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January 15, 2016 201285818

Commonwealth of Kentucky 

Workers’ Compensation Board

 

 

 

OPINION ENTERED:  May 18, 2018

 

 

CLAIM NO. 201364729

 

 

TERRY ADAMS                                   PETITIONER

 

 

 

VS.                         

APPEAL FROM HON. CHRIS DAVIS,

                 ADMINISTRATIVE LAW JUDGE

 

 

 

EXCEL MINING, LLC

AND HON. CHRIS DAVIS,

ADMINISTRATIVE LAW JUDGE                      RESPONDENTS

 

 

OPINION

AFFIRMING IN PART

VACATING IN PART

AND REMANDING

 

                       * * * * * *

 

 

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

 

 

RECHTER, Member.  Terry Adams (“Adams”) appeals from the April 25, 2016 Opinion, Award and Order and the May 23, 2016 Order on Reconsideration rendered by Hon. Chris Davis, Administrative Law Judge (“ALJ”).  The ALJ concluded Adams is permanently totally disabled as a result of a low back injury and work-related hearing loss.  On appeal, Adams argues he is entitled to income benefits from the date of injury, and the tier-down provisions of KRS 342.730(4) should not apply to his claim.  For the reasons set forth herein, we remand this claim to the ALJ. 

     The factual background necessary to decide this appeal is uncontested.  On October 3, 2013, Adams injured his low back while working as an underground mine electrician and crew leader for Excel Mining, LLC (“Excel”).  He also developed work-related hearing loss during his 38-year career as a miner.  After the October 3, 2013 injury, Adams worked light duty until November 26, 2013, when he was laid off. 

     The ALJ determined Adams reached maximum medical improvement for the low back injury on April 3, 2014.  He further determined Adams returned to the majority of his normal job tasks during his period of light duty, and the work was bona fide work of genuine benefit to Excel.  On this basis, the ALJ declined to award temporary total disability benefits during Adams’ period of light duty work.  This conclusion has not been appealed.

     The ALJ then determined Adams is permanently totally disabled.  This conclusion has not been appealed.  The ALJ began the award of permanent total disability (“PTD”) benefits on November 27, 2013, the day after Adams was laid off, and continued the award for a period of 104 weeks.  The ALJ further stated he lacked authority to consider Adams’ challenge to the constitutionality of KRS 342.730(4).

     Both parties petitioned for reconsideration, asking the ALJ to begin the award of PTD benefits on the date of injury.  Adams further argued Excel is not entitled to a credit for the wages he earned during the period of light duty.  Excel requested the ALJ to order PTD benefits commencing on October 3, 2013, but it not be ordered to commence income benefit payments until November 27, 2013.  The ALJ declined the petition, explaining Adams “continued to work for [Excel], performing genuine work and paid bona fide wages between October 3 and November 26, 2013, he was not totally disabled during that time, even if relying partially on the forbearance of [Excel].”

     Adams now appeals.  He first argues he is entitled to lifetime PTD benefits with no reduction.  The ALJ awarded PTD benefits for a period of 104 weeks commencing on November 27, 2013.  According to Adams, the Kentucky Supreme Court’s ruling in Parker v. Webster County Coal, LLC (Dotiki Mine), 529 S.W.3d 759 (Ky. 2017), declared KRS 342.730(4) unconstitutional and effectively eliminated the required cessation of PTD benefits when the claimant reaches Social Security old age retirement.  He argues he is entitled to a lifetime award.   

     We acknowledge the Parker case, and have recently expressed our opinion that the 1994 version of KRS 342.730(4) has been revived.  In Pickett v. Ford Motor Co., Claim No. 2015-01910 (WCB February 16, 2018), we held:

The version of KRS 342.730(4) the Parker Court deemed unconstitutional, enacted in 1996, states in pertinent part:

All income benefits payable pursuant to this chapter shall terminate as of the date upon which the employee qualifies for normal old-age Social Security retirement benefits under the United States Social Security Act, 42 U.S.C. secs. 301 to 1397f, or two (2) years after the employee's injury or last exposure, whichever last occurs.

 

     In Parker, supra, the Kentucky Supreme Court concluded the manner in which income benefits were limited in the 1996 version of KRS 342.730(4) is unconstitutional. In so ruling, the Supreme Court stated, in part, as follows:

[T]he equal protection problem with KRS 342.730(4) is that it treats injured older workers who qualify for normal old-age Social Security retirement benefits differently than it treats injured older workers who do not qualify. As Justice Graves noted in his dissent in McDowell, “Kentucky teachers ... have a retirement program and do not participate in social security.” 84 S.W.3d at 79. Thus, a teacher who has not had any outside employment and who suffers a work-related injury will not be subject to the limitation in KRS 342.730(4) because that teacher will never qualify for Social Security retirement benefits. There is no rational basis for treating all other workers in the Commonwealth differently than teachers. Both sets of workers will qualify for retirement benefits and both have contributed, in part, to their “retirement plans.” However, while teachers will receive all of the workers' compensation income benefits to which they are entitled, nearly every other worker in the Commonwealth will not. This disparate treatment does not accomplish the goals posited as the rational bases for KRS 342.730(4). The statute does prevent duplication of benefits, but only for non-teachers because, while nearly every other worker is foreclosed from receiving “duplicate benefits,” teachers are not.

Id. at 768 (emphasis added).

 

     The Supreme Court determined the 1996 version of KRS 342.730(4) does not pass constitutional muster because it treats injured older workers in the Commonwealth who do not qualify for old-age Social Security benefits, such as teachers, differently from all other injured older workers in the Commonwealth who qualify for old-age Social Security benefits. That said, the Supreme Court’s pronouncement in Parker lacks guidance as to how income benefits should now be calculated for injured older workers. In other words, should income benefit calculations for injured older workers be devoid of any age-related restrictions or should income benefit calculations revert back to the previous version of KRS 342.730(4) immediately preceding the 1996 version? Having had another opportunity to offer guidance in Cruse v. Henderson, Not To Be Published, 2015-SC-00506-WC (December 14, 2017), the Supreme Court declined. Thus, this Board must turn to other sources in order to address this inquiry.

     The previous version of KRS 342.730(4) 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.

     The above-cited language does not induce the same constitutional quandary identified by the Parker Court, as the tier-down directed in the previous version of KRS 342.730(4) does not differentiate between injured older workers eligible for old-age Social Security benefits and those who are not. All workers injured before the age of sixty-five are subject to the tier-down provisions regardless of their eligibility for Social Security benefits. The previous version of KRS 342.730(4) does, however, differentiate between injured younger workers and injured older workers, because those injured above the age of sixty-five are not subjected to the tier-down. The Parker Court has already addressed the rational basis of providing for such a distinction:

The rational bases for treating younger and older workers differently is: (1) it prevents duplication of benefits; and (2) it results in savings for the workers' compensation system. Undoubtedly, both of these are rational bases for treating those who, based on their age, have qualified for normal Social Security retirement benefits differently from those who, based on their age, have yet to do so.

Id. at 768.

     However, there must be a determination of whether the Supreme Court’s pronouncement in Parker revives the previous iteration of KRS 342.730(4).  

KRS 446.160 states as follows:

If any provision of the Kentucky Revised Statutes, derived from an act that amended or repealed a pre-existing statute, is held unconstitutional, the general repeal of all former statutes by the act enacting the Kentucky Revised Statutes shall not prevent the pre-existing statute from being law if that appears to have been the intent of the General Assembly.

(emphasis added).

     In making an educated assessment of the legislative intent at the time the current version of KRS 342.730(4) was enacted in 1996, we turn to a contemporaneous provision, contained in the 1996 legislation, in which the legislature addressed the dire need to preserve the long-term solvency of the Special Fund, now the Division of Workers’ Compensation Funds, which reads as follows:

Section 90. The General Assembly finds and declares that workers who incur injuries covered by KRS Chapter 342 are not assured that prescribed benefits will be promptly delivered, mechanisms designed to establish the long-term solvency of the special fund have failed to reduce its unfunded competitive disadvantage due to the cost of securing worker’s vitality of the Commonwealth’s economy and the jobs and well-being of its workforce. Whereas it is in the interest of all citizens that the provisions of this Act shall be implemented as soon as possible, an emergency is declared to exist, and this Act takes effect upon its passage and approval by the Governor or upon its otherwise becoming a law.                                      

     The language of Section 90 indicates the legislature, at the time the 1996 version of KRS 342.730(4) was enacted, intended to preserve the solvency of the Special Fund. Indeed, the language used in Section 90 speaks to this intent as being “an emergency.” This legislative intent cannot be ignored in the wake of the Supreme Court’s determination the 1996 version of KRS 342.730(4) is unconstitutional. This expressed concern certainly bolsters the conclusion the legislature contemplated a revival of the tier-down provisions in the previous version of KRS 342.730(4).

     Accordingly, we hold that income benefits are to be calculated pursuant to the tier-down formula as set forth in the pre-existing version of KRS 342.730(4) in place when the statute in question was enacted in 1996. As the record indicates Pickett was sixty at the time of the July 13, 2015, injury to his left shoulder, and the ALJ awarded PPD benefits commencing on July 13, 2015, we vacate the ALJ’s award of PPD benefits which are “subject to the limitations set forth in KRS 342.730(4)” and remand for a revised calculation of PPD benefits and an amended award consistent with the views set forth herein.

          Adams relies on Cruse v. Henderson County Board of Education, id., to support his argument that the tier-down provisions of the 1994 statute should not apply.  However, the claimant in Cruse was 71 years old at the time of her injury.  Adams was 64 years-old at the time of his injury.  As such, we believe this claim must be remanded for entry of an award of PTD benefits subject to the tier-down provision contained in KRS 342.730(4) as enacted in 1994.

          Adams next argues the award of PTD benefits must commence on the date of injury, not on the date he ceased working.  Permanent total disability is “the condition of an employee who, due to an injury, has a permanent disability rating and has a complete and permanent inability to perform any type of work as a result of the injury.”  KRS 342.0011(11)(c).  The condition of being disabled typically commences on the date of injury, though sometimes occurs after a latency period.  Sweasy v. Walmart, 295 S.W.3d 835 (Ky. 2009)(analyzing the commencement date of an award of permanent partial disability benefits). 

     However, there are circumstances under which the condition of permanent total disability does not arise until the claimant ceases working.  In Underwood v. Pella Windows Depe PLLC, 2017-WL-1203227 (Ky. App. 2017)[1], the Court of Appeals affirmed an opinion of this Board in which we determined “as a matter of law, a worker cannot be considered totally permanently disabled during a period he continues to work at his regular job, with no accommodations, at full wages.”  Because Underwood worked for several months after his date of injury, the Court of Appeals concluded his award of PTD benefits could not commence until he ceased working.  Still, under exceptional circumstances, a claimant may continue to labor and earn wages during a period of permanent total disability.  Gunderson v. City of Ashland, 701 S.W.2d 135 (Ky. 1985). 

          Here, the ALJ determined Adams’ permanent total disability arose on the date he was laid off, not the date of injury.  There is substantial evidence in the record to support this determination, and we note Adams has not challenged the sufficiency of the ALJ’s analysis.  Special Fund v. Francis, 708 S.W.2d 641 (Ky. 1986).

          Adams was working the position of foreman and supervising a crew.  He was prohibited from lifting anything himself, but had no difficulty performing his supervisory work.  He earned full wages.  He did not require the assistance of a helper to perform his essential duties as a crew leader.  For these reasons, we conclude there is substantial evidence to support the ALJ’s determination Adams was not permanently totally disabled until he ceased working.

          For the foregoing reasons, the award of income benefits is VACATED. This claim is REMANDED to the ALJ for entry of an award of permanent total disability benefits subject to the tier-down provisions set forth in the 1994 version of KRS 342.730(4).  The April 25, 2016 Opinion, Award and Order and the May 23, 2016 Order on Reconsideration rendered by Hon. Chris Davis, Administrative Law Judge, are hereby AFFIRMED in all other respects.          

          ALL CONCUR.

 

 

COUNSEL FOR PETITIONER:

 

HON C PHILLIP WHEELER, JR

5055 NORTH MAYO TRAIL

PIKEVILLE, KY 41501

 

COUNSEL FOR RESPONDENTS:

 

HON TERRI S WALTERS

PO BOX 1167

PIKEVILLE, KY 41502

 

KENTUCKY ATTORNEY GENERAL:

 

HON ANDY BESHEAR

700 CAPITOL AVE, STE 118

FRANKFORT, KY 40601

 

ADMINISTRATIVE LAW JUDGE:

 

HON CHRIS DAVIS

ADMINISTRATIVE LAW JUDGE

PREVENTION PARK

657 CHAMBERLIN AVENUE

FRANKFORT, KY 40601



[1] Cited pursuant to CR 76.28(4).