Court Opinion

ID: 3008658
Source: CourtListenerOpinion
Date Created: 2015-10-08 14:10:14.371756+00
Date Added: 2024-06-11T11:46:13.310766
License: Public Domain

RENDERED : March 20, 2008
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                                   2007-SC-000303-WC

OFFICEWARE                                                                    APPELLANT

                       ON APPEAL FROM COURT OF APPEALS
V.                             2006-CA-001911-WC
                      WORKERS' COMPENSATION NO. 98-87996

STEPHEN JAY JACKSON,
HONORABLE SHEILA C. LOWTHER,
CHIEF ADMINISTRATIVE LAW JUDGE,
AND WORKERS' COMPENSATION
BOARD                                                                         APPELLEES

                                OPINION OF THE COURT

                                       AFFIRMING

       As amended effective July 14, 2000, KRS 342 .125(3) includes "seeking

temporary total disability benefits during the period of an award" among the exceptions

to, the prohibition on reopening a claim "more than four (4) years following the original

award or order granting or denying benefits ."

       An Administrative Law Judge determined that KRS 342 .125(3) did not bar the

claimant's motion to reopen to obtain temporary total disability (TTD) benefits during his

recovery from surgery and that he was entitled to the benefits. The ALJ also

determined that the employer had no reasonable ground for refusing to pay the benefits

when due and ordered it to pay 18% interest on the past due amount under KRS

342 .040(1) and to pay the claimant's attorney's fees under KRS 342.310(1) . The
 employer appealed, but the Workers' Compensation Board (Board) and the Court of

 Appeals affirmed . We affirm.

        On August 20, 1999, an ALJ approved a settlement agreement, which indicated

 that the claimant sustained a low back injury on April 17, 1997, and later underwent

 surgery to repair a herniated disc. Among other things, the agreement provided for a

 period of TTD benefits that was followed by a lump sum for permanent partial disability.

 On April 22, 2004 the claimant filed a motion to reopen seeking TTD benefits. The

 motion and supporting affidavit stated that the employer had approved a post-award

low back surgery, which had been scheduled, but that it refused to approve TTD

benefits through the recovery period .

       The employer objected to the motion on three grounds : 1 .) that reopening is

governed by the law on the date of injury, which limits reopening to within four years of

the settlement date and does not contain an exception for a motion seeking TTD ; 2.)

that under KRS 342.125(6), the law on the date of injury controls the parties' rights; and

3.) that no legislative statement designates the 2000 amendment as being remedial and

applicable to claims for injuries that occurred before July 14, 2000.

       The ALJ determined that the exceptions found in KRS 342.125(3) applied

retroactively under KRS 342 .125(8), basing the decision on Meade v. Reedy Coal Co . ,

13 S .W.3d 619 (Ky. 2000), and Johnson v. Gans Furniture Industries, Inc. , 114 S .W.3d

850 (Ky. 2003). Turning to the merits of the TTD request, the ALJ awarded benefits for

the period from April 12, 2004 through June 14, 2004. The claimant's petition for

reconsideration noted that the ALJ failed to award interest on past due benefits and

asserted that the employer had no reasonable grounds for refusing to pay TTD when
due. He requested 18% interest under KRS 342 .040(1) and his attorney's fees under

KRS 342 .310(1). The AU granted the request, and the employer appealed .

       When the claimant's injury occurred, the December 12, 1996 version of KRS

342.125 governed reopening . It provided, in pertinent part, as follows :

             (3) Except for reopening solely for determination of the
             compensability of medical expenses, fraud, or conforming
             the award as set forth in KRS 342 .730(1)(c)(2)., or for
             reducing a permanent total disability award when an
             employee returns to work, no claim shall be reopened more
             than four (4) years following the date of the original award or
             order granting or denying benefits, or within two (2) years of
             such award or order, and no party may file a motion to
             reopen within two (2) years of any previous motion to reopen
             by the same party.

             (6) In a reopening or review proceeding where there has
             been additional permanent partial disability awarded, the
             increase shall not extend the original period, unless the
             combined prior disability and increased disability exceeds
             fifty percent (50%), but less than one hundred percent
             (100%), in which event the awarded period shall not exceed
             five hundred twenty (520) weeks, from commencement date
             of the original disability previously awarded . The law in effect
             on the date of the original injury controls the rights of the
             parties .

             (8) The time limitation prescribed in this section shall apply
             to all claims irrespective of when they were incurred, or
             when the award was entered, or the settlement approved.
             However, claims decided prior to December 12, 1996, may
             be reopened within four (4) years of the award or order or
             within four (4) years of December 12, 1996, whichever is
             later, provided that the exceptions to reopening established
             in subsections (1) and (3) of this section shall apply to these
             claims as well.

      The 1996 General Assembly also enacted KRS 342.0015, which provides, in
 pertinent part, as follows:

               The substantive provisions of 1996 (1st Extra.Sess .) Ky.
               Acts ch. 1 shall apply to any claim arising from an injury or
               last exposure to the hazards of an occupational disease
               occurring on or after December 12, 1996. Procedural
               provisions of 1996 (1st Extra .Sess .) Ky. Acts ch . 1 , shall
               apply to all claims irrespective of the date of injury or last
               exposure, including, but not exclusively, the mechanisms by
               which claims are decided and workers are referred for
               medical evaluations . The provisions of KRS . . . 342 .125(8) .
               . . are remedial .

        The 2000 General Assembly amended a number of provisions from the 1996

Act. As amended effective July 14, 2000, KRS 342.125(3) includes a motion to reopen

for the purpose of seeking TTD among the exceptions to the four-year period of

limitations . It no longer contains the two-year waiting periods, and although it retains

the four-year limitations period, a party must wait for only one year after filing any

previous motion to reopen . The 2000 versions of KRS 342 .125(6) and (8) are identical

to the 1996 versions .

                                 REMEDIAL LEGISLATION

       The employer argues that the last sentence of KRS 342.125(6) states explicitly

that the law on the date of the injury controls the rights of the parties . It reasons that

the claimant's injury occurred in 1997; therefore, her motion was untimely because the

1996 version of KRS 342.125(3) does not include an exception to the four-year period

for a motion seeking TTD. Relying on KRS 446.080(2) and the legislature's failure to

state that the 2000 amendment to KRS 342 .125(3) is remedial, the employer also

asserts that the exception for a motion seeking TTD applies only to injuries that

occurred on or after July 14, 2000 . We disagree with both arguments .

       Reopening is the remedy that Chapter 342 authorizes to address post-award
 changes in a worker's disability. The court explained in Peabody Coal Co. v. Gossett,

 819 S .W.2d 33, 36 (Ky. 1991), that a statute relating to a remedy or mode of procedure

does not come within the legal conception of a retrospective law if it does not disturb

vested rights . Nor does it violate KRS 446 .080(3)'s rule against the retrospective

operation of statutes . The court determined that the reasons supporting the 1987

amendment to KRS 342.125(1) applied to claims that arose before its effective date as

well as to subsequent claims ; therefore the statute applied to both groups despite the

absence of a legislative declaration .

       A motion to reopen is the procedural device for invoking an ALJ's jurisdiction to

consider a claim for additional benefits . KRS 342.125 did not limit the time for filing

such a motion until December 12, 1996. As noted in Johnson v. Gans Furniture

Industries, Inc., su ra at 854-55, a party has no vested right to a particular statute of

limitations . Limitations on the time for taking action relate to the remedy and may be

enlarged or restricted without impairing vested rights . For example, an amendment

may extend a limitations period that has not run but may not revive a limitations period

that has expired . An amendment may shorten a limitations period, but it may not

extinguish an existing cause of action or leave less than a reasonable amount of time in

which to assert a claim .

       The last sentence of KRS 342 .126(6), like the first sentence of KRS 342 .0015, is

a legislative statement of the longstanding principles stated in Maggard v. International

Harvester Co . , Ky., 508 S .W.2d 777 (1974). Under those principles, the law on the

date of an injury governs a worker's entitlement to benefits and the significance of a

filing date is to determine compliance with a statute of limitations . As explained more
 recently in Dingo Coal Co . v. Tolliver, 129 S .W .3d 367 (Ky. 2004), KRS 342.125's

 procedural requirements relate to the motion to reopen and have no effect on the

 substantive requirements for proving increased disability after a claim has been

 reopened . KRS 342 .126(6) concerns the duration of income benefits to be awarded in

 a reopening . It is inapplicable to KRS 342 .125(3), which is procedural and concerns the

 period for filing a motion to reopen .

        In Meade v. Reedy Coal Co . , supra at 621-22, the court determined that the

 December 12, 1996 amendments to KRS 342.125(3) and (8) were remedial and

applied to claims that arose before the amendments' effective date. The court noted

that KRS 342.0015 included KRS 342.125(8) among the list of remedial statutes .

Considering whether KRS 342.125(3)'s two-year waiting period applied to a claim that

arose and was decided before December 12, 1996, the court determined that the two-

year waiting periods and four-year period of limitations found in KRS 342.125(3)

governed claims in which an award was entered on or after December 12, 1996,

without regard to the date of injury. The four-year period of limitations found in KRS

342 .125(8) governed claims that arose and were decided before December 12, 1996 .

Based on the explicit language of KRS 342 .125(8), the court determined that KRS

342 .125(3)'s exceptions to reopening applied to all claims and permitted reopening at

any time upon proof of the requisite facts.

       The court upheld the constitutionality of the 1996 amendments to KRS 342.125

and the 2000 amendment to KRS 342 .125(3) in Johnson v. Gans Furniture Industries,

Inc., supra . Johnson received an award before December 12, 1996, when KRS

342 .125 placed no limit on the time for reopening. She alleged in 2001 that she had
    become permanently totally disabled and argued that KRS 342.125(8) deprived her of a

    vested right by limiting her time to reopen . The court rejected the argument as well as

    an argument that the limitations periods found in KRS 342.125 violated Section 59(24)

    by treating classes of injured workers differently. The court noted that the right to

    reopen is a matter of legislative grace and that a purpose of the 1996 amendments was

    to remedy the competitive disadvantage to Kentucky's employers due to the high cost

    of securing worker's compensation insurance . After comparing the cost of permanent

    partial, permanent total, and temporary total disability awards, the court concluded that

    permanent total disability awards are likely to have the most significant impact on

    insurance costs; whereas, TTD awards entered more than four years after the initial

    award are likely to have the least significant impact. The court reasoned, supra at 857-

    58, that the 2000 amendment to KRS 342.125(3) furthers the purpose of the 1996

    amendments and that there is a reasonable basis for treating workers who become

temporarily totally disabled more than four years after the initial award differently from

those who become permanently totally disabled .

          Although the 1996 version of KRS 342.0011(11)(a) provided the first statutory

definition of TTD, although KRS 342.730(1)(a) referred to TTD as well as to permanent

total disability benefits, and although KRS 342.020(1) entitled a worker to reasonable

and necessary medical treatment "during disability," the 1996 version of KRS 342.125

was silent concerning a reopening to seek TTD . The Board determined in 1998 that the

legislature did not intend for that silence to prohibit a worker from enforcing a right to

TTD benefits during recovery from surgery.' When the legislature met next, in 2000, it

1 General Electric Co . v. Mary Nadine Higdon , Claim No. 96-06027 (rendered August
17, 1998) .
                                           7
 amended KRS 342.125(3) to add a motion seeking TTD to the list of exceptions for

 which reopening is permitted at any time. The amendment became effective on July

 14, 2000, which was within four years after December 12, 1996, and before the four-

 year reopening period expired in any claim . Like the exceptions enacted in 1996, the

 TTD exception concerns the procedure for reopening. KRS 342.125(8) provides that

 the exceptions to reopening apply to all claims ; therefore, it permits any claim to be

 reopened at any time upon proof that an injury causes TTD. The ALJ did not err in

 granting the claimant's motion.

                         18% INTEREST AND ATTORNEY'S FEES

        The employer asserts that the finding that it refused to pay TTD without

reasonable ground constituted an abuse of the ALJ's discretion . Arguing that its

conduct was not unreasonable, the employer states that no published judicial decision

addressed the legal basis that it raised for doing so. The employer maintains that the

sole reason for the ALJ's findings under KRS 342 .040(1) and KRS 342.310(1) was the

fact that it lost its primary argument.

       A longstanding policy of Chapter 342 is to encourage employers to pay income

benefits voluntarily when warranted . KRS 342 .040(1) requires them to begin to pay

benefits when a worker misses more than seven days of work after an injury . It

imposes 12% interest on past-due benefits if the employer is later found to be liable for

such benefits but permits 18% interest to be awarded if an employer's denial, delay, or

termination of benefits was without reasonable foundation . KRS 342.310(1) permits an

ALJ to assess the whole cost of the proceedings, including attorney's fees, on a party

who has brought, prosecuted, or defended such proceedings without reasonable
ground ." Sexton v. Sexton , 125 S .W.3d 258, 272 (Ky. 2004), explains that the test for

an abuse of discretion is whether the resulting decision was arbitrary, unreasonable,

unfair, or unsupported by sound legal principles.

       KRS 342.'125(3) and (8) have limited the period for filing a motion to reopen

since December 12, 1996. They clearly base the periods of limitations on dates other

than the date of injury, and KRS 342.125(8) clearly applies the four-year period of

limitation and the exceptions to all claims "irrespective of when they were incurred ."

KRS 342:125(6) concerns the duration of income benefits awarded in a reopening

rather than the procedure for reopening.

       Peabody Coal Co. v. Gossett , supra , explained in 1991 that an amendment

concerning a remedy or mode of procedure does not come within the legal concept of a

retrospective law and does not require a legislative declaration . Like the present case,

it concerned an amendment to KRS 342.125 . Meade v. Reedy Coal Co . , supra,

determined in 2000 that the 1996 amendments to KRS 342.125(3) and (8) are remedial

and that KRS 342 .125(8) permits any claim to be reopened at any time upon proof of

one of the exceptions to reopening. The 2000 amendment extended the period for

filing a motion to obtain TTD and did so before the four-year period stated in KRS

342.125(3) expired . In 2003, Johnson v. Gans Furniture Industries, Inc. , supra, upheld

the constitutionality of the 2000 amendment, noting explicitly that to permit a motion

seeking TTD to be filed in any claim at any time furthered the purpose of the 1996

amendment. It was unreasonable under the circumstances for the employer to argue in

2004 that the 2000 amendment to KRS 342 .125(3) was not remedial absent a

legislative statement to that effect ; that the last sentence of KRS 342.125(6) required
the ALJ to consider the claimant's motion under the 1996 amendment to KRS

342 .125(3) ; or that the 2000 amendment did not apply because the injury occurred

before its effective date. Because the arguments were unreasonable, the decision

requiring it to pay 18% interest and attorney's fees was not an abuse of discretion.

      The decision of the Court of Appeals is affirmed .

      All sitting . All concur.

COUNSEL FOR APPELLANT,
OFFICEWARE :

JAMES GORDON FOGLE
FERRERI & FOGLE
203 SPEED BUILDING
333 GUTHRIE GREEN
LOUISVILLE, KY 40202

COUNSEL FOR APPELLEE,
STEPHEN JAY JACKSON :

MICHAEL P. NEAL
SEWELL, O'BRIEN & NEAL, PLLC
ONE RIVERFRONT PLAZA
401 WEST MAIN STREET
SUITE 1800
LOUISVILLE, KY 40202-2927