Workers’
Compensation Board
OPINION ENTERED: August
30, 2018
CLAIM
NO. 201592281
MARIA
GRANT PETITIONER
VS. APPEAL FROM HON. TANYA PULLIN,
ADMINISTRATIVE
LAW JUDGE
NEWGISTICS,
ET AL AND
HON.
TANYA PULLIN,
ADMINISTRATIVE
LAW JUDGE RESPONDENTS
OPINION
DISMISSING
AND ORDER
*
* * * * *
BEFORE: ALVEY, Chairman, STIVERS and
RECHTER, Members.
ALVEY, Chairman. Maria
Grant (“Grant”) appeals from the November 22, 2017 Opinion and Order on
Bifurcated Issue, and the March 20, 2018 Opinion, Award and Order rendered by
Hon. Tanya Pullin, Administrative Law Judge (“ALJ”). In the November opinion, the ALJ found Grant
was employed by Corporate Resource Services (“CRS”) at the time of her injury
and that Newgistics, Inc. (“Newgistics”) did not bear any liability pursuant to
KRS 342.610(2). The ALJ further held the
question of whether the Kentucky Insurance Guaranty Association (“KIGA”) is
liable for payment is controlled by KRS 304.36 and is, therefore, outside her
jurisdiction. In the March 2018 opinion,
the ALJ awarded Grant temporary total disability (“TTD”) benefits, permanent
partial disability (“PPD”) benefits and medical benefits against her Employer,
CRS, and/or their insurer. No petition
for reconsideration was filed by either party.
On appeal, Grant argues
the ALJ erred by misinterpreting KRS 342.610(2) and should have held Newgistics
liable as the up-the-ladder employer.
Grant also argues the ALJ erred in finding she did not have jurisdiction
to address the issue of KIGA’s liability under KRS 342.325. Grant additionally argues the ALJ erred by
failing to determine the Workers’ Compensation Act provided a mechanism to hold
KIGA liable for her benefits. Grant
argues the bar on benefits due to residency limitations set forth in KRS 304.36
violates the Privileges and Immunities Clause of the U.S. Constitution. In her supplemental brief addressing the
Board’s June 21, 2018 opinion, Grant argues CRS is not an indispensable party
to this appeal. Because we determine CRS
is an indispensable party which Grant failed to name in her appeal, this Board
is without jurisdiction to rule on the
merits and this appeal is dismissed.
Grant
filed a Form 101 alleging she injured her hand on March 4, 2015. Grant named CRS as the Defendant/Employer and
Lumbermen’s Underwriting Alliance (“LUA”) as its workers’ compensation insurer. Grant identified Newgistics and the KIGA as
additional defendants since LUA is insolvent.
In the Form 104, Grant indicated she worked for CRS, a temporary help
service, as a machine operator from May 1, 2014 to March 4, 2015.
Both
Newgistics, as insured by Chubb Group of Insurance Companies, and KIGA filed a
Form 111 denying Grant’s claim. Neither
CRS nor LUA filed a Form 111, or participated in this
claim. On May 31, 2017, the Commissioner
of the Department of Workers’ Claims (“the Commissioner”) issued two
certifications of coverage. The Commissioner
certified an insurer, LUA, reported a policy of workers’ compensation insurance
was in effect for CRS on the alleged injury date of March 4, 2015. The Commissioner also certified an insurer,
Chubb Indemnity Insurance Company, reported a policy was in effect for
Newgistics on the alleged injury date of March 4, 2015.
KIGA
submitted bankruptcy documents indicating CRS and its subsidiaries ceased
operations on March 27, 2015 and filed for Chapter 11 Bankruptcy protection in
New York in July 2015. KIGA also
submitted documents filed by CRS with the Kentucky Secretary of State,
including the May 2011 Certificate of Authority and its Annual reports from
2011, 2012 and 2013. Those documents
reflect CRS was organized in Delaware on December 15, 2009. CRS maintained its principal office in New
York. Likewise, the annual reports
listed New York as the location for all CRS officers. CRS listed with the Kentucky Secretary of
State a registered agent company in Kentucky as its registered agent.
The
claim was bifurcated on the issues of whether Newgistics is an up- the-ladder
contractor and whether the KIGA bears any potential liability.
Grant
testified by deposition on May 23, 2017, and at the hearing held September 28,
2017. At the deposition, Grant testified
she resides in Cincinnati, Ohio. Grant
began working for CRS, a temporary agency, in May 2014. Grant was placed at Newgistics,
and worked as a forklift operator at the time of the March 4, 2015
injury. Grant indicated Newgistics is a
fulfillment center for various companies such as Rite Aid, Fitgeek, Geek Squad,
Cooking.com, and Simples. Grant
explained Newgistics contained eight departments and, at the time of her
injury, she was working in the Rite Aid department. Grant operated a sit down or standing
forklift to pull orders. Grant testified
that on March 4, 2015, she injured the long and small fingers of her left hand
when it was crushed between a metal rack and a part of the forklift. Grant indicated she reported her injury to
her shift lead at Newgistics, the safety coordinator, and the on-site
coordinator for CRS. Grant ultimately
underwent three surgeries for her work injury.
Grant confirmed LUA paid TTD benefits and medical expenses until July
2016. Grant also indicated she has
received a check for a small amount from KIGA for medical and mileage
reimbursement. Grant stated she neither
returned to Newgistics, nor has she been assigned to another work site by CRS
since the work accident.
At
the hearing, the ALJ noted Grant submitted a ledger indicating LUA paid her TTD
benefits from March 2015 through July 20, 2016 and medical benefits for
treatment up through July 8, 2016. Grant
testified she responded to a CRS advertisement for employment opportunities on
Craigslist. Grant went to the CRS office
in Florence, Kentucky where she completed an application, watched safety and
training videos, and attended an orientation.
Grant was assigned to Newgistics located in Hebron, Kentucky. When she reported to work at Newgistics,
Grant completed a time sheet at the door for CRS and also
logged onto Newgistics computers to clock in.
Grant testified Newgistics’ employees trained her and controlled her
day-to-day activities. Grant reported to
a Newgistics’ supervisor if she made a mistake.
However, she also reported to the CRS on-site supervisor for issues that
could not be worked out with Newgistics.
Grant estimated there was a CRS on-site supervisor present at the
Newgistics facility “at least half the time.” The CRS on-site supervisor hand-delivered
paychecks. Grant testified she reported
her March 4, 2015 work injury to her team leader and her supervisor, both
Newgistics’ employees. Grant confirmed
she resided in Cincinnati, Ohio throughout the period she worked at
Newgistics.
In
the November 22, 2017 opinion, the ALJ determined Newgistics does not have up-the-ladder
liability pursuant to KRS 342.610(2).
That statute reads, “A contractor who subcontracts all or any of the
contract and his or her carrier shall be liable for the payment of compensation
to the employee unless the subcontractor primarily liable for the payment of
such compensation has secured the payment of compensation as provided for in
this chapter.” The ALJ noted the
Commissioner certified an insurer reported CRS had a workers’ compensation
insurance policy effective on the date of injury, March 4, 2015. LUA paid TTD benefits and medical expenses
after Grant’s work injury. Therefore,
the ALJ found that the subcontractor, CRS, “secured payment of compensation” as
required by KRS 342.610(2) by having a valid workers’
compensation insurance policy on the date of injury. Accordingly, the ALJ determined there was no
basis for “up-the-ladder” liability to Newgistics under KRS 342.610.
The
ALJ then determined CRS was a temporary help service and Grant was a temporary
worker pursuant to KRS 342.615. The ALJ
found Newgistics was the client of CRS.
Pursuant to KRS 342.615, the ALJ found CRS was Grant’s employer, rejecting
the argument she was a leased employee. Because
the ALJ found Grant was employed by CRS on the date of injury, she dismissed
Newgistics as a Defendant.
In
addressing whether KIGA has any liability, the ALJ noted the ALJ’s jurisdiction
is limited pursuant to KRS 342.325 to “all questions arising under this chapter,
if not settled by agreement of the parties interested therein, with the
approval of the [ALJ], shall be determined by the [ALJ] except as otherwise
provided in this chapter.” The ALJ
stated whether KIGA is liable for payment is controlled by KRS 304.36 and is,
therefore, outside the jurisdiction of the ALJ.
Therefore, the ALJ dismissed the KIGA as a Defendant. The ALJ noted any dispute between Defendant
Employer and KIGA or Plaintiff and KIGA is properly reserved in Circuit
Court.
The
ALJ dismissed Newgistics and KIGA as parties.
The ALJ granted Grant and CRS fifteen days to file a motion to request
or waive an additional formal hearing.
On
December 7, 2017, Grant filed a Notice of Appeal from the November 22, 2017
Opinion and a motion to waive her right to a second formal hearing. This Board, in an opinion rendered December
21, 2017, dismissed Grant’s appeal since the November 2017 opinion did not
represent a final and appealable order.
Subsequently,
the ALJ issued an Opinion, Award and Order on March 20, 2018. The ALJ began by noting she previously
dismissed KIGA and Newgistics as parties, and CRS, who has not participated in
any manner in the claim, remained as the sole defendant. Since CRS failed to file a Form 111, the ALJ
found it had admitted the allegations contained in Grant’s Form 101, including
whether she sustained a work-related hand injury on March 4, 2015. The ALJ determined Grant’s average weekly
wage. The ALJ found Grant is entitled to
PPD benefits based upon a 20% impairment rating and found she does not retain
the physical capacity to return to the type of work performed at the time of
injury. The ALJ awarded TTD benefits,
PPD benefits and medical benefits against CRS, and/or its insurer. No petition for reconsideration was filed.
Grant
filed a notice of appeal on March 23, 2018 and an amended notice of appeal on
April 3, 2018. In both notices, Grant
listed the style of the case as, “Maria Grant v. Newgistics, et al. and
Administrative Law Judge Tonya Pullin.” The
body of the amended notice states, “Plaintiff, Maria Grant, by and through
counsel, hereby gives notice that she appeals the Opinion, Award and Order
dated March 20, 2018 and the Opinion on Bifurcated Issues dated November 22,
2017.” Counsel for Grant certified a
copy of the notice was sent to counsel for KIGA and Newgistics, CRS, the
Department of Workers’ Claims, and the ALJ.
KIGA filed a motion to be
dismissed since the ALJ had previously dismissed it as a party in the November
2017 opinion and awarded benefits against Grant’s employer, CRS, in the March
2018 opinion. KIGA also states, “[m]ore
importantly KIGA must be dismissed as a party as it was never named as a party
in the Notice of Appeal.” KIGA asserts
listing respondents as, “Newgistics, et al. and Administrative Law Judge Tonya
Pullin” does not comply with 803 KAR 25:010§21(1)(c)2. Newgistics also filed a motion to dismiss
since the ALJ previously dismissed it as a party to the claim in the November
2017 opinion.
This
Board issued an Order on June 21, 2018, addressing KIGA’s and Newgistics’
motions to dismiss. Pursuant to 803 KAR
25:010 §(2), this Board dismissed KIGA as a party because
it was not named in the appeal. The
Board noted the regulations require KIGA to be specifically named as a party,
and the fact that its counsel may have been served with a Notice of Appeal is
not sufficient to join it as a party to the
appeal. The order also referenced CR
73.03(1), which states, “The notice of appeal shall specify by name all appellants
and all appellees (“et al.” and “etc.” are not proper designation of parties) . . . .” Based upon
the above, the Board held the designation of “Newgistics, et al.” is
insufficient to name KIGA as a party to the appeal and sustained its motion to
be dismissed as a party to the appeal.
The Board, however, overruled Newgistics’ motion since it was
specifically named as a party to the appeal.
The
Board further stated, “We are compelled to note that in her Notice of Appeal,
Grant did not name CRS as a party to the appeal. The ALJ’s March 20, 2018, Opinion, Award, and
Order awarded benefits to be paid by CRS.”
Therefore, the Board ordered the parties to “address whether CRS was a
necessary and indispensable party to this appeal and whether Grant’s failure to
name CRS as a party to the appeal necessitates dismissal of her appeal.”
On
appeal, Grant argues the ALJ misinterpreted KRS 342.610(2) and should have held
Newgistics liable as the up-the-ladder employer. Grant stresses she stopped receiving compensation
once LUA became insolvent and will in all likelihood
receive no further payments without a favorable ruling by the Board. Grant argues the ALJ misinterpreted the
language of KRS 342.610(2) by concluding insurance coverage at the time of her
injury satisfies the statutory requirement of payment of compensation. Grant argues this fact does not absolve
Newgistics of the ongoing responsibility for compensation to be paid, noting PPD
benefits are reasonably expected to last at least 425 weeks. Grant states, “Assuming arguendo that all KRS
342.610(2) requires is that a contractor has their subcontractors obtain
insurance coverage, then the intent must be that there is ongoing coverage,
otherwise the payment of compensation ceases without recourse to the
contractor. The better reading of the
statute would be that the contractor is liable if the coverage lapses and
payment of compensation is required.”
Grant states this reading is more consistent with the Act’s purpose of
protecting injured workers.
Grant argues the ALJ
erred by “not determining that Chapter 342 provided a mechanism for her to find
that KIGA should pay on this claim.”
Grant asserts the ALJ had jurisdiction to address the issue of KIGA’s
liability under KRS 342.325 since the question had to be determined in
conjunction with the claim against other parties and could only be brought
before an ALJ pursuant to KRS 342.690.
Grant asserts by not addressing this issue, she was denied the opportunity
to obtain relief under the Act. Grant
also argues KIGA’s stated reason for finding it was not obligated to pay her
claim, i.e., that she is not a Kentucky resident, is inconsistent with the
Workers’ Compensation Act. She notes the
Act itself contains no residency requirements for benefits. She also notes the
principal that Kentucky statutes shall be liberally construed with a view to
carry out their objective. Grant asserts
the residency exclusion contained in KRS 304.36-050(6)(a) conflicts with the
legislative intent and practical application of Chapter 342. When statutes are in apparent conflict, the
one containing positive language relating to the particular
subject should take precedence over a provision dealing with a matter in
general terms.
Grant
argues the bar on benefits due to residency of KRS 304.36 violates the
Privileges and Immunities Clause of the U.S. Constitution.
In
her supplemental brief addressing the Board’s June 21, 2018 opinion, Grant
argues CRS is not an indispensable party to the appeal.
We
first address whether CRS is an indispensable party to this appeal. As noted above, this Board rendered an Order on June 21, 2018. In that order, the Board held Grant failed to
name CRS as a party to the appeal. The
Board directed the parties to address whether CRS was a necessary and
indispensable party to this appeal and whether Grant’s failure to name CRS as a
party to the appeal necessitates dismissal of her appeal.
We note 803 KAR 25:010§2(3)(a)
requires all persons shall be joined as defendants against whom the ultimate
right to relief pursuant to the Act may exist, whether jointly, severally, or
in the alternative in adjustments of claims.
Within thirty days of a final award, order or decision rendered by an
ALJ, any aggrieved party may file a notice of appeal to the Board. 803 KAR 25:010 §22(2)(c) mandates the notice of
appeal denote the following information:
(c) The notice of appeal
shall:
1. Denote the appealing party as the
petitioner;
2. Denote all parties
against whom the appeal is taken as respondents;
3. Name
the administrative law judge who rendered the award, order, or decision
appealed from as a respondent;
4. If appropriate
pursuant to KRS 342.120 or KRS 342.1242, name the director of the Division of
Workers’ Compensation Funds as a respondent; and
5. Include
the claim number.
(Emphasis added.)
An indispensable party to an appeal is one whose absence prevents the tribunal from
granting complete relief among those already listed as parties. See
CR 19.01; CR 19.02; Braden v. Republic-Vanguard Life Ins. Co., 657
S.W.2d 241 (Ky. 1983); Milligan v. Schenley Distillers, Inc., 584 S.W.2d
751 (Ky. App. 1979). “In determining
whether a party is truly necessary on appeal, the court must ask ‘who is
necessary to pursue the claim … If a party’s participation in the appeal is
unnecessary to grant relief, and requiring its
participation would force unnecessary expense on the party, then … such a party
is not indispensable.’” Browning v.
Preece, 392 S.W.3d 388, 392 (Ky. 2013) quoting
Nelson County Bd. of Educ. v. Forte, 337 S.W.3d 617, 625 (Ky.
2011). The issue is whether the party
has “an interest that would be affected
by the decision of the Court of Appeals, regardless of whether that interest is
affected adversely or favorably.” Id. Even if a party is
indispensable at a trial, pursuant to CR 19.02,
the party is not necessarily indispensable to the appeal. Nelson County Bd. of Educ. v. Forte, 337 S.W.3d at 624.
The failure to name an indispensable party in the
notice of appeal is ‘a jurisdictional defect that cannot be remedied.’ ” Id. at 626
(quoting City of Devondale v. Stallings, 795 S.W.2d 954, 957 (Ky. 1990).
We
find CRS is an indispensable party to Grant’s appeal and her failure to name it
as a party to the appeal necessitates dismissal of her appeal. The ALJ found CRS was Grant’s employer on the
date of injury, and as such, it and its insurer are liable for the TTD
benefits, PPD benefits and medical benefits awarded. These findings are not disputed on
appeal. Although neither CRS nor LUA
participated in the underlying claim, presumably due to its financial status,
CRS maintains an interest affected by the ALJ’s determination and any decision by
this Board. Regardless of CRS’ financial
status, it is the primary party responsible for Grant’s award of indemnity and
medical benefits. Additionally, assuming
arguendo that Newgistics is found an
up-the-ladder contractor liable for the payment of compensation as argued by
Grant, neither it nor its insurer may recover the amount of such compensation
paid and necessary expenses from the “subcontractor,” in this instance CRS, who
is primarily liable. Therefore, CRS has
an interest that would be affected by the Board’s decision and is an
indispensable party to the appeal. The failure to name an indispensable party is a
jurisdictional defect fatal to an appeal. Commonwealth of Kentucky,
Department of Finance, Division of Printing v. Drury, 846 S.W.2d 702 (Ky.
1993). Consequently, we are without
jurisdiction to rule on the merits of the argument raised by Grant on appeal.
Accordingly, for the reasons stated herein, IT IS HEREBY ORDERED AND ADJUDGED the
appeal filed by Grant is DISMISSED.
ALL CONCUR.
_____________________________________
MICHAEL
W. ALVEY, CHAIRMAN
WORKERS’
COMPENSATION BOARD
COUNSEL FOR PETITIONER:
HON
PETER A TRIPP
2500
CHAMBER CENTER DR, STE 300
FORT
MITCHELL, KY 41017
COUNSEL FOR NEWGISTICS:
HON
BRIAN D WIMSATT
303
NORTH HURSTBOURNE PKWY, STE 110
LOUISVILLE,
KY 40222
COUNSEL FOR KIGA:
HON
CHARLES JOBSON
6006
BROWNSBORO PK BLVD, STE C
LOUISVILLE,
KY 40207
RESPONDENT:
CORPORATE
RESOURCE SERVICES
160
BROADWAY, STE 1300
NEW
YORK, NY 10038
ADMINISTRATIVE LAW JUDGE:
HON
TANYA PULLIN
657
CHAMBERLIN AVE
FRANKFORT,
KY 40601