Court Opinion

ID: 9878613
Source: CourtListenerOpinion
Date Created: 2023-09-27 17:28:22.81906+00
Date Added: 2024-06-11T14:01:52.711773
License: Public Domain

WRIGHT, J.,
DISSENTING:
I respectfully dissent from the majority opinion affirming the Court of Appeals. I would, instead, reverse the Court of Appeals, vacate the ALJ’s order, and remand the case, as the DWC failed to properly notify Lopez.
KRS 342.135 says that “any notice” required under the Kentucky Workers’ Compensation Act is “considered properly given and served” when mailed via “registered letter or package” to the recipient’s last known address. In this case, the Department of Workers’ Claims sent Lopez notice of the claim via first-class mail to his last known address, which was returned stamped “undeliverable.” The Department’s first-class mailing was insufficient to allow the absent employer (Lopez) to be considered constructively noticed of *321documents initiating the claim against him. Further, it is undisputed that Lopez never received actual notice of Silva-Lamas’s claim. Therefore, there was no jurisdiction over Lopez.
The UEF claimed (and. I agree) that the first-class mailing did not comply with KRS 342.135, which governs the sending of notices required under Chapter 342 and provides that such notices are “considered properly given and served” if sent by “registered” mail. Because the notice here was sent by first-class and not registered mail,6 it was ineffective to serve as constructive notice to Lopez under the Act. Therefore, the ALJ’s ordering Lopez liable for Silva-jbamas’s compensation cannot stand, because due process requires that the employer be .given notice of a claim before he can be made to pay it.
At its core, the statutory-interpretation question before us is about procedural due process—to wit, how much process is due employers under our Workers’ Compensation Act, KRS Chapter 342 (the Act).
Parties that stand to be affected by an administrative order are entitled to procedural due process. Am. Beauty Homes Corp. v. Louisville & Jefferson Cty. Planning & Zoning Comm’n, 379 S.W.2d 450, 456 (Ky. 1964). At the most fundamental level, this requires reasonable notice and an opportunity to be heard. Bd. of Levee Comm’rs v. Johnson, 178 Ky. 287, 199 S.W. 8, 12 (1917). Employers, as real parties in interest, are thus entitled to be given notice of their employees’ work-injury claims and afforded an opportunity to contest them. Realty Improvement Co. v. Raley, 194 S.W.3d 818, 822-23 (Ky. 2006). Here, the issue is the first requirement: notice.
The Act expressly addresses the due-process notice requirement. First, it puts the burden on the DWC commissioner to give notice to all parties that an application for resolution of claim has been filed. KRS 342.270(2). Although both employees and employers are empowered to file such applications if the parties can’t come to an agreement outside litigation, see KRS 342.270(1), the typical scenario involves an employee filing a claim alleging a work-related injury, which the employer then has 45 days to answer, see KRS 342.270(2). If the employer does not file ah answer, “all allegations of the application shall be deemed admitted.” 803 KAR 25:010 § 7(2)(b).
Second, the Act dictates in clear terms how the KRS 342.270(2) notice (or any other notice required under KRS Chapter 3427) is to be given: “in a registered letter *322or package properly stamped and addressed to the person to whom notice is to be given at. his last known address and in time to; reach him in due time to act thereon.” KRS 342,135. It also allows for notices to “be given and served like notices in civil litigation.” Id. (As discussed in more detail below.) Notices that comply with these directives, the statute adds, “shall be considered properly given and served when deposited in the mail.” Id.
Thus, KRS 342.135, by its terms, has two distinct purposes: (1) to define how notice is given and served—by “registered” mailing to the recipient’s last known address or else in the same manner as in civil actions; and (2) to stipulate that compliant notices are “considered properly given and served” when mailed—that is, to provide for effective constructive notice. These purposes are intended to ensure that parties to be affected by a workers’ compensation order receive the process that they are due.
The question here is whether the commissioner’s first-class mailing .was sufficient to satisfy the Act’s due-process requirements so as to subject the absent employer, Luis López, to the ALJ’s order against him. The majority holds that it was—-but, I disagree.
Simply put, Lopez received neither actual nor constructive notice of Silva-Lamas’s claim. There is no evidence that Lopez was ever actually .notified of the claim—the mailing, after all, was returned undelivered. More importantly, the DWC’s mailing did not comply with KRS 342.135—it was sent via first-class and. not registered mail. Because the attempted notice was not sent by registered mail, the statute’s terms do not allow it to be “considered properly given and served.” In other words, the first-class mailing did not provide constructive notice of the claim under the Act.
First, I note that KRS 342.270 governs the filing of claims and the DWC commissioner’s obligations when a claim is filed. But it says only that “the commissioner shall issue notice of the [applieation-for-resolution-of-claim] filing to all parties.” KRS 342.270(2). Although it says nothing in express terms about how that is to be given, it implicitly does so by calling it “notice”—KRS 342.135, again, lays out how “any notice” is given. The statute then concludes by directing the commissioner to “promulgate administrative regulations establishing procedures for the resolution of claims.” KRS 342.270(3).
Exercising that authority, the commissioner crafted the regulation that was relied on below to sign off on the notice given here, 803 KAR 25:010 section* 3(2).8 The regulation begins by directing the filing' party to file its application “with sufficient copies for service on all parties.” Id. It then directs the commissioner to “make service by first class mail.” Id. Therefore, the Board and Court of Appeals reasoned that the DWC’s first-class mailing was an effective notice because this regulation required that it be sent in that manner.
Regulations, however, are subordinate to statutes—where their directives conflict, the statute wins. To the extent the commissioner’s regulation directs . KRS 342.270(2) notices to be sent by first-class mail, it is in direct conflict with, and invali*323dated by, the statutory registered-mail requirement. Nothing in the . language of KRS 342.135 suggests that it applies to anything less than any and every notice that is required under Chapter 342. By its terms, it defines how “any notice” is given and served—that doubtlessly includes the initiating document that provides notice of a claim filing that the commissioner must give under KRS 342.270(2). “Administrative agencies are bound by the procedural dictates of the statutes and are not empowered to adopt regulations in conflict with plain statutory provisions.” Natural Res. & Envtl. Prot. Cabinet v. Pinnacle Coal Corp., 729 S.W.2d 438, 439 (Ky. 1987). Because 803 KAR 25:010 section 3(2) purports to require the commissioner to send notices in a manner that differs from and, directly conflicts with what KRS 342.135 requires, it has no forcé and cannot validate the noncompliant notice that was attempted here.
The majority reasons that KRS 342.135 does not require that notice be given or served by registered mail, but that such notice is merely “deemed adequate.” It goes on to assert that there are two methods for giving notice: first, by registered mail; or, second,' by any means notices may be served in civil actions.
This Court had previously held in Akers v. Pike County Board of Education, 171 S.W.3d 740 (Ky. 2005), that the commissioner was not subject to KRS 342.135’s registered-mail requirement, albeit in a different context concerning a different statutory obligation. At issue in Akers was the commissioner’s obligation under KRS 342.040(1) to “in writing, advise the employee ... of right [sic] to prosecute a claim under [the Act]” (which arises after the employer or its insurance carrier notifies the commissioner that it has terminated temporary-total-disability (TTD) income-benefit payments). In Akers, after the employer ceased paying TTD, the commissioner sent the employee the required so-called “statute letter”—advising him of his right to file a claim under the Act within two years after the TTD-termination date—by first-class mail. Id. at 741. It is impossible to consider this a document initiating a claim. The employee would be aware that he should inquire what to do after the payments stopped. When the employee filed his claim more than four years lat'er, he'argued that it should not be time-barred because, among other things, the commissioner’s letter, which he never received, failed to comply with 'KRS 342.135’s registered-mail requirement. Id. This Court rejected that argument, holding that KRS 342.135 does not apply to the commissioner’s obligation under KRS 342.040(1). Id. at 742.
But what distinguishes Akers from this case is that the issüe there- turned on the Court’s recognizing that “notice,” as used in KRS 342.135, is a legal term of art, which the legislature has employed in some instances and' not others. Presuming that “the legislature had a reason for its choice of words,” id. (citing ' KRS 446.080(4)), the Court concluded that the choice in KRS 342.040(1) to require only that the commissioner “advise” employees of their right to prosecute a claim under the Act meant that obligation was not subject to the requirements for giving “notice” under KRS 342.135. Id. But here, by contrast, the legislature’s choice in KRS 342.270(2) was to require that the commissioner indeed give “notice.” I disagree with the majority’s interpretation of KRS 342.135. It does disservice to the legislative choice evident in the drafting of that statute—much as holding the statute applicable in Akers would have disserved KRS 342.040(l)’s choice of words.
Further distinguishing Akers from this case is the substantive difference between *324the commissioner’s obligations under KRS 342.040(1) and KRS 342.270(2). The former is effectively a statutorily required courtesy—think: “Just so that you are aware, you have the right to file a claim for benefits under the Act and have two years to do so.” That is very different from the latter: “Be aware that a claim has been filed against you that might result in an ALJ ordering you to pay this person a sum of money (and almost certainly will result in that if you fail to file an answer).” The primary purpose for the KRS 342.270(2) notice is to ensure that all parties receive due process; there is no due-process purpose underlying the KRS 342.040(1) obligation. The “notice” requirement in KRS 342.270(2) necessarily contemplates the due-process procedures contained in KRS 342.135, the “advise” requirement in KRS 342.040(1) does not.
The focus here should not be on what Silva-Lamas did to comply with the Act’s filing requirements. But, because at its core the issue here is about due process, the proper focus is on the absent employer, Lopez, not the employee. The question is not whether Silva-Lamas’s actions sufficed to allow his claim to go forward; the question is whether Lopez received sufficient notice to permit the ALJ to enter an order affecting him. Answering the question presented requires assessing the process Lopez received and ascertaining whether that complied with the statute and, by extension, the requirements of procedural due process.
I respectfully dissent from the majority’s holding that notices may be given “pursuant to whatever method the civil rules deem adequate.” That issue has never been raised, argued, briefed, or considered by any party or tribunal in this case. This Court is ill-suited to address in this appeal the meaning of the second sentence in KRS 342.135, and so should not. That is best left to a future case where the issue is properly before us.
As the majority holds, CR 5.01 and 5.02 dictate what KRS 342.135’s second sentence means. This would seem to allow all “notices” in civil actions to be effectuated by a mailing of any sort, and so would control the result here. To arrive at that conclusion, the majority begins by telling us that “CR 5.02 provides that ‘whenever ... service is required or permitted to be made ... [sjervice ... shall be made by ... mailing [the thing to be served] to the ... party at the last known address of such person.’” Because CR 5.01 directs that every “written notice ... shall be served upon each party,” the majority concludes that the two rules read together authorize notices in civil actions—and so also “notices” in workers’ compensation litigation under KRS 342.135—to be mailed by any method the mailer chooses. If we fill in the gaps, however, it is apparent that CR 5.01 and 5.02 do not apply here at all.
First, the majority concludes that KRS 342.270(2)’s “notice” should be considered equivalent to the “written notice” used in CR 5.01. The problem with that construction is that the workers’ compensation notice at issue is not a simple notice of filing or deposition or some other pleading in the midst of litigation; it is the initiating or original complaint against the employer by the employee claiming workers’ compensation benefits. Indeed, CR 5.01 applies to “every pleading subsequent to the original complaint.” (Emphasis added.) The notice here was the document initiating the claim against Lopez and so is not covered by the rules governing the servicing and filing of pleadings and other papers—CR 5.01, et seq. Instead, our rules governing service of process—CR 4.01,9 et seq.—control how *325the notice to the employer required under KRS 342.270(2) is considered given as in civil actions under KRS 342.135.10 The last sentence of CR 5.01 specifically provides that “[pjarties so in default shall be given notice of pleadings asserting new or additional claims for relief against them by summons or warning order issued thereon as provided in Rule 4.”
The language of CR 5.02 makes it clear that it is inapplicable to the case before us. The relevant portion of that rule reads:
Whenever under these rules service is required or permitted to be made upon a party represented by an attorney, which shall not include a warning order attorney, the service shall be made upon the attorney unless service upon the party is ordered by the court. Except as provided in paragraph (2) of this rule,[11] service upon the attorney or upon a party shall be made by delivering a copy to the attorney or party or by mailing it to the attorney or party at the last known address of such person; or, if no address is known, by leaving it with the clerk of the court.
CR 5.02(1) (emphasis added). The rule’s first clause unmistakably limits its scope: it applies only where "service is required or permitted to be made upon a party represented by an attorney.” Id. Lopez would only have had an attorney representing him in the claim if he had been served with the initiating document and hired an attorney to enter an appearance for him. Lopez, of course, had no such representation. That, alone, renders CR 5.02 inapplicable here. But there’s more—even if Lopez had been represented by an attorney so as to bring him within the scope of CR 5.02, the rule goes on to direct that “service shall be made upon the attorney.” Id. Only if it is “ordered by the court,” does the rule then permit service to be made upon the party instead of the attorney. Id. There, of course, was no such court order directing that service be made upon Lopez rather than his attorney. Again, CR 5.02 has no role to play here.
Finally, the majority’s interpretation of KRS 342.135’s second sentence would render that provision’s first, main sentence meaningless. If the second sentence says that notices can be sent by any method óf mailing, then the first sentence’s registered-mail directive becomes no directive at all. See generally Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 174-79 (2012) (discussing the surplusage canon of statutory interpretation).
Whatever the second sentence in KRS 342.135 means, it does not mean that the notice. mailed to Lopez was effective in serving a document initiating a claim against him. Having said that, I am not blind to the majority’s worries about the costs entailed by requiring that every notice, or even just the documents initiating a claim, under Chapter 342 be sent by registered mail versus cheaper alternatives. As discussed above, CR 4.01, et seq., *326governs the service of a document .initiating a claim. Alter a party has been served with the initiating document, CR 5.01, et «of/., allows for service of pleadings by other, less expensive methods. While that is a worthy concern, if has no place in this Court’s statutory analysis. That is a policy matter reserved to the General Assembly. It is the General Assembly who saw fit to require that notices under Chapter 342 be sent by the pricier method of registered mail-—it is that body alone who has the power to change it.
To be certain, I recognize and agree with the sentiments expressed in the decisions below that reversing and dismissing Silva-Lamas’s claim for this procedural error—which of course was not his error— would be unfair and serve only to undermine the Act’s fundamental compensatory purpose. But I can account for that recognition in crafting a remedy: the proper remedy for the defective notice is to unwind the case, not dismiss it, and allow for the defect to be cured—that is, for Lopez to be given proper notice before adjudicating Silva-Lamas’s claim.
Because the failed notice to Lopez was never “considered properly given and served” under KRS 342.135, I would vacate the order and award and remand this matter to the ALJ for further proceedings. On remand, there would be nothing to prevent the commissioner, or anyone else for that matter, from properly Serving notice to Lopez of Silva-Lamas’s claim. I would leave it up to the ALJ: if the ALJ were convinced that this notice meets the Act’s requirements, then I would allow him to proceed with adjudicating the claim against Lopez. I recognize that this result further delays the injured worker’s receipt of benefits, and so may be unsavory to some—yet it is a result that is dictated by our statute and the principles of due process.
In sum, due process requires that employers receive notice of their employees’ workers’ compensation claims. The language of KRS 342.135 is clear: for “any notice” required under the Workers’ Compensation Act to be “considered properly given and served,” it must be sent by registered mail or in the same manner as civil-action notices. Because the commissioner mailed Lopez the KRS 342.270(2)-required notice initiating the claim against him by first-class rather than registered mail, that notice cannot be considered properly given and served. Therefore, I would vacate the ALJ’s order and award and remand this matter for further proceedings.

. According to the United States Postal Service website, first-class (or regular) mail is "the least expensive, most immediate option for mailing postcards, letters, and large envelopes 13 ounces or less.” What is First-Class Mail?, USPS.com, faq.usps.com/?arti-cleld=218984 (last accessed May 10, 2017) ("First-Class mail over 13 ounces is called Priority Mail.”).
Registered, mail, on the other hand, is "the most secure USPS mail service (protected by safes, cages, sealed containers, locks and keys).” What is Registered Mail?, USPS.com, http://faq.usps.com/?articleld=220838 (last accessed May 10, 2017). It uses a "system of receipts ... to monitor the mail from the point of acceptance to delivery.” Id. Its "delivery status or attempted delivery status" is available to the sender, and a signature is required upon delivery. Id. See also registered mail, Black's Law Dictionary (10th ed. 2014) ("Mail that the U.S. Postal Service records at the time of mailing and at each point on its route so as to guarantee safe delivery.”).

. The Court of Appeals read KRS 342.135 as applying only to "pre-claim notice.” That misreading helps explain that court's mistaken conclusion that the administrative regulation directing the DWC to issue notices by first-class mail does not conflict with KRS 342.135's registered-mail requirement. We *322discuss that regulation and conflict in more detail below.

. The Board and Court of Appeals relied on the language in what was then section 3(2), but the regulation has since been amended effective October 2016. Section 5(3)(b) now contains the language at issue, which is virtually unchanged. We use section 3(2) in our discussion, however, to be consistent with those below.

. CR 4.01 governs the issuance of summonses "[u]pon the filing of the complaint (or other *325initiating document),” CR 4.01(1), and directs the court clerk to mail a copy of the summons and initiating document "in the United States mail as registered mail or certified mail return receipt requested with instructions to the delivering postal employee to deliver to the addressee only and show the address where delivered and the date of delivery,” CR 4.01(1 Xa).

. It bears repeating, however, that a well-reasoned, deliberate analysis of what the General Assembly meant by allowing that "[n]o-tice may also be given and served like notices in civil actions,” KRS 342.135, should wait for another day and case when that question is actually before us,

. CR 5.02(2) governs elections by attorneys and parties to effectuate and receive service by electronic means.