BILLY BAKER PAINTING v. DANIEL BERRY; HON. BONNIE C. KITTINGER, ADMINISTRATIVE LAW JUDGE; and WORKERS' COMPENSATION BOARD
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RENDERED:
DECEMBER 17, 2004; 2:00 p.m.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2004-CA-000414-WC
BILLY BAKER PAINTING
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-97-76344
v.
DANIEL BERRY;
HON. BONNIE C. KITTINGER,
ADMINISTRATIVE LAW JUDGE;
and WORKERS' COMPENSATION BOARD
APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE:
BARBER, McANULTY, AND MINTON, JUDGES.
BARBER, JUDGE:
Appellant, Billy Baker Painting (Billy Baker),
petitions for review from a decision of the Workers’
Compensation Board (WCB) that affirmed a decision of the
Administrative Law Judge (ALJ) finding that the two-year Statute
of Limitations applicable to filing an application for
adjustment of claim was tolled on Appellee, Daniel Berry’s
(Berry), claim for benefits due to a knee injury.
Having
thoroughly reviewed the facts and circumstances of the case and
the applicable case law, we affirm.
The facts are more than adequately set forth in the
ALJ’s Opinion and we adopt that statement as follows:
Plaintiff, Daniel Berry, filed for
workers’ compensation benefits on December
17, 2002, against Defendant, Billy Baker
Painting. Plaintiff alleges that on or
about July 19, 1997, he injured his right
knee while stepping onto a ladder, which
shifted, and that subsequently, he developed
back pain from limping on his right leg.
Defendant filed a Notice of Claim Denial, on
Form 111, stating that the claim is barred
by the Statute of Limitations, inasmuch as
the employer last paid temporary total
disability benefits in November 1997.
Defendant also filed a Special Answer,
specifically raising the affirmative defense
of Statute of Limitations contained in KRS
342.185. . . .
1. Plaintiff is 52 years old and his
work history is that of a painter and a
musician. He sustained an injury to his
right knee on July 19, 1997, as he was
painting an interior wall and attempted to
step onto a ladder. He received payment of
temporary total disability benefits through
November 16, 1997, and returned to work for
the same employer for another 3½ years.
Plaintiff states that he has not worked
since November 21, 2002, when he was laid
off from work with a different employer.
Following his injury, Plaintiff
underwent arthroscopic surgery on his right
knee in September, 1997, and was released to
return to work by Dr. Bonarens, his treating
doctor, in November, 1997. Plaintiff
received TTD benefits from the date of
injury through November 16, 1997.
-2-
He testified that he continued to have
problems with his knee and that in April,
2001, his employer terminated the employment
relationship without providing a reason.
His knee subsequently worsened; however he
stated that he did not seek medical
treatment until sometime in 2002.
Defendant-Employer took the depositions
of two Department of Workers’ Claims
employees, Joe Peters and Deborah Wingate.
Mr. Peters is the Supervisor in the
Agreements Section at the Kentucky
Department of Workers’ Claims (DWC). His
department is responsible for processing
Statute of Limitations letters generated by
electronic data input from employers. Mr.
Peters was able to testify that DWC received
an electronic filing report advising of the
initiation of TTD payments. DWC received
[another] electronic filing report advising
of a suspension or termination because of
Plaintiff’s return to work.
Ordinarily, a notice from the employer,
such as the third notice electronically
submitted by the Defendant-Employer, would
trigger a Termination of Benefits letter
(WC3) to the Plaintiff notifying him of the
two-year Statute of Limitations following
the last payment of TTD, in which to file a
workers’ compensation claim. According to
Mr. Peters, Plaintiff was not sent a WC3
termination letter because the
electronically filed report by the
Defendant-Employer did not include a
“payment adjustment end date” which
indicates the date of last payment of TTD.
Mr. Peters characterized the payment
adjustment end date as a mandatory field on
the computer screen used in the electronic
filing process. He characterized the
electronic filing by Defendant as
“deficient” in the sense that it did not
include an adjustment end date.
-3-
Deborah Wingate testified as Director
of the information and research division for
the Kentucky DWC. She confirmed that the
WC3 termination letter was generated, but
was not mailed to the claimant because of
the missing information in the payment
adjustment field. Such letters, which were
generated without a termination date, were
allowed to accumulate for a period of time
and were then simply thrown away. She
testified that, to her knowledge, DWC did
not reject the employer’s filing or generate
any kind of error message to the carrier’s
third party adjuster indicating that a
termination letter would not be sent.
According to Ms. Wingate the WC3 termination
letter was not generated because the
adjustment end date was not included in the
Defendant’s electronic filing.
As an Exhibit to Mr. Peter’s
deposition, Plaintiff filed a copy of a
November 14, 2000, letter from former DWC
Commissioner Walter W. Turner, addressing
the issue of the failure of the Department
to issue a WC3 termination letter in
circumstances similar to the one at hand.
According to Mr. Turner, in a similar case,
the employer filed a notice indicating that
the report was a suspension transaction;
however, the payment adjustment end date was
left blank. Mr. Turner characterized the
adjustment end date as a mandatory field
when the payment of benefits is suspended or
terminated. He acknowledged that no edit or
reject system was in place to notify the
employer when the data was missing or that a
termination of benefits letter would not be
mailed to the employee. According to Mr.
Turner one or more employees of DWC made a
policy judgment to discard the letters
generated without a payment adjustment end
date instead of mailing them to the
employee, a decision which he felt was
erroneous.
-4-
Defendant obtained and filed the deposition
testimony of Mary Margaret Sutherland,
Claims Manager at Ladegast & Heffner Claims
Service. Ms. Sutherland testified that
Plaintiff was paid TTD benefits from July
29, 1997, through November 16, 1997. At the
end of his period of TTD, her company
electronically filed a report advising DWC
of the termination of his benefits.
Ladegast & Heffner received an
acknowledgment from DWC that the filing was
accepted on November 21, 1997. According to
Ms. Sutherland, the filing contained a
return to work date of November 16, 1997;
however, no information was shown in the
payment adjustment end date field.
According to Ms. Sutherland, the
initial stages of electronic filing included
numerous changes in the program and
methodology and a change in the computer
software program. The early filing system
did not include a method by which the
carriers were notified of missing
information. It is also her understanding
from documents received in September, 1999,
and March, 2000, that DWC might have changed
their policy regarding whether a WC3
termination letter would be generated as a
result of any notice of suspension, as
opposed to being generated only when
specific payment adjustment end date
information was supplied. Ms. Sutherland
said Ladegast & Heffner was not advised by
DWC that its suspension notice was deficient
or would result in a decision not to mail a
WC3 termination letter.
Ms. Sutherland testified that she
received a letter in December 1999 from
Deborah Wingate with a list of claims
showing lost time injuries, which did not
reflect a return to work date or a
subsequent report from the carrier. The
list did not include the name of the
Plaintiff in this case.
-5-
As an Exhibit to Ms. Sutherland’s
deposition, Plaintiff filed an affidavit by
Commissioner Larry Greathouse certifying the
electronic data interchange records filed
regarding the injury to this Plaintiff.
These records include a First Report of
Injury and two subsequent reports of injury,
including the November 21, 1997, suspension
notice at issue herein. Commissioner
Greathouse’s affidavit also included the
following statement: “I also certify as of
this date, January 5, 2003, the Kentucky
Department of Workers’ Claims’ data base
does not reveal the filing of a suspension
IAT reflecting the Adjustment End Date and
as a result, the WC3 termination of benefits
letter has not been generated.”
On appeal Billy Baker continues to argue that it
fulfilled all of its statutory duties and the only party who
failed to fulfill its obligation was the Department of Workers’
Claims (DWC).
Therefore, it contends that the defense of the
Statute of Limitations should be available to it in this case.
KRS 342.185(1) requires a worker to file a claim for
injury within two years of the date of the accident or two years
from the last payment of income benefits.
KRS 342.040(1)
requires the employer to notify the DWC of any termination or
failure to make payments.
This notification then triggers the
duty of the DWC to send the WC3 termination letter to the
employee advising him of his right to prosecute a claim.
It has long been recognized that the provisions of KRS
342.185(1) and 342.040(1) work in tandem.
-6-
J & V Coal Co. v.
Hall, Ky., 62 S.W.3d 392, 395 (2001).
An employer that does not
comply with KRS 342.040(1) is estopped from relying on the
Id.; Patrick v. Christopher East Health
statute of limitations.
Care, Ky., 142 S.W.3d 149, 151-152 (2004).
This is so even if
the failure to comply is not in bad faith.
Rogers v. Palm Beach
Co., Inc., Ky., 114 S.W.3d 848, 850 (2003).
It is undisputed in this case that Berry did not file
his claim within two years of the last payment of TTD.
It is
also undisputed that he was never sent the WC3 termination
letter advising him of the applicable Statute of Limitations.
What was disputed in this case was whether Billy Baker complied
with its duty to notify the DWC under KRS 342.040(1) so that the
letter would be sent.
The ALJ found that the reason the DWC did
not send the letter was because of Billy Baker’s failure,
through its carrier, to communicate to the DWC the payment
adjustment end date.
evidence.
This finding is supported by substantial
Pruitt v. Bugg Bros., Ky., 547 S.W.2d 123, 124
(1977).
Where the employer fails to comply with KRS
342.040(1), even if that failure is unintentional, the
consequences of that failure fall on the employer.
Lizdo v.
Genetic Equip., Ky., 74 S.W.3d 703, 705-706 (2002); Colt
Management Co. v. Carter, Ky. App., 907 S.W.2d 169, 171 (1995);
-7-
Ingersoll-Rand Co. v. Whittaker, Ky. App., 883 S.W.2d 514, 515
(1994).
Accordingly, the decision of the WCB is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT:
Douglas A. U’Sellis
Louisville, Kentucky
BRIEF FOR APPELLEE, DANIEL
BERRY:
Christopher P. Evensen
Louisville, Kentucky
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