Court Opinion

ID: 9352436
Source: CourtListenerOpinion
Date Created: 2023-01-06 15:03:25.212531+00
Date Added: 2024-06-11T17:02:43.730485
License: Public Domain

RENDERED: SEPTEMBER 23, 2022; 10:00 A.M.
                     NOT TO BE PUBLISHED

     MODIFIED UPON DENIAL OF REHEARING: DECEMBER 27, 2022

               Commonwealth of Kentucky
                         Court of Appeals

                           NO. 2022-CA-0032-WC

JONATHAN HAWK                                                   APPELLANT

                PETITION FOR REVIEW OF A DECISION
v.            OF THE WORKERS’ COMPENSATION BOARD
                      ACTION NO. WC-17-01865

MS COMPANIES; WORKERS’ COMPENSATION
BOARD; AND HONORABLE GRANT ROARK,
ADMINISTRATIVE LAW JUDGE                                        APPELLEES

                              OPINION
                      VACATING AND REMANDING

                                ** ** ** ** **

BEFORE: CLAYTON, CHIEF JUDGE; ACREE AND TAYLOR, JUDGES.

TAYLOR, JUDGE: Jonathan Hawk appeals from a decision of the Workers’

Compensation Board (Board) vacating and remanding a July 26, 2021, order of an

Administrative Law Judge (ALJ) that directed appellee, MS Companies, to pay
Hawk workers’ compensation benefits.1 For the reasons expressed below, we

vacate the Board’s decision and direct the Board, on remand, to dismiss MS

Companies’ underlying administrative appeal.

                                     BACKGROUND

              Express Employment Professionals (“Express”) is a temporary

employment agency; Hawk is its former employee; and when Hawk worked for

Express, Express assigned him to work for one of its clients, Faurecia. Hawk’s

employment with Express terminated in April 2017. Hawk then filed a workers’

compensation claim against Express on November 7, 2017, alleging bilateral

hand/wrist/arm injuries from repetitive motion that manifested on November 15,

2016, while he was working on Faurecia’s assembly lines manufacturing car seats.

In 2018, Hawk began his employment with MS Companies and was assigned to

work again at Faurecia. On May 3, 2018, Express moved to dismiss Hawk’s claim

based upon Hawk’s deposition testimony that he had returned to work on

Faurecia’s assembly lines, albeit on behalf of a different temporary employment

agency employer, appellee MS Companies.

              Express noted in its motion that Hawk testified he had been

performing work at Faurecia – on behalf of Express on November 15, 2016 –

1
 Based on our review of the record, at least three different Administrative Law Judges (ALJ)
participated in this case.

                                              -2-
where his job was to install the “side shield” on car seats approximately 35-45

times per hour on average. And, Hawk further testified that in February 2018, he

had returned to work at Faurecia – on behalf of MS Companies – once again

building car seats; this time, his job on the assembly line was to attach the “pork

chop” to the seats approximately 35-45 times per hour on average. In sum,

Express argued that because Hawk had alleged a “cumulative trauma”-type injury

caused by assembly line work, Hawk’s employer at the time of his “most recent

injurious exposure in the work place” – MS Companies – bore all liability in this

matter. Record, p. 132-34.

               On July 26, 2018, MS Companies was joined to this litigation as a

defendant. On July 30, 2018, the ALJ then entered an order passing on the merits

of Express’s motion until “all proof has been developed,” explaining “[t]he fact

that the Plaintiff returned to work on the same assembly line is not dispositive of

the issues in this claim. He was performing a different job when he returned.”

               On October 11, 2019, Express once again moved to dismiss; in

support, it made the same arguments and cited the same proof it had relied upon in

its prior motion. On March 6, 2020, following a telephonic status conference, the

ALJ then entered an interlocutory order granting Express’s motion.2 The ALJ’s

2
 In granting Express Employment Professionals’ motion to dismiss, the Administrative Law
Judge (ALJ) did not resolve all the claims involved in this matter, and his March 6, 2020, order
of dismissal did not recite that it was “final” and that there was “no just reason for delay.”

                                               -3-
order contained no legal analysis or findings in support of its decision. Notably,

MS Companies did not oppose Express’s motion nor participate in the status

conference.

              MS Companies did not make any attempt at litigating this matter until

July 22, 2021, when its attorney filed his first notice of appearance and, in

conjunction therewith, MS Companies’ post-hearing brief.3 Therein, MS

Companies argued in relevant part:

              Even if causation is found to exist, the responsible
              employer is not MS Companies. Indeed, the parties have
              stipulated that the injury occurred on November 15,
              2016. It is undisputed that the Plaintiff was working for
              Express Employment Professionals on this date. MS
              Companies acknowledges that the Plaintiff returned to
              work for MS Companies after November 15, 2016;
              however, there has never been an alternative injury date
              alleged. As a result, MS Companies had no obligation to
              defend a claim that was sustained prior to their
              employment. Moreover, the simple fact that one returns
              to work, does not mean that additional permanency
              developed. Simply put, the Plaintiff has stipulated to a
              November 15, 2016 injury date. While he returned to
              work, he never pled an alternative injury date for which
              an award can be generated.

Record, p. 306.

Therefore, the ALJ’s March 6, 2020, order remained interlocutory until July 26, 2021, when the
ALJ resolved the remaining issues in this matter. See 803 Kentucky Administrative Regulation
(KAR) 25:010 § 22(2)(b) (providing “a final award, order, or decision shall be determined in
accordance with Civil Rule 54.02(1) and (2)”).
3
  MS Companies did not participate in the benefit review conference or the final hearing before
the ALJ, which was conducted by the ALJ on May 27, 2021.

                                              -4-
               In an order entered July 26, 2021, the ALJ resolved the remaining

issues in this matter, ultimately directing MS Companies to pay Hawk the total

amount of his temporary total disability benefits (TTD), permanent partial

disability benefits (PPD), and his reasonable and necessary medical expenses

relating to his cumulative trauma work injury. Regarding MS Companies’

contention that it was not Hawk’s employer on the stipulated date of his injury, the

ALJ further held:

                      For the first time, on July 22, 2021, legal counsel
               entered an appearance on behalf of the defendant
               employer, MS Companies. At the same time, counsel
               filed a post[-] hearing brief. In its brief, the defendant
               attempts to argue plaintiff’s alleged injuries are not work-
               related. However, this defendant never filed a form 111,
               Notice of Claim Denial or Acceptance, and as such, all
               allegations alleged in plaintiff’s form 101, including
               those as amended, were deemed admitted. 803 KAR
               [Kentucky Administrative Regulation] 25:010 Sec.
               5(2)(b). Moreover, causation and work relatedness were
               not listed as a contested issue at the benefit review
               conference conducted on May 27, 2021 at the beginning
               of the final hearing. Similarly, whether plaintiff was an
               employee of the defendant, MS Companies the date of
               the injury was also not listed as a contested issue so,
               again, the defendant is precluded from making that
               argument at this time. For these reasons, the defendant is
               precluded from arguing causation which is now
               presumed as a matter of law.[4]

4
  After being named a party to this proceeding by order of the ALJ on July 26, 2018,
inexplicably, MS Companies did not participate or appear in the case for almost three years, until
the filing of its motion to file a brief on July 22, 2021.

                                               -5-
Record, p. 313.

            Shortly thereafter, MS Companies filed a petition for reconsideration.

There, MS Companies stated it was “not asserting error in the ALJ’s finding that

the Plaintiff suffered a cumulative trauma injury.” Rather, as before, MS

Companies took issue with the ALJ’s decision to hold it liable for Hawk’s

cumulative trauma injury – either because: (1) proof of Hawk’s subsequent

injurious exposure to cumulative trauma or worsening of his cumulative trauma

injury while in its employ was non-existent; or (2) Hawk had failed to amend his

Form 101 application for benefits to encompass the time frame of his employment

with MS Companies, or to otherwise rescind his stipulation that his cumulative

trauma work injury manifested while he was employed by Express. Specifically,

MS Companies argued:

                   It is undisputed that the Plaintiff was working for
            Express Employment Professionals on the date of injury
            – November 15, 2016. There has never been an
            alternative injury date alleged. As a result, MS
            Companies had no obligation to defend a claim that was
            sustained prior to their employment taking effect. While
            the Plaintiff did return to work after November 15, 2016,
            the simple fact that one returns to work, does not mean
            that additional permanency developed. The fact remains
            that the Plaintiff has stipulated to a November 15, 2016
            injury date. While he returned to work after November
            15, 2016, he never pled an alternative injury date for
            which MS Companies had an obligation to defend the
            claim.

                                        -6-
                    In rendering his award, the ALJ relied upon the
             fact that MS Companies failed to tender a denial or
             contest that an employment relationship exists. In
             response, MS Companies argues that there was never an
             Order requiring them to tender a response denial.
             Similarly, MS Companies is unaware of any statute or
             regulation requiring a response denial in this
             circumstance. Moreover, MS Companies argues that it is
             immaterial that they failed to submit a denial in this
             claim. Indeed, while MS Companies was joined as a
             party, there was no alternative injury date filed for which
             MS Companies opened itself up to liability. MS
             Companies had no obligation to mount a defense for an
             injury date that the Plaintiff stipulated occurred prior to
             the Plaintiff’s work with MS Companies. This statement
             against interest requires judicial notice be taken. MS
             Companies does agree that there was an employment
             relationship; however, that employment relationship
             began at a time after the stipulated injury date.
             Therefore, MS Companies argues that they cannot be
             liable in this matter.

Record, p. 320-21.

             On August 30, 2021, the ALJ overruled MS Companies’ petition. MS

Companies then appealed to the Board, reasserting the substance of its argument

set forth above. Notably, however, MS Companies did not name Express as a

party to the appeal or serve Express or its counsel with a copy of the notice of

appeal.

             Upon consideration, the Board vacated the ALJ’s order. In its

December 10, 2021, decision to that effect, it explained in relevant part:

                   We agree that an award against MS cannot be
             based upon a November 15, 2016 injury date. Liability

                                         -7-
            of MS necessarily depends on exposure to cumulative
            trauma occurring during its employment period. During
            litigation of this claim, no ALJ made an explicit finding
            of fact that Hawk was exposed to cumulative trauma
            while employed by MS. Certainly, Express raised an
            issue concerning the last employer at which Hawk was
            exposed to cumulative trauma in its Motions to Dismiss
            and its proposed stipulations and contested issues.
            However, ALJ Neal’s March 6, 2020 Order dismissing
            Express as a party made no specific finding that
            employment with MS produced a cumulative trauma
            injury. MS is correct in noting Hawk never moved to
            amend his claim to include an allegation of a cumulative
            trauma injury during his employment with MS or to
            allege a later injury date. ALJ Neal’s July 2, 2018 Order
            states a telephonic status conference was held on that
            date and indicates Hawk would amend his claim to
            include the current employer. Hawk’s Motion to Join
            MS was silent as to the reason for joinder.

                  On remand, the ALJ must determine whether
            Hawk ever amended the Form 101 to include his
            employment period with MS. If no such amendment was
            made, MS must be dismissed. It cannot be held liable for
            any injury occurring prior to employing Hawk.

            ...

                   Accordingly, the July 26, 2021 Opinion, Award
            and Order and the August 30, 2021 Order on Petition for
            Reconsideration rendered by Hon. Grant S. Roark,
            Administrative Law Judge, are hereby VACATED. This
            claim is REMANDED for additional findings consistent
            with the views expressed herein.

Record p. 376-77 (emphasis added).

            Hawk now appeals.

                                       -8-
                                           ANALYSIS

               For the reasons that follow, we must vacate the Board’s decision on

two grounds, including a jurisdictional ground that the Board and parties failed to

recognize.5 The thrust of MS Companies’ arguments and the Board’s opinion is

that Express could be liable for Hawk’s injuries. As MS Companies and the Board

both pointed out, no ALJ made a specific finding that employment with MS

Companies had caused Hawk to sustain a cumulative trauma injury. But, Hawk’s

Form 101 – the allegations of which the ALJ deemed MS Companies had admitted

– asserted Hawk’s injury at issue in this matter manifested on November 15, 2016,

while employed by Express. Moreover, when an employee alleging a work-related

cumulative trauma injury works for multiple employers, the employer on the date

of manifestation of the injury bears the burden of paying workers’ compensation

benefits. See Hale v. CDR Operations, Inc., 474 S.W.3d 129, 138 (Ky. 2015)

(holding that “[n]othing in KRS [Kentucky Revised Statute] Chapter 342 limits the

liability of the employer, in whose employ the date of manifestation occurred, to

5
  See, e.g., Basin Energy Co. v. Howard, 447 S.W.3d 179, 187 (Ky. App. 2014) (holding that
“[a] reviewing body or court has an affirmative obligation to ensure that it is acting within its
subject-matter jurisdiction. Even if not raised by the parties, a court must dismiss if it determines
at any point in the litigation that it lacks subject-matter jurisdiction. The parties cannot confer
jurisdiction by failing to raise the issue either intentionally or unintentionally.”); Liquor World of
Corbin, LLC v. Commonwealth Dep’t of Alcoholic Beverage Control, 458 S.W.3d 814, 816 (Ky.
App. 2014) (“It is fundamental that a court must have jurisdiction before it has authority to
decide a case. . . . Each court or administrative body must determine for itself whether it has
jurisdiction.” (Internal quotation marks and citations omitted)).

                                                 -9-
the percentage of the claimant’s work-life spent there” within the context of

cumulative trauma injuries).

               However, upon being named a party to this case on July 26, 2018, MS

Companies took no affirmative steps to participate in the case until July 22, 2021,

when counsel entered an appearance for MS Companies and filed a post-hearing

brief, almost three years after being joined as a party. As noted by the ALJ, MS

Companies did not participate in the benefit review conference or formal hearing

on May 27, 2021. At the conference, various stipulations and contested issues

were entered by the ALJ, including the date of injury and that MS Companies was

the responsible employer, since Express had previously been dismissed. Given

that MS Companies had not filed a Form 111 or otherwise raised as a contested

issue its liability for the alleged workplace injury, the ALJ concluded that MS

Companies effectively waived its right to contest its liability by virtue of its own

inaction in this case, citing 803 KAR 25:010 § 13(12).6

               We agree with the ALJ that MS Companies’ inaction and failure to

participate in the case for three years constituted a waiver of the contested issue of

MS Companies being liable for Jonathan Hawk’s injuries. The Workers’

6
 This regulation provides that issues not raised are waived. The ALJ concluded in its Order of
July 26, 2021, that MS Companies was precluded from arguing that it was not the responsible
employer for Hawk’s injuries for failure to raise this as a contested issue at the benefit review
conference.

                                               -10-
Compensation Board clearly erred as a matter of law by not addressing the issue

and recognizing that MS Companies had waived this argument by not participating

in the benefit review conference and raising the issue therein, as required by 803

KAR 25:010 § 13(12).

             Additionally, the Board’s order vacating the ALJ’s award did not

remand for the purpose of determining which employer was responsible for

Hawk’s injuries, but rather was limited to determine if Hawk ever amended his

Form 101 to include employment with MS Companies. If not, the Board directed

the ALJ to dismiss MS Companies as Hawk’s employer, which effectively results

in setting aside the award of benefits for Hawk, since Express had previously been

dismissed as a party by an interlocutory order entered March 6, 2020. That

interlocutory order became final upon entry of the final order entered July 26,

2021, and Express was not named as a party to this appeal by MS Companies.

             Presumably, because Express was not named as a party to the appeal,

the Board declined to address or reopen the case for determination of the liability

for Hawk’s injuries. That looks to another problem in this appeal. Express was an

“adverse party” in this matter, i.e., a party “against whom the ultimate right to

relief pursuant to KRS Chapter 342 may exist, whether jointly, severally, or in the

alternative.” 803 KAR 25:010 § 2(1) and (3)(a). Indeed, the Board could not

vacate the ALJ’s July 26, 2021, order without arguably affecting Express’s rights,

                                         -11-
since Express was an “indispensable” party to MS Companies’ appeal – one whose

absence prevented the Board “from granting complete relief among those already

parties.” Milligan v. Schenley Distillers, Inc., 584 S.W.2d 751, 753 (Ky. App.

1979), superseded on other grounds by statute, KRS 342.285; see also Browning v.

Preece, 392 S.W.3d 388, 391 (Ky. 2013) (holding that an “indispensable party” is

one who has an interest that would be affected by the decision of a reviewing

tribunal, “regardless of whether that interest is affected adversely or favorably”).

             Accordingly, it was incumbent upon MS Companies to name Express

as a party to its administrative appeal. Specifically, within thirty days after the

ALJ’s award became final, MS Companies was required to name Express as a

party in its notice of appeal to the Board, and to serve its notice upon Express. See

803 KAR 25:010 § 22(2)(a) (specifying the thirty-day period for filing a notice of

appeal to the Board); 803 KAR 25:010 § 22(2)(c)2. (providing “[t]he notice of

appeal shall . . . [d]enote all parties against whom the appeal is taken as

respondents”); 803 KAR 25:010 § 22(4)(a)2. (providing that “[t]he petitioner shall

specifically designate as respondents all adverse parties”); see also 803 KAR

25:010 § 22(8)(a) (“[b]efore filing a notice of appeal, cross-appeal, or any brief

with the commissioner of the Department of Workers’ Claims, a party shall serve,

in the manner provided by Civil Rule 5.02, or electronically as set forth in this

administrative regulation, a copy of the document on each adverse party”).

                                         -12-
             But, MS Companies failed to do so. And the Board nevertheless

addressed the merits of its appeal, without Express being a party or having the

opportunity to participate in the appeal, which in this case serves to be to the

detriment of Hawk.

             With respect to our review of an opinion of the Board, we only

reverse when “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.” W. Baptist Hospital v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992).

Here, when the Board rendered its opinion of December 10, 2021, it improperly

addressed the merits of a dispute relating to a notably absent indispensable party,

and thus overlooked or misconstrued the law controlling its appellate jurisdiction.

             Failure to name an indispensable party in the notice of appeal is a

jurisdictional defect that cannot be remedied after the period for filing the notice

has run. See Browning, 392 S.W.3d at 391. Moreover, “[t]his Court has often

emphasized that one seeking review of administrative decisions must strictly

follow the applicable procedures. Since an appeal from an administrative decision

is a matter of legislative grace and not a right, the failure to follow the statutory

guidelines for an appeal is fatal.” Taylor v. Duke, 896 S.W.2d 618, 621 (Ky. App.

1995) (citations omitted). Here, having failed to include Express in its notice of

appeal before the Board, MS Companies effectively deprived the Board of

                                          -13-
jurisdiction to resolve its appeal. Accordingly, we vacate the Board’s opinion.

Upon remand, the Board is directed to dismiss MS Companies’ underlying appeal

in this matter.

             For the foregoing reasons, the opinion of the Workers’ Compensation

Board is vacated and remanded to dismiss MS Companies’ appeal and affirm the

ALJ’s July 26, 2021, Opinion, Award, and Order.

             ALL CONCUR.

 BRIEF FOR APPELLANT:                     BRIEF FOR APPELLEE MS
                                          COMPANIES:
 James R. Martin
 Lexington, Kentucky                      Donald J. Niehaus
                                          Lexington, Kentucky

                                       -14-