HOMESTEAD NURSING HOME v. LANNY D. PARKER; HONORABLE W. BRUCE COWDEN, JR., ADMINISTRATIVE LAW JUDGE; AND THE WORKERS' COMPENSATION BOARD
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RENDERED: June 18, 1999; 10:00 a.m.
TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1998-CA-002619-WC
HOMESTEAD NURSING HOME
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-1997-68048
v.
LANNY D. PARKER;
HONORABLE W. BRUCE COWDEN, JR.,
ADMINISTRATIVE LAW JUDGE; AND
THE WORKERS' COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
KNOPF, KNOX, AND SCHRODER, JUDGES.
KNOPF, JUDGE:
In March 1998, Lanny Parker, the appellee herein,
filed a resolution of injury claim with the Department of
Workers’ Claims.
Pursuant to procedures delineated in 803 KAR
Chapter 25, Parker’s claim was assigned to an arbitrator, who
duly conducted a benefit review conference.
At the conference,
Parker’s claim was “bifurcated,” which meant, apparently, that
the arbitrator agreed to address preliminary issues concerning
Parker’s entitlement to medical benefits and temporary total
disability (TTD) income, and to abate Parker’s claim for
permanent disability income benefits.
Following the conference,
the arbitrator ruled that Parker was entitled to medical benefits
to defray the cost of back surgery, and to TTD benefits pending
the results of that treatment.
Parker’s employer, Homestead
Nursing Home, the appellant herein, denied that Parker’s
condition was work related.
When the arbitrator ruled otherwise,
Homestead sought de novo review by an administrative law judge
(ALJ).
Ruling that the arbitrator’s award of TTD and medical
benefits was interlocutory and not appealable, the Chief ALJ
dismissed Homestead’s appeal.
Homestead thereupon appealed to
the Workers’ Compensation Board (Board), which, in an order
entered September 21, 1998, summarily affirmed the ALJ’s
dismissal.
Undaunted, Homestead has now appealed the Board’s
ruling to this Court.
Homestead maintains that the ALJ and the
Board have misconstrued both KRS 342.275, which provides for
administrative appeal from an arbitrator’s benefit review
determinations, and the regulations promulgated thereunder.1
We
disagree.
1
Homestead also maintains that the guarantees of procedural
and substantive due process in both the federal and Kentucky
Constitutions require that the medical benefit and TTD awards at
issue here be subject to immediate review. It argues, therefore,
that, as interpreted by the Board, KRS 342.275 is
unconstitutional. Before this Court may address a challenge to
the constitutionality of a statute or regulation, however, the
Attorney General must be notified. CR 24.03; KRS 418.075.
Homestead has failed to give such notice. Our Supreme Court has
held that the notification requirement is mandatory and should be
strictly enforced. Maney v. Mary Chiles Hospital, Ky., 785
S.W.2d 480 (1990). Accordingly, we must decline to address the
constitutional question.
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In Western Baptist Hosp. v. Kelly, Ky., 827 S.W.2d 685,
687-88 (1992), our Supreme Court described as follows this
Court’s role as a reviewer of Board decisions:
The WCB is entitled to the same
deference for its appellate decisions as we
intend when we exercise discretionary review
of Kentucky Court of Appeals decisions in
cases that originate in circuit court. The
function of further review of the WCB in the
Court of Appeals is to correct the Board only
where the [] 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.
Although our review of the Board’s statutory interpretations is
less deferential than our review of its factual determinations,
Uninsured Employers’ Fund v. Garland, Ky., 805 S.W.2d 116 (1991),
nevertheless, an administrative agency’s construction of its
statutory mandate, particularly its construction of its own
regulations, is entitled to respect and is not to be overturned
on appeal unless clearly erroneous.
J.B. Blanton Company, Inc.
v. Lowe, Ky., 415 S.W.2d 376 (1967).
Homestead maintains that the Board’s ruling is clearly
erroneous here.
It acknowledges that, prior to the 1996
amendments to the Workers’ Compensation Act, an ALJ’s
interlocutory awards of TTD or medical benefits were not ripe for
either administrative or judicial appeal.
Ramada Inn v. Thomas,
Ky., 892 S.W.2d 593 (1995); Transit Authority of River City v.
Saling, Ky. App., 774 S.W.2d 468 (1989).
It argues, however,
that the 1996 statutory changes--which, among other innovations,
introduced arbitration to the claims processing system-contemplate immediate review of an arbitrator’s benefit award
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regardless of whether the award is final or interlocutory.
Homestead relies on KRS 342.275, Appeal of benefit review
determination, which provides for de novo review of arbitrator
rulings.
Homestead contends that because the statute does not
expressly condition the right to review on the finality of the
arbitration proceeding, a right to appeal from interlocutory
rulings should be inferred.
It notes, too, that the Board’s 1997
implementing regulations provided for review of arbitration
awards without mentioning finality.
803 KAR 25:010 § 12 (1997).
In contrast, the regulation providing for appeal of an ALJ’s
decision to the Board required that the order appealed from be
final “in accordance with Civil Rule 54.02(1) and (2).”
803 KAR
25:010 § 23 (1997).
We are not persuaded that, in the revised Workers’
Compensation Act, the General Assembly included a right to appeal
from interlocutory arbitration awards.
Such a mandate would run
counter to the broad discretion otherwise accorded the Board to
devise its own procedures, and would run counter as well to the
purpose of the 1996 amendments to the Act.
Those amendments were
intended to simplify and streamline the claims settlement
process.
Subjecting the arbitrator’s interlocutory awards to
immediate appellate scrutiny, however, would undermine the
legislature’s goal of creating a simpler process, and the delay
necessary for review, particularly an initial de novo review,
would negate its goal of making the process less time consuming.
Given these countervailing considerations, we are unwilling to
-4-
read into the silence of KRS 342.275 the “unfettered right of
appeal” that Homestead finds there.
Nor are we persuaded that the Board created a right to
appeal from interlocutory arbitration awards in its regulations.
We agree with Homestead that the Board could provide for such
appeals.
The Board’s broad authority to fashion its own
procedures is shown by its exemption from the adjudicatory
provisions of the Administrative Procedures Act.
13B.020(3)(e).
KRS
Furthermore, 803 KAR 25:010 § 23 refers to CR
54.02, indicating that the Board is aware that, although piecemeal appeals are not to be allowed, complex claims may sometimes
be divided efficiently into independent portions.2
We are not
persuaded, however, that the Board exercised its procedural
authority in this instance in the way Homestead contends.
The
Board itself, after all, rejected Homestead’s interpretation of
the regulations, and aside from limitations imposed by the
contemporaneous construction doctrine, which has no applicability
here, the Board’s interpretation of its own regulations is
entitled to considerable deference. J.B. Blanton Company, Inc. v.
Lowe, supra.
The Board modified its regulations, moreover, shortly
after Homestead’s appeal, and eliminated the distinction between
arbitrator awards and ALJ awards upon which Homestead relies.
The 1998 regulations provide that
[n]o appeal shall be taken from a written
benefit review determination that does not
2
The record does not make clear whether this is what the
arbitrator had in mind when he “bifurcated” Parker’s claim.
-5-
grant or deny the ultimate relief sought as
to all parties without the need for further
steps to be taken.
803 KAR 25:010 § 12 (1998).
This addition to section 12, we
believe, was intended to clarify the regulation, not to alter it.
We further believe, therefore, that the 1997 regulations should
be understood as limiting the right to review in the same way.
In this case, Parker seeks permanent disability income benefits.
There has yet been no determination of his entitlement to that
ultimate relief.
Under the regulations, therefore, Homestead’s
right to de novo review by an ALJ has not yet ripened.
Finally, Homestead argues that its right to appeal
immediately from the award of TTD and medical benefits should be
inferred from the fact that, otherwise, its undisputed right to
appeal will be rendered essentially meaningless.
Once paid,
Homestead maintains, these benefits are unlikely to be recovered.
The “right” to seek recovery on appeal, therefore, is really no
right at all.
As noted above, Homestead has failed to preserve
for our review certain constitutional issues allegedly implicit
in this contention.
Aside from the constitutional issues,
however, this argument was rejected in Ramada Inn v. Thomas,
supra, and Transit Authority of River City v. Saling, supra.
Even if we agreed with this argument, therefore, we could not, on
this ground, find Homestead entitled to relief.
To summarize, Homestead asserts a right to appeal from
an interlocutory ruling by an arbitrator which found it liable
for TTD and medical benefits.
This purported right is not
expressly granted in either the Workers’ Compensation Act or the
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regulations promulgated thereunder, but Homestead insists that it
can and should be inferred.
We disagree.
The Workers’
Compensation Act and the Board’s implementing regulations attempt
to balance the often divergent interests of injured workers and
their employers.
The statutory and regulatory provisions for
interlocutory relief strike that balance in a particular way.
The right Homestead has asserted would materially affect that
balance.
We are simply not persuaded that, had such an important
right been intended, both the General Assembly and the Board
would have failed to say so.
For these reasons, we affirm the September 21, 1998,
ruling of the Workers’ Compensation Board that Homestead’s
attempted appeal from the June 24, 1998, interlocutory award of
TTD and medical benefits was premature.
ALL CONCUR.
BRIEF FOR APPELLANT:
No brief for appellee
Carla Foreman Dallas
Williams & Wagoner
Louisville, Kentucky
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