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April 27, 2018 201601027

Commonwealth of Kentucky 

Workers’ Compensation Board

 

 

 

OPINION ENTERED:  April 27, 2018

 

 

CLAIM NO. 201601027

 

 

RODNEY LAWSON and

JOHNNIE L. TURNER                              PETITIONER

 

 

 

VS.         APPEAL FROM HON. JOHN B. COLEMAN,

                 ADMINISTRATIVE LAW JUDGE

 

 

 

PARTON BROS. CONTRACTING, INC. and

HON. JOHN B. COLEMAN,

ADMINISTRATIVE LAW JUDGE, and

ANDY BESHEAR, KY ATTORNEY GENERAL             RESPONDENTS

 

AND

 

PARTON BROS. CONTRACTING, INC.                 PETITIONER

 

 

 

VS.                         

 

 

 

RODNEY LAWSON and

HON. JOHN B. COLEMAN,

ADMINISTRATIVE LAW JUDGE                      RESPONDENTS

 

 

OPINION

AFFIRMING

 

                       * * * * * *

 

 

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

 

ALVEY, Chairman.    Rodney Lawson (“Lawson”) and Parton Bros Contracting Inc. (“Parton Bros.”) both appeal from the Opinion and Award rendered October 30, 2017 by Hon. John B. Coleman, Administrative Law Judge (“ALJ”).  The ALJ awarded Lawson permanent total disability (“PTD”) and medical benefits for coal workers’ pneumoconiosis (“CWP”) he contracted while working for Parton Bros.  The parties also appeal from the November 17, 2017 order on the petition for reconsideration.

          On appeal, Lawson argues the ALJ erred in applying the tier-down provision of KRS 342.730(4) as it existed prior to the 1996 changes to the Kentucky Workers’ Compensation Act.   Parton Bros. argues the ALJ erred in finding Lawson provided due and timely notice of his disease.   It also argues the ALJ erred in finding it is the employer liable for compensation for Lawson’s CWP because his work there was not his last injurious exposure.  Parton Bros. next argues the Commissioner of the Kentucky Department of Workers’ Claims erred in failing to refer Lawson for a medical examination by a university evaluator, required by both statute and administrative regulation.  Parton Bros. additionally argues the ALJ erred in failing to provide it a credit against the award for Lawson’s earnings from subsequent employment.  Parton Bros. also argues the ALJ erred in awarding 12% interest on accrued but unpaid benefits through June 28, 2017. 

          We affirm the ALJ’s decision in its entirety.  The ALJ did not err in applying the tier down provision contained in the pre-1996 version of KRS 342.730(4).  We likewise determine the ALJ did not err in determining Lawson provided due and timely notice of his condition and in finding Parton Bros. responsible for payment of the award of income and medical benefits.   Additionally, the ALJ did not err in his determination regarding the referral of Lawson for an evaluation by the Commissioner of the Kentucky Department of Workers’ claims to a physician other than a university evaluator.  We also determine the ALJ did not err by refusing to provide Parton Bros. a credit against the award for Lawson’s subsequent employment with other employers not engaged in the severance and processing of coal.  Finally, we determine the ALJ did not err in awarding 12% interest on benefits accrued but unpaid through June 28, 2017. 

          Lawson filed a Form 102 on May 16, 2016 alleging he contracted CWP while working for Parton Bros.  Lawson was born on September 15, 1965.  Lawson alleged he was exposed to coal dust for over twenty-four years while working for various coal companies.  He alleged his last injurious exposure to coal dust occurred on October 14, 2014 when he was laid off by Parton Bros.  The claim was initially assigned to Hon. Robert L. Swisher, Chief Administrative Law Judge.  The claim was subsequently reassigned to Hon. R. Roland Case, Administrative Law Judge (“ALJ Case”).  The claim was finally reassigned to the ALJ.

          Lawson testified by deposition on August 16, 2016.  The parties waived the opportunity to have a formal hearing.  Lawson testified he resides in Jonesville, Virginia.  Lawson testified he was scheduled to start working as an asphalt truck driver a couple of days after his deposition, although there is no evidence he actually did so.  Lawson also testified he has never been a smoker.  Lawson additionally testified he had a chest x-ray taken in July 2014 at the St. Charles Respiratory Clinic because he had been experiencing breathing problems.  He stated that after he was told by St. Charles Respiratory Clinic he had CWP, he verbally advised his supervisor of his condition.  He was subsequently laid off from his job.  He attempted to go to work for another coalmine, but could not pass the pre-employment physical examination.

          After leaving his job with Parton Bros., Lawson worked for multiple employers as a truck driver.  He stated he primarily hauled equipment, however, his job with Clinch Mountain Trucking also involved hauling materials, including a few loads of coal.  He stated he was not exposed to coal dust because he stayed inside the air-conditioned cab of his truck while it was loaded, which unloaded into hoppers in either Georgia or South Carolina.  He did not have to climb up on the coal, nor did he shovel loose coal.  He testified he does not use the prescribed Albuterol inhaler.  The only medication he takes are those for heartburn and high cholesterol.   

          Lawson filed the July 4, 2014 x-ray report of Dr. Kathleen Daponte, a B-reader at the St. Charles Community Health Clinic in support of the Form 102.  Dr. Daponte stated the x-ray was a film quality 1, and she read it as 2/2 for CWP with p/p opacities in all six lung zones.

          Parton Bros. filed the Form 108-OD report prepared by Dr. Glen Baker, on March 27, 2015.  Dr. Baker read an x-ray taken that day as 1/1 for CWP, with p/q opacities in all six lung zones.  He stated Lawson had experienced increased breathing difficulty for four to five years, worsened by exertion.  He noted Lawson is not a smoker.  Pulmonary Function Studies taken at the examination were within the range of normal, demonstrating an FVC of 92% of predicted value, and FEV1 of 81% of predicted value.  Dr. Baker diagnosed Lawson with CWP and mild resting arterial hypoxemia.  He stated Lawson’s condition is causally related to his coal dust exposure and the work environment.

          Parton Bros. also filed the Form 108-CWP report of Dr. Bruce Broudy dated September 13, 2016.  Dr. Broudy noted Lawson’s twenty-four year coal mining history, and the fact he never smoked.  Dr. Broudy noted that on the date of the examination, Pulmonary Function Studies were within the range of normal, with the FVC being 89% of predicted value, and the FEV1 being 80% of predicted value.  Although Dr. Broudy found no evidence of respiratory impairment, he stated the x-ray showed evidence of complicated CWP, with q/q opacities in all six lung zones.  He also found Lawson had “A” large opacities or PMF, which was caused by exposure to coal dust in the severance and processing of coal. 

          Lawson was scheduled for an evaluation with Dr. Sanjay Chavda at the Muhlenberg Community Hospital by the Kentucky Department of Workers’ Claims.  Parton Bros. objected to the examination.  In an order issued July 6, 2017, ALJ Case ordered as follows:

IT IS HEREBY CONSIDERED AND ORDERED the Objection and Motion to Reschedule 342.316 Evaluation if OVERRULED.  Quite simply, due to the backlog of CWP claims and the University of Kentucky doing no exams and the University of Louisville doing approximately six (6) exams a month, the commissioner out of necessity contracted with other facilities to do exams.  Dr. Chavda was randomly selected from the selected facilities by the commissioner pursuant to KRS 342.316, which does not require the physician be associated with a university.

 

          Dr. Chavda examined Lawson on June 22, 2017.  Dr. Chavda noted that on the date of the examination, Pulmonary Function Studies were within the range of normal, with the FVC being 81% of predicted value, and the FEV1 being 81% of predicted value.  Dr. James Crum noted the x-ray taken that day was a quality 1 film.  Dr. Crum stated the x-ray showed 2/3 for complicated CWP, with p/q opacities in all six lung zones, and “B” opacities.   Parton Bros. later requested films reviewed by Dr. Chavda be released for review by another physician.  This motion was granted, but no additional reports or interpretations were submitted as evidence.

          ALJ Case conducted a telephonic benefit review conference (“BRC”) on August 10, 2017.  The BRC Order and Memorandum reflects the issues preserved for resolution included benefits per KRS 342.732, notice, average weekly wage, last exposure, responsible employer, indispensable parties, credit for subsequent work, and the university evaluator and report.  Additional proof time was granted to the parties.

          The ALJ conducted a second telephonic BRC on August 31, 2017.  He noted the contested issues remained the same as those enumerated at the previous BRC.  He also granted additional proof time.  He noted the parties waived their rights to a hearing, and the case would stand submitted for decision as of September 16, 2017.

          The ALJ rendered the Opinion and Award on October 30, 2017.  The ALJ determined Lawson’s last injurious exposure to coal dust occurred while working for Parton Bros.  He cited to Lawson’s unrebutted testimony he was not exposed to coal dust while driving for his subsequent employers.  He found Lawson gave due and timely notice to Parton Bros. that he had CWP prior to being laid off.  The ALJ determined Lawson was permanently totally disabled pursuant to KRS 342.731(1)(e) based upon the multiple diagnoses of complicated CWP, and awarded PTD benefits and medical benefits.   Pursuant to the holding in Smith v. Leeco, Inc., 897 S.W.2d 581 (Ky. 1995), the ALJ determined Lawson was not entitled to income benefits until he was laid off on October 14, 2014, despite the earlier diagnosis of CWP.  The ALJ determined Parton Bros. is not entitled to credit for his subsequent earnings with other employers.  The ALJ determined Lawson’s average weekly wage was $988.81. 

          The ALJ also addressed Parton Bros. request for a university evaluation pursuant to KRS 342.315.  The ALJ referenced the previous order by ALJ Case noting the inability for universities to timely perform evaluations due to the backlog of CWP claims.  Citing to the decision by the Kentucky Court of Appeals in Tema Isenmann Inc. v. Jeff Miller, 2015-CA-001544-WC rendered August 5, 2016 (designated to be published), the ALJ determined it was proper for the Commissioner to order an independent examination due to the unavailability of a university evaluator.  The ALJ additionally found Lawson’s award of benefits is subject to KRS 342.730(4).

          Parton Bros. filed a petition for reconsideration arguing Lawson failed to give due and timely notice of his occupational disease.  It also argued Lawson failed to name as a party the employer where he was last exposed to coal dust.  It additionally argued Lawson failed to join indispensable parties.  Parton Bros. next argued Lawson must be sent for a university evaluation.  It also argued Lawson cannot receive PTD benefits while working.  Finally, Parton Bros. argued the ALJ erroneously awarded 12% interest on accrued benefits through June 28, 2017, and 6% on accrued benefits thereafter.  It argued it was only liable for 6% interest on any accrued but unpaid benefits.

          The ALJ issued an order on November 17, 2017 denying the petition for reconsideration.  He determined the oral notice provided by Lawson prior to the layoff was sufficient, timely and consistent with the holding in Mary Helen Coal Corporation v. Chitwood, 351 S.W.2d 167 (Ky. App. 1961).  The ALJ determined Lawson sustained his last injurious exposure to coal dust while working for Parton Bros.  The ALJ determined Lawson was not injuriously exposed while driving occasional loads of coal for a subsequent employer, therefore he did not fail to join an indispensable party.  Regarding the need for a university evaluation, the ALJ again cited to the Miller case decided by the Kentucky Court of Appeals, and determined no additional examinations were required in addition to the one ordered by the Commissioner with the Muhlenberg Community Hospital.  The ALJ also determined Lawson was not entitled to PTD benefits until Parton Bros. laid him off, but it was not entitled to a credit for income earned from Lawson’s subsequent employment, which did not expose him to the hazards of the disease. 

          Pursuant to Stovall v. Couch, 658 S.W.2d 437 (Ky. App. 1983), the ALJ determined Lawson was entitled to 12% interest on accrued but unpaid benefits through June 28, 2017, and 6% on accrued but unpaid benefits thereafter.   Finally, the ALJ determined that Parker v. Webster County Coal, LLC (Dotiki Mine), 529 S.W.3d 759 (Ky. 2017) had become final since the date of the award, therefore, because Lawson was not yet 65 at the time he became entitled to benefits, his award of PTD benefits was subject to the tier down provision of KRS 342.730(4), as it existed prior to 1996. 

Regarding Lawson’s argument pertaining to the application of the tier down provision contained in the pre-1996 version of KRS 342.730(4), we find no error.   This issue was resolved by the holding of the Kentucky Supreme Court in Parker, supra.  There, the Kentucky Supreme Court found KRS 342.730(4), as amended in 1996, is unconstitutional.  That case is now final, and this Board must apply its holding to all decisions that have been timely appealed.  As noted in the holding in Legislative Research Com’n v. Fischer, 366 S.W.3d 905 (Ky. 2012), an unconstitutional statute is null and void from the date of its enactment, and therefore it practically never existed.  The result is that the unconstitutional statute’s pre-amendment version controls.  Mosely v. Commonwealth Dept. of Highways, 489 S.W.2d 511 (Ky. 1972); Commonwealth v. Malco-Memphis Theatres, 169 S.W.2d 596 (Ky. 1943).  In this instance, the 1996 version of KRS 342.730(4), which was an amendment to an existing provision, was found unconstitutional.  Since this was an amendment to an existing statute, the 1994 version is in effect.  

The ALJ appropriately determined the application of the tier down provision contained in KRS 342.730(4) as it existed in 1994 was appropriate.  Because Lawson was not yet 65 years old at the time he contracted CWP, the tier down provision contained in the pre-1996 version of KRS 342.730(4) is applicable.  That version reads as follows:

If the injury or last exposure occurs prior to the employee’s sixty-fifth birthday, any income benefits awarded under KRS 342.750, 342.316, 342.732, or this section shall be reduced by ten percent (10%) beginning at age sixty-five (65) and by ten percent (10%) each year thereafter until and including age seventy (70). Income benefits shall not be reduced beyond the employee’s seventieth birthday.  

Therefore, the ALJ’s determination on that issue will not be disturbed.

          As noted above, Parton Bros. has raised numerous issues on appeal.   We acknowledge that as the claimant in a workers’ compensation proceeding, Lawson had the burden of proving each of the essential elements of his cause of action.  See KRS 342.0011(1); Snawder v. Stice, 576 S.W.2d 276 (Ky. App. 1979).  Since Lawson was successful in his burden, the question on appeal is whether there was substantial evidence of record to support 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).  

          In rendering a decision, KRS 342.285 grants an ALJ as fact-finder the sole discretion to determine the quality, character, and substance of evidence.  Square D Co. v. Tipton, 862 S.W.2d 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 v. General Refractories Co., 581 S.W.2d 10 (Ky. 1979); Caudill v. Maloney’s Discount Stores, 560 S.W.2d 15 (Ky. 1977).   Although a party may note evidence supporting a different outcome than reached by an ALJ, such proof is not an adequate basis to reverse on appeal.  McCloud v. Beth-Elkhorn Corp., 514 S.W.2d 46 (Ky. 1974).  Rather, it must be shown there was no evidence of substantial probative value to support the decision.  Special Fund v. Francis, 708 S.W.2d 641 (Ky. 1986). 

          The function of the Board in reviewing an ALJ’s decision is limited to a determination of whether the findings made are so unreasonable under the evidence that they must be reversed as a matter of law.  Ira A. Watson Department Store v. Hamilton, 34 S.W.3d 48 (Ky. 2000).  The Board, as an appellate tribunal, may not usurp the ALJ's role as fact-finder by superimposing its own appraisals as to weight and credibility or by noting other conclusions or reasonable inferences that otherwise could have been drawn from the evidence.  Whittaker v. Rowland, 998 S.W.2d 479 (Ky. 1999).

          Parton Bros. first argues the ALJ erred in concluding Lawson provided due and timely notice of his CWP.  It argues Lawson did not provide notice of his condition until the delivery of the May 5, 2016 notice letter.  The ALJ determined Lawson actually provided verbal notice of his condition shortly after he received the diagnosis in 2014, prior to him being laid off from work by Parton Bros.

          Regarding whether Lawson gave due and timely notice to Parton Bros. of his CWP, we initially note that in injury claims, KRS 342.185 requires an employee provide notice of a work-related condition, “as soon as practicable after the happening thereof.”  While notice is mandatory, the Court of Appeals has indicated, "The statute should be liberally construed in favor of the employee to effectuate the beneficent purposes of the Compensation Act."  Marc Blackburn Brick Co. v. Yates, 424 S.W.2d 814, 816 (Ky. 1968).  Whether notice has been given as “soon as practicable” depends upon the circumstances of the particular case.  Id.  The same liberal construction is applicable in occupational disease claims. (Emphasis added). 

Parton Bros. contends Lawson knew he had CWP prior to his lay off in 2014 and did not notify it of the condition until he sent the notice letter on May 5, 2016.  Parton Bros. submits this delay in giving notice does not satisfy the requirements of KRS 342.316(2).  That statute requires an employee to provide notice as soon as practicable after he first experiences a distinct manifestation of the disease in the form of symptoms reasonably sufficient to apprise him he has contacted the disease or a diagnosis of the disease has been communicated to him, whichever shall first occur.  Historically, notice with respect to occupational disease claims required notice of disability from the disease rather than notice of contraction of the disease.  The “disability” requirement was developed to protect workers who continued to work and would face termination if they filed a claim.  See Mary Helen Coal Corporation vs. Chitwood, supra.  KRS 342.316(2) states as follows:

The procedure with respect to the giving of notice and determination of claims in occupational disease cases and the compensation and medical benefits payable for disability or death due to the disease shall be the same as in cases of accidental injury or death under the general provisions of this chapter, except that notice of claim shall be given to the employer as soon as practicable after the employee first experiences a distinct manifestation of an occupational disease in the form of symptoms reasonably sufficient to apprise the employee that he or she has contracted the disease, or a diagnosis of the disease is first communicated to him or her, whichever shall first occur.

 

In Newberg vs. Slone, 846 S.W.2d 694 (Ky. 1992) the Court provided a comprehensive review and analysis of the notice requirements of KRS 342.316(2).  The Court recognized that developments in workers’ compensation law weakened the notion that an employee’s obligation to notify his employer of a claim is triggered only by an actual incapacity to perform work.  This was especially true if the claimant was no longer working.  In Newberg, the Court found that while there was no specific time frame for satisfying the notice requirement in occupational disease cases, the discretion for making the determination of whether it was given “as soon as practicable” lies properly with the ALJ. 

Lawson’s testimony he verbally advised his employer of his CWP diagnosis prior to his being laid off is unrefuted.  He subsequently sent the notice letter in May 2016. The ALJ provided a sufficient analysis in determining Lawson provided due and timely notice.   We find the ALJ did not err in his determination, and we will not disturb his decision on this issue. 

Likewise, we determine the ALJ did not err in determining Lawson’s last injurious exposure was with Parton Bros., and finding it responsible for the benefits to which he is entitled for his CWP.  KRS 342.316(1)(a) states as follows:

The employer in whose employment the employee was last exposed to the hazard of the occupational disease. During any period in which this section is applicable to a coal mine, an operator who acquired it or substantially all of its assets from a person who was its operator on and after January 1, 1973, shall be liable for, and secure the payment of, the benefits which would have been payable by the prior operator under this section with respect to miners previously employed in the mine if it had not been acquired by such later operator. At the same time, however, this subsection does not relieve the prior operator of any liability under this section. Also, it does not affect whatever rights the later operator might have against the prior operator.

 

Lawson testified he occasionally hauled loads of coal for subsequent employers.  However, he testified he was not exposed to coal dust while doing so.  Again, this testimony is unrefuted.   We note the recent holding from the Kentucky Supreme Court in Miller v. Tema Isenmann, Inc., 2016-SC-000449-WC, rendered March 22, 2018 (designated not to be published).  That case notes that KRS 342.0011 defines injurious exposure as “that exposure to occupational hazard which would, independently of any other cause whatsoever, produce or cause the disease for which the claim is made.”  The Court noted that statute requires only that an exposure could independently cause the disease, not that in fact did so. 

The ALJ outlined the evidence he reviewed, and provided the basis for his determination that the hauling of such loads did not constitute injurious exposures as required by the Kentucky Workers’ Compensation Act.  This is a factual determination within the scope of the ALJ’s discretion, and again we find no error.  The ALJ’s finding on this issue is supported by Lawson’s testimony, which constitutes substantial evidence, and again the ALJ’s determination regarding this issue will remain undisturbed.  

Parton Bros. next argues the ALJ erred in failing to refer Lawson for a university evaluation as required by KRS 342.315 and KRS 342.316(3)(b)(4)(b).  We again find no error.  While Parton Bros. is correct that the Commissioner is required to refer an individual who has filed an occupational disease claim for a university evaluation, he is not required to do so when it is an impossibility.  As noted by ALJ Case in his order dated July 6, 2017, the scheduling of a university evaluation was impossible due to the backlog of claims.  He noted the University of Kentucky does not perform such evaluations, and the University of Louisville’s ability to do so is extremely limited.  Therefore, he declined to order such an evaluation.  The ALJ again addressed this issue in his decision rendered October 30, 2017, and he outlined his reason for doing so.  The ALJ specifically noted that although a university evaluation had not been performed, Lawson was in fact evaluated by a physician with whom the Commissioner had contracted.  The ALJ again addressed this issue in his November 17, 2017 order denying Parton Bros.’ petition for reconsideration.

In Miller v. Tema Isenmann, Inc., supra, the Court dealt with this very issue.  In that case, the employee claimed he developed bladder cancer due to exposure to MOCA, a chemical compound used at work.  The Court noted the mandatory language contained in KRS 342.315(1) requiring the Commissioner to contract with the University of Kentucky and the University of Louisville medical schools to evaluate injured workers who become affected by occupational diseases.   Although the Commissioner was unable to find a physician to perform such an evaluation, the Court held he had fulfilled his obligation by contracting with the universities.  We note that although the opinions of a physician other than one performed by a university evaluator is not afforded presumptive weight, it still may constitute substantial evidence upon which an ALJ can rely in making a determination.  Magic Coal Co. v. Fox, 19 S.W.3d 88 (Ky. 2000).  

As noted by the Kentucky Supreme Court in Miller v. Tema Isenman, Inc., supra, “the fact that the presumption can be overcome and is not dispositive of the case clearly demonstrates that a claim can be decided on evidence that contradicts a university evaluation.  Therefore, a case can also be decided on the evidence if the ALJ is unable to obtain such an evaluation.”  In this instance, ALJ Case noted the difficulty in scheduling a university evaluation, which was reiterated by the ALJ.  As noted by the court, “it would be nonsensical to turn a party away from pursuing a claim because he was unable to obtain a university evaluation.”  Id.  We find no error in the ALJ’s refusal to refer this claim back to the Commissioner for a university evaluation.  Both the ALJ and ALJ Case set forth the reasoning why such evaluation was not originally scheduled.  We additionally note an evaluation was performed by a physician at a facility contracted with by the Commissioner.  This satisfies the statutory requirements set forth in KRS 342.315 and KRS 342.316.  Again, we will not disturb the ALJ’s determination on this issue.

Parton Bros. next argues the ALJ erred in awarding benefits while Lawson was still working.  We note the ALJ determined that although Lawson continued to work in the severance and processing of coal after he was diagnosed with CWP, he was not entitled to benefits for that condition until October 14, 2014, the date he was laid off.  This is in accordance with the holding in Smith v. Leeco, Inc., 897 S.W.2d 581 (Ky. 1995).  The ALJ noted that pursuant to the holding in Millersburg Military Institute v. Puckett, 260 S.W.3d 339 (Ky. 2008), there is no such proscription from awarding benefits during a time period when Lawson was employed in types of employment not engaged in the severance and processing of coal.

In Smith v. Leeco, supra, the court noted it was faced with the novel situation where a coal worker who was considered totally occupationally disabled as a matter of law due to category 2 CWP, but he was still employed full-time as a miner.  The Court recognized it was not the intention of the Act to provide an individual total disability benefits while he continued to work full-time.  The court determined the appropriate remedy was to award total disability benefits but abate the award until the claimant ceased active gainful employment, thus avoiding double recovery.  

Later in Leeco, Inc. v. Smith, 970 S.W.2d, 337 (Ky. 1998), the Kentucky Supreme Court again stated despite the fact Smith suffered from Category 2 CWP, the payment of his benefits could not begin until the date of last injurious exposure, or actual disability whichever last occurred.

Here, the ALJ determined Lawson was not entitled to PTD benefits while he was engaged in the severance and processing of coal.  This is consistent with the cases cited above.  Once he stopped working in that industry, October 14, 2014, the ALJ determined Lawson was entitled to such benefits.  The ALJ determined Parton Bros. was not entitled to a credit for Lawson’s earnings for other employers not engaged in severance and procession of coal.  He cited to the holding in Millersburg Military Institute v. Puckett, supra, where the court held the employer was not entitled to credit for bona fide wages earned by an employee during an award of benefits.  In this instance, Parton Bros. is seeking a credit against the award for Lawson’s earnings for another employer.  We agree with the ALJ, the prohibition against the payment of PTD benefits only extends to the date he left employment in the severance and processing of coal.  We additionally note Lawson’s testimony that he attempted to find additional coal mining work but was unable to pass a pre-employment physical examination.  Again, we find the ALJ did not err in his determination, which is supported by substantial evidence, and therefore affirm.

Parton Bros. also argues the award of 12% interest on unpaid benefits through June 28, 2017, and 6% thereafter is inappropriate.  The applicable statute is KRS 342.040.  Prior to June 29, 2017, that provision of the statute read, in relevant part, as follows:

All income benefits shall be payable on the regular payday of the employer, commencing with the first regular payday after seven (7) days after the injury or disability resulting from an occupational disease, with interest at the rate of twelve percent (12%) per annum on each installment from the time it is due until paid, . . .

Effective June 29, 2017, the Kentucky legislature amended KRS 342.040 to read, in relevant part, as follows:

All income benefits shall be payable on the regular payday after seven (7) days after the injury or disability resulting  from an occupational disease, with interest at the rate of six percent (6%) per annum on each installment from the time it is due until paid, except that if the administrative law judge determines that a denial, …

          In Stovall v. Couch, supra, the Court of Appeals resolved the very issue raised by Parton Bros. on appeal.  Couch was found totally occupationally disabled due to CWP.  The issue on appeal was whether the Board erred in awarding interest at the rate of 12% on all past due benefits.  On the date of last injurious exposure to CWP, the statute allowed 6% interest on unpaid benefits.  However, the statute was subsequently amended effective July 15, 1982, increasing the interest rate to 12% per annum on each installment from the time it is due until paid.  In determining the employer owed 6% interest on all past due installments through July 14, 1982, and 12% on all unpaid installments thereafter, the Court of Appeals concluded as follows:

On this appeal, appellants contend that KRS 342.040, governing the rate of interest on past due installments, was misapplied. On the date of last injurious exposure, that statute allowed 6% interest on such benefits. However, the provision was amended, effective July 15, 1982, increasing the rate of interest to 12% per annum on each installment from the time it is due until paid. To uphold the Board's award would amount to retroactive application of the amendment, appellants contend.

As this particular application of KRS 342.040 has yet to be the topic of an appellate decision, both sides in this controversy look for analogy to the case of Ridge v. Ridge, Ky., 572 S.W.2d 859 (1978). Ridge dealt with the application of an amendment to the statute governing the legal rate of interest on judgments. The Kentucky Supreme Court decided:

... to adopt the position that the rate of interest on judgments is a statutory rather than a contractual matter. We therefore hold that the increase of the legal interest rate applies prospectively to prior unsatisfied judgments, the new rate beginning with the effective date of the amendment. Id. at 861.

Appellants assert that, employing the logic of Ridge, the 12% rate of interest should begin on the effective date of the statutory amendment, July 15, 1982, and that prior to that date, interest should be 6% as per the old statute. Appellee Couch looks to the language in Ridge, namely that the new rate of interest “applies prospectively to prior unsatisfied judgments,” thus concluding that the rate of interest is controlled by the date of judgment and not the date of accrual of the cause of action, and that the 12% rate in effect upon the date of judgment is applicable.

In Campbell v. Young, Ky., 478 S.W.2d 712, 713 (1972), the then Court of Appeals discussed the question of when interest was to begin accruing on unpaid compensation benefits. That court held that interest was due from the date the claim for compensation was filed. In the instant case, when Couch filed his claim, the interest rate in effect was 6% per annum. In our opinion, the plain wording of KRS 342.040 dictates that appellants may only be assessed interest on unpaid benefits at 6% prior to July 15, 1982, and at 12% thereafter. Consequently, the Board's award to the contrary and the lower court's affirmation thereof was in error.

Id. at 437-438.

          The same logic applies here.  Lawson’s entitlement to PTD benefits vested at the time his condition became disabling.  Therefore, from October 15, 2014 through June 28, 2017, Lawson is entitled to 12% interest on all past due benefits.  Lawson is entitled to 6% interest on income benefits accrued but unpaid from and after June 29, 2017. 

         In Hamilton v. Desparado Fuels, Inc., 868 S.W.2d 95, 97 (Ky. 1993), the Supreme Court instructed:

Accordingly, we believe that what constitutes an authorized attorney's fee for prosecuting a claim for those particular benefits also should be determined by the law in effect on the date of the injury. A contract that provides otherwise is void. KRS 342.320(2).

KRS 446.080(1) provides that statutes are to be liberally construed in order to promote their objectives and the legislative intent, and KRS 446.080(3) provides that no statute is to be applied retroactively absent an express legislative directive. In Peach v. 21 Brands Distillery, Ky. App., 580 S.W.2d 235 (1979), the court emphasized that the rule against the retroactive application of statutes should be strictly construed. Particularly where a statute creates new rights or duties, it should be presumed that the legislature intended for the statute's application to be prospective only. The 1990 amendment to KRS 342.320(1) exposes injured workers to liability for substantially greater attorney's fees in relation to the size of their awards than was authorized at the time the maximum amount of the award was fixed. We find no indication, whatever, that the legislature intended for the 1990 amendment to KRS 342.320 to apply retrospectively to awards of attorney's fees relative to injuries which occurred before its effective date.

          Contrary to Parton Bros.’ assertion, we find no indication, express or implied, that the legislature desired the recent amendment to have retroactive effect.  Therefore, we affirm the ALJ’s decision regarding the applicable interest rate.

Accordingly, the October 30, 2017 decision and the November 17, 2017 order on petition for reconsideration issued by Hon. John B. Coleman, Administrative Law Judge, are hereby AFFIRMED.

          ALL CONCUR.

 

 

COUNSEL FOR PETITIONER RODNEY LAWSON:

 

HON JOHNNIE L TURNER

PO BOX 351

HARLAN, KY 40831

 

COUNSEL FOR RESPONDENT PARTON BROS CONTRACTING:

 

HON W BARRY LEWIS

PO BOX 800

HAZARD, KY 41702

 

KENTUCKY ATTORNEY GENERAL:

 

HON ANDY BESHEAR

700 CAPITAL AVE, STE 118

FRANKFORT, KY 40601

 

ADMINISTRATIVE LAW JUDGE:

 

HON JOHN B COLEMAN

657 CHAMBERLIN AVE

FRANKFORT, KY 40601