RENDERED: JANUARY 8, 2021; 10:00 A.M. NOT TO BE PUBLISHED 

# Commonwealth o f Kentucky Court of Appeals

NO. 2020

- CA

- 0251

- WC

BRENDA MARKS APPELLANT

PETITION FOR REVIEW OF A DECISION v. OF THE WORKERS ’ COMPENSATION BOARD ACTION NO. WC

- 17

- 93657

BAPTIST HEALTHCARE SYSTEM, INC.; HONORABLE BRENT DYE, ADMINISTRATIVE LAW JUDGE; KENTUCKY WORKERS’ COMPENSATION BOARD ; AND HONORABLE DANIEL CAMERON, ATTORNEY GENERAL OF KENTUCKY APPELLEES

OPINION AFFIRMING
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BEFORE: LAMBERT, MCNEILL , AND TAYLOR , JUDGES.
TAYLOR , JUDGE: Brenda Marks petitions this Court to review a January 24, 2020, Opinion of the Workers ’ Compensation Board (Board) affirm ing the- 2

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Administrative Law Judge ’ s (ALJ) award of permanent partial disability benefits and permanent total disability benefits for two separate work

- related injuries . We affirm. Marks was employed by Baptist Healthcare, Inc., as a housekeeper. She suffered two separate work

- related injuries; the first injury was to her right shoulder on June 24, 2016, and the second was to her left shoulder on February 11,
2017. As a result of these injuries, Marks filed claims for workers ’ compensation benefits. In an Opinion, Award, and Order rendered February 22, 2019, the ALJ awarded Marks permanent partial disability benefits for the June 24, 2016, right shoulder injury and permanent tota l disability benefits for the February 11, 2017, left shoulder injury. The ALJ also concluded that Kentucky Revised Statutes (KRS) 342.730(4), as amended on July 14, 2018, retroactively applied to
Ma r ks ’ claims. 1

Marks sought review with the Board. Mar ks argued that the ALJ erred by retroactively applying the amended version of KRS 342.730(4) and the retroactive application of KRS 342.730(4) was unconstitutional. By Opinion entered January 24, 2020, the Board affirmed the ALJ ’ s award. The Board
conclu ded that the ALJ properly applied KRS 342.730(4) retroactively to Marks ’

1 Brenda Marks was born on August 12, 1951.- 3

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claims and cited as authority Holcim v. Swinford , 581 S.W.3d 37 (Ky. 2019). As the Board lack ed authority to pass upon the constitutionality of a statute, the Board
did not reach the merits of Marks ’ constitutional challenge to the retroactive application of the amended version of KRS 342.730(4). This review follows.

Marks contends that retroactive application of the amended KRS 342.730(4) is unconstitutional. In particular, Marks argues that retroactive application of the amended KRS 342.730(4) violates the C ontract C lause set forth in Article 1, Section 10 of the United States Constitution and in Section 19 of the Kentucky Constitution:

The retro

- active [sic] provisions of KRS 34 2.730(4) significantly decrease the benefits available to an injured worker. Here, the provisions arguabl y decrease Brenda ’ s benefits by her life expectancy after she reache s age 70. Pursuant to the life expectancy tables of 803 KAR 25:036 used in worker s ’ compensation claims, that is 15.5 years for a 70

- year - old

- woman. Therefore, the retro

- active [sic] provisions impair the obligation of the contract for workers ’ compensation benefits. These retroactive provisions did not remedy a broad and general soc ial or economic problem. . . . The injured worker is not allowed to reject the exclusivity provisions of workers ’ compensation after the injury, and the injured worker ’ s benefits are set as of the date of the injury. Accordingly, the retroactive provis ions of KRS 342.730(4) should be voided. . . .
Marks ’ Brief at 9.

We begin by setting forth KRS 342.730(4), as amended July 14, 2018 :- 4

- All income benefits payable pursuant to this chapter shall terminate as of the date upon which the employee reaches the age of seventy (70), or four (4) years after the employee ’ s injury or last exposure, whichever last occurs. In like manner all income benefits payable pursuant to this chapter to spouses and dependents shall terminate as of the date upon which the emp loyee would have reached age seventy (70) or four (4) years after the employee ’ s date of injury or date of last exposure, whichever last occurs. The Kentucky Supreme Court has set forth the following standard to determine whether a statute violates the C ontract C lause:

(1) whether the legislation operates as a substantial impairment of a contractual relationship; (2) if so, then the inquiry turns to whether there is a significant and legitimate public purpose behind the regulation, such as the remedying o f a broad and general social or economic problem; and (3) if, as in this case, the government is a party to the contract, we examine “whether that impairment is nonetheless permissible as a legitimate exercise of the state ’ s sovereign powers,” and we deter mine if the impairment is “upon reasonable conditions and of a character appropriate to the public purpose justifying its adoption.” Maze v. Bd. of Dirs. for Comm on w ealth Postsecondary Educ. Prepaid Tuition Trust Fund , 559 S.W.3d 354 , 36 9 (Ky. 2018). Our analysis shall proceed accordingly. First, a s to whether the amended KRS 342.730(4) substantially impairs the contractual relationship, we believe that it does not. In determining whether a contractual relationship is substantially impaired, the Kentuck y Supreme- 5

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Court has instructed that “ [ a ] significant consideration . . . is the extent to which the industry . . . [has been] subject to the contract

. . . [being] regulated in the past.” Maze , 559 S.W.3d at 370 (citations omitted) . Emphasizing this poin t of law, the Supreme Court noted that “[o]ne who se rights, such as they are, are subject to state restriction, cannot remove them from the power of the State by making a contract about them.” Id. (quoting Hudson Water Co. v. McCarter , 209 U.S. 349, 357 ( 1908) ) . The rights of workers ’ compensation claimants are subject to legislative
enactment, including the duration of income benefits. Consequently, we think that Marks ’ contractual rights were not substantially impaired by retroactive application of KRS 342.730(4).

Second , we must examine whether there is a legitimate public purpose that supports the retroactive application of KRS 342.730(4). By limiting the duration of income benefits, the amended KRS 342.730(4) decreases the duplication of benefits by limiting the amount of time a worker receives both income benefits and social security benefits , and it results in significant savings to the workers ’ compensation system. We, thus, conclude that a legitimate public
purpose exist s for retroactive appli cation of KRS 342.730(4).

Third , we must determine “whether the adjustment of ‘ the rights and responsibilities of contracting parties [is based] upon reasonable conditions and [is] of a character appropriate to the public purpose justifying [the legislati on ’ s]- 6

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adoption. ’ ” Maze , 559 S.W.3d at 372 (quoting U

. S

. Trust Co. of New York v. New Jersey , 431 U.S. 1, 22 (1977)). And, “[w]hen the state itself is not a contracting party, ‘ [a]s is customary in re v i ew ing economic and social regulation, . . . courts
p roperly defer to legislative judgment as to the necessity and reasonableness of a particular measure. ’ ” Maze , 559 S.W.3d at 372 (quoting United States Trust , 431
U.S. at 22

- 23 )) . As the state is not a party to the contract herein, we must defer to legisl ative judgment. Accordingly, we are of the opinion that retroactive application of KRS 342.730(4) does not offend the C ontract C lause of the United States Constitution or the Kentucky Constitution.

We view any remaining contentions as moot. In sum, we cannot conclude that the Board misconstrued controlling statutes or precedent or committed an error in assessing the evidence. W. Baptist Hospital v. Kelly , 827 S.W.2d 685 , 687

- 88 (Ky. 1992)

.

For the foregoing reasons, we affirm the Opinion of the Workers ’ Compensation Board.

ALL CONCUR.- 7

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BRIEF FOR APPELLANT: Scott F. Scheynost Louisville, Kentucky BRIEF FOR APPELLEE BAPTIST HEALTHCARE SYSTEM, INC. : Douglas A. U ’ Sellis Louisville, Kentucky
BRIEF FOR APPELLEE HONORABLE DANIEL CAMERON, ATTORNEY GENERAL OF KENTUCKY : S. Chad Meredith Matthew F. Kuhn Frankfort, Kentucky