HOBART MASON D/B/A KENTUCKY FARM EQUIPMENT v. RANDALL PATRICK MULLINS
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RENDERED:
February 26, 1999; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1997-CA-001191-MR
HOBART MASON
D/B/A KENTUCKY FARM EQUIPMENT
APPELLANT
APPEAL FROM LINCOLN CIRCUIT COURT
HONORABLE WILLIAM T. CAIN, JUDGE
ACTION NO. 97-CI-000015
v.
RANDALL PATRICK MULLINS
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: COMBS, HUDDLESTON, AND KNOPF, JUDGES.
KNOPF, JUDGE:
Hobart Mason, d/b/a Kentucky Farm Equipment
(Mason) appeals from a circuit court judgment enforcing a
workers’ compensation award.
Finding no error, we affirm.
In November 1994, the appellee, Randall Patrick Mullins
(Mullins), was injured during the course of his employment with
Mason.
After filing a claim for workers’ compensation benefits,
the Administrative Law Judge (ALJ) found Mullins to have a twenty
percent (20%) occupational disability, and awarded temporary
total disability benefits accordingly.
Mason to pay Mullins’s medical expenses.
The ALJ also directed
The ALJ further
assessed a fifteen percent (15%) penalty against Mason for
violation of safety regulations.
KRS 342.165.
The Workers’
Compensation Board (Board) affirmed the award on appeal.
In January 1997, Mullins brought a petition in Lincoln
Circuit Court, pursuant to KRS 342.305, to enforce the award and
to reduce to present value the total of the future payments due
under the award.
A copy of the petition was served upon Mason’s
counsel, but not directly to Mason.
response to the petition.
Mason did not file a
On March 6, 1997, the trial court
entered a judgment for Mullins, directing that all future
payments due under the award be commuted and reduced to a lump
sum which will equal the present value of the total sum of the
probable future payments discounted at four percent (4%) true
discount compounded annually on each payment.
On March 17, Mason filed motions pursuant to CR 59.05
and CR 60.02, to set aside the judgment on the grounds that he
had not been served notice of the action, and that he was
entitled to a credit for payments previously made.
The trial
court denied the motion to set aside the judgment.
This appeal
followed.
Mason again argues that the circuit court was without
jurisdiction to enter a judgment because it had not been
personally served.
Nonetheless, the function and duty of the
circuit court under KRS 342.305 is merely to enforce the order of
the ALJ by rendering a judgment in accordance with the award.
KRS 342.305 is a summary, ex parte procedure for obtaining a
judgment on a workmen's compensation award.
The only notice
called for is a notice given by the court after the judgment is
entered.
Fruchtenicht v. U.S. Fidelity & Guaranty Co., Ky., 451
-2-
S.W.2d 835, 837 (1969).
Therefore, service of process pursuant
to CR 4.04(2) was not required.
Mason next contends that the trial court erred in
commuting the future payments to a lump sum.
We disagree.
KRS
342.305 authorizes the circuit court to reduce a periodic
compensation award to a lump sum.
Hereford v. Storms, Ky. App.,
808 S.W.2d 819, 820 (1990).
Along the same line, Mason argues that he was entitled
to a credit for payments which its insurer made to Mullins.
At
the time of Mullins’ injury, Mason did not have workers’
compensation coverage for his employees.1
However, Mason did
have medical and disability insurance coverage through Employers’
Underwriters, Inc.,(Employers).
Employers paid Mullins’ medical
expenses, and made disability payments totaling $4,050.00 to
Mullins up to the date of the ALJ’s order.
Mason contends that
it was entitled to a “dollar for dollar” credit for those
payments which Employers made to Mullins.
We disagree.
The Supreme Court recently held that
payments made pursuant to an employee benefit plan may not be
credited against workers’ compensation benefits.
Williams v.
Eastern Coal Corp., Ky., 952 S.W.2d 696, 698-701 (1997).
Therefore, Mason is not entitled to credit for disability
payments made by its insurer to Mullins.
1
In the proceedings before the ALJ, Mason argued that
Mullins voluntarily waived workers’ compensation coverage. The
ALJ found that Mullins did not sign a valid rejection notice
prior to the injury, and thus had not voluntarily waived coverage
under the Act.
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Moreover, we recognize the strong public policy against
double recovery.
See, Hardaway Management Co. v. Southerland,
Ky., 977 S.W.2d 910, 918 (1998).
However, an employer is only
entitled to credit with respect to those portions of the judgment
which duplicate payments previously made under an insurance
policy.
Id. at 919.
The circuit court judgment represents the
present value of Mullins’ future benefits.
Since these benefits
do not overlap with the benefits paid by Mason’s insurer, we find
no equitable grounds which would entitle Mason to credit.2
Mullins argues that this Court should remand the action
to circuit court with instructions to increase the judgment
commensurate with the amount of credit which was given to Mason
by the ALJ in the original award.
However, Mullins did not raise
this issue before the circuit court, and he failed to file a
cross-appeal from the circuit court judgment on this issue.
Consequently, this Court is without authority to grant the relief
requested.
Last, Mullins asks this Court to impose sanctions upon
Mason, pursuant to CR 11, for filing a frivolous appeal.
CR
73.02(4) permits this Court to award costs and damages upon a
determination that an appeal is so lacking in merit that it
appears to have been taken in bad faith.
If the Court finds that
the appeal is totally lacking in merit in that no reasonable
attorney could assert such an argument, bad faith may be
inferred, and the appeal is frivolous.
2
The factors to be
Furthermore, we note that the ALJ credited Mason with the
payments made to Mullins by Employers under the disability
insurance policy.
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considered must necessarily be in the record which can be
reviewed objectively.
Leasor v. Redmon, Ky., 734 S.W.2d 462, 464
(1987).
Mullins contends this appeal was taken for no other
reason than to delay collection of the workers’ compensation
award.
We find considerable support for this position.
When
Mason filed its notice of appeal from the circuit court judgment,
the Supreme Court had not yet issued its ruling in Williams v.
Eastern Coal Corp., supra.
The Supreme Court in Williams
overruled a line of cases which suggested that an employer may be
entitled to credit against workers’ compensation benefits to the
extent that they are duplicative of benefits provided under an
employer-funded disability benefit package.
Id. 952 S.W.2d at
700-01.
Yet even under the law in effect prior to Williams, we
question the merit of Mason’s position.
In his opinion and
award, the ALJ credited Mason for the disability benefits paid by
Employers.
Record on Appeal [ROA], pp. 20, 22.
consequently,
Mason cannot reasonably argue that Mullins reaped a double
recovery.
The purpose of KRS 342.305 is to provide an expedited
means to obtain judicial enforcement of a workers’ compensation
award.
Although we find that Mason’s position is without merit
under both the current and the prior case law, we recognize that
the conflicting rulings have created come ambiguity.
Reasonable
persons could differ on the justification for Mason’s appeal.
Therefore we decline to impute to Mason an improper motive in
bringing this appeal and choose not to impose sanctions.
-5-
Accordingly, the judgment of the Lincoln Circuit Court
is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
Cabel Francis
Francis & Francis
Stanford, Kentucky
Jackson W. Watts
Versailles, Kentucky
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