Court Opinion

ID: 4651847
Source: CourtListenerOpinion
Date Created: 2021-01-15 15:06:08.750007+00
Date Added: 2024-06-11T08:01:42.744756
License: Public Domain

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                      NOT TO BE PUBLISHED

               Commonwealth of 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

                                ** ** ** ** **

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) affirming the
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 total 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

Marks’ claims.1

                Marks sought review with the Board. Marks 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

concluded that the ALJ properly applied KRS 342.730(4) retroactively to Marks’

1
    Brenda Marks was born on August 12, 1951.

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claims and cited as authority Holcim v. Swinford, 581 S.W.3d 37 (Ky. 2019). As

the Board lacked 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 Contract Clause 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 342.730(4)
             significantly decrease the benefits available to an injured
             worker. Here, the provisions arguably decrease Brenda’s
             benefits by her life expectancy after she reaches age 70.
             Pursuant to the life expectancy tables of 803 KAR 25:036
             used in workers’ 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 social 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
             provisions 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:

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                    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 employee 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 Contract Clause:

               (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 of 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
               determine 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 Commonwealth Postsecondary Educ. Prepaid Tuition

Trust Fund, 559 S.W.3d 354, 369 (Ky. 2018). Our analysis shall proceed

accordingly.

               First, as 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 Kentucky Supreme

                                           -4-
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 point of law, the

Supreme Court noted that “[o]ne whose 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 exists for retroactive application 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 legislation’s]

                                            -5-
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 reviewing economic and social regulation, . . . courts

properly 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

legislative judgment. Accordingly, we are of the opinion that retroactive

application of KRS 342.730(4) does not offend the Contract Clause 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.

                                         -6-
BRIEF FOR APPELLANT:    BRIEF FOR APPELLEE BAPTIST
                        HEALTHCARE SYSTEM, INC.:
Scott F. Scheynost
Louisville, Kentucky    Douglas A. U’Sellis
                        Louisville, Kentucky

                        BRIEF FOR APPELLEE
                        HONORABLE DANIEL CAMERON,
                        ATTORNEY GENERAL OF
                        KENTUCKY:

                        S. Chad Meredith
                        Matthew F. Kuhn
                        Frankfort, Kentucky

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