Court Opinion

ID: 9910335
Source: CourtListenerOpinion
Date Created: 2023-12-15 15:05:10.225047+00
Date Added: 2024-06-11T12:52:18.130679
License: Public Domain

RENDERED: DECEMBER 8, 2023; 10:00 A.M.
                       NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals
                             NO. 2023-CA-0342-MR

INTECH CONTRACTING, LLC AND
ZURICH AMERICAN INSURANCE
COMPANY                                                           APPELLANTS

              APPEAL FROM MUHLENBERG CIRCUIT COURT
v.               HONORABLE BRIAN WIGGINS, JUDGE
                       ACTION NO. 15-CI-00280

MICHELE L. HAMPTON, AS
ADMINISTRATRIX OF THE ESTATE
OF GEOFFREY HAMPTON                                                  APPELLEE

                                   OPINION
                                  AFFIRMING

                                 ** ** ** ** **

BEFORE: CETRULO, COMBS, AND EASTON, JUDGES.

COMBS, JUDGE: Appellants, Intech Contracting, LLC, and its workers’

compensation carrier, Zurich American Insurance Company (collectively

Intech/Zurich), appeal from a judgment of the Muhlenberg Circuit Court ordering

them to pay $6,579.50 for an underpayment of permanent total disability benefits
-- with interest, attorney fees, and costs -- in an enforcement action filed pursuant

to KRS1 342.305.2 The statute provides as follows:

                Any party in interest may file in the Circuit Court of the
                county in which the injury occurred a certified copy . . .
                of an award of the administrative law judge unappealed
                from . . . . The court shall render judgment in accordance
                therewith and notify the parties. Such judgment shall
                have the same effect, and all proceedings in relation
                thereto shall thereafter be the same as though it had been
                rendered in a suit duly heard and determined by that
                court. . . .

                This case has a long history. By way of background, on September 9,

2009, Hampton, a diabetic, was working on a bridge resurfacing project. He was

severely injured in a fall that occurred while he was having a hypoglycemic attack.

Hampton filed a workers’ compensation claim. An Administrative Law Judge

(ALJ) dismissed the claim, finding that Hampton's hypoglycemia was likely the

cause of the incident. The Workers’ Compensation Board (Board) and this Court

affirmed. Hampton appealed to our Supreme Court, which reversed. The Court

concluded that the positional risk doctrine applied and reasoned that “[t]here is

little doubt that Hampton’s employment placed him in a position increasing the

dangerous effects of the idiopathic fall.” Hampton v. Intech Contracting, LLC,

1
    Kentucky Revised Statutes.

2
 KRS 342.305 gives the circuit court sole jurisdiction to enforce a final workers’ compensation
award. Southeast Coal Co. v. Mansfield, 231 S.W.3d 122, 124 (Ky. 2007).

                                              -2-
2011-SC-000741-WC, 2013 WL 1188040, at *4 (Ky. Mar. 21, 2013) (cleaned up).

The Court found that Hampton was eligible for workers’ compensation benefits

and remanded the matter to the ALJ for further proceedings consistent with that

holding.

              On remand, the claim was reassigned to ALJ Coleman. By Opinion,

Award and Order dated October 6, 2014, ALJ Coleman awarded permanent total

disability (PTD) benefits beginning September 9, 2009, at $523.79 per week “with

interest at the rate of 12% per annum on all due and unpaid installments of such

compensation . . . .” It continued: “[t]he employer shall pay all reasonable and

necessary medical expenses for the cure and relief of his work related injuries . . .

pursuant to KRS 342.020.”3

              Relevant facts and procedural events leading up to the matter now

before us are summarized Hampton v. Intech Contracting, LLC, 581 S.W.3d 27, 31

(Ky. 2019),4 as follows:

                     According to Hampton, notwithstanding his
              entitlement to the awarded benefits, Intech/Zurich has
              consistently failed to timely approve medical treatment,
              reimburse his out-of-pocket expenses, or pay him the
              correct amount of past due principal and interest for his
              income benefits. The validity of Hampton’s claim is
3
  Those injuries included below the knee amputation, a C2 fracture with spinal cord injury, C6
level ASIA-C tetraplegia, multiple spinal fractures, lower extremity deep vein thrombosis,
traumatic brain injury, vocal cord injury, fractured teeth, and underlying anxiety.
4
 Hampton, 581 S.W.3d 27, involved a prior appeal from an Order of the Muhlenberg Circuit
Court in an enforcement action that was ultimately dismissed as interlocutory.

                                              -3-
                supported by the fact the Department of Workers’ Claims
                opened an Unfair Claims Settlement investigation that
                resulted in Zurich agreeing to pay a civil penalty of
                $18,500.

                       On August 5, 2015, Hampton filed [the subject]
                workers’ compensation enforcement action in the
                Muhlenberg Circuit Court against Intech/Zurich, alleging
                that Intech/Zurich had failed to timely pay certain
                medical benefits to which he was entitled. As authority
                for his filing, Hampton cited KRS 342.305 . . . .

                …

                       Thereafter, through a succession of motions for
                partial summary judgment, Hampton made a variety of
                piecemeal enforcement requests. By order dated March
                6, 2017, the circuit court granted Hampton’s third, fourth,
                and fifth motions for partial summary judgment and
                ordered as follows: an award directing payment for the
                cost of a power wheelchair (third motion); an award of
                past-due income benefits in the amount of $6,579.59 for
                the underpayment of past permanent total disability
                benefits plus interest (fourth motion); and an award of
                $1,884.68 for the reimbursement of expenses for a
                medically-related trip to Oklahoma (fifth motion). . . . [5]

                Intech/Zurich [appealed the March 6, 2017 Order to the]
                Court of Appeals[.] Hampton filed a motion to dismiss,
                arguing that the circuit court’s order was interlocutory
                and did not contain CR[6] 54.02 finality language. The
                Court of Appeals agreed that the underpayment of
                benefits aspect of the appeal was interlocutory as
                Hampton’s complaint in the circuit court had claimed

5
 The circuit court’s award of the underpayment of past due income benefits plus interest (the
subject of Hampton’s fourth partial motion for summary judgment) is one of the issues in the
appeal now before us.
6
    Kentucky Rules of Civil Procedure.

                                              -4-
                 attorney fees and that claim remained pending.
                 Therefore, the Court of Appeals dismissed that aspect of
                 the appeal pursuant to CR 54.02 because the order
                 appealed from did not resolve all the issues between all
                 the parties and did not contain the necessary finality
                 language.

Id. at 29-30. However, the Court of Appeals reversed the portion of the circuit

court’s Order granting Hampton’s third and fifth summary judgment motions.

Ultimately, our Supreme Court concluded that “the entire appeal should have been

dismissed as being an appeal from a nonfinal order.” Id. at 31.

                 Hampton died on August 27, 2020. By Order entered on February 2,

2021, Michele Hampton, the Administratrix of her brother’s estate, was substituted

as the plaintiff in the enforcement action.7

                 On January 17, 2023, Hampton filed a combined motion for a final

and appealable judgment and a motion for attorney fees and costs with a

supporting memorandum and affidavits. Hampton argued that the estate is still

owed the $6,579.59 pursuant to the circuit court’s March 6, 2017, Order for the

underpayment of PTD benefits previously paid -- together with 12% interest

compounded annually from October 6, 2014, to the date when paid in full.

Hampton explained that a plaintiff may seek costs -- including attorney fees

7
    We continue to refer to the Plaintiff/Appellee as Hampton to avoid confusion.

                                                 -5-
pursuant to KRS 342.3108 in bringing an enforcement action under KRS 342.305,

citing Palmore v. Swiney, 807 S.W.2d 950 (Ky. App. 1990). Citing Meyers v.

Chapman, 840 S.W.2d 814 (Ky. 1992), Hampton noted that courts use the lodestar

method to determine an attorney fee award in which the number of attorney hours

is multiplied by the hourly rate. Hampton submitted that the lodestar amount for

attorney fees to date was $77,970.00 (259.9 hours x hourly rate of $300.00), plus

$8,126.48 for expenses advanced.

                 On February 24, 2023, the circuit court entered Judgment as follows:

                       1. The plaintiff’s motion for a final and appealable
                 judgment is SUSTAINED. IT IS HEREBY ORDERED
                 that Defendants shall pay Plaintiff $6,579.59 for the
                 underpayment of permanent total disability benefits
                 previously paid together with an interest rate of twelve
                 percent (12%) interest compounded annually from
                 October 6, 2014 to the date paid in full.

                        2. Plaintiff’s motion for attorney fees and
                 expenses is SUSTAINED. Judgment shall be entered in
                 favor of Plaintiff’s [sic] in the sum of $79,970.00 for
                 attorney fees, plus expenses in the amount of $8,126.48,

8
    KRS 342.310 provides in relevant part that:

                 (1) If any administrative law judge, the board, or any court before
                     whom any proceedings are brought under this chapter
                     determines that such proceedings have been brought,
                     prosecuted, or defended without reasonable ground, he or it
                     may assess the whole cost of the proceedings which shall
                     include actual expenses but not be limited to the following:
                     court costs, travel expenses, deposition costs, physician
                     expenses for attendance fees at depositions, attorney fees, and
                     all other out-of-pocket expenses upon the party who has so
                     brought, prosecuted, or defended them.

                                                  -6-
              against all Defendants together with an interest rate of six
              percent (6%) interest compounded annually from the date
              of this judgment to the date paid in full.

                     There being no just cause for delay, this judgment
              is final and appealable.

(Emphasis original.)

              On March 23, 2023, Intech/Zurich filed a notice of appeal to this

court. For its first argument, Intech/Zurich stated as follows:

              Enforcement cannot be given pursuant to KRS 342.305
              for compound interest for which there is no order by an
              Administrative Law Judge; and when that interest
              payment was timely made in accordance with the simple
              interest formula historically adopted and in current
              application, as proven by qualified testimony of the
              Commissioner of the Department of Workers’ Claims.

              Intech/Zurich cites no controlling authority to support its argument.

Rather, Intech/Zurich relies upon a September 7, 2007, Opinion of the Workers’

Compensation Board in Abbott Laboratories v. Smith, Claim No. 04-78095, in

which the Board dismissed the appeal because it determined, sua sponte, that it

lacked subject matter jurisdiction to rule on the matter.9

9
  Although we need not discuss Smith further, a statement at page 11 of Appellants’ brief
warrants clarification. Intech/Zurich appears to suggest that the Board in Smith quoted Parts
Depot., Inc. v. Beiswenger, 170 S.W.3d 354 (Ky. 2005), as holding that “KRS 360.040 [which
governs interest on judgments] has no application in Kentucky workers’ compensation.” Parts
Depot does not address KRS 360.040 whatsoever. Parts Depot was a wage and hour case that
the Board simply cited as authority for a rule of statutory construction.

       Intech/Zurich’s selective quotation from Commissioner Lovan’s testimony at page 12 of
Appellants’ brief also warrants clarification. Intech/Zurich omits that Commissioner Lovan

                                             -7-
                “[I]f a court does not have subject matter jurisdiction, the court has no

power to do anything at all.” Commonwealth Health Corp. v. Croslin, 920 S.W.2d

46, 48 (Ky. 1996) (cleaned up); see Shockley v. Okeke, 92 Conn. App. 76, 85, 882

A.2d 1244, 1250 (2005) (cleaned up) (“A court lacks discretion to consider the

merits of a case over which it is without jurisdiction. Lacking jurisdiction, the

court should not deliver an advisory opinion on matters entirely beyond its power

to adjudicate. Such an opinion . . . is not binding on anyone.”).

                There is no “Smith case precedent” on the issue of post-judgment

compound interest as Intech/Zurich suggests at page 15 of Appellants’ brief.10 “It

is not our function as an appellate court to research and construct a party’s legal

arguments . . . .” Hadley v. Citizen Deposit Bank, 186 S.W.3d 754, 759 (Ky. App.

2005). “Assertions of error devoid of any controlling authority do not merit

relief.” Koester v. Koester, 569 S.W.3d 412, 414 (Ky. App. 2019). Such is clearly

the case here.

testified “I’m not talking about what happens in circuit court, I don’t want to get into that . . . .”
when asked about the computation of interest and his “read” of the Board’s Opinion in Smith,
supra (Lovan depo., p. 46).
10
  Abbot Laboratories v. Smith, 205 S.W.3d 249 (Ky. App. 2006), to which Intech/Zurich refers
does not address interest. It only involved the compensability of the underlying workers’
compensation claim -- “[t]he sole issue in this appeal is whether Smith was within the course of
his employment when the car accident occurred following his stop for dinner.” Id. at 253.

       There has been a disturbing pattern of omission, distortion, and misrepresentation
throughout the arguments propounded by Intech/Zurich.

                                                  -8-
             Next, Intech/Zurich takes issue with the circuit court’s award of

attorney fees and costs. As noted above, KRS 342.310(1) permits “any court

before whom any proceedings are brought under this chapter” to assess the whole

cost of the proceedings, including attorney fees, “if it determines that such

proceedings have been brought, prosecuted, or defended without reasonable

ground[.]” Whether to assess such cost is a matter of discretion. Steel Creations

By and Through KESA, The Kentucky Workers’ Compensation Fund v. Injured

Workers Pharmacy, 532 S.W.3d 145, 157 (Ky. 2017).

             In an apparent attempt to persuade us that it did not defend the

proceedings without reasonable ground, Intech/Zurich contends that it was

proactive in attempting to settle the case, that it made offers of judgment, and that

it was Hampton who acted without reasonable ground in pursuing the enforcement

action. Zurich also contends that the fee awarded should have been proportionate

to or in relation to the degree of success obtained.

             CR 52.01 provides that “[i]n all actions tried upon the facts without a

jury or with an advisory jury, the court shall find the facts specifically and state

separately its conclusions of law thereon and render an appropriate judgment[.]”

CR 52.04 provides that:

             A final judgment shall not be reversed or remanded
             because of the failure of the trial court to make a finding
             of fact on an issue essential to the judgment unless such
             failure is brought to the attention of the trial court by

                                          -9-
             a written request for a finding on that issue or by a
             motion pursuant to Rule 52.02.

(Emphasis added.) The Judgment entered by the Muhlenberg Circuit Court

contains no findings of fact with respect to the award of attorney fees and

expenses. Intech/Zurich made no request for findings as mandated by CR 52.04

regarding the essential issue of whether it defended the proceedings without

reasonable ground. Thus, the issue is waived before the appellate court. Kentucky

Lottery Corp. v. Stewart, 41 S.W.3d 860 (Ky. App. 2001).

             “When given discretion, trial courts are permitted to make decisions

of their choosing within the realm of possible choices, and appellate courts are

powerless to disturb such rulings that fall within that realm even if the appellate

court would make a different choice.” Nebraska All. Realty Company v. Brewer,

529 S.W.3d 307, 311 (Ky. App. 2017) (cleaned up). In the case before us,

Hampton’s counsel submitted detailed documentation to support his motion for

attorney fees and expenses. Thus, we cannot say that the circuit court’s award falls

outside the realm of possible choices.

             We affirm the Judgment of the Muhlenberg Circuit Court.

             ALL CONCUR.

                                         -10-
BRIEFS FOR APPELLANTS:     BRIEF FOR APPELLEE:

Walter A. Ward             Charles W. Gorham
Betsy R. Catron            Lexington, Kentucky
Lexington, Kentucky

                         -11-