ROBERT L. WHITTAKER, ACTING DIRECTOR OF SPECIAL FUND v. MAGOFFIN COAL CORPORATION; GRADY BURSON; HON. W. BRUCE COWDEN, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD
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RENDERED: May 7, 1999; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1998-CA-001913-WC
ROBERT L. WHITTAKER,
ACTING DIRECTOR OF
SPECIAL FUND
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-85-017853
v.
MAGOFFIN COAL CORPORATION;
GRADY BURSON;
HON. W. BRUCE COWDEN,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS' COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
GUIDUGLI, HUDDLESTON AND McANULTY, JUDGES.
GUIDUGLI, JUDGE.
Robert L. Whittaker, Acting Director of
Special Fund (Special Fund), appeals from an order of the
Workers’ Compensation Board (Board) which held that it was
required to pay the entirety of benefits awarded to appellee,
Gary Burson (Burson), in the event that he lives past his life
expectancy.
We affirm.
Because of the unusual procedural aspects of this case,
a review of the steps this matter took in reaching us is in
order.
Burson sustained a work-related injury on June 18, 1985.
An opinion and award entered May 19, 1988, found Burson to be 50%
occupationally disabled.
Liability was apportioned 40% to his
employer, Magoffin Coal Corporation (MCC), and 10% to the Special
Fund.
In 1991 Burson moved to reopen his claim alleging that
he was now 100% occupationally disabled.
Burson’s motion was
granted, and in an opinion and award entered May 21, 1993, the
Administrative Law Judge (ALJ) found him to be 100%
occupationally disabled.
In apportioning liability, the ALJ
found that the doctrine of res judicata required him to apply the
same apportionment ratios set forth in the 1988 award and
apportioned liability 80% to MCC and 20% to the Special Fund.
On May 28, 1993, the Special Fund filed a petition for
reconsideration.
In its petition, the Special Fund relied on
Newburg v. Damron, No. 90-31991, rendered by the Board on May 14,
1993, for the proposition that in the event a claimant outlives
his life expectancy, the employer and the Special Fund are to pay
the claimant their respective share of the weekly benefit owed
for each week the claimant outlives his life expectancy.
The
Special Fund’s petition was denied.
Following denial of its petition for reconsideration,
the Special Fund filed its notice of appeal to the Board on
July 9, 1993.
On the same day, the Special Fund also filed a
motion seeking to hold the appeal in abeyance on the ground that:
The issue presented by this appeal concerns
the payment liability on apportioned awards
should the claimant live beyond the life
expectancy set forth in the U.S. Decennial
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Life Tables. That issue is now before the
Court of Appeals in Pickands-Mather & Co. v.
Newburg, 93-CA-001382, (on appeal from
Newburg v. Damron, W.C.B. No. 90-31991 & 8920787). A final decision in that case will
be dispositive of the within appeal.
The Special Fund’s motion was granted by order entered July 30,
1993.
While the Special Fund’s appeal was in abeyance, the
Kentucky Supreme Court rendered its decision in Newberg v.
Weaver, Ky., 866 S.W.2d 435 (1993).
The question in Weaver was
whether the Special Fund’s liability could be accelerated when
the claimant and employer enter into a pre-award settlement
calling for periodic payments throughout the claimant’s lifetime
instead of a lump-sum payment.
In its opinion, the Court
discussed the case of Newburg v. Chumley, Ky., 824 S.W.2d 413
(1992):
[In Chumley], we ruled that neither Palmore
v. Helton, [Ky., 779 S.W.2d 196 (1989)], nor
KRS 342.120 entitled a worker who reached a
pre-award lump-sum settlement with his
employer to receive during his life
expectancy an amount of benefits from the
Special Fund greater than he otherwise would
have received. When payment of the Special
Fund’s share of the award was complete,
payment would be suspended until such time as
the worker lived beyond his anticipated life
expectancy. We also noted that KRS 342.120
controls the distribution of benefits during
the worker’s life expectancy. It does not
address the procedure to be followed where
the worker lives beyond his anticipated life
expectancy. Because the worker and the
employer in that case had reached a
settlement and its terms had been fulfilled,
the employer’s obligation was complete.
However, if the worker lived beyond his life
expectancy the Special Fund would, at that
time, resume payment for its percentage of a
total disability award for so long as the
worker lived.
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Weaver, 866 S.W.2d at 437.
(Emphasis added).
The Court
ultimately held that the periodic payments under a settlement
cannot extend “beyond the percent of the worker’s life expectancy
represented by the percent of disability to which the parties
have agreed... .
After the employer’s obligation was paid in
full, the obligation of the Special Fund would come due.”
Id. at
438.
On May 9, 1994, the Board entered an opinion and order
on the Special Fund’s appeal in this case wherein it removed the
appeal from abeyance on its own motion.
The Board held:
In Newberg v. Weaver, Ky., 866 S.W.2d 435
(1993), the Supreme Court held that if a
worker lived beyond his life expectancy, the
Special Fund would then be responsible for
“its percentage of a total disability award
for so long as the worker lived.” (emphasis
added). Accord Newberg v. Chumley, Ky., 824
S.W.2d 413, 417 (1992). In the judgment of
this Board, the cited authority establishes
that the legal payment scheme for a total
disability award is: First, the employer pays
the full weekly benefit for a period
commensurate to its apportioned liability;
secondly, the Special Fund pays the full
weekly benefit commencing with the
termination of the employer’s payment period
and extending through the date upon which
claimant reaches his projected life
expectancy; and thirdly, the employer and the
Special Fund pay their respective
proportionate shares of the weekly benefits
for the balance of the claimant’s life.
Based upon its holding, the Board remanded the matter to the ALJ
with instructions to enter an award in conformity with its
opinion.
Unfortunately for all involved and for reasons which do
not appear of record, the ALJ waited until March 16, 1998, to
enter an amended order in accordance with the Board’s opinion and
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order.
During this four year period, the Pickands case wound its
way through this Court and the Kentucky Supreme Court.
In a
published opinion rendered on March 23, 1995, the Court held that
once a claimant outlives his life expectancy, the Special Fund is
liable for the entire weekly benefit for as long as the claimant
remains disabled.
S.W.2d 3, 4 (1995).
Pickands Mather & Co. v. Newberg, Ky., 895
In ruling as it did, the Court found that
the Special Fund’s reliance on Weaver for the proposition that it
was only required to pay its proportional share once the claimant
exceeded his life expectancy was misguided.
at 4.
Pickands, 895 S.W.2d
Despite the ruling in Pickands, the ALJ amended his order
in accordance with the Board’s instructions to hold that MCC and
the Special Fund would each pay their proportionate share of
benefits in the event Burson outlives his life expectancy.
Following entry of the ALJ’s order, MCC appealed,
arguing that Pickands controls the apportionment of benefits in
the event Burson exceeds his life expectancy and that the ALJ
erred in apportioning the benefits in accordance with Weaver.
The Board agreed, and in an order entered June 26, 1998, held:
Upon remand, the ALJ entered an order
precisely as directed by this Board.
Normally we would be precluded from
considering the issue raised here based upon
the law of the case. See Inman vs. Inman,
Ky., 648 SW2d 847 (1982). However, we
believe that exceptions to this rule exist,
one of which would be when there has been an
alteration in the interpretation of the law
between the time this Board entered its
decision and the entry of the order on remand
and re-appeal. That is precisely what has
occurred in this claim.
The ultimate issue
is easily resolved. The question relates to
the payment of benefits in the event that the
injured worker outlives his life expectancy
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when a total disability is involved. It is
an issue that has been resolved since the
Supreme Court rendered its decision in
Pickands [citation omitted]. Our ultimate
holding is that the matter must be reversed
and remanded for the ALJ to enter an award in
accordance with [Pickands] directing that in
the event Burson outlives his life expectancy
that the Special Fund (“SF”) shall be
responsible for the entirety of any
disability benefits due.
...
In other words, the impact of [Pickands] was
that our opinion of May 6, 1994, was
erroneous and our reliance upon Weaver was
misplaced. Since the issue had not become
finalized, it is appropriate upon remand for
the ALJ to enter an award in accordance with
[Pickands] directing the SF to pay the
entirety of the benefits in the event that
Burson outlives his life expectancy.
Accordingly, the decision of Hon. W. Bruce
Cowden, Jr., Administrative Law Judge, is
hereby REVERSED AND REMANDED for entry of an
award in conformity with this opinion.
The Special Fund has now appealed directly from the Board.
Before addressing the merits of the appeal, we first
note that this whole situation could have been avoided had the
Board not removed the case from abeyance on its own motion.
By
proceeding without first waiting for this exact issue to be
resolved in Pickands as requested by the Special Fund, the Board
set into motion a chain of events which resulted in the dilemna
currently before us.
The Board is not entirely to blame,
however, given the fact that almost four years elapsed between
the initial Board’s opinion and the entry of the ALJ’s order
amending his original opinion.
Had either the Board waited for
the Pickards decision to be rendered or the ALJ timely entered
his order, this matter would have been resolved years ago.
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Instead, the parties have been exposed to unnecessary, lengthy
and expensive litigation.
We must also
address MCC’s contention that the Special
Fund has not appealed from a final order because the Board
remanded the matter to the ALJ.
Because the Board’s order would
result in a disposition which would terminate the matter, there
is no problem with finality in this case.
King Coal Co. v. King,
Ky. App., 940 S.W.2d 510, 511 (1997).
We now address the merits.
The Special Fund maintains
that the effect of the Board’s opinion is to give Pickands
improper retroactive effect.
The Special Fund argues that the
law in effect on the date of injury controls, and that the law in
effect on July 18, 1985, should control apportionment in this
case.
Under the law of the case doctrine, “if an appellate
court has passed on a legal question and remanded the cause to
the court below for further proceedings, the legal questions thus
determined by the appellate court will not be differently
determined on a subsequent appeal in the same case.”
Inman, Ky., 648 S.W.2d 847, 849 (1982).
Inman v.
There is, however, an
exception to the doctrine of the law of the case.
Notwithstanding the firmness of [the law
of the case] rule in general, a number of
courts have maintained and held that the rule
is not inflexible but is subject to
exception, although the exception must be
rare and the former decision must appear to
be clearly and palpably erroneous. In such a
case it is deemed to be the duty of the court
to admit its error rather than to sanction an
unjust result and “deny to litigants or
ourselves the right and duty of correcting an
error merely because of what we may be later
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convinced was merely our ipse dixit in a
prior ruling in the same case.” McGovern v.
Kraus, 200 Wis. 64, 227 N.S. 300, 305, 67
A.L.R. 1381. That opinion thoroughly
considers the qualification of the rule where
the error in a former decision was great.
The court notes the analogy of sustaining
petitions for rehearing which substantially
change the position and views of the court
from those originally taken. Upon sensible
and cogent reasons for making an exception in
an extraordinary case, the court modified the
practice formerly established in Wisconsin
and, as indicated above, reserved unto itself
a right and recognized the duty to correct a
prior ruling made by it in the same case
whenever the error was great and substantial
and proper reasons exist for doing do.
Union Light, Heat & Power Co. v. Blackwell’s Adm’r., Ky., 291
S.W.2d 539, 542 (1956).
Union has not been overturned, and it
appears that courts are not required to abide by an erroneous
opinion made on a former appeal.
See, Frenel v. Commonwealth,
Department of Highways, Ky., 361 S.W.2d 280 (1962); Folger v.
Commonwealth, Department of Highways, Ky., 350 S.W.2d 703 (1961).
We believe this case to be one of the rare exceptions to which
the Union exception applies.
First, prior to Pickands there was no clear
determination of the issue at hand.
Second, due to the way this
case has been handled by the Board and the ALJ, the decision
rendered by the Board under Weaver had never become final, and as
such, was still subject to change.
Had the ALJ entered his
amended order in a timely fashion prior to Pickands and had the
matter become final, our decision may have been different.
Having considered the parties’ arguments on appeal, the
decision of the Board is affirmed and this matter is remanded to
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the ALJ with instructions to amend his order to comply with the
Board’s opinion and order of June 26, 1998.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE, MAGOFFIN
COAL COMPANY:
Benjamin C. Johnson
Appellate Attorney for Special
Fund
Louisville, KY
John T. Chafin
Prestonsburg, KY
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