Commonwealth
of Kentucky
Workers’
Compensation Board
OPINION
ENTERED: February 17, 2017
CLAIM NO. 201280645
MCCOY ELKHORN COAL CORP – INSOLVENT
EMPLOYER
KY COAL EMPLOYEES SELF-INSURANCE FUND
and ITS TPA HEALTHSMART PETITIONERS
VS. APPEAL FROM HON. JEANIE OWEN MILLER,
ADMINISTRATIVE LAW JUDGE
JEANNIE SARGENT, AS WIDOW,
PERSONAL REPRESENTATIVE,
ADMINISTRATRIX OF THE ESTATE OF
FARLEY SARGENT, II (DECEASED) AND
JEANNIE SARGENT AS GUARDIAN OF THE
MINOR CHILDREN OF FARLEY SARGENT;
JOSHUA SARGENT, ALYSSA SARGENT AND
SARAH SARGENT; AND JOSHUA SARGENT
UPON REACHING THE AGE OF EIGHTEEN
and HON. JEANIE OWEN MILLER,
ADMINISTRATIVE LAW JUDGE RESPONDENTS
OPINION
AFFIRMING
*
* * * * *
BEFORE: ALVEY, Chairman, STIVERS and RECHTER, Members.
STIVERS,
Member.
McCoy
Elkhorn Coal Corporation - Insolvent Employer, KY Coal Employers Self Insurance
Fund and its Third Party Administrator, HealthSmart ("McCoy Elkhorn")
appeal from the August 30, 2016, Amended Opinion and Award on Remand and the
October 7, 2016, Order ruling on McCoy Elkhorn’s September 8, 2016, “Petition
for Reconsideration From Amended Opinion and Award on Remand” and September 15,
2016, “Renewed and Clarified Petition to Consider and For Reconsideration From
Amended Opinion and Award Dated August 30, 2016 on Remand and Order of
September 7, 2016” of Hon. Jeanie Owen Miller, Administrative Law Judge
("ALJ").[1]
In the August 30, 2016, Amended Opinion and Award on Remand, the ALJ determined
the 30% enhancement of compensation contained in KRS 342.165(1) is
applicable.
On appeal, McCoy Elkhorn asserts the
ALJ erred in assessing the 30% enhancement of compensation pursuant to KRS
342.165(1). Additionally, McCoy Elkhorn asserts the ALJ erred in assessing the
30% enhancement of compensation against the KY Coal Employers Self Insurance
Fund and its TPA HealthSmart.
In the claim filed by Jeannie
Sargent, widow of the decedent Farley Sargent (“Farley”), the Form 101 asserts
on June 25, 2012, Farley was killed in a rock fall while in the employ of McCoy
Elkhorn.
The May 5, 2015, Benefit Review
Conference Order and Memorandum lists one contested issue: KRS 342.165
violation. Under "Other" is the following: "Matter is bifurcated
on the issue of the safety penalty. The undersigned awaits a Form 110-I with
respect to all matters except the issue of the applicability of KRS
342.165."
A Form 110 Settlement Agreement was approved
by the ALJ on September 14, 2015, and the ALJ rendered a September 25, 2015,
Opinion and Award. In the September 25, 2015, Opinion and Award, the ALJ
enhanced Jeannie Sargent's compensation by 30% pursuant to KRS 342.165(1) and
set forth the following Analysis, Findings of Fact, and Conclusions of Law:
The
Defendant/employer's roof control plan which had been approved by [the Mine
Safety and Health Administration] MSHA on August 10, 2011 and was in force on
the date Mr. Sargent died, June 25, 2012, contained the following verbiage
under the caption, Roof Control, General Safety Precautions:
Rib Control: Adverse
ribs will be either taken down or supported.
When adverse ribs are to be supported,
supplemental supports will be installed to adequately support the ribs. These supports will include but not be
limited to:
·
Angle
brackets
·
* Timbers
·
Cribs
·
*
Steel supports (jacks, etc.)
·
Mesh
·
Wire
ropes
·
Screen
·
Rib
bolts
·
Any
combination of these materials.
* When timbers/jacks are used as rib supports and
the ribs are exerting pressure against these supports, such rib supports will
be secured against falling.
Mr.
Harris testified that McCoy Elkhorn's management never used any of the above
supplemental methods (except setting timbers) to support the ribs, and he had
never before heard that specific portion of the roof plan. (Harris Depo., p. 32).
The
Defendant/employer failed to comply with MSHA's standards and received
citations for its violations of 30 CFR 75.202(a) pertinent to adequate support
of ribs, and 30 CFR 75.220(a)(1) pertaining to compliance with the approved
roof control plan, and 30 CFR 75.360(b)(a) pertaining to pre-shift
examinations. Most troubling to this ALJ
was the Defendant/employer's violation of its own roof-control plan and failure
to obtain MSHA's approval of the modifications it made: enlargement of the pillared
rooms; enlargement of the width of Entry 5 and the dual-use of that entry for
the conveyor belt and the railway; and failure to adequately-bolt the roof or
to install any bracing timbers along the 90 foot long rib beside the rail
tracks.
The Plaintiff avers she is entitled to the
enhancement of benefits by virtue of the employer’s violation of KRS 342.165(1)
for failure to comply with a statute or regulation. The pertinent section of the statute provides
as follows:
If an accident is caused in
any degree by the intentional failure of the employer to comply with any
specific statute or lawful administrative regulation made thereunder,
communicated to the employer and relative to installation or maintenance of
safety appliances or methods, the compensation for which the employer would
otherwise have been liable under this chapter shall be increased thirty percent
(30%) in the amount of each payment. KRS
342.165(1).
In the case at bar, there is substantial
evidence that violations of the respective regulations were indeed the cause of
the Plaintiff deceased’s death. It is also undisputed that the
Defendant/employer was cited for its violations of 30 CFR 75.202(a) pertinent
to adequate support of ribs, and 30 CFR 75.220(a)(1) pertaining to compliance
with the approved roof control plan, and 30 CFR 75.360(b)(a) pertaining to
pre-shift examinations. Accordingly, I
fine [sic] that: (1) there was a violation of state workplace safety statutes
or regulations at the time of Mr. Sargent’s fatal injury; and (2) the violation
caused Mr. Sargent’s accident.
The Defendant/employer argues that
Plaintiff has failed to prove intent as required by statute. While it may not
appear the Defendant/employer “willfully” violated the safety regulation, the
state of the law is such that it was undisputed that the Defendant was cited
and fined for the violation of a safety regulation, and that the violation was
a contributing cause of the injury, thus intent is inferred. See Chaney vs.
Dags Branch Coal Co., 244 SW3d 95, 101 (Ky. 2008).
Here, there is no argument that safety
violations occurred. The only evidence
of substance is that the violation of the safety regulations caused the
Plaintiff’s accident and resulting injuries. Accordingly, “its intent is
inferred from the failure to comply with a specific statue or regulation. If
the violation ‘in any degree’ causes a work-related accident, KRS 342.165(1)
applies”. Id. at 101.
The Court in Chaney notes that this
scenario is different from the cases where KRS 338.031 the “general duty”
provision applies. The analysis in those cases do not apply to the case at bar.
See also the unpublished case of Abel Verdon Construction vs. Rivera,
2009-CA-000771-WC where the Court of Appeals quoted Chaney and reiterated:
"An employer is
presumed to know what specific state and federal statutes and regulations
concerning workplace safety require; thus, its intent is inferred from the
failure to comply. If the violation 'in any degree' causes a work-related
accident, KRS 342.165(1) applies." Chaney, 244 S.W.3d at
96-97.
Lastly,
the Defendant/employer argues that the MSHA reports, as filed, do not fall
within the hearsay exceptions to be relied upon as evidence. Similar to the
finding in Chaney, supra, the undersigned finds that the MSHA
report was admissible as evidence under 803 KAR 25:010, § 14(2) as a public
record.
The
Kentucky Workers’ Compensation Act has been implemented in part through the
adoption of administrative regulations. The Kentucky Rules of Evidence (KRE)
apply “in all proceedings before an administrative law judge except as varied
by specific statute and this administrative regulation.” 803 KAR 25:010 Section
14(1). The specific issue here is whether a public record may be admitted pursuant
803 KAR 25:010 Section 14(2) and its Kentucky Rules of Evidence counterpart,
KRE 803(8), better known as the hearsay exceptions. The case of Prater vs. Cabinet for Human Resources, Com.
of Ky., 954 SW2d 954
(Ky. 1997) provides the analogy needed to answer this question. In Prater,
supra, Justice Cooper provides the following background to KRE 803(8):
The
drafters of the Kentucky Rules of Evidence used the Uniform Rules of Evidence
rather than the Federal Rules of Evidence as the model for KRE
803(8). . . [K]RE 803(8) requires that the records be of the
agency's "regularly conducted and regularly recorded activities.". .
. [K]RE 803(8) also
admits factual findings resulting from an investigation made pursuant to
authority granted by law, but identifies three types of records and reports
that "are not within this exception to the hearsay rule":
(A) Investigative reports by
police and other law enforcement personnel;
(B) Investigative reports
prepared by or for a government, a public office, or an agency when offered by
it in a case in which it is a party; and
(C) Factual findings offered
by the government in criminal cases.
Thus, while FRE 803(8) is available to admit investigative
reports of public agencies in any civil action, KRE 803(8) is available to admit such reports only
if the agency is not a party or if the report is offered by another presumably
adverse party. Id.
In
applying KRE 803(8) and 803 KAR 25:010 Section 14(2) to the case at bar, I find
that the exception to the hearsay rule as to public records applies and allows
the admission of the report by MSHA with or without the availability of the
declarant.
McCoy Elkhorn filed a petition for
reconsideration alleging six errors. By order dated October 27, 2015, the ALJ
granted in part and denied in part McCoy Elkhorn’s petition for reconsideration
ruling as follows:
This matter is before
the Administrative Law Judge (ALJ) upon the Petition for Reconsideration by the
Defendant/Employer, McCoy Elkhorn Coal Corp., of the Opinion and Award rendered
by the undersigned ALJ on September 25, 2015.
The Plaintiff has filed a Response. After a review of the evidence, the
Defendant/employer’s Petition is GRANTED
in part and DENIED in part.
The Defendant/employer
avers errors in six specific areas and each will be separately addressed:
1. [t]he Administrative Law Judge has
erroneously set out facts on page six (6) of the decision with regard to a
sloughage diagram attached with the investigation report of MSHA. The ALJ states that following the March 29,
2012 MSHA quarterly inspection, ribs had subsided at the mine and that the
sloughage of ribs began to occur May 30, 2012, with the ALJ further
specifically setting out the following:
The sloughage of ribs began to occur May 30,
2012, and 10 ribs had subsided in the areas along Mains #1 through #4 by June
6, 2012; 13 more had fallen in the areas along Mains #4 through #7 by June 13,
2012; and by June 20, another 11 ribs had fallen in the areas along mains #5
through #9. Each time a rib fell the
Defendant/Employer cleared out the rubble and then installed wood timbers to
brace up the walls. The
Defendant/Employer did not install additional roof bolting.
The diagram referred to by the ALJ is a
sloughage map for the mine for the day of accident and does not represent what
she details in the findings. The dates referred to by the ALJ are mining spad
dates. No one testified that the rib sloughage map shows “fallen ribs” and the
legend itself clearly refers to the dark lines as sloughage on the date of
accident of June 25, 2013, not fallen ribs as apparently the Judge read the
diagram. Sloughage is not a fallen rib. The deposition testimony of Hargis Hurt
describes the difference between sloughage and a fallen rig [sic]. Sloughage is
a pushing outward of the rib. Mr. Hurt testified on Page 26 of his deposition
that adverse rib and loose rib can be used interchangeably but these conditions
are not the same as coal sloughage. He further described sloughage on Page 23
of his deposition testimony, as follows:
Sloughage is – after you take the coal out of
here, and this, let’s say we’re in an underground room right now, the sloughage
would be the pressure that is forced on the coal wall down to the floor between
the overburden, how much weight you have over top of mines from the very top of
the coal seam to the treeline on, at the surface down to the coal seam.
And when you have quite a bit of overburden or, you know, whatever, it
pushes down that causes the coal to the pressure of the pushes the coal
out. We refer to that as sloughage.
On Page 25, he referred to concaving of the
rib. He also described the appropriate
procedure to be taken when walls start concaving, being that slate bars will be
used to clean the roof and then timbers will be set “right up next to the rib.”
The diagram referred to by the ALJ as showing
34 fallen ribs shows nothing of the sort.
Additionally, there is no evidence to support the statement by the
Administrative Law Judge that after these 34 ribs had fallen that the employer
would “clear out the rubble” and then install wood timbers to brace up the
walls. The diagram supports and shows
the employer’s action in having placed timbers in areas where sloughage had
been found to exist.
The additional statement by the
Administrative Law Judge that the employer did not install additional roof
bolting is another statement not based upon the record nor the diagram that she
references. There is no evidence that
this was required or if required, that the employer failed to roof bolt. Page 6 of the MSHA report makes reference to
Appendix B and the fact that the mine had provided extra support in areas of
sloughage with the use of timbers which was sufficient at the time of installation
from between May 30, 2012 to June 25, 2012.
However, on June 25, 2012, the condition was that of an adverse rib or
loose coal and the examiner effectively concluded that the timber was no longer
capable of providing the support as the rib fell while Sargent was engaged in
its placement.
The MSHA report clearly reflects that
sloughage of the ribs had occurred in the mine. The diagram referred to by the
ALJ shows the areas of sloughage on the day of accident and areas of timbering.
Nowhere within the report nor in the diagram is there evidence of the falling
of ribs during this period of time. The ALJ should remove Line 1 through 10 on
Page 6 of the decision as erroneous findings not contained within the evidence
and completely inconsistent with the evidence and no reliance should be placed
upon this erroneous finding in the final decision.
The Defendant/employer points to Mr. Hunt’s
testimony as being a clear indication of the difference between “loose rib” and
“sluffage” (it is noted that the words “sluffage” as used in the deposition of
Mr. Hunt and Mr. Harris, and the word “sloughage”, as correctly used in the
MSHA reports, refer to the same term).
The undersigned does not interpret Mr. Hunt’s testimony as being “clear”
as the Defendant argues. First, the Defendant/employer assumes that the
undersigned regarded Mr. Hunt as an “expert”. It should be noted that the issue
of whether Mr. Hunt would be considered as an expert witness was never before
the undersigned. Certainly, the
Defendant/employer has made credible arguments that Mr. Hunt’s testimony should
be considered as probative. However, Plaintiff’s counsel, in his
cross-examination of Mr. Hunt, points out several facts that relate to whether
Mr. Hunt would be considered an “expert” in certain areas. For example, Mr.
Hunt admitted he had not obtained the schooling necessary to be considered a
“roof control specialist” as recognized by MSHA. (See Hunt Depo., p. 68). Also, even though Mr. Hunt had been employed
by MSHA at one time --- he was not qualified to sign off on a fatal accident.
(See Hunt Depo., p. 94). The weight and
credibility to give to Mr. Hunt’s testimony, as a proffered expert, is within
the discretion of the ALJ as the fact finder. See Kentucky Power Company vs.
Kilbourn, 307 SW2d 9 (Ky. 1957); Lee
vs. Butler, 605 SW2d 20
(Ky.App.1979); and Dravo Lime Company, Inc., vs. Eakins, 156 SW3d 283
(Ky. 2005).
In reviewing the MSHA reports (both federal and
state) as well as the deposition of Mr. Harris, the term(s) “sluffage” and
“fallen ribs” “unstable ribs” “adverse ribs” and “rib sloughage” are used
interchangeably to describe generally the same conditions. See pages 4 and 5 of the US Department of
Labor MSHA Report where in the “Discussion” section states:
An examination of the rib conditions in the mine (compare Appendix A and Appendix B)
indicates that the rib sloughage
resulted from stress created by a narrow remnant barrier and small centers of
the underlying mine. . .
This mine does not have a
roof bolting machine capable of installing roof bolts into the rib. (Id. at page 5) (see
defendant’s argument that there is no evidence that the employer did not
install additional roof bolting and that there was no evidence that this was
required or if required, that the employer failed to roof bolt.)
. . .
The approved roof control plan on page 12 contained precautions for rib
control. The first precaution is that, “Adverse
ribs will be either taken down or supported.” It further states, “When adverse ribs are to be supported,
supplemental supports will be installed to adequately support the ribs.”
Id.
The report found that the adverse ribs are to be
supported, supplemental supports will be installed to adequately support the
ribs. It mentions the roof control plan lists those supplemental measures – and
notes that “Since the adverse ribs
that continued to develop were not taken down or properly supported, 30
CFR 75.220(a)(1) was violated because this standard requires compliance with
the provisions of the approved roof control plan.” (Emphasis ours). Id. at p. 6.
Important to the undersigned ALJ was that the
federal MSHA report notes:
[N]o corrective actions for rib and roof conditions were recorded.
The operator initially complied with the Roof Control Plan, but failed to install additional supports or
take the ribs down with the rib sloughage increased.
Because of the
sloughage of the ribs that was present in the areas shown in Appendix B, the operator installed timbers for rib support when the condition
became apparent from approximately May 30, 2012 to June 25,2012, when the
accident occurred. The timbers were sufficient at the time of installation and
subsequently, the ribs deteriorated to
the point where the timbers installed would not adequately support the ribs.
This condition was not recognized by the examiner.” Id. at p.6. (Emphasis ours).
In Mr. Harris’ deposition he is asked what parts of
the roof control plan that he as a foreman would be primarily focused upon in
connection with the safe traveling under the roof or the safe work of miners
under the roof? Part of Mr. Harris’
reply included:
[D]ry rock is a separation on the roof, just
like a piece of rock that can fall down. The
ribs, you would watch for sluffage which is breaking off the ribs, dropping
down. . .” (Harris Depo., pp. 6-7). (Emphasis added).
In Mr. Harris’ deposition,
he testifies he was told by Plaintiff’s co-workers that Mr. Sargent was
“putting a timber back”. (Harris Depo., p. 30). However, Mr. Harris testified
that Mr. Sargent’s task that day was “laying track”. (Id. at p. 7). Apparently
the trio ran out of material to lay track and Mr. Sargent recognized the
dangerous situation he found himself in and was attempting to put up another
timber. (US Dept of Labor MSHA report at page 3). In addition to finding an
inadequate pre-shift examination/inspection the report outlines the following:
While installing timbers to support a loose rib, Farley Sargent received fatal
crushing injuries when the support he was installing failed and he was struck
by falling rib material. This is also a violation of 30 CFR 75.220(a)(1)
because this condition or practice did
not comply with provisions of the approved roof control plan. This
violation is an unwarrantable failure to comply with a mandatory standard.
Standard 75.202(a) was cited 21 times in two years at mine 15-18721 (21 to the
operator, 0 to a contractor). (Id. at p. 10). (Emphasis ours).
Also significant to the undersigned was paragraph 3
of the report which notes another regulatory violation in that an inadequate
pre-shift examination has been conducted and insufficient warnings to alert the
miners of the dangerous situation.
Timbers were installed initially in the
affected area for rib support. However, at some point the ribs deteriorated to
a point that the timbers were not sufficient to support the ribs. The examiner
did not recognize this condition. Sloughing,
hazardous loose ribs and overhanging brows were present . . . . (Id.
at p.10). (Emphasis ours).
To the degree that “sloughage” is not a “fallen
rib”, as argued by the Defendant, the Opinion and Award is amended. However, the terms as used in the US Dept of
Labor MSHA Report are adopted, and the finding of MSHA was and remains the
basis upon which the undersigned determined that the Defendant had violated KRS
342.165.
2. That the Administrative Law Judge
erroneously states on Page 16 of the decision that the employer failed to
obtain MSHA’s approval of the modifications it made: “Enlargement of the
pillared rooms; enlargement of the width of Entry 5 and the dual use of that
entry for the conveyor belt and the railway; and failure to adequately bolt the
roof or to install any bracing timbers along the 90-foot long rib beside the
rail tracks.” This finding by the
Administrative Law Judge is not within the evidence nor supported by the
evidence.
First, the record is clear that an approved
Mine Roof Control Plan cannot be reduced in its requirements, but a mine
operator can increase the safety measures set out in the plan. In referring to the enlargement of the
pillared rooms, it appears that the ALJ is referring to the fact that the mine
operator increased the centers from the required 70 x 70 feet entry and
cross-cut centers to 70 x 90 feet entry and cross-cut centers. There is no evidence that this should be
characterized as a “troubling” action or an action requiring modification of
the existing Roof Control Plan. On Pages
5 and 6 of the MSAH [sic] report, the investigation refers to the fact that the
employer had made this increase in centers and cross-cut centers in anticipation
for rib sloughage over projections in areas of remnant barriers and in addition
thereto had installed two additional 8-foot cable bolts every third row of
permanent support over the required four, 8-foot cable bolts for intersections. The MSHA investigation report on Pages 5 and
6 further details the minimums required within the Roof Control Plan in effect
on the date of the subject accident and nowhere states that the employer failed
to meet those requirements. As indicated
above, the investigation report recognizes that the use of timbers for
additional support had been effective up to the point where the accident
occurred and the use of timbers is one of the specifically identified methods
for additional support within the plan.
The Defendant would also point out that following the accident when MSHA
roof control experts determined how to best revise the plan to secure against
falls occurring, it was only then that an increase was made to 80-feet entry
centers and 90-feet cross-cut centers.
The plan was increased for the centers as the employer had on its own,
not in violation of a plan but in going beyond its plan. It was error for the
Administrative Law Judge to characterize the proof as showing the employer had
violated its plan and engaged in modifications requiring MSHA approval.
As for the enlargement of the width of Entry
5 and the dual use of that entry for the conveyor belt and railway, there is no
evidence that this was a violation of the Roof Control Plan nor that this
action was determined to have any direct causal connection to the subject
accident. It was only after this accident that the MSHA roof control experts
determined that the mine should separate track and belt entries. It would
further appear that the ALJ has erroneously determined that the increase of the
entry width for the belt from 20-feet to 22-feet was a violation of the plan
when Page 6 of the Roof Control Plan reflects that in areas involving the belt,
the width is 22-feet at entries and not the 20 maximum otherwise applicable.
Additionally, the statement by the ALH [sic] that
there was a failure to adequately bolt the roof or to install any bracing
timbers along the 90-foot long rib beside the rail tracks is nowhere contained
within the evidence and certainly if a mine had failed to adequately bolt a
roof or to install timbers along a 90-foot rib, mining investigators would have
certainly included this in an investigation report. This is not an
investigatory finding and it is puzzling as to the inclusion of this finding by
the ALJ. Statements of fact inconsistent with the evidence should be removed
from the decision.
It is also erroneous that the ALJ has stated
that the employer violated its own Roof Control Plan. Presumably, the ALJ is referring to the root
cause statement of the MSHA report on Page 8 where the investigator writes as
follows: “The operator failed to comply with the approved roof control plan and
install adequate roof support in areas where mining crossed remnant barriers in
the underlying seam. The rib support timbers installed at the accident location
were inadequate to support the weight of the falling rib, or otherwise control
or protect persons from the hazards of falling material.” The report clearly
set out that the use of timbers had been effective, but when the rib fell while
Farley Sargent was installing a timber for additional support, it was at that
point in time that the use of timbers was ineffective. Timber use for
additional support failed to adequately protect in spite of the fact that up to
that point it had been effective. Since
the plan states that the operator shall maintain a plan to prevent falls, a
citation resulted. The employer only violated the plan in terms of the approved
means of control failed. The employer was installing the approved timber with
the use of support to secure it against falling, being a wooden cap wedge over
the third timber; exactly what the MSHA approved plan stated for the plan in
effect on the date of accident.
The Defendant respectfully requests that the
Administrative Law Judge provide additional findings that would support the
characterization of the proof as set out in the last paragraph on Page 16 of
the decision concerning both alleged actions/inactions identified by the
Administrative Law Judge as “most troubling” as the actions of the mine on June
25, 2012 were in compliance with the instruction of its approved Roof Control
Plan.
The paragraph that appears on page 16 of the Opinion
and Award is essentially a summary of the facts the ALJ inferred from the
totality of the evidence. Much of the evidence appears in the reports of the
federal and state mine safety departments. This paragraph sets out not just
“findings” of the report but also facts that can be appropriately inferred by
this fact-finder. The report does however specifically note:
...[t]hat the operator/ defendant initially
complied with the Roof Control Plan, but failed to install additional supports
or take the ribs down when the rib sloughage increased. (See p .6).
The post-injury actions of the Defendant/employer
and the citations of the regulating bodies are the basis for the findings on
page 16 of the Opinion and Award and will not be disturbed. In rendering a
decision, KRS 342.285 grants an ALJ as fact-finder the sole discretion to
determine the quality, character, and substance of the evidence. Square D
Co. vs. Tipton, 862 SW2d 308 (Ky. 1993). An ALJ may draw reasonable
inferences from the evidence, reject any testimony, and believe or disbelieve
various parts of the evidence, regardless of whether it comes from the same
witness or the same adversary party’s total proof. Jackson vs. General
Refractories Co., 581 SW2d 10 (Ky. 1979); Caudill vs. Maloney’s Discount
Stores, 560 SW2d 15 (Ky. 1977). Magic
Coal Co. vs. Fox, 19 SW3d 88 (Ky. 2000).
3. That the
Administrative Law Judge erroneously states that there is an inferred intent of
the Defendant to violate its Roof Control Plan by the fact that it received a
citation for failure to operate in compliance with its approved Roof Control
Plan for the adequate support of ribs.
The approved Roof Control Plan as set out by the Administrative Law
Judge on Page 16 of the decision states that the following supplemental
supports for adverse ribs include but are not limited to the following:
·
Angle
brackets
·
*Timbers
·
Cribs
·
*Steel
supports (jacks, etc.)
·
Mesh
·
Wire
ropes
·
Screen
·
Rib
bolts
·
Any
combination of these materials.
*When timbers/jacks are used as rib supports
and the ribs are exerting pressure against these supports, such rib supports
will be secured against falling.
The employer was utilizing timbers in
securing against falling with a cap wedge. As indicated throughout the
investigative report, this method of support had been effective up to the date
of the accident. The ALJ remarks on Page 16 of the decision that Terry Harris,
the section foreman at the time of the accident, said that mine management had
never used any of the above supplemental methods with the exception of timbers
to support the ribs and that he had never before heard of that specific portion
of the roof plan. The Judge cites to Mr. Harris’ testimony on Page 32 of his
deposition. Review if [sic] his deposition testimony does not entirely support
the ALJ’s version of his testimony nor is there any evidence that any further
method of support was determined by MSHA to be required until after the
occurrence of this accident. The only
additional method of supplemental support that Mr. Harris stated that he was
not familiar with was the use of angle brackets. The fact that Mr. Harris said
that he had not previously used angle brackets is no indication that the mine
had never used any of the supplemental methods other than timbers or further
based upon the evidence, that any further support had been needed by virtue of
timbers being deemed effective until after the unfortunate occurrence of Mr.
Sargent’s accident. The employer was complying with the provisions of its plan
and the fact that angle brackets were not known by Mr. Sargent to be available
is not a roof control plan violation. On Page 8 of the Roof Control Plan
attached as Exhibit 3 to the deposition of Hargis Hurt, those items of
supplemental roof support material to be readily accessible are identified and
the list does not include angle brackets.
The fact that the rock fell onto Farley
Sargent is observable as the ineffectiveness of the timber at the time of his
accident but in no way supports a conclusion that there was an intentional
violation of a roof control plan. There was only a violation of the plan for the
purposes of an MSHA citation because the employer has a strict responsibility
to prevent any falls from occurring and in spite of the use of the methods MSHA
approved, the fall occurred. As
testified to by Hargis Hurt, a former mine inspector, and Terry Harris, the
section foreman, the citation will result strictly because the rock fell.
The MSHA standard for citing the employer is
entirely separate from the provisions for citing an employer under KRS 342.165
and the Administrative Law Judge has erroneously found the MSHA citation to
provide an appropriate basis for a concurrent penalty upon the employer under
KRS 342.165. There is no evidence
whatsoever that the employer intentionally failed to comply with any specific
statute or lawful administrative regulation made thereunder relative to the
installation or maintenance of safety appliances or methods. The approved
method simply was not adequate against the forces of nature on June 25, 2012
and there was no reason for the employer or the state and Federal mining
inspectors reviewing this mine prior to the date of accident to believe that
the approved plan was inadequate to provide safeguard against falling rock. The
injury report states that the August 12, 2011 Roof control Plan specifies the
minimum 4-foot long fully grouted resin roof bolts on 4-foot centers as a
support means in the mine and again it is noted that the mine was using
increased support measures in anticipation of sloughage, those being timbers
which had been effective in previously mined areas where remnant barriers were
located and a means specifically identified for additional support within its
Roof Control Plan.
As for the citation regarding failure of the
mine foreman to recognize an adverse rib during a pre-shift inspection, this,
too, is not a citation which equates to a violation of KRS 342.165. As evidence in the record indicates that an
adverse rib can very quickly develop, there is no evidence whatsoever that
would establish that this condition was present at the time that the pre-shift
inspection was completed and certainly no evidence whatsoever that Mr. Miller,
the foreman performing the inspection, intentionally regarded (sic,
disregarded) it. It is recognized throughout the record that watching
for adverse rib is the responsibility of all miners, who are each taught how to
recognize changes in the environment around them. It was in fact the
recognition of an adverse rib by Farley Sargent (a foreman) that resulted in
his action pursuant to the Roof control Plan of adding additional timber
support in the area where his accident occurred. Again, this was action in compliance with the
plan and action which had previously proven effective to control the roof/rib
environment.
The issuance of citations following this
accident does not support the ALJ’s conclusion that a violation of KRS 342.165
has occurred and additional findings should be provided by the ALJ as what
action or inaction on the part of the employer in disregard to its Roof Control
Plan and the safety of workers has occurred to subject it to a culpable finding
under KRS 342.165.
The ALJ refers to the findings of the
regulatory bodies that indeed the [sic] stated:
“The approved roof control plan on page 12
contained safety precautions for rib control. The first precaution is that,
“Adverse ribs will be either taken down or supported.” It further states, “When
adverse ribs are to be supported, supplemental supports will be installed to
adequately support the ribs.” Also the roof control plan states these supports
will include but at (sic)not limited to Angle Brackets, Timbers, Cribs, Steel
Supports (jacks, etc.) Mesh, wire ropes, screen, Rib Bolts, any combination of
these materials. When timbers/jacks are used as rib supports and the ribs are
exerting pressure against these supports, such rib supports will be secured
against falling.
Since the adverse ribs that continued to develop were not taken
down or properly supported, 30 CFR 75.220(a)(1) was violated because this
standard requires compliance with the provisions of the approved roof control
plan. (emphasis ours) (Id. at p. 6).
The Opinion and Award notes specifically on page 12
that the Defendant/employer’s Safety Director (Clifton Preece) and
Superintendent (Kenny Runyon) (whose names appear at the end of the US Dept of
Labor MSHA report, see p. 7 Appendix C) directed Mr. Harris to begin installing
angle brackets and wrapping ribs, and taking other measure which were described
in the defendant’s roof plan. As previously discussed, Mr. Harris testified he
had never heard of that method of bracing before and even had to order parts
(angle brackets) to get the job done. That was part of the existing Roof
Control Plan which the Defendant was found to have violated. The next paragraph on page 12 of the Opinion
and Award sets out additional evidence upon which this fact-finder relied in
reaching these conclusions. I find no
error in this portion of the Opinion and Award and therefore it will remain
undisturbed.
4. That
the ALJ includes findings on Page __ of the decision that counsel for the
employer cannot locate within the record. These findings include the payment of
fines by McCoy Elkhorn in connection with the subject action, the bankruptcy
sale of the company, the identification of new owners, and the representation
as to employees retained by the new owners. The decision specifically states
that Mark Turnmire and Reaford Coleman were “retained” and “most of Farley
Sargent’s co-workers.” Terry Harris
testified that he was hired by the new owners and identified having his same
superintendent and mine foreman but that is the extent of his testimony. Reaford Coleman is nowhere mentioned in the
record as an employee of the new owner nor Mr. Turnmire and since the
undersigned counsel will not engage in the furthering of facts being presented
which are not within the record, she will direct the parties and the ALJ to the
Department of Workers’ Claims active litigant records for names of Mr. Coleman
and others of Farley Sargent’s co-workers who are for reasons unclear to
counsel represented in the ALJ’s decision as active workers of the company that
Terry Harris is now employed by in Pike County. The recitation of facts set out
on page eight (8) beginning at the end of line four (4) with the sentence
beginning “The Defendant” and continuing through to the end of the paragraph
should be omitted as statements within the decision not contained within the
record.
It is also erroneous that the ALJ has
characterized the testimony of Terry Harris in connection with his own employment
with his new employer as being “retained” as an employee when they purchased
the assets of the Defendant in 2014. Although the undersigned recognizes that
this is not a material error, Mr. Harris testified that he is currently working
for the new owners of the mining company but he did not testify that he was
“retained” which leaves the impression that there was no interruption in his
work between the two companies and that he and other workers were actively
employed in 2014 at the time of the purchase. This is, nonetheless, a patent
error as the description of his employment is inconsistent with his testimony.
To the extent that the Opinion and Award references
payment of fines by the Defendant/employer, it is erroneous and will be AMENDED. On page 8 of the Opinion and
Award the undersigned erroneously stated that the Defendant/employer paid the
fines in 2013. The Defendant is correct that there is no evidence that they
ever paid a fine. That statement should have read that Defendants was [sic] issued
citations (not fines) in 2013 and the Opinion and Award is so AMENDED.
The statement regarding the bankruptcy proceeding in
2014 is taken from information outside the evidentiary record in this claim and
SHALL BE STRICKEN from the AMENDED Opinion and Award. Lines 5
through 11 of page 8 of the Opinion and Award shall be stricken from the AMENDED Opinion and Award.
Parenthetically, Mr.
Harris testified that at the time of the accident he was working for McCoy
Elkhorn. At the time of Mr. Harris’ deposition, he stated he was working for
McCoy Elkhorn Coal Company now. He also added it was a totally different outfit
now. (Harris Depo., p. 19). However, he
did testify that: “I’ve got the same superintendent and same mine foreman that
we had. I think they kept most of them people in place.” (Harris Depo., p. 20).
Although immaterial to the decision in this matter,
the MSHA report noted the name of Kenny Runyon as Superintendent and Reaford
Coleman as the Outby Mine Foreman. Mr. Hargis Hunt also testified he knew Mr.
Runyon and had known him since approximately 1999 and that Mr. Runyon had the
charisma and personality to be a good leader. Mr. Hunt also testified he had
known Mr. Reaford Coleman professionally since the early 1980’s. (Hunt Depo.,
pp. 11-12).
5. That
ALJ states in the decision the greater portion of the testimony of Hargis Hurt
pertains to activities regarding his investigation of the Upper Big Branch
disaster. The pages in connection with this investigation are 7, 86, and 92-98,
which the undersigned counsel does not agree should be characterized as the
“greater portion” of his testimony. Further, there was no summarization of his
testimony provided relative to his description of mining terms or the role of
MSHA and the approval of mine plans, the measures taken by the employer that
exceeded the requirements of its plan for the control of the roof/ribs for the
safety of the workers and the testimony provided by him of the liability
standards of MSHA for all falls of rocks in the mines. However, the Defendant recognizes that there
is no responsibility of the ALJ to summarize all parts of the testimony of a
witness.
The undersigned discussed Mr. Hunt’s deposition
through three pages of the Opinion and Award. Specifically noting and quoting
his testimony regarding the citation by MSHA of the 202(a) which refers to a
failure to support. It is also noted by the undersigned that Mr. Hunt formed
his opinion on the federal MSHA report and the Kentucky OMS&L report
(exhibit 1 and 2 of his deposition). Finding no error in the reference to, or
the characterization, of Mr. Hunt’s testimony, I deny the Defendant/employer’s
petition regarding Mr. Hunt’s testimony.
6. That
it was error for the ALJ to rely upon records not filed as evidence in this
claim. Although it is unclear from the decision that any records contained
within the Plaintiff’s response to request for production of documents sent to
the prior counsel in this claim were in fact relied upon, the documents are
identified by the ALJ in the order reciting the proof in the record provided by
the Administrative Law Judge post-decision. Only records submitted by notice of
filing or records filed with the Application for Benefits, provided no
objection is filed, are to be considered as evidence. The response to request
for production is not a notice of foiling [sic] of evidence with the ALJ to
(be) relied upon in a claim, and in fact, the undersigned counsel does not
submit any responses to request for production to the Department of Workers’
Claims as counsel has consistently been advised that the records will be
removed from the ALJ’s file as improperly submitted. Further, counsel for Plaintiff did not
include these records on his witness list in the claim. Any reference in the
decision to these records should be removed and no information contained within
the records submitted should be considered by the ALJ in the rendering of the
decision in this matter. Counsel requests that the ALJ provide clarification as
to whether said records were erroneously relied upon in rendering the final
decision.
The claimed error in paragraph 6 of the
Defendant/employer’s Petition for Reconsideration is without merit and shall be
DENIED. The United States Department
of Labor MSHA report and Office of Mine Safety and Licensing of the
Commonwealth of Kentucky were filed in two places in the record. First was the
notice of filing by the Plaintiff on November 14, 2014 with the Department of
Workers’ Claims. Additionally, the
Defendant/employer filed the reports as Exhibits 1 & 2 to Mr. Hunt’s
deposition taken on April 1, 2015. Indeed, as mentioned in Mr. Hunt’s
deposition on page 13, Plaintiff’s Notice of Filing is attached to the front of
the Exhibit 1 & 2 “since this is exactly what was filed in the record by Mr.
Downey on behalf of his client. (Hunt Depo., p. 13). Mr. Hunt is asked;
“Are all of your responses today based upon
what you have read within the reports that have been filed in this matter? Yes,
ma’am.” (Hunt Depo., pp.18-19).
Most of the findings by the undersigned reference
certain pages of the two reports that appear in the Record as noted above. No
error is found in the undersigned’s reliance upon these reports. The
undersigned also specifically ruled that the reports were admissible as
evidence pursuant to 803 KAR 25:010, section 14(2) as a public record. (See
pages 18 and 19 of the Opinion and Award). Accordingly, paragraph 6 of the
Defendant/employer’s Petition for Reconsideration is DENIED.
IT IS HEREBY ORDERED that the
Defendant/employer’s Petition for Reconsideration is GRANTED in part and DENIED
in part and the Opinion and Award of September 25, 2015 is AMENDED in accordance with the above stated findings. The remainder
of the Opinion and Award shall remain as rendered.
McCoy Elkhorn appealed to the Board,
asserting the ALJ erred in finding a violation of KRS 342.165. In the Board's
March 4, 2016, Opinion, we articulated the following errors with respect to the
August 27, 2015, Settlement Agreement and the September 25, 2015, Opinion and Award:
As previously noted, this claim was only asserted by
the widow, Jeannie Sargent. The personal representative of the estate and
Farley’s children, as statutory recipients of income benefits, were never
joined as parties in the claim. The estate and the children are real parties in
interest in this action. At the time of Farley’s death he had three minor
children namely: Josh Sargent, born January 29, 1996; Alyssa Sargent, born July
17, 2002; and Sarah Sargent, born January 13, 2004. However, between the time
of Farley’s death and the time the parties reached the settlement agreement,
Josh Sargent, the oldest child of Farley attained the age of eighteen. Further,
we note the record is silent as to whether the district court in the county in
which the children resided approved the settlement of the minor’s claims for
the work-related death of their father. No one signed the agreement as guardian
for the two infant children. Since Josh Sargent had attained the age of 18 and
was of majority at the time the settlement agreement was entered, the district
court was not required to approve the settlement of the funds due and payable
to him. However, prior to any payment or execution of any settlement agreement,
the district court should have approved the purported settlement of the minors’
claims. Further, since Josh Sargent was of majority and the agreement
terminates his entitlement to income benefits, he should have been joined as a
party and signed any settlement agreement.
We remanded
the claim to the ALJ with the following instructions:
[T]he matter must be
remanded to the ALJ for entry of an order joining the personal representative
of the estate and Alyssa Sargent and Sarah Sargent, through their guardian, and
Josh Sargent, individually, as he is an adult. [footnote omitted]. We note
Jeannie signed as the “Administrator [sic] of the estate.” However, we find no document in the file
indicating she was appointed Administratrix of the estate. That fact aside,
Jeannie, as Administratrix of the estate, was never made a party to the action.
After entry of an order
joining the real parties in interest identified herein and setting aside the
September 14, 2015, Order approving the settlement agreement, the ALJ shall
require the parties to submit a new settlement agreement to be executed by the
widow, the personal representative of the estate, Alyssa Sargent and Sarah
Sargent, through their guardian, and Josh Sargent. The settlement agreement
shall only be approved by the ALJ upon approval of the settlement agreement on
behalf of the minors by the appropriate district court.
On May 6, 2016, Jeannie Sargent filed
a “Motion to Add Additional Parties” requesting the ALJ to add as parties
Jeannie Sargent as an individual; Jeannie Sargent as Guardian of Joshua
Sargent, Alyssa Sargent, and Sarah Sargent; Jeannie Sargent as the personal
representative of the Estate of decedent Farley Sargent; and Joshua Sargent in
his individual capacity. By order dated August 9, 2016, the ALJ sustained
Jeannie Sargent’s motion.
In the
record is a Form 110 Settlement Agreement, approved by the ALJ on August 9,
2016, between the following parties: “Jeannie Sargent - Widow, Administrator
[sic] of Estate of Farley Sargent and Guardian of Sarah Sargent, and Alyssa
Sargent and Joshua Sargent and by Joshua Sargent upon reaching the age of
eighteen” and “HealthSmart-TPA; KY Coal Self Insurers Guaranty Fund.” The
agreement sets forth a date of injury and death of June 25, 2012, and the
following description of the injury: “Plaintiff was fatally injured in a rock
fall.” Under “Benefit and Settlement Information” is the following:
No temporary total disability was paid in this
claim.
If death occurs within 4 years of the injury, has a
lump sum payment been made to decedent’s estate per KRS 342.750(6)? A payment
has been voluntarily made in the statutory amount of $72,313.24 and said
payment was made on 6/29/2012 by James River Coal Company Self Insured Fund to
Jeannie Sargent as the administrator [sic] of the decedent’s estate. Said payment
was made prior to the insolvency of James River Coal Company and the transfer
of responsibility for the payment of benefits under KRS 342.730/750 for the
accidental death of Farley Sargent to the Kentucky Coal Self Insurers Guaranty
Fund.
Monetary terms of settlement: Pursuant to the
provisions of KRS 342.750, bi-weekly payments have been voluntarily paid in the
amount of $1,104.26, beginning with the date of death of Farley Sargent and
have continued to present and will continue to be paid pursuant to the
provisions of the statute as to the period of eligibility for each recipient.
Settlement computation: The maximum ‘widow’ with
children living in the home benefit for 2012 is $552.13. At this time the
statutory beneficiaries are as follows:
[chart omitted - beneficiaries listed in chart are
Jeannie Sargent, Josh Sargent, Alyssa Sargent, and Sarah Sargent]
…
Relationship of claimant (party signing settlement
agreement) to decedent’s minor dependents: Jeannie Sargent is the widow of
Farley Sargent and mother to Josh Sargent, Alyssa Sargent and Sarah Sargent. As
verified by the attached orders from Pike Circuit Court, Jeanne [sic] Sargent
is the guardian for Alyssa Sargent and Sarah Sargent. Approval has been
provided by the Court for the receipt of the benefits agreed upon, with said
benefits representing the maximum benefit payments under KRS 342.750 to the
beneficiaries for the calendar year of Farley Sargent’s death.
Under “Other Information” is the following:
…
This Form 110 is prepared post-bankruptcy of McCoy
Elkhorn Coal Company and James River Coal Company. Upon the insolvency of James
River Coal Company, the parent company of McCoy Elkhorn Coal Company, the
Kentucky Coal Self Insurers Guaranty Fund assumed the prior obligations of its
insolvent member for payment of compensation under KRS 342.750. This Form 110
represents a written document to memorialize the voluntarily [sic] agreement of
the employer/carrier to pay benefits in this claim for fatal injury pursuant to
the terms and provisions of KRS 342.750 for the Estate, spouse, and children of
Farley Sargent and the continuation of these payments by the Kentucky Coal Self
Insurers Guaranty Fund.
The party plaintiff to this action, Jeannie Sargent,
has filed a claim seeking payments under KRS 342.165. This agreement does not
affect that claim and the agreement by the Kentucky Coal Self Insurers Coal
Fund to assume the payment of the benefits to the parties hereunder per KRS
342.750 represents no acceptance or bond to assume payments under KRS 342.165
if determined payable based upon acts or omissions of McCoy Elkhorn Coal
Company and any obligation is denied.
In the August 30, 2016, Amended
Opinion and Award on Remand, the ALJ stated as follows:
The undersigned rendered an Opinion and Award on
September 25, 2015 regarding the bifurcated issue of a safety violation
pursuant to KRS 342.165. The defendant appealed the decision and the Workers
Compensation Board (WCB) rendered an Opinion Vacating and Remanding the case on
March 4, 2016.
At the direction of the WCB, the undersigned issued
an Order on Remand (dated August 9, 2016) outlining the procedural steps taken
by the parties and the undersigned to comply the with WCB’s directives in the
Opinion Vacating and Remanding. The
corrected Agreement as to Compensation and Order Approving Settlement
was approved by the undersigned on August 9, 2016. In the Agreement as to
Compensation and Order Approving Settlement, the following paragraphs were
added to the agreement:
OTHER INFORMATION
If additional information is pertinent to
settlement, explain, (Attach additional pages if necessary):
This Form 110 is prepared post-bankruptcy of McCoy
Elkhorn Coal Company and James River Coal Company. Upon the insolvency of James
River Coal Company, the parent company of McCoy Elkhorn Coal Company, the
Kentucky Coal Self Insurers Guaranty Fund assumed the prior obligations of its
insolvent member for payment of compensation under KRS 342.750. This Form 110
represents a written document to memorialize the voluntarily [sic] agreement of
the employer/carrier to pay benefits in this claim for fatal injury pursuant to
the terms and provisions of KRS 342.750 for the Estate, spouse, and children of
Farley Sargent and the continuation of these payments by the Kentucky Coal Self
Insurers Guaranty Fund.
The party plaintiff to this action, Jeannie Sargent,
has filed a claim seeking payments under KRS 342.165. This agreement does not
affect that claim and the agreement by the Kentucky Coal Self Insurers Coal
Fund to assume the payment of the benefits to the parties hereunder per KRS
342.750 represents no acceptance of bond to assume payments under KRS 342.165
if determined payable based upon acts or omissions of McCoy Elkhorn Coal
Company and any obligation is denied.
(Settlement Agreement approved August 9, 2016)
The undersigned now reiterates and incorporates in
full the Findings of Fact and Conclusions of Law and Order, contained in the
original Order and Award dated September 25, 2015, together with the Order
on Petition for Reconsideration, dated October 27, 2015 (Granting in Part
and Denying in Part the Defendant’s Petition for Reconsideration) as they were
originally rendered.
The issue of the liability of the Kentucky Coal Self
Insurers Guaranty Fund for any benefits ultimately awarded pursuant to KRS
342.165 shall also be addressed in that it was raised by the parties as part of
the settlement agreement of August 9, 2016.
The Kentucky Coal Self Insurers Guaranty Fund agrees that it assumes the
prior obligations of its insolvent member for payment of compensation under KRS
342.750 – but denies it would be responsible for payment of the benefits to the
parties hereunder per KRS 342.165 if determined payable based upon acts or
omissions of McCoy Elkhorn Coal Company and any obligation is denied.
The undersigned views the law and the facts
differently. The case of AIG/AIU INSURANCE COMPANY vs. SOUTH
AKERS MINING COMPANY, LLC, 192 S.W.3d 687 (Ky. 2006) is on point and
would indicate that the Kentucky
Coal Self Insurers Guaranty Fund would indeed step in the shoes of the
self-insured bankrupt coal company and be liable for payments awarded under KRS
342.165.
In the AIG/AIU case, supra, the Kentucky Supreme Court held in pertinent part:
Although KRS 342.165(1) authorizes what has commonly
been referred to as a safety penalty and although the party that pays more or
receives less is likely to view the provision as being a penalty, the
legislature did not designate the increase or decrease as such or include it in
KRS 342.990. Nor does KRS 342.165(1) imply that the legislature viewed the
increase or decrease as being the equivalent of punitive damages. It authorizes
an increase or decrease in compensation if an "intentional failure"
to comply with a safety regulation contributes to causing an accident.
Notwithstanding the use of the word "penalty" as a metaphor in Apex Mining v. Blankenship, 918 S.W.2d
225 (Ky. 1996), Whittaker v. McClure,
891 S.W.2d 80, 84 (Ky. 1995), and Ernst
Simpson Construction Co. v. Conn. 625 S.W.2d 850, 851 (Ky. 1981), it
implies that the increase or decrease serves to compensate the party that
benefits from it for the effects of the opponent's misconduct. Therefore, the
employer's insurance carrier is liable for any increase in benefits under KRS
342.165(1) despite a contractual term to the contrary. Consistent with the
principle that workers' compensation benefits are a cost of production, the
carrier is free to consider the amount of compensation it has paid on an
employer's behalf when assessing the risk and deciding whether to continue to
offer coverage after the policy expires and, if so, at what rate. (Id at
689)
In applying the principles set out in the
above-referenced case, the undersigned finds that the Kentucky Coal Self
Insurers Guaranty Fund shall be liable for any increase in benefits under KRS
342.165(1) found in the Opinion and Award of September 25, 2015, and the
Order on Petition for Reconsideration of October, 27, 2015. This provision is not a “penalty” and thus is
not exempted under KRS 342.990. This Amended Opinion and Award on Remand also
incorporates the Order on Remand dated August 9, 2016.
McCoy
Elkhorn filed a “Petition for Reconsideration From Amended Opinion and Award on
Remand” on September 8, 2016, and a “Renewed and Clarified Petition to Consider
and For Reconsideration From Amended Opinion and Award Dated August 30, 2016 on
Remand and Order of September 7, 2016” on September 15, 2016. In the October 7,
2016, Order, the ALJ determined as follows:
This Order
addresses the rather confusing trek that the case at bar has taken since the
Workers’ Compensation Board’s Opinion Vacating and Remanding the case on March
4, 2016. The undersigned believes that the confusion lies, in part, due to the
fact that the Defendant’s: Petition for Reconsideration from the ALJ’s Order
on Remand dated August 9, 2016 (dated and filed on August 23, 2016) was not
received by the undersigned until after the undersigned had rendered the Amended
Opinion and Award on Remand on August 30, 2016. However, the undersigned is
heretofore operating on the following legal procedure of this claim:
The parties
entered into a settlement agreement (originally approved September 14, 2015)
and agreed to bifurcate the issue of a KRS 342.165 enhancement of benefit for
the Defendant/employer's failure to comply with safety laws. The undersigned
rendered an Opinion and Award on September 25, 2015 regarding the
bifurcated issue of a safety violation pursuant to KRS 342.165. The defendant
appealed the decision and the Workers Compensation Board (WCB) rendered an Opinion
Vacating and Remanding the case on March 4, 2016. It is significant to note
that the WCB Order required the undersigned and the parties to proceed with
correcting “procedural” errors before the matter could go forward on the merits
of the claim.
At
the direction of the WCB, the undersigned issued an Order on Remand (dated
August 9, 2016) outlining the procedural steps taken by the parties and the
undersigned, to comply the with WCB’s directives in the Opinion Vacating and
Remanding. This August 9, 2016 Order on Remand did not address any
matter except those addressed by the WCB in its Opinion Vacating and
Remanding, i.e. the issues on the merits in the bifurcated claim, regarding
the enhancement of the award per KRS 342.165, were not addressed in the August
9, 2016 Order on Remand.
The corrected
Agreement as to Compensation and Order Approving Settlement was approved by the
undersigned on August 9, 2016. In the Agreement as to Compensation and Order
Approving Settlement of August 9, 2016, the following paragraphs were added
(these did not appear in Settlement Agreement of September 14, 2015):
OTHER INFORMATION
If additional
information is pertinent to settlement, explain, (Attach additional pages if
necessary):
This Form 110 is
prepared post-bankruptcy of McCoy Elkhorn Coal Company and James River Coal
Company. Upon the insolvency of James River Coal Company, the parent company of
McCoy Elkhorn Coal Company, the Kentucky Coal Self Insurers Guaranty Fund
assumed the prior obligations of its insolvent member for payment of
compensation under KRS 342.750. This Form 110 represents a written document to
memorialize the voluntarily agreement of the employer/carrier to pay benefits
in this claim for fatal injury pursuant to the terms and provisions of KRS
342.750 for the Estate, spouse, and children of Farley Sargent and the
continuation of these payments by the Kentucky Coal Self Insurers Guaranty
Fund.
The party
plaintiff to this action, Jeannie Sargent, has filed a claim seeking payments
under KRS 342.165. This agreement does not affect that claim and the agreement
by the Kentucky Coal Self Insurers Coal Fund to assume the payment of the
benefits to the parties hereunder per KRS 342.750 represents no acceptance of
bond to assume payments under KRS 342.165 if determined payable based upon acts
or omissions of McCoy Elkhorn Coal Company and any obligation is denied.
(Settlement Agreement approved August 9, 2016)
As was done in
the August 30, 2016, Amended Opinion and Award on Remand, the
undersigned again reiterates, incorporates and adopts in full, the Findings
of Fact and Conclusions of Law and Order, contained in the original Order
and Award dated September 25, 2015, together with the Order on Petition
for Reconsideration, dated October 27, 2015 (Granting in Part and Denying
in Part the Defendant’s Petition for Reconsideration) as if they were re-stated
in full and set out herein.
On September 7,
2016, the undersigned rendered an Order on Petition for Reconsideration,
addressing the Defendant’s August 23, 2016, Petition for Reconsideration (of
the undersigned’s August 9, 2016 Order on Remand). In that Order on
Petition for Reconsideration (of September 7, 2016), the undersigned references
the Amended Opinion and Award on Remand of August 30, 2016, believing
that this subsequent amended Opinion addressed the issues raised by the
Defendant’s Petition for Reconsideration of August 23, 2016.
CURRENT PLEADING
Thereafter, the
Defendant timely filed a Petition for Reconsideration from Amended Opinion
and Award on Remand, (dated and filed on September 8, 2016) Before any
response was received, and before any Order had been rendered, on the
Defendant’s September 8, 2016, Petition for Reconsideration from Amended
Opinion and Award on Remand, the defendant filed another pleading entitled:
“Renewed and
Clarified Petition to consider and for Reconsideration from Amended Opinion and
Award Dated August 30, 2016 on Remand and Order of September 7, 2016.”
The following is
in response to that pleading.
The Defendant
argues that the undersigned’s determination on the merits of the violation of
KRS 342.165 was in error. Those arguments have been previously made and
considered. The undersigned’s Order on Petition for Reconsideration,
dated October 27, 2015 (Granting in Part and Denying in Part the Defendant’s
Petition for Reconsideration) are adopted, incorporated as if they were
re-stated in full and set out herein.
Next, the
Defendant argues that the undersigned has erred in the determination that the
Kentucky Coal Self Insurers Guaranty Fund shall remain liable for any benefits
ultimately awarded pursuant to KRS 342.165. The Defendant points to the holding
of Chief ALJ Swisher (and attaches a copy of the Opinion in Doyle E Whitaker
vs. James River Coal Company, Claim No. 2009-97597) on essentially the same
issue as the case at bar. The Defendant also cites to a Workers’ Compensation
Board Opinion, Electric Steel Company Inc. vs. McCall, wherein the WCB directs
that the guaranty funds should be “directed solely to income benefits and
medical benefits.”
While it goes
without saying that the undersigned recognizes and respects the legal findings
of these two bodies, the sources relied upon in each of these decisions
predates the case of the Kentucky Supreme Court in AIG/AIU INSURANCE COMPANY
vs. SOUTH AKERS MINING COMPANY, LLC, 192 SW3d 687 (Ky. 2006). While the
Defendant may agree with other fact-finders and appellate bodies, the
undersigned is bound by the Kentucky Supreme Court’s decisions. I find that the
line of reasoning in AIG/AIU vs. South Akers, supra, translates to the
responsibility and liability of the Kentucky Coal Self Insurers Guaranty Fund.
The only potential “shield” here is KRS 342.910(2). However, as reference in AIG/AIU,
the provision of KRS 342.165 is not a “penalty” as noted in the KRS 342.990.
The same would hold true with KRS 342.910(2) as it specifically exempts
“[p]ayment of any penalties or interest assessed. . .”
As previously
stated, the undersigned views the law and the facts differently. The case of AIG/AIU
INSURANCE COMPANY vs. SOUTH AKERS MINING COMPANY, LLC, 192 SW3d 687 (Ky. 2006) is
on point and would indicate that the Kentucky Coal Self Insurers Guaranty Fund
would indeed step in the shoes of the self-insured bankrupt coal company and be
liable for payments awarded under KRS 342.165.
In the AIG/AIU
case, supra, the Kentucky Supreme Court held in pertinent part:
Although KRS
342.165(1) authorizes what has commonly been referred to as a safety penalty
and although the party that pays more or receives less is likely to view the
provision as being a penalty, the legislature did not designate the increase or
decrease as such or include it in KRS 342.990. Nor does KRS 342.165(1) imply
that the legislature viewed the increase or decrease as being the equivalent of
punitive damages. It authorizes an increase or decrease in compensation if an
"intentional failure" to comply with a safety regulation contributes
to causing an accident. Notwithstanding the use of the word "penalty"
as a metaphor in Apex Mining v. Blankenship, 918 S.W.2d 225 (Ky. 1996), Whittaker
v. McClure, 891 S.W.2d 80, 84 (Ky. 1995), and Ernst Simpson Construction
Co. v. Conn. 625 S.W.2d 850, 851 (Ky. 1981), it implies that the increase
or decrease serves to compensate the party that benefits from it for the
effects of the opponent's misconduct. Therefore, the employer's insurance
carrier is liable for any increase in benefits under KRS 342.165(1) despite a
contractual term to the contrary. Consistent with the principle that workers'
compensation benefits are a cost of production, the carrier is free to consider
the amount of compensation it has paid on an employer's behalf when assessing
the risk and deciding whether to continue to offer coverage after the policy
expires and, if so, at what rate. (Id at 689)
In applying the
principles set out in the above-referenced case, the undersigned finds that the
Kentucky Coal Self Insurers Guaranty Fund shall be liable for any increase in
benefits under KRS 342.165(1) found in the Opinion and Award of September 25,
2015, and the Order on Petition for Reconsideration of October, 27, 2015. This
provision is not a “penalty” and thus is not exempted under KRS 342.990 or KRS
342.910(2). This Amended Opinion and Award on Remand also incorporates the
Order on Remand dated August 9, 2016.
Accordingly, the
Defendant’s, “Renewed and Clarified Petition to consider and for
Reconsideration from Amended Opinion and Award Dated August 30, 2016 on Remand
and Order of September 7, 2016.” is DENIED.
McCoy Elkhorn first asserts the ALJ
erred by finding inferred intent under KRS 342.165(1) due to the issuance of
the MSHA citations without the ALJ citing evidence that, in the ALJ’s own estimation,
supports a violation of each of the regulations. We disagree and affirm.
Significantly,
since this first argument on appeal does not contest the substance of the ALJ’s
findings of fact but, instead, asserts a lack of adequate findings of fact, we affirm
relying upon all findings of fact made by the ALJ in the September 25, 2015,
Opinion and Award, incorporated in full in the August 30, 2016, Amended Opinion
and Award On Remand, and in the October 27, 2015, Order on Petition for
Reconsideration.
As the claimant in a workers’ compensation proceeding, Jeannie Sargent
et al. had the burden of proving each
of the essential elements of her cause of action. See KRS 342.0011(1); Snawder v. Stice, 576 S.W.2d 276 (Ky.
App. 1979). Since she was successful in
her burden of proving entitlement to the 30% enhancement of compensation permitted by KRS 342.165(1), the question on appeal
is whether substantial evidence existed in the record supporting
the ALJ’s decision. Wolf Creek
Collieries v. Crum, 673 S.W.2d 735 (Ky. App. 1984). “Substantial evidence”
is defined as evidence of relevant consequence having the fitness to induce
conviction in the minds of reasonable persons.
Smyzer v. B. F. Goodrich Chemical Co., 474 S.W.2d 367 (Ky. 1971).
As fact-finder, the ALJ has the sole authority to determine the
weight, credibility and substance of the evidence. Square
D Co. v. Tipton, 862 S.W.2d 308 (Ky. 1993). Similarly, the ALJ
has the sole authority to judge all reasonable inferences to be drawn from the
evidence. Miller v. East Kentucky Beverage/Pepsico, Inc., 951 S.W.2d 329
(Ky. 1997); Jackson v. General Refractories Co., 581 S.W.2d 10 (Ky.
1979). The ALJ may reject any testimony and believe or disbelieve
various parts of the evidence, regardless of whether it comes from the same
witness or the same adversary party’s total proof. Magic Coal Co. v. Fox, 19 S.W.3d 88
(Ky. 2000); Whittaker v. Rowland, 998 S.W.2d 479 (Ky. 1999). Mere evidence contrary
to the ALJ’s decision is not adequate to require reversal on appeal. Id. In order to reverse the decision of the ALJ,
it must be shown there was no substantial evidence of probative value to
support his decision. Special Fund v. Francis, 708 S.W.2d 641
(Ky. 1986).
The
Board, as an appellate tribunal, may not usurp the ALJ’s role as fact-finder by
superimposing its own appraisals as to the weight and credibility to be
afforded the evidence or by noting reasonable inferences which otherwise could have been drawn from the
record. Whittaker
v. Rowland, 998 S.W.2d 479 (Ky. 1999). So long as the ALJ’s ruling
with regard to an issue is supported by substantial evidence, it may not be
disturbed on appeal. Special
Fund v. Francis, 708 S.W.2d 641 (Ky. 1986).
KRS 342.165(1) provides as follows:
If an accident is caused in any degree
by the intentional failure of the employer to comply with any specific statute
or lawful administrative regulation made thereunder, communicated to the
employer and relative to installation or maintenance of safety appliances or
methods, the compensation for which the employer would otherwise have been
liable under this chapter shall be increased thirty percent (30%) in the amount
of each payment.
The
burden is on the claimant to demonstrate an employer’s intentional violation of
a safety statute or regulation.
Cabinet for Workforce Development v. Cummins, 950 S.W.2d 834 (Ky.
1997).
The
application of the 30% enhancement of
compensation under KRS 342.165(1) requires proof of two elements. Apex
Mining v. Blankenship, 918 S.W.2d 225 (Ky. 1996). First, the record must contain evidence of
the existence of a violation of a specific safety provision, whether state or
federal. Secondly, evidence of “intent”
to violate a specific safety provision must also be present. Enhanced benefits do not automatically flow
from a showing of a violation of a specific safety regulation followed by a
compensable injury. Burton v. Foster Wheeler Corp., 72 S.W.3d 925 (Ky.
2002). The worker also has the burden to
demonstrate the employer intentionally failed to comply with a specific statute
or lawful regulation.
Intent
to violate a regulation can be inferred from an employer’s failure to comply
because employers are presumed to know what state and federal regulations
require. See Chaney v. Dags Branch
Coal Co., 244 S.W.3d 95, 101 (Ky. 2008). As stated by the Supreme Court
in Chaney, supra:
Absent
unusual circumstances such as those found in Gibbs Automatic Moulding Co. v. Bullock, 438 S.W.2d 793 (Ky. 1969), an employer is
presumed to know what specific state and federal statutes and regulations
concerning workplace safety require. Thus, its intent is inferred from the
failure to comply with a specific statute of regulation. If the violation “in
any degree” causes a work-related accident, KRS 342.165(1) applies. AIG/AIU Insurance Co. v. South Akers Mining Co., LLC, 192 S.W.3d 687 (Ky.2006), explains that KRS 342.165(1) is not penal in nature,
although the party that pays more or receives less may well view it as such.
Instead, KRS 342.165(1) gives employers and workers
a financial incentive to follow safety rules without thwarting the purposes of
the Act by removing them from its coverage. It serves to compensate the party
that receives more or pays less for being subjected to the effects of the
opponent's “intentional failure” to comply with a safety statute or regulation.
Id.
Further, in Chaney, supra,
the Supreme Court determined the report and citations of MSHA were admissible
as evidence under 803 KAR 25:010 Section 14 (2) as a public record.
Substantial evidence supports the
ALJ’s determination to assess the 30% enhancement of compensation pursuant to
KRS 342.165(1). The September 25, 2015, Opinion and Award, incorporated in full
in the August 30, 2016, Amended Opinion and Award On Remand, and the October
27, 2015, Order on Petition for Reconsideration, firmly establish the ALJ
indeed relied upon the MSHA report in finding McCoy Elkhorn violated KRS
342.165(1). As the ALJ stated in the September 25, 2015, Opinion and Award, the
MSHA report indicates McCoy Elkhorn was cited for violating three statutory
provisions: “30 CFR 75.202(a) pertinent to adequate support of ribs, and 30 CFR
75.220(a)(1) pertaining to compliance with the approved roof control plan, and
30 CFR 75.360(b)(a) pertaining to pre-shift examinations.” McCoy Elkhorn’s argument regarding the standard by which an
ALJ is held in determining a violation of KRS 342.165(1) is incorrect. The
ALJ has the discretion to rely on the MSHA report to not only establish a violation of specific safety regulations but also to
establish intent. As held in Chaney, supra, intent to violate a
regulation can be inferred from an employer’s failure to comply because
employers are presumed to know what state and federal regulations require. That
said, we note the ALJ also relied on other aspects of the record in finding
intent under KRS 342.165(1), including the deposition testimony of Terry
Harris, section foreman at the time of Farley’s fatal injury on June 25, 2012.
The relevant testimony relied upon by the ALJ pertained to the Roof Control
Plan that was in effect at the time of Farley’s death and is, in significant
part, as follows:
Q: Did anybody
from the company talk to you about the roof control plan after the accident?
A: Yeah.
Q: Who talked to
you?
A: Well, MSHA.
Q: I said from
the company.
A: Oh, the
company? Well, the superintendent and stuff, yeah, and the safety guy, safety
director.
Q: What did they
tell you or talk to you about?
A: We started
putting up angle brackets and wrapping ribs and stuff.
Q: Had you all
done that before?
A: No. I had
never heard of that before.
Q: It was in the
roof control plan.
A: I know, but I
hadn’t ever heard of that.
Q: So they had
stuff in there that you - -
A: No, we didn’t
have it. It wasn’t - - I mean the angle brackets, we didn’t have them done.
Q: All right. So
if I’m understanding what you’re telling me, the roof control plan that you
were following, that you testified about, there are things in there that you
had never done and hadn’t seen?
A: Yes.
The ALJ’s reliance upon the MSHA
citations as well as Harris’ testimony indicating McCoy Elkhorn was in
violation of its own Roof Control Plan comprises substantial evidence in support
of the ALJ’s determination McCoy Elkhorn intentionally violated 30 CFR
75.202(a), 30 CFR 75.220(a)(1), and 30 CFR 75.360(b)(a) and, therefore,
violated KRS 342.165(1). This determination will not be disturbed.
In its second and final argument on
appeal, McCoy Elkhorn asserts the ALJ erred by assessing the 30% enhancement of
compensation pursuant to KRS 342.165(1) against the KY Coal Self Insurers
Guaranty Fund, as it is not an insurer. Thus, as argued by McCoy Elkhorn, AIG/AIU
Insurance Company v. South Akers Mining Company, LLC, 192 S.W.3d. 687 (Ky.
2006) is inapplicable, as the Kentucky Supreme Court’s holding applied to
insurance carriers and not a guaranty fund. We disagree and affirm.
In the October 7, 2016, Order, the
ALJ stated that the KY Coal Self Insurers Guaranty Fund would “step in the
shoes of the self-insured bankrupt coal company and be liable for payments
awarded under KRS 342.165.” The ALJ relied upon the holding in AIG/AIU, supra,
indicating KRS 342.165(1) is not a penalty included under KRS 342.900.[2]
The Kentucky Supreme Court in AIG/AIU, and quoted by the ALJ in the
October 7, 2016, Order stated:
‘Although
KRS 342.165(1) authorizes what has commonly been referred to as a safety
penalty and although the party that pays more or receives less is likely to
view the provision as being a penalty, the legislature did not designate the
increase or decrease as such or include it in KRS 342.990.’
Id. at 689.
This is consistent with the
language in KRS 342.165(1) which makes no reference to a “penalty” but,
instead, a 30% increase in “compensation.”
McCoy Elkhorn’s argument that because the KY Coal Employers Self
Insurance Fund is not an insurance carrier it is not liable for the 30%
enhancement in compensation begs the question, if not the KY Coal Employers
Self Insurance Fund, who? The answer to that question in the case sub judice is simply this - the party
responsible for payment of KRS 342.750 compensation pursuant to the Form 110
Settlement Agreement approved on August 9, 2016, is also responsible for
enhancement of that compensation pursuant to KRS 342.165(1). Any different
result would be unjust and against the tenor of all applicable law.
Accordingly, the August 30, 2016,
Amended Opinion and Award on Remand and the October 7, 2016, Order ruling on
McCoy Elkhorn’s September 8, 2016, “Petition for Reconsideration From Amended
Opinion and Award on Remand” and September 15, 2016, “Renewed and Clarified
Petition to Consider and For Reconsideration From Amended Opinion and Award
Dated August 30, 2016 on Remand and Order of September 7, 2016” are AFFIRMED.
ALL CONCUR.
COUNSEL
FOR PETITIONER:
HON TERRI SMITH
WALTERS
HON J GREGORY
ALLEN
P O BOX 1167
PIKEVILLE KY
41502 COUNSEL FOR RESPONDENT: HON ROY J
DOWNEY |
ADMINISTRATIVE
LAW JUDGE:
HON JEANIE OWEN MILLER
657 CHAMBERLIN AVE
FRANKFORT KY 40601
[1] In its August 23, 2016, “Motion to Amend To
Correct Name of Defendant,” McCoy Elkhorn moved to formally amend the style of
the case to reflect its status as an insolvent employer, and the motion was
granted by order dated September 7, 2016.
[2] KRS 342.900 pertains to penalties and
restitution under the Workers’ Compensation Act.