Construction’s failure to comply with a specific statute or lawful administration [sic] regulation. The fact Powers Construction was unaware it was violating safety regulations is irrelevant, as intent is inferred from tis failure to comply with the regulation.” The Board cited Chaney v. Dags Branch Coal Co., 244 S.W.3d 95 (Ky. 2008), as authority for the proposition that “Payne was not required to show Powers Construction intentionally violated a statute or regulation concerning workplace safety.” Rather, intent is inferred from the violation. “Powers Construction’s awareness or lack thereof of workplace safety regulations is irrelevant and the record clearly indicates Powers Construction violated numerous safety regulations. Chaney v. Dags Branch Coal Company, supra, is clear, absent unusual circumstances, an employer is presumed to know what specific state and federal regulations concerning workplace safety require.” Recall that in Chaney v. Dags Branch, the court expressly admonished that it was dealing with violation of a specific safety statute and not KRS 338.031, KOSHA’s “general duty” clause. KRS 342.165 does not itself require evidence of egregious or malicious conduct by the employer. So, if the claimant is able to point to a specific safety statute or regulation that was violated by the employer 181

and that violation “in any degree” caused the accident, the safety penalty will apply. Knowledge and intent by the employer are inferred. XII.

STATUTE OF LIMITATIONS – CUMULATIVE TRAUMA Consol of Kentucky, Inc. v. Sparks, Claim No. 2010-00773, November 4, 2011 ALJ Hays found that notice of a cumulative trauma injury was timely despite the claimant’s admission that his treating physician had informed him four years before giving notice and filing his claim that his symptoms of pain in his neck, back and knees were due to working in low coal. The Board affirmed, stating as follows: As pointed out in Hill v. Sextet Mining Corp., supra, Sparks was not required to self-diagnose the cause of the pain and reoccurring symptoms in his neck, back, and knees. Further, the fact Dr. Gish informed Sparks his symptoms over the years were due to his work in the mines did not create an obligation to notify his employer of a work-related injury and file his workers’ compensation claim. Dr. Gish’s records do not reflect she ever advised Sparks he had sustained a work-related injury. The records of Drs. Gish and Breeding do not establish Sparks was ever advised he sustained a work-related injury. Although Sparks was told by Dr. Gish the symptoms she treated were probably due to his work, that is certainly a far cry from diagnosing specific work-related injuries. The fact Sparks had complaints or symptoms which Dr. Gish informed him were related to his work do not establish work-related injuries that have been specifically identified and diagnosed; thus, the obligation to notify Consol of an injury and to file a claim was not triggered. The record clearly supports the ALJ’s determination the first time Sparks was ever advised he had work-related injuries was when his attorney informed him of Dr. Hoskins’ diagnoses.

182

2011 KENTUCKY COURT PUBLISHED DECISIONS ON WORKERS’ COMPENSATION ISSUES James G. Fogle

INDEX OF DECISIONS Burroughs v. Martco Hudson v. Cave Hill Cemetery Kroger v. Ligon Nesco v. Haddix Nickell v. Diversicare Management Services One Beacon Ins. Co. v. KIGA Pella Corp. v. Bernstein Schmidt v. South Cent. Bell Traugott v. Virginia Transp.

I.

AMA GUIDES Pella Corp. v. Bernstein, 336 S.W.3d 451 (Ky. 2011). Joyce Bernstein injured her neck, shoulder, arm, hand, and low back on 1/27/05. Dr. Jackson diagnosed "adhesive capsulitis of the shoulders greater on the left than the right." He assigned a 10 percent permanent impairment rating. An ALJ determined that Bernstein sustained injuries to her neck and back that produced impairment ratings of 25 percent and 10 percent respectively, for a combined impairment rating of 33 percent. The ALJ found that she sustained a permanent injury to her left shoulder but did not sustain a permanent right shoulder injury that warranted a permanent impairment rating, basing the latter finding on certain medical evidence and her testimony that she no longer had any right shoulder complaints. Noting that Dr. Jackson failed to separate the 10 percent impairment rating that he assigned to the shoulders, the ALJ concluded that the evidence did not permit an award for the left shoulder. Bernstein's petition for reconsideration pointed out that Dr. Jackson's testimony clearly attributed at least half of the 10 percent impairment rating he assigned to the left shoulder. She argued that to base an award for the left shoulder injury on a 5 percent rating would be reasonable under the circumstances and requested the ALJ to do so. The ALJ overruled the petition, reasoning that an ALJ lacks the discretion to invade the evidence of bilateral shoulder impairment and speculate on a percentage that is applicable to the left shoulder. WCB reversed. CA and SC affirmed. Although the permanent impairment rating that an injury produces is a medical question, an ALJ has some discretion to select the rating upon which to base a partial disability award. An ALJ may consult the Guides when considering the medical evidence and deciding which expert to rely upon. An ALJ may rely on at least some of the conversion tables found in the Guides, such as the tables used to combine whole-person impairment ratings or to convert a binaural hearing impairment to a whole-person 183

 

impairment. An ALJ may also translate a Class 1-5 impairment assigned to a mental condition under the Fourth or Fifth Edition of the Guides into a percentage impairment. We view the present facts as also warranting the exercise of discretion. Dr. Jackson clearly thought that the left shoulder injury warranted a permanent impairment rating. Although he assigned a 10% rating based on impairment to both shoulders, his treatment notes and Form 107 would permit the ALJ to infer reasonably that he attributed more than half of the rating to the left shoulder. We conclude that the ALJ was free under the circumstances to consider the relevant medical evidence and select a reasonable impairment rating to be used to calculate income benefits. COMMENT: This ruling has extremely limited application because the facts are so unusual. There was no substantial reason to publish this decision. II.

APPEAL Nickell v. Diversicare Management Services, 336 S.W.3d 454 (Ky. 2011). WCB entered an opinion in which it affirmed the ALJ's decision on 11/3/09. On 12/3/09 the claimant transmitted to the Clerk of the Court of Appeals by U.S. Postal Service express mail a document styled as a motion for an extension of time in which to file her "brief." The motion stated that the thirty-day period set forth in CR 76.25 was due to expire on 12/3/09 and sought leave for an extension of time through 12/15/09 in which to file a petition for review. Justifications for the request involved office staffing during the Thanksgiving holiday as well as counsel's workload at the time and personal health issues. The Court of Appeals denied the motion for an enlargement of time to file a petition for review, having construed CR 76.25(2) as mandating dismissal. WCB reversed. CR 76.25 contains no explicit provision that prohibits the time for filing a petition for review from being enlarged…we conclude that the use of the phrase "within the time allowed" in the second sentence of CR 76.25(2) rather than the words "30 days" has significance and implies that the time for filing a petition for review may be enlarged pursuant to a motion filed before it expires. The Court of Appeals erred in the present case by denying the claimant's motion without considering the merits of her request for what amounted to an enlargement of time in which to file a brief. The decision of the Court of Appeals is reversed and this matter is remanded for the court to consider the merits of the motion for an extension of time and proceed accordingly. COMMENT: Again, this decision has very limited application. This is a one in a million fact situation. Why publish this?

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III.

AVERAGE WEEKLY WAGE Nesco v. Haddix, 339 S.W.3d 465 (Ky. 2011). Jacklyn Haddix worked for Nesco, a staffing service. Nesco placed her with several different businesses at which she performed various types of work for various periods of time. The employment was not continuous. Nesco placed her on "availability call" between assignments and called her near the end of an assignment to inform her if another placement was available. Sometimes she declined available jobs. Nesco placed Haddix at Star Manufacturing on 4/24/07. She worked there for four weeks. Nesco then placed her at another business briefly. She declined Nesco's next placement offer. On 8/6/07, Nesco sent her back to Star. She was injured on 8/8/07. The position Haddix held at Star paid $8.00 per hour for a forty-hour week. Haddix’ wage records for 2006 and 2007 indicated that she worked continuously from 1/1/06 through 5/20/06 for between eight and 48.25 hours per week. She did not work for Nesco again until the week ending 4/27/07, when she was sent to Star for the first time. She worked twenty hours that week; thirty-six hours during the week ending 5/4/07; and forty hours during the week ending 5/11/07, for a total of $768.00 or a weekly average of $59.08. In the thirteen-week period immediately preceding her injury, she worked thirteen hours during the week ending 5/18/07; 15.3 hours during the week ending 6/15/07; and twenty-four hours during the week ending 8/10/07, for a total of $587.40 or a weekly average of $45.18. Haddix' injury produced a 17 percent impairment rating, and the ALJ found that she did not retain the physical capacity to return to lifting boxes of parts that weighed fifty pounds. The ALJ found Haddix’ work placement with Nesco to be "very sporadic" as reflected in her wage records. Noting that the prior period of employment at Star only lasted for four weeks, the ALJ found it unrealistic to treat the subsequent job at Star as being permanent for the purpose of the AWW calculation. Accepting Nesco's position but failing to specify whether under KRS 342.140(1)(d) or (e), the ALJ found the AWW to be $45.18. WCB reversed and remanded for additional evidence to be submitted. CA affirmed. SC affirmed in part and reversed in part. WCB and CA acted within the scope of their authority when they determined that Haddix’ AWW must be calculated under KRS.31404(1)2(e) as construed in C & D Bulldozing Co. v. Brock1 because Nesco had employed her for less than thirteen weeks when her injury occurred. KRS 342.140(1)(d) clearly requires the employee to have worked for the employer for at least one thirteen-week period when injured. KRS 342.140(1)(e) clearly does not. The evidence compelled a conclusion that each placement was a separate employment. KRS 342.140(1)(e) controls the AWW calculation as a matter of law because Haddix' injury occurred three days after Nesco re-employed her and placed her at Star.

Although the ALJ accepted Nesco's position as to the correct manner in which to calculate the average weekly wage, nothing indicates that the ALJ adopted Nesco's average weekly wage analysis under KRS 342.140(1)(e) rather than KRS 342.140(1)(d).                                                              1

820 S.W.2d 482 (Ky. 1991).

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The claim must be remanded for further consideration because the evidence would have supported but did not compel an average weekly wage of $45.18 when analyzed properly under KRS 342.140(1)(e). Unlike KRS 342.140(1)(d), which bases the average weekly wage calculation on the most favorable 13-week period in the year immediately preceding the worker's injury, KRS 342.140(l)(e) bases the analysis for an employment of less than 13 weeks on the 13-week period that ends with the injury. KRS 342.140(1)(e) does not on its face consider that the parties may have had a longstanding but sporadic employment relationship…. Unique to the present case are two facts. First,…Nesco and [Haddix] had a sporadic employment relationship of nearly two years' duration. Second, Nesco sometimes offered work that [Haddix] declined. A realistic estimate of her probable earnings in a normal 13-week period must take both facts into account. Thus, the calculation under KRS 342.140(1)(e) may be based on reasonable inferences drawn from the course of the parties' relationship as well as evidence of what similarly-situated employees would have earned… We are not convinced that the circumstances warrant the taking of additional proof. An injured worker bears the burden of proof and risk of non-persuasion before the fact-finder with regard to every element of a claim, including her average weekly wage. This is not a case in which [Haddix] was uncertain about which section of KRS 342.140(1) applied to her claim. She argued from the outset that KRS 342.140(1)(e) governed the calculation and had the burden to submit the necessary evidence within the time for taking proof…. To permit additional proof under the circumstances would amount to giving her a "second bite at the apple." COMMENT: This is good news for employers. Recall that, just a week prior to this decision, CA affirmed WCB’s decision in Commonwealth v. Rogers, 2011 WL 1843164 (Ky. App. May 13, 2011), directing the ALJ on remand to reopen proof time to allow the claimant a “second bite of the apple” to submit evidence to prove his AWW in a less-than-thirteen-week situation. IV.

EXTRA-TERRITORIAL COVERAGE Traugott v. Virginia Transp., 341 S.W.3d 115 (Ky. 2011). Anthony Traugott, a Kentucky resident, was injured in Missouri on 9/25/08. The employer is headquartered in Rhode Island and has no office in Kentucky. Traugott testified that he worked for Virginia Transportation as a car hauler from 186

 

3/08 until 9/25/08. After talking with one of Virginia's drivers, Traugott telephoned to seek employment as a car hauler. Virginia faxed an employment application, which he completed and returned by fax. Virginia's representative contacted him and told him that he was hired. Thus, he rented a car with the understanding that Virginia would reimburse the expense and drove to Rhode Island. While there he completed tax forms, took a drug test, completed orientation, and chose a truck. Traugott’s work involved travel throughout the contiguous forty-eight states; he was in no one state for a majority of the time, and he called Virginia's Rhode Island office when he completed an assignment in order to request his next assignment. He was on the road two to four weeks at a time, which might or might not involve travel in Kentucky, after which he received two or three days off at home. He always brought a load to drop off in Kentucky when he returned home and always picked up a load in Kentucky when he left. Traugott picked up or delivered between twenty and forty loads in Kentucky and went to Rhode Island only about five times. He acknowledged that his employer withheld Rhode Island income taxes from his paychecks and that the checks were drawn from a Rhode Island financial institution. He maintained that Kentucky taxes should have been withheld according to his accountant. He acknowledged receiving some voluntary benefits but did not know at the time that they were paid under Rhode Island law. Traugott maintained that he was working under a contract of hire that was made in Kentucky and in employment that was not principally localized in any state. He argued that the employment relationship was established in Kentucky when he was verbally notified that he was hired. The employer maintained that his employment was either principally localized in Rhode Island or was not principally localized in any state. Moreover, he was injured while working under a contract of hire that was made in Rhode Island, where he completed the employment paperwork, drug test, and orientation program. The ALJ dismissed the claim based on findings that the claimant's employment was not principally localized in Kentucky and that the contract for hire was not made in Kentucky. The ALJ reasoned that Traugott offered to become employed by Virginia, who faxed him an application. Acceptance of his offer occurred when Virginia, having reviewed the application, advised him that he was accepted. The acceptance was, however, contingent upon his completing the required paperwork and passing the required drug test. Thus, the final acceptance occurred in Rhode Island, where he met those requirements. WCB, CA & SC affirmed. "A contract is made at the time the last act necessary for its formation is complete and at the place where that act is performed…the record contains no evidence [Virginia Transportation] conditioned its acceptance of [Traugott]'s offer of his services for hire upon his completion of various employment-related tasks in Rhode Island." A contract made by telephone is made in the place where the acceptor speaks his acceptance. "The fact remains, however, that the record supports the ALJ's conclusion." Traugott admitted that he contacted Virginia seeking employment after talking with one of its employees. "He admitted that the employer faxed him an employment application, which he completed and returned, and that the employer telephoned his home from Rhode Island to inform him that he was hired. Just as the record contains no evidence to show that the employer conditioned its acceptance of his application on his completion 187  

of certain tasks in Rhode Island, it also contains no evidence to show that the parties did anything that would have compelled the ALJ to view their roles differently." V.

GUARANTY FUND One Beacon Ins. Co. v. KIGA, 336 S.W.3d 914 (Ky. App. 2011). On 7/22/74, 9/26/74, and 5/2/75, Robert M. Cissell, an employee of Coca-Cola Bottling Company, sustained injuries to his low back. The WCB awarded benefits for 50 percent PPD and apportioned the liability between two different insurance companies. At the time of the first injury, Northern Assurance Company of America was the carrier, and at the time of the second and third injuries, Leatherby Insurance Company was the carrier. One Beacon later assumed Northern. The WCB Opinion entered on 8/2/76 provided that the two workers’ compensation insurers would equally share on a 50/50 basis the responsibility for payment of future income benefits and future medical benefits. Later Leatherby changed its name to Western Employers Insurance Company, which became insolvent in 1991. At that time KIGA then became responsible for payment of claims previously held by Western. In 2007, One Beacon learned that it was paying all of Cissell’s medical bills. This was the first time One Beacon was aware of this since entry of the original award in 1976. During this time, KIGA never received any medical bills from One Beacon or from any medical providers requesting payment. In the instant action entitled “Petition to Enforce Order,” One Beacon sought an order from Jefferson Circuit Court ordering KIGA to pay $54,435.53, which constitutes one-half of the medical bills which it has paid. One Beacon admitted that it did not submit any medical bills to KIGA for payment prior to 9/7/07, and admitted that the amount in controversy constitutes “subrogation funds” claimed for reimbursement of payments for Cissell’s medical treatment. The Circuit Court entered summary judgment in favor of KIGA. CA affirmed. KIGA is a statutorily-created entity for limited purposes with limited liability and authority…It is not required, or even authorized, to pay all of the claims and obligations of insolvent insurance companies. It can only pay those claims which it is empowered to pay: to wit, “covered claims.” KRS 304.36-050 states, in relevant part: As used in this subtitle, unless the context otherwise requires: (3) “Claimant” means any insured making a first-party claim or any person instituting a liability claim, provided that no person who is an affiliate of the insolvent insurer may be a claimant; *** (6) (a) “Covered claim” means an unpaid claim, including one for unearned premiums, submitted by a claimant, which arises out of and is within the coverage and is subject to the applicable limits of 188

 

an insurance policy to which this subtitle applies issued by an insurer, if the insurer becomes an insolvent insurer after June 16, 1972, and: 1. The claimant or insured is a resident of this state at the time of the insured event, provided that for entities other than an individual, the residence of a claimant, insured, or policyholder is the state in which its principal place of business is located at the time of the insured event; or 2. The claim is a first-party claim for damage to property with a permanent location in this state. (b) “Covered claim” shall not include the following: 1. Any amount due any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise;… One Beacon is clearly an insurer which now seeks to recover from KIGA one-half of the amounts it paid on behalf of the injured employee for medical fees. One Beacon has admitted that it is an insurer and that its claim is a subrogation claim. By the clear language of the statute, One Beacon is not an insured making a first-party claim or a person seeking a liability claim. Thus, One Beacon is not a claimant under KRS 304.36-050. Further, One Beacon’s claim for subrogation of paid medical benefits is not a covered claim, as subrogation claims are specifically prohibited in the statute. COMMENT: Why would One Beacon admit that this is a “subrogation claim”, when it probably is not? This is a one in a million fact situation. There was absolutely no reason to publish this decision. VI.

MEDICAL BENEFITS A.

Schmidt v. South Cent. Bell, 340 S.W.3d 591 (Ky. App. 2011). On 8/4/62, thirty-year-old Richard Schmidt, an installer/repairman, was injured when his arm came into contact with an energized wire caused by a downed 7200-volt power line. Schmidt suffered extensive burns to his right upper and lower left extremities. Ultimately, his entire right arm and his left leg below the knee were amputated. The parties reached a settlement on 4/7/64. In 1994, SCB filed a motion to reopen to contest medical expenses for what it alleged to be excessive prescriptions. The parties eventually settled the matter. On 9/24/08, SCB filed another motion to reopen to contest medical expenses. SCB contended that the 189

 

medications prescribed were unreasonable and unnecessary. Additionally, and for the first time, SCB raised the existence of the cap on medical expenses in the version of KRS 342.020 in effect at the time of Schmidt’s injury. Based upon that version, SCB argued that the medical expenses it had already paid exceeded the $3,500.00 cap. As of 12/29/08, $178,667.95 had been paid in medical expenses. The ALJ ruled that the statutory cap of $3,500.00 required the termination of the employer’s responsibility for future medical expenses. WCB affirmed. CA reversed. It is also well settled that "[t]he rights of the parties in respect to compensation for injuries [become] fixed and vested on the date of the injury. Those rights [are] controlled by the law in existence at that time[.]"…. There is no dispute that the version of the statute in effect in 1962 included a $3,500.00 cap on medical expenses that an employer must pay. The legislature amended the Act in 1964 and 1972 and removed the medical expenses cap. The Court agreed with Schmidt "that the amended version of the statute should apply to him so that he would not be subject to the $3,500.00 statutory cap." At the outset, we recognize that “[n]o statute shall be construed to be retroactive, unless expressly so declared.” KRS 446.080(3)…the legislature never provided in any version of the statute that the amendments were to have retroactive application. There is, however, an exception to this rule where the amendment represents a procedural or remedial change only and is not substantive in nature… Amendments have also been found to be remedial where they corrected apparent oversights in the prior law… "[D]espite the existence of some contrary authority, remedial statutes, or statutes relating to remedies or modes of procedure, which do not create new or take away vested rights, but only operate in furtherance of the remedy or confirmation of such rights, do not normally come within the legal conception of a retrospective law, or the general rule against the retrospective operation of statutes"2…. [W]e hold that the amendments in 1964 and 1972 removing the statutory cap on future medical expenses represented a remedial, procedural change… These amendments did not constitute substantive changes in the law. On the contrary, the amendments at issue did not                                                              2

Peabody Coal Co. v. Gossett, 819 S.W.2d 33, 36 (Ky. 1991).

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create or take away any vested rights, but only operated to further Schmidt’s remedy. COMMENT: This is potentially a multi-million decision for Kentucky employers. Most of the claimants impacted by this decision may never learn of its existence. But, what if Medicare does learn of this decision? There are, no doubt, several thousand old claims in which the insurer closed its file fifty years ago. If this is the law, CMS could come knocking on the insurer’s door to request reimbursement for conditional payments that have been made for the last fifty years. We continue to believe that the legislature addressed this situation by enacting a statute clearly intended to prohibit the appellate courts from applying a law retroactively unless the General Assembly has specifically provided for retroactive application. B.

Kroger v. Ligon, 338 S.W.3d 269 (Ky. 2011). Japheth Ligon injured his right shoulder on 9/21/06. Dr. Grossfeld performed arthroscopic shoulder surgery to repair a SLAP tear. Dr. Bonnarens examined Ligon on 7/11/07 and released him to return to regular duty. On 8/29/07, Dr. Bonnarens considered Ligon to be at MMI; he assigned a 0 percent impairment rating. Dr. Dovan noted on 4/8/08 that Ligon failed to keep his appointment and that the recent FCE was invalid due to his failure to put forth maximal effort. Dr. Dovan concluded that Ligon was at MMI; assigned a 1.5 percent impairment rating and released him to full duty with no restrictions. He did not think further medical treatment was needed. Dr. Fishbein assigned an 8 percent impairment rating and stated that the injury would require medical care for the indefinite future. The ALJ awarded TTD benefits from 12/4/06 through 7/15/07, but dismissed the claims for PPD and medical benefits. WCB reversed, concluding that the evidence compelled an award of future medical benefits. CA and SC affirmed. FEI Installation, Inc. v. Williams3 concerned whether KRS 342.020(1) entitles a worker who reaches [MMI] with no permanent impairment rating to future medical benefits. The court determined that an injured worker is entitled to future medical benefits for so long as the injury causes… "a loss, loss of use, or derangement of any body part, organ system, or organ function." *** The Williams court explained that the presence of impairment demonstrates a harmful change in the human organism and 'disability,' regardless of whether the impairment and resulting disability are severe enough to warrant a permanent impairment rating or permanent

                                                             3

214 S.W.3d 313 (Ky. 2007).

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income benefits… in Mullins v. Mike Catron Construction/Catron Interior Systems, Inc.,4 the court reaffirmed an ALJ's decision to deny future medical benefits to a worker who suffered a temporary exacerbation of his pre-existing condition and failed to show the need for medical treatment after the date he reached MMI. Mullins governs a narrow class of cases to which the present case does not belong. Ligon did not sustain a temporary exacerbation of a pre-existing condition, such as occurred in Mullins, but a SLAP tear that required surgery and the permanent implantation of hardware in his shoulder. Thus, evidence that he required no medical treatment as of the date he reached MMI or the date that his claim was heard was an improper basis to deny future medical benefits. COMMENT: WCB should have remanded this claim to the ALJ to make findings of fact as to whether the injury caused "a loss, loss of use, or derangement of any body part, organ system, or organ function." Instead, WCB, which is not permitted by law to make findings of fact, made the findings of fact that supported its decision. The Supreme Court ignored this issue. VII.

REOPENING Burroughs v. Martco, 339 S.W.3d 461 (Ky. 2011).

Ron Burroughs alleged cumulative trauma to his neck that became manifest on 1/4/01. On 3/28/02, an ALJ awarded him 425 weeks of PPD benefits based upon a 5 percent impairment rating. Burroughs moved to reopen after undergoing cervical decompression and fusion surgeries in 8/02 and 11/02. In an award rendered on 7/19/04, the ALJ found that the injury produced a 28 percent impairment rating. Despite expressing a personal conviction that Burroughs could return to work as a service technician, the ALJ noted that the medical experts found him unable to do so and that the weekly benefit for total or partial disability would be the same due to his disability rating and the applicable multipliers. The ALJ then proceeded to state: “The end result is basically that Burroughs will be entitled to receive $350.10 per week for the remaining period of his earlier award." The ALJ found that Burroughs was 100 percent occupationally disabled and entitled to receive $350.10 per week from the time the motion to reopen was filed, for the remaining period of his earlier award, with the employer being entitled to a credit for any payments on the old award that overlap into the award on reopening. Burroughs failed to file a petition for reconsideration or to appeal on the ground that it limited the duration of PTD benefits to the remainder of the original 425-week period. The employer continued to pay PTD benefits until 2/6/09, when the 425-week period of the initial award ended. On 3/3/09, Burroughs filed a motion to reopen based on "mistake" as well as a motion to reopen under CR 60.01 and CR 60.02, in which he asserted that the 7/19/04 award contained a mistake of law with respect to the duration of PTD benefits.                                                              4

237 S.W.3d 561 (Ky. App. 2007).

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He pointed out that the award entered at reopening should have ordered the employer to pay PTD benefits until such time as he became sixty-six years of age and eligible for normal old-age Social Security retirement benefits, which would not occur until 6/10/10. The ALJ denied the motions. The order explained that more than four years had passed from the date of the award of PTD benefits on reopening and that an ALJ lacks authority to rule on a motion filed under CR 60.01 or CR 60.02. WCB, CA and SC affirmed. The 7/19/04 award clearly contained a patent error. It limited the duration of PTD benefits awarded at reopening to the remaining weeks of the initial partial disability award. Wheatley v. Bryant Auto Service5 permits an ALJ to reopen a final award sua sponte in order to correct a mistake in applying the law as it existed at the time of the award. "Wheatley was decided, however, at a time when KRS 342.125 placed no limitations on the time for reopening. That was not the case in February 2009, when [Burroughs] sought to have his award reopened and corrected." As amended in 2000 and as applicable to the claimant's motion, KRS 342.125(3) provides a four-year limitation on reopening. KRS 342.125(3) barred a reopening based on "mistake" for the purpose of correcting Burroughs' award because he filed his motion more than four years after the order on reopening granting additional benefits. Although the regulations that govern workers' compensation proceedings have adopted several of the Rules of Civil Procedure, they have not adopted CR 60.01 or CR 60.02. VIII.

SETTLEMENT Hudson v. Cave Hill Cemetery, 331 S.W.3d 267 (Ky. 2011). An approved Form 110 Settlement Agreement filed in the initial claim referred to a cervical spine injury, headaches, and psychological complaints that Matthew Hudson sustained from an injury on 7/30/01. It indicated that the parties agreed to settle the claim in 1/03 for previously-paid TTD benefits and a lump sum representing 10.69 percent PPD. The agreement did not include a waiver or buyout of past or future medical expenses or the right to reopen for additional income benefits. Hudson applied for Social Security Disability benefits. He filed a motion to compel the employer to pay medical expenses for treatment being rendered by his chiropractor. The employer filed a reopening to resolve a medical dispute shortly thereafter to contest causation and the reasonableness/necessity of ongoing prescription medications and psychiatric treatment. The parties completed proof, were heard on 9/19/07, and received thirty days for briefing. The Hearing Order stated that the matter would be submitted for a decision on 10/21/07.

The ALJ rendered an Opinion and Order on 11/15/07 that relieved the employer of responsibility for the disputed psychiatric treatment and medications but ordered the employer to pay for a detoxification program. Hudson's attorney filed a petition for reconsideration based on exchanges that took place during the period from 10/16/07 through 10/19/07 between himself and the claims adjuster,                                                              5

860 S.W.2d 767 (Ky. 1993).

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and between himself and the employer's attorney. He asserted that the parties settled their dispute as a result of the carrier's 10/16/07 settlement offer, which he accepted on the claimant's behalf in a letter faxed to the adjuster on 10/19/07. As a consequence, neither party filed a brief to the ALJ. Hudson’s attorney stated that he requested defense counsel to prepare a Form 110 Settlement Agreement on two occasions but that the form had yet to be prepared. Defense counsel stated that the parties failed to reach a final settlement because they failed to come to terms concerning the outstanding hospital bill or the Medicare Set-Aside. "Moreover, they failed to reduce an agreement to a memorandum as required by KRS 342.265 or submit it to the ALJ for approval, and nothing guaranteed that it would have been approved had they done so." The ALJ entered an order denying the petition that also stated, "[T]here is no enforceable Agreement pursuant to KRS 342.265." WCB vacated, reasoning that the ALJ could resolve the existence of a settlement agreement only after a verified motion to approve the agreement was filed and the parties received a reasonable period to submit proof. The parties substituted counsel and Hudson submitted a motion to enforce the agreement. At a Hearing, Hudson’s prior attorney testified concerning his conversations and correspondence with the adjuster and defense counsel. He explained that the parties' dispute concerned medications for the thirty-year-old claimant that totaled from $1,500 to $2,000 per month and a hospital bill of about $33,000. He testified that the adjuster contacted him on 10/16/07 and offered to settle. His hand-written notes of the conversation stated: "10/16/07; [Adjusters] offered $500,000 to include set aside -- Good thru 10/19/07; not to be extended." A transmittal sheet indicated that he faxed the following message to the adjuster on 10/19/07: "we accept the offer of $500,000 -- Hudson has not yet been approved for SSD." A letter from the adjuster, dated 10/19/07 stated: I am in receipt of your fax dated 10/19/07 advising that [Hudson] has agreed to accept our settlement offer in the amount of $500,000 as a full and final resolution of his… claim. I have forwarded a copy of the claim file to our defense attorney… and asked that he draft up the settlement papers… A copy of the papers will be sent for your review within the next 30 days. In addition, I have contacted NuQuest to obtain some information on how we should proceed with handling the Medicare Set-Aside issue in light of the fact that Mr. Hudson is reportedly in the process of appealing his denial on this request for SSDI benefits. Hudson’s former attorney stated that he telephoned defense counsel, who was unaware of the offer; informed him that they would not need to file briefs; and asked him to prepare a Form 110. He stated that defense counsel agreed to prepare the Form 110 but failed to do so despite at least two additional requests. "Questioned about whether he and [defense counsel] ever agreed to a specific breakdown of the amount allocated to buy out medical expenses or to the Medicare Set-Aside, [he] responded, 'No, but nobody ever cares, as you know.'" 194  

The ALJ determined that the parties reached a valid settlement agreement and had agreed to clarify the amount allocated for a Medicare Set-Aside when that information was obtained. WCB reversed. CA and SC affirmed. Coalfield Telephone Co. v. Thompson6 "stands for the principle that an ALJ may approve a settlement based on correspondence between the parties if the correspondence memorializes of all of the terms to which they agreed and neither party asserts that the terms are incomplete. Neither KRS 342.265 nor Thompson should be construed as encouraging hastily-drafted and incomplete settlement agreements." The correspondence in the present case failed to show the existence of a complete settlement agreement such as was present in Thompson. The amount of lump sum proceeds to be allocated to a Medicare Set-Aside Account may have legal and financial consequences for the parties. The allocation is an essential element of a settlement that includes such an account…. The agreement was incomplete under the circumstances because the parties clearly had not come to terms concerning the portion of the lump sum to be allocated to the Medicare Set-Aside Account.

                                                             6

113 S.W.3d 178 (Ky. 2003).

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196  

2011 KENTUCKY COURT DECISIONS ON WORKERS’ COMPENSATION ISSUES TO BE PUBLISHED James G. Fogle

INDEX OF DECISIONS Abel Verdon Construction v. Rivera Audi of Lexington v. Elam Gaines Gentry Thoroughbreds/Fayette Farms v. Mandujano Graham v. TSL, LTD Greg’s Construction v. Keeton Hampton v. Intech Contracting, LLC Uninsured Employers’ Fund v. Jesse Rogers d/b/a Quality Exteriors UPS Airlines v. West Vision Mining, Inc. v. Gardner

I.

ACTIVE IMPAIRMENT Audi of Lexington v. Elam, 2011 WL 2693503 (Ky. App. Jul. 8, 2011). On 11/5/05, Colin Elam was involved in a motor vehicle accident and suffered a back injury. Elam had suffered with chronic, active, and significant low back pain prior to the date of the accident. Dr. Kriss apportioned the majority of Elam’s current lumbar condition and symptoms (63 percent of the total lumbar causation) to his pre-existing active condition and apportioned the minority of Elam’s current lumbar condition any symptoms (37 percent of total lumbar causation) to the work-related accident. Dr. Kriss assigned a 5 percent impairment rating pre-existing the accident and an 8 percent impairment rating following the accident. Mirroring the apportionment outlined above, Dr. Kriss attributed the 3 percent increase in Elam’s impairment to the effects of the workrelated accident. Elam subsequently underwent a lumbar spinal fusion by Dr. Lockstadt. Dr. Kriss did not evaluate Elam following this surgery, did not express a post-surgical opinion concerning Elam’s over-all impairment, nor did he address the apportionment of the impairment between Elam’s pre-existing, active impairment and his work-related impairment. Dr. Lockstadt assigned a 21 percent impairment rating, and stated that Elam’s worsened condition and the need for surgery were likely caused by the workrelated accident. The ALJ concluded that Elam suffers a 21 percent over-all impairment, and was persuaded that Dr. Kriss had accurately analyzed the apportionment between Elam’s pre-existing, active impairment and his workrelated impairment. From Dr. Kriss’s analysis, the ALJ inferred that 63 percent of Elam’s post-surgery impairment was attributable to his pre-existing, active condition and that the remaining 37 percent was work-related and compensable. Consequently, the ALJ awarded income benefits on a disability rating derived from a 7.77 percent impairment rating (21 percent over-all impairment x the 37 percent work-related rating). 197

 

WCB reversed, concluding that the ALJ erred as a matter of law by extrapolating from Dr. Kriss’s analysis to reach a permanent impairment rating that had not been offered by any medical expert, and that the ALJ was compelled to accept the testimony of Dr. Kriss and Dr. Lockstadt pertaining to their assignment of a 5 percent pre-existing, active impairment rating and to exclude only that 5 percent from the over-all 21 percent (or 16 percent). CA affirmed. Elam’s 21 percent impairment rating in this case is based upon the spinal fusion undertaken by Dr. Lockstadt in March 2009. This procedure requires an automatic 20-23 percent impairment rating under the AMA Guides. *** [T]he assessment of an impairment rating is a medical determination that must be made by a medical expert. The ALJ’s findings of fact are not at issue in this matter. Instead, we are asked to review the Board's application of law to the facts…. [W]e agree with the Board that the ALJ was not at liberty to assume from Dr. Kriss’s analysis that the portion of Elam’s impairment rating attributable to his pre-existing impairment progressed at a rate commensurate with that portion of his impairment attributable to the work-related injury. There was simply no medical testimony to support the ALJ’s inference that Dr. Kriss’s ratio of 5:8 would continue unaltered when Elam’s over-all impairment climbed to 21 percent. No expert medical testimony supports Audi’s hypothesis that the Board’s calculation grossly underestimated the impact of Elam’s pre-existing, active impairment in contributing to the need for the surgery upon which his ultimate impairment was based….Subtracting Elam’s preexisting, active impairment rating of 5 percent from his overall impairment rating of 21 percent following the work-related accident, the Board properly determined that Elam should have been awarded permanent, partial disability benefits based upon an impairment rating of 16 percent. COMMENT: The employer appealed to the Supreme Court. II.

AVERAGE WEEKLY WAGE Commonwealth v. Rogers, 2011 WL 1843164 (Ky. App. May 13, 2011). SEE REMAND Abel Verdon Construction v. Rivera, 348 S.W.3d 749 (Ky. 2011). SEE ILLEGAL ALIEN

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III.

BLACK LUNG Vision Mining, Inc. v. Gardner, 2011 WL 6543000 (Ky. Dec. 22, 2011). In a fifty-nine-page decision, the Kentucky Supreme Court ruled that the consensus procedure and the clear and convincing standard of proof violate the Kentucky Constitution as a denial of equal protection of the law.

IV.

CREDIT UPS Airlines v. West, 2011 WL 1549289 (Ky. App. Apr. 22, 2011). Edwin Corey West began working for UPS as a pilot in 1996, and received TTD benefits during the time that he was out of work. He received a total of $35,019.88 in TTD benefits over the period from 10/18/04 through 12/21/05. West was also entitled to receive Loss of License benefits from UPS under the terms of the collective bargaining agreement. Under the terms of the agreement, after a pilot has been off work and unable to use his FAA certificate to fly for a period of six months, he is entitled to a negotiated benefit, which is based upon a percentage of the pilot’s pay, for up to twenty-four months. West received $50,936.67 in Loss of License benefits during the time that he was injured and unable to work. The ALJ found that the Loss of License benefit was exclusively employer funded, and entered an order granting UPS a credit representing an offset against the amount of TTD benefits that West had received. WCB reversed. CA affirmed. This presents an issue of first impression for our courts as we have not before considered the question of whether benefits received pursuant to a collective bargaining agreement are “exclusively employer-funded” under the terms of KRS 342.730(6)…. After careful consideration, we agree with the Board that benefits negotiated through the collective bargaining process are contractual in nature and are different from non-negotiated employer benefit plans. In GAF Corp. v. Barnes, 906 S.W.2d 353 (Ky. 1995), the Supreme Court found that an employer was not entitled to a credit or offset against an award of income benefits to its employee under an employer-funded disability retirement pension plan. The Court noted that an employee benefit which is the product of a collective bargaining process may properly be presumed to be a bargained-for benefit and cannot accurately or speculatively be characterized as the product of employer largess. COMMENT: This is bad law. The entire issue of employer largess v. bargaining agreement was rendered moot by the 1996 amendment to the statute. The appellate courts continue to forget that when the legislature met in Special Session in 1996, the purpose was to reduce the cost of workers’ compensation. Whether the sickness and accident plan exists due to employer largess or 199

 

bargaining agreement does not change the simple fact that the plan is entirely funded by the employer. The simple answer is usually the correct answer. The employer appealed to the Supreme Court. 9/30/11. V.

The briefs were filed as of

DUAL PURPOSE DOCTRINE Gaines Gentry Thoroughbreds/Fayette Farms v. Mandujano, 2011 WL 1648262 (Ky. App. Apr. 29, 2011). SEE GOING AND COMING RULE

VI.

EXTRA-TERRITORIAL COVERAGE Graham v. TSL, LTD, 350 S.W.3d 430 (Ky. 2011). Jeffrey Graham resided in Nicholasville, KY. He worked for TSL, Ltd. as a tractor/trailer driver, hauling automobiles. TSL had corporate offices in St. Peters, Missouri and in Toledo, Ohio, but no office in Kentucky. Graham fell and injured his foot while unloading a Jeep in New Jersey on 1/25/08. Graham's testimony was that his previous employer planned to cease car hauling at the end of 2007. He learned TSL was hiring truck drivers in 11/07, telephoned its Missouri offices seeking employment, and was hired over the phone. At TSL's request he obtained a copy of his personnel file from his former employer as well as a copy of his commercial driver's license, documentation concerning his work experience, and the results of a recent physical examination and drug test, all of which he faxed to TSL's Missouri offices. TSL reviewed the information while they were on the phone and told him that he could start tomorrow, but he insisted on giving his former employer two weeks' notice. TSL agreed and Graham considered himself hired. TSL sent him a one-way bus ticket for travel from Lexington, Kentucky to St. Louis, Missouri. From St. Louis he traveled to TSL's offices in St. Peters, Missouri; took a required driving test; participated in a training program concerning TSL, policies and procedures; and underwent another drug test. TSL then provided a truck and he began working. Graham hauled automobiles throughout the U.S., from "coast to coast and border to border." He received assignments from TSL's dispatch office in St. Peters and took his truck to the St. Peters terminal for maintenance. TSL deposited his payroll checks directly from its offices in Ohio. TSL's Vice President testified that the application for employment Graham prepared in Kentucky on 11/8/07 stated specifically that it was not an employment contract. He completed the remainder of the employment paperwork in Missouri on 11/19/07. TSL issued a letter for hire on 11/20/07. TSL's receipt of an employment application is the first of a number of steps in the hiring process. The applicant must report to the St. Peters, Missouri offices to complete orientation concerning DOT regulations and company policies; undergo a road test, drug test, and physical examination; complete employment-related paperwork, including a payroll deposit request; and become registered in Ohio with authority to drive for TSL in forty-eight states. TSL issues a letter for hire only after the applicant satisfies all of the requirements. 200

 

Graham completed the employment application in Kentucky, and completed all of the subsequent pre-employment requirements in Missouri. He was hired in Missouri after he did so. The ALJ dismissed the claim for lack of jurisdiction. Having found that the claimant's employment was not principally localized in any state, the ALJ determined that the parties entered into the actual contract of hire in Missouri. WCB, CA and SC affirmed. The ALJ applied the law correctly to the facts and reached a decision that was reasonable under the evidence. A contract is made at the time the last act necessary for its formation is complete and at the place where that act is performed. Although a contract made by telephone is made in the place where the acceptor speaks his acceptance, the record supports the ALJ's conclusion that the parties' contract was not formed until [Graham] completed various requirements in Missouri…[C]ompleting the requirements was a mandatory prerequisite to any contract of hire entered into and approved by TSL. COMMENT: This decision became final on 9/15/11, and the publication letter was sent. VII.

GOING AND COMING RULE Gaines Gentry Thoroughbreds/Fayette Farms v. Mandujano, 2011 WL 1648262 (Ky. App. Apr. 29, 2011). Adan Mandujano worked for Gaines Gentry, a horse farm, as a groom. While employed by Gaines Gentry, Mandujano also showed horses for Eaton Sales, a consignment seller, and received compensation for such work. On 8/2/07, Eaton, acting as Gaines Gentry’s sales agent, transported five or six of Gaines Gentry’s yearlings to a sale in Saratoga, New York. Mandujano traveled in the van with the horses. Mandujano indicated that John Hayes, Gaines Gentry’s general manager, told him to ride in the van with the horses. According to Mandujano, Hayes told him it was important that Mandujano work for Eaton and show the horses at the sale because the horses belonged to Olin Gentry – an owner of Gaines Gentry – and were “special horses.” Mandujano testified that he initially asked Hayes’s assistant if he could take time off to work the sales in Saratoga and another sale in Florida. Working at those sales paid more money per day than his work at the horse farm. The assistant told him he could go to the Saratoga sales but not to the Florida sales. Mandujano wanted to travel to Saratoga in his truck, but Hayes told him it would be better if he rode in the van with the horses to take care of them instead. Mandujano agreed, and Gaines Gentry paid him $200.00 for the trip. Mandujano had worked outside of Kentucky at other sales, and on those occasions he normally drove his truck to the sale. However, according to Mandujano, neither Gaines Gentry nor Eaton offered to provide or to pay for a ride back to Kentucky after the Saratoga sales. As a result, he had to make his own arrangements to find a ride home. Mandujano did acknowledge, however, 201

 

that he could have ridden back in the van that brought the horses to the sales. Mandujano further testified that he was expected to return to work at Gaines Gentry after the sales ended. At the beginning of the Saratoga sales, Mandujano worked for Eaton showing Gaines Gentry’s horses, including Olin Gentry’s horses. As a showman, his job was to clean and show the horses to the buyers. Mandujano testified that it took special skills, which develop over time, to show horses to the buyers. He further testified that he did not speak to anyone at Eaton about what he would be doing at the sales because Hayes had told him what he was to do. Mandujano testified that Eaton paid him an extra $250.00 for the trip and that he worked three to four days for Eaton and was paid $200.00 per day plus extra for each night. Mandujano indicated that when the first sale ended on 8/7/07, his work for Eaton ended. He subsequently found work showing horses for Paramount Sales. Mandujano testified that he did not have a prearranged agreement with Paramount to work for them in Saratoga because he did not know there were more sales after the first sale. However, he believed Paramount knew him and would use him at Saratoga. Mandujano apparently had permission from Hayes to stay in Saratoga until the end of the sales, so he worked three to four days for Paramount and was paid $200.00 per day. Once his work for Paramount – and the sales – ended, Mandujano was able to get a ride back to Kentucky with a friend. Mandujano was a passenger in the friend’s truck when a motor vehicle accident occurred, and he suffered multiple injuries. Following his recovery, Mandujano returned to work at Gaines Gentry in October and has remained in its employ. John Hayes testified that Mandujano asked if he could take off work to go to the Saratoga sales. Hayes equated the situation to Mandujano taking a leave of absence to work the sales. Hayes testified that he knew Mandujano needed a ride to Saratoga, so he told Mandujano that he would like for him to ride in the van carrying Gaines Gentry’s horses because those horses were very valuable. However, Hayes denied ever instructing or directing Mandujano to go to the sales. Gaines Gentry paid Mandujano $200.00 for the ride to Saratoga. Hayes testified that it was customary for Gaines Gentry to have an employee in the van with the horses while traveling to Saratoga – even if the van company had also placed an employee with the horses. Accordingly, Hayes acknowledged that if Mandujano had not gone to Saratoga, Gaines Gentry would have sent someone else in the van. Hayes testified that as soon as Mandujano got out of the van in Saratoga, Mandujano was “done with us.” However, Hayes acknowledged that Mandujano would show Gaines Gentry’s horses at the sales. Hayes’s testimony also confirmed that Gaines Gentry was owned by Olin Gentry and Thomas Gaines and that Olin Gentry is associated with Eaton and possibly has an ownership interest in Eaton. Hayes explained that there was a three-day select sale and an open sale for lesser horses. Hayes believed Mandujano would call consignors to line up work at Saratoga, so he did not attempt to find any other work for Mandujano at the Saratoga sales. He knew that Mandujano had worked for Paramount and Eaton at sales in previous years. According to Hayes, it was expected that Mandujano would return to work at Gaines Gentry after the sale. Hayes testified that he made no arrangements for 202  

Mandujano to return to Kentucky because he did not know how long Mandujano was going to work the sales. During the Saratoga sales he received a call from Mandujano because Mandujano was upset with the sleeping arrangements there. Hayes told him there was a Sallee van coming home every day. J. Reiley McDonald, the managing member for Eaton, testified that Eaton operated as a sales agent to sell horses at auctions and that Eaton sold Gaines Gentry’s horses at Saratoga at the August 2007 sales. McDonald testified that both Thomas Gaines and Olin Gentry are shareholders in Eaton Sales. Once at Saratoga, the horses are handled and shown by people Eaton hires as contract laborers. A showman’s contract was for a limited number of days. McDonald denied Mandujano was ever Eaton’s employee; instead, he was an independent contractor hired for short-term work. According to McDonald, Mandujano was hired for his skill and was never told how to show the horses. Eaton paid Mandujano $1,200.00 for his time in Saratoga. Mandujano showed horses for Eaton from 8/3 to 8/7/07. After 8/7/07, Mandujano was free to do as he pleased. Eaton did not make any travel arrangements for Mandujano. The ALJ found that Mandujano had been injured during the course and scope of his employment with Gaines. WCB and CA affirmed. The “dual purpose” doctrine addresses situations in which an employee is injured during a trip that was undertaken for both business and personal purposes. Kentucky has adopted the following test for determining whether a trip that has both personal and business purposes is compensable under the Workers’ Compensation Act: "[W]hen a trip serves both business and personal purposes, it is a personal trip if the trip would have been made in spite of the failure or absence of the job purpose and would have been dropped in event of the failure of the private purpose, though the business errand remained undone; it is a business trip if a trip of this kind would have been made in spite of the failure or absence of the private purpose, because the service to be performed for the employer would have caused the journey to be made by someone even if it had not coincided with the employee’s personal journey. If permission to take a personal trip is made conditional on the performance of a business errand, the trip becomes a business trip." *** Applying this test, the trip in question clearly qualifies as a business trip because John Hayes acknowledged that if Mandujano had not gone to Saratoga, Gaines Gentry would have sent another employee in the horse van to watch the horses during their trip to New York. Therefore, Mandujano’s trip to Saratoga was a business trip under the dual purpose doctrine since "the service to be performed for the employer would have caused the journey to be made by someone even if it had not coincided with the employee’s personal journey." *** 203  

Gaines Gentry also challenges the reliance of the ALJ and the Board on the “positional risk” doctrine and the “traveling employee” exception to the “going and coming” rule in determining that Mandujano’s injuries arose out of and in the course of his employment. The “positional risk” doctrine generally provides that when employment places a worker in what turns out to be a dangerous place, a resulting injury is considered work-related even though the injury-producing mechanism itself was not necessarily work-related… A close, more-specific, cousin of this concept – and one that is perhaps more appropriately applied here – is the so-called “risks of the street” doctrine. Under this rule, “an employee’s injuries sustained as the result of exposure to risks of the streets or highways are covered by the compensation act if the exposure to the hazards was the result of his work or if his employment was the reason for his presence at the place of danger”… Moreover, such sojourns need not be a regular part of a person’s employment. "[W]hen a workman is sent into the street on his master’s business, whether it be occasionally or habitually, his employment necessarily involves exposure to the risks of the streets and injury from such a cause arises out of his employment." This rule is also closely related to the so-called “service/benefit to the employer” doctrine or – as referenced in this case – the “traveling employee” doctrine, all of which share many, if not most, of the same principles and all of which are exceptions to the “going and coming” rule. Indeed, for the most part, these doctrines appear to be different ways of saying the same thing; i.e., "transitory activities of employees are covered [under the Act] if they are providing some service to the employer[.]" Here, the ALJ and the Board concluded after applying this principle of law that Mandujano’s injuries in the automobile accident resulted from his employment with Gaines Gentry. Substantial evidence supports this conclusion… [I]t was reasonable for the ALJ to conclude that Mandujano’s trip to Saratoga was for a business purpose since he was conferring a benefit to Gaines Gentry by traveling with the horses to New York and by showing them during the sales. Gaines Gentry argues, however, that any causal link between Mandujano’s employment and his injuries was effectively severed once he arrived in Saratoga or – at the latest – when he began showing horses for Paramount Sales. Because of this “distinct departure and deviation from his employment,” Gaines Gentry argues, Mandujano’s injuries did not arise out of and in the course of his employment. Instead, he would have only returned to his status as 204  

an employee of Gaines Gentry once he had returned to Lexington and had resumed his customary work at the horse farm. As a general rule, "[e]mployees whose work entails travel away from the employer’s premises are… within the course of their employment continuously during the trip, except when a distinct departure on a personal errand is shown"… Accordingly, the injuries suffered by Mandujano on his return trip to Kentucky would be considered compensable in the absence of their having occurred during a “distinct departure on a personal errand.” However, Gaines Gentry argues that once Mandujano began working for Paramount Sales (at the latest), he had effectively undertaken a personal errand and was, therefore, no longer acting within the course and scope of his employment when he was injured. This argument, though, ignores the fact that Mandujano was not injured while working for Paramount Sales or even for Eaton Sales. Instead, he was injured while he was traveling back to Lexington to resume his work at the horse farm. Even assuming that Mandujano’s work for Eaton and Paramount could be considered “personal errands” that would have removed him from compensation coverage at the time he was working for them, Mandujano’s coverage under the Act resumed once these deviations ceased and he undertook the journey home… "During the course of his travel the employee may deviate for personal purposes unrelated to his work and thus remove himself from compensation coverage during the continuance of the deviation. But ordinarily the deviation will not embody any intent to abandon the work-connected travel home and when the deviation is terminated and the travel home is resumed the coverage will resume." *** As noted by the ALJ, at the time of his dispatch, both parties contemplated that Mandujano would return to Kentucky after his work at the sales and would continue to work as an employee of Gaines Gentry. Because of this, his journey home was a necessary and inevitable event inextricably linked to his employment. Thus, the injuries suffered by Mandujano during his return were correctly found by the ALJ and the Board to have occurred during the course of his employment, and they were, therefore, compensable. We further note that the facts of this case also lend themselves to the applicability of yet another exception to the “going and coming” rule – the so-called “special errand” doctrine. A close relative of the “risks of the street” doctrine (indeed, for all intents and purposes it is essentially the same notion), this rule provides that 205  

"[i]f the [employee] was 'sent into the street upon a special errand' for the employer, compensation would be payable for an injury he sustained while thus engaged"… Under the circumstances, Mandujano could certainly argue that he was injured during the course of a “special errand” for his employer. However, we need not belabor the point since we have already concluded that the decisions of the ALJ is supported by substantial evidence. (internal citations omitted) COMMENT: The employer has appealed to the Supreme Court. The briefs were filed as of 10/25/11. VIII.

HEARING LOSS Greg’s Construction v. Keeton, 2011 WL 4347203 (Ky. App. Sep. 16, 2011). Jerry Keeton has thirty years of exposure to occupational noise working as a heavy equipment operator. In 2007 Keeton worked as a bulldozer operator for Greg’s Construction. In 9/07 he started working for Johnson Floyd Coal Company. On 12/15/08, an audiogram performed by Dr. Manning revealed 15 percent impairment. On 3/5/09, Keeton filed his Form 103 alleging he became disabled due to hearing loss on 12/15/08. On 3/6/09, Keeton ceased working for Johnson Floyd. Keeton worked for Miller Brothers Coal Company from 3/6/09 through 4/3/09. On 5/13/09, he began working for Apostle Fuels. On 5/14/09, Dr. Touma evaluated Keeton and assessed 9 percent impairment for high frequency loss compatible with noise-induced hearing loss. On 7/1/09, Dr. Jones conducted a university evaluation and assessed 19 percent impairment. Per Dr. Jones, the audiograms and other testing established a pattern of hearing loss compatible with that caused by hazardous noise exposure in the workplace. Dr. Jones stated Keeton’s hearing loss was related to repetitive exposure to hazardous noise over an extended period of employment. On 7/8/09, Keeton ceased working for Apostle, and worked for Greg’s Construction from 7/10/09 through 2/8/10. On 3/16/10, Keeton was again examined by Dr. Manning, who assessed 18 percent impairment. The ALJ accepted Dr. Jones’s 19 percent impairment rating, and because Greg’s Construction was the last employer to injuriously expose Keeton to hazardous levels of noise, it was exclusively liable for benefits. WCB, CA and SC affirmed. Greg’s argued, first, that it was error for the ALJ to hold it liable for paying benefits because the evidence failed to prove that its workplace caused or worsened Keeton’s hearing impairment. Greg’s misapplied the applicable rule of law. The Kentucky Supreme Court has explained that issues of causation and worsening are irrelevant: “The exposure incurred during a particular employment need not have been the actual cause of the disease[,]” and a claimant demonstrates “injurious exposure” by “present[ing] evidence which proves that the type of exposure received during the subject employment would have 206

 

eventually resulted in contraction of the disease, in other words, that it was injurious.” (citation omitted) *** …[T]here can be no serious dispute to the finding that the type of work which was being performed by Keeton at Greg’s Construction could, over time, give rise to occupational hearing loss, i.e., that it constituted “injurious exposure.” It was the same type of work that had, over the course of thirty years, given rise to the occupational hearing loss Keeton had prior to his employment with Greg’s Construction. Keeton testified that he was exposed to “a lot of noise” during his employment with Greg’s Construction, that the open cab D5 he drove was “very noisy,” and that he believed his hearing loss worsened during his employment with Greg’s… *** Greg’s Construction cites to nothing in the record that would rebut that Keeton was injuriously exposed to hazardous levels of noise in its workplace. Second, Greg’s argued that the ALJ erred in holding it exclusively liable for paying Keeton’s benefits and that liability should instead be apportioned between Greg’s, Johnson Floyd, Miller Brothers, and Apostle. …Greg’s Construction notes that Dr. Manning’s December 15, 2008 evaluation, and Dr. Jones’s July 1, 2009 evaluation, both predated Keeton’s six-month tenure as Greg’s Construction employee, and that the one medical evaluation of record that was conducted when Keeton was its employee, i.e., Dr. Manning’s reevaluation on March 16, 2010, gives no indication that his impairment was caused or worsened during that time. KRS 342.7305(4) provides that "'the employer with whom the employee was last injuriously exposed to hazardous noise shall be exclusively liable for benefits.'" Third, Greg’s asserted that the only evidence of whether Keeton was even exposed to hazardous levels of noise at its workplace came from Keeton’s own testimony, and that he was not qualified to make that assessment. KRS 342.7305(4) requires only that “the employee demonstrates repetitive exposure to hazardous noise in the workplace.” Keeton’s own testimony constituted substantial evidence that he continued to be exposed to harmful occupational noise at Greg’s Construction. (internal citations omitted) Finally, Greg’s asserted that the record actually demonstrated Keeton’s hearing improved while he was working as Greg’s employee, since Dr. Jones assessed 207  

19 percent impairment on 7/1/09 and Dr. Manning later assessed 18 percent impairment on 3/16/10. …[T]he 1 percent difference between Dr. Manning’s and Dr. Jones’s respective evaluations does not indicate that Keeton’s condition improved while he was working for Greg’s Construction. It only indicates that two different experts used [the AMA Guides] to arrive at two different conclusions regarding Keeton's impairment… And, Dr. Manning’s 18 percent impairment [on his 3/16/10] evaluation is 3 percent higher than his [12/15/08 assessment] of 15 percent impairment, which actually reflects his belief that Keeton’s condition had worsened between those two dates. COMMENT: Scientific testing to determine the level of noise at the workplace should be good evidence as to whether the employee was exposed to a “hazardous” level of noise, i.e. noise that exceeds the acceptable ANSI standards. The employer appealed to the Supreme Court. Its brief is due by 12/24/11. IX.

IDIOPATHIC FALL Hampton v. Intech Contracting, LLC, 2011 WL 5903409 (Ky. App. Nov. 18, 2011). Intech resurfaces, maintains, and repairs bridge structures. On the night of 9/9/09, the crew began resurfacing a bridge deck. All work was completed between a four-foot tall concrete barrier wall placed in a position to divide the travel lanes from the work area and an outside four-foot high bridge guardrail placed to prevent cars from traveling off the bridge. The crew worked only on the bridge deck. The foreman testified that Hampton, a diabetic, stated that he needed something sweet to increase his blood sugar. He was permitted to get something from his truck and, afterward, reported that he was “feeling pretty good.” Hampton later reported that his back and knees were hurting and was told to sit in the truck. Thirty minutes later, Hampton shouted a profanity and walked from the barrier wall to the bridge guardrail. He witnessed Hampton hold the guardrail, throw his legs over the guardrail and jump. The foreman could offer no explanation for Hampton’s action but did not believe it was a suicide attempt. The paramedic testified that Hampton had a blood glucose reading within normal limits. The ALJ found that Hampton was having difficulty with low blood sugar the night of the accident and began experiencing symptoms of hypoglycemia, that he negligently failed to take the necessary steps to ward off a hypoglycemic reaction, and that the failure led to substantial impairment of his mental alertness and ability to make rational decisions. This condition caused Hampton to become extremely disoriented to the extent that he voluntarily approached the bridge, climbed up onto the guard rail, and descended over the edge, falling over sixty feet to the earth below. The ALJ dismissed the claim because Hampton’s injury did not arise out of his employment and was not part of the positional risk in which his employment placed him. WCB and CA affirmed. 208

 

…[T]his is not an unexplained fall case. Although it remains undetermined why Hampton climbed over the guardrail, the explanation for the fall itself is that Hampton climbed over the guardrail and ultimately fell to the ground. The ALJ found that Hampton was disorientated as a result of a hypoglycemic attack, a condition purely personal in nature and, therefore, his fall is properly characterized as idiopathic. *** …[T]o be compensable, the employment must have increased the risk of injury from an idiopathic fall. This may appear to draw a fine line of distinction from the positional risk cases… based on the theory that the injurious incident would not have occurred except for the employee’s presence at the particular place where it happened. However, it is the basic rule, on which there is general agreement… The positional risk theory applies in this type of case only if the employment places the employee in a position increasing the dangerous effects of such a fall, such as on a height, near machinery or sharp corners, or in a moving vehicle. Thus, the ultimate question is whether Hampton’s employment placed him in a position of risk…Hampton’s work on the deck of the bridge did not place him in a position of risk. Although he was atop the bridge deck, he did not fall from the bridge deck. His fall was caused by his actions unrelated to his employment: He placed himself in a position of risk when he climbed over the guardrail…Hampton’s injuries did not originate from a risk connected with his employment and did not flow from his employment as a "rational consequence." (internal citations omitted) X.

ILLEGAL ALIEN Abel Verdon Construction v. Rivera, 348 S.W.3d 749 (Ky. 2011). Miguel Rivera, a fifteen-year-old unauthorized alien, was injured on 7/8/05 when he fell through a hole in the second floor of a home that Verdon was constructing. The ALJ found Rivera to be Verdon's employee; found his AWW to be $150.00; awarded TTD benefits from 7/9/05 through 12/20/06; and awarded triple PPD benefits based on an impairment rating of 44 percent. The ALJ concluded that no safety violation was applicable. WCB remanded for additional findings of fact regarding the issue of the safety violation, and affirmed on all other grounds. CA and SC affirmed. 209

 

"KRS 342.640 provides workers' compensation coverage to "employees," without regard to the legality of the employment relationship." Rivera admitted that he never spoke to Abel Verdon. A cousin, Margarito Villa Martinez, hired him as a part-time helper to pick up trash at Verdon's construction site for $50.00 per day during the summer break from school. Rivera testified that he was paid in cash and that he earned $250.00 during the two-week period before his accident occurred. Martinez, the foreman, was asked whether Rivera was an employee; he responded, "Not really." He explained that Rivera worked part time during vacation and that there no intention for him to work full time because he was a teenager. He was paid $7.00 to $8.00 per hour and worked about eight hours per day for two or three days per week. Martinez did not tell Verdon that he hired Rivera because his duties included hiring workers and paying them. Rivera picked up garbage and scrap materials at the construction site and sometimes carried supplies and tools to the carpenters. The work was necessary and would have been performed by Martinez or the carpenters had Rivera not been hired. The ALJ analyzed the evidence of an employment relationship emphasizing the four primary Ratliff v. Redmon1 factors as set forth in Chambers v. Wooten's IGA Foodliner.2 The ALJ determined that an employment relationship existed based on findings that the claimant's work as a site maintenance person was within the scope of Verdon's business constructing homes; that Verdon controlled the work being performed; and that the work did not require any particular skill. Noting that the three objective factors favored an employment relationship and that objective factors should prevail when the intent of the parties could not be ascertained, the ALJ determined that the claimant was Verdon's employee. The finding that an employment relationship existed between Rivera and Verdon was properly affirmed. Federal immigration law does not preempt the Workers' Compensation Act with regard to coverage of unauthorized aliens. Chapter 342 does not require documentary proof of a worker's AWW in a case where nothing refutes testimony by the worker and his foreman that the employer paid its employees in cash. The ALJ relied on the testimonies of Rivera and Martinez to find an average weekly wage of $150.00, which constituted a reasonable estimate of what Rivera probably would have earned had he worked for the full thirteen-week period immediately preceding his injury when work was available. Noting the absence of any proof of a specific date that Rivera reached MMI, the ALJ relied on the earliest date that a physician assigned an impairment rating. The 5th Edition of the AMA Guides indicates on page 2 that impairment is not considered to be permanent until the patient reaches MMI. Thus, the earliest date that a physician assigned a                                                              1

396 S.W.2d 320 (Ky. 1965).

2

436 S.W.2d 265, 266 (Ky. 1969).

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permanent impairment rating constitutes evidence that MMI occurred and TTD ended on or before that date. Rivera alleged that Verdon violated a safety regulation by failing to protect him from falling through the hole in the floor. The ALJ determined without analysis that no violation applied to the claim. WCB remanded the claim to analyze the remaining evidence under KRS 342.165(1) and to determine whether Rivera's accident resulted in any degree from Verdon's safety violation. The record contained evidence that Kentucky OSHA regulations pertaining to residential construction imposed certain requirements concerning fall protection at the time of [Rivera]'s injury. An ALJ is presumed to know the law with respect to safety violations and is charged with applying it properly to the facts as found. KRS 342.165(1) does not require expert testimony to prove that the employer's violation of a known safety regulation helped to cause the accident in which its employee was injured. Employers are presumed to know what specific state and federal statutes and regulations govern their workplace; thus, an employer's violation of such a provision implies the intent to do so. XI.

PENALTY FOR SAFETY VIOLATON Abel Verdon Construction v. Rivera, 348 S.W.3d 749 (Ky. 2011). SEE ILLEGAL ALIEN

XII.

REMAND Commonwealth v. Rogers, 2011 WL 1843164 (Ky. App. May 13, 2011). On 2/27/09, after working for Quality Exteriors for only three hours, William Willis Ballard fell ten feet onto a concrete sidewalk from a roof that he was helping to install. Dr. Henderson diagnosed a right scaphoid fracture and assigned a 13 percent impairment rating. Quality Exteriors had no workers’ compensation insurance. The ALJ found that Rogers agreed to pay Ballard at a rate of $10.00 per hour. Since Ballard had worked for Rogers for only three hours before he sustained the work-related injury, the ALJ determined that his average weekly wage must be calculated in accordance with the provisions of [KRS] 342.140(1)(e). This statute requires the factfinder to ascertain how much money the injured employee "would have earned had he or she been so employed by the employer the full thirteen calendar weeks immediately preceding the injury and had worked, when work was available to other employees in a similar occupation[.]" The ALJ specifically rejected the [UEF]’s contention that roofing is “exclusively seasonal” and found that Ballard’s wages were to be calculated on the basis of a regular forty-hour work week. 211

 

WCB concluded that the ALJ’s calculation of Ballard’s AWW based upon a fortyhour work week (uninterrupted for thirteen weeks) did not provide a realistic estimate of what he would have expected to earn during a normal period of employment. WCB concluded that the ALJ was unable to determine Ballard’s AWW properly since there was insufficient evidence contained in the record to permit such a calculation. Thus, WCB vacated the ALJ’s calculation of Ballard’s AWW and remanded the matter to the ALJ for additional proceedings. WCB instructed the ALJ to reopen proof time for thirty days for the sole purpose of revisiting the AWW issue. CA affirmed. The calculation of [an award] is controlled by statute. It is a question of law and can be decided by the Board… Here, the Board was fully within its authority to determine that the ALJ’s computation of Ballard’s average weekly wage failed to provide a realistic estimate of his earning capacity in accordance with the provisions of KRS 342.140. It is also within the Board's authority to modify an award to insure that it complies with the provisions of the [Act]… Under the circumstances of this case, where insufficient proof had been introduced to permit a proper calculation of Ballard’s average weekly wage under the unique requirements of KRS 342.140(1(e), we believe that the Board was within its authority to remand the matter to the ALJ for further proceedings. In so doing, the Board has not ignored or excused the employee’s obligation to present the required proof. Instead, the Board has insisted that Ballard provide to the ALJ the proof necessary to calculate correctly the value of his award. Remand was not a misuse of the Board's power but a wholly proper and necessary procedural decision. Workers’ compensation proceedings are administrative rather than judicial in nature…. Under these circumstances, and keeping in mind the beneficent purpose of KRS Chapter 342 to wholly compensate injured workers whenever possible, we conclude that the Board did not act outside its authority by remanding the matter for additional proof. Nor are we persuaded that the Board erred as a matter of law by determining that the provisions of KRS 342.140(2) (pertaining to occupations which are exclusively seasonal) are irrelevant to a determination of Ballard’s average weekly wage. The question of whether particular work is seasonal depends on the facts and circumstances of each case… While roofing projects may have been intermittent in this area around the time of Ballard’s injury, the ALJ’s finding of fact that roofing is not an exclusively seasonal occupational was adequately supported by the record. (internal citations omitted)

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COMMENT: This is bad law. The plaintiff has the burden of proof to establish his AWW. If the plaintiff does not introduce sufficient evidence to meet the burden of proof on any element of his claim, then the correct answer is that his claim is denied. The correct answer is not to remand the claim to the ALJ to give the plaintiff another chance to submit evidence. If this ultimately becomes the law in Kentucky, then where does it end? If the plaintiff did not introduce sufficient evidence to allow the ALJ to find that he met his burden of proof on causation, does the Board have the authority to remand the claim to the ALJ to allow the claimant another opportunity to meet his burden of proof? The employer knows it is in trouble when the appellate court supports its ruling by commenting that this is just administrative law, not real law, and when the court has to resort to “the beneficent purposes of the Act”, watch out, the employer is about to get hosed. XIII.

TEMPORARY TOTAL DISABILITY Abel Verdon Construction v. Rivera, 348 S.W.3d 749 (Ky. 2011). SEE ILLEGAL ALIEN

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