OWENSBORO MUNICIPAL UTILITIES, as insured by KACO V. RICHARD LYNN MOSELEY; OWENSBORO MUNICIPAL UTILITIES, SPECIAL FUND; HONORABLE SHEILA LOWTHER, ADMINISTRATIVE LAW JUDGE and WORKERS' COMPENSATION BOARD
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RENDERED: June 18, 1999; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1998-CA-002358-WC
OWENSBORO MUNICIPAL UTILITIES,
as insured by KACO
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS' COMPENSATION BOARD
ACTION NO. 96-92937
v.
RICHARD LYNN MOSELEY;
OWENSBORO MUNICIPAL UTILITIES,
as insured by MARYLAND CASUALTY
and GREAT AMERICAN INSURANCE;
SPECIAL FUND; HONORABLE SHEILA
LOWTHER, ADMINISTRATIVE LAW JUDGE
and WORKERS’ COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING IN PART, REVERSING IN PART
AND REMANDING
** ** ** ** **
BEFORE:
EMBERTON, GARDNER AND MILLER, JUDGES.
GARDNER, JUDGE:
Owensboro Municipal Utilities (OMU) as insured
by KACO (KACO) appeals from an opinion of the Workers’
Compensation Board (the board) affirming an opinion of the
Administrative Law Judge (ALJ) which found the employee in this
case, Richard Moseley (Moseley), to be one hundred percent
occupationally disabled and apportioned responsibility fifty
percent to OMU as insured by KACO and fifty percent to the
Special Fund.
After reviewing the arguments raised by KACO, the
record below and the applicable law, this Court affirms in part,
reverses in part and remands for proceedings consistent with this
opinion.
Moseley began employment with OMU in 1972 and worked
for OMU until July 1997.
While employed with OMU, he served as a
fuel system operator, mechanic and maintenance worker.
Moseley
has suffered from various back problems throughout the years,
beginning in the 1970s.
In March 1985, Moseley suffered a back
strain while cutting a steel channel at work.
He saw several
physicians around that time and in the following years, but
returned to work after the incident.
In August 1992, Moseley
injured his back at work when he fell and was struck by a cable.
Moseley received medical treatment following this incident and
was off work from August 1992 until January 1993.
KACO, the
insurer for OMU in August 1992, voluntarily paid Moseley
temporary total disability benefits (TTD)from August 21, 1992,
through January 4, 1993.
Moseley returned to work in January 1993.
He worked
from January 1993 until November 1993 as a maintenance supervisor
which was less strenuous than his prior position.
He returned to
his previous position in November 1993 and worked there until
March 8, 1996.
On that date, he was pushing a 1,500 pound tool
box, and his back went out.
Following this event, his pain
worsened and he saw Drs. Oexmann and Arendall.
Arendall after
having an MRI, myelogram and other tests conducted, determined
that surgery was indicated.
A lumbar laminectomy was performed
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in October 1996.
Surgery revealed that Moseley had a lateral
recess decompression and a posterior foraminotomy which is a
narrowing of the nerve canal resulting from calcium deposits,
which decompresses the nerve.
disc.
Moseley did not have a ruptured
Moseley reached maximum medical recovery in June 1997 but
was never released by his physician to return to his previous
work.
His employment was terminated by OMU in 1997, because
there were no positions available which matched the restrictions
placed on Moseley.
OMU as insured by Great American Insurance
Company (Great American) voluntarily paid TTD benefits from March
8, 1996, through August 27, 1996.
Voluntary benefits were also
paid pursuant to the agreed order by KACO and Great American
jointly from late 1996 until early 1997.
A claim for workers’ compensation benefits was filed in
1992, and Moseley filed an application for adjustment of his
claim following the 1996 work incident.
The case proceeded, and
in January 1998, the ALJ issued an opinion and award.
The ALJ
concluded that the 1985 work incident did not result in any
occupational disability to Moseley.
She thereby dismissed OMU’s
insurer in 1985, Maryland Casualty, from the action.
After
reviewing the medical evidence, the ALJ concluded that Moseley
sustained a compensable work-related injury on August 20, 1992,
and that this injury aroused into disabling reality a congenital
abnormality in Moseley’s spine, which became symptomatic.
She
concluded that Moseley’s current problems are the end result of
the 1992 injury and that the 1996 injury he suffered exacerbated
his symptoms.
She also concluded that the Special Fund was
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responsible for one-half of all benefits award and that KACO, the
1992 insurance provider, was responsible for the other fifty
percent.
She found that Moseley’s future medical expenses were
the responsibility of KACO.
$190 per week from KACO.
Specifically, she awarded Moseley
This amount represented fifty percent
occupational disability from and after August 29, 1992, for all
periods of time during which Moseley was unable to work and
continuing for as long as Moseley is disabled.
She provided that
during the periods that Moseley was able to work, no occupational
disability benefits were payable.
She awarded the same amounts
to Moseley against the Special Fund.
She dismissed Moseley’s
claims for benefits from the 1985 and 1996 injuries.
The ALJ
subsequently denied a petition for reconsideration of the opinion
and award.
KACO appealed to the board which affirmed the ALJ.
KACO has now appealed to this Court.
KACO first argues that as a matter of law, the 1996
injury is compensable, and some percentage of occupational
disability must be attributed to that injury.
After reviewing
the record below, this Court concludes that the ALJ’s findings
regarding the 1992 and 1996 injuries are contrary to the medical
evidence presented and the applicable law, and thus we must
reverse on this issue.
A claimant in a workers’ compensation case bears the
burden of proof and the risk of persuasion before the ALJ.
REO
Mechanical v. Barnes, Ky. App., 691 S.W.2d 224, 226 (1985),
quoting Wolf Creek Collieries v. Crum, Ky. App., 673 S.W.2d 735
(1984).
If the claimant succeeds, the question on appeal before
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the reviewing tribunal is whether the decision of the ALJ is
supported by substantial evidence.
Id.
If the claimant is
unsuccessful and appeals, the question is whether the evidence
was so overwhelming, upon consideration of the entire record, as
to have compelled a finding in his or her favor.
Id.
See also
Western Baptist Hospital v. Kelly, Ky., 827 S.W.2d 685 (1992).
The function of further review of the board’s opinion in this
Court is to correct the board only where this 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.
v. Kelly, 827 S.W.2d 687-88.
Western Baptist Hospital
A reviewing court must determine
whether an ALJ applied the correct rule of law to the facts he or
she found.
Starks v. Kentucky Health Facilities, Ky. App., 684
S.W.2d 5, 6 (1984).
In the instant case, the record reflects that
substantive evidence was presented before the ALJ that compelled
a finding that both the 1992 and 1996 injuries were of
appreciable proportions.
Dr. Arendall, upon whom the ALJ heavily
relied, clearly testified that he would apportion 2.5 percent of
Moseley’s impairment to the 1992 injury and 2.5 percent to the
1996 injury.
The record reflects that the 1996 incident was a
distinct injury which occurred when Moseley was pushing a heavy
tool box.
The fact that the term “aggravation” was used by
Arendall was of no appreciable consequence since he clearly
testified that both the 1992 and 1996 injuries were instrumental
in leading to Moseley’s subsequent level of disability.
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The
finding that Moseley’s prior existing condition was totally
brought out by 1992 incident strains credibility.
We believe this case is fundamentally distinguishable
from Calloway County Fiscal Court v. Winchester, Ky. App., 557
S.W.2d 216 (1977).
In Winchester, the medical evidence indicated
that the employee’s subsequent injury was of no consequence and
had little effect on his subsequent condition.
The employee was
only able to work a short time following the first injury.
In
the case at bar, the evidence shows that Moseley’s second injury
was of appreciable proportions, and that Moseley was able to work
for at least three years following the 1992 injury.1
As a result
of the error committed by the ALJ, we must reverse and remand
this case to the ALJ in order that the ALJ can properly apportion
the resulting occupational disability benefits between the 1992
and 1996 injuries and the arousal of a pre-existing dormant
condition which would be the responsibility of the Special Fund.2
The court must also properly apportion the medical expenses.
1
We also note that the ALJ concluded that Moseley was one
hundred percent occupationally disabled following the 1992
injury. This conclusion appears to be contrary to established
law. The Kentucky Supreme Court in Yocum v. Spalding, Ky., 547
S.W.2d 442 (1977), stated that while an ALJ has broad leeway to
translate functional impairment into occupational disability,
that authority is not unlimited. It held that a worker who
continues to be regularly employed cannot be totally disabled.
Id., at 444. See also Winn Dixie, Louisville, Inc. v. Watson,
Ky., 473 S.W.2d 148 (1971); Osborne v. Johnson, Ky., 432 S.W.2d
800 (1968); R.C. Durr Co. v. Chapman, Ky. App., 563 S.W.2d 743
(1978).
2
We have concluded that the ALJ’s finding that the 1985
injury did not cause any disability and her subsequent dismissal
of Moseley’s claim based upon this incident is supported by
substantial evidence. Hence, we affirm on this issue.
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KACO next contends that any award of benefits to
Moseley should be entirely the Special Fund’s responsibility.3
As part of its argument, KACO contends that KRS 342.1202, which
applies in this case, is unconstitutional and contradicts KRS
342.120(6).4
KACO’s argument lacks merit.
KRS 342.1202 provided,
An award for income benefits for permanent
total or permanent partial disability under
this chapter based, in whole or in part, on a
pre-existing disease or pre-existing
condition of the back, or of the heart shall
be apportioned, by the administrative law
judge, fifty percent (50%) to the employer
and fifty percent (50%) to the special fund.
Apportionment required by this section shall
not be a cause of appeal.
KRS 342.120(6) and (7) stated,
(6) If it is found that the employee is
a person mentioned in paragraphs (a) or (b)
of subsection (2) of this section and a
subsequent compensable injury or occupational
disease has resulted in additional permanent
disability so that the degree of disability
caused by the combined disabilities is
greater than that which would have resulted
from the subsequent injury or occupational
disease alone, and the employee is entitled
to receive compensation on the basis of the
combined disabilities, the employer shall be
liable for the payment of all income benefits
awarded by the administrative law judge which
is equal to the percentage of disability
which would have resulted from the latter
injury or occupational disease had there been
no pre-existing disability or dormant, but
aroused disease or condition.
(7) The remaining compensation for
which such resulting condition would entitle
3
Great American also contends that the Special Fund should
bear the entire responsibility of the award.
4
KRS 342.1202 was repealed in December 1996, when the
General Assembly overhauled the workers’ compensation statutes.
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the employee, including any compensation for
disability resulting from a dormant disease
or condition aroused into disabling reality
by the injury or occupational disease, but
excluding all compensation which the
provisions of this chapter would have
afforded on account of prior disabling
disease or injury had it been compensated
thereunder, shall be paid out of the special
fund provided for in KRS 342.122. Such
remaining compensation shall be paid directly
to the employee under such regulations as the
secretary of finance and administration may
provide for such purpose.
The purpose and viability of KRS 342.1202 has been
discussed and approved by Kentucky’s highest court.
In
Commonwealth of Kentucky, Central State Hospital v. Gray, Ky.,
880 S.W.2d 557 (1994), the court noted that the General Assembly
in 1987 attempted to deal with the escalating and unfunded
liability of the Special Fund.
The court observed that KRS
342.1202 was enacted in response to judicial decisions which
shifted liability from the employer to the Special Fund.
558.
Id., at
The court noted that this Court had earlier encouraged the
legislature to review the issue of apportionment in cases
involving heart attacks in Stovall v. Dal-Camp, Inc., Ky. App.,
669 S.W.2d 531 (1984).
Id., at 557.
The statute assured that
employers would be liable for no less than fifty percent of the
workers’ compensation awards in heart attack and back cases and
assured that the employers would be encouraged to make the
workplace as safe as possible.
Id., at 559.
See also Heartland
Health Care Center v. Maupin, Ky., 887 S.W.2d 553 (1994).
KACO’s
reliance on Accuride Corp. v. Donahoo, Ky., 865 S.W.2d 652
(1993), is misplaced.
The Supreme Court in that case
specifically acknowledged that any unfairness inherent in the
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application of KRS 342.120 to pre-existing heart or back
conditions had been remedied by the enactment of KRS 342.1202.
KACO has failed to cite any authority which supports its
contention that KRS 342.1202 was unconstitutional or that the ALJ
should have apportioned all of the responsibility to the Special
Fund.
The ALJ correctly applied KRS 342.1202 to the facts of
this case.
KACO also maintains that the majority of Moseley’s
current level of disability existed prior to the alleged 1992
event.
We decline to disturb the ALJ’s finding on this issue.
Dr. Arendall testified that based upon the information he
received from Moseley and the medical records, he did not believe
that Moseley had any prior active disability as of August 19,
1992, the day before the August 20, 1992 injury.
Thus, there is
substantial evidence to support the ALJ’s finding on this issue.
This Court finds it unnecessary to address the other arguments
raised by KACO.
For the foregoing reasons, this Court affirms the ALJ
and the Workers’ Compensation Board regarding the findings of a
pre-existing dormant condition prior to the 1992 injury and the
applicability of KRS 342.1202, but must reverse the ALJ’s
findings concerning the effect of the 1992 and 1996 injuries upon
Moseley’s occupational disability and remand for proceedings
consistent with this opinion.
ALL CONCUR.
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BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE RICHARD
LYNN MOSELEY:
John C. Morton
Samuel J. Bach
Henderson, Kentucky
David M. Taylor
Owensboro, Kentucky
BRIEF FOR APPELLEE OWENSBORO
MUNICIPAL UTILITIES AS INSURED
BY MARYLAND CASUALTY:
Max S. Hartz
Owensboro, Kentucky
BRIEF FOR APPELLEE OWENSBORO
MUNICIPAL UTILITIES AS INSURED
BY GREAT AMERICAN INSURANCE
COMPANY
James David Bryant
Bowling Green, Kentucky
BRIEF FOR APPELLEE SPECIAL
FUND:
David W. Barr
Louisville, Kentucky
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