January 15, 2016 201285818

Commonwealth of Kentucky 

Workers’ Compensation Board




OPINION ENTERED:  July 7, 2017



CLAIM NO. 201486257



THERESA HUNT                                  PETITIONER


















                       * * * * * *



BEFORE:  ALVEY, Chairman, STIVERS and RECHTER, Members. 



RECHTER, Member.  Theresa Hunt (“Hunt”) appeals from the November 23, 2016 Opinion, Award and Order and the December 23, 2016 and January 24, 2017 Orders rendered by Hon. Douglas W. Gott, Administrative Law Judge (“ALJ”).  On appeal, Hunt argues the ALJ erred by failing to include language specifically limiting the extent to which Voith Industries (“Voith”) is entitled to a credit for reimbursing Liberty Mutual, a third party insurance company, for short-term disability (“STD”) benefits.  Because the ALJ adequately addressed the award of temporary total disability (“TTD”) benefits, we affirm.

          Hunt performed janitorial work at Voith.  She alleged a right shoulder injury occurring on April 22, 2014 while lifting an empty cardboard box from the floor and placing it above her head.  She eventually underwent surgery for a rotator cuff repair.  

          Hunt’s claim was bifurcated to determine the compensability of the shoulder surgery.  ALJ Otto D. Wolff entered an interlocutory order on August 12, 2015 finding a work-related right shoulder injury and directing Voith to pay TTD commencing April 23, 2014.  Pursuant to the interlocutory order, and as stipulated in the Benefit Review Conference (“BRC”) Order, TTD benefits were paid at a rate of $402.91 from April 23, 2014 to August 17, 2014.  At the BRC, the parties also stipulated Voith paid TTD at a rate of $4.13 per week from August 18, 2014 to February 1, 2015, and at a rate of $27.25 per week from October 16, 2015 to December 24, 2015.  The payments for these two periods represent the difference between the STD benefits and the TTD rate.

          By the time of the final hearing, the claim had been reassigned to ALJ Gott.  The following dialogue occurred prior to Hunt’s testimony:

ALJ:  Thank you.  We just completed the BRC Order, which lists the stipulations of the parties and the contested issues.  I guess by way of a little explanation the TTD benefits – they’re stipulation number five.  They were paid at a regular TTD rate for one period of time, but they were paid at a reduced rate for the other two periods of time listed there, and that rate relates to an issue pending at the time on the Employer’s entitlement to a credit for short-term and/or long term disability benefits that Ms. Hunt was receiving.  This case was assigned to another ALJ previously, and there is an Order of September 13, 2015 that provides for a credit for the Employer to take against TTD benefits that were awarded previously.  But the parties agree – and I can’t remember now whether they’ve told me that that’s documented in the record separately or not but, regardless, that Order was subsequently  determined to have been entered without knowledge that there is in fact a reimbursement provision in the Employer’s plan.  And so, therefore, the Employer is not entitled to a credit against TTD benefits.  Gentlemen, without digressing into argument, did I generally state that fairly for both of you?


Mr.  Jennings:  Yes, sir.


Mr.  Black:  Yes, Judge.


ALJ:  Thank You.


Mr.  Black:  I would add that we have actually paid those benefits – reimbursed Liberty Mutual for the benefits for they paid – short-term and long-term disability benefits, which I don’t think that’s at issue that we’ve reimbursed them.


ALJ: Thank you.


          In his November 23, 2016 Opinion, Award and Order, the ALJ noted the issue of credit for STD and long-term disability (“LTD”) benefits had been waived at the hearing.  The ALJ awarded permanent partial disability benefits and ordered Hunt shall recover from Voith “temporary total disability benefits as paid.”

          Hunt filed a petition for reconsideration arguing the ALJ erred in failing to specify the periods for the award of TTD benefits and the exact dollar amounts of TTD benefits paid.  In his December 23, 2016 Order, the ALJ amended the award to provide Voith was responsible for TTD benefits from April 23, 2014 to August 17, 2014, August 18, 2014 to February 1, 2015, and October 16, 2015 to December 24, 2015 at a rate of $402.91 per week.  Voith was granted credit against past due compensation for “any compensation previously paid.” 

          Hunt filed a second petition for reconsideration requesting that the ALJ specifically state that Voith’s credit is limited to $4.13 per week from August 8, 2014 through February 1, 2015 and $27.25 per week from October 16, 2015 through December 24, 2015.  By Order dated January 24, 2017, the ALJ denied the petition for reconsideration stating “The ALJ believes his prior orders provide for a credit against prior payments, and does not appreciate the need for more specific, limiting language involving that credit.”

          On appeal, Hunt argues the ALJ erred in failing to provide specific language limiting the extent of the credit.  She maintains it is her obligation to repay Liberty Mutual, and no provision in the Act permits Voith to make the payment directly to Liberty Mutual.  Rather, she contends Voith must pay the full amount of TTD benefits directly to her, plus statutory interest of any late payment.  Hunt argues she is entitled to statutory interest because she received short and long-term disability payments in 2014 and 2015 – not TTD benefits.  Therefore, the TTD payments must be considered overdue.  On this basis, she argues the ALJ should be directed to specifically limit Voith’s credit to the amount of $402.91 per week from April 23, 2014 to August 17, 2014, $4.13 per week from August 18, 2014 to February 1, 2015, and $27.35 from October 16, 2015 to December 24, 2015. 

          We first note, the issue of any credit for payments of STD or LTD benefits was no longer before the ALJ at the time he rendered his decision.  Voith’s counsel informed the ALJ at the final hearing that the reimbursement had been paid directly to Liberty Mutual, the STD and LTD carrier, and Hunt’s counsel stated no objection.  More importantly, the BRC order contained a stipulation to the duration and rates of payments that Hunt requests the Board to direct the ALJ to make on remand.  In the November 23, 2016 Opinion, Award and Order, the ALJ accepted “the facts as stipulated in the BRC order.”  The ALJ’s order of December 23, 2016 specifically sets forth the rate and periods to which Hunt is entitled to receive TTD benefits. 

          The ALJ provided a credit only for compensation previously paid.  Payments from disability plans that do not conform to the Act, i.e. not fully employer funded or containing an internal offset, are not compensation and thus were not a part of the credit granted by the ALJ.  It appears Hunt is concerned she will not receive the full amount of TTD benefits from Voith – that is, the difference between the amount of TTD paid and what she received from Liberty Mutual in the form of STD and LTD benefits.  We consider Hunt’s concerns speculative at this point and are in the nature of enforcement, a matter properly addressed by the circuit court pursuant to KRS 342.305.

          Hunt additionally argues Voith was required to pay the past due TTD benefits directly to her.  Instead, by reimbursing Liberty Mutual directly, Hunt argues Voith essentially assigned benefits, which is prohibited by KRS 342.180.  In Newburg v. Sarcione, 865 S.W.2d 317 (Ky. 1993), the Kentucky Supreme Court explained the purpose and scope of KRS 342.180.  In Newburg, the claimant and the employer entered into a settlement agreement which permitted the employer to be reimbursed by the Special Fund for benefits it paid, but which were later determined to be the responsibility of the Special Fund.  The Court determined the reimbursement provision did not violate KRS 342.180.  Bearing in mind that the primary purpose of Chapter 342 is to ensure injured workers can immediately meet the financial requirements of daily living, the Court drew a distinction between the assignment of claims to fulfill a prior debt, versus the reimbursement for payment of workers’ compensation benefits.  The Court explained:

We believe that, in the instant case, the reimbursement provision, which operated as an assignment of a portion of the benefits received pursuant to the worker's subsequent compensation award against the Special Fund, does not violate either the purpose or the language of KRS 342.180 and is in accord with the purposes of the Workers' Compensation Act. KRS 342.180 prohibits the assignment of a workers' compensation claim. The agreement herein did not contemplate an assignment of the worker's claim against the Special Fund to the employer, but rather an assignment of whatever portion of the worker's recovery had been paid by the employer but was determined by the ALJ to be the responsibility of the Special Fund. The reimbursement to the employer relates to compensation benefits for the present injury and not to satisfaction of a debt which predated the injury.


Id. at 322.


As in Newburg, there was no assignment of Hunt’s claim to satisfy a prior debt.  Rather, the ALJ simply permitted a transfer of the compensation received pursuant to the November 23, 2016 Opinion and Order.  See also Kentucky Employers’ Mut. Ins. v. Novation Capital, LLC, 361 S.W.3d 320 (Ky. App. 2011).  We find no error in the ALJ permitting Voith to reimburse Liberty Mutual directly and to take a credit against TTD benefits it owes.       

          Finally, Hunt briefly argues the ALJ did not take into consideration any unpaid interest and any reduction for attorney fees.  She cites KRS 376.460 and the federal Employee Retirement Income Security Act.  Hunt does not develop these arguments pursuant to KRS 376.460 and ERISA, and we find no substantiation therein.            

          Accordingly, the November 23, 2016 Opinion, Award and Order and the December 23, 2016 and January 24, 2017 Orders rendered by Hon. Douglas W. Gott, Chief Administrative Law Judge, are hereby AFFIRMED.








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