IMPORTANT NOTICE 

NOT TO BE PUBLISHED OPINION 

THIS OPINION IS DESIGNATED "NOT TO BE PUBLISHED." 

PURSUANT TO THE RULES OF CIVIL PROCEDURE 

PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C), 

THIS OPINION IS NOT TO BE PUBLISHED AND SHALL NOT BE 

CITED OR USED AS BINDING PRECEDENT IN ANY OTHER 

CASE IN ANY COURT OF THIS STATE; HOWEVER, 

UNPUBLISHED KENTUCKY APPELLATE DECISIONS, 

RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR 

CONSIDERATION BY THE COURT IF THERE IS NO PUBLISHED 

OPINION THAT WOULD ADEQUATELY ADDRESS THE ISSUE 

BEFORE THE COURT. OPINIONS CITED FOR CONSIDERATION 

BY THE COURT SHALL BE SET OUT AS AN UNPUBLISHED 

DECISION IN THE FILED DOCUMENT AND A COPY OF THE 

ENTIRE DECISION SHALL BE TENDERED ALONG WITH THE 

DOCUMENT TO THE COURT AND ALL PARTIES TO THE 

ACTION. 
RENDERED: MARCH 23, 2017 

NOT TO BE PUBLISHED 

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LANDY MILLS APPELLANT 

ON APPEAL FROM COURT OF APPEALS 

V. CASE NO. 2015-CA-001168-WC 

WORKERS' COMPENSATION BOARD NO. 13-WC-00153 

NALLY AND HAMILTON ENTERPRISES, 

HONORABLE J. GREGORY ALLEN, ADMINISTRATIVE 

LAW JUDGE AND WORKER'S COMPENSATION BOARD 

MEMORANDUM OPINION OF THE COURT 

AFFIRMING 

I. FACTUAL AND PROCEDURAL BACKGROUND. 

APPELLEES 

Landy Mills filed a workers' compensation claim against Nally and 

Hamilton (Nally) when he was injured during the course of his employment. 

Mills claimed to have injured his back, his right leg, and his right foot. At the 

hearing, Mills and Nally agreed to a $40,000 lump-sum agreement that 

included interest, attorney's fees, vocational rehabilitation, temporary total 

disability, permanent total disability, permanent partial disability, a waiver of 

the right to reopen, and a waiver of medical expenses. This settlement 

agreement acted as a total dismissal of the claim with prejudice. 

The agreement contained, in pertinent part, the following key terms and 

conditions: 
In consideration of the lump sum payment set forth above, the 

Plaintiff and the Defendant hereby agree that the Plaintiff. 

completely releases and forever discharges the Defendant from any 

and all liability for further reopening for income benefits pursuant 

to KRS 342.125 based on an increase in occupational disability, 

statutory disability, or any other theory of recovery which the 

Plaintiff now has, or which may hereafter accrue or otherwise be 

acquired, on account of, or which may in any way grow out of the 

alleged work-related injury and that the Plaintiffs claim for 

benefits shall be dismissed with prejudice. Plaintiff shall have no 

right to reopen for increased occupational disability benefits 

in consideration of the amounts paid pursuant to this 

agreement. $8,000.00 of the lump sum settlement to the 

Plaintiff constitutes consideration for the waiver of the right 

to reopen. $8,000.00 of the lump sum constitutes consideration 

for the waiver of all past, present, and future medical expenses. No 

past or future medical bills will be paid by the DefendantEmployer. $500.00 of the lump sum is specifically paid as 

consideration for the waiver of all claims for vocational 

rehabilitation. The remainder of the settlement proceeds 

constitutes consideration for the waiver of all claims for income 

benefits including temporary total disability; permanent partial 

disability; permanent total disability; interest and attorney fees. 

The agreement also recognized that Mills was apprised to the terms and 

conditions and fully understood he was dismissing future benefits with 

prejudice. 

The Chief Administrative Law Judge (CAW) approved the settlement 

agreement on.August 27, 2013. In the time leading up to approving the 

agreement, Mills had received an MRI of his lumbar spine and was referred to 

Dr. Bean for surgical intervention on August 26, 2013-the day before the 

CAW approved the settlement. Accordingly, on September 6, 2013, Mills filed a 

"Motion to Set Aside Proposed Settlement," asserting his need for surgery as 

the basis for setting aside the agreement. Nally objected to both Mills's 

characterization of the motion and the merits of his petition. In Nally's view, 

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the motion was, by its terms, a motion to reopen the case, that the express 

terms of the agreement prevented Mills from pursuing. 

The CAW granted Mills's motion. But on appeal, the Board dismissed the 

appeal after determining that the CAW treated the motion to set aside the 

settlement as a motion to reopen Mills's claim. Under Kentucky Rules of Civil 

Procedure (CR) 54.02(1) and (2), an order is only appealable if it terminates the 

action itself, acts to decide all matters litigated by the parties, determines all 

the rights of the parties, and divests the AW of his or her authority. The Board 

then reasoned that because the CAW's order only determined that Mills made 

a prima facie showing that he may prevail under evidence proffered in favor of 

reopening, the order was not final and appealable. The order failed to show a 

change in disability caused by the injury and there was no final award. So the 

Board dismissed and the case was then reassigned to an AW. 

The AW then ordered that the settlement agreement was valid and 

enforceable under KRS 342.265 and that Mills's motion to set aside the 

agreement did not comport with Kentucky administrative regulations. Under 

KRS 325.265, a reopening may be justified through evidence the agreement 

was procured by fraud, mistake, or newly-discovered evidence that could not 

have been discovered by due diligence. Mills's referral to Dr. Bean occurred 

before the agreement, so the AW concluded his new need for surgery did not 

amount to newly-discovered evidence. Mills acknowledged that he fully 

understood and consented to the terms of the agreement, so the AW concluded 

that the plain language waived Mills's ability to reopen the claim. 

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Mills then filed a motion for reconsideration with the AW. Specifically, 

Mills asserted that he had not filed a motion to reopen under the terms of KRS 

325 .265 and insisted his motion was in fact a motion to set aside the 

agreement. The AW denied the petition for reconsideration. In his order, the 

AW reiterated that the Board determined that though Mills did not label his 

original motion as such, it was in fact a motion to reopen to be considered 

under the provisions of KRS 325.265. Mills appealed to the Board again. 

The Board affirmed the AW. In reaching its decision, the Board again 

found there was no basis for setting aside the previously approved settlement. 

KRS 325.265(4) provides that the only remedy once an agreement has been 

approved by an AW is for a party to move to reopen under KRS 342.125. And 

this process involves two steps: ( 1) a claimant files a prima facie motion 

providing sufficient information to demonstrate a substantial possibility of 

success; and (2) if he succeeds in demonstrating a prima facie case, the matter 

is assigned to an AW to set additional proof time to fully adjudicate the merits 

of reopening. The Board held that the CAW's original order setting aside the 

agreement was not controlling because it amounted to making a ruling prior to 

taking proof on the questions of fraud, mistake, or newly discovered evidence. 

Mills then appealed to the Kentucky Court of Appeals. 

The Court of Appeals affirmed the Board. The appellate court held that 

filing a motion to reopen under KRS 342.125 was his exclusive remedy from 

the approved settlement agreement, despite his efforts to style his motion as 

one to set aside the settlement. And as such, thepanel concluded the CAW's 

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order setting aside the agreement should have stated it was reopening the 

claim-in essence, determining that Mills established a prima facie case. The 

court then ruled that the agreement was valid and supported by substantial 

evidence, with Mills acknowledging that he entered into the agreement 

knowingly and received monetary consideration in exchange for waiving his 

right to reopen. Because Mills failed to prove the existence of fraud, mistake, or 

newly discovered evidence, the Court of Appeals ruled that the AW had no 

basis for reopening the claim. Mills appealed to this Court. 

II. ANALYSIS. 

Standard of Review. 

On appellate review of the Board's decision in a workers' compensation 

appeal, our role "is to correct the Board only where the ... Court believes the 

Board has overlooked or misconstrued controlling statutes or precedent, or 

committed an error in assessing the evidence so flagrant as to cause gross 

injustice."1 This is a highly deferential standard and we will only displace the 

Board's judgment with our own upon a finding of grave error. As such, Mills 

faces an uphill battle to succeeding on appeal. 

The Board's Opinion was Supported by Substantial Evidence. 

Mills's essential argument on appeal is that the Board failed to apply the 

doctrine of res judicata in rendering its decision. He correctly highlights that 

the doctrine indeed does apply to workers' compensation claims. 2 In this 

1 Weste~ Baptist Hosp. v. Kelly, 827 S.W.2d 685,687 (Ky. 1992). 

2 See Whittaker v. Cecil, 69 S.W.3d 69, 72 (Ky. 2002). 

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context, the CAW to set aside the agreement. So according to Mills, the AW 

ignored res judicata when he ruled that the settlement agreement is 

enforceable. 

Nally alternatively argues, as both the Board and the Court of Appeals 

agreed, that an approved settlement agreement carries the same full force and 

effect as an award from ajudge.3 Additionally, Nally reminds us that a claimant 

may waive his right to reopen his claim as part of a settlement agreement.4 And 

indeed, we have recognized that settlement agreements are favored and should 

be enforced whenever possible.s Nally contends that once the settlement was 

approved, Mill's only avenue for relief was a motion to re-open the claim under 

the strictures of KRS 342.125. We agree. 

KRS 342.265(4) provides .that "If the parties have previously filed an 

agreement which has been approved by the administrative law judge, and 

compensation has been paid or is due in accordance therewith and the parties 

thereafter disagree, either party may invoke the provisions of KRS 342.125, 

which remedy shall be exclusive." This would appear to contemplate today's 

case perfectly. Here both parties entered into a settlement agreement, the 

agreement was approved by an AW, and Mills received valued consideration in 

the form of $8,000 in exchange for his right to re-open. By the express terms of 

3 See Bell v. Consol of Kentucky, Inc., 294 S.W.3d 459,462 (Ky. App. 2009) (citing Jude 

v. Cubbage, 251 S.W.2d 584, 586 (Ky. 1952)). 

4 See Richey v. Perry Arnold, Inc., 391 S.W.3d 705, 710 (Ky. 2012). 

s See Beale v. Faultless Hardware, 837 S.W.2d 893 (Ky. 1992). 

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this statute, Mills's only way to alter the approved agreement is to invoke the 

terms of KRS 342.125. And he did not move the Board on those grounds. 

But moreover, Mills's settlement agreement expressly contracted away 

his right to reopen this claim. In Whittaker v. Pollard, we held that though a 

settlement award may be reopened under KRS 342.125, a reopening may 

nonetheless still be precluded by the terms of the underlying agreement.6 Here, 

there are no allegations of fraud or bad faith in entering the settlement 

agreement. Mills received a lump sum of $8,000 in exchange for vacating his 

statutory right to reopen his claim. To us, it seems clear that the Board was 

correct in rejecting his attempts to continue this workers' compensation claim 

once the agreement had been approved. 

III. CONCLUSION. 

For the reasons stated above, we affirm the Board's ruling that Mills may 

not reopen his claim. 

All sitting. All concur. 

6 25 S.W.3d 466 (Ky. 2000). 

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