PEABODY COAL COMPANY v. KENNY SMITH; HON. THOMAS M. RHOADS; HON. ROGER D. RIGGS, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD
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RENDERED: MAY 11, 2001; 10:00 a.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1999-CA-001464-WC
PEABODY COAL COMPANY
v.
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-98-00438
KENNY SMITH; HON. THOMAS M.
RHOADS; HON. ROGER D. RIGGS,
ADMINISTRATIVE LAW JUDGE;
AND WORKERS’ COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING IN PART,
REVERSING IN PART AND REMANDING
** ** ** ** **
BEFORE:
GUIDUGLI, JOHNSON AND KNOPF, JUDGES.
JOHNSON, JUDGE: Peabody Coal Company has petitioned for review of
an opinion of the Workers’ Compensation Board rendered on May 21,
1999, which affirmed an award of total occupational disability
benefits in favor of the appellee, Kenny Smith.
Peabody Coal
does not challenge the Board’s determination that the ALJ’s
findings are supported by substantial evidence; but rather, it
argues that the Board failed to properly interpret and apply
amendments to the workers’ compensation statutes made by the
Legislature in 1996 that define disability.
Peabody Coal also
contends that KRS1 342.320(2)(c), as amended in 1996, which
allows for an award of an attorney’s fee to the claimant’s
attorney, is unconstitutional.
The petition for review was held
in abeyance by an order of this Court entered on February 4,
2000, pending the resolution of issues raised in two cases before
the Supreme Court of Kentucky that were identical to the issues
raised by Peabody Coal.
The recent holdings of our Supreme Court
in Ira A. Watson Department Store v. Hamilton,2 and City of
Louisville v. Slack,3 are now final, and this case is now ripe
for our review.
Based on Watson and Slack, we affirm in part,
reverse in part and remand.
On May 13, 1997, Smith, a 46-year-old coal miner,
suffered a severe injury to his neck and cervical spine when the
shuttle car he was operating ran over a rock and caused his head
to be jammed into the roof of the mine.
Smith had spent the
majority of his adult life working in the coal mining industry
and he was employed by Peabody Coal from 1974 until shortly after
his injury in 1997.
Smith’s claim for workers’ compensation
benefits was filed on March 4, 1998, and assigned to an
arbitrator.
After reviewing medical reports, the arbitrator
found Smith to be totally disabled as a result of his neck
injury.
1
Kentucky Revised Statutes.
2
Ky., 34 S.W.3d 48 (2000).
3
Ky., ___ S.W.3d ___, 2000 Ky. LEXIS 54 (rendered March 22,
2001, final April 12, 2001).
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Peabody Coal sought a de novo hearing before an ALJ.
In his opinion and award, the ALJ recited Smith’s testimony and
the testimony of various experts and found and concluded as
follows:
Dr. [Eric A.] Norsworthy and Dr. [Ray]
Hester both express the opinion that Mr.
Smith does not have the physical capabilities
to return to his work in the mines and Dr.
Hester has stated that he would not be able
to return to any type of gainful employment
considering his injuries and restrictions.
When one considers the plaintiff’s age,
skill, education and work experience based
upon the restrictions even as assigned by Dr.
[Daniel] McHugh, [Smith] has clearly become
totally disabled under the Act. KRS
342.0011.
In his opinion, the ALJ fully concurred with the result
reached by the arbitrator.
Further, since Peabody Coal was
unsuccessful before the ALJ, an order was entered allowing
Smith’s attorney, Thomas M. Rhoads, to be paid $5,000 directly
from Peabody Coal as an attorney’s fee pursuant to KRS
342.320(2)(c).
In its appeal to the Board, Peabody Coal argued that
the ALJ’s conclusion that Smith was totally disabled was
incompatible with the 1996 amendment to KRS 342.0011(11)(c),
which defines permanent total disability as “a complete and
permanent inability to perform any type of work as a result of an
injury.”
Peabody Coal also asserted that although the
restrictions placed on Smith precluded his return to the mining
industry, there were jobs Smith could still perform.
The Board
agreed with Peabody Coal’s contention that the Legislature
intended to change the definition of permanent injury, but it
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rejected Peabody Coal’s argument that it was no longer relevant
to consider whether an injured worker could compete for jobs.
The Board ruled:
[T]he very nature of the language used by the
Legislature and to which we must give
credence . . . mandates an analysis of the
impact of the injury on the individual’s
ability to compete for those jobs remaining
after physical restrictions are considered.
Although a final appellate decision at that time had not been
rendered in Watson, supra, the Board reiterated the reasoning it
had employed in that case, and ruled that “[a]lthough the full
impact of Osborne v. Johnson, Ky., 432 S.W.2d 800 (1968) has been
modified”, it was not “gone” with respect to the ALJ’s assessment
of total disability.
Finally, the Board concluded that the ALJ
did accurately understand the testimony of
the physicians, and through reasonable
inferences from their testimony and the
testimony of the claimant, concluded that
Smith presently has a total inability to work
as that is defined in KRS 342.0011(11)(c).
Since the Board lacked jurisdiction to address the
constitutionality of KRS 342.320(2)(c), it affirmed the decision
of the ALJ in all respects.
Clearly, the Board did not err in its application of
KRS 342.0011(11)(c), as amended by the Legislature in 1996.
In
Watson, supra, the Supreme Court unanimously endorsed the Board’s
interpretation of the amendments and held that
determining whether a particular worker has
sustained a partial or total occupational
disability as defined by KRS 342.0011(11)
clearly requires a weighing of the evidence
concerning whether the worker will be able to
earn an income by providing services on a
regular and sustained basis in a competitive
economy. For that reason, we conclude that
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some of the principles set forth in Osborne
v. Johnson, supra, remain viable when
determining whether a worker’s occupational
disability is partial or total.
An analysis of the factors set forth in
KRS 342.0011(11)(b), (11)(c), and (34)
clearly requires an individualized
determination of what the worker is and is
not able to do after recovering from the work
injury. Consistent with Osborne v. Johnson,
supra, it necessarily includes a
consideration of factors such as the worker’s
post-injury physical, emotional,
intellectual, and vocational status and how
those factors interact. It also includes a
consideration of the likelihood that the
particular worker would be able to find work
consistently under normal employment
conditions. A worker’s ability to do so is
affected by factors such as whether the
individual will be able to work dependably
and whether the worker’s physical
restrictions will interfere with vocational
capabilities. The definition of “work”
clearly contemplates that a worker is not
required to be homebound in order to be found
to be totally occupationally disabled.4
Our Supreme Court also reiterated that despite the vast
changes in the workers’ compensation statutes made by the
Legislature in 1996, “the ALJ remains in the role of the factfinder,”5 and where a finding of total disability has been made,
the “inquiry on appeal” is whether the finding “is so
unreasonable under the evidence that it must be viewed as
erroneous as a matter of law.”6
Peabody Coal does not contend
that the ALJ’s findings are not supported by substantial
4
Watson, supra at 51.
5
Id. at 52.
6
Id.
-5-
evidence.
Thus, that portion of the Board’s opinion affirming
the award of total disability benefits to Smith must be affirmed.
Peabody Coal has devoted the majority of its brief to
the issue of the constitutionality of KRS 342.320(2)(c), which at
one time provided that an employer or its insurer would be
required to pay up to $5,000 directly to the claimant’s attorney
if the employer’s appeal of an arbitrator’s determination were
not successful.7
Peabody Coal has attacked the constitutionality
of the statute on several grounds that had been previously
rejected by this Court.8
However, in Slack, supra, the Supreme
Court, in a 4-3 decision, agreed with the arguments advanced by
the employer that the statute was unconstiutional and reversed
the Court of Appeals.
The Court opined that the attorney’s fee
statute had the single purpose “to punish an employer who brings
an appeal in good faith,” and it held the statute to be both
arbitrary and violative of an employer’s right to procedural due
process.9
Thus, the opinion of the Board affirming the award of
an attorney’s fee of $5,000 to the appellee, attorney Rhoads,
must be reversed.
Accordingly, the opinion of the Board is affirmed in
part, reversed in part, and this matter is remanded to the ALJ
with instructions to enter an order setting aside the award of
$5,000 in attorney’s fees.
7
KRS 342.320(2)(c) was repealed by the Legislature effective
July 14, 2000.
8
See Earthgrains v. Cranz, Ky.App., 999 S.W.2d 218
(1999)(overruled by Slack, supra).
9
Slack, slip op. at 7.
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ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
William P. Swain
Peter J. Glauber
Louisville, KY
Thomas M. Rhoads
Madisonville, KY
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