SOUTHEAST COAL COMPANY V. PEGGY LOU MANSFIELD, ET AL.
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RENDERED : AUGUST 23, 2007
TO BE PUBLISHED
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2006-SC-000678-WC
SOUTHEAST COAL COMPANY
V.
APPELLANT
ON APPEAL FROM COURT OF APPEALS
2006-CA-000085-WC
WORKERS' COMPENSATION NO. 85-30892
PEGGY LOU MANSFIELD ;
HON. J. LANDON OVERFIELD,
ADMINISTRATIVE LAW JUDGE AND
WORKERS' COMPENSATION BOARD
APPELLEES
OPINION OF THE COURT
AFFIRMING
This appeal concerns an Administrative Law Judge's (ALJ's) order denying the
claimant's post-award "Motion to Suspend Deductions from Plaintiffs Weekly Benefits ."
The Workers' Compensation Board set the decision aside on the grounds that the ALJ
lacked jurisdiction under KRS 342 .125 and that circuit court was the sole forum for
enforcing an award . Nonetheless, it also found the decision to be erroneous under
Triangle Insulation and Sheet Metal Company v. Stratemeyer, 782 S .W .2d 628 (Ky.
1990). The employer appealed, but the Court of Appeals affirmed under Stratemeyer
and declined to address whether the order exceeded the ALJ's authority under Chapter
342. Although we affirm, we do so on the grounds that the ALJ lacked jurisdiction
under KRS 342.125 and that KRS 342.305 designates circuit court as being the sole
forum for enforcing an award .
It is undisputed that the claimant was awarded total disability benefits on
December 20, 1989, at the rate of $304.80 per week. Under then-existing law, the
award required the employer to pay the entire benefit for a number of weeks equal to
the initial half of the claimant's life expectancy (i.e., from November 2, 1989, through
March 13, 2008). It required the Special Fund to pay the entire benefit thereafter .
For some reason, the employer paid benefits erroneously at the rate of $340.85
per week for nearly 14 years before discovering the error. It notified the claimant on
September 17, 2003, that her benefits would be reduced in order to recoup the
overpayment, which it calculated to be $19,974 .96. A subsequent letter from the
employer, dated December 14, 2004, indicated that the adjustment had not yet been
made; that the overpayment presently amounted to $21,168.00 ; that benefits would be
reduced to a rate of $177.28 from December 29, 2004, through March 12, 2008, in
order to recoup that amount; but that the Special Fund would begin to pay the full
$304.80 per week as of March 13, 2008.
On May 25, 2005, the claimant filed with the Office of Workers' Claims a
document styled as a "Motion to Suspend Deductions from Plaintiffs Weekly Benefits ."
She requested the entry of an order requiring the employer to reimburse her for the
amounts deducted from her weekly benefits and to refrain from taking such deductions
in the future . The employer objected, distinguishing Stratemever, supra, on the ground
that it prohibits an ALJ from reducing a worker's future periodic benefits to offset a preaward overpayment ; whereas, post-award overpayments amount to advances of future
benefits . Thus, Stratemever is inapplicable to'post-award overpayments.
The AU determined that the claimant was unjustly enriched by the employer's
accounting error and that to permit the employer to recoup the excess over the balance
of its payment period was neither unfair nor contrary to the policy expressed in
Stratemeyer , supra . On that basis, the AU denied the motion and granted the
employer leave to continue paying the reduced weekly benefit .
At the heart of this dispute is the scope of the subject matter jurisdiction of the
Office of Workers' Claims and, hence, of the ALJ . Chapter 342 is a legislative creation .
As noted in Custard Insurance Adjusters, Inc. v. Aldridqe , 57 S.W. 3d 284, 287 (Ky.
2001), an administrative agency's jurisdiction extends only to matters that are delegated
to it by the legislature . Relying on Aldridge , the employer argues that KRS 342 .325
implicitly gives an AU the authority to clarify an award. The claimant does not dispute
this assertion but argues that the AU made an arbitrary distinction between pre- and
post-award overpayments and that Stratemeye , supra, prohibits an employer from
crediting an overpayment made at either time against future benefits .
KRS 342.325 states as follows:
All questions arising under this chapter, if not settled by
agreement of the parties interested therein . .. shall be
determined by the [ALJ] except as otherwise provided in this
chapter." (emphasis added) .
The claimant did not seek an order to clarify the terms of her award but to
require strict compliance with its terms. The legislature designated circuit court as
being the proper forum for an action to enforce the terms of a final workers'
compensation award. Aldridge , supra at 287, explains that not only does KRS 342.305
permit a party in interest to enforce a final award in circuit court; it also gives the circuit
court sole jurisdiction over its enforcement .
Although KRS 342.125(1)(c) permits a party to invoke the jurisdiction of the
Office of Workers' Claims to reopen and modify a final award on the ground of mistake,
the claimant's award was neither erroneous nor the product of a mistake . In any event,
KRS 342.125(8) limits the period for reopening an award entered before December 12,
1996, to four years after December 12, 1996 . Because the award was entered before
December 12, 1996, the parties' right to reopen on the ground of mistake expired on
December 12, 2000. Brooks v. University of Louisville Hospital , 33 S .W.3d 526 (Ky.
2000) ; Meade v. Reedy Coal Co. , 13 S.W .3d 619 (Ky. 2000) .
The opinion and award of December 20, 1989, is final and enforceable as a
judgment. Under KRS 342.305, the sole forum for enforcing its terms is the Estill
Circuit Court, the circuit court of the county in which the injury occurred . See Custard
Insurance Adjusters, Inc. v. Aldridge, supra ; Palmore v. Swiney, 807 S.W .2d 950 (Ky.
App. 1990); Pierce v. Russell Sportswear Corp. , 586 S .W .2d 301 (Ky. App. 1979) .
The decision of the Court of Appeals is affirmed .
All sitting . Lambert, CJ, and Cunningham, Minton, Noble, Schroder and Scott,
JJ ., concur.
COUNSEL FOR APPELLANT,
SOUTHEAST COAL COMPANY:
WALTER E . HARDING
BOEHL STOPHER & GRAVES, LLP
AEGON CENTER
SUITE 2300
400 WEST MARKET STREET
LOUISVILLE, KY 40202-3351
COUNSEL FOR APPELLEE,
PEGGY LOU MANSFIELD :
L . DAVIS BUSSEY
BUSSEY & FOUTS
501 DARBY CREEK ROAD, #13
LEXINGTON, KY 40505
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