NU WAY MANUFACTURING, INC. v. JERRY WYNN; HONORABLE PHYLLIS L. ROBINSON; HONORABLE BRUCE COWDEN, JR., ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD
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RENDERED:
SEPTEMBER 21, 2001; 2:00 p.m.
NOT TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
2000-CA-000478-WC
NU WAY MANUFACTURING, INC.
v.
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS’ COMPENSATION BOARD
ACTION NOS. WC-97-67171 & WC-98-01037
JERRY WYNN; HONORABLE PHYLLIS L.
ROBINSON; HONORABLE BRUCE COWDEN, JR.,
ADMINISTRATIVE LAW JUDGE;
AND WORKERS’ COMPENSATION BOARD
APPELLEES
OPINION
REVERSING
** ** ** ** **
BEFORE:
GUDGEL, Chief Judge; COMBS, and McANULTY, Judges.
McANULTY, JUDGE:
Nu Way Manufacturing, Inc. appeals from an
opinion of the Workers’ Compensation Board reversing a decision
by the Administrative Law Judge (ALJ) denying Jerry Wynn’s
attorney, Phyllis Robinson, a $5,000 appellate attorney’s fee
under KRS 342.320(2)(c) in his workers’ compensation claim.
Given the recent decision of the Kentucky Supreme Court in City
of Louisville v. Slack, Ky., 39 S.W.3d 809 (2001) that KRS
342.320(2)(C) is unconstitutional, we hold that Robinson is not
entitled to an award of attorney’s fees under that statute, and
therefore reverse.
While employed by Nu Way Manufacturing, Jerry Wynn
injured his back on February 15, 1997, when he lifted 20-25
stainless steel bars from a table and carried them to a milling
machine.
He reported experiencing pain and a stinging sensation
in his neck and arms.
Wynn continued working until March 4,
1997, after which he did not return due to pain in his neck and
back.
Wynn was examined by Dr. William Brooks, a neurosurgeon,
on April 7, 1997, who ordered an MRI.
Dr. Brooks reported that
the MRI showed Wynn had focal herniation at the C6-7 level
centrally and left laterally with foramina narrowing at C6-7 due
to facet joint hypertrophy.
There also was evidence of disc
bulging at the C5-6 level and facet joint hypertrophy at the C4-5
level left laterally.
After undergoing some therapy, Wynn
continued to complain of neck, shoulder, arm, and lower back
pain, so Dr. Brooks had a second MRI performed in May 1997.
This
MRI showed that Wynn had disc degeneration at the L4-5, L5-S1,
and L3-4 levels associated with degenerative osteoarthritis and
facet sclerosis.
Dr. Brooks assigned a 15% impairment rating
based on Wynn’s lower back condition.
In April 1997, Wynn also
saw Dr. James Bean, a neurosurgeon, who concurred in Dr. Brook’s
reading of the April MRI as indicating disc herniation at the C67 level.
On December 9, 1997, Dr. John Vaughan examined Wynn and
reported herniation at the C6-7 level laterally and severe
degenerative disc disease at the L4-5 level based on the April
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1997 MRI.
Dr. Vaughan indicated that Wynn suffered from both
cervical and lumber spondylosis.
He assigned a total impairment
rating of 20% with 15% related to Wynn’s cervical spine and 5% to
the lumbar spine.
Dr. Vaughan apportioned 50% of his impairment
rating to a pre-existing dormant condition and 50% to the
February 1997 injury.
Dr. Vaughan restricted Wynn’s activities
to lifting no more than 10 pounds repetitively or 20 pounds at
once, and no reaching above the shoulder.
He stated that Wynn
was unable to return to the type of factory manual labor he had
performed at Nu Way.
On December 1, 1997, Wynn filed an application for
resolution of injury claim, No. WC-97-67171, involving the injury
on February 15, 1997, and his neck and back condition.
In a
benefit review determination, an arbitrator assigned a 15%
functional impairment rating under the American Medical
Association (AMA) Guidelines based on a work-related injury.
After concluding that Wynn could not return to his previous type
of employment, the arbitrator applied the statutory enhancement
factor of 1.5 pursuant to KRS 342.730(1)(c)1 and the regular
factor of 1.25 associated with the impairment rating pursuant to
KRS 342.730(1)(b) for a total permanent partial disability rating
of 18.75% [15% x 1.25] subject to enhancement by the l.5
multiplier.
For purposes of arbitration, the parties stipulated
that Wynn’s average weekly wage was $350.03.
After filing a
petition for reconsideration that was denied, Nu Way filed a
notice on March 27, 1998, raising a constitutional challenge to
the attorney’s fees statute, KRS 342.320(2)(c) based on due
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process and equal protection.
On May 11, 1998, Nu Way filed a
request for a hearing before an ALJ.
While the initial claim was awaiting assignment to an
administrative law judge, Wynn filed a second workers’
compensation claim against Nu Way on June 4, 1998, alleging
hearing loss from exposure to loud noises at work.
In support of
this claim, No. WC-98-01037, Wynn submitted a report from Dr.
Albert Cullum indicating that Wynn suffered from severe tinnitus
and a hearing loss of 16.9% in the right ear and 35.6% in the
left ear for a total average binaural hearing loss of 20%.
Dr.
Cullum assessed a total disability rating of 20% based on the
hearing loss.
After Claim No. WC-97-67171 was assigned to ALJ W.
Bruce Cowden, Nu Way filed an amended statement of proposed
stipulations and contested issues that listed the
constitutionality of KRS 342.320(2)(c) as an issue and modified
the stipulation on the previous average weekly wage amount to
$319.30 from $350.03.1
While the cervical spine/back claim was
pending, ALJ Cowden was assigned as arbitrator in Claim No. WC98-01037 involving the hearing loss claim.
On August 12, 1998,
Wynn filed a motion to add a third claim for
depression/psychological problems to Claim No. WC-98-01037.
ALJ
Cowden on his own motion ordered that Claim No. WC-97-67171 and
Claim No. 98-01037 be heard together.
1
Nu Way also asked to consolidate the claim with two
prior workers’ compensation claims filed by Wynn in 1993.
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Following an evidentiary hearing, the ALJ issued an
opinion and order on December 21, 1998, finding that Wynn had
suffered a work-related injury to his cervical spine in February
1997, based on Dr. Vaughan’s report and the April 1997 MRI.
However, the ALJ also found that Wynn could not recover on his
hearing loss claim because he did not provide sufficient notice
to the employer, did not establish injurious exposure to noise
while at Nu Way, and failed to show injury leading to impairment
exceeding the minimum 8% functional impairment rating.
The ALJ
also found that Wynn had not established a work-related
psychiatric condition or alternatively any functional impairment
due to his psychiatric condition.
The ALJ concurred with the
arbitrators decision by assessing a 15% impairment rating to the
cervical spine resulting in an 18.75% permanent partial
disability rating after applying the 1.25 conversion factor in
KRS 342.730.
He also found Wynn could not return to his previous
work so the 1.5 enhancement factor under KRS 342.730(1)(c)1 would
apply.
The ALJ declined to decide the issue of the
constitutionality of KRS 342.320(2)(c) in favor of review by the
appropriate judicial body.
He awarded benefits on the stipulated
average weekly wage of $319.30.
The ALJ denied Nu Way’s petition
for reconsideration.
On April 28, 1999, Wynn’s attorney filed a verified
motion for attorney’s fees seeking a regular attorney’s fee of
$2,000 plus an amount of $5,000 payable by the employer for work
done on the appeal from the arbitrator to the ALJ based on KRS
342.320(2)(c) for a total fee of $7,000.
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Nu Way filed a response
challenging the request for appellate based fees on the grounds
that KRS 342.320(2)(c) was unconstitutional and that Wynn did not
“prevail” on appeal as required by the statute.
On June 1, 1999, the ALJ awarded Wynn’s attorney fees
of $5,044 under KRS 342.320(1) payable by the claimant, and
denied the request for a penalty fee under KRS 342.320(2)(c).
The ALJ found that Nu Way prevailed on the appeal because he
awarded Wynn a lower amount of benefits than the arbitrator.2
The ALJ denied Wynn’s motion to reconsider the attorney’s fees
award.
Wynn filed an appeal to the Workers’ Compensation Board
on the sole issue of attorney’s fees and Nu Way filed a
protective cross-appeal based on the constitutionality of KRS
342.320(2)(c) with notice to the Attorney General.
On January 28, 2000, the Board entered an opinion
reversing and remanding the ALJ’s decision.
It declined to
address the constitutional issue and held that KRS 342.320(2)(c)
was applicable to the cervical spine claim but not the hearing
loss and depression/psychological claims because the former was
decided by the arbitrator and appealed to another decision-maker.
The Board rejected the ALJ’s basis for his decision by stating Nu
Way should not be considered to have prevailed merely because of
a mathematical modification in the stipulated average weekly wage
of the claimant.
It found that the ALJ’s decision on the
cervical spine claim concurred with the arbitrator’s decision on
2
Although the ALJ applied the same functional impairment
rating and enhancement factors, he utilized the lower average
weekly wage amount in the modified stipulation resulting in a
lower benefit amount.
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the relevant issues.
The Board reversed the ALJ’s decision and
remanded the case for an attorney’s fee award payable by the
employer under KRS 342.320(2)(c).
This appeal followed.
Subsequent to the Board’s opinion, the Kentucky Supreme
Court decided in City of Louisville v. Slack, Ky., 39 S.W.3d 809
(2001), which held KRS 342.320(2)(c) unconstitutional.3
In
Slack, the court accepted many of the arguments raised by Nu Way
in its briefs before the Board and this Court.
Relying on Burns
v. Shepherd, Ky. App., 264 S.W.2d 685 (1953), the 4-3 majority in
Slack held that KRS 342.320(2)(c) was arbitrary and violated the
employer’s right to procedural due process protected by Section 2
of the Kentucky Constitution.4
Given the Supreme Court’s
decision in Slack, we need not discuss whether Nu Way “prevailed”
in its appeal.
Thus, we reverse the opinion of the Workers’
Compensation Board.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
W. Berry Lewis
Hazard, Kentucky
Phyllis L. Robinson
London, Kentucky
3
The Court overruled the previous Court of Appeals’
opinion in Earthgrain v. Cranz, Ky. App., 999 S.W.2d 218 (1999),
which had upheld the constitutionality of the statute and is
cited in appellee’s brief.
4
See also Commonwealth, Transportation Cabinet v. Guffey,
Ky., 42 S.W.3d 618 (2001). In 2000, the General Assembly
eliminated the arbitrator and deleted KRS 342.320(2)(c), the
provision for an award of attorney’s fees based on an appeal.
See 2000 Ky. Acts Ch. 514 §624 (effective July 14, 2000).
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