WAL-MART STORES, INC. VS. COMPENSATION WELLS (DONALD GREG), ET AL.
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RENDERED: FEBRUARY 19, 2010; 10:00 A.M.
TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-001682-WC
WAL-MART STORES, INC.
v.
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-06-97979
DONALD GREG WELLS;
HON. DOUGLAS W. GOTT,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS’ COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: COMBS, CHIEF JUDGE; CLAYTON AND STUMBO, JUDGES.
STUMBO, JUDGE: Wal-Mart Stores, Inc., appeals the award of workers’
compensation benefits to Donald Wells. Wal-Mart argues that Wells was not
entitled to workers’ compensation benefits because he pursued a civil suit against
two third-party tortfeasors who were responsible for his injury. Wal-Mart claims
that the $900,000 settlement reached in the civil suit precludes Wells from also
being awarded workers’ compensation benefits. Wells argues that the
Administrative Law Judge (hereinafter ALJ) and Workers’ Compensation Board
(hereinafter Board) correctly awarded him benefits. We agree with Wells and
affirm.
On December 10, 2005, Wells suffered injuries from exposure to
carbon monoxide while working in a freezer for the Wal-Mart Distribution Center.
At the time Wells was exposed to the carbon monoxide, Wal-Mart had hired
contractors Atlas and Unarco to perform renovations to the freezer. These two
contractors were using generators in the non-ventilated freezer. They also were
using welding machinery. It was from these machines that Wells believed he was
exposed to the carbon monoxide.
Wells simultaneously pursued a workers’ compensation claim against
Wal-Mart and civil actions against Atlas and Unarco. The civil actions were
resolved first, with Atlas settling for $500,000 and Unarco settling for $400,000.
As for the workers’ compensation claim, the ALJ awarded Wells a total of
$440,659.21 in income benefits and past and future medical benefits.
Wal-Mart now claims that Wells should only be allowed to collect
from either the civil suits or the workers’ compensation claim, but not both. WalMart cites to KRS 342.700(1) which states:
Whenever an injury for which compensation is payable
under this chapter has been sustained under
circumstances creating in some other person than the
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employer a legal liability to pay damages, the injured
employee may either claim compensation or proceed at
law by civil action against the other person to recover
damages, or proceed both against the employer for
compensation and the other person to recover damages,
but he shall not collect from both. If the injured
employee elects to proceed at law by civil action against
the other person to recover damages, he shall give due
and timely notice to the employer and the special fund of
the filing of the action. If compensation is awarded
under this chapter, the employer, his insurance carrier,
the special fund, and the uninsured employer’s fund, or
any of them, having paid the compensation or having
become liable therefor, may recover in his or its own
name or that of the injured employee from the other
person in whom legal liability for damages exists, not to
exceed the indemnity paid and payable to the injured
employee, less the employee’s legal fees and expense.
The notice of civil action shall conform in all respects to
the requirements of KRS 411.188(2).
Wal-Mart argues the “but he shall not collect from both” language means Wells
can either collect from a civil suit or a workers’ compensation claim, not both as he
is trying to do.
The ALJ, Board, and Wells all disagree. We find there is plenty of
caselaw dispositive of this issue. Cincinnati Ins. Co. v. Samples, 192 S.W.3d 311
(Ky. 2006); AIK Selective Self Ins. Fund v. Bush, 74 S.W.3d 251 (Ky. 2002); and
Hillman v. American Mut. Liability Ins. Co., 631 S.W.2d 848 (Ky. 1982); among
others, all interpret the above statute to mean that one cannot collect workers’
compensation benefits from a workers’ compensation claim and a civil action. In
other words, if you collect on a workers’ compensation claim, you cannot collect
the awards in the civil action that mirror workers’ compensation benefits; i.e.,
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money for past and future medical expenses, lost wages, and the impairment of
power to earn money. If an employee does pursue both claims, then the employer
has a right to subrogation against the proceeds recovered in the civil action that
duplicate the workers’ compensation benefits. This prevents the employee from
receiving a double recovery.
The ALJ examined Wells’ $900,000 civil recovery to determine
which duplicated workers’ compensation benefits. The ALJ allotted $38,939.79
for past medical expenses, $265,200.00 for future medical expenses, $17,284.57
for lost wages, $175,000.00 for the impairment of power to earn money, and
$403,575.64 for past and future pain and suffering. The ALJ then found that
$444,080.36 duplicated workers’ compensation benefits and were amenable to a
claim of subrogation for Wal-Mart.
However, KRS 342.700(1) “requires that the employee’s entire legal
expense . . . be deducted from the employer’s or insurer’s portion of any recovery.”
Bush at 257. Wells’ attorney’s fees and expenses for the claim against Atlas were
$203,367.76. His fees and expenses for the claim against Unarco were
$113,901.00. In total, Wells’ fees and expenses equaled $317,268.76. As the ALJ
and Board found, this would give Wal-Mart a subrogation credit of $126,811.60
($444,080.36 minus $317,268.76).
We find that the reasoning of the ALJ, Board, and Wells comports
with statutory and caselaw and therefore affirm the amount of subrogation credit
owed to Wal-Mart.
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Wal-Mart also argues that as part of his tort settlement with Atlas,
Wells waived his right to bring a workers’ compensation claim. Wal-Mart brings
our attention to language contained in the settlement agreement which states that
Wells unconditionally released Atlas from any claims, agreed to satisfy all medical
and workers’ compensation liens and subrogation claims, and agreed to release
Atlas from all such liens and claims.
We find this issue to be without merit. Nothing in the settlement
agreement, especially the sections Wal-Mart brings to our attention, waives Wells’
right to pursue a workers’ compensation claim. In fact, the settlement sets out
exactly the requirements of KRS 342.700(1), that Wal-Mart has a subrogation
claim and that Wells must satisfy it. The ALJ and Board took this into
consideration when Wal-Mart received the subrogation credit of $126,811.60.
This means that Wal-Mart will not have to pay Wells $126,811.60 worth of
workers’ compensation benefits.
Based on the foregoing, we affirm the opinions of the ALJ and Board
in awarding Wells workers’ compensation benefits and giving Wal-Mart a
$126,811.60 subrogation credit.
ALL CONCUR.
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PETITION FOR REVIEW
FOR APPELLANT:
W. Bryan Hubbard
Donald C. Walton, III
Louisville, Kentucky
RESPONSE PETITION FOR
REVIEW FOR APPELLEE,
DONALD GREG WELLS:
James D. Holliday
Hazard, Kentucky
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