GAYLE M. HOLBROOK V. LEXMARK INTERNATIONAL GROUP, INC., As Insured by Kemper; LEXMARK INTERNATIONAL GROUP, INC., As Insured by CNA; RON CHRISTOPHER, Director of SPECIAL FUND; DONNA H. TERRY, Administrative Law Judge; and WORKERS' COMPENSATION BOARD
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RENDERED: SEPTEMBER 27,200l
MODIFIED: FEBRUA
GAYLE M. HOLBROOK
V.
APPEAL FROM COURT OF APPEALS
NOS. 1999-CA-3095WC, 2000-CA-0089-WC
WORKERS’ COMPENSATION BOARD NO. 97-68293
LEXMARK INTERNATIONAL GROUP, INC.,
As Insured by Kemper; LEXMARK INTERNATIONAL
GROUP, INC., As Insured by CNA;
RON CHRISTOPHER, Director of SPECIAL FUND;
DONNA H. TERRY, Administrative Law Judge; and
WORKERS’ COMPENSATION BOARD
APPELLEES
OPINION OF THE COURT
AFFIRMING
The claimant sought benefits for a work-related gradual injury on June 9, 1998.
She had first obtained treatment for her symptoms in 1994, was advised that her
complaints were probably work-related, was prescribed wrist splints to wear while
working, and she informed her employer in December, 1994. Furthermore, there was
evidence that on February 15, 1995, she was informed of her diagnosis and its cause
and that restrictions were imposed. Thus, an Administrative Law Judge (ALJ)
determined that a gradual injury became manifest no later than February 15, 1995,
more than two years before the claim was filed. Although concluding that the 1995
injury was barred by the period of limitations and rejecting an argument that an expired
period of limitations could be revived by the subsequent payment of salary continuation
benefits, the ALJ determined that the claimant sustained an additional injury from work
she performed within two years of filing her claim and awarded benefits for that injury.
Appealing, the claimant has asserted, unsuccessfully, that the manifestation of
disability did not occur until she first missed work on July 11, 1997, and that the ALJ’s
finding to the contrary constituted an abuse of discretion. In the alternative, she has
asserted that the employer’s payment of benefits during various periods of temporary,
total disability (TTD) that occurred between July 11, 1997, and April 20, 1998, served to
revive and extend the period of limitations, thereby making her entire claim
compensable. A final argument is that KRS 342.040(l) is unconstitutionally arbitrary
because it did not entitle the claimant to a “notice to prosecute” letter until more than
two years after the February 15, 1995, manifestation of disability.
The claimant first sought medical treatment for her symptoms in November,
1994, and learned that her condition was probably related to her work. She was placed
on light duty, wore splints, and was prescribed anti-inflammatory medication. It is
undisputed that she informed her employer of her condition in 1994, and she testified
that her employer’s carrier paid her medical bills. After nerve conduction studies were
positive for bilateral carpal tunnel syndrome, the claimant was referred to
Dr. Ritterbusch, an orthopedic surgeon. On February 15, 1995, Dr. Ritterbusch
assigned permanent work restrictions, informed the claimant of her diagnosis and its
cause, but did not assign a permanent functional impairment rating. Although he
discussed the possibility of surgery with the claimant as well, by March 22, 1995, he
had concluded that it was not appropriate.
The ALJ noted that the employer accommodated the claimant’s restrictions and,
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for that reason, she was able to continue working, without absence, until July, 1997.
She missed work due to her injury from July 1 l-28, 1997, worked through August 17,
1997, and then underwent surgery. She missed work thereafter from August 25, 1997,
to April 30, 1998. During these absences, she received a continuation of her salary
pursuant to a company policy that did not take into account whether the absence was
work-related so long as there was a doctor’s excuse. The claimant testified that she
knew that she was entitled to TTD benefits but that she never disputed the receipt of
sickness and accident benefits because TTD benefits would have been at a lesser rate.
Medical evidence established that there was a measurable increase in the extent
of the claimant’s injury due to the trauma incurred after June 8, 1996, and attributed a
7% functional impairment to the increase. Her entire impairment due to the condition
was 14%. After determining that the claimant did not retain the physical capacity to
return to her former employment, the ALJ awarded income and medical benefits.
Concluding that the subsequent injury became manifest on August 17, 1997, the last
day that the claimant worked, the ALJ assigned liability for the award to the insurance
carrier who provided coverage at that time.
The claimant’s subsequent petition for reconsideration was granted to the extent
that the ALJ corrected the amount of the claimant’s weekly benefit. Furthermore, the
ALJ made specific findings that the claimant was temporarily totally disabled during
certain periods that salary continuation was paid but that the employer was not entitled
to credit for those sickness and accident benefits under the decision in Williams v.
Eastern Coal Corp., Ky., 952 S.W.2d 696 (1997). This appeal by the claimant follows
unsuccessful appeals to the Workers’ Compensation Board and the Court of Appeals.
In Alcan Foil Products v. Huff, Ky., 2 S.W.3d 96 (1999), we determined that the
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“manifestation of disability” to which Randall v. Pendland, Ky.App., 770 S.W.2d 687
(1988),
referred was actually the manifestation of physically and/or occupationally
disabling symptoms that lead a worker to learn that she has sustained a work-related
injury. The entitlement to workers’ compensation benefits arises with a work-related
accident that causes an injury and does not require that the injury result in a permanent
functional impairment or that it be permanently disabling. Thus, the notice and
limitations provisions for a gradual injury are triggered when the worker becomes aware
of a gradual injury and knows that it was caused by work, regardless of whether the
symptoms that led to discovery of the injury later subside. This approach is consistent
with one of the purposes of the notice requirement, to enable the employer to take
measures to minimize the worker’s ultimate impairment and, hence, its liability. Id. at
101. Notice is not at issue in the instant case. The employer has known of the injury
from the outset, and the claimant testified that her employer’s workers’ compensation
carrier paid her 1995 medical bills. With regard to the employer’s obligation under KRS
342.038(l) to notify the Department of Workers’ Claims (Department) that the claimant
had been injured, the ALJ noted that a Form SF-l (first report of injury) was filed on
December 8, 1994, two days after the claimant reported her symptoms. The claimant
also admits that the employer filed another report on June 24, 1997.
In Special Fund v. Clark, KY., 988 S.W.2d 487 (1999), we returned to the
question of limitations as it applied to a gradual injury. We pointed out that once a
worker became aware of the existence of a work-related gradual injury and of its cause,
the period of limitations began to run for whatever occupational disability was
attributable to trauma incurred before that date. If the worker continued to sustain
additional work-related trauma, and suffered additional injury thereafter, KRS 342.185
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operated to prohibit compensation for any disability that was attributable to trauma
incurred more than two years preceding the filing of the claim. Id. at 490.
It is clear that the claimant knew and had notified her employer of her workrelated injury in December, 1994. She admitted that she was paid workers’
compensation medical benefits for the treatment that she obtained early in 1995.
Considering Dr. Ritterbusch’s testimony, there clearly was substantial evidence that the
claimant had sustained a gradual injury and knew that it was caused by her work no
later than February 15, 1995. We also conclude that substantial medical evidence
supported the findings that a portion of her functional impairment and occupational
disability were attributable to trauma incurred within two years of the filing of the claim
and, therefore, were compensable.
The claimant asserts that Crenshaw v. Weinberg, Ky., 805 S.W.2d 129 (1991)
supports her argument that the entire claim was timely, but we are not persuaded that it
does. Crenshaw involved the interplay of two provisions of the Motor Vehicle
Reparations Act. KRS 304.39-230(l) provided that an action for no-fault benefits must
be filed within two years of the date of “loss” or four years of the date of “accident,”
whichever was earlier. KRS 304.39-230(6) provided that an action for tort liability must
be commenced with two years after the injury, death, or last reparation payment,
“whichever later occurs.” The plaintiff filed a no-fault claim more than two years after
the accident, but it was timely under subsection (1) because it was filed within two years
of the loss that was claimed and within four years of the accident. Within four years
after the accident, the defendant’s carrier made a reparation payment, after the
plaintiffs tort action was filed. The defendants argued that the tort claim was barred by
limitations because no reparation payment was made within two years after the
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accident. We explained, however, that the plain language of subsection (6) provided
that the “later” event triggered the period of limitations for filing a tort action. There, the
later event was a reparation payment that was made pursuant to a timely filed claim for
no-fault benefits. Thus, because the no-fault claim was timely and resulted in a
reparation payment, the tort limitations period was tolled by the reparation payment on
that claim. Had the no-fault claim not been timely, no reparation payment would have
been required, and none was likely to have been made. Thus, the tort limitations period
would not have been tolled.
The instant case concerns the period of limitations for a workers’ compensation
claim which, unlike a tort claim, is purely a statutory cause of action.
Neither Crenshaw
nor the statutes involved therein are persuasive under the present facts. KRS 342.185
provides, in pertinent part, as follows:
[N]o proceeding under this chapter for compensation for an injury or
death shall be maintained . . . unless an application for adjustment of
claim for compensation with respect to the injury shall have been made
with the department within two (2) years after the date of accident. . . . If
payments of income benefits have been made, the filing of an application
for adjustment of claim with the department within the period shall not be
required, but shall become requisite within two (2) years following the
suspension of payments or within two (2) years of the accident, whichever
is later.
In the instant case, the first salary continuation payment to the claimant was not made
until July, 1997, more than two years after a gradual injury became manifest. Thus, the
two-year period of limitations had run before the payment was made. In other words,
under KRS 342.185, as construed in Alcan Foil Products v. Huff, supra, the period of
limitations was triggered when the claimant’s injury became manifest, and no
intervening payment served to toll the period before it expired. Thus, the relevant
question on the present facts is whether a period of limitations may either be waived or
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revived by the payment of a salary continuation benefit sometime after the period has
expired.
It has long been recognized that KRS 342.185 operates together with KRS
342.040(l) and toils the period of limitations until after the payment of voluntary income
benefits ceases in order to protect injured workers who might be lulled into a false
sense of security by receiving such payments and, therefore, fail to actively pursue a
claim. See City of Frankfort v. Roaers, Ky.App., 765 S.W.2d 579, 580 (1988). Thus,
an employer who fails to comply with KRS 342.040(l) by notifying the Board that
voluntary payments have ceased and, therefore, prevents the Board from complying
with its duty under KRS 342.040(l) to notify the worker of his right to prosecute a claim
and of the applicable period of limitations, is not permitted to raise a limitations defense.
Id. Consistent with this, payments that are made by an employer pursuant to an
employment contract and that are reasonably viewed by a worker as having been made
in lieu of workers’ compensation benefits also toll the period of limitations. Kentucky
West Virginia Gas Co. v. Spurlock, Ky., 415 S.W.2d 849 (1967).
Here, the ALJ did not make a specific finding concerning whether the claimant
reasonably believed that the salary continuation benefits were paid in lieu of workers’
compensation benefits because, regardless of whether they were, they did not toll the
period of limitations as to the injury that existed on February 15, 1995. Clearly, in
instances where a payment is neither made nor due until after the period of limitations
has expired, it could not be said that such a payment lulled the worker into a false
sense of security and, therefore, caused his subsequent claim to be untimely. The
same is true with regard to an employer’s alleged failure to notify the Department that it
was terminating income benefits that were neither made nor due until after the period of
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limitations had expired. For that reason, we are not persuaded that the legislature
intended for the period of limitations to be revived by payments that are made after it
has expired.
The question then becomes whether such payments would constitute a waiver of
the employer’s limitations defense, in other words, whether the claimant’s employer
waived the limitations defense as to that part of the claimant’s injury that existed on
February 15, 1995, by making salary continuation payments beginning in July, 1997.
As we observed in Harris Brothers Construction Co. v. Crider, Ky., 497 S.W.2d 731,
733 (1973):
[A] waiver exists only where one with full knowledge of a material fact
does or forbears to do something inconsistent with the existence of the
right or of his intention to rely upon the right. . . . No one can be said to
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have waived that which he does not know, or where he has acted under a
misapprehension of the facts. 28 Am.Jur.2d, Estoppel and Waiver,
Sections 157 and 158; (citations omitted).
In view of the fact that the claimant continued to work until August 17, 1997, the ALJ’s
decision to treat this claim as being for two gradual injuries (one injury that became
manifest on February 15, 1995, and a subsequent injury that became manifest on
August 17, 1997) was consistent with the rationale that was expressed in Special Fund
v. Clark, It is clear that the employer knew of the initial injury in December,
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1994, but the salary continuation payments were made to the claimant more than two
years later, shortly after the employer had filed a second accident report. At the point
that the payments began, the claimant had sustained minitrauma for more than an
additional two years and had finally decided to undergo surgery. Under those
circumstances, we are not persuaded that the evidence compelled a finding that the
employer knowingly and voluntarily waived its limitations defense with regard to the
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injury that became manifest on February 15, 1995, by paying salary continuation
benefits in 1997 and 1998.
KRS 342.038(l) requires an employer to keep a record of all work-related
injuries and to file a report with the Department in instances where a worker misses
more than one day of work due to an injury. It is undisputed that this employer did so.
KRS 342.038(l) contains no requirement that the Department notify the worker of his
right to prosecute a claim, but the claimants appeal is not pitched to KRS 342.038(l).
Instead, she attacks the constitutionality of KRS 342.040(l), which provides, in
pertinent part, as follows:
Except as provided in KRS 342.020, no income benefits shall be payable
for the first seven (7) days of disability unless disability continues for a
period of more than two (2) weeks, in which case income benefits shall be
allowed from the first day of disability. . . . If the employer should
terminate, or fail to make payments when due, the employer shall notify
the commissioner of the termination or failure to make payments and the
commissioner shall, in writing, advise the employee or known dependent
of right to prosecute a claim under this chapter.
The claimant focuses on the fact that although KRS 342.040(l) triggers the
employer’s duty to give notice, it does so only after income benefits are not paid when
due or after they are terminated. Thus, in instances where income benefits first
become payable after the applicable period of limitations has run, KRS 342.040(l)
triggers the employer’s and the Departments duty to give notice of the right to
prosecute after the period of limitations has already expired. Only those workers who
miss more than seven days of work due to their injury before the applicable period of
limitations has run are entitled to receive notice of their right to prosecute a claim before
the period of limitations has run. She asserts, therefore, that the provision is
unconstitutionally arbitrary and that it violates the due process protections of the
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constitutions of the United States and Kentucky.’
Particularly when they involve the regulation of economic matters, the acts of the
legislature are entitled to a strong presumption of constitutionality. Delta Air Lines. Inc.
v. Corn., Revenue Cabinet, Ky., 689 S.W.2d 14 (1985). A statute involving the
regulation of economic matters or matters of social welfare complies with both due
process and equal protection requirements if it is rationally related to a legitimate state
objective. The constitutionality of a statutory classification will be upheld if the
classification is not arbitrary, or if it is founded upon any substantial distinction
suggesting the necessity or propriety of the classification. See Kentuckv Harlan Coal
Co. v. Holmes, Ky., 872 S.W.2d 446,455 (1994); Waaaoner v. Waaaoner, Ky., 846
S.W.2d 704 (1992); Estridae v. Stovall, Ky. App., 704 S.W.2d 653, 655 (1985). Thus, a
party seeking to have a statute declared unconstitutional is faced with the burden of
demonstrating that there is no conceivable basis to justify the legislation. Buford v.
Corn., Ky.App., 942 S.W.2d 909 (1997).
The claimant argues that by enacting KRS 342.040(l), the legislature has
recognized the need for injured workers to be informed that the period of limitations on
their claim has begun to run but that the statute provides for notice only to a limited
group of workers. We have previously explained, however, that the purpose of
KRS 342.185’s provision for tolling the period of limitations during the payment of
voluntary income benefits is to prevent injured workers who are paid voluntary income
benefits from being lulled into a false sense of security and, therefore, failing to file a
‘As at the Court of Appeals, the claimant has certified that the Attorney General
was served with a copy of her brief. But, again, the record contains no response by the
Attorney General.
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timely claim. Furthermore, we have explained that KRS 342.040(l) acts in concert with
KRS 342.185 to prevent employers from manufacturing a limitations defense. City of
Frankfort v. Roqers, Both are clearly legitimate state objectives and serve the
supra.
larger objective of ensuring that the costs of workplace injuries are borne by the
businesses in which they occur rather than the public. In view of those objectives, it is
rational to require employers to notify the Department when they terminate voluntary
income benefits and then to require the Department to notify the affected worker of the
right to prosecute and of the applicable period of limitations. As a result, all workers
who receive voluntary income benefits become entitled upon the termination of those
benefits to receive notice, and workers who remain disabled at that time are more likely
to file a timely claim.
The claimant focuses upon the fact that workers must have missed more than
seven days of work in order to be eligible for income benefits and, therefore, to receive
notice from the Department. She characterizes the legislative choice of that number as
being arbitrary because it is underinclusive, i.e., it fails to provide notice to all injured
workers of the right to file a claim and of the applicable period of limitations. This is
essentially an equal protection argument.
By itself, the fact that a legislative classification is underinclusive will not render it
unconstitutionally arbitrary. The legislature is free to choose to remedy only part of a
problem. First Bank & Trust Co. v. Board of Governors of Federal Reserve Svstem,
605 F.Supp. 555 (E.D. Ky. 1984); Richardson v. Secretary of Labor, 689 F.Zd 632
(1982). Furthermore, it may “select one phase of a field and apply a remedy there,
neglecting the others.” Cleland v. National Colleae of Business, 435 U.S. 213, 220, 55
L.Ed.2d 225, 98 S.Ct. 1024 (1978), quoting Williamson v. Lee Optical of Oklahoma, 348
U.S. 483,489, 99 L.Ed.2d 563, 75 S.Ct. 461 (1955). Thus, even if we
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were to assume for the purposes of discussion that the legislature recognized a need to
inform all injured workers of the right to prosecute a claim within the applicable period of
limitations, we are not persuaded that the failure to provide notice to those workers who
did not miss work due to their injury and were not paid or entitled to be paid income
benefits renders KRS 342.040(l)
unconstitutionally arbitrary.
Employers are required to pay income benefits for the essential financial support
of those who are permanently disabled by a workplace injury for a period of from 425
weeks to life so that the public will not be required to support them and their families.
Thus, there is a legitimate purpose for requiring the Department to notify workers who
are likely to have been permanently disabled by a workplace injury of the right to
prosecute a claim and of the applicable period of limitations. Although it is true that
some workers will miss more than seven days of work after being injured but will retain
no permanent occupational disability, and some workers will not miss work but will
sustain a permanent disability, the fact remains that those who miss more than seven
days of work are more likely to have sustained a permanent occupational disability than
those who have missed no work at all. Thus, there is a rational basis for providing
notice to the former group but not to the latter.
The claimant missed no work within two years after the injury that became
manifest on February 15, 1995, and she was neither due nor paid any income benefits
before the period of limitations expired on that injury. Therefore, she does not come
within the class of workers that KRS 342.040(l) was designed to protect, and the
provision was not arbitrary simply because it failed to apply to that portion of her claim.
The decision of the Court of Appeals is affirmed.
All concur.
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COUNSEL FOR APPELLANT:
Diana Beard Cowden
125 Church Street
Lexington, KY 40507
COUNSEL FOR APPELLEE LEXMARK
INTERNATIONAL GROUP, INC., As
Insured By Kemper:
Jo Alice Van Nagell
Lynn, Fulkerson, Nichols & Kinkel, PLLC
267 West Short Street
Lexington, KY 40507
COUNSEL FOR APPELLEE LEXMARK
INTERNATIONAL GROUP, INC.,
As Insured By CNA:
Steven R. Armstrong
P. Kevin Moore
Boehl, Stopher, & Graves, LLP
444 West Second Street
Lexington, KY 40507
COUNSEL FOR APPELLEE CHRISTOPHER:
M. Ronald Christopher
Joel D. Zakem
Labor Cabinet, Special Fund
1047 U.S. Highway 127 South, Suite 4
Frankfort, KY 40601
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2000-SC-0993-WC
APPELLANT
GAYLE M. HOLBROOK
APPEAL FROM COURT OF APPEALS
NOS. 1999-CA-3095WC, 2000-CA-0089-WC
WORKERS’ COMPENSATION BOARD NO. 97-68293
V.
LEXMARK INTERNATIONAL GROUP, INC.,
As Insured by Kemper; LEXMARK INTERNATIONAL
GROUP, INC., As Insured by CNA;
RON CHRISTOPHER, Director of SPECIAL FUND;
DONNA H. TERRY, Administrative Law Judge; and
WORKERS’ COMPENSATION BOARD
APPELLEES
ORDER DENYING PETITION FOR REHEARING
AND MODIFYING OPINION
The Petition for Rehearing of this Court’s opinion rendered September 27, 2001,
filed by appellant is DENIED. The opinion is modified on its face by the substitution of
Pages 1, 3, 7 and 11 appended hereto.
the opinion.
All concur.
ENTERED: February 21, 2002
Said modifications do not affect the holding of
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