Court Opinion

ID: 6324628
Source: CourtListenerOpinion
Date Created: 2022-03-18 14:06:28.798957+00
Date Added: 2024-06-11T09:21:53.884199
License: Public Domain

RENDERED: MARCH 11, 2022; 10:00 A.M.
                       NOT TO BE PUBLISHED

               Commonwealth of Kentucky
                         Court of Appeals

                            NO. 2020-CA-0632-WC

PAMELA JOHNSON                                                  APPELLANT

                 PETITION FOR REVIEW OF A DECISION
v.             OF THE WORKERS’ COMPENSATION BOARD
                       ACTION NO. WC-13-60999

PRESCOTECH INDUSTRIES, INC.;
DANIEL CAMERON, THE ATTORNEY
GENERAL OF KENTUCKY;
HONORABLE JANE RICE WILLIAMS,
ADMINISTRATIVE LAW JUDGE;
AND WORKERS’ COMPENSATION
BOARD                                                            APPELLEES

                                  OPINION
                                 AFFIRMING

                                ** ** ** ** **

BEFORE: CLAYTON, CHIEF JUDGE; CETRULO AND GOODWINE,
JUDGES.

CLAYTON, CHIEF JUDGE: Pamela Johnson appeals from an opinion of the

Workers’ Compensation Board which affirmed in part the ruling of the
Administrative Law Judge (ALJ) that Johnson’s workers’ compensation benefits

were subject to the amended version of Kentucky Revised Statutes (KRS)

342.730(4). Johnson contends that the statutory amendment, which has the effect

of terminating her benefits when she reaches the age of seventy, should not be

applied retroactively and is unconstitutional. In light of recent Kentucky Supreme

Court precedent, we affirm.

             Johnson was born in 1958 and began working for Prescotech

Industries, Inc. in 1998. She suffered a work-related back injury on November 4,

2013. On February 6, 2015, the ALJ awarded Johnson temporary total disability

benefits, permanent partial disability benefits, and medical benefits.

             Johnson thereafter experienced a worsening of her condition and

underwent two surgeries. On May 12, 2016, she filed a motion to reopen, alleging

that she was now permanently totally disabled. The ALJ considered the medical

evidence and found that Johnson had proved a worsening of her condition and,

upon consideration of her age, limited vocational experience, and significant

medical restrictions, concluded it was not likely she would be able to find and

continue sustained employment. On November 20, 2018, the ALJ awarded

permanent total disability benefits to be paid beginning from the date of the motion

to reopen until Johnson reaches the age of seventy. This limitation was in

accordance with the amendment of KRS 342.739(4), which became effective on

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July 14, 2018, and provides in pertinent part: “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.”

               Johnson appealed to the Board, arguing that the ALJ erred in applying

the amended version of the statute retroactively to limit the award of benefits and

that the amended statute was unconstitutional.

               Relying on Holcim v. Swinford, 581 S.W.3d 37 (Ky. 2019), the Board

held that the ALJ did not err in retroactively applying the amended version of the

statute. It further held that, as an administrative body, it did not have the

jurisdiction to rule on the constitutionality of the amended statute. See Blue

Diamond Coal Co. v. Cornett, 300 Ky. 647, 649, 189 S.W.2d 963, 964 (1945).

The Board also reversed the ALJ’s award of temporary total disability benefits for

the period predating the motion to reopen, but this ruling is not at issue in this

appeal.

               Johnson petitioned for review of the Board’s decision. On the

Attorney General’s motion,1 the appeal was held in abeyance pending finality in

two Kentucky Supreme Court cases which addressed identical issues. When these

1
  The Attorney General was notified of the challenge to the constitutionality of the statute as
required under KRS 418.075(2).

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opinions became final, the appeal was returned to the active docket and the

Commonwealth thereafter filed a response to Johnson’s petition.

            Upon review, we “correct the Board only where the . . . 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.” Western Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky.

1992). Furthermore, “as an intermediate appellate court, this Court is bound by

established precedents of the Kentucky Supreme Court. [Rules of the Supreme

Court] 1.030(8)(a). The Court of Appeals cannot overrule the established

precedent set by the Supreme Court or its predecessor Court.” Smith v. Vilvarajah,

57 S.W.3d 839, 841 (Ky. App. 2000).

            Johnson argues that KRS 342.730(4), the 2018 provision terminating

benefits when an employee reaches the age of seventy, should not be applied

retroactively in her case because it is not remedial. She acknowledges that the

version of KRS 342.730(4) which was in effect at the time of her injury would also

have limited her benefits by terminating them upon the date on which she qualifies

for normal old-age Social Security retirement benefits. This latter provision was

held to be unconstitutional in Parker v. Webster County Coal, LLC (Dotiki Mine),

529 S.W.3d 759, 769-70 (Ky. 2017). Johnson argues that this provision could be

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severed from the rest of the statute and that the duration of her benefits should be

controlled by KRS 342.730(1), which contains no age limitation.

             We agree with the Board that we are bound in this matter by the

Kentucky Supreme Court’s opinion in Holcim, supra, which states that the 2018

amendment of KRS 342.730(4) applies retroactively to those cases which “have

not been fully and finally adjudicated, or are in the appellate process, or for which

time to file an appeal [h]as not lapsed, as of the effective date of this Act.”

Holcim, 581 S.W.3d at 44. The effective date of the statutory amendment was July

14, 2018. On that date, Johnson’s motion to reopen, which she filed on May 12,

2016, was still pending before the ALJ. Consequently, her case had not been fully

and finally adjudicated and the amendment terminating her benefits when she

reaches the age of seventy must be applied.

             Next, Johnson argues that the retroactive application of the

amendment is unconstitutional as violative of the contracts clause of the United

States and Kentucky Constitutions and as an exercise of arbitrary power in

contravention of Section 2 of the Kentucky Constitution.

             As noted, this appeal was held in abeyance pending the finality of two

opinions of the Kentucky Supreme Court which addressed precisely these issues.

In Dowell v. Matthews Contracting, 627 S.W.3d 890 (Ky. 2021), the Supreme

Court rejected the appellants’ argument that the amended version of KRS

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342.730(4) violated the Contracts Clause of both the United States and Kentucky

Constitution, expressly stating that the Workers’ Compensation Act “does not

constitute a contract between Kentucky workers and their employers or the state.

Instead, the [Act] is a statutory scheme that may be amended as the General

Assembly chooses, provided it fits within our constitutional framework.” Id. at

894-95. The Court stressed that the Act “provides only statutory rights, not

contractual ones.” Id. at 895.

             Johnson’s argument that the retroactive application of the amended

statute constitutes an arbitrary exercise of power in violation of Section 2 of the

Kentucky Constitution was addressed and rejected by the Supreme Court in Cates

v. Kroger, 627 S.W.3d 864, 871-72 (Ky. 2021). There, the Court found “no

arbitrary exercise of legislative authority in the retroactive application of the

amendment.” Id. at 871. It deferred to the power of the legislature to “amend the

law and make the change applicable to pending cases, even when the amendment

is outcome determinative.” Id.

             Under the foregoing clear and unambiguous Kentucky Supreme Court

precedent, we affirm the opinion of the Board.

             ALL CONCUR.

                                          -6-
BRIEF FOR APPELLANT:    BRIEF FOR APPELLEE
                        ATTORNEY GENERAL OF
Wayne C. Daub           KENTUCKY:
Louisville, Kentucky
                        Matthew F. Kuhn
                        Solicitor General

                        Brett R. Nolan
                        Principal Deputy Solicitor General

                        Alexander Y. Magera
                        Assistant Solicitor General
                        Frankfort, Kentucky

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