DANNY OSBORN v. COUGAR COAL COMPANY; BEECHFORK PROCESSING; AND WORKERS' COMPENSATION BOARD
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RENDERED: July 11, 2003; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2002-CA-001204-WC
DANNY OSBORN
v.
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS’ COMPENSATION BOARD
ACTION NOS. WC-00-01344, WC-00-1317, AND WC-99-93288
COUGAR COAL COMPANY;
BEECHFORK PROCESSING;
AND WORKERS' COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
EMBERTON, CHIEF JUDGE; JOHNSON AND SCHRODER, JUDGES.
JOHNSON, JUDGE:
Danny Osborn has appealed from an opinion of
the Workers’ Compensation Board entered on May 8, 2002, which
affirmed the opinion, award and order of the Administrative Law
Judge granting Cougar Coal Company credit on an award for
temporary total disability (TTD) benefits for payments Cougar
made to Osborn as “salary continuation”.
Having concluded that
the Board has not overlooked or misconstrued controlling
statutes or precedent,1 and that the ALJ correctly applied the
law, we affirm.
Osborn began working for Cougar as an underground mine
foreman in 1991.
On January 6, 1999, Osborn injured himself at
work while attempting to lift a metal bar.
Osborn notified
Cougar’s day-shift mine superintendent of his injury and Cougar
placed him on limited-work detail for the following two weeks.
When the pain persisted, Osborn consulted a family practitioner,
Dr. Don Bryson, who advised him to refrain from working until
March 15, 1999.
Consequently, Osborn did not work during the
period of January 29, 1999, to March 15, 1999, but Cougar paid
him “salary continuation” during this period.2
Osborn returned
to work on March 15, 1999, and he continued working for Cougar
until July 1999, when the mine was shut down and he was
transferred to Beechfork Processing.
Osborn worked for
Beechfork until August 4, 2000, but he has not worked since
August 2000.
Osborn filed a claim for workers’ compensation
benefits on November 3, 2000,3 and his claim was heard by the ALJ
1
Western Baptist Hospital v. Kelly, Ky., 827 S.W.2d 685, 687-88 (1992).
2
“Salary continuation” was paid on a bi-weekly basis in the amount of
$2,041.00. The parties’ stipulation to this fact can be found in the benefit
review conference order and memorandum dated March 12, 2001.
3
Osborn asserted several claims in his workers’ compensation petition,
including an occupational hearing loss claim, a cumulative trauma claim, and
a work-related injury claim. However, the only issue before us pertains to
the salary continuation Osborn received.
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on October 29, 2001.
The ALJ awarded Osborn TTD benefits in the
amount of $487.20 per week from January 29, 1999, through March
15, 1999, and thereafter the sum of $36.54 per week for a 10%
permanent disability, commencing on March 16, 1999, and
continuing for a period not to exceed 425 weeks.4
The ALJ also
granted Cougar credit for the “salary continuation” it paid
Osborn from January 29, 1999, through March 15, 1999.
Osborn
filed a petition for reconsideration and on January 24, 2002,
the ALJ denied the petition.5
Osborn subsequently appealed to
the Workers’ Compensation Board and on May 8, 2002, the Board
affirmed the ALJ’s ruling.
This petition for review followed.
Osborn claims in his petition that the ALJ erred by
failing to apply KRS6 342.730(6) to the credit she allowed Cougar
for the payment of salary continuation.
Specifically, Osborn
argues that the ALJ failed to follow the mandates of KRS
342.730(6) when she granted Cougar credit for any payments made
in the form of “salary continuation”.
Whether the ALJ failed to
follow the mandates of KRS 342.730(6) in giving Cougar credit
for the payment of “salary continuation” constitutes a question
4
The TTD benefits were awarded against Cougar. No income benefits were
awarded against Beechfork; however, the ALJ did hold Beechfork liable for any
medical expenses pertaining to Osborn’s work-related hearing loss.
5
The ALJ found that Osborn’s petition for reconsideration sought to reargue
the merits of his claim and thus failed to point out any error patent on the
face of the opinion and award as required by KRS 342.281.
6
Kentucky Revised Statutes.
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of law subject to this Court’s independent determination.7
Thus,
our analysis of the issue begins with the language of KRS
342.730(6), which states as follows:
All income benefits otherwise payable
pursuant to this chapter shall be offset by
payments made under an exclusively employerfunded disability or sickness and accident
plan which extends income benefits for the
same disability covered by this chapter,
except where the employer-funded plan
contains an internal offset provision for
workers’ compensation benefits which is
inconsistent with this provision.
Pursuant to KRS 342.730(6) an employer is only
entitled to receive credit for disability payments made in lieu
of workers’ compensation benefits if the payments were made
pursuant to an exclusively employer-funded plan, which covers
the work-related disability, and only if the plan did not
contain an internal offset provision for workers’ compensation
which is inconsistent with the statute.
If, the plan complies
with the statute, the employer is entitled to an offset for any
benefits paid pursuant to the employer-funded disability plan.
Osborn’s argument is flawed because, as noted by the
Board, the attorneys for Osborn and Cougar signed the
stipulation from the benefit review conference order and
memorandum which included on line 5 the following pre-printed
information:
7
“Temporary total disability benefits were paid at
Halls Hardwood Floor Co. v. Stapleton, Ky.App., 16 S.W.3d 327, 330 (2000).
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the rate of $________ per week from _________.”
Following
“from”, someone, presumably the ALJ, wrote: “Salary continuation
from 1-29-99 thru 3-15-99; 8-5-00 thru 12-22-00.”
We agree with
the Board’s conclusion that in light of the parties having
stipulated that Cougar paid Osborn his salary from January 29,
1999, through March 15, 1999, and since no TTD benefits were
paid during this period and since in the stipulation the salary
continuation information was placed on the line referencing TTD
benefits, the ALJ correctly allowed Cougar credit for the salary
continuation payments against the TTD benefits owed to Osborn
for this same time period.
This area of the law has caused confusion for years.
Prior to the adoption of KRS 342.730(6) in 1996, there was no
statute addressing such a credit; but to encourage employers to
voluntarily pay TTD benefits, the Board had applied the
equitable rule that any compensation the employer had previously
voluntarily paid to the employee would be credited against any
compensation that it was ordered to pay.
Unfortunately, such a
simple concept got distorted and caused a great deal of
litigation.
While the Supreme Court in American Standard v.
Boyd,8 and GAF Corp. v. Barnes,9 helped to clarify this area of
8
Ky., 873 S.W.2d 822 (1994).
9
Ky., 906 S.W.2d 353 (1995).
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the law, as we see in this case, the enactment of KRS10
342.730(6) in 1996 may result in additional confusion.
In the case sub judice, KRS 342.730(6) is not
applicable since the stipulation provided that the payments at
issue were a continuation of Osborn’s salary which was being
paid in lieu of TTD benefits.
If in fact these payments were
from some type of employee disability benefit, then Osborn
waived his right to have these payments analyzed pursuant to KRS
342.730(6) when he entered into the stipulation.
For the foregoing reasons, the opinion of the Board as
to the issue of credit for the payment of salary continuation is
affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
J. Drew Anderson
Prestonsburg, Kentucky
Denise Kirk Ash
Lexington, Kentucky
10
The confusion appears to have resulted from the Board, when it was the
fact-finder, using language in the award stating that the employer “‘is to
take credit for any compensation heretofore paid.’” South Central Bell
Telephone Co. v. George, Ky.App., 619 S.W.2d 723, 724 (1981). This very
general language was then broadly applied by the Court of Appeals in George
and Beth-Elkhorn Corp. v. Lucas, Ky.App., 670 S.W.2d 480 (1983), and Copher
v. American Standard, Ky.App., 732 S.W.2d 508 (1987), to include not only
voluntary payments of TTD benefits through workers’ compensation insurance
coverage, but also payments from disability insurance coverage provided
through the employer.
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