CHED JENNINGS v. RED, HOT & BLUE; LESLIE MCKINNEY; HON. THOMAS LEWIS, ARBITRATOR; HON. THOMAS A. NANNEY, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD
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RENDERED: July 13, 2001; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
2000-CA-000878-WC
CHED JENNINGS
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-90-24860
v.
RED, HOT & BLUE; LESLIE MCKINNEY;
HON. THOMAS LEWIS, ARBITRATOR;
HON. THOMAS A. NANNEY, ADMINISTRATIVE
LAW JUDGE; AND WORKERS’ COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BUCKINGHAM, JOHNSON AND TACKETT, JUDGES.
JOHNSON, JUDGE:
Ched Jennings has appealed from an opinion
rendered by the Workers’ Compensation Board on March 3, 2000,
that reversed an attorney’s fee award to him of $5,000.00.
Having concluded that pursuant to the recent Supreme Court case
of City of Louisville v. Slack,1 that KRS2 342.320(2)(c) is
unconstitutional and that Jennings is not entitled to relief, we
1
Ky., ___ S.W.3d ___, 2000 Ky. LEXIS 54 (rendered March 22,
2001, final April 12, 2001).
2
Kentucky Revised Statutes.
affirm.3
On January 15, 1998, Leslie McKinney filed a claim for
workers’ compensation benefits against her employer, Red, Hot and
Blue, alleging that she suffered an injury while she was
unloading a truck during the course of her employment.
The claim
was assigned to Arbitrator Thomas Lewis; and the employer
contested the following issues: (1) extent and duration of
disability, (2) exclusion of a portion of the impairment as being
due to the “natural aging process,” (3) due and timely notice,
3
Jennings also argues in his petition for review that the
employer, by failing to file a petition for reconsideration
pursuant to KRS 342.281, failed to properly preserve for review
the decision of the administrative law judge. Jennings contends
that if a party fails to file a petition for reconsideration
pursuant to KRS 342.281 that the party has waived its right for
appellate review. This argument is without merit.
KRS 342.281 provides:
Within fourteen (14) days from the date of
the award, order, or decision any party may
file a petition for reconsideration of the
award, order, or decision of the arbitrator
or administrative law judge. The petition
for reconsideration shall clearly set out the
errors relied upon with the reasons and
argument for reconsideration of the pending
award, order, or decision. All other parties
shall have ten (10) days thereafter to file a
response to the petition. The administrative
law judge shall be limited in the review to
the correction of errors patently appearing
upon the face of the award, order, or
decision and shall overrule the petition for
reconsideration or make any correction within
ten (10) days after submission [emphasis
added].
Clearly, the error alleged by the employer is not the type of
error that is required to be corrected under KRS 342.281. We
believe this statute is intended to apply to patent errors by the
ALJ, such as an error in a mathematical computation. In the case
sub judice, the issue of whether the employer prevailed was a
question of law that had been properly presented to the ALJ for
decision and thus was properly preserved for further review.
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(4) average weekly wage, (5) the compensability of certain
medical expenses, (6) whether the employer could choose a
treating physician pursuant to KRS 342.020, and (7) overpayment
of temporary total disability (TTD) benefits.
On September 2, 1998, the arbitrator rendered a benefit
review determination favorable to McKinney on the issues of
notice, exclusions due to the natural aging process,
compensability of medical expenses, choice of a treating
physician, and payment of TTD benefits.
The arbitrator awarded
McKinney permanent partial disability benefits based upon a 5%
impairment; and having found that she did not have the functional
capacity to return to her regular employment, he applied the 1.5
multiplier as provided for in KRS 342.730(1)(c)1 to her award.
On September 4, 1998, the employer filed a petition for
reconsideration on the issues of average weekly wage, the
duration of TTD, the use of the 1.5 multiplier, and vocational
rehabilitation benefits.
The claim was assigned to
Administrative Law Judge Thomas A. Nanney.
On September 24,
1998, the ALJ entered an order denying the petition for
reconsideration on the issues of average weekly wage, the
duration of TTD, and the use of the 1.5 multiplier, but he
sustained the employer’s objection to the award of vocational
rehabilitation benefits.
On October 15, 1998, the employer requested a hearing
before the ALJ on the following issues: (1) whether the alleged
work-related injury occurred, (2) due and timely notice, (3)
extent and duration of any disability, (4) average weekly wage,
(5) compensability of the contested medical expenses, (6)
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appropriate periods of TTD, and (7) whether sanctions should be
imposed against either party.
The ALJ conducted a hearing on these issues on March 3,
1999, and on August 17, 1999, he issued his decision.
In
discussing whether sanctions should be imposed on either party,
the ALJ stated:
Since the beginning of this litigation,
substantial amounts of time of the attorney’s
as well as this Administrative Law Judge have
been taken up with attempting to resolve
disputes between the attorneys as to
scheduling of deposition dates and numerous
other procedural aspects of the case. This
case is a prime example of how a total lack
of cooperation between counsel for the
parties can result in extreme delays and the
mushrooming of a relatively straightforward
case into a “federal case.” By this I, in no
way mean to minimize the importance of
plaintiff’s case or the defense of it.
Naturally, counsel on both sides point
fingers to one another and each claims to be
completely innocent of anything and asks me
to believe that they are the victim of the
unreasonable actions of the other side. I
have previously noted and I again state that
it is almost impossible to determine which
side is at fault for the problems which have
arisen in this case and I refuse to attempt
to do so as it would clearly result only in
further bickering between counsel for both
parties.
Nevertheless, as I have stated
previously in this opinion, I believe that
there were significant and close questions as
to plaintiff’s credibility. I, therefore, do
not believe that this is an appropriate case
for sanctions based upon an unreasonable
defense. Further, I do not believe that it
was unreasonable for the plaintiff to contest
the issue of wages. Therefore, all requests
for sanctions shall be denied.
The ALJ noted that the case presented a close question
as to whether the injury was work-related, but he found that
based on the uncontradicted testimony of McKinney, who was the
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sole witness to the incident, that she had established her basic
claim of a work-related injury.
However, the ALJ’s award of
benefits was significantly less than the benefits awarded in the
arbitrator’s decision: (1) the ALJ agreed with the employer as to
McKinney’s average weekly wage; (2) although he decided that
McKinney had a 5% impairment and awarded permanent partial
disability accordingly, the ALJ applied a .5 multiplier pursuant
to KRS 342.730(1)(c)2, rather than the 1.5 multiplier requested
by McKinney and used by the arbitrator; and (3) he found that
McKinney’s TTD benefits should end on October 7, 1997, rather
than March 3, 1998, as found by the arbitrator.
Thus, McKinney
received benefits that were significantly less than the benefits
the arbitrator had awarded her and significantly less than the
benefits she had sought.
On October 25, 1999, the ALJ entered an order awarding
Jennings an attorney’s fee in the amount of $5,241.40.
Of this
amount, $241.40 was to be paid from the proceeds of McKinney’s
award pursuant to KRS 342.320(2)(b), and the remaining $5,000.00
was to be paid directly to Jennings by the employer pursuant to
KRS 342.230(2)(c).
In his order, the ALJ stated:
In the instant case, it is found that the
Respondent’s claim has been practiced with a
high level of skill and competence and an
excellent result has been achieved. These
factors, together with recognition that the
attorney’s fee was contingent in nature and
no fee would have been payable in the event
an Award were not rendered, all mitigate in
favor of the approval of the maximum
attorney’s fee allowable.
The employer appealed this order to the Board and on March 3,
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2000, the Board reversed.
Jennings’ petition for review
followed.
The Board agreed with the employer’s basic argument
that KRS 342.230(2)(c) only authorizes an award of attorney’s
fees if the employer “does not prevail upon appeal.”
While the
employer concedes that it did not prevail upon all issues that it
raised before the ALJ, it contends that since it prevailed on
some issues and since McKinney ultimately received far less than
she was seeking, that it prevailed before the ALJ.
KRS 342.320(2)(c) provides:
Upon an appeal by an employer or carrier
from a written determination of an arbitrator
or an award or order of an administrative law
judge, if the employer or carrier does not
prevail upon appeal, the administrative law
judge shall fix an attorney’s fee to be paid
by the employer or carrier for the employee’s
attorney upon consideration of the extent,
quality, and complexity of the services
rendered not to exceed five thousand dollars
($5,000) per level of appeal. This
attorney’s fee shall be in addition to any
fee awarded under paragraphs (a) and (b) of
this subsection [emphasis added].4
The parties’ briefs and the oral arguments centered on
the meaning of the term “prevail,” which was not defined in the
statute.
However, since the oral arguments our Supreme Court has
rendered Slack, supra, which held KRS 342.320(2)(c) to be
unconstitutional.
In City of Louisville v. Slack, supra, the
Supreme Court, in a 4-3 decision, agreed with the arguments
advanced by the employer that the statute was unconstitutional
4
In 2000, the General Assembly amended Chapter 342 again and
eliminated the arbitrator, modified the attorney’s fees
provisions and repealed KRS 342.320(2)(c).
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and reversed the Court of Appeals.5
The Court opined that the
attorney’s fee statute had the single purpose “to punish an
employer who brings an appeal in good faith,” and it held the
statute to be both arbitrary and violative of an employer’s right
to procedural due process.6
Thus, the opinion of the Board reversing the award of
an attorney’s fee of $5,000 to the appellant, attorney Jennings,
pursuant to KRS 342.320(2)(c), is affirmed.
ALL CONCUR.
BRIEF AND ORAL ARGUMENT FOR
APPELLANT:
BRIEF FOR APPELLEE:
James G. Fogle
Louisville, KY
Ched Jennings
Louisville, KY
ORAL ARGUMENT FOR APPELLEE:
Sherri P. Brown
Lexington, KY
5
The Supreme Court also overruled Earthgrains v. Cranz,
Ky.App., 999 S.W.2d 218 (1999), which had held the statute to be
constitutional.
6
Slack, slip op. at 7.
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