Gardens Glen Farm v. Balderas, No. 2014-CA-000191-WC (Ky.App. 2014): In a reopening of a claim, a negotiated settlement might not reflect the claimant’s actual disability and any change in occupational disability is the difference between the claimant’s actual occupational disability on the date of settlement and his or her occupational disability at the time of reopening.
In Balderas, a Court of Appeals opinion to be published, the Court addressed the reopening of a negotiated settlement which compromised the return to work factor. In finding an increase in occupational disability, the ALJ calculated the increase based on the actual occupational disability the claimant had on the date of settlement (in this case more than what was negotiated) and the disability at the time of reopening. The Court, as did the Workers’ Compensation Board, relied on Whittaker v. Rowland, 998 S.W.2d 479 (Ky. 1999) and Newburg v. Davis, 841 S.W.2d 164 (Ky. 1992) for the proposition that “The figure for occupational disability which is contained in a settlement agreement represents a compromise and might or might not equal the workers’ actual occupational disability at the time…” Whittaker at 482.
UPDATE: Governor Beshear has appointed Udell Levy to fill the unexpired term of former ALJ Hays. The term will expire on December 31, 2015.
The DWC Nominating Commission has recommended three attorneys to be considered by Governor Beshear for filling the unexpired term of former ALJ Ed Hays. They are: Louisville attorney, Udell Levy; Louisville attorney, Stephanie Kinney and Northern Kentucky attorney, Gregory N. Schabell. Levy and Schabell have appeared on the Commission’s recommendation list before. This is Kinney’s first time on the list.
UPDATE: HR 507, a bill identical to SB 136, was recently introduced in the House and has been posted to the House Labor & Industry Committee as of March 7, 2014. SB 137 has been reassigned to committee twice, and as of March 17, 2014 was reassigned to the Senate Appropriations & Revenue Committee.
There are presently two competing workers’ compensation bills in the Kentucky Senate attempting reform of KRS Chapter 342, one modest (SB 137) and one quite a bit more ambitious (SB 136).
SB 137, sponsored by J. Carroll, W. Blevins, Jr. and D. Harper Angel attempts to (1) increase attorney fees and (2) to extend payment of workers’ compensation income benefits to age 70 or 5 years after the injury, whichever is later.
The relevant changes of SB 137 are set forth below:
AN ACT relating to workers’ compensation.
Be it enacted by the General Assembly of the Commonwealth of Kentucky:
->Section 1. KRS 342.320 is amended to read as follows:
(2) In an original claim, attorney’s fees for services under this chapter on behalf of an employee shall be subject to the following maximum limits:
(a) Twenty-five percent (25%)
[Twenty percent (20%)] of the first fifty [twenty-five] thousand dollars ($50,000) [($25,000)] of the award, fifteen percent (15%) of the [ next ten thousand dollars ($10,000), and five percent (5%) of the] remainder of the award, not to exceed a maximum fee of twenty-four thousand dollars ($24,000) in an original award [twelve thousand dollars ($12,000)]. Annually, the commissioner shall compute, in accordance with KRS 342.740, the increase or decrease in the state average weekly wage, and consistent with that calculation shall adjust the maximum attorney fee for an injury in the succeeding year. This fee shall be paid by the employee from the proceeds of the award or settlement; and
(b) Attorney-client employment contracts entered into and signed after July 14, 2000, shall be subject to the conditions of paragraph (a) of this subsection.
(7) In a claim that has been reopened pursuant to the provisions of this chapter, an attorney’s fee may be awarded by the administrative law judge
[ subject to the limits set forth in subsection (2) of this section]. For a reopening, the maximum additional attorney fee shall be twelve thousand dollars ($12,000). The maximum fee for a reopening shall be adjusted annually as the attorney fee for an original award. In awarding the attorney’s fee, the administrative law judge shall compute the fee based on additional income benefits awarded as a result of that reopening and shall consider the factors set forth in subsection (3) of this section. [ If no additional amount is recovered upon reopening, no attorney's fee shall be awarded. No attorney's fee shall be allowed or approved exceeding the amounts provided in subsection (2)(a) of this section applicable to any additional amount recovered.]
(8) Attorney’s fees for representing employers in proceedings under this chapter pursuant to contract with the employer shall be subject to approval of the administrative law judge in the same manner as prescribed for attorney representation of employees. Employer attorney’s fees are subject to the limitation of twenty-four
[twelve] thousand dollars ($24,000) [($12,000)] maximum fees except that fees for representing employers shall not be dependent upon the result achieved. Employer attorney’s fees may be paid on a periodic basis while a claim is adjudicated and the payments need not be approved until the claims resolution process is completed. Fees for legal services in presenting a claim for reimbursement from the Kentucky coal workers’ pneumoconiosis fund shall not exceed one thousand dollars ($1,000). All such approved fees shall be paid by the employer and in no event shall exceed the amount the employer agreed by contract to pay.
->Section 2. KRS 342.730 is amended to read as follows:
(4) All income benefits payable pursuant to this chapter shall terminate as of the date upon which the employee reaches age seventy (70)
[qualifies for normal old-age Social Security retirement benefits under the United States Social Security Act, 42 U.S.C. secs. 301 to 1397f,] or five (5) [two (2)] years after the employee’s injury or last exposure, whichever last occurs. In like manner all income benefits payable pursuant to this chapter to spouses and dependents shall terminate when such spouses and dependents qualify for benefits under the United States Social Security Act by reason of the fact that the worker upon whose earnings entitlement is based would have qualified for normal old-age Social Security retirement benefits.
SB 136 sponsored by T. Buford and D. Seum seeks to amend KRS Chapter 342 to (1) define and recognize temporary partial disability benefits; (2) define medical provider; (3) limit medical benefits to age 70 or five years after date of injury, whichever is later except for permanent total awards or awards involving prosthetic devices; (4) allow attorney’s fees or increased payments for medical fee disputes that are decided in favor of the claimant; (5) amend the reopening statutes to allow for reopening for additional temporary total or partial benefits; (6) permit claimants who have awards of $60 or less per week to elect a lump sum; (7) require settlements for future medicals to be approved by the federal Medicare Secondary Payer Act; (8) permit claimants to recover damages from an insurance carrier who commits an unfair claims settlement practice; (9) increase attorneys’ fees to a total of $24,000; (10) specify that administrative law judges do not approve attorney’s fees; (11) enumerate changes to the manner that income benefits are determined; (12) increase the maximum for temporary total or partial income benefits from 100% of the state average weekly wage to 120% of the state average weekly wage; (13) increase the maximum of permanent partial income benefits from 75% to 85% of the state average weekly wage; (14) increase and clarify multiplier language factors; and (15) provide that the time limit for permanent partial income benefits is determined by the impairment ratings.
Kentucky State Police v. McCray, No. 2013-CA-000857-WC (Ky..App. 2013): PTSD is compensible only if it results from a physically traumatic event to the claimant, and resultant physical manifestations of the stressful event such as high blood pressure or a racing heartbeat do not constitute a causal, physically traumatic event.
On September 25, 2009, McCray, a state trooper, was called to investigate a domestic disturbance. When he arrived, he confronted a man who he believed was armed, and was forced to shoot the man in self-defense. He suffered no physical injuries during the event.The ALJ deemed the claim for PTSD to not be compensable because the PTSD did not directly result from a physically traumatic event. The Workers’ Compensation Board reversed, reasoning that McCray’s testimony that he suffered high blood pressure following the event could constitute evidence that he sustained a physical injury. The Court of Appeals reversed, holding that Kubajak v. Lexington-Fayette Urban County Government, 180 S.W.3d 454 (Ky. 2005) was on point and compelled a finding that the claimant was not entitled to benefits because his PTSD was not caused by a physical injury. They further held that resultant physical manifestations (i.e. the high blood pressure or racing heartbeat) did not constitute a causal, physically traumatic event.
Howard v. Basin Energy Company, et al, 2006-84485 (WCB 2013). Boiler plate language in an order approving a settlement agreement overrides the specific terms set forth in the agreement.
This is a Kentucky Workers’ Compensation Board (WCB) decision regarding a medical fee dispute. The dispute and motion to reopen was brought by the employer to contest the reasonableness and necessity of specific medical treatment. The Chief ALJ allowed the dispute to proceed , and after the taking of proof and a hearing, the ALJ ruled in favor of the employer. Plaintiff appealed.
Instead of addressing the issues presented on appeal, the WCB focused on boiler plate language in the order approving the original settlement agreement, the specific terms of which left open plaintiff’s right to future medical benefits. The specific language of the agreement provided:
Settlement is for complete and total dismissal with prejudice of any and all claims, except that Plaintiff preserves and does not waive his right to future medical expenses that are reasonable and necessary and for his physical injuries. The open medical obligation of the Defendant/Employer is defined as a cervical and lumbar strain and right shoulder impingement syndrome.
There is a partial waiver of future medical expenses in connection with the psychological/psychiatric claim. Plaintiff preserves and does not waive his right to future medical expenses for an open medical obligation of the Defendant/Employer which is defined as cervical and lumbar strain and right shoulder impingement syndrome. Medical expenses for any other medical conditions are waived, and $1,000.00 of the settlement proceeds constitutes consideration for this partial waiver of future medical expenses.
Due to the risks and costs of further litigation, Plaintiff and the Defendant/Employer have agreed to compromise and settle this claim for a complete and total dismissal with prejudice of all claims including a waiver of medical expenses, a waiver of vocational rehabilitation and a waiver of the right to reopen; except that Plaintiff preserves and does not waive his right to future medical expenses that are reasonable and necessary and for the following defined open medical obligation; cervical and lumbar strain and right shoulder impingement syndrome. In consideration of the payment of $85,000.00 in a lump sum all claims are waived except that Plaintiff preserves and does not waive his right to future medical expenses covered under the open medical obligation as described above.
The Plaintiff acknowledges the effects of the settlement. The Plaintiff has been advised that a dismissal with prejudice of all claims for indemnity means that he shall have no right to further payment of any income benefits whatsoever as a result of the work accident referenced herein. Plaintiff understands that he shall receive no further income benefits; vocational rehabilitation; or TTD benefits at anytime [sic] in the future. Plaintiff has been warned of the effects of this settlement agreement; Plaintiff desires to go forward with the settlement agreement due to the risk of loss and costs of further litigation.
The language of the order approving the agreement, however, contained broader, boilerplate language:
This matter is before the Administrative Law Judge on motion of the Defendant-Employer to approve a Form 110-I settling the above-captioned claim. The Administrative Law Judge having reviewed the motion and being fully advised; IT IS HEREBY ORDERED that the Plaintiff’s claim will be and the same is hereby ordered DISMISSED, with prejudice, as SETTLED.
Despite the very specific delineation of future medical benefits as not being waiver, the WCB apparently focused on the ALJ’s order approving the agreement and found that the entire claim was dismissed with prejudice (even though there was no consideration for a waiver of the future medical benefits and the agreement specifically provided for continued payment of future medical benefits) and held the Chief ALJ was without jurisdiction to rule on the motion to reopen in the first place. Therefore, the board dismissed the appeal and remanded to the Chief ALJ with instructions to deny the motion to reopen.
COMMENTARY: This was the wrong decision on various grounds and likely will not withstand an appeal. The WCB ignored the very specific language of the agreement, the lack of consideration for any alleged waiver of future medical benefits, the understanding of the parties and the fact subject matter jurisdiction was not preserved (although arguably they could have addressed that issue sua sponte). If anything, they should have remanded for clarification of the intent of the parties or to allow the motion to reopen to be amended to also allege mistake.
Governor Beshear has reappointed Michael W. Alvey to the Kentucky Workers’ Compensation Board and has reappointed J. Landon Overfield, John B. Coleman, Robert L. Swisher and Jeanie Owen Miller as ALJs. He has granted new ALJ appointments to Gregory Allen and R. Roland Case, both Eastern Kentucky attorneys. Allen will fill the vacated term of Judge Allison E. Jones and will serve through December 31, 2014. Case will serve a four year term expiring on December 31, 2017.