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February 17, 2017 201280645

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
P O BOX 3850
PIKEVILLE KY 41502

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.