Title: SAFETY KLEEN V. ERIC LEE MARAMAN, ET AL

State: kentucky

Issuer: Kentucky Supreme Court

Document:

'71 VIS SIHI 1019110,9AA' 'All 7SVJ fJHJ0INS'iVIAlIWOH.LllVSV QgS11 90 aJIIJ JgJON 77VHS CIXV CIJHSI7fad Iff od ION SI NOIATldo SIHI `(0) W Sz' 99L MJ `,LurnOJ ,7HJfdr1S 9HdAd a9dVO7I1HOYd Jxnag,90fd 71AIJ JO S9711tY 7HI od INVnSxlld "QgxSI7dnd aff of .loN Qgdvx9Isga sImoijvido sixl NOIVIdOQgHSI7Sl1d 9S O.L SOS 93110ATIATIlly, dKi SAFETY KLEEN ,*UyrtMr C~Vurf of ~R~A 2004-SC-0728-WC APPEAL FROM COURT OF APPEALS 2004-CA-0157-WC WORKERS' COMPENSATION BOARD NO . 02-1894 ERIC LEE MARAMAN ; HON . DONALD G . SMITH, ADMINISTRATIVE LAW JUDGE ; AND WORKERS' COMPENSATION BOARD RENDERED : August 25, 2005 NOT TO BE PUBLISHED MEMORANDUM OPINION OF THE COURT AFFIRMING LDD~TFl- i9-oto APPELLANT APPELLEES The claimant sought workers' compensation benefits, alleging that he injured his back while working on July 15, 2001 . Accepting the allegations contained in his application for benefits and deciding the claim in his favor, the Administrative Law Judge (ALJ) noted that the employer failed to file a Form 111 denial of the claim or to submit any medical evidence . The employer appealed, maintaining that the ALJ erred by failing to grant its post-hearing motion to reopen proof on the ground of what it asserted was newly-discovered medical evidence, but the Workers' Compensation Board (Board) and the Court of Appeals affirmed . Appealing, the employer asserts that the Court of Appeals misinterpreted the facts and its argument. We affirm. As amended effective October 15, 2002, 803 KAR 25:010, § 5 sets forth the procedure regarding the filing of an application for benefits and response . On November 13, 2002, the claimant filed a Form 101 application, seeking benefits for the effects of a back injury that occurred on or about July 15, 2001 . The application alleged that he gave oral notice to his supervisor on the date he was injured . It also alleged that his wage on the date of injury was $550 .00 per week and that his current employer paid him $440.00 per week . As required by 803 KAR 25 :010, § 5(1)(b), he attached a Form 105 medical history, stating that Drs . Sexton and Erickson treated his back and that Dr . Karnes was his family physician . The application was accompanied by a report from Dr. Sexton, a neurosurgeon, who recommended surgery for a herniated disc . On December 16, 2002, a letter from the Department of Workers' Claims notified the employer and AIGS Insurance Company of the application and advised the employer to forward all correspondence to its carrier at the time of the alleged injury "at once as there are specific time requirements for defensive responses ." On December 23, 2002, the Department issued its "scheduling order," a letter notifying the employer, AIGS Insurance Company, the claimant, and his counsel that the application had been assigned to an ALJ and that a benefit review conference (BRC) was scheduled for April 9, 2003 . The letter stated that parties were required to file witness lists, copies of exhibits, proposed stipulations, and notice of contested issues at least 10 days before the conference . It also stated that proof for all parties commenced immediately for 60 days, followed by 30 days for the defendants only and 15 days thereafter for rebuttal by the claimant . It is undisputed that both of the Department's letters were sent to the employer and to AIGS Insurance Company at their respective last known addresses, and neither the employer nor AIGS has asserted that it failed to receive them . 803 KAR 25:010, § 5(2) provides that an employer "shall file a notice of claim denial or acceptance on a Form 111" within 45 days after the Department issues its scheduling order and that if an employer fails to do so, "all allegations of the application shall be deemed admitted ." Nonetheless, the employer failed to file a Form 111 notice of claim denial or acceptance in response to the claimant's application for benefits and failed to introduce any proof or to submit a witness list within the period set forth in the scheduling order. On March 12, 2003, the claimant filed, without objection, an IME report from Dr . Auerbach . He served a copy of the report on AIGS at the same address to which the Department sent its letters . The report from Dr . Sexton that accompanied the claimant's Form 101 was also admitted into evidence . See 803 KAR 25 :010, § 8(4) . On April 9, 2003, counsel for the employer first entered an appearance at the benefit review conference . 803 KAR 25 :010, § 13 explains that a BRC is an informal proceeding, without a transcript, the purpose of which is to expedite the processing of the claim. 1t may be postponed upon a showing of good cause in a motion filed at least 15 days before the conference . Consistent with the purpose of the conference, the claimant and the other parties or their representatives are required to attend . Representatives are required to have authority to resolve disputed issues and to settle the claim . 803 KAR 25 :010, § 13(11) directs the parties to attempt to resolve controversies and disputed issues, to narrow and define disputed issues, and to facilitate a prompt settlement . If the parties have not reached an agreement on all issues, 803 KAR 25:010, § 13(13) directs the AU to prepare a memorandum containing a summary stipulation of contested and uncontested issues for the parties to sign, and 803 KAR 25:010, § 13(14) provides that only the contested issues shall be the subject of further proceedings . The parties' representatives signed an order and memorandum of the April 9, 2003, BRC . It indicates that the employer disputed the claimant's allegation that he sustained a work-related injury on July 15, 2001, and that the contested issues were limited to: extent and duration, notice, temporary total disability (TTD), medicals, average weekly wage, failure to file Form 111, and causation or work-relatedness . It indicates that the claimant's evidence consisted of the reports from Drs . Auerbach and Sexton but lists no evidence for the employer . Finally, it indicates that the parties would depose all lay witnesses before the hearing . The employer deposed the claimant on April 11, 2003 . Testifying about the circumstances of his injury, he stated that his employer sent him on a service call to remove about 60 gallons of used solvent and sludge from a tank and then to replace it with fresh solvent . The pump that he normally used to accomplish the task broke, so he had to use a half-gallon dipper and do it by hand . When he was nearly finished, something in his back "jerked ." Though in severe pain, he was able to drive back to the shop . He informed his supervisor, Glen Kennedy, when he met him on the road near the office . The claimant stated that rather than advising him to seek medical treatment, Kennedy accused him of hurting his back moving furniture over the weekend, which was untrue . He explained that he had injured his back previously while working, in December, 2000, and his physician had instructed him not to do things such as move furniture . He stated that although he missed about a week of work after the 2000 injury, he was released to return to work without restrictions, and denied that his back continued to bother him until the 2001 injury . Asked about his medical care, he stated that he was unsure whether or when he had seen Dr. Karnes after the injuries and that he was "not going to make up a date ." He was questioned about whether he had seen Dr . Ericksen before July, 2001, and the following colloquy ensued : A . That's the Safety-Kleen's doctor . I seen him in December Q . No . I think Dr . Ericksen is a chiropractor . He's the guy with the big lightning bolts all over his sign on - - A. Dixie Highway? Q . Yeah . A . Yeah . I tried that before I had my back surgery . Q. Okay . A . I tried that to make my back feel better, but it didn't work . Q . Had you ever seen Dr . Ericksen before? A . Before? Q . Yeah . Before July of 2001? A. I don't know . I'd have to go to his office and look at what dates I went there. My head's not good with dates really . I just can't remember crap . I know my birthday and my youngest daughter's birthday and my wife's birthday escapes me . Q. You're sitting here today telling me you don't know whether you had ever seen the chiropractor Dr. Ericksen before you hurt your back in July of 2001 ? A . I'm not sure . I know I went to him . I know I went to him, but I believe it was before I had my surgery . I wanted to try other things before I got as they say went under the knife . Q . Okay . But I'm talking about before you even hurt your back at work in July of 2001 - - A . I'm going to tell you again, sir - - Q . - - you don't know? A. I'm not sure . On April 21, 2003, the employer filed notice of the claimant's wage records from the date of his injury and from his current employment . The filing indicated that his average weekly wage was $765 .82 at the time of injury. It was $491 .87 at present . 5 The hearing was conducted on April 22, 2003 . At that time, the ALJ noted that the claimant had filed reports from Drs. Sexton and Auerbach and that the employer had taken the claimant's deposition . Asked if that was all the proof to be considered in addition to the claimant's hearing testimony, counsel for both of the parties responded affirmatively. Responding to questions by his attorney, the claimant testified that he began working for the defendant-employer in September, 2000 . His job was to service parts washers for garages and other businesses and to sell and deliver various products . Among other things, it required him to handle barrels of solvent that weighed from about 175 to 250 pounds . He rolled them onto a dolly and moved them into place, loaded and unloaded barrels of used solvent, and pumped it. He stated that he hurt his back in December, 2000, and went to the doctor. After missing about a week of work, he returned to his regular duties . Asked about the problems he experienced between December, 2000, and July, 2001, he testified : A. Just some "minor aching," but I never experienced pain like I did when I hurt myself in July . Q . Did you have to go to see any doctors during that interim that you can recall? A. I don't believe so, maybe a family doctor for checkups . Q . But outside of that, you weren't seeking medical attention actively for your back? A. I don't believe so, no, sir. During subsequent testimony, the claimant introduced copies of "off work" slips from Dr. Sexton for the period from July 12, 2001, through November 12, 2001 . He stated that when he returned to work thereafter, he was informed that he no longer had a job. He attempted a job delivering milk to schools but quit after several months because unloading and handling 300 cases of milk per day was too demanding on his back . He 6 became employed by Holdaway Medical Services on July 15, 2002, performing work that was within his restrictions . He earned less presently than he did in July, 2001 . He stated that his back ached all the time but that the left leg pain had resolved after Dr. Sexton performed surgery . When cross-examined, the claimant testified that the December, 2000, injury occurred while he was working for the defendant-employer and that he was sent to the company doctor. He stated that he was not off work long enough to receive workers' compensation benefits . Asked whether he followed up with his family physician for aches and pains following the incident, he stated, "A couple of times, I believe ." Questioned about his inability to recall the number of times he had done so before the July, 2001, injury, he replied, "I'm not real good with dates . Had I known I was going to be done wrong, I would have written all this stuff down ." At the close of the hearing, the parties stipulated to the claimant's average weekly wage at the relevant points in time, as set forth in the employer's filing, and to the withdrawal of notice as a contested issue . Counsel for the claimant then pointed out that at the BRC, the parties had agreed to depose both the claimant and Mr. Kennedy. Although Mr . Kennedy failed to appear and had not been deposed, counsel stated that the claimant had decided not to ask for a continuance to depose him . After stating that concurrent briefs were due on May 23, 2003, the ALJ asked the parties' counsel whether there were any other matters to be considered . Both responded that there were not . On May 7, 2003, the employer moved to reopen proof on the basis of what it alleged was newly-discovered evidence that was contrary to the claimant's testimony and also moved to hold the briefing schedule in abeyance . The employer sought to depose the individuals at Ericksen Chiropractic Center who treated the claimant, asserting that it had just received chiropractic records from Dr . Ericksen . They indicated that he treated the claimant's back no less than six times during the two-week period immediately preceding July 15, 2001, which was contrary to the claimant's testimony and called into question whether he had sustained the alleged injury . In a supplemental motion filed on May 12, 2003, the employer asserted that Dr . Auerbach's opinion of causation could not be considered probative evidence as he did not appear to have reviewed Dr. Ericksen's records . Objecting to the motion, the claimant asserted that the employer failed to file a timely Form 111 . Furthermore, it failed to introduce any evidence during the designated proof time . Now, it was attempting to introduce evidence after the hearing, which the regulations did not allow. The ALJ denied the motion . In a decision rendered on June 18, 2003, the ALJ noted the employer's failure to file a Form 111 . On that basis, the ALJ accepted the allegations contained in the application as having been admitted by the employer. 803 KAR 25:010, § 5(2)(b) . The AU noted that Dr . Auerbach's report confirmed the allegation of a July 15, 2001, work- related injury and determined that reasonable and necessary medical treatment for the injury was compensable . Based on Dr. Sexton's records, the ALJ determined that the claimant was not at maximum medical improvement and was taken off work from July 27, 2001, until November 12, 2001, during which time he was entitled to benefits for temporary total disability. Relying on Dr . Auerbach, the ALJ determined that the claimant's AMA impairment was 13% . Noting that Dr. Auerbach had placed the claimant under significant restrictions that prevented him from returning to his past work and that the claimant's testimony regarding his pain and restrictions was credible, the ALJ determined that the claimant was not totally disabled but was incapable of returning to the type of work he performed at the time of the injury . The claimant received a triple partial disability benefit that was based on a 13% impairment and a statutory factor of 1 . KRS 342 .730(1)(b) and (1)(c)1 . On July 10, 2003, the employer filed a motion, tendering medical records from Dr . Sexton "in further support of the prior motion to reopen proof." A letter attached to the motion indicates that counsel for the employer requested them from Dr. Sexton on May 22, 2003, the day before briefing time expired . Among the records was a July 26, 2001, report, which indicated that the claimant had experienced low back and left leg pain for one month . The claimant objected to the motion, noting that the regulations did not permit additional proof to be filed after a claim was taken under submission and that the claim had already been decided . He requested that the pleading and tendered medical records be stricken from the record . On July 25, 2003, the ALJ overruled the employer's motion and ordered the evidence stricken from the record, after which the employer appealed . Asserting that the Board and the Court of Appeals erred by affirming the award, the employer argues that the ALJ's refusal to grant its motion to reopen for additional proof based upon newly discovered evidence would not have prejudiced the claimant and was an abuse of discretion . It asserts that even if it defaulted concerning the claimant's allegation of a July 15, 2001, work-related injury, by failing to file a Form 111, the claimant was required to offer proof of the extent and duration of disability during the initial 60 days of proof time . Yet, he failed to submit Dr. Auerbach's report until March 12, 2003, and it appeared to indicate a lack of awareness that Dr. Ericksen had treated the claimant shortly before the injury. Finally, it maintains that the ALJ's refusal to reopen proof and allow it to present evidence that would have defeated the claim for permanent disability denied its fundamental right to due process . We disagree . Proof time closed shortly before the BRC . Yet, the record contains no excuse or explanation for the employer's failure to file a Form 111 or to make any attempt to defend the claim until the BRC . It first attempted to present proof after the hearing and attempted to do so again after the decision was rendered . The goal of workers' compensation statutes and regulations is to facilitate the prompt and orderly resolution of claims . Nonetheless, an AU has broad authority to make exceptions to the designated times for submitting proof where the circumstances warrant . See New Directions Housing Authority v . Walker, 149 S.W.3d 354 (Ky . 2004); Durham v . Copley , 818 S .W .2d 610 (Ky. 1991) . In the present case, the hearing had been held, but the claim had not yet been taken under submission when the employer sought to reopen proof. It sought to submit Dr . Ericksen's chiropractic records and to depose individuals who had treated the claimant at the doctor's facility . Its grounds for the motion were that the records were newly-discovered evidence that it had just received . The term "newly discovered evidence" is a legal term of art . It refers to evidence that has just been discovered and with the exercise of due diligence could not have been discovered earlier. Durham v. Copley , 818 S.W.2d 610 (Ky. 1991) . When raising an assertion that evidence is newly discovered, a party must be mindful that workers' compensation proceedings are adversarial and that each party is obliged to exercise due diligence in producing evidence to prove its case within the designated proof time . Only if evidence is properly viewed as being "newly-discovered" does the question of its decisive effect arise . See Walker v . Farmer, 428 S.W .2d 26 (Ky. 1968) . Contrary to the employer's assertion, this was not a case such as Durham v. Cooley , supra, in which one party concealed evidence that favored its opponent's position . Neither Dr. Ericksen's nor Dr. Sexton's reports came within the legal concept of newly discovered evidence . The claimant listed both doctors on his application for benefits, so it is clear that their records were discoverable with the exercise of due diligence within the designated proof time . The employer's failure to request them until after the hearing rendered it immaterial that they were not received until after the decision on the claim .' Parties to litigation are entitled to procedural due process, which includes the right to notice and an opportunity to be heard . American Beauty Homes v . Louisville and Jefferson County Planning and Zoninq Commission , 379 S .W.2d 450 (Ky . 1964) . The record indicates that the employer had both . It is undisputed that the employer and its carrier were served at their last known addresses with copies of the claimant's application for benefits, the evidence he submitted, the Department's letters, and the ALJ's orders . There is no assertion that the documents were not received . Yet, the employer failed to file a timely Form 111, to submit any evidence within the time for taking proof, or to enter an appearance until the BRC . As permitted in the BRC order and memorandum, it later deposed the claimant and filed the transcript into evidence . ' The employer's prayer for relief requests permission to depose Dr . Sexton as well as Dr . Ericksen ; however, its appeal to the Board did not assert that the AU erred by failing to set aside the award based upon its motion to introduce Dr. Sexton's report . In any event, our conclusion that the report was not newly-discovered evidence renders the issue moot as well as unpreserved . Although the claimant filed Dr. Auerbach's report after the initial 60-day period, he did so without objection and before the time for taking proof had closed . Further- more, the employer failed to raise the admissibility of the report as a contested issue at the BRC . Although default judgments are disfavored, the employer has offered no excuse or explanation for its failure to file a Form 111 or its failure to submit defensive medical evidence within the time for taking proof. Under the circumstances, we are convinced that the ALJ did not err in refusing to reopen proof time or in relying on Dr. Auerbach's report as substantial evidence to support the award . The decision of the Court of Appeals is affirmed . All concur . COUNSEL FOR APPELLANT : Allan Weiss Ferreri & Fogle 203 Speed Building 333 Guthrie Green Louisville, KY 40202 COUNSEL FOR APPELLEE : Charles Ched Jennings Haydon Dockter & Jennings 412 Kentucky Home Life Building 239 S . Fifth Street Louisville, KY 40202 12