State News : Kentucky

Exclusivity Provision of Workers’ Compensation Act Does Not Preclude Civil Recovery For Non-Work-Related Injuries

Schneider Electric USA, Inc. f/k/a Square D v. Williams, et. al. (2022-CA-0190-MR) KY Court of Appeals 7/7/2023, not final

Plaintiff was six years old when adopted by Ken Baxter in 1967. Plaintiff lived with Baxter until the mid-1980s and during that time Baxter worked for Square D who manufactured plastic electrical parts from molding compounds, some of which contained asbestos until around 1974. Plaintiff also worked for Square D for a few months in 1978. Plaintiff was diagnosed with mesothelioma in 2016 and died a year later. Prior to her death she filed suit against Square D claiming she was exposed to asbestos from her father’s contaminated work clothes and directly during her brief employment in 1978. During discovery, all of the medical and expert proof attributed her mesothelioma to asbestos from her father’s work clothes. Square D moved for summary judgment based partly on the exclusivity provision of the Workers’ Compensation Act. The trial court denied summary judgment. Square-D argues the trial court wrongly concluded Plaintiff’s claims were not barred by the Workers’ Compensation Act.

The Kentucky Court of Appeals affirmed the trial court’s refusal to dismiss claims against Square D based on workers’ compensation exclusivity. It reasoned that there was no evidence that Plaintiff was exposed to asbestos during her brief time working at Square D.  The Court also agreed with the trial court that a jury is capable of apportioning work-related and non-work-related injuries, if appropriate. The Court further determined that allowing Plaintiff’s brief summer employment with Square D to immunize Square D against all repercussions from other-than-workplace asbestos exposure would result in an unfair windfall for Square D.

Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200
Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200 

Jurisdiction of Injured Employee's Claim

Letcher County Board of Education v. Hall, (2022-SC-0313-WC, 6/15/23) not final
 
Teacher filed WC claim alleging he developed mesothelioma after being exposed to asbestos during his employment in county high school. County School Board argued that the Board of Claims, not Department of Workers’ Claims, had exclusive jurisdiction over the claim under KRS 49.070(16) which states that “any claim” against the school district for damages as a result of asbestos exposure shall be brought before Board of Claims. Rejecting this argument, the Supreme Court of Kentucky concluded that KRS 49.070(16) pertains to claims by third parties, not employees. The Court cited the purpose of the Workers’ Compensation Act to compensate injured workers for loss sustained as a result of work-related injury or disease as well as its exclusivity. Furthermore, the Court pointed out that KRS 49.020(5) requires the Board of Claims to find negligence while the Workers’ Compensation Statute requires no showing of fault.
 

Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200
Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200 

Cumulative Trauma - Sufficiency of Evidence 

Lexington Fayette Urban County Gov’t v. Gosper, 2021-SC-0386-WC (not final)

Claimant worked exclusively as firefighter and EMT for employer for 18 years. He presented to his treating physician, Dr. Balthrop, in December of 2017 with unbearable bilateral knee pain which his physician stated was work-related. He underwent two total knee replacement surgeries paid through workers’ compensation. Claimant had treated for knee problems for years and was diagnosed with osteoarthritis in 2012. He had a prior right knee work injury in 2007 that led to a meniscectomy. Dr. Balthrop testified that Claimant’s physically exacting work demands combined with his varus deformity accelerated the gradual deterioration of his knees and his occupation worsened his arthritis. The employer’s IME expert, Dr. Prince acknowledged that sustained, repetitive, and strenuous work is a risk factor for arthritis and would have accelerated Claimant’s degenerative changes. Dr. Prince, attributed 75% of his left knee impairment and 50% of his right knee impairment to non-occupational factors, including his varus deformity and being overweight. He testified that without the work-related component, Claimant would likely not have needed the knee replacement surgery at the age he had it. Claimant’s IME expert, Dr. Burke, noted that while Claimant experienced intermittent knee pain, he continued to work, however by the end of 2017 his knees deteriorated to where he couldn’t function with regular duty activities. Dr. Burke diagnosed progressive development of bilateral osteoarthritis contributed significantly by the nature and duration of his work. The employer also had a report prepared by Dr. Lyon, who attributed 50% of Claimant’s right knee condition to work and 0% of the left knee condition. Dr. Lyon emphasized Claimant’s history of knee pain and bowleggedness.

The ALJ found that the nature and duration of Claimant’s work aggravated his degenerative condition into active physical impairment sooner than would have been, awarding PPD benefits with the 3x multiplier and medical benefits. The employer appealed, arguing that the Claimant did not meet his burden of proving a work-related injury, noting injury does not include the effects of the natural aging process. The Supreme Court of Kentucky held that substantial evidence existed to support the ALJ’s determination, finding that three doctors, including one of the employer’s IME experts, acknowledged that the Claimant’s job duties significantly contributed to the acceleration or aggravation of his degenerative knee condition. 

Kentucky Workers’ Compensation Case Law Update

By H. Douglas Jones, Esq. and Margo Menefee, Esq., JSB Attorneys, PLLC

Employee v. Independent Contactor and Economic Realities Test

Oufafa v. Taxi, LLC d/b/a Taxi 7, et. al., (2022-SC-0003-W, not final) Supreme Court of Kentucky

Taxi 7 generates revenue by leasing taxis to its drivers, which it identifies as independent contractors. Claimant sought to work for Taxi 7 in 2016, meeting with the office’s head, providing his license, resume and background check. He passed a drug test and was given two documents to fill out. In one document, Claimant acknowledged in his own handwriting that he was not an employee and not entitled to workers’ compensation benefits.

Taxi 7 only allows the leased cabs to be used for Taxi 7 rides. It operates a dispatch system and cab drivers are penalized for declining rides. Customers could either pay with a credit card, which would go through Taxi 7’s processing system, or could pay the driver directly.

Claimant filed for workers' compensation benefits after being shot while driving. The ALJ found Claimant was an independent contractor and Taxi 7 was a taxicab leasing company utilizing the factors outlined in Ratliff v. Redmon and Chambers v. Wooten’s IGA Foodliner.

The appellate Board reversed, finding that the ALJ incorrectly concluded that Taxi 7 was a taxicab leasing company rather than a taxicab company that employed the Claimant as a driver. The Court of Appeals reversed the Board, stating that the ALJ’s finding of fact that Taxi 7 was a taxicab leasing business and Claimant was not an employee was supported by the facts and not clearly erroneous. The Court of Appeals held on its own that the Claimant was an independent contractor by relying on the definition of “work” as tied directly to renumeration as defined in KRS 342. The Court of Appeals further emphasized that Taxi 7’s income was unaffected by how much or little the lessees work.

Vacating the ALJ’s decision, and striking down the Court of Appeals’ reasoning, the Supreme Court of Kentucky adopted the economic realities test to determine whether a worker is an employee or independent contractor, remanding the claim to the ALJ for a determination consistent with that test.

Medical Fee Dispute – Burden of Proof

Perry County Board of Education v. Campbell, et. al. (2022-SC-0119-WC, not final)

Claimant worked for school district and was in the school gym hanging a banner when he hit his head on a duct and fell on April 11, 2018, alleging injury to his head, shoulder and knee. Radiology report indicated mild changes in the right knee from arthritis and possible fracture. One month later, a follow-up appointment indicated softening of cartilage of patella and partial dislocation. Non-surgical treatment was unsuccessful and a right knee arthroscopy with partial meniscectomy was performed on November 6, 2018, after which Claimant was released to full duty. His knee pain persisted, and a total knee replacement was recommended following his September 16, 2019 office visit. The employer denied the knee replacement on reasonableness and necessity grounds as well as causation, citing to pre-existing arthritic changes. The employer presented three medical opinions finding the knee replacement not

reasonable nor necessary for treatment of the work injury. Claimant presented an opinion from Dr. Madden diagnosing total knee replacement surgery and chronic knee pain. Dr. Madden stated Claimant’s complaints were caused by the work injury, but he did not explicitly state whether the osteoarthritis or need for a total knee replacement were causally related to work injury. He further stated that the work injury required surgical repair and that failing to provide the recommended treatment would worsen his condition. The ALJ found the total knee replacement compensable. The employer appealed, arguing the ALJ improperly relied on inferences instead of medical opinion to determine the knee replacement was causally related to the work injury and to find it was reasonable and necessary.

The Court of Appeals affirmed, finding the ALJ as fact finder has sole authority to judge the weight, credibility, substance and inferences to be drawn from evidence. First, although there was prior arthritis, all of the medical records indicated the Claimant had no prior right knee problems, so the ALJ’s determination that the arthritis was dormant and aroused into a disabling reality by the work injury was supported by substantial evidence. Second, the Court of Appeals approved the ALJ’s use of a patchwork of evidence, including treating doctor’s notes’ Claimant’s testimony, timeline of events, and inferences from Dr. Madden’ s report, to determine the knee replacement was causally related to the work injury as well as reasonable and necessary. The Court concluded that the Claimant bore the burden of proving the compensability of the knee surgery, he was successful, and the determination was supported by substantial evidence.

Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200

Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200

First ALJ Opinion on COVID-19
 
Perkins v. North American Stainless, (WC 2021-01615)
 
Employee Perkins was a mechanical maintenance shift technician working 12-hour shifts in close proximity to his crew partner, Springer. Perkins contracted COVID-19 and died. His widow, Megan Perkins alleged he caught COVID-19 from Springer at work on 8/8/21.

Springer testified that Perkins had been to a party on 8/7/21 at Parkers’ house. Springer had been to the outdoor races earlier in the day but did not go to the party. The two were off on 8/9/21 and 8/10/21 and Springer testified that during their shift on 8/11/21, Perkins was not feeling well and complained of sinus issues. Another employee testified to same.
 
On 8/13/21, Perkins texted Springer that his wife had pneumonia and he didn’t want to go to doctor and was taking Aleve D. Springer developed sinus pressure on 8/14/21 and tested positive for COVID on 8/15/21, texting his results to Perkins. Perkins texted Springer on 8/16/21 that he was also positive, stating: “I bet we got it from parkers. meg said him and all kinds of people are sick from down there…wonder if we should tell hr that so they don’t think we have it at work cause she was down there too.” 
 
Megan denied that he or she went to a party at Parker’s house. She testified that Perkins, herself, her three children, and her mother all lived together. All three children played outdoor soccer and attended public school. She and Perkins ate out in Louisville on 8/4/21 for their anniversary and went to breakfast on 8/11/21. She did not recall Perkin’s having any symptoms until he told her he was feeling sick on 8/15/21. They went to the hospital, and both tested positive for COVID. She had been having sinus issues for three weeks and frequently had infections due to a deviated septum. All three children tested positive after 8/15/21.
 
Perkin’s doctor stated that his COVID symptoms were consistent with exposure at work on 8/8/21 but he could not say for sure that his exposure was from work. The employer’s expert determined there was no way to know for certain how and where Perkins contracted COVID, but he and his wife likely contracted it at the same time since they were symptomatic at the same time and hospitalized at the same time and that their children were the most likely source. He further testified that Springer likely contracted COVID from Perkins since Perkins had symptoms several days before Springer.
 
The ALJ held that Perkins did not prove a workplace injury arising out of employment. He failed to prove an occupational disease since COVID is not “incidental to the character of the business” which is manufacturing steel. Furthermore, Perkins did not prove that the COVID was caused by a work exposure. Perkins had a communicable disease but failed to prove he was at a greater risk than the general public of contracting the communicable disease due to his employment, and therefore the claim is barred.

Coming and Going Rule and Traveling Employee Exception
 
Com. Of Kentucky, Personnel Cabinet v. Timmons (2021-SC-0271-WC)
 
Timmons worked in the office daily but was also required to conduct occasional home visits and off-site trainings. While leaving her home to conduct a training at a nearby church, she fell on the front steps. The Commonwealth contested the work-relatedness of the claim arguing for application of the coming and going rule. Timmons argued that the travelling-employee exception to the going and coming rule applied.
 
The ALJ determined the injury was not work-related and the travelling-employee exception did not apply. The Workers’ Compensation Board reversed finding the travelling-employee exception applicable and the Court of Appeals agreed. The Supreme Court of Kentucky reversed the Court of Appeals, determining that the traveling employee exception to the coming and going rule does not apply until the travelling employee leaves their property, exposing themselves to the common risks of the public street.

2023 Workers’ Compensation Benefit Schedule
 
The 2023 Benefit Schedule has been published by the Department of Workers’ Claims and can be found here:
https://labor.ky.gov/Documents/2023%20Workers%27%20Compensation%20Benefit%20Schedule.pdf
 
2023 Discount Rate Order and Tables
 
The Discount Rate Order and Tables can be found here:
 
https://labor.ky.gov/Documents/2022%20Discount%20Rate%20Order%20and%20Tables.pdf
 

Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200
Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200

Motion to Reopen a Prior Claim Based on Mistake Supported by Subsequent IME Report

Dreibach Wholesale Florists, Inc. v. Leitner, 2021-CA-1495-WC (11/10/22, not final)

Holding: Medical opinion acquired after ruling that could have been obtained prior to closure of case does not justify reopening on ground of “mistake” per KRS 342.125. The purpose of the “mistake” provision is to correct a decision based on misconception concerning the workers’ condition, not to give the losing party an opportunity to bring up reinforcements and relitigate.
 
Conflicting medical evidence was presented to the Administrative Law Judge ("ALJ") regarding the worker’s condition, including allegations of neck pain. The ALJ awarded medical benefits for the left knee and right shoulder; there was no award for the neck and there was no appeal of the award.
 
After undergoing cervical surgery to resolve ongoing shoulder pain, the worker submitted an IME assessing a 29% impairment for his neck and opining that the shoulder pain was previously misdiagnosed and was actually a result of the neck maladies. The worker then filed a motion to reopen, claiming that newly discovered evidence, the IME report, supported reopening. Denying the motion to reopen, the ALJ found that the IME report was not newly discovered evidence because it could have been discovered by the exercise of due diligence prior to the hearing. The worker also sought to reopen based on mistake and a change in condition. The ALJ determined that the IME report did not support reopening based on mistake or a change in condition, as there was no original award for any neck condition. The Workers' Compensation Board reversed, holding the worker had made a prima facie showing of mistake as to the original finding that he had not sustained a compensable neck injury.
 
The employer appealed, arguing that the Board usurped the ALJ’s role as fact finder by reopening a case to allow presentation of evidence discoverable before the initial hearing. The Court of Appeals agreed, finding that when an ALJ considers conflicting medical evidence regarding a workers’ compensation claim in making his ruling upon a final hearing, a subsequent medical opinion that could have been obtained prior to the close of evidence will not justify reopening on the ground of “mistake” as contemplated by KRS 342.125(1)(c).

Language in Settlement Agreement Required Continuation of Survivor Benefits with No Modification of Weekly Amount

Kentucky Employers’ Mutual Insurance Authority v. Fleming, Cl No. 201401039 (11/18/22, Workers' Compensation Board Opinion, not controlling)
 
KEMI appealed order substituting Debra Fleming, widow of Lenville Fleming, deceased, as a party and continuing indemnity benefits pursuant to KRS 342.730(3)(a). The order also extended the time of benefits to be paid to Debra for an additional 3 years, until Fleming would have turned 70.
 
KEMI argued proper procedure was to file a separate claim pursuant to KRS 342.750 (death statute) based on Baytos and Calloway County. Furthermore, KEMI contended Debra was not entitled to continuation of benefits because she was 63 at time of death and the 1996 version of KRS 342.730 did not provide for continuation of benefits after age 60. KEMI also argued that reopening rights were waived, and the 110 included waiver of reopening under KRS 342.750 and 342.730.
 
The Board disagreed that Debra’s sole avenue of relief was to file an action pursuant to KRS 342.750 noting that the death certificate didn’t conclusively show the death was work-related and the fact that Fleming was still owed indemnity benefits per the settlement agreement distinguished this case from Baytos and Calloway County. The Board rejected the notion that the waiver of reopening rights precluded Debra from reopening the claim to enforce the settlement agreement. The Board held that Fleming waived the right to reopen only to seek an increase in benefits and Debra was instead seeking to enforce a valid contract pursuant to KRS 342.265(4).
 
The Board found the terms of the settlement agreement controlling, construing the agreement as requiring indemnity payments to Fleming, and now to his widow, through 9/6/29, without modification of the amount. Below is the language in the 110:

In Other Information the settlement was stated to encompass any claim which might later arise and be claimed by Fleming and/or his dependents, further supporting the Courts conclusion that KEMI must continue payments through the settlement date without alteration to Fleming’s widow.
 
The Board reversed the order extending the benefits for 3 years, again stating that the terms of the Agreement control.

Pending Before the Supreme Court of Kentucky: 45-day Requirement for Submission of Medical Bills by Medical Provider 
 
P & P Construction, Inc. v. Farley, 2022-CA-0332-WC

Several cases have gone before the Workers' Compensation Board regarding whether KRS 342.020(4), requiring medical bills to be submitted by the medical provider within 45 days after the date or service, applies prior to an award of medical benefits (either by opinion or agreement). Based on Wonderfoil, the Board has consistently found that the 45-day rule only applies post-award. 

In P & P Construction, the Kentucky Court of Appeals overturned the Board, stating that the clear language of the statute requires the submission of medical bills by the provider within 45 days of service, period. This decision has been appealed and is currently before the Supreme Court of Kentucky. We will let you know when a decision has been issued, but it is currently safe to deny any medical benefits submitted more than 45 days from the date of service as untimely per KRS 342.020(4).  

New Administrative Law Judge, Kenneth Smith

Kenneth Smith has been appointed to replace ALJ Christina Hajjar, who has resigned. He will serve for the remainder of the term expiring December 31, 2023. ALJ Smith graduated UK law school in 2004 and has spent his career as a Plaintiff attorney handling personal injury, SSD and workers' compensation cases.

New Supreme Court of Kentucky Chief Justice

The justices of the Supreme Court of Kentucky have elected Justice Laurance B. VanMeter as the next chief justice of the commonwealth of Kentucky. Chief Justice-elect VanMeter is the 6th chief justice and will serve a four-year term beginning Jan. 2, 2023. 

Chief Justice-elect VanMeter will succeed Chief Justice Minton, who is retiring Jan. 1 after serving more than 14 years as administrative head of the Judicial Branch. 


Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200
Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200

2x Multiplier and Return to Work

Helton v. Rockhampton Energy, LLC (2021-SC-0248-WC)

The 2x multiplier in KRS 342.730(1)(c)2 applies to permanent partial disability benefits only where an employee “returns to work” after a work-related injury at the same or higher wages and that work subsequently ends.  To qualify as a “return to work,” there must be a cessation of work followed by a resumption of work. Continuation of work is not a return to work.

Employee suffered a work-related injury on 11/16/18. He continued working his normal job at the same or greater wages until he was laid off for economic reasons on 9/2/19. Prior to being laid off, the employer never ceased working after the injury. The ALJ awarded the 2x multiplier since he was working making the same or greater wages post-injury and was then laid off. The Board reversed finding there was no “return” to work pursuant to KRS 342.730(1)(c)(2) because there was never a cessation of work followed by a resumption. The Court of Appeals and Supreme Court of Kentucky upheld the reversal.

3x Multiplier and Inapplicability of Public Policy Exclusion

Tractor Supply v. Wells (2021-SC-0286-WC)

In Livingood v. Transfreight, LLC, the Court held that if an employee returns to work making equal or greater wages and is subsequently fired for intentional misconduct with a reckless disregard to the consequences, the employee is not entitled to the 2x multiplier as awarding same would be against the public policy rule that no claimant should profit from own misconduct. Here, the employer sought to expand this public policy exclusion to the 3x multiplier which, pursuant to 342.730(1)(c)1, applies when the claimant no longer has the physical ability to return to the pre-injury job.

The employee was injured at work resulting in restrictions that prevented her from performing her pre-injury job duties. She returned to a light duty position and was subsequently terminated for allegedly providing false information during an investigation (unrelated to workers’ comp claim).

The ALJ awarded indemnity benefits with the 3x multiplier. The employer argued that claimant was not entitled to the 3x multiplier due to her misconduct, seeking to extend the holding in Livingood.

Affirming the decision of the ALJ, the Board, and Court of Appeals, the Supreme Court of Kentucky declined to extend Livingood to the 3x multiplier. The Court found that the 3x multiplier is concerned with the finding of disability and is not tied to any condition of employment. Because the 2x multiplier is related to leaving employment, it was reasonable for the court to determine that when the job loss is due to misconduct, awarding a double benefit would be unreasonable and against public policy. Here, the employee was entitled to the 3x multiplier because she could not return to her pre-injury duties and her subsequent termination was irrelevant.

Admissibility of Out of State Physician Reports

Toler v. Oldham County Fiscal Court (2021-SC-0356-WC)

In a case of first impression, the Supreme Court of Kentucky held that a written report by a physician not licensed in Kentucky cannot be submitted as evidence in a workers’ compensation case.

Overturning the ALJ, the Board and Court of Appeals, the Supreme Court first noted that the Kentucky Rules of Evidence (“KRE”) must be followed in all proceedings before an ALJ, except as varied by statute or 803 KAR 25:010. It then stated that KRS 342.033 provides that a party may introduce direct testimony from a physician through a written medical report. The Court also referenced 803 KAR 25:010 which states a party may file evidence from two physicians in accordance with KRS 342.033, either by deposition or medical report. Holding that the written report of a physician not licensed in Kentucky was inadmissible, the Court found that the plain language of KRS 342.0011(32) defining “physician” only included those who were licensed in Kentucky. It further found that the prefatory phrase in KRS 342.011 “unless context otherwise requires” did not apply.

The Court clarified that this holding does not apply to treating physicians because the “context otherwise requires” phrase required an expanded reading of physicians when dealing with treating physicians. Therefore, a treating physician not licensed in Kentucky may provide a written opinion on behalf of an employee. 

Note this case involved the admissibility of a written report. It is arguable that a medical opinion of an out of state physician introduced by deposition testimony would be admissible. In a 2005 case, the Supreme Court of Kentucky allowed the deposition testimony of a non-physician expert on the issue of causation, specifically stating that the definition of “physician” does not preclude an ALJ from considering other types of expert testimony if it is relevant to resolving a causation question. Dravo Lime Co., Inc. v. Eakins. Also, KRE 702 allows expert testimony on relevant issues, and it seems it would violate the KRE to refuse to admit deposition testimony of qualified experts, including out of state physicians.

Even if an out of state physician opinion would be admissible through deposition, it may now be difficult if not impossible to get the claimant to see an out of state physician if not licensed in Kentucky. KRS 342.205(1), in pertinent parts, states that “[a]fter an injury and so long as compensation is claimed, the employee, if requested by a party…shall submit himself or herself to examination, at a reasonable time and place, to a duly qualified physician or surgeon designated and paid by the requesting party.” (emphasis added).

Furthermore, if a claimant has moved out of state, it appears the employer will now have to pay to have the claimant travel back to Kentucky for an examination with a Kentucky licensed physician if they wish to submit a written report into evidence.

There are numerous places throughout KRS Chapter 342 and the applicable regulations that could be impacted by this decision, including regulations governing Utilization Review (“UR”) and Medical Fee Disputes. UR is currently being regulated by an emergency regulation while the new regulations work their way through the regulatory approval process. 803 KAR 25:195E defines “physician” as defined by KRS 342.0011(32). It further provides that “only a physician shall issue an initial utilization review denial.” (emphasis added). Final UR decisions also needed to be issued by a “physician.” Do UR denials now need to be made only by Kentucky licensed physicians? Can the UR decisions be admitted into evidence in medical fee disputes (“MFD”) if the physician is out of state? The DWC is working on current regulations to govern UR and MFD, so we anticipate the new regulations will provide clarification and guidance on these issues. Also, a Petition for Rehearing has been submitted to the Supreme Court requesting clarification on the impact this decision will have on the UR process. We will monitor closely and keep you updated on any developments.

Sixty-Day Submission Requirement for Medical Bills Applies Only Post-Award

Wonderfoil, Inc. v. Russell (2020-SC-0301-WC)

The Supreme Court of Kentucky held that the Board and Court of Appeals properly reversed the ALJ’s ruling that certain medical expenses were not submitted timely, holding that the 60-day deadline for submission of medical expenses by an employee only applies post-award. 

The Supreme Court of Kentucky reasoned that pre-award application of the 60-day deadline found in 803 KAR 25:096 would contradict other regulations requiring disclosure of unpaid medical bills during litigation. It cited a prior Board opinion, Brown Pallet v. Jones, which held that the 45-day deadline for submission of bills by medical providers found in KRS 342.020 only applies post-award. The Court also cited its earlier decision in R.J. Corman Railroad Construction v. Haddix holding that the requirement that employers pay medical bills within 30 days only applies post-award.

The Court explained that the claimant is still required to submit unpaid medical expenses in its Notice of Disclosure which must be filed within 45-days of the issuance of the Notice of Filing Application. Furthermore, the claimant then must turn over new medical expenses within 10 days of receiving same. And claimant must bring copies of unpaid medical bills and expenses to the Benefit Review Conference and failure “may” constitute a waiver to claim payment for those bills.

Exclusive Remedy and Up-the-Ladder Immunity

Cunningham v. Kroger Limited Partnership I (2021-CA-0704-MR)

Plaintiff worked for Penske, who agreed by contract to receive freight for Kroger Limited Partnership II (“KLP II) and deliver said freight to KLP II and to facilities of all KLP II’s divisions, subsidiaries or affiliates. Plaintiff was injured while making a delivery to Danville Kroger store, which is owned and operated by KLP I, a limited partner of the Kroger Company. KLP II is a subsidiary of the Kroger Company.

Plaintiff received workers’ compensation benefits from his employer, Penske. Plaintiff then filed civil suit against KLP I alleging negligence and seeking damages for medical expenses, lost wages and pain and suffering. The Court of Appeals affirmed the lower court decision granting KLP I summary judgment as an up-the-ladder employer immune from tort liability.

Application of 3x Multiplier to Injuries Sustained on Two Separate Occasions

Apple Valley Sanitation, Inc. v. Jon Stambaugh (2021-SC-0227-WC)

The employee sustained two separate work injuries, returning to work after the first injury until a subsequent injury 12 weeks later, after which he did not return to work. The employee was performing his pre-injury job except for a light duty restriction during 6 of the 12 weeks. The employee submitted a physician report stating he lacked the physical ability to perform his pre-injury job. The ALJ awarded benefits for both injury dates enhancing both by the 3x multiplier.

The employer argued that it was erroneous to enhance the award for the first injury date by the 3x multiplier because the employee returned to work performing the same job after the first injury. The Supreme Court of Kentucky affirmed the award of the 3x multiplier, finding that the employee’s continued work did not constitute a return to work reflecting a capacity to continue pre-injury work for the indefinite future.

Psychological and Psychiatric Conditions

Time Warner Cable, Inc. v. Smith (2020-SC-0580-WC)

The Supreme Court of Kentucky held that a Claimant's testimony is competent evidence as to his psychological medical condition, which the ALJ can rely on when determining the extent and duration of a disability. Here the claimant presented medical reports assessing physical and psychological impairments due to the work injury. The psychological report failed to assess restrictions based on the psychological condition. The ALJ noted that the physical injury and physical restrictions alone did not render the claimant permanently and totally disabled. Relying on the claimant’s testimony as to the affect his psychological condition had on his ability to work, the ALJ  found the claimant permanently and totally disabled and the Supreme Court affirmed.

Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200

Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200

Income Benefits

O’Bryan v. Zip Express, (2020-SC-02620WC, not final) – The Supreme Court of Kentucky

Claimant was found by the ALJ to be permanently and totally disabled following a work-related motor vehicle accident. Claimant was 65 on the date of accident. Claimant appealed the award, arguing the age 70 cap on indemnity benefits under KRS 342.730(4) is an unconstitutional violation of equal protection.

The Court of Appeals found KRS 342.730(4) and the age 70 cap is constitutional both on its face and as retroactively applied (applies to all cases not fully and finally adjudicated as of the effective date of the act, 7/14/2018). The Supreme Court affirmed, consistent with its opinion in Kroger v. Cates, 627 S.W.3d 864 (Ky. 2021).

Employee v. Independent Contractor

AIG v. Oufafa, et. al., (2020-CA-0942-WC, not final); Taxi, LLC d/b/a Taxi 7 v. Oufafa, et. al., (2020-CA-0946-WC, not final) – Kentucky Court of Appeals

Taxi 7’s business is leasing taxicabs and related services, including dispatch and credit card processing to individuals, corporations, partnerships and other entities. Claimant signed a Lease agreement with Taxi 7 agreeing to pay $405 weekly for a cab lease, dispatch services, and credit card processing services, as well as $30 weekly for vehicle insurance. He also signed a paper titled “Status as a Self-Employed Businessperson,” in which he clearly acknowledged he was not an employee and not entitled to workers’ compensation benefits. Claimant could operate the cab as he saw fit, choose his hours, charge his own rates, and keep his collected fares.

Claimant filed for worker’s compensation benefits after being shot while driving. ALJ found Claimant was an independent contractor and Taxi 7 was a taxicab leasing company. While the ALJ did find that cab driving was an integral part of Taxi 7’s business of leasing cabs, the ALJ concluded that driving passengers was a distinct occupation different than the leasing of cabs.

The appellate Board reversed, finding that the ALJ incorrectly concluded that Taxi 7 was a taxicab leasing company rather than a taxicab company that employed the Claimant as a driver. The Court of Appeals reversed the Board, stating that the ALJ’s finding of fact that Taxi 7 was a taxicab leasing business and Claimant was not an employee was supported by the facts and not clearly erroneous. The Court emphasized Claimant received no remuneration from Taxi 7 and his earnings all came directly from his customers.

Should you have any questions or wish to discuss any related matters, please contact us at your convenience.

H. Douglas Jones, Esq. – djones@jsbattorneys.com, 859.594.4200

Margo Menefee, Esq. – mmenefee@jsbattorneys.com, 859.594.4200

H. Douglas Jones and Margo J. Menefee, JSB Attorneys, PLLC

So you’ve settled a workers compensation claim on a full and final basis with all waivers including reopening rights. Congratulations, now you can close that file and move on to the next. But wait, what if the employee dies after the settlement and the death is attributable to the work injury?

In Kentucky when an employee dies due to a work injury or occupational illness, the employee’s surviving spouse and dependents are entitled to “death benefits” per KRS 342.750. The weekly benefits payable to all beneficiaries in case of death can equate to as much as 75 percent of the average weekly wage of the state (current max is $688.34 weekly for injuries in 2021). Continued payment of those weekly benefits can continue until the date the deceased indemnity benefits would have ended per KRS 342.730 (age 70 or 4 years after injury, whichever occurs last).

In addition to the above weekly benefits, if the death occurs within four years of the date of injury, the deceased’s estate is entitled to a lump sum payment (currently $90,150.18 for injuries in 2021).

Death benefits can be quite the contingent liability, yet they are rarely discussed or analyzed as part of the settlement of a workers’ compensation claim. That’s because when we think of death benefits, we usually think of some catastrophic accident that has caused the death of the employee before that employee is able to adjudicate his/her own claim. The estate gets the lump sum payment, and the surviving spouse and dependents get weekly benefits as described above.

When settling a workers’ compensation claim with an injured worker, the parties usually don’t consider a possible future death relating to the work injury. However, what happens if a death occurs several years after the accident and after settlement of the underlying claim?

In the Supreme Court of Kentucky case Family Dollar v. Baytos, 525 S.W.3d 65 (Ky. 2017), the employee tore his aortic artery at work. He entered into a “full and final” settlement of all claims and died a year later as a result of the torn artery. His wife brought a claim for death benefits despite the prior settlement. The court affirmed the death benefit award, holding that death benefits are not derivative of the injured employee’s claim and therefore were not covered under the prior “full and final” settlement of her husband’s claim. Acknowledging that this interpretation of KRS 342.750 doubled the employers’ exposure, the court stated it was bound by the text of the statute.

KRS 342.750 creates a separate cause of action for surviving spouses and dependents when an injured worker dies as a result of a work injury, which results in a lingering contingent liability even after a claim is settled or paid in full. Whether the claimant can waive the rights of estates and death benefit recipients as part of a full and final settlement has not been resolved, but it is worth discussing death benefits as part of the settlement. We have included such waivers, along with additional consideration to the spouse as part of full and final settlements and would recommend exploring same when settling claims -- especially in high value and serious injury cases.