Court Opinion

ID: 5135483
Source: CourtListenerOpinion
Date Created: 2021-12-16 16:08:02.302126+00
Date Added: 2024-06-11T08:23:49.492074
License: Public Domain

IMPORTANT NOTICE
        NOT TO BE PUBLISHED OPINION

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PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C),
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                                          RENDERED: DECEMBER 16, 2021
                                                  NOT TO BE PUBLISHED

              Supreme Court of Kentucky
                             2020-SC-0307-WC

RESCARE, INC.                                                     APPELLANT

                   ON APPEAL FROM COURT OF APPEALS
V.                         NO. 2020-CA-0218
                    WORKERS’ COMPENSATION BOARD
                           NO. WC-12-90001

PATRICIA MONTGOMERY (CAIN);                                       APPELLEES
DR. KEITH HALL, PIKEVILLE MEDICAL
CENTER; DR. KATHERINE BALLARD, THE
PAIN TREATMENT CENTER OF THE
BLUEGRASS; HONORABLE CHRIS DAVIS,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS’ COMPENSATION BOARD

                 MEMORANDUM OPINION OF THE COURT

                                AFFIRMING

     In this post-settlement medical dispute involving the workers’

compensation claim of Patricia Montgomery (Cain), hereinafter Montgomery,

ResCare, Inc. appeals from the determination of the Administrative Law Judge

(ALJ) that a contested total right knee replacement surgery was compensable.

After the ALJ reconsidered his conclusion but made no change, the Workers’

Compensation Board (Board) and the Kentucky Court of Appeals each affirmed

the ALJ’s determination. Now, having thoroughly considered the parties’

arguments and the record, we affirm.
                  A. FACTUAL AND PROCEDURAL HISTORY

      Montgomery was injured on three separate dates while working as a

residential caregiver and job coach in a ResCare group home in Inez, Kentucky.

On January 26, 2011, her right knee was injured when a resident grabbed her

leg, twisted it, and did not let go for five minutes until help arrived. Later, on

August 26, 2011, her back was injured while lifting another resident into bed

resulting in a weeklong absence from work. Finally, on March 28, 2012, while

cleaning walls and carpet at work and carrying a five-gallon bucket of cleaning

solution, her left knee gave way causing her to fall onto her right side over a

carpet cleaner. This third incident resulted in a head injury, accompanied by

headaches, blurred vision, and double vision, as well as right knee and leg,

neck and back complaints. She was transported to the hospital where she was

“diagnosed with an injury to her head, head contusion, cervical sprain, and

back sprain.” Discharged from the emergency room with medication, she did

not return to work after this fall and was ultimately awarded Social Security

Disability payments.

      Montgomery was treated or examined by numerous medical doctors and

a vocational expert, and an MRI obtained on May 3, 2012, demonstrated

complex tearing and irregular injuries involving her right knee. A vocational

report prepared on May 9, 2013, referenced early indications Montgomery

might need a total right knee replacement.

      The parties ultimately reached a compromise settlement encompassing

all three work-related incidents based on a lump sum payment of $40,000.00.

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A Form 110, Agreement as to Compensation and Order Approving Settlement

(Settlement Agreement), was approved by the ALJ on April 10, 2014.

      Pursuant to the Settlement Agreement, the parties specifically

apportioned $1,000.00 for the complete dismissal of the January 26, 2011,

injury claim; $1,000.00 for the complete dismissal of the August 26, 2011,

injury claim; and $35,000.00 for permanent partial disability arising from the

March 28, 2012, injury claim, with an additional $1,000.00 for waiver of

related vocational rehabilitation, $1,000.00 for waiver of the right to reopen,

and $1,000.00 for waiver and dismissal of any related psychological claim.

      Regarding medical expenses, however, the Settlement Agreement

specifically stated, “[t]he claimant retains her right to payment of medical

expenses in relation to her right knee and back.” In bold and italicized print,

the Settlement Agreement further acknowledged Montgomery agreed to dismiss

all rights and claims pertaining to the three work-related incidents except for

“her right to reasonable and necessary medical treatment for the right knee

and back,” while ResCare expressly agreed “it will raise no objection to

payment of medical expenses related to the back or right knee, based on the

allegation that the treatment actually relates to one of the 2011 injuries, rather

than the 2012 injury.” In a separate, boxed-in section relating specifically to

waiver of medical coverage, Montgomery attested her understanding that “I am

waiving all medical coverage except for my back and right knee . . . .”

Importantly, the Settlement Agreement executed by both Montgomery and

ResCare, and approved by the ALJ, failed to specifically limit compensability of

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medical benefits relative to her back and right knee condition to any particular

work-related incident, whether occurring in 2011 or 2012.

      Several years later, based on Montgomery’s medical history, worsening

pain, and medical examinations conducted in July, August, and November of

2018, her treating family physician, Dr. Keith Hall, concluded she was in need

of a total right knee replacement as the result of the March 28, 2012, work-

related incident. Thus, Dr. Hall proceeded to request pre-certification for the

recommended procedure.

      At the request of ResCare, Dr. Steven Shockey subsequently conducted a

records review and independent medical examination (IME) of Montgomery’s

right knee condition. He agreed a total right knee replacement was reasonable

and necessary based on symptoms and degeneration of the knee, but opined

surgery was necessitated by the natural progression of her pre-existing

arthritic condition, radiographically noted in July 2011 films, rather than due

to any deterioration of any work-related injury in either 2011 or 2012.

      Based on Dr. Shockey’s medical opinion, ResCare filed an amended Form

112, Medical Dispute, on December 13, 2018, “contesting the compensability of

the proposed total knee replacement as to work-relatedness/causation.”

Following a telephonic benefit review conference, the ALJ entered an opinion

and order on July 18, 2019, determining the medical procedure to be

compensable. In doing so, the ALJ meticulously set forth factual findings

supportive of his conclusion.

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      Characterizing as “unusual” the broad language contained in the

Settlement Agreement, the ALJ determined by its clear terms ResCare had

“waived all right to contest work relatedness/causation of future medical

treatment for the right knee or low back” related to any of the work-related

incidents having occurred in 2011 or 2012, and Montgomery had bargained

away “all treatment for any condition other than the right knee and low back.”

Finding the recommended medical procedure to be both reasonable and

necessary for the cure and relief of Montgomery’s condition, the ALJ noted even

Dr. Shockey, the physician who conducted an independent medical

examination on behalf of ResCare, agreed with Montgomery’s treating

physicians. Finding Dr. Hall’s opinion attributing Montgomery’s condition and

need for surgery to the continuing effects of her March 28, 2012, incident, to

have been “based on [her] subjective history,” the ALJ instead referenced

medical “records from Dr. Anbu Nadar, Dr. Don Chaffin, and x-rays and MRIs”

contained in the record in determining her condition and recommended

procedure instead related back to her January 26, 2011, right knee injury.

Most importantly, in determining the total right knee replacement surgery was

compensable, the ALJ found:

      the Settlement Agreement clearly shows the parties [sic] belief and
      intent, negotiated into reality and approved the ALJ, that the right
      knee and low back, remain forever compensable based on
      causation while the other claims were forever dismissed.

      As to the rule that Settlement Agreements are not binding as to
      anything contained therein[,] that rule does not apply to something
      that was so clearly set forth and bargained for as in this case.

                                       5
      The condition of the right knee, and the need for the right total
      knee replacement related to the 2011 dates of injury and thus
      cannot be contested on causation.

      ResCare petitioned the ALJ to reconsider. Based on Dr. Shockey’s

medical opinion, ResCare argued Montgomery’s deteriorated right knee

condition and need for surgery was attributable to the natural progression of

non-work-related degenerative changes rather than the effects of any work-

related incident occurring in 2011 or 2012. Alternatively, ResCare argued the

Settlement Agreement should have been interpreted as having limited its

liability for future medical treatment of Montgomery’s right knee and back

conditions to the ongoing effects of her March 28, 2012, work-related injury,

and to the exclusion of either of the 2011 incidents. Based thereon, because

the ALJ had attributed Montgomery’s current right knee condition and need for

surgery to her January 26, 2011, incident, ResCare argued the ALJ erred in

finding the recommended medical procedure to be compensable.

      On reconsideration, the ALJ rejected ResCare’s arguments, holding he

had reasonably interpreted the Settlement Agreement based on its clear and

unambiguous terms. The ALJ further held his factual findings were both

sufficient and supported by the record.

      After the Board affirmed the ALJ’s ruling, ResCare appealed to the Court

of Appeals. Quoting the Board’s analysis, the Court of Appeals cited to Stone v.

Kentucky Farm Bureau Mutual Insurance Company, 34 S.W.3d 809 (Ky. App.

2000), holding:

      [A] settlement agreement constitutes a contract by and between the
      parties. The scope . . . must be determined primarily by the intent
                                          6
      of the parties as expressed within the four corners of the
      document. The terms . . . should be interpreted in light of the
      usage and understanding of the average person.

The appellate panel agreed with the ALJ’s conclusion that the terms of the

Settlement Agreement clearly expressed the understanding of the parties that

future medical treatment for the knee would remain compensable. In doing so,

the panel referenced the Settlement Agreement’s declaration that “[t]he

claimant retains her right to payment of medical expenses in relation to her

right knee and back” and Montgomery’s attestation of her understanding “that

I am waiving all medical coverage except for my back and right knee[]” as clear

evidence of parties’ intent. The panel concluded:

      These two provisions do not reference limitations on medical care
      for the knee. The agreement expressly waived ResCare’s ability to
      assert the 2011 injury as a basis to challenge causation. The ALJ
      interpreted the agreement as the parties expressing an intent that
      the knee be compensable and precluding ResCare from asserting
      the 2011 injury is the cause of the knee condition. The ALJ was
      without authority to use the grounds bargained away by ResCare
      to find the contested injury is not compensable.

The panel emphasized its agreement that language incorporated by the parties

into their joint Settlement Agreement clearly indicated “reasonable and

necessary medical expenses related to either the 2011 or the 2012 injur[ies]”

would remain compensable and ResCare would be foreclosed from denying

such payments by asserting treatment related to one of the two 2011 work-

related incidents rather than the 2012 incident, stating, “[t]he ALJ could

reasonably conclude the parties intended to make a bargain including

compensability of medical expenses for the work-related knee, whether from

the 2011 or the 2012 injury.”
                                        7
      However, in so ruling, the appellate panel characterized the ALJ’s holding

that treatment for Montgomery’s right knee and back conditions would “remain

forever compensable based on causation” as “somewhat overbroad” but “at

most harmless error.” The panel acknowledged:

      ResCare is not precluded from asserting some other cause, such as
      natural aging, progression of a preexisting condition independent
      of the work injuries in 2011 or 2012, or subsequent events as it
      relates to future care.

Even so, the panel pointed out the ALJ had “made a finding as to causation,”

specifically determining, “[t]he condition of the right knee, and the need for the

right total knee replacement [is] related to the 2011 dates of injury and thus

cannot be contested on causation.” The panel concluded:

      ResCare’s argument that the ALJ’s finding of injury occurring in
      2011 is essentially an attempt to assert the 2011 injury as a
      defense to causation, which it bargained away. Because the
      surgery could not be contested on grounds that it was causally
      related to the 2011 injury, and because the ALJ determined the
      surgery is reasonable and necessary, he did not err in finding the
      surgery compensable.

      Having determined the disputed medical treatment to be causally related,

and therefore compensable, the panel also held the ALJ had correctly found the

recommended procedure to be both reasonable and necessary, noting “there is

no medical evidence that the proposed right total knee replacement is not

reasonable and necessary” and that even ResCare’s IME physician, Dr.

Shockey, had indicated the same.

      ResCare appealed.

                                        8
                           B. STANDARD OF REVIEW

      The well-established appellate standard of review relative to workers’

compensation decisions:

      is to correct the Board only where 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.

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

of review in workers’ compensation claims differs depending on whether we are

reviewing questions of law or questions of fact.” Miller v. Tema Isenmann, Inc.,

542 S.W.3d 265, 270 (Ky. 2018).

      An appellate court reviews de novo a decision of the Board or ALJ

regarding proper interpretation of the law or its application of facts. Id.

(citation omitted). However, with regard to factual findings, “[t]he ALJ as fact

finder has the sole authority to judge the weight, credibility, substance, and

inferences to be drawn from the evidence.” LKLP CAC Inc. v. Fleming, 520

S.W.3d 382, 386 (Ky. 2017) (citation omitted).

      An ALJ may draw reasonable inferences from the evidence, reject
      any testimony, and believe or disbelieve various parts of the
      evidence, regardless of whether it comes from the same witness or
      the same adversary party’s total proof. Jackson v. Gen.
      Refractories Co., 581 S.W.2d 10 (Ky. 1979); Caudill v. Maloney’s
      Discount Stores, 560 S.W.2d 15 (Ky. 1977); Magic Coal Co. v. Fox,
      19 S.W.3d 88 (Ky. 2000). In that regard, an ALJ is vested with
      broad authority to decide questions involving causation. Drava
      Lime Co. v. Eakins, 156 S.W.3d 283, 288-290 (Ky. 2005).

Miller v. Go Hire Emp’t Dev., Inc., 473 S.W.3d 621, 629 (Ky. App. 2015).

                                         9
      “When the decision of the fact-finder favors the person with the burden

of proof, his only burden on appeal is to show that there was some evidence of

substance to support the finding, meaning evidence which would permit a fact-

finder to reasonably find as it did.” Special Fund v. Francis, 708 S.W.2d 641,

643 (Ky. 1986). “Substantial evidence means evidence of substance and

relevant consequence having the fitness to induce conviction in the minds of

reasonable men.” Smyzer v. B. F. Goodrich Chem. Co., 474 S.W.2d 367, 369

(Ky. 1971).

      However, “[i]f the fact-finder finds against the person with the burden of

proof, his burden on appeal is infinitely greater[]” and “[h]e must show that the

evidence was such that the finding against him was unreasonable[,] because

the finding cannot be labeled ‘clearly erroneous’ if it reasonably could have

been made.” Special Fund, 708 S.W.2d at 643. In short, “an ALJ’s decision

should not be overturned on appeal unless it ‘is so unreasonable under the

evidence that it must be viewed as erroneous as a matter of law.’” Eddie’s Serv.

Ctr. v. Thomas, 503 S.W.3d 881, 886 (Ky. 2016) (quoting Ira A. Watson Dep’t

Store v. Hamilton, 34 S.W.3d 48, 52 (Ky. 2000)).

      As specifically relates to workers’ compensation medical benefits, an

employer is required to pay for reasonable and necessary medical treatment

resulting from the effects of a work-related injury. Kentucky Revised Statute

(KRS) 342.020(1). However, an employer may move to reopen an award and

contest whether medical treatment is reasonable and necessary or whether the

need for the treatment is causally-related to the work injury. FEI Installation,

                                       10
Inc. v. Williams, 214 S.W.3d 313, 319 (Ky. 2007). The employer carries the

burden in challenging the medical expenses and must file a timely motion to

reopen the matter. Crawford & Co. v. Wright, 284 S.W.3d 136, 140 (Ky. 2009)

(citing Mitee Enters. v. Yates, 865 S.W.2d 654 (Ky. 1993)). Hence, ResCare has

the burden of proof to show Montgomery’s recommended procedure was

unreasonable and unnecessary or not work-related.

                                  C. ANALYSIS

      With the foregoing standards of review and legal authority in mind, we

now turn to ResCare’s arguments raised in this appeal. Before this Court,

ResCare essentially argues the ALJ misinterpreted and misapplied the terms of

the parties’ joint Settlement Agreement. In the alternative, ResCare argues the

ALJ erred in finding Montgomery’s right knee condition and recommended

medical procedure were causally-related to her January 26, 2011, work-related

injury rather than to the natural progression of a pre-existing arthritic

condition. For the following reasons, we reject ResCare’s assertions of ALJ

error and affirm.

      Regarding ResCare’s argument alleging the ALJ erroneously interpreted

and applied the parties’ Settlement Agreement, thereby depriving the employer

of the benefit of its bargain, and resulting in gross injustice, we note:

      “An agreement to settle legal claims is essentially a contract
      subject to the rules of contract interpretation.” Cantrell Supply,
      Inc. v. Liberty Mutual Insurance Co., 94 S.W.3d 381, 384 (Ky. App.
      2002). The primary objective is to effectuate the intentions of the
      parties. Id. When no ambiguity exists in the contract, we look
      only as far as the four corners of the document to determine the
      parties' intentions. Hoheimer v. Hoheimer, 30 S.W.3d 176, 178

                                        11
      (Ky. 2000). “The fact that one party may have intended different
      results, however, is insufficient to construe a contract at variance
      with its plain and unambiguous terms.” Cantrell, 94 S.W.3d at
      385.

3D Enters. Contracting Corp. v. Louisville & Jefferson Cnty. Metro. Sewer Dist.,

174 S.W.3d 440, 448 (Ky. 2005). In short, in the absence of ambiguity, a

settlement agreement must be interpreted as intending or meaning what it

clearly and plainly says. Further, because a Settlement Agreement is

characterized as a contract, we consider its interpretation de novo. Miller, 542

S.W.3d at 270.

      In the present appeal, the parties individually adopted plain language in

their joint Settlement Agreement evincing a bargained mutual compromise

relative to Montgomery’s three work-related injuries—two having occurred in

2011 and the other having occurred in 2012. Based on the parties’ negotiated

lump sum settlement amount, Montgomery surrendered all rights except future

medical benefits relative to her right knee and back condition and ResCare

accepted continued responsibility for such treatment so long as deemed

reasonable and necessary and causally-related to any of the three work-related

incidents.

      We agree with the ALJ, Board, and Court of Appeals that the Settlement

Agreement’s language was unambiguous, and the parties’ intentions were

made manifest by clear terms contained within the four corners of the

document. Had ResCare intended future medical benefits to be limited to the

March 28, 2012, incident, it need not have acquiesced to the Settlement

Agreement. Yet, it did. ResCare could have insisted upon insertion of plain
                                       12
language expressly limiting its liability for future medical benefits specifically to

the March 28, 2012, incident. Yet, it did not. Regardless, we are precluded

from reading into the document any intent contrary to its plain terms and

reasonable understanding, and we affirm the sound legal analysis of the Court

of Appeals.

      Here, based on ResCare’s agreement to a lump sum payment of

$40,000.00, the parties’ Settlement Agreement clearly set forth Montgomery’s

dismissal, settlement, or waiver of her respective claims relative to her rights to

income benefits, vocational rehabilitation services, medical treatment of any

work-related psychological condition, and medical treatment of all physical

conditions excepting her right knee and back conditions. No language limited

ResCare’s liability for future right knee or back medical treatment to any

particular injury date, but simply referred generally to Montgomery’s retention

of her right to such benefits. ResCare’s current argument seems disingenuous

given its previous agreement to “raise no objection to payment of medical

expenses related to the back or right knee, based on the allegation that the

treatment actually relates to one of the 2011 injuries, rather than the 2012

injury.”

      Finally, regarding ResCare’s argument that the ALJ improperly adopted

an overly expansive interpretation of the parties’ Settlement Agreement by

broadly stating Montgomery’s right to future medical benefits would “remain

forever compensable based on causation,” we again agree with the sound legal

analysis of the Court of Appeals. Any reasonable reading of the Settlement

                                         13
Agreement indicates ResCare was never prevented from defending against

liability for Montgomery’s future medical treatment based on some alternative

cause, “such as natural aging, progression of a preexisting condition

independent of the work injuries in 2011 or 2012, or subsequent events as it

relates to future care.”

      Importantly, because the ALJ’s factual finding that Montgomery’s current

right knee condition and need for surgery is due to ongoing effects of her

January 26, 2011, work-related injury was based on substantial medical

evidence from Dr. Nadar, Dr. Chaffin, and various x-rays and MRIs, it matters

not that Dr. Shockey was of the opinion that the condition and surgery arose

due to the natural progression of a pre-existing arthritic knee condition. Here,

the ALJ reasonably determined the proper weight to be assigned to conflicting

medical evidence and reached a reasonable conclusion regarding causation.

Fleming, 520 S.W.3d at 386; Miller, 473 S.W.3d at 629. As both the Board and

Court of Appeals noted, and we agree:

      Contrary to ResCare’s argument, the ALJ made a finding as to
      causation, stating, “The condition of the right knee, and the need
      for the right total knee replacement related to the 2011 dates of
      injury and thus cannot be contested on causation.”

The ALJ further found there was no medical evidence indicating the proposed

right total knee replacement is not reasonable and necessary.

                               D. CONCLUSION

      Because ResCare has failed to meet its burden of demonstrating the

ALJ’s decision regarding compensability of Montgomery’s current right knee

                                        14
condition and need for surgical intervention was unreasonable, and therefore

clearly erroneous, we discern no error and affirm.

      All sitting. All concur.

COUNSEL FOR APPELLANT:

Samantha Steelman
Mark Reynolds Bush
Reminger Co., L.P.A.

APPELLEES:

Patricia Montgomery (Cain), pro se

Dr. Keith Hall, pro se
Pikeville Medical Center

Dr. Katherine Ballard, pro se
The Pain Treatment Center of the Bluegrass

ADMINISTRATIVE LAW JUDGE:

Honorable Chris Davis

WORKERS’ COMPENSATION BOARD:

Michael Wayne Alvey

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