Court Opinion

ID: 5120340
Source: CourtListenerOpinion
Date Created: 2021-10-22 14:06:36.076611+00
Date Added: 2024-06-11T08:22:17.309679
License: Public Domain

RENDERED: OCTOBER 15, 2021; 10:00 A.M.
                       NOT TO BE PUBLISHED

               Commonwealth of Kentucky
                         Court of Appeals

                            NO. 2020-CA-0675-WC

MIKE FRENCH                                                       APPELLANT

                 PETITION FOR REVIEW OF A DECISION
v.            OF THE WORKERS’ COMPENSATION BOARD
             ACTION NOS. WC-XX-XXXXXXX AND WC-XX-XXXXXXX

REAGENT CHEMICAL &
RESEARCH; HONORABLE CHRIS
DAVIS, ADMINISTRATIVE LAW
JUDGE; DANIEL CAMERON,
ATTORNEY GENERAL OF
KENTUCKY; AND WORKERS’
COMPENSATION BOARD                                                 APPELLEES

                                  OPINION
                                 AFFIRMING

                                ** ** ** ** **

BEFORE: CALDWELL, GOODWINE, AND LAMBERT, JUDGES.

CALDWELL, JUDGE: Mike French petitions for review of a Workers’

Compensation Board opinion affirming the decision of an administrative law judge
(ALJ). He argues that the ALJ erred in applying KRS1 342.730(4)–as amended

effective July 14, 2018–to govern termination of his benefits for a work-related

injury sustained on May 15, 2018. He further argues that such retroactive

application of this now-current version of KRS 342.730(4) is unconstitutional. We

disagree and affirm.

                French was sixty-seven (67) years old when he was exposed to acid at

work on May 15, 2018. As a result of the acid exposure, he has suffered from lung

problems. The ALJ found him to be permanently totally disabled and ultimately

determined that his permanent total disability (PTD) benefits would terminate on

May 15, 2022. The termination date was apparently based on the current version

of KRS 342.730(4) which became effective July 14, 2018 and provides: “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.”

                French appealed to the Workers’ Compensation Board, arguing that

the ALJ erred in retroactively applying the July 14, 2018 version of KRS

342.730(4) to the award of PTD benefits for his May 15, 2018 injury. He also

argued that such retroactive application is unconstitutional. But the Board

determined that the ALJ’s decision was consistent with Holcim v. Swinford, 581

1
    Kentucky Revised Statutes.

                                          -2-
S.W.3d 37 (Ky. 2019). And the Board noted its lack of authority to rule on

constitutional issues.

                 In his petition for review to this Court, French again claims error in

the retroactive application of the version of KRS 342.730(4) which became

effective July 14, 2018 (hereinafter “amended KRS 342.730(4)”). He again claims

such retroactive application is unconstitutional. Specifically, he contends that it

violates the Contracts Clauses of the United States and Kentucky Constitutions2

and Section 2 of the Kentucky Constitution prohibiting exercise of arbitrary power.

                 Since pending cases in the Kentucky Supreme Court posed similar

questions about the constitutionality of retroactively applying amended KRS

342.730(4), we entered an Order placing this appeal in abeyance in January 2021.

Now that the Supreme Court has issued final opinions rejecting similar

constitutional challenges, this case is taken out of abeyance by separate Order

entered herein.

                 Despite French’s arguments for overturning the Board’s opinion, we

do not perceive that the Board has overlooked or misconstrued controlling statutes

or precedent. Thus, we must affirm under the appropriate standard of review. See

Western Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992). (“The

function of further review of the [Board] in the Court of Appeals is to correct the

2
    See U.S. CONST. art. I, § 10, cl. 1; KY. CONST. §19.

                                                  -3-
Board only where the the [sic] Court perceives 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.”). Furthermore, recent

Kentucky Supreme Court opinions have rejected the constitutional arguments

against retroactive application of amended KRS 342.730(4) raised by French.

             We note that French has not alleged any errors in assessing the

evidence. And after careful review of applicable legal authority, we conclude that

he cannot prevail on his assertions of constitutional and other errors about

retroactive application of amended KRS 342.730(4) under the facts here.

      Amended KRS 342.730(4) Applies Retroactively to French’s Claim

             In Holcim v. Swinford, the Kentucky Supreme Court held that

amended KRS 342.730(4) applied retroactively in specified situations, 581 S.W.3d

at 44, based on a Legislative Research Commission (LRC) note following the

official version of the statute which the Court quoted:

             Subsection (3) of Section 20 of that Act reads,
             “Subsection (4) of Section 13 of this Act shall apply
             prospectively and retroactively to all claims: (a) For
             which the date of injury or date of last exposure occurred
             on or after December 12, 1996; and (b) That have not
             been fully and finally adjudicated, or are in the appellate
             process, or for which time to file an appeal has not
             lapsed, as of the effective date of this Act.”

581 S.W.3d at 43. Although Subsection 3 of Section 20 of the Act was not

formally codified, the Kentucky Supreme Court determined it did not have to be

                                         -4-
codified since it was a temporary measure. The Court determined that the

legislature had declared its intent for amended KRS 342.730(4) to apply

retroactively as provided in the LRC note. Id. at 44.

                Whether or not we agree with the Kentucky Supreme Court’s opinion

in Holcim, it is binding authority and we must follow it under SCR3 1.030(8)(a).

Thus, we cannot disturb its construing amended KRS 342.730(4) to apply

retroactively based on the LRC note.

                Furthermore, the Kentucky Supreme Court has recently issued

opinions indicating its continued adherence to Holcim’s holding that amended

KRS 342.730(4) applies retroactively to all pending appeals regarding injuries

occurring after 1996. See Dowell v. Matthews Contracting, 627 S.W.3d 890, 898

(Ky. 2021) (“we reiterate our holding in Holcim that the legislature intended for

the new amendment to apply to all pending appeals with injury dates occurring

after December 1996.”). See also Cates v. Kroger, 627 S.W.3d 864, 873, 2021

(Ky. 2021) (footnote omitted) (“By the time the Court of Appeals addressed this

case, the 2018 version was effective, and we had ruled in Holcim that the

amendment applied to all pending appeals. As a result, the Court of Appeals

appropriately applied the 2018 version of the statute to Cates’s claim.”).

3
    Rules of Kentucky Supreme Court.

                                         -5-
             French raises no factual matters about why KRS 342.730(4) would

not apply retroactively based on the aforementioned LRC note–for example, his

injury undisputedly occurred after 1996 and his case had not been fully and finally

adjudicated prior to July 14, 2018.

             While the Kentucky Supreme Court construed amended KRS

342.730(4) to apply retroactively in Holcim, it did not reach arguments about the

constitutionality of such retroactive application because the issue of

constitutionality was not properly before it for reasons including failure to timely

notify the Attorney General. 581 S.W.3d at 44 (citing KRS 418.075).

             French has notified the Attorney General and has clearly challenged

the constitutionality of retroactively applying amended KRS 342.730(4) in this

Court as well as before the Board and the ALJ. Thus, there is no impediment to

our reaching his constitutional challenge. But unfortunately for French, the

Kentucky Supreme Court has recently rejected the same sort of constitutional

arguments against retroactive application of amended KRS 342.730(4) as he raises

in this appeal and we are bound by its precedent. SCR 1.030(8)(a).

  The Kentucky Supreme Court has Rejected Contracts Clause Challenges
         to Retroactive Application of Amended KRS 342.730(4)

             French notes that he did not expressly opt out of workers’

compensation and thereby waived his jural rights to sue his employer for injury

due to negligence. So, he argues that he and his employer entered into a contract

                                         -6-
regarding his rights to workers’ compensation benefits. He further contends that

his rights to workers’ compensation benefits vested on the date of his injury. So,

he claims that retroactively applying amended 342.730(4) to his claim violates the

Contracts Clauses of the Kentucky and federal Constitutions.

             Contrary to these arguments, however, the Kentucky Supreme Court

recently held that no contract forms between employers and employees regarding

workers’ compensation benefits–even though an employee has the choice of opting

out of the Workers’ Compensation system. Dowell, 627 S.W.3d at 894-95. Thus,

the Kentucky Supreme Court has held that a Contracts Clause claim cannot arise

from a retroactive application of amendments to workers’ compensation statutes:

                    The workers’ compensation system is controlled
             by the state and is governed by legislative enactments. It
             is not a contract on [sic] between employers and their
             employees. Changes to the relevant statutes, therefore,
             do not create a Contracts Clause issue. While changes to
             statutes may result in other constitutional issues, such as
             a violation of due process or constitute special
             legislation, a Contracts Clause issue is impossible in this
             matter because there is simply no contract or
             contractual right for the statutory amendment to impair.

Id. at 896. (footnote omitted).

             Furthermore, the Kentucky Supreme Court also clarified that while a

claimant’s rights to receive some workers’ compensation benefits is vested as of

the date of injury, rights concerning the duration and amount of benefits do not

become vested until the date of a final decision on his/her claim. Id. at 897; Cates,

                                         -7-
627 S.W.3d at 874. So, French’s right to a particular amount and duration of

workers’ compensation benefits did not become vested on the date of injury. In

short, in light of recent Kentucky Supreme Court precedent, French cannot prevail

on his Contracts Clause challenge to retroactive application of amended KRS

342.730(4).

     Kentucky Supreme Court has Rejected Arguments that Retroactive
      Application of KRS 342.730(4) is an Arbitrary Exercise of Power

              French argues that retroactively applying amended KRS 342.730(4)–

after he has waived his jural rights by accepting application of the Workers’

Compensation Act–violates the prohibition against the arbitrary exercise of power

in Section 2 of the Kentucky Constitution. Unfortunately for French, however, the

Kentucky Supreme Court has rejected similar arguments that this statute’s

retroactive application is an arbitrary exercise of power. See Cates, 627 S.W.3d at

871 (“We find here no arbitrary exercise of legislative authority in the retroactive

application of the amendment” to KRS 342.730(4)).

              We recognize that the challenge to retroactive application in Cates on

arbitrary exercise of power grounds was framed somewhat differently–as an

argument about creating an arbitrary way to classify claimants. See id. at 871.

Nonetheless, the Kentucky Supreme Court has rejected arguments that retroactive

application of amended KRS 342.730(4) impermissibly affects vested rights or

violates the Contracts Clause as we previously discussed. And the Kentucky

                                         -8-
Supreme Court has recognized that amended KRS 342.730(4)’s retroactive

application may further legitimate state interests–namely, to prevent the

duplication of benefits and to promote “the solvency of the workers’ compensation

system[.]” Id. at 870. The Kentucky Supreme Court also noted in Dowell that

employees have the choice of opting in or out of the workers’ compensation, 627

S.W.3d at 896, despite ultimately rejecting constitutional challenges to retroactive

application of amended KRS 342.730(4).

             To our knowledge, the Kentucky Supreme Court has not explicitly

noted in a published case that an employee must give up their right to sue the

employer for negligence causing injuries to accept workers’ compensation benefits

when rejecting constitutional challenges to amended KRS 342.730(4)’s retroactive

application. But we construe its recent opinions as nonetheless rejecting French’s

arguments of an arbitrary exercise of power.

             Surely the Kentucky Supreme Court is well aware that a worker must

waive the right to sue the employer for negligence causing injuries in order to

accept workers’ compensation benefits. See generally KRS 342.690(1) (“If an

employer secures payment of compensation as required by this chapter, the

liability of such employer under this chapter shall be exclusive and in place of all

other liability of such employer to the employee[.]”); KRS 342.395 (employee

deemed to accept workers’ compensation provisions as only source of employer’s

                                         -9-
liability unless the employee has given employer written notice of intent to opt out

prior to the injury or occupational disease occurring). Yet the Kentucky Supreme

Court has rejected constitutional challenges to retroactive application of amended

KRS 342.730(4) on the basis of alleged arbitrariness as well as Contracts Clause

arguments. So, we cannot disturb the Board’s opinion affirming retroactive

application of amended KRS 342.730(4).

             We decline to discuss other sub-arguments in the parties’ briefs as

unnecessary to resolve the present petition for review. Given recent Kentucky

Supreme Court precedent, the opinion of the Board must be affirmed.

                                 CONCLUSION

             For the foregoing reasons, we AFFIRM the Board’s opinion.

             GOODWINE, JUDGE, CONCURS.

             LAMBERT, JUDGE, CONCURS AND FILES SEPARATE
OPINION.

             LAMBERT, JUDGE, CONCURRING: While I am not entirely

comfortable with the holding in the above-styled case, I must vote to concur with

the presiding Judge’s opinion, because we – as the Kentucky Court of Appeals –

are obligated to follow the direction of our Supreme Court.

                                        -10-
BRIEF FOR APPELLANT:     BRIEF FOR APPELLEE:

Wayne C. Daub            Carl M. Brashear
Louisville, Kentucky     Lexington, Kentucky

                       -11-