RENDERED:  MAY 5, 2017; 10:00 A.M.


Commonwealth Of Kentucky

Court of Appeals


NO. 2016-ca-001517-wc



SUNZ INSURANCE COMPANY.                                              APPELLANT




                           PETITION FOR REVIEW OF A DECISION


                                        ACTION NO. WC-11-00465






KENTUCKY ATTORNEY GENERAL                                                              APPELLEES







** ** ** ** **


BEFORE:  clayton, combs, and taylor, JUDGES.


COMBS, JUDGE:  Appellant, Sunz Insurance Company, appeals from an Opinion of the Workers’ Compensation Board affirming the Administrative Law Judge’s   determination on remand that Sunz failed to show good cause for untimely filing its Notice of Claim Denial (Form 111).  We affirm.

                   This case has a lengthy procedural history, and we refer to the record only as necessary to resolve the issues before us involving numerous Appellees.   

                   Appellee Owen Carroll Laney, d/b/a Laney Utilities (Laney), is a business which erects utility poles.  Laney had a service contract agreement with Appellee Employee Staff, LLC (ES), to provide payroll services and workers’ compensation coverage for its “assigned employees.”  Laney did not have workers’ compensation coverage independent of its agreement with ES.  The Appellant, Sunz Insurance Company (Sunz), is ES’s workers’ compensation insurance carrier.

                    Appellee A&C Communications (A&C) had a contract with Mountain Rural Telephone to perform work on a communication line.  A&C subcontracted that work to Laney.  Appellee Henry J. Decker (Decker) was injured while working for Laney on A&C’s job.  A&C has workers’ compensation coverage through KEMI. 

                   On March 28, 2011, Decker filed an Application for Resolution of Injury Claim (Form 101) naming Laney as the defendant-employer and Appellee Uninsured Employers’ Fund (UEF) as Laney’s “insurance carrier.”  Decker also named A & C and KEMI as “other defendants.”

                   On March 28, 2011, the Commissioner of the Department of Workers’ Claims (DWC or the Department) issued a certification of coverage, which provides in relevant part as follows:

I, Dwight T. Lovan, of the Department of Workers’ Claims of the Commonwealth of Kentucky, do hereby certify that Owen Carroll Laney d/b/a Laney Utilities … did have workers’ compensation insurance in Kentucky on the alleged injury date of January 4, 2011.  This employer was insured under Employee Staff LLC.  The insurance carrier for Employee Staff LLC is Sunz Insurance Company.  


(bold-face emphasis original)


                   On March 30, 2011, the Commissioner of the DWC issued notice[1] acknowledging the filing of the Form 101 addressed to Decker, his attorney, Laney, the UEF, KEMI and Sunz Insurance Company.  The notice provided in relevant part as follows:

An application for adjustment of injury claim, referenced above, was filed with our office on March 28, 2011.


Defendant employers are advised to forward all correspondence to their insurance carrier at the time of the alleged injury.  Please comply with this request at once, as there are specific time requirements for defensive responses.


Insurance carriers, self-insured employers and uninsured employer please contact counsel of your choice at this time and give written notice to the Department of Workers’ Claims concerning the name and address of counsel.


A scheduling order, or other appropriate order will be issued.


(Bold-face emphasis added).


                   On April 20, 2011, the Department issued a scheduling order assigning the claim to an ALJ.  Addressed to Decker, his attorney, Laney, KEMI, the UEF and Sunz, the scheduling order mandates that “[w]ithin forty-five (45) days of this notice, Defendants shall file a notice of claim denial or acceptance (Form 111).  If none is filed all allegations of the application shall be deemed admitted.”[2]  Sunz did not file a Form 111 within 45 days of the scheduling order.

                   On April 28, 2011, defense counsel for A&C filed an entry of appearance.  On June 2, 2011, A&C filed a motion to join ES and Sunz as parties on grounds that the Commissioner had certified that Laney had workers’ compensation coverage through ES and Sunz. 

                   By Order of June 27, 2011, the Administrative Law Judge (ALJ) granted A&C’s motion to join ES and Sunz and further ordered that:

[P]ursuant to KRS 342.270(2) and 803 KAR 25:010, §5(2), Employee Staff, LLC and Sunz Insurance Company SHALL ENTER AN APPEARANCE AND FILE A FORM 111 within 45 days of the date of this order.  Employee Staff, LLC and Sunz Insurance Company SHALL TAKE NOTICE that pursuant to statute and regulation, they shall file notice of claim denial or acceptance, setting forth specifically those matters which are admitted, those which are denied, and the basis of any denial of the claim.  Failure to file a timely Form 111 may result in the sanctions provided by the provisions of 803 KAR 25:010, §5.


(Upper case and underline emphasis original).  However, neither ES nor Sunz timely filed a Form 111 within 45 days of the ALJ’s June 27, 2011 Order.[3] 

On August 19, 2011, counsel for ES filed an entry of appearance and a Form 111 denying the claim.  On August 29, 2011, counsel for Sunz filed an entry of appearance and a Form 111 denying the claim.  Sunz also filed a motion to continue the hearing and for extension of time, reflecting that its counsel was “newly hired, having been contacted by Sunz … for representation on August 23, 2011.  Neither ES nor Sunz filed a motion for leave to file a late Form 111.

                   As noted at the beginning of this Opinion, this case is now before us on remand from a decision of the ALJ as a result of the Board’s May 22, 2015, Opinion, Vacating in part and Remanding.  The Board summarized the sequence of events succinctly but thoroughly as follows: 

          The ALJ found A&C liable as an up-the-ladder employer pursuant to KRS 342.610(2)[[4]] for benefits awarded to Henry J. Decker ("Decker"). A&C argues the ALJ erred in overruling its motion to strike the untimely Forms 111 submitted by Employee Staff, LLC ("ES") and Sunz Insurance ("Sunz"), and in dismissing them as parties. … For the reasons set forth below, we vacate in part and remand for additional findings of fact.

The primary issue before the ALJ was Decker's employer. It was the position of ES and Sunz that Decker was never made an "assigned employee" pursuant to the service agreement. Instead, ES and Sunz argued Laney was a subcontractor to A&C. Because Laney did not carry workers' compensation coverage outside of its agreement with ES, Decker was an uninsured employee and, therefore, A&C bore up-the-ladder liability.


On appeal, the issues do not concern the ALJ’s determination [that] Decker is permanently and totally disabled. …

On appeal, A&C argues the ALJ erred in overruling its motion to strike the untimely Forms 111 of ES and Sunz, and in dismissing them as parties.  A&C also claims the ALJ erred in concluding Decker was not an employee of ES, and [erred in concluding] that it [A&C] bears up-the-ladder liability.  For the reasons set forth below, we conclude the question of whether the Forms 111 were properly admitted is determinative of all three issues.


Here, the ALJ never made a determination of whether good cause was shown. ... On remand, the ALJ must determine whether ES/Sunz established good cause for the delay and specifically state the basis for that finding. If ES failed to establish good cause, it must be deemed Decker's employer and, because ES was insured by Sunz at the time of Decker's injury, A&C would not have liability for the award.  If ES is deemed the employer, KRS 342.610 is inapplicable.


(Bold-face emphasis added).  No party appealed.  The case was accordingly remanded to the ALJ to answer the questions raised by the Board.

                    The ALJ’s “Remand Amended Opinion, Award and Order,” rendered January 29, 2016, provides in relevant part as follows:

          The Board has ordered a determination be made, whether “good cause” existed to excuse Defendants Employee Staff, LLC (“ES”) and/or Sunz Insurance Company (“Sunz”), ES’ Kentucky workers’ compensation insurance carrier, from their untimely filing of Form 111s.  The Board instructed, if it is determined they did not have good cause, then Plaintiff’s employer must be deemed ES, who would then be liable to pay Plaintiff’s PTD[5] award. 


          Sunz did not file a Form 111 until August 29, 2011.  Sunz filed the untimely Form 111 without filing a motion for leave to file the form out of time nor did it provide a “good cause” explanation for the late filing.


The ALJ noted that the “only input suggesting why Sunz might have filed the Form 111 after expiration of the time to do so” was contained in its August 29, 2011, motion to continue hearing and for extension of time.  That motion candidly indicated that counsel was newly hired after having been contacted by Sunz on August 23, 2011.  The ALJ explained that Sunz’s business address listed on its untimely Form 111 was the same address to which the Commissioner’s March 30, 2011, notification and the April 20, 2011, scheduling order had been sent; thus, the ALJ stated that there “is no reason to believe” Sunz had not received them.  The ALJ determined that neither ES nor Sunz provided a good cause explanation for the untimely filing of the Form 111.  Consequently, the ALJ held that ES and its insurer, Sunz, were liable for the award.

                   Sunz filed a petition for reconsideration, which the ALJ denied by Order rendered March 31, 2016.  Sunz appealed to the Board, which affirmed by Opinion rendered September 16, 2016, as follows:

On appeal, Sunz argues Employee Staff, LLC (“ES”) was not properly joined to Decker’s claim in accordance with 803 KAR 25:010 §5(2)(c).  It additionally argues the issues of employer-employee relationship and coverage are non-waivable defenses.  Sunz also argues Decker’s application for resolution of claim did not contain allegations which can be deemed admitted against it. Finally, it argues its procedural due process rights were violated when the ALJ denied it the opportunity to submit additional proof.  Because we determine the ALJ performed the analysis previously directed by this Board, he did not err in refusing to allow the introduction of additional proof, and he did not abuse his discretion, we affirm.


The Board was not persuaded that the ALJ erred in not allowing Sunz additional proof time:

          The ALJ was not directed, or permitted, to conduct further proceedings, or to allow the introduction of additional evidence.  This is consistent with the decisions of the Kentucky Supreme Court in T. J. Maxx v. Blagg, 274 S.W.3d 436 (Ky. 2008); Nesco v. Haddix, 339 S.W.3d 465 (Ky. 2011); and UEF v. Pellant, 396 S.W.3d 292 (Ky. 2012) which prohibit “a second bite of the apple” or the introduction of additional evidence on remand.  We therefore determine the ALJ did not err in refusing to allow Sunz additional time to introduce evidence, especially in a case in which it has been named since it was served notifications by the Commissioner of the Kentucky Department of Workers’ Claims in March and April 2011.


The Board also concluded that the ALJ did not err in determining that Sunz and ES had not shown good cause for neglecting to timely file Forms 111:

Whether good cause is adequately proven in such instances is a question of fact for determination within the discretion of the ALJ on a case by case basis, depending on the evidence presented. … [T]he exercise of such discretion by an ALJ cannot be disturbed on appeal absent a clear showing of abuse.  The test for abuse of discretion is whether the fact-finder’s decision was arbitrary, unreasonable, unfair, or unsupported by sound legal principles.


         In accordance with the directive of this Board, the ALJ determined ES, and its insurer Sunz, at no time moved for leave to file untimely claim denials, and neither demonstrated good cause for failing to do so.  He therefore determined they are responsible for payment of Decker’s award.  Because the ALJ made the determinations required by this Board, his decision will not be disturbed.


(Citations omitted).  (Emphasis added).

                   Sunz appeals.  Sunz’s first argues that there was good cause to excuse the delayed filing of the Forms 111; i.e., that neither Sunz nor ES was provided copies of the claim file as required by 803 KAR 25:010§2(3)[6] and that this “insufficient joinder” deprived them of procedural due process rights.  We disagree.

In the case before us, the ALJ explained that there was no reason to believe that Sunz had not received the Commissioner’s March 30, 2011 notification or the April 20, 2011 scheduling order and that Sunz “did nothing” in response.  By Order of June 27, 2011, the ALJ directed Sunz to file a Form 111 within 45 days; however, Sunz did not file the Form 111 until August 29, 2011 -- well beyond the prescribed 45 days.  When Sunz finally did file the form, it did so without filing a motion for leave.  The only “input” to explain the late filing was contained in Sunz’s August 29, 2011, motion to continue the hearing/motion for extension of time -- and that was the statement by Sunz that it had just contacted counsel on August 23, 2011.  Thus, by its own admission, Sunz waited four months after the scheduling order had been issued and nearly two months after the ALJ’s June 27, 2011, Order to attempt to comply. 

Whether good cause for the delay [in filing the Form 111] has been shown by the employer is a factual determination to be made within the ALJ's discretion. … The standard for appellate review of an ALJ's factual findings is a clearly erroneous standard. In short, appellate courts may not second-guess or disturb discretionary decisions of an ALJ unless those decisions amount to an abuse of discretion.


American Woodmark Corp. v. Mullins, 484 S.W.3d 307, 314 (Ky. App. 2016) (internal quotation marks and citations omitted).  In Woodmark, the defendant submitted the adjuster’s affidavit, which confirmed that the electronic file contained the Department’s notification that a Form 101 had been filed -- but that there was no record of the scheduling order.   The ALJ noted that the scheduling order had been mailed to the same address as the notification. The ALJ determined that the “evidence that the scheduling order was not entered into the carrier's electronic database and, therefore, not forwarded to defense counsel in a timely manner, was insufficient to demonstrate good cause.”  Id. at 314.  This Court agreed.  “Inattentiveness or lack of diligence by the carrier or defense counsel is not ‘good cause’ to excuse its delay in filing the Form 111.”  Id.  

                   As our Supreme Court explained in Western Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687–88 (Ky. 1992), the function of review in this Court “is to correct the Board only where the Court perceives the Board has overlooked or misconstrued controlling statutes or precedent, or committed an error in assessing the evidence so flagrant as to cause gross injustice.”  Pursuant to that standard, we find no error.

Next, Sunz contends that the employee/employer relationship and coverage under Kentucky Workers’ Compensation Act are “non-waivable defenses.”   We disagree.  Gray v. Trimmaster, 173 S.W.3d 236 (Ky. 2005) (Effect of employer’s failure to timely file Form 111 was to admit that injury occurred within course and scope of employment.); Huntsman v. Manning, 2014-SC-000569-WC, 2015 WL 5042157, at *5 (Ky. June 11, 2015) (Defendant waived defenses that claimant was not an employee under the Act by failing to timely file Form 111.).

Sunz also contends that the Form 101 did not contain allegations against it or ES; therefore, it contends that none can be deemed admitted against Sunz by virtue of the untimely filed Form 111.  However, Decker and Sunz were joined as parties by the ALJ’s June 27, 2011 Order.  Furthermore, by Order of September 1, 2011, the ALJ granted Decker’s motion and amended the Form 101 to include ES “as a Defendant Employer in the alternative.” 

In its May 22, 2015, Opinion remanding, the Board directed the ALJ to “determine whether or not good cause existed for the late filing of the Form 111.”  The Board further instructed that if “ES failed to establish good cause, it must be deemed Decker's employer ….”  The Board’s reasoning was premised on the fact that if ES were deemed to be Decker’s employer, Decker would be insured by ES’s workers compensation coverage through Sunz -- thus relieving A&C of up-the-ladder liability under KRS 342.610(2).  The Board announced what then became the law of the case.  Our Supreme Court explained in Thomas v. Kwik Set, 2006-SC-000445-WC, 2007 WL 1159959, at *3–4 (Ky. Apr. 19, 2007):  

The law of the case doctrine concerns the extent to which a judicial decision made at one stage of litigation is binding at a subsequent stage. …


[T]he law of the case doctrine applies to the Board's decisions because its jurisdiction is appellate.  A party who wishes to appeal an adverse decision of the Board must do so at the time the decision is rendered.  To raise the issue on appeal from the decision on remand would amount to an attempt to re-litigate an issue that the Board decided previously.  Absent a change in the issues or evidence on remand, the doctrine limits the questions on appeal to whether the [ALJ] properly construed and applied the Board's order.

(Citations omitted).  We agree with the Board that “the ALJ made the determinations required by this Board [on remand], [and] his decision will not be disturbed.” 

Sunz contends that entry of what amounts to default judgment against it is void because the ALJ “did not have particular case jurisdiction over ES and Sunz” and did not have the authority to decide the case as he did.  Again, we disagree. 

Subject matter jurisdiction and particular case jurisdiction are related, but they are different in that the former concerns a more broad, general class; whereas, particular case jurisdiction focuses on a more limited or narrow fact-specific situation.


Particular case jurisdiction is a subset of subject matter jurisdiction in that a court that lacks subject-matter jurisdiction over an action will also always lack particular-case jurisdiction, [but] a court can have proper subject-matter jurisdiction over an action, but nonetheless lack particular case jurisdiction[.]


Hisle v. Lexington-Fayette Urban County Government, 258 S.W.3d 422, 429 (Ky. App. 2008) (citations and internal quotation marks omitted).  In Basin Energy Co. v. Howard, 447 S.W.3d 179, 187 (Ky. App. 2014), this Court explained: “if a court or administrative body acts within its general jurisdiction, but outside its particular-case jurisdiction, its acts are voidable, but not void … because the parties can waive particular-case jurisdictional defects.”

The ALJ joined ES and Sunz as parties upon A&C’s Motion based upon the Commissioner’s certification that Laney was insured under ES and that ES’s insurance carrier was Sunz.  KRS 342.325 provides that “[a]ll questions arising under this chapter, if not settled by agreement of the parties interested therein, with the approval of the administrative law judge, shall be determined by the administrative law judge except as otherwise provided in this chapter.”  Clearly, the ALJ had both subject matter and particular case jurisdiction in the case before us; Sunz waived any defenses that it might have had by failing to timely file the Form 111.

Sunz also argues that it was denied procedural due process by not being permitted to present additional proof on remand pertaining to the issue of good cause.  Citing Woodmark, 484 S.W.3d at 307, Sunz contends that this Court confirmed that it is appropriate when “on remand, proof was reopened on the issue of whether [the employer] had good cause for the delay in filing the Form 101.”  While proof may have been reopened in that case, it was not at issue on appeal.  Central to that issue is the discretion of the ALJ.

We agree with the Board that the ALJ did not err in refusing to provide Sunz additional time to submit proof on remand under the facts of this case.  It has long been accepted that an ALJ has broad discretion to control the taking and presentation of proof in a workers' compensation proceeding.”  New Directions Housing Authority v. Walker, 149 S.W.3d 354, 358 (Ky. 2004).

Finally, Sunz contends that it should be allowed to present proof on the extent and duration of Decker’s disability in the event that we affirm the Board.  Because this issue was not presented as a matter on appeal to the Board, it is not properly before us.  Kem Coal Co. v. Baker, 918 S.W.2d 236, 238 (Ky. App. 1996).  Nevertheless, we note that the ALJ’s determination that Decker is permanently and totally disabled was not challenged on appeal.

We affirm the September 16, 2016, Opinion of the Workers’ Compensation Board.


                     all concur.





Mark R. Bush                                        W. Barry Lewis                                    

Ft. Mitchell, Kentucky                           Hazard, Kentucky


                                                              Mark D. Knight

                                                              Somerset, Kentucky





[1]Kentucky Revised Statutes (KRS) 342.270(2) provides in relevant part:

[T]he commissioner shall issue notice of the filing to all parties and shall promptly assign the claim to an administrative law judge. …. Within forty-five (45) days of the date of issuance of the notice required by this section, the employer or carrier shall file notice of claim denial or acceptance, setting forth specifically those material matters which are admitted, those which are denied, and the basis of any denial of the claim.


[2] 803 KAR 25:010§5(2)(a), then in effect, provided that “[t]he defendant shall file a Notice of Claim Denial or Acceptance on a Form 111… within forty-five (45) days after the notice of the scheduling order[.]”  Further, 803 KAR 25:010§5(2)(b) provided that: “[i]f a Form 111 is not filed, all allegations of the application shall be deemed admitted.”

[3] Forty-five days from June 27, 2011, was August 11, 2011.

[4] The statute provides in relevant part:

A contractor who subcontracts all or any part of a contract and his or her carrier shall be liable for the payment of compensation to the employees of the subcontractor unless the subcontractor primarily liable for the payment of such compensation has secured the payment of compensation as provided for in this chapter.



[5] Permanent total disability.

[6] The regulation upon which Sunz relies entitled “Parties,” provides that “[j]oinder shall be sought by motion as soon as practicable after legal grounds for joinder are known. Notice of joinder and a copy of the claim file shall be served in the manner ordered by the administrative law judge.”  803 KAR 25:010§2(3)(b).