JIMMY HOWARD AND DICK ADAMS, ATTORNEY v. PEABODY COAL COMPANY; HON. J. LANDON OVERFIELD, ADMINISTRATIVE LAW JUDGE; WILLIAM EMRICK, ACTING EXECUTIVE DIRECTOR, OFFICE OF WORKERS' CLAIMS; CHRISTOPHER H. SMITH, EXECUTIVE DIRECTOR, KENTUCKY LABOR DEPARTMENT; GREGORY D. STUMBO, ATTORNEY GENERAL
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RENDERED: April 1, 2005; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-002477-WC
JIMMY HOWARD
AND DICK ADAMS, ATTORNEY
v.
APPELLANTS
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-03-01026
PEABODY COAL COMPANY;
HON. J. LANDON OVERFIELD,
ADMINISTRATIVE LAW JUDGE;
WILLIAM EMRICK, ACTING EXECUTIVE
DIRECTOR, OFFICE OF WORKERS’
CLAIMS; CHRISTOPHER H. SMITH,
EXECUTIVE DIRECTOR, KENTUCKY
LABOR DEPARTMENT; GREGORY D. STUMBO,
ATTORNEY GENERAL1
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
1
Attorney General Gregory D. Stumbo did not participate in this appeal,
having given notice to the Board of his intention not to intervene,
indicating “that the parties already before the Workers’ Compensation Board
adequately represent all the interests in regard to the constitutionality of
KRS 342.732(1)(a) and 803 KAR 25:125 for which reason he respectfully
declines to appear herein to defend the challenged statute.”
BEFORE:
TACKETT AND VANMETER, JUDGES; MILLER, SENIOR JUDGE.2
MILLER, SENIOR JUDGE:
Appellants, Jimmy Howard (Howard) and
Dick Adams, Attorney (Adams), have petitioned for review of an
opinion of the Workers’ Compensation Board (Board) entered on
November 5, 2004, which affirmed a decision of the
Administrative Law Judge (ALJ) rendered on July 9, 2004, that
denied Adams an attorney fee for services rendered to Howard in
obtaining an award of Retraining Incentive Benefits (RIB)
against appellee Peabody Coal Company (Peabody).
Before us appellants argue that 803 KAR3 25:125, which
sets out the computation of attorney fee in RIB award cases, is
an unconstitutional violation of federal and state equal
protection rights;4 that the award of an RIB claimant’s attorney
fee should be governed by Kentucky Revised Statutes (KRS)
342.320(2)(A); that 803 KAR 25:125 violates public policy; and
that the ALJ’s weekly award rate was computed incorrectly.
We
conclude that Adams’ request for attorney fees is premature and
affirm the Board.
Howard, born October 30, 1950, worked in coal mines
for over thirty years until being laid off on December 2, 2002,
2
Senior Judge John D. Miller sitting as Special Judge by assignment of the
Chief Justice pursuant to Section 110(5)(b) of the Kentucky Constitution and
Kentucky Revised Statutes 21.580.
3
Kentucky Administrative Regulation.
4
United States Constitution, 14th Amendment; Kentucky Constitution, Sections
I, II, and III.
-2-
due to the mine closure.
Following unrebutted evidence of
Howard’s Coal Worker’s Pneumonoconiosis (CWP) claim, the ALJ
concluded, pursuant to KRS 342.732(1)(a)1, that Howard suffered
from the disease of CWP, category 1, and awarded Howard a one
time only RIB of $103.25 per week for a period not to exceed 104
weeks.
Despite KRS 342.732(1)(a)2 and 3’s prerequisite that
receipt of said benefits was contingent upon enrollment and
active and successful participation as a full-time student in a
bona-fide training or education program, the record is void of
any documentation certifying compliance.
On June 24, 2004, Adams filed a motion for approval of
attorney fee in the amount of $2,147.60.
A fee agreement signed
by both appellants indicating payment of attorney fee upon
recovery of an award of benefits was attached to the motion.
The motion did not reference any enrollment by Howard in a
training or education program.
On July 9, 2004, the ALJ
overruled the motion, stating:
Pursuant to 803 KAR 25:125, counsel for
[Howard] is entitled to an attorney’s fee
for a retaining [sic] incentive benefit
(RIB) award only if [Howard] has enrolled in
a bona fide retraining program or GED
program and is actually receiving payments
as a result of the award. There has been no
showing by counsel for [Howard] that such is
the case.
Appellants thereafter appealed to the Board, raising
the same three issues pertaining to attorney fees raised herein.
-3-
Appellants also raised for the first time a computational error
in Howard’s award.
The Board affirmed the ALJ on the attorney
fee issues, noting that it was without authority to address the
constitutional issues.
Although stating with regard to the
computational issue that the award appears “incorrect on its
face,” the Board concluded that it had no jurisdiction to reach
this issue because Howard failed to preserve or timely appeal
it.
The Board noted, however, that Howard could seek correction
of the erroneous calculation by way of a motion to reopen.
This
petition for review follows.
Our standard of review of a decision of the Board “is
to correct the Board only where the the (sic) Court perceives
the Board has overlooked or misconstrued controlling statutes or
precedent, or committed an error in assessing the evidence so
flagrant as to cause gross injustice.”
Western Baptist Hospital
v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992).
Additionally in
this case, because appellants are claiming that a duly enacted
regulation is unconstitutional, our review of those issues is de
novo.
Commonwealth v. DLX, Inc., 42 S.W.3d 624 (Ky. 2001).
Appellant Adams first contends that 803 KAR 25:125
violates state and federal equal protection rights and public
policy.
803 KAR 25:125, titled “Computation of attorney fee in
award of retraining incentive benefits pursuant to KRS
342.732(1)(a) and interim attorney fee motions,” is promulgated
-4-
under the statutory authority of KRS 342.260(1).
That section
requires the commissioner to promulgate administrative
regulations necessary to implement the workers’ compensation
chapter.
The regulation is also enacted pursuant to KRS
342.270(3), which requires the commissioner to promulgate an
administrative regulation to establish procedures for the
resolution of claims, and KRS 342.732 and 342.792, which set
forth the requirements for retraining incentive benefits.
Additionally, as stated in the “Necessity, Function, and
Conformity” section of the regulation, it:
(E)stablishes requirements for computing
attorney’s fee awards for claims for
retraining incentive benefits in order to
assist with the claims process and allow
claimants to obtain appropriate legal
assistance from an attorney.
803 KAR 25:125, Section 1(2), directs the claimant’s attorney to
file a motion to request an attorney fee “(i)f benefits are
awarded for retraining pursuant to KRS 342.732(1)(a).”
Section
2(1)(a) provides for payment of the attorney fee if the claimant
“(i)s enrolled and has been accepted in a bona fide training
program or GED program” and (b) “(d)oes not defer the beginning
of benefits pursuant to KRS 342.732(1)(a)5.”
Section 2(2)
directs payment based on the number of weeks of retraining
completed by the claimant at the time the motion for attorney
fee is filed.
-5-
Appellant Adams’ specific constitutional complaint is
that he is being treated differently than the employer’s
attorney because his attorney fee is based on a successful claim
and his client’s enrollment in training, while pursuant to KRS
342.320(8), the employer’s attorney gets paid a fee regardless
of the outcome of the case.
He also complains that the
regulation is violative of public policy by discouraging
attorneys from representing RIB claimants.
Adams’ also argues that KRS 342.320(2)(a)5, which sets
the formula for computing contingent attorney fees following
successful resolution of the case, is exceeded in scope and
authority by 803 KAR 25:125, which places prerequisites and
procedures governing when and under what circumstances
contingency fees are due in RIB cases.
We find no merit in any of these contentions.
We are
of the opinion that the case of Baker v. Shamrock Coal Company,
Inc., 985 S.W.2d 755 (Ky. 1999), is dispositive.
In that case,
the Supreme Court concluded that an award of attorney fees was
premature until the RIB claimant was eligible to receive the
award.
In Baker, the successful claimant continued working and
5
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 percent (20%) of the first twenty-five thousand dollars ($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 twelve thousand dollars ($12,000). This fee shall be paid
by the employee from the proceeds of the award or settlement.
-6-
had not enrolled at the time the motion for attorney fee was
made.
Similarly, here, the successful claimant has not yet
demonstrated compliance with retraining.
As such, Adams’ award
of attorney fees is premature.
Finally, it is agreed by the Board and all parties
that the ALJ erred in arriving at the weekly benefit rate of
Howard’s award.
In addressing this issue, the Board stated:
[Howard] is correct that, although the
parties stipulated Howard was earning
sufficient wages to qualify for the state
maximum benefit rate, the ALJ only granted
benefits in the amount of $103.25 a week for
a period not to exceed 104 weeks. The award
therefore would appear to be incorrect on
its face. . . That having been said . . .
Howard may still seek a correction of the
ALJ’s erroneous calculation by way of a
motion to reopen. Cf. Whittaker v. Reeder,
Ky., 30 S.W.3d 138 (2000); Wheatley v.
Bryant Auto Service, Ky., 860 S.W.2d 767
(1993).
We find no error in the Board’s decision on this issue.
Although we have felt compelled to affirm the Board
under the authority of Baker, we are unable to determine from
the record if, since the RIB award, Howard has become physically
unable to be retrained.6
If it is proven that Howard became
6
The record on appeal does contain a “Notice of Deferral” filed by Howard in
which he elects to defer commencement of RIB benefits for up to 365 days
until such time as his health permits fulfillment of the training aspect of
the regulation. This notice, however, was filed after the ALJ’s overruling
of Adams’ attorney fee motion. We also note that a medical report, dated
after the ALJ’s RIB award, is appended to appellants’ brief. The report
gives one doctor’s opinion that Howard is not a good candidate for
rehabilitation. We cannot, however, consider these documents in this appeal
as they were not before the ALJ.
-7-
unable to undergo retraining after the RIB award it would seem
that the matter of attorney fees could be squarely presented to
the ALJ at that time.
The question then will be whether the
applicable statutes and regulations shall be interpreted to
authorize an attorney fee to claimant’s counsel.
We express no
opinion on this.
For the foregoing reasons, the Opinion of the Workers’
Compensation Board is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
Dick Adams
Madisonville, Kentucky
BRIEF FOR APPELLEE PEABODY
COAL COMPANY:
Peter J. Glauber
Louisville, Kentucky
BRIEF FOR APPELLEE CHRISTOPHER
H. SMITH:
Robert L. Whittaker
Frankfort, Kentucky
-8-
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