ALPH KAUFMAN CONSTRUCTION V. TOMMY OWEN DOWELL; HON. NEIL WEINER; SPECIAL FUND; HON. W. BRUCE COWDEN, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD
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RENDERED:
AUGUST 25, 2000; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1999-CA-001981-WC
ALPH KAUFMAN CONSTRUCTION
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-96-66502
v.
TOMMY OWEN DOWELL; HON. NEIL WEINER;
SPECIAL FUND; HON. W. BRUCE COWDEN,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS' COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BARBER, EMBERTON AND GUIDUGLI, JUDGES.
BARBER, JUDGE:
The employer challenges the constitutionality of
KRS 342.320(2)(c).
The statute, as amended effective December
12, 1996, provides for the employer to pay the plaintiff’s
attorney fee where the employer appeals and does not prevail.
hold that KRS 342.020(2)(c) is constitutional.
We
Tommy Dowell filed a workers’ compensation claim on
March 12, 1998, alleging a November 5, 1996 low back injury
during the course of his employment with Alph Kaufman
Construction.
The case was initially decided in Dowell’s favor
by an arbitrator.
ALJ.
The employer sought de novo review before an
The ALJ determined that Dowell was totally occupationally
disabled.
Dowell’s attorney, Hon. Neil S. Weiner, subsequently
requested approval of his attorney fee including a $5,000.00 fee
to be paid by the defendant-employer under KRS 342.320(2)(c), as
amended December 12, 1996, the plaintiff having prevailed on
appeal.
The employer filed a response and “partial objection,”
contending that KRS 342.320(2)(c) is unconstitutional, in
violation of §§ 27, 28 and 115 of the Constitution of Kentucky.
By order of May 19, 1999, the ALJ awarded an attorney
fee, including $5,000.00 to be paid by the Defendant-Employer
under KRS 342.020(2)(c):
[A]fter full review of the above factors and
of the record in this claim, and further
exercising the discretion afforded an
Administrative Judge to balance the competing
interest of the injured worker and those of
his legal counsel, and noting that the
employer appealed and did not prevail on
appeal, an attorney’s fee in the amount of .
. . $5,000.00 is to be paid by the defendantemployer pursuant to KRS 342.320(2)(c).
The ALJ passed the issue of the constitutionality of
KRS 342.320(2)(c) to a court for ruling.
By opinion rendered
August 6, 1999, the Board affirmed the ALJ’s award of attorney
fees, stating that
“as an administrative tribunal, the Workers’
Compensation Board lacks the authority and has no jurisdiction to
determine the constitutionality of a statute . . . . ”
Appellant contends KRS 342.320(2)(c) is
unconstitutional because it:
(1) prevents the employer from
exercising its constitutional right to appeal; (2) violates
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separation of powers doctrine; (3) is unconstitutionally vague;
(4) constitutes class legislation and violates the employer’s
right to equal protection; (5) denies the employer due process;
(6) violates the prohibition against special legislation; (7)
should not be applied retroactively.
KRS 342.320(2)(c), effective December 12, 1996,
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.
Our decision in Earthgrains v. Cranz, Ky. App., 999
S.W.2d 218 (1999), disposes of the majority of Appellant’s
arguments.
In Earthgrains, we adjudged the statute to be
constitutional under the Constitutions of the United States and
this Commonwealth.
We rejected reliance upon Burns v. Shepherd,
Ky., 264 S.W.2d 685 (1953), as support for
the argument that KRS
342.320(2)(c) violated the due process provision of Section 2 of
the Kentucky Constitution.
We held that Owens v. Clemons, Ky.,
408 S.W.2d 642 (1966), “substantially weakened Burns.”
221.
Owens upheld the constitutionality of KRS
337.360, which permitted the awarding of
attorney fees against a losing employer in
claims brought by employees under the minimum
wage laws. Owens, noting the conflict with
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Id at
the Burns opinion, stated "since . . . the
public policy exemplified under both laws is
basically the same, we now have some question
concerning the soundness of the Burns
decision." Owens at 646. In view of the
foregoing, we do not believe Burns is
controlling in the case at bar. See Supreme
Court Rule 1.030(8)(a).
Id., at 222.
We held that KRS 342.320(2)(c) does not violate
equal protection. The discrepancy in the financial resources of a
disabled employee compared to those of an employer and its
workers’ compensation carrier provides a sufficient rational
basis for shifting the cost of litigation to the employer where
it appeals and does not prevail.
We rejected the contention that
KRS 342.320(2)(c) violates substantive due process
considerations, under essentially the same analysis. Id., at 222223.
We held that KRS 342.320(2)(c) does not unconstitutionally
restrict the right to appeal guaranteed by Section 2 of the
Kentucky Constitution.
The statute “does not prevent employers
from appealing adverse decisions.
Employers are still free to
appeal, but with the condition that they will have to pay
attorney fees if . . . unsuccessful.
The state’s interest in
seeing that the injured employee is promptly compensated
outweighs any limiting effect the statute may have on the
employer’s appeal.”
Id. at 223.
Appellant fails to convince us that the statute
violates separation of powers
-- that the Legislature
impermissibly usurped the judiciary’s power of review by
attempting to block a litigant’s access to the courts.
As we
held in Earthgrains, supra, the statute does not impermissibly
restrict the employer’s right of appeal.
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We are unpersuaded by appellant’s argument that KRS
342.320(2)(c) is “unconstitutionally vague.”
that the meaning of “prevail” is not clear.
Appellant argues
We disagree;
regardless, the fact that a statute is may be susceptible to more
than one interpretation does not require a holding that the
statute is unconstitutional if those who are affected by it can
reasonably understand what the statute requires of them.
Gurnee
v. Lexington-Fayette Urban County Gov't, Ky. App., 6 S.W.3d 852,
856 (1999).
It can be reasonably understood from KRS
342.320(2)(c) that the employer will pay for the plaintiff’s
attorney fee, if it appeals and loses.
We are perplexed by the argument that the statute fails
to give the ALJ guidance in determining the amount of the
attorney fee.
considered:
rendered.
The statute clearly states the factors to be
the extent, quality, and complexity of the services
The statute also provides that the fee is not to
exceed five thousand dollars ($5,000) per level of appeal.
Appellant also argues that the amount is arbitrary and punitive;
however, $5,000 is a maximum, and the ALJ has the discretion to
fix a lesser amount.
We are not persuaded by Appellant’s argument that KRS
342.320(2)(c) constitutes impermissible special or class
legislation.
Section 59 prohibits the general assembly
from passing local or special acts concerning
certain subjects when a general law can be
made applicable. . . . [T]his particular
section of the Constitution does not prohibit
the legislature from making reasonable
classifications. . . . [W]here a
classification is one made on a reasonable
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and natural distinction, having a reasonable
relationship to the purposes of the Act, it
does not run afoul of this section. . . .
[citation omitted] [T]he fact that a statute
discriminates in favor of a certain class
does not render it unconstitutional if the
discrimination is founded upon a reasonable
distinction or if any state of facts
reasonably can be conceived to sustain it.
Kentucky Milk Marketing & Anti-Monopoly Com.v. Border Co, Ky.,
456 S.W.2d, 831, 836 (1969).
There is a reasonable distinction
between the financial positions of a disabled employee and the
employer/workers’ compensation carrier.
Appellant acknowledges
the distinction, but complains about being denied "access to the
appeal process just because parties have the funds to pursue an
appeal.”
The 1996 revision of the Workers’ Compensation Act
substantially reduced benefits and limited attorney fees.
Were
it not for the fee shifting mechanism contained in KRS
342.320(2)(c), it would be difficult for many disabled employees
to obtain legal representation.
In our view, KRS 342.320(2)(c)
simply levels the playing field.
We disagree with Appellant’s contention that KRS
342.320(2)(c) effectively denies the employer procedural due
process, because of constraints in putting on proof at the
Arbitrator level.
Appellant argues that it is forced to appeal
to an ALJ in order to obtain due process.
Procedural due process
requires: “[A] hearing, the taking and weighing of evidence, if
such is offered, a finding of fact based upon consideration of
the evidence, the making of an order supported by substantial
evidence, and, where the party's constitutional rights are
involved, a judicial review of the administrative action.
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Kentucky Alcoholic Beverage Control Board v. Jacobs, Ky., 269
S.W.2d 189, 192 (1954).
The fact that the plaintiff’s attorney
fees will be charged to the employer if it appeals and loses,
does not deprive the employer of procedural due process.
Appellant also contends that KRS 342.320(2)(c) is
unconstitutional, if applied retroactively, because it imposes a
new obligation and duty upon the employer.
Appellant argues that
the law on the date of injury should control and that there is
nothing in the statute to indicate it has retrospective
application.
We disagree.
KRS 342.0015, entitled “Application
of 1996 (1st Extra. Sess.) Ky. Acts ch 1,” specifically states
that the provisions of KRS 342.320 are remedial.
Remedial
amendments do not normally come within the legal conception of a
retrospective law, or the general rule against the retrospective
operation of statutes.
Peabody Coal Co. v. Gossett, Ky., 819
S.W.2d 33 (1991).
For the foregoing reasons, we find KRS 342.320(2)(c)
constitutional.
EMBERTON, JUDGE, CONCURS.
GUIDUGLI, JUDGE, DISSENTS.
BRIEF AND ORAL ARGUMENT FOR
APPELLANT:
BRIEF AND ORAL ARGUMENT FOR
APPELLEE, TOMMY OWEN DOWELL:
Mark Webster
Louisville, Kentucky
Neil S. Weiner
Louisville, Kentucky
BRIEF APPELLEE, SPECIAL FUND:
Joel Zakem
Frankfort, Kentucky
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