DONALD GREG WELLS V. WAL-MART STORES, INC.
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IMPORTANT NOTICE
NOT TO BE PUBLISHED OPINION
THIS OPINION IS DESIGNATED "NOT TO BE PUBLISHED ."
PURSUANT TO THE RULES OF CIVIL PROCEDURE
PROMULGATED BY THE SUPREME COURT, CR 76 .28(4)(C),
THIS OPINION IS NOT TO BE PUBLISHED AND SHALL NOT BE
CITED OR USED AS BINDING PRECEDENT IN ANY OTHER
CASE IN ANY COURT OF THIS STATE; HOWEVER,
UNPUBLISHED KENTUCKY APPELLATE DECISIONS,
RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR
CONSIDERATION BY THE COURT IF THERE IS NO PUBLISHED
OPINION THAT WOULD ADEQUATELY ADDRESS THE ISSUE
BEFORE THE COURT. OPINIONS CITED FOR CONSIDERATION
BY THE COURT SHALL BE SET OUT AS AN UNPUBLISHED
DECISION IN THE FILED DOCUMENT AND A COPY OF THE
ENTIRE DECISION SHALL BE TENDERED ALONG WITH THE
DOCUMENT TO THE COURT AND ALL PARTIES TO THE
ACTION.
RENDERED : JANUARY 20, 2011
NOT TO BE PUBLISHED
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2010-SC-000306-WC
DONALD GREG WELLS
APPELLANT
ON APPEAL FROM COURT OF APPEALS
CASE NO. 2009-CA-001682-WC
WORKERS' COMPENSATION BOARD NO . 06-97979
WAL-MART STORES, INC . .
APPELLEE
MEMORANDUM OPINION OF THE COURT
AFFIRMING
An Administrative Law Judge (ALJ) awarded the employer a subrogation
credit for damages recovered in the claimant's third-party tort action that
duplicated his workers' compensation benefits. The award prohibited the
employer from taking the credit until it paid income and medical benefits that
equaled the claimant's attorney's fee in the tort action. The Workers'
Compensation Board affirmed and the Court of Appeals affirmed the Board.
The claimant appeals the Court of Appeals" order denying his petition for
rehearing. The petition requested the court to modify its opinion to make clear
that the employer is not entitled to a subrogation lien until it has paid benefits
equal to his attorney's fee in the tort action.
We affirm. The Court of Appeals did not err by addressing only the
amount of the subrogation credit. The employer argued on appeal that KRS
342 .700(1) barred any workers' compensation award due to the claimant's tort
recovery. The argument did not include a question concerning the point at
which the subrogation lien would become effective .
The claimant sustained injuries from being exposed to carbon monoxide
while working in a freezer on December 10, 2005. He thought that the injuries
occurred because Atlas and Unarco, the contractors the employer hired to
perform renovations, used a welder and generators in the freezer without
providing ventilation . He filed a workers' compensation claim against his
employer and simultaneous tort claims against Atlas and Unarco .
The claimant settled the tort claims first for a total of $900,000 .00 . After
considering the workers' compensation claim, an ALJ awarded a total of
$440,659 .21 in past and future income and medical benefits. The ALJ then
calculated the employer's subrogation credit under KRS 342 .700(l) as follows :
Tort recovery
LESS: Items not duplicating
workers' compensation benefits'
LESS : Attorney's fees/costs in tort case2
Subrogation credit
$900,000 .00.
-$455,919 .64
- $317,268 .76
$126,811 .60
1 These items included $403,575 :64 for pain and suffering ; $7,020 .00 for lost wages
awarded in excess of temporary total disability benefits; and $45,324 .00 for
permanent impairment of the ability to earn money awarded in excess of permanent
partial disability benefits .
2 See AIK Selective Self-Insurance Fund v. .Bush, 74 S.W.3d 251, 257 (Ky. 2002) .
The ALJ also determined that the employer was not entitled to apply the
subrogation credit until it had paid benefits equal to $317,268 .76, i.e ., equal to
the attorney's fee and costs in the tort case.
The employer appealed, maintaining that KRS 342 .700(1) prohibited the
claimant from being awarded any workers' compensation benefits due to his
tort recovery. The appeal did not dispute the allocation of damages or the point
at which the employer's subrogation credit arose under the award.
The Board rejected the employer's arguments, noting that KRS
342 .700(1) does not prohibit simultaneous tort and workers' compensation
awards. It precludes a duplication of benefits by granting employers a limited
right of subrogation against the proceeds of a third-party settlement . Noting
that the employer had paid no income or medical benefits due under Chapter
342, the Board stated as follows :
What Wal-Mart fails or pretends not to grasp is that in
accordance with the ALJ's decision there will be no
double recovery by Wells, and no enforceable
subrogation lien until Wal-Mart pays medical and
income benefits, excluding interest, that equal the
amount of the attorney fees and costs borne by Wells
in the third party tort action . In addition, damages
recovered from Atlas and Unarco that are not
duplicative of Wells' workers' compensation award are,
as a matter of law, not subject to subrogation under
KRS 342 .700(l) . (emphasis original) .
The employer appealed the decision, citing to KRS 342 .700(1), which
states in pertinent part as follows :
Whenever an injury for which compensation is payable
under this chapter has been sustained under
circumstances creating in some other person than the
employer a legal liability to pay damages, the injured
employee may either claim compensation or proceed at
law by civil action against the other person to recover
damages, or proceed both against the employer for
compensation and the other person to recover
damages, but he shall not collect from both. If the
injured employee elects to proceed at law by civil
action against the other person to recover damages, he
shall give due and timely notice to the employer and
the special fund of the filing of the action. If
compensation is awarded under this chapter, the
employer, his insurance carrier, the special fund, and
the uninsured employer's fund, or any of them, having
paid the compensation or having become liable
therefor, may recover in his or its own name or that of
the injured employee from the other person in whom
legal liability for damages exists, not to exceed the
indemnity paid and payable to the injured employee,
less the employee's legal fees and expense. The notice
of civil action shall conform in all respects to the
requirements of KRS 411 .188(2) . (emphasis added) .
The employer argued that the "but he shall not collect from both" language
limited the claimant to collecting from either a tort action or a workers'
compensation and precluded his present attempt to collect from both .
The Court of Appeals rejected the employer's argument and affirmed the
Board. Nevertheless, the claimant filed a petition for rehearing in which he
asked the court to modify its opinion to clarify that the employer is not entitled
to a subrogation lien until it has paid $317,268 .76 in benefits as stated by the
ALJ and the Board. The court denied the petition summarily and this appeal
by the claimant followed . He argues that the Court of Appeals should have
modified its opinion as requested on rehearing. We disagree .
The Court of Appeals' decision addressed only the amount and
calculation of the subrogation credit because the employer argued that KRS
342 .700(1) barred any workers' compensation award due to the claimant's tort
recovery. The court did not err by refusing to "clarify" its opinion as requested
in the claimant's petition for rehearing because the issues on appeal did not
include a question concerning the point at which the subrogation lien would
become effective.
The decision of the Court of Appeals is affirmed.
.
All sitting. All concur.
COUNSEL FOR APPELLANT,
DONALD GREG WELLS:
James Douglas Holliday
P.O . Box 29
Hazard, KY 41702-0029
COUNSEL FOR APPELLEE,
WAL-MART STORES, INC . :
William Bryan Hubbard
Ward, Hocker 8. Thornton, PLLC
333 West Vine Street
Suite 1100
Lexington, KY 40507
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