ST. JOSEPH HOSPITAL v. NANCY BRATTON; HON. W. BRUCE COWDEN, JR., ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD
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RENDERED: October 31, 2003; 10:00 a.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2002-CA-001522-WC
ST. JOSEPH HOSPITAL
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-99-00933
v.
NANCY BRATTON; HON. W. BRUCE COWDEN, JR.,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS' COMPENSATION BOARD
APPELLEES
OPINION
VACATING AND REMANDING
** ** ** ** **
BEFORE:
GUIDUGLI, JOHNSON AND KNOPF, JUDGES.
JOHNSON, JUDGE:
St. Joseph Hospital has petitioned for review
of an order of the Workers’ Compensation Board entered on July
12, 2002.
The Board dismissed St. Joseph’s appeal from the
Administrative Law Judge’s order entered on May 31, 2002, on
grounds that the order was interlocutory and not appealable.
Having concluded that the Board erred in dismissing St. Joseph’s
appeal, but that the ALJ was correct in granting Nancy Bratton’s
motion to reopen and by ordering St. Joseph to pay for Bratton’s
knee replacement surgery, we vacate the Board’s order dismissing
St. Joseph’s appeal, and remand with instructions to enter an
order affirming the ALJ’s order and award.
Bratton was employed by St. Joseph as a central supply
technician from approximately October 1977, through June 1999.1
On February 5, 1998, Bratton was carrying her lunch tray to a
table in St. Joseph’s cafeteria when a small “dip” in the floor
caused a “slip and fall” type accident in which Bratton severely
injured her left knee.
Approximately one month later, on March
11, 1998, Dr. Gregory D’Angelo performed an arthroscopy on
Bratton’s knee.
Dr. D’Angelo reported that Bratton had “grade 4
chondromalacia,” which he described as being the worst level of
damage to the knee’s cartilage and other tissues.
Bratton
eventually returned to work at St. Joseph, but she was
restricted in the types of activities she could perform.
Despite having undergone the arthroscopy, Bratton
continued to experience pain in her left knee.
Dr. D’Angelo
testified that around October 1999, he formed the opinion that
total knee replacement surgery would be required to completely
alleviate Bratton’s pain and other complications.
Dr. Edward
Berghausen evaluated Bratton on October 6, 1998, and opined that
1
According to Bratton’s testimony, “central supply” is the area of the
hospital where various pieces of equipment from throughout the hospital are
sent to be sterilized in preparation for use on the next patient. Bratton
testified that her job required a great deal of stooping, bending, and
lifting.
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she was not a candidate for total knee replacement.2
Dr.
Berghausen further assigned Bratton a functional impairment
rating of 3%.
Approximately one year later, on November 16, 1999,
Dr. Craig Roberts examined Bratton pursuant to a KRS3 342.315
evaluation.4
Dr. Roberts opined at that time that Bratton was
not a candidate for knee replacement surgery, but that she would
likely require such surgery in the next five to ten years.
Dr.
Roberts assigned Bratton a functional impairment rating of 12%,
but attributed 25% of her impairment to the natural aging
process.
On March 29, 2000, a settlement agreement between
Bratton and St. Joseph was approved by the ALJ.
St. Joseph
agreed to pay Bratton a lump sum of $23,485.38, even though it
was typically St. Joseph’s policy to pay settlements in periodic
amounts as provided for in the workers’ compensation statutes.
The settlement amount was reached by assigning Bratton an
initial impairment rating of 10%.
Pursuant to KRS 342.730, this
figure was then multiplied by factors of 1.25 and 1.50, which
2
Dr. Berghausen testified that he was a part of a referral service called
“Case Consultants.” He further testified that St. Joseph would often refer
injured workers to him for medical evaluations.
3
Kentucky Revised Statutes.
4
Among other things, KRS 342.215 authorizes an ALJ to direct the appointment
of a medical evaluator to examine an injured employee.
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led to a total impairment rating of 18.75%.5
According to St.
Joseph, at the time the parties reached the settlement
agreement, KRS 342.730 provided that the multiplying factor for
a 10% impairment rating was 1.00, and the 1.50 factor applied
only to those cases where it was determined that the employee
was unable to return to work.
St. Joseph contends that it
agreed to pay Bratton a settlement based on a higher impairment
rating than required and in a lump sum amount, in exchange for
Bratton agreeing to waive her claim against St. Joseph for the
costs of knee replacement surgery.
On September 12, 2001, Bratton filed a motion to
reopen based on a “medical fee dispute.”
Bratton claimed that
her knee condition had worsened and that the parties’ settlement
agreement did not preclude her from seeking to hold St. Joseph
liable for the costs of knee replacement surgery.
St. Joseph
objected to the reopening, arguing that Bratton had not
established a worsening of her condition, and that because
Bratton had waived any claims against St. Joseph for a knee
replacement, there was no “medical fee dispute.”
On October 22,
2001, the ALJ found that Bratton had set forth a prima facie
case for reopening and granted Bratton’s motion.
5
KRS 342.730(b) provides guidelines for determining an injured worker’s
benefits when there has been a permanent partial disability. The employee’s
wages are first multiplied by an impairment rating. This figure is then
multiplied again by a corresponding factor provided in the statutory
guidelines.
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Following a benefit review conference held on February
6, 2001, and a formal hearing held on February 21, 2001, the ALJ
entered an opinion, order, and award regarding Bratton’s motion
to reopen.
The ALJ found that “there was not in fact adequate
consideration given [by St. Joseph] for the waiver for total
knee replacement [ ] surgery[.]”
Thus, the ALJ ruled that the
settlement agreement in which Bratton allegedly waived any claim
against St. Joseph for a total knee replacement failed for lack
of consideration and the settlement agreement did not preclude
her from reopening her claim on this issue.
The ALJ further
found that even if St. Joseph had provided sufficient
consideration to render Bratton’s waiver binding, her
conditioned had “worsened.”
Therefore, pursuant to KRS 342.125,
the ALJ ruled that the knee replacement issue was subject to
reopening.
Based upon the ALJ’s further findings that Bratton’s
knee condition had in fact worsened, the ALJ ordered that St.
Joseph and/or its insurer would be liable for the costs of
Bratton’s knee replacement surgery if she elected to undergo
that procedure.
The ALJ further ordered St. Joseph and/or its
insurer to pay Bratton temporary total disability (TTD) benefits
pursuant to KRS 342.730(1)(a), until she achieved maximum
medical improvement.
Bratton’s claim was ordered to be held in
abeyance until maximum medical improvement was achieved.
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St.
Joseph appealed the ALJ’s order to the Board.
However, on July
12, 2002, the Board held that St. Joseph was appealing from an
interlocutory order and therefore dismissed St. Joseph’s appeal.
This petition for review followed.
St. Joseph first argues that the Board erred by
dismissing its appeal as interlocutory.
In its response to
Bratton’s motion to dismiss before the Board, St. Joseph argued:
This matter [ ] was before ALJ Cowden
on a medical fee dispute, wherein the
primary issue was whether waiver language in
a settlement agreement was enforceable to
bar [Bratton] from claiming medical expenses
for knee replacement surgery. Thus, the
ALJ’s decision, made by entry of an Opinion
and Award [in which it ordered that St.
Joseph be held liable for Bratton’s knee
replacement surgery], was, in fact,
dispositive of the issues presented in the
medical fee dispute. By definition,
therefore, this appeal is not interlocutory,
and may proceed.
We agree with St. Joseph’s argument on this issue and hold that
the Board erred by dismissing St. Joseph’s appeal as
interlocutory.
In its order dismissing St. Joseph’s appeal, the Board
relied on the cases of Transit Authority of River City v.
Saling,6 and KI USA Corp. v. Hall.7
However, those cases are
distinguishable from the case sub judice.
6
Ky.App., 774 S.W.2d 468 (1989).
7
Ky., 3 S.W.3d 355 (1999).
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In Saling and Hall,
the injured worker in both cases applied for and received an
award for interlocutory TTD benefits from the ALJ pursuant to
803 KAR8 25:010, Section 12.
As our Supreme Court explained in
Hall, “[i]nterlocutory awards are appropriate only in instances
where the affected individual ‘will suffer irreparable injury,
loss or damage pending a final decision on the application.’”9
In the case at bar, Bratton was not seeking interlocutory
relief; rather, she filed a motion to reopen her case on the
basis of a medical fee dispute.
A review of the record shows that in the parties’
motions and briefs filed with the ALJ, the issue of whether
Bratton had shown the requisite “irreparable injury, loss or
damage” to entitle her to interlocutory relief was never raised.
Further, as the ALJ noted in his order and memorandum following
a benefit review conference held on February 6, 2002, the
primary issue before the ALJ was the legal effect of the waiver
language contained in the parties’ settlement agreement.
In
short, there is nothing in the record indicating that either the
parties or the ALJ contemplated that Bratton was seeking
interlocutory relief.10
8
Unlike the facts of Saling and Hall, the
Kentucky Administrative Regulations.
9
Hall, 3 S.W.3d at 358 (citing 803 KAR 25:010, § 11(3) which has been
renumbered as § 12(4)(a)(2)).
10
The ALJ’s order holding St. Joseph liable for Bratton’s knee replacement
and TTD benefits is titled “Opinion, Order and Award Upon Reopening Opinion
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ALJ in the instant case ordered St. Joseph to pay for Bratton’s
knee replacement and to pay her TTD benefits pursuant to KRS
342.020 and KRS 342.730 respectively; it did not order those
payments under the interlocutory scheme found under 803 KAR
25:010, Section 12.
Hence, Saling and Hall are inapplicable to
the facts of the case sub judice.
A final and appealable order is one which either
“‘terminates the action itself or operates to divest some right
in such manner as to put it out of the power of the court making
the order after the expiration of the term to place the parties
in their original condition.’”11
As St. Joseph correctly points
out, the ALJ’s determination that the language in the parties’
settlement agreement was not an effective waiver of future
medical benefits and that St. Joseph would therefore be liable
for Bratton’s knee replacement surgery, was a final order that
divested St. Joseph of the right to refuse payment under the
settlement agreement.
Hence, the ALJ’s order was therefore
final and appealable.
Accordingly, we hold that the Board erred
by dismissing St. Joseph’s appeal as interlocutory.
and Order On Interlocutory Relief.” Since this order makes no further
reference to the requirements for interlocutory relief, we must conclude that
the inclusion of the words “Interlocutory Relief” was merely a clerical
error.
11
Searcy v. Three Point Coal Co., 280 Ky. 683, 134 S.W.2d 228, 231
(1939)(quoting Green River Fuel Co. v. Sutton, 260 Ky. 288, 84 S.W.2d 79, 81
(1935)). See also Davis v. Island Creek Coal Co., Ky., 969 S.W.2d 712
(1998).
-8-
The only remaining issue is whether the ALJ was
correct in granting Bratton’s motion to reopen.
Since this is a
question of law, we have determined in the interest of judicial
economy that it would be proper for this Court to address this
issue on the current appeal, rather than remand the case to the
Board.
St. Joseph argues that the waiver language in the
parties’ settlement agreement precludes Bratton from seeking to
hold St. Joseph liable for the costs of her knee replacement
surgery.
We disagree with St. Joseph, but for different reasons
than those stated by the ALJ.
The ALJ found that “there was not in fact adequate
consideration given for the waiver for total knee replacement or
mosaic-plasty surgery on [Bratton’s] left knee.”
We believe the
ALJ erred in measuring the adequacy of consideration, rather
than limiting his determination to whether there was in fact
consideration given by both parties.
In order for an agreement
to be binding, there must be consideration, “but the adequacy of
the consideration cannot be inquired into if there is something
of detriment to one party or benefit to the other, however
slight.”12
In the case at bar, there was a bona fide dispute with
respect to Bratton’s impairment rating.
12
Dr. Berghausen assigned
Posey v. Lambert-Grisham Hardware Co., 197 Ky. 373, 247 S.W. 30, 33 (1923).
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her a rating of 3%, while Dr. Roberts assigned a rating of 12%.
Both parties have admitted that the final 18.75% impairment
rating, which included the factors of 1.25 and 1.5, was a
compromise between the parties that had been reached during
negotiations.
Further, St. Joseph agreed to pay a lump sum
amount to Bratton, as opposed to its normal practice of paying
in periodic installments.
Thus, St. Joseph agreed to the higher
impairment rating and the lump sum payment in exchange for
Bratton agreeing to the waiver language.
Accordingly, we hold
that the agreement was supported by consideration; both parties
incurred a detriment and/or received a benefit as a part of the
negotiations.
We now turn to the language of the settlement
agreement itself.
“An agreement to settle a workers’
compensation claim constitutes a contract between the parties.”13
The construction and interpretation of contracts are questions
of law for the court.14
review on appeal.15
Questions of law are subject to de novo
The intention of the contracting parties
should be ascertained by construing the contract as a whole.16
13
Whittaker v. Pollard, Ky., 25 S.W.3d 466, 469 (2000).
14
Cinelli v. Ward, Ky.App., 997 S.W.2d 474, 476 (1998).
15
Id.
16
Bullock v. Young, 252 Ky. 640, 651, 67 S.W.2d 941, 946 (1933).
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If the contract contains inconsistent clauses, those clauses
should be reconciled if possible.17
In support of its argument that Bratton has waived her
right to seek payment for her knee replacement surgery, St.
Joseph relies on the following language from the settlement
agreement:
Plaintiff, Nancy Bratton, waives and
dismisses her claim for a total knee
replacement, and/or mosaic-plasty surgery,
of her left knee, as part of the
consideration for settlement.
However, above this quoted language is a sentence which states:
“Does settlement amount include waiver or buyout of ____ past or
_____ future medical expenses?”
In response, the parties
checked the blank space marked “No.”
Directly underneath this
sentence, is the following:
“If yes, settlement amount for
waiver or buyout: $_______”.
The parties inserted “N/A.”18
Hence, the settlement agreement contains some
seemingly inconsistent provisions.
However, we conclude that
these provisions can be reasonably reconciled so as to give
effect to the agreement as a whole.
The quoted language that
St. Joseph relies upon makes no mention of future medical
expenses.
On the other hand, the other provision makes specific
mention of future medical expenses.
Therefore, we conclude that
17
Black Star Coal Corp. v. Napier, 303 Ky. 778, 781, 199 S.W.2d 449, 451
(1947).
18
We assume this is an abbreviation for “not applicable.”
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this settlement agreement must be interpreted to provide that
Bratton agreed to waive her claim for knee replacement surgery
at the time the agreement was reached, but that she did not
waive a future claim that might arise if her condition worsened.
Accordingly, we hold that it was proper for the ALJ to grant
Bratton’s motion to reopen.
Following the ALJ’s order granting Bratton’s motion to
reopen, there was substantial evidence presented to the ALJ
supporting his decision to order St. Joseph to pay for Bratton’s
knee replacement surgery and to pay her TTD benefits.
Dr.
D’Angelo testified that since March 29, 2000, the day the
settlement agreement was approved by the ALJ, Bratton’s
condition had worsened and that in his opinion, knee replacement
surgery was necessary to alleviate both her pain and
complications.
Dr. D’Angelo specifically stated that a “total
knee replacement would be a reasonable and necessary procedure
for the cure and/or relief of [Bratton’s] left knee condition.”
Further, Bratton also testified that her condition had worsened.
Specifically, Bratton stated that her ability to sleep through
the night had been hampered and that it “has changed my whole
life.”
Considering the fact that St. Joseph presented no
evidence to the contrary, we hold that there was substantial
evidence before the ALJ supporting his decision, and that St.
Joseph failed to meet its burden of showing that the knee
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replacement surgery was unnecessary.19
Accordingly, we affirm
the order of the ALJ holding St. Joseph liable for the costs of
Bratton’s knee replacement surgery and for the payment of TTD
benefits.
Based on the foregoing, the order of the Board
dismissing St. Joseph’s appeal is vacated, and this matter is
remanded to the Board with instructions to enter an order
affirming the ALJ’s award.
ALL CONCUR.
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
David C. Trimble
Lexington, Kentucky
David R. Marshall
Lexington, Kentucky
19
National Pizza Co. v. Curry, Ky.App., 802 S.W.2d 949, 951 (1991).
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