ROBERT L. WHITTAKER, Director of Special Fund v. SALLIE JOHNSON; PHOENIX MANUFACTURING CO., as insured by AIK SELECTIVE SELF-INSURANCE FUND; PHOENIX MANUFACTURING CO., as insured by LIBERTY MUTUAL INSURANCE GROUP; J. LANDON OVERFIELD, Administrative Law Judge; and WORKERS' COMPENSATION BOARD AND PHOENIX MANUFACTURING COMPANY, INSURANCE GROUP v. BOARD SALLIE JOHNSON; PHOENIX MANUFACTURING COMPANY, ROBERT L. WHITTAKER, Director of Special Fund; J. LANDON OVERFIELD, Administrative Law Judge; and WORKERS' COMPENSATION BOARD
Annotate this Case
Download PDF
RENDERED: February 23, 2001; 2:00 p.m.
NOT TO BE PUBLISHED
(OPINION RENDERED NOVEMBER 3, 2000 WITHDRAWN)
C ommonwealth O f K entucky
C ourt O f A ppeals
NO. 2000-CA-000146-WC
ROBERT L. WHITTAKER,
Director of Special Fund
v.
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS' COMPENSATION BOARD
CLAIM NO. WC-92-50798
SALLIE JOHNSON;
PHOENIX MANUFACTURING CO., as insured by
AIK SELECTIVE SELF-INSURANCE FUND;
PHOENIX MANUFACTURING CO., as insured by
LIBERTY MUTUAL INSURANCE GROUP;
J. LANDON OVERFIELD,
Administrative Law Judge; and
WORKERS’ COMPENSATION BOARD
APPELLEES
** ** ** ** **
NO. 2000-CA-000271-WC
PHOENIX MANUFACTURING COMPANY,
as insured by LIBERTY MUTUAL
INSURANCE GROUP
v.
CROSS-APPELLANT
CROSS-PETITION FOR REVIEW OF A DECISION
OF THE WORKERS’COMPENSATION BOARD
CLAIM NO. WC-92-50798
SALLIE JOHNSON;
PHOENIX MANUFACTURING COMPANY,
as insured by AIK SELECTIVE SELF-INSURANCE FUND;
ROBERT L. WHITTAKER, Director of Special Fund;
J. LANDON OVERFIELD, Administrative Law Judge;
and WORKERS’ COMPENSATION BOARD
CROSS-APPELLEES
** ** ** ** **
NO. 2000-CA-000285-WC
PHOENIX MANUFACTURING COMPANY,
as insured by AIK SELECTIVE
SELF-INSURANCE FUND
v.
CROSS-APPELLANT
CROSS-PETITION FOR REVIEW OF A DECISION
OF THE WORKERS’ COMPENSATION BOARD
CLAIM NO. WC-92-50798
SALLIE JOHNSON;
PHOENIX MANUFACTURING COMPANY, as insured
by LIBERTY MUTUAL INSURANCE GROUP;
ROBERT L. WHITTAKER, Director of Special Fund;
J. LANDON OVERFIELD, Administrative Law Judge;
and WORKERS’ COMPENSATION BOARD
CROSS-APPELLEES
OPINION
AFFIRMING IN PART, REVERSING IN PART
AND REMANDING
** ** ** ** **
BEFORE:
HUDDLESTON, MILLER and TACKETT, Judges.
HUDDLESTON, Judge:
Robert L. Whittaker, director of the Special
Fund, appeals, and Phoenix Manufacturing Company, as insured by
Liberty Mutual Insurance Group, and Phoenix Manufacturing Company,
as insured by AIK Selective Self Insurance Fund, cross-appeal from
a decision of the Workers’ Compensation Board affirming in part,
reversing in part and remanding an Administrative Law Judge’s
ruling
regarding
the
reopening
of
Sallie
Johnson’s
workers’
compensation claim.
Johnson was injured on two separate occasions while
employed by Phoenix Manufacturing Company.
The first injury
occurred in 1989 while Phoenix was insured by Liberty Mutual.
-2-
The
second injury occurred in 1992 while Phoenix was insured by AIK.
Following the second injury, Johnson filed a workers’ compensation
claim against Phoenix.
Johnson, who testified at two depositions
and at two hearings, described various incidents of pain and
discomfort in her back.
Her 1989 work-related injury came as a
result of picking up rolls of cloth to put them on a pallet.
Johnson was treated by Dr. William Brooks, who prescribed physical
therapy and ultimately released Johnson to return to work without
restriction. Johnson did return to work following this injury. In
1990, Johnson had a flare-up of her 1989 injury, which caused her
to miss work for seven months.
Then, in 1992, Johnson sustained
another work-related injury caused by picking up a heavy item.
This injury caused Johnson pain in her low back, burning leg pain
and numbness in her left leg.
Johnson
testified,
she
was
Subsequent to the 1992 injury,
unable
to
do
housework
and
other
activities were extremely limited. Johnson settled her claims with
Liberty Mutual and AIK in 1994.
The 1989 claim against Liberty
Mutual was settled on the basis of a 20% occupational disability
with Liberty Mutual and a 17.5% occupational disability with the
Special Fund.
The 1992 injury was settled on the basis of a 20%
occupational disability with both AIK and the Special Fund.
Johnson filed a motion to reopen her claim on April 3,
1998, alleging that her condition had substantially worsened since
the settlements were reached.
In support of her motion, Johnson
testified to increased pain and numbness in her right leg, as well
as severe pain in her back.
She also testified that she had
undergone surgery in 1996 to relieve severe back pain.
-3-
Johnson
further supported her motion with the affidavit and medical records
of Dr. Brooks and Dr. David Jackson.
Dr. Brooks reported that he
had treated Johnson for her 1989 and 1992 injuries and was of the
opinion that Johnson’s physical condition had worsened to the point
that surgical intervention was needed.
Surgery was performed in
1996 by Dr. Brooks’ associate, Dr. Steven Keifer.
Attached to Dr.
Brooks’s affidavit was a letter written by Dr. David Jackson who
opined that Johnson was totally disabled.
On May 14, 1999, Johnson’s motion to reopen was granted
pursuant to Kentucky Revised Statute (KRS) 342.125.1
Evidence
presented during the reopened proceedings included the deposition
of Dr. Steven Keifer who testified that Johnson had originally come
under his care in 1996.
After examining Johnson, Dr. Keifer
performed surgery that confirmed a large disc rupture in her back
at the L5-S1 level.
Dr. Keifer also stated that the herniation
resulted from long-standing degenerative disc disease that probably
predated her 1989 injury.
Dr. Keifer believed that Johnson’s 1989
and 1992 injuries did not cause her 1996 condition, but only played
a role in the progression of her disease.
1
Ky. Rev. Stat. (KRS) 342.125(1)(d) provides that:
(1) Upon motion by any party or upon an arbitrator’s or
administrative law judge’s own motion, an arbitrator or
administrative law judge may reopen and review any award
or order on any of the following grounds: . . .
(d) Change of disability as shown by objective
medical evidence of worsening or improvement of
impairment due to a condition caused by the injury since
the date of the award or order.
-4-
Johnson
also
introduced
the
testimony
Jackson who evaluated Johnson in August 1996.
of
Dr.
David
He testified that
Johnson had degenerative disc disease that was aggravated by a work
condition that progressed from 1989 to 1996.
Dr. Jackson believed
that Johnson currently had a 10% permanent impairment.
Finally, Johnson testified during the March 3, 1999,
hearing that she had not returned to work after the 1992 accident.
She said that she now experienced pain worse than it had ever been
and had numbness in her right leg all the way down to her foot.
As
compared to her condition in 1994, Johnson testified that currently
she could not do anything but walk, whereas in 1994 her ability to
move about was not nearly as limited.
Johnson also stated that her
back and legs hurt to the point that she could not sleep and that
medication did little to alleviate the pain.
The ALJ determined that Johnson’s condition had worsened
since the 1994 settlement with Liberty Mutual and AIK.
Relying on
Dr. Keifer’s testimony, the ALJ concluded that Johnson was totally
disabled and that a combination of the 1989 and the 1992 injuries
and a progression of her injured state had led to her total
disability.
Because Johnson’s injuries were the result of a
natural progression, the ALJ held that Liberty Mutual and AIK were
equally responsible for the increase in income benefits.
More
specifically, the ALJ ordered Liberty Mutual and the Special Fund
to pay for 50% of the amount that would be a 100% award for the
1989 injury.
The ALJ went on to explain that even though Liberty
Mutual’s 425 week period for the permanent partial disability
benefits had expired, under a reopening situation where the total
-5-
occupational disability is not caused by a subsequent intervening
event, Johnson could recover total disability benefits from Liberty
Mutual.
The ALJ also ordered AIK and the Special Fund to pay 50%
of the 100% award for the 1992 injury.
In essence, each insurance
carrier was ordered to pay 50% of the new award, with each carrier
splitting its 50% with the Special Fund.
Finally, the ALJ ordered
that medical expenses related to Johnson’s 1994 surgery and all
future medical expenses be paid equally by Liberty Mutual and AIK.
Liberty Mutual appealed to the Board contending that,
pursuant to Fleming v. Windchy,2 it could not be held liable for
the
portion
of
Johnson’s
total
disability
that
exceeds
the
disability for which she settled her claim against Liberty Mutual.
Liberty Mutual also claimed that Johnson’s reopening was barred by
Commercial Drywall v. Wells.3
The Board determined that although
the ALJ made no explicit findings as to whether Johnson was totally
disabled at the time she settled her claims in 1994, his findings
implied that Johnson’s degree of occupational disability agreed to
in the settlements was accurate.
Although there was evidence that
indicated that Johnson was totally disabled in 1994, the relevant
question
on
reopening,
according
to
the
Board,
was
whether
Johnson’s actual disability at present was greater than her actual
disability at the time she entered into the settlement agreements,
not whether her present disability was greater than that to which
she had testified.
As a result, an increase in disability could be
2
Ky., 953 S.W.2d 604 (1997).
3
Ky. App., 860 S.W.2d 299 (1993).
-6-
found.
Thus, the Board held, the ALJ did not err in reopening
Johnson’s claim.
Next, the Board determined that the ALJ had erred in
apportioning medical expenses equally between Liberty Mutual and
AIK.
The Board’s decision was based on policy reasons and on KRS
342.020, which mandates that “the employer shall pay for the cure
and relief from the effects of an injury or occupational disease
the medical, surgical, and hospital treatment, . . . as may be
required for the cure and treatment of an occupational disease.”4
The Board thus held that the ALJ erred in apportioning 50% of the
medicals to Liberty Mutual, whereas AIK, as Johnson’s last employer
is responsible for the medical expenses.
Lastly, the Board addressed Liberty Mutual’s contention
that the ALJ erred in apportioning half of the increased income
benefits
for
Johnson’s
against the carrier.
Windchy5
and
current
total
occupational
disability
The Board held that, pursuant to Fleming v.
Spurlin
v.
Brooks,6
Johnson
could
only
receive
increased benefits from her 1989 claim if it could be shown that a
worsening of the 1989 injury in and of itself could cause Johnson’s
total occupational disability.
The Board then remanded the claim
to the ALJ with instructions to reopen proof to make a factual
determination
as
to
whether
the
1989
injury
alone
progression could produce total occupational disability.
4
KRS 342.020(1).
5
Supra, n. 3.
6
Ky., 952 S.W.2d 687 (1997).
-7-
and
its
If not,
then Liberty Mutual could not be held liable for any increase in
benefits.
The Special Fund raises the following issues on appeal:
(1)
whether the ALJ was required to make a specific finding as to
the
actual
degree
settlement; (2)
of
occupational
disability
on
the
date
of
whether the Special Fund could be required to pay
more than the employer when equal liability was stipulated, and
whether the claim involves excess liability; and (3) whether the
Board has the authority to reorder the ALJ to take additional
proof.
On cross-appeal Liberty Mutual argues that the Board
erred
in
holding
that
there
was
an
increase
in
Johnson’s
occupational disability and that it erred in instructing the ALJ to
allow the parties to submit additional evidence.
AIK contends on cross-appeal that the Board erred (1) in
reversing the ALJ’s finding as to apportionment of expenses; (2) in
finding that the carrier for the first injury, Liberty Mutual, may
only be responsible for additional income benefits if that injury
alone would have caused total disability; and (3) in affirming the
reopening of Johnson’s claim and the ALJ’s finding of increased
occupational disability.
Reopening of Johnson’s Claim
In order to properly reopen and review an award or order,
an ALJ must find, inter alia, that the claimant has increased
disability
“as
shown
by
objective
medical
evidence
of
worsening . . . due to a condition caused by the injury since the
-8-
date of the award or order.”7
The Special Fund argues that the ALJ
was required to make a specific finding as to Johnson’s actual
degree
of
occupational
settlement.
disability
at
the
time
of
the
1994
If such a finding would have led to a conclusion that
Johnson was totally occupationally disabled in 1994, the Special
Fund argues, then the ALJ erred in reopening Johnson’s case because
no increase in occupational disability could be shown. The Special
Fund disagrees with the Board’s conclusion that the ALJ’s findings
implied that the degree of occupational disability reflected in the
settlement agreement was accurate.
Our function upon review of the Board is to “correct the
Board only where [we perceive that] 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.”8
As the Board pointed out, substantial evidence in the
original proceeding existed to show that Johnson was not totally
occupationally disabled. Both Dr. Brooks and Dr. Gumbert testified
that Johnson was capable of performing light to sedentary work.
Such evidence supports a finding that the percentages of disability
that Johnson settled for in 1994 were accurate.
Also, such
testimony contradicts Liberty Mutual’s argument (which was adopted
by AIK) that Johnson was totally disabled after 1993. The relevant
question on reopening is whether the claimant has had an increase
in occupational disability from the time of her earlier settlement,
7
KRS 342.125(1)(d).
8
Western Baptist Hosp. v. Kelly, Ky., 827 S.W.2d 685, 687
(1992).
-9-
not, in the words of the Board, whether her present disability is
greater than that to which she testified. The Board did not err in
affirming the ALJ’s decision to reopen Johnson’s claim.
Liability for Permanent Total Disability
The next issue is whether the Board erred in remanding
this claim to the ALJ to reopen proof to establish whether the 1989
injury,
standing
disability.
alone,
would
have
caused
total
occupational
In light of the Supreme Court’s decisions in Fleming
v. Windchy9 (Fleming I) and Whittaker v. Fleming10 (Fleming II), we
believe that the Board erred and that remand is not necessary to
determine liability for the permanent total disability award.
Fleming I involved two work-related injuries much like
the injuries here.
In Fleming I, the claimant returned to work
after his first injury, only to be injured again.11
The claimant
sought total disability benefits due to the two work-related
injuries.
The ALJ attributed 84% total disability equally to the
two injuries.12
The Court said that
a defendant may not be held liable for any additional
occupational effect which results from the fact that a
subsequent disabling injury is superimposed upon the
9
10
Supra, n. 3.
Ky., 25 S.W.3d 460 (2000).
11
Unlike in the present case, however, the claimant in
Fleming I returned to work after his second injury as well.
12
See Fleming I, supra, n. 3. The ALJ determined that 16%
of the disability was prior, active and noncompensable. Id. The
84% attributed to the claimant is misleading because of the prior,
active disability of 16%. However, the ALJ did find the claimant
to be permanently, totally disabled.
-10-
injury for which the defendant is liable. (Citation
omitted).
Hence, notwithstanding any confusion created
by our opinion in Campbell, . . . the award for the 1990
injury may extend only for 425 weeks, with benefits
payable at the 1990 rate pursuant to KRS 342.730(1)(b).13
The
Court
held
that
the
first
injury,
although
it
accounted for 42% of the permanent, total disability, could only be
compensated for 425 weeks.
injury.
This is analogous to Johnson’s 1989
Although the Board believes it necessary to remand to the
ALJ to determine whether the 1989 injury alone could have caused a
permanent, total occupational disability, there is no question that
Johnson did not become totally disabled until after her 1992
injury.
Johnson returned to work after her 1989 injury, although
she did have a temporary flare-up of the injury.
As the Fleming I
court stated, “a worker is not entitled to benefits for total
disability until such time as he becomes totally disabled.”14
Johnson did not become totally disabled until after the 1992
injury, and the Board erred in remanding to reopen proof on whether
the
1989
injury
disability.
could
have
alone
caused
total
occupational
Consistent with Fleming I, Johnson was entitled to
compensation for her 1989 injury for only 425 weeks.
The next step in the analysis is the liability of the two
insurance companies and the Special Fund for each injury.
we turn to Fleming I for guidance.
13
Id. at 607.
14
Id.
-11-
Again,
[T]he correct method for excluding the percentage of
prior, active disability [the 1989 injury] on these facts
is to permit an offset against [AIK’s] and the Special
Fund’s
liability
pursuant
to
the
award
of
total
disability to the extent that benefits paid by the
defendants
pursuant
to
the
partial
disability
award
overlap the compensable period of the subsequent total
disability award.15
Because Johnson’s injury was to her back, KRS 342.1202 applies to
the
award.16
As
the
court
in
Fleming
II
pointed
out,
“the
legislature has determined that, regardless of the extent to which
a prior back or heart condition has contributed to a worker’s
ultimate disability, liability is to be borne equally by the
employer and the Special Fund.”17
Hence, AIK and the Special Fund
are equally responsible for 50% of the award.
Although Johnson became totally disabled as a result of
the 1992 injury, she is entitled to an award of total disability as
15
Id. at 608.
16
This section was repealed effective December 12, 1996.
However, because the injuries involved here predate the repeal, the
section applies to this case.
After the 1994 amendment to KRS
342.1202, the statute provided, in pertinent part, that:
(1) 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.
17
Whittaker v. Fleming, (Fleming II), supra, n. 11.
-12-
of the date of the motion to reopen, April 3, 1998.18 Apportionment
of the 1992 award is controlled by KRS 342.120219; therefore,
liability for the 100% total occupational disability award must be
borne by AIK and the Special Fund.
Under the mandate of Fleming I,
AIK and the Special Fund would be entitled to a credit against the
1992 award to the extent that benefits payable pursuant to the 1989
partial disability award against Liberty Mutual and the Special
Fund
overlap
the
period
of
total
disability.
However,
the
compensable period for the 1989 injury has expired and no offset is
available
to
AIK.
Therefore,
AIK
and
the
Special
Fund
are
responsible for 100% of the total occupational award as long as
Johnson remains totally disabled.20
Because both Fleming cases provide guidance in relation
to the payment of the total occupational award, we need not discuss
the Board’s authority to remand for the ALJ to take additional
proof.
Inasmuch as the Board erred in remanding the issue of
whether the 1989 injury would have caused total occupational
disability, we reverse that portion of its decision.
Apportionment of Medical Expenses
Finally, AIK argues that the Board erred in reversing the
ALJ’s apportionment of medical expenses equally between Liberty
Mutual and AIK.
Relying on KRS 342.020 and Derr Construction Co.
18
See Whittaker v. Allen, Ky. 966 S.W.2d 956, 958 (1998),
stating that “an award increasing benefits for a particular
disability begins on the date of the motion to reopen . . . .”
19
This is also consistent with the stipulation that the
Special Fund had with the insurance companies that the award would
be apportioned 50% to the Special Fund and 50% to the employer.
20
See Fleming I, supra, n. 3, at 606.
-13-
v. Bennett,21 the Board held that AIK, as the last employer of
Johnson, should be entirely responsible for the medical expenses
for the 1996 surgery and future medical expenses.
KRS 342.020(1) provides that
the employer shall pay for the cure and relief from the
effects of an injury or occupational disease the medical,
surgical, and hospital treatment, including nursing,
medical, and surgical supplies and appliances, as may
reasonably be required at the time of the injury and
thereafter during disability, or as may be required for
the cure and treatment of an occupational disease.
The
employer’s obligation to pay the benefits specified in
this section shall continue for so long as the employee
is disabled . . . .
As
the
Board
correctly
points
out,
KRS
342.020
contains
no
apportionment language. Although AIK argues that since there is no
apportionment language there is no statutory bar to apportionment,
the Supreme Court explained in Derr Construction that,
[l]iability for medical expenses requires only that an
injury was caused by work and that medical treatment was
necessitated by the injury.
Regardless of whether an
injured worker’s disability actually was caused by the
arousal of a previous dormant condition rather than by
the work-related injury, itself, the employer has been
21
Ky., 873 S.W.2d 824 (1994).
-14-
held liable for the payment of medical benefits relative
to the injury.22
The Board did not err in reversing the ALJ’s apportionment of
medical benefits between Liberty Mutual and AIK.
As a result, AIK
is responsible for medical expenses due to the 1996 surgery and all
future medical expenses.
The
decision
of
the
Workers’
Compensation
Board
is
affirmed in part and reversed in part and this case is remanded to
the Board for entry of an award consistent with this opinion.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE/CROSSAPPELLANT PHOENIX
MANUFACTURING AS INSURED BY
LIBERTY MUTUAL INSURANCE
GROUP:
Joel D. Zakem
DIVISION OF SPECIAL FUND
Frankfort, Kentucky
W. Barry Lewis
LEWIS & LEWIS LAW OFFICES
Hazard, Kentucky
BRIEF FOR APPELLEE/CROSSAPPELLANT PHOENIX
MANUFACTURING AS INSURED BY
AIK SELECTIVE SELF-INSURANCE
FUND:
Carla Foreman Dallas
Louisville, Kentucky
22
Derr Construction, supra, n. 21, at 827.
-15-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
