ELSIE ROGERS V. PALM BEACH COMPANY, INC . ; HON . RONALD W . MAY, ADMINISTRATIVE LAW JUDGE ; AND WORKERS' COMPENSATION BOARD
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RENDERED : SEPTEMBER 18, 2003
TO BE PUBLISHED
(9ourf of
2002-SC-0720-WC
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ELSIE ROGERS
V.
`0 3 EI i ~ G'~vt -~, L
APPELLANT
APPEAL FROM THE COURT OF APPEALS
2002-CA-0102-WC
WORKERS' COMPENSATION BOARD NO . WC 95-44344
PALM BEACH COMPANY, INC. ; HON.
RONALD W. MAY, ADMINISTRATIVE
LAW JUDGE ; AND WORKERS'
COMPENSATION BOARD
APPELLEES
OPINION OF THE COURT BY JUSTICE WINTERSHEIMER
AFFIRMING
The claimant contests a Court of Appeals decision, affirming the Worker's
Compensation Board and the Administrative Law Judge, who dismissed the claim as
barred by the statute of limitations.
Rogers allegedly sustained a work related injury at Palm Beach in 1995 when
she slipped and fell outside the plant while leaving work after her shift ended. The
employee parking lot was located across the street from the plant and Rogers testified
that as she was walking to the lot, she slipped on a grassy slope which was considered
a part of the Palm Beach premises . The grassy area borders the public road between
the parking lot and the plant. As a result of her fall, Rogers suffered a fractured patella
of her right knee. As a result of the injury, her right knee cap was surgically removed .
The company claims department denied the claim on the question of work
relatedness . Thereafter, Rogers retained counsel and filed for social security disability
benefits in 1996. These benefits were awarded in February of 1997 . Palm Beach was
acquired by Plaid Clothing Group, Inc., which became the successor to Palm Beach in
Rogers' cause of action. After being notified by Palm Beach that her claim had been
denied, Rogers received a bankruptcy notice dated December 15, 1995, indicating that
the Plaid Clothing Group had filed a Chapter 11 bankruptcy in the Southern District of
New York. The notice specifically instructed Rogers that she must file a proof of claim
in the bankruptcy court or risk being forever barred from asserting her cause of action
against Palm Beach or their successors . On February 1, 1996, with the assistance of
counsel, she filed a proof of claim relative to her alleged work-related injury . In
December of 1999, Rogers received a notice and application for an order reducing
and/or expunging certain general unsecured claims from the bankruptcy court.
Repeated requests for information from the bankruptcy court were unanswered . In
2001, Rogers filed an application for resolution of an injury claim with the Department of
Workers' Claims. The AU sustained the motion by Palm Beach to dismiss the action
as being in violation of the two-year statute of limitations pursuant to KRS 342 .185.
The Workers' Compensation Board affirmed as did the Court of Appeals. This appeal
followed .
The claimant argues that the statute of limitations was tolled . In support, she
cites KRS 413 .260. The claimant also contends that her employer should be estopped
from asserting a defense under the statute of limitations because of its misleading
conduct.
Statute of Limitations
KRS 413 .260 provides :
If the doing of an act necessary to save any right or benefit is
restrained or suspended by injunction or other lawful restraint, . . . the time
covered by the injunction, restraint, . . . shall not be counted in the
application of any statute of limitations .
A plain reading of the statute would seem to go along with the claimant's
argument. So the true issue becomes whether the claimant was actually restrained or
suspended from asserting her claim .
In Re: Mansfield Tire and Rubber Company, 660 F.2d 1108 (6th Circuit, 1981),
the controlling federal court ruled that states have the right to adjudicate worker's
compensation claims while the company is in bankruptcy.
This directly undermines the idea that a restraint or suspension was put upon
the claimant in this case. The bankruptcy proceeding would not restrain her and the
Department of Worker's Claims from determining whether she had a legitimate claim to
disability. The claimant should have filed her claim as soon as possible after the
occurrence of the accident and her right would not have lapsed .
Estoppel
The claimant asserts that her employer's behavior should preclude invoking the
statute of limitations as a defense. The claimant cites one case as authority .
In H .E. Neumann Co . v. Lee , Ky., 975 S.W .2d 917 (1998), this Court held that an
employer's failure to fulfill a statutory duty, even if bad faith is absent, will estop a
defendant from asserting a statute of limitations defense .
The claimant would have this case extend to the situation where an employer
provides the claimant with information regarding the employer's bankruptcy and
therefore, an automatic stay on the claim. Though misleading, because the claimant's
rights were not actually stayed by the bankruptcy, nothing in the employer's activities
violates a statutory duty or seems to be in bad faith. She asserts that because the
employer told her about the bankruptcy, the employer had a duty to tell her the way out.
The claimant cites no bad faith or fraud on the part of her employer. The
employer gave notice of the bankruptcy and a stay to the claimant. It was the duty of
claimant to find out and pursue her claim, because it is the law that the worker's
compensation claims may be litigated at the same time as bankruptcy proceedings .
Therefore, the opinion of the Court of Appeals is affirmed .
All concur, except Graves, J., who believes that a bankruptcy stay should mean
what it says.
COUNSEL FOR APPELLANT :
Paul F. Henderson
301 W . Mt. Vernon Street
P.O . Box 783
Somerset, KY 42502
COUNSEL FOR APPELLEE,
PALM BEACH :
Ronald J. Pohl
PICKLESIMER, POHL & KISER, P .S .C.
167 West Main Street, Suite 1500
Lexington, KY 40507
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