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Workers’
Compensation Board
OPINION
ENTERED: FEBRUARY 24, 2017
CLAIM NO. 201481319
ACTIVE CARE CHIROPRACTIC, INC. PETITIONER
VS. APPEAL FROM HON. JEANIE OWEN MILLER,
ADMINISTRATIVE LAW JUDGE
KATHERINE RUDD and
HON. JEANIE OWEN MILLER,
ADMINISTRATIVE LAW JUDGE RESPONDENTS
OPINION
AFFIRMING
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BEFORE: ALVEY, Chairman, STIVERS and RECHTER, Members.
ALVEY,
Chairman. Active Care Chiropractic, Inc.
(“Active Care”) seeks review of the Opinion, Order and Award rendered October
25, 2016 by Hon. Jeanie Owen Miller, Administrative Law Judge (“ALJ”) awarding
Katherine Rudd (“Rudd”) temporary total disability (“TTD”) benefits, permanent
partial disability (“PPD”) benefits increased by the two multiplier pursuant to
KRS 342.730(1)(c)2, and medical benefits for a left upper extremity injury
occurring on June 2, 2014. Active Care
also seeks review of the December 6, 2016 Order denying its petition for
reconsideration.
On appeal, Active
Care argues the ALJ erred in awarding Rudd double income benefits after she
voluntarily retired since her decision to cease working is unrelated to her
work injury and the purpose of the statute is not applicable to the case sub judice. Because the ALJ’s decision is in accordance
with Livingood vs. Transfreight, LLC, et. al, 467 S.W.3d 249 (Ky. 2015),
we affirm.
Rudd testified by
deposition on May 16, 2016, and at the hearing held August 26, 2016. Rudd was born on June 29, 1956, and resides
in Paducah, Kentucky. She began working
for Active Care in June 2004 as a secretary and receptionist. At the time of the June 2, 2014 accident,
Rudd earned $12.00 per hour, and worked sixteen or seventeen hours per week.
On June 2, 2014,
Rudd slipped and fell on loose asphalt while taking the garbage out to the
dumpster, and landed on her left side.
Rudd was taken to the emergency room.
Dr. Phillip Hunt performed left shoulder surgery the following day. After a period of post-operative physical
therapy and continued complaints of pain, Dr. Hunt performed a second surgery
on August 27, 2014. Again after a period
of physical therapy with little improvement, Dr. Hunt performed a third surgery
on February 2, 2015.
Rudd testified she
was off work from June 3, 2014 through April 27, 2015, during which time she
received TTD benefits. Dr. Hunt released
her to light duty work on April 27, 2015.
While on light duty, she earned the same amount of pay and worked the
same number of hours as she had prior to her work injury. Dr. Hunt released her to regular duty with no
restrictions in September 2015. Rudd
testified she resumed all of her pre-injury job duties and continued to earn
the same rate of pay until she retired on May 2, 2016.
At her deposition,
Rudd stated she retired because, “it was time to do something else,” she wished
to spend more time at home and her priorities had changed. Rudd testified her left shoulder injury did
not factor into her decision to retire.
At the hearing, Rudd stated her decision to retire was not directly due
to the work accident. She stated:
I was turning 60, and I’d never had any
medical problems before. This kind of
made me re-evaluate things. I decided I
wanted to spend what quality years I have left doing things that provide the
greatest satisfaction, and decided that being a secretary just wasn’t doing it
for me anymore. So I’m retired.
The medical records
introduced by Rudd demonstrate she went to the Lourdes emergency room where she
was admitted after x-rays demonstrated a severely comminuted fracture of the
left humeral head and neck, with displacement of fracture fragments. Rudd treated with Dr. Hunt, who performed
three surgeries on her left shoulder.
Dr. Hunt restricted Rudd from work until April 21, 2015. He then released her to return to work with a
five-pound lifting limitation. On
September 10, 2015, Dr. Hunt released Rudd to her regular employment with no
restrictions.
In a March 28, 2016
questionnaire, Dr. Hunt diagnosed failure of fixation left shoulder fracture
and subsequent left reverse total shoulder arthroplasty, and performed three
surgeries. He opined the June 2, 2014
work injury caused Rudd’s condition. Dr.
Hunt confirmed he allowed Rudd to return to light duty on April 21, 2015 and
then to regular duty on September 10, 2015.
On June 7, 2016, Dr. Hunt opined Rudd had reached maximum medical
improvement (“MMI”) and he assigned permanent restrictions. Dr. Hunt assessed a 22% impairment rating
pursuant to the American Medical Association, Guides to the Evaluation of
Permanent Impairment, 5th Edition (“AMA Guides”).
Active Care filed
the August 24, 2016 report of Dr. Robert Jacob.
He opined Rudd sustained a harmful change to the human organism due to
her work-related injury, and she attained MMI by February 2016. Like Dr. Hunt, he assessed a 22% impairment
rating pursuant to the AMA Guides, and opined Rudd is able to return to
her former job.
A benefit review
conference (“BRC”) was held on July 12, 2016.
The BRC order reflects the parties stipulated Rudd sustained a
work-related injury on June 2, 2014 for which Active Care received due and
timely notice. Active Care paid TTD
benefits from June 3, 2014 through April 26, 2015 for a total of $7,207.12, and
medical expenses in the amount of $75,349.60.
The parties stipulated to an average weekly wage (“AWW”) of $197.30 and
that Rudd retains the physical capacity to return to the type of work she
performed at the time of her injury. The
parties stipulated Rudd returned to work on April 27, 2015 at a wage equal to
or less than her AWW through May 2, 2016, and then retired. The parties identified benefits per KRS
342.730 as the contested issue.
In the October 25,
2016 opinion, the ALJ adopted the 22% impairment rating assessed by Drs. Hunt
and Jacob. In light of Livingood vs.
Transfreight, LLC, et. al, supra, and the fact Rudd’s cessation from
work was due to her voluntarily retirement and not misconduct, the ALJ
determined she is entitled to the two multiplier. She therefore awarded PPD benefits based on a
22% impairment rating from June 2, 2014 through May 2, 2016, and awarded
benefits at the two multiplier thereafter.
She also awarded TTD benefits, as already paid, and medical expenses.
Active Care filed a
petition for reconsideration making the same argument it now raises on
appeal. Emphasizing the language of KRS
342.730(1)(c)2 and Livingood vs. Transfreight, supra, the ALJ
denied its petition for reconsideration.
On appeal, Active
Care argues the purpose of KRS 342.730(1)(c)2 is to encourage disabled workers
to return to work at an equal or greater AWW by allowing a basic benefit, but
assuring them of a double benefit if the attempt proves to be
unsuccessful. Active Care argues in
Rudd’s case, the purpose of the double multiplier is not applicable since her
post-injury return to work was successful and her subsequent cessation of equal
or greater wages was due to her voluntary retirement, unrelated to her work
injury. Active Care asserts Livingood
vs. Transfreight, supra, is not applicable in a case which the
injured worker successfully returned to work and then subsequently retires
since the purpose of KRS 342.730(1)(c)2 is unfulfilled. Therefore, Active Care asserts the ALJ erred
in enhancing the award of PPD benefits by the two multiplier after Rudd
retired.
KRS 342.730(1)(c)2
provides:
If an employee returns to work at a weekly
wage equal to or greater than the average weekly wage at the time of injury,
the weekly benefit for permanent partial disability shall be determined under
paragraph (b) of this subsection for each week during which that employment is
sustained. During any period of cessation of that employment, temporary or
permanent, for any reason, with or without cause, payment of weekly
benefits for permanent partial disability during the period of cessation shall
be two (2) times the amount otherwise payable under paragraph (b) of this
subsection. (emphasis added)
In Chrysalis
House, Inc. v. Tackett, 283 S.W.3d 671 (Ky. 2009), the claimant was
discharged from his employment at a residential substance abuse treatment
center for theft from a resident. The
ALJ determined the criminal activity was irrelevant for the purposes of KRS
342.730(1)(c)2. The Workers’
Compensation Board and the Kentucky Court of Appeals affirmed. The Kentucky Supreme Court reversed and
narrowed the applicability of KRS 342.730(1)(c)2. The Court stated although subsection (c)2 is
unambiguous, it must be considered in the context of the entire provision. There, the Court held the section permits
double benefit during a period of cessation of employment at the same or
greater wage “‘for any reason, with or without cause,’ provided that the reason relates to the disabling injury.”
Id. at 674; See also Hogston v. Bell South
Telecommunication, 325 S.W.3d 314 (Ky. 2010).
Subsequently, the
Kentucky Supreme Court overruled Chrysalis House, Inc. v. Tackett, supra,
through its holding in Livingood v. Transfreight, LLC, et al., supra. In Livingood, the claimant sustained a
work-related shoulder injury requiring three surgeries. He eventually returned to work without
restrictions. Upon his return to work,
the claimant accidently bumped into a pole while operating a forklift without
causing damage. The employer
subsequently terminated his employment in December 2010. The claimant began subsequent employment in
December 2011 earning less than he did with his previous employer. The ALJ determined the claimant’s termination
was not due to his disabling shoulder injury and declined to award the two
multiplier pursuant to Chrysalis House, Inc. v. Tackett, supra. Regarding the two multiplier, the Workers’
Compensation Board and the Kentucky Court of Appeals affirmed. The Kentucky Supreme Court provided the
following analysis in overruling Chrysalis House, Inc. v. Tackett, supra:
“It has long been
established that the purpose of awarding income benefits to injured workers is
to provide an ongoing stream of income to enable them to meet their essential
needs and those of their dependents.” Ball v. Big Elk Creek Coal Co., 25 S.W.3d 115, 117 (Ky. 2000).
KRS 342.730(1) provides income benefits to replace some of the
wages that workers lose due to the occupational effects of work-related
injuries.
Consistent with the purpose of the benefit
and with KRS 342.710(1)'s goal of encouraging a return to work, KRS 342.730(1)(c)2 focuses on post-injury wages ...
The purpose of KRS 342.730(1)(c)2 is to keep partially disabled workers in
the habit of working and earning as much as they are able. It creates an
incentive for them to return to work at which they will earn the same or a
greater average weekly wage by permitting them to receive a basic benefit in
addition to their wage but assuring them of a double benefit if the attempt
proves to be unsuccessful.
Toy v. Coca Cola Enterprises, 274 S.W.3d 433, 434–35 (Ky. 2008). The statute also
“discourages an employer from continuing to employ an injured worker at the
same or a greater wage for the sole purpose of securing a finding of partial
rather than total disability or a finding under KRS 342.730(1)(c)2 rather than [a triple benefit under] KRS 342.730(1)(c)1.” Chrysalis House at 675.
In Kentucky Mountain Coal Co. v. Witt, 358 S.W.2d 517 (Ky. 1962), the Court construed the
former KRS 342.120(5)2, which provided for awards to be paid from the
Subsequent Claim Fund (“SCF”) where a claimant was employed by the same
employer after an injury at the same or greater wage. At issue was whether the
SCF remained liable for payment of the award after the claimant's employment
was terminated. There, the award commenced on September 12, 1960. The claimant
was reemployed at wages equal to or exceeding his former wages. The SCF
proceeded to pay the award until June 1961, when it discovered that the
reemployment had ended on March 2, 1961. The then Board relieved the SCF from
payment and imposed liability upon the employer for future payments during such
time as the claimant was not employed at the same or greater wage. The employer
appealed. The Court affirmed.
The obvious purpose of the statute is to
encourage reemployment of injured workmen at adequate wages by relieving the
employer of the requirement of paying disability compensation in addition to
full wages ... But the inducement or encouragement the legislature has extended
is clearly for continued reemployment. It is not conceivable that the
legislature intended to relieve an employer completely of liability for
compensation payments if he should reemploy the workman for only one day.
In construing a statute, the courts will
consider the purpose which the statute is intended to accomplish. Id. at 518.
We conclude that the construction of KRS 342.730(1)(c)2 in Chrysalis House does not effectuate the legislative intent.
Requiring that the cessation of employment at the same or greater wage must
relate to the disabling injury does not promote the statute's obvious purpose
of encouraging continued employment. Instead, it limits the statute's
application. Moreover, such a construction does little to discourage employers
from taking workers back after an injury just long enough to avoid liability
for a greater award.
Re-examining the statute in context
reinforces our conclusion. The preceding subsection, KRS 342.730(1)(c) 1 governs application of the three
multiplier and provides: “If, due to an injury, an employee does not retain the
physical capacity to return to the type of work that the employee performed at
the time of injury, the benefit for permanent partial disability shall be
multiplied by three....” By contrast, KRS 342.730(1)(c)2, governing application of the two
multiplier, does not include the language, “if due to an injury.” “[W]here the
legislation includes particular language in one section of a statute, but omits
it in another section of the same Act, it is generally presumed that the legislature
acted intentionally and purposefully in the disparate inclusion or exclusion.” Turner v. Nelson, 342 S.W.3d 866, 873 (Ky. 2011) (citing Palmer v. Commonwealth, 3 S.W.3d 763 (Ky. App. 1999)).
Given our analysis, we conclude that Chrysalis House was incorrect in holding that the reason for
cessation of work at the same or greater wage under KRS 342.730(1)(c)2 must relate to the disabling injury. To that extent, Chrysalis House is overruled. Nevertheless, a literal
construction of KRS 342.730(1)(c)2 would lead to an unreasonable result if an
employee like the one in Chrysalis House is allowed to benefit from his own
wrongdoing.
“General principles of statutory construction
hold that a court must not be guided by a single sentence of a statute but must
look to the provisions of the whole statute and its object and policy.” County of Harlan v. Appalachian Reg'l Healthcare,
Inc., Ky., 85 S.W.3d 607,
611 (2002)
... In addition, “[w]e have a duty to accord to words of a statute their
literal meaning unless to do so would lead
to an absurd or wholly unreasonable conclusion.” Bailey v. Reeves, Ky., 662 S.W.2d 832, 834 (1984) ... The legislature's
intention “shall be effectuated, even at the expense of the letter of the law.”
Commonwealth v. Rosenfield Bros. & Co., 118 Ky. 374, 80 S.W. 1178, 1180 (1904).
We must further acknowledge that the General
Assembly “intends an Act to be effective as an entirety. No rule of statutory
construction has been more definitely stated or more often repeated than the
cardinal rule that significance and effect shall, if possible, be accorded to
every part of the Act.” George v. Scent, Ky., 346 S.W.2d 784, 789 (1961). Cosby v. Com., 147 S.W.3d 56, 58–59 (Ky. 2004)
KRS Chapter 342 evinces a legislative intent
that an employee should not benefit from his own wrongdoing. KRS 342.165(2) bars compensation where an employee knowingly and
willfully makes a false representation regarding his or her physical condition
or medical history in writing at the time of entering employment. KRS 342.610(3) provides that “[l]iability for compensation shall
not apply where injury, occupational disease, or death to the employee was
proximately caused primarily by voluntary intoxication as defined in KRS 501.010, or by his or her willful intention to injure or
kill himself, herself, or another.” In Advance Aluminum Co. v. Leslie, 869 S.W.2d 39, 40 (Ky. 1994), the Court explained that “KRS 342.610(3) encompasses situations including horseplay,
intoxication, or other employee conduct shown to have been an intentional,
deliberate action with a reckless disregard of the consequences either to
himself or to another.”
An employee's conduct after an injury may
also result in the termination or reduction of income benefits. KRS 342.035(3) provides that “[n]o compensation shall be payable
for the ... disability of an employee ... if and insofar as his disability is
aggravated, caused, or continued, by an unreasonable failure to submit to or
follow any competent surgical treatment or medical aid or advice.” Where an
employee refuses to submit to or obstructs an independent medical exam, KRS 342.205(3) provides that “his or her right to take or
prosecute any proceedings under this chapter shall be suspended until the
refusal or obstruction ceases. No compensation shall be payable for the period
during which the refusal or obstruction continues.” KRS 342.710(5) provides that “[r]efusal to accept [vocational]
rehabilitation pursuant to an order of an administrative law judge shall result
in a fifty percent (50%) loss of compensation for each week of the period of
refusal.”
Consistent with the foregoing, we conclude
that the legislature did not intend to reward an employee's wrongdoing with a
double benefit. We hold that KRS
342.730(1)(c)2 permits a double income
benefit during any period that employment at the same or a greater wage ceases
“for any reason, with or without cause,” except where the reason is the
employee's conduct shown to have been an intentional, deliberate action with a
reckless disregard of the consequences either to himself or to another. In the instant case, the
substantial evidence of record does not establish that Livingood's conduct was
of that nature. Rather, the ALJ concluded that “but for the prior
transgressions the pole bumping incident would not have resulted in
[Livingood's] termination.” (emphasis added)
Id. at 256-259
In Fuertes v. Ford Motor Co.,
481 S.W.3d 808, 810 (Ky. 2016), the Court reiterated:
KRS 342.730(1)(c)2 permits a
double income benefit during any period that employment at the same or a
greater wage ceases for any reason, with or without cause,' except where the reason is the employee's
conduct shown to have been an intentional, deliberate action with a reckless
disregard of the consequences either to himself or to another.
The
Court stated the burden of proof rests with the employer to show the cessation
was due to conduct noted in Livingood.
The Court further noted, “this is a high standard and basic bad behavior
will not bar application of the two multiplier.
If Fuertes did not engage in such conduct, the two multiplier may be
applied to his award.” Id.
Based
upon the plain language of KRS 342.730(1)(c)2 stating during any period of
cessation of employment, “temporary or permanent, for any reason, with or
without cause,” and the recent holding of Livingood v. Transfreight, LLC, et
al., supra, and Fuertes v. Ford Motor Co., supra, we
find the ALJ did not err in applying the two multiplier in the case sub judice. The ALJ correctly noted the Court in Livingood
held,
KRS 342.730(1)(c)2 permits a double income benefit during any
period that employment at the same or a greater wage ceases ‘for any reason,
with or without cause,’ except where the reason is the employee's conduct shown
to have been an intentional, deliberate action with a reckless disregard of the
consequences either to himself or to another.
The ALJ noted Rudd acknowledges, and
it appears undisputed, she voluntarily retired and her cessation was not due to
misconduct as contemplated in Livingood.
Therefore, the ALJ determined Rudd is entitled to the two multiplier
beginning on the date of her cessation of her employment.
Based upon KRS 342.730(1)(c)2 and the
holdings in Livingood v. Transfreight, LLC, et al., supra, and Fuertes v.
Ford Motor Co., supra, the ALJ performed the appropriate analysis,
and substantial evidence, primarily Rudd’s testimony, supports her
determination.
Accordingly,
the October 25, 2016 Opinion, Order and Award and the December 6, 2016 Order on
petition for reconsideration rendered by Hon. Jeanie Owen Miller,
Administrative Law Judge, are hereby AFFIRMED.
ALL CONCUR.
COUNSEL
FOR PETITIONER:
HON R CHRISTION HUTSON
PO BOX 995
PADUCAH, KY 42002
COUNSEL
FOR RESPONDENT:
HON MARK L ASHBURN
PO BOX 268
PADUCAH, KY 42002
ADMINISTRATIVE
LAW JUDGE:
HON JEANIE OWEN MILLER
PREVENTION PARK
657 CHAMBERLIN AVE
FRANKFORT, KY 40601
