quad/graphics, Inc. v. Mario Holguin ( 2015 )

IMPORTANT NOTICE
NOT TO BE PUBLISHED OPINION
THIS OPINION IS DESIGNATED "NOT TO BE PUBLISHED."
PURSUANT TO THE RULES OF CIVIL PROCEDURE
PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C),
THIS OPINION IS NOT TO BE PUBLISHED AND SHALL NOT BE
CITED OR USED AS BINDING PRECEDENT IN ANY OTHER
CASE IN ANY COURT OF THIS STATE; HOWEVER,
UNPUBLISHED KENTUCKY APPELLATE DECISIONS,
RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR
CONSIDERATION BY THE COURT IF THERE IS NO PUBLISHED
OPINION THAT WOULD ADEQUATELY ADDRESS THE ISSUE
BEFORE THE COURT. OPINIONS CITED FOR CONSIDERATION
BY THE COURT SHALL BE SET OUT AS AN UNPUBLISHED
DECISIO,N IN THE FILED DOCUMENT AND A COPY OF THE
ENTIRE DECISION SHALL BE TENDERED ALONG WITH THE
DOCUMENT TO THE COURT AND ALL PARTIES TO THE
ACTION.
RENDERED: APRIL 2, 2015
NOT TO BE PUBLISHED
0$nintntr (1,4 ourf of 'f.fir 4.11N
2014-SC-000391-WC
QUAD/GRAPHICS, INC. APPELLANT
ON APPEAL FROM COURT OF APPEALS
V. CASE NO. 2013-CA-002063-WC
WORKERS' COMPENSATION NO. 12-01160
MARIO HOLGUIN;
HONORABLE EDWARD D. HAYS,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS' COMPENSATION BOARD APPELLEES
MEMORANDUM OPINION OF THE COURT
AFFIRMING
Appellant, Quad/Graphics, Inc., ("Quad") requests review of a Court of
Appeals decision which affirmed the denial of an offset for light duty wages
paid to Appellee, Mario Holguin, for a period he was awarded temporary total
disability ("TTD") benefits. Quad argues that the Court of Appeals, Workers'
Compensation Board ("Board"), and Administrative Law Judge ("ALJ") erred by
denying it an offset because it is unfair to pay full TTD benefits to Holguin
when he is also being paid regular wages. For the below stated reasons, we
affirm the Court of Appeals.
Holguin suffered a work-related injury at Quad when the tip of the third
finger on his left hand was severed by a machine. The finger tip was
successfully reattached by surgery that day. Holguin was then released to "one
handed duty" and returned to work the next day. He was placed in several
light duty jobs by Quad from December 28, 2011 through February 12, 2012.
The light duty work performed by Holguin during this period included checking
books for printing errors, painting the facility, and odd jobs. Cynthia Maynard,
Quad's safety coordinator, testified that the work performed by Holguin would
not have been assigned to an employee under normal conditions. She stated
the jobs were assigned to Holguin in an attempt to find work which he could
complete within the constraints of his physical restrictions. While on light
duty, Holguin was not allowed to work overtime like he was accustomed. Quad
contended that the wages paid to Holguin were not bona fide, but were paid as
a benefit to him and should be treated as being paid in lieu of TTD benefits.
The ALJ awarded Holguin TTD benefits from December 28, 2011, to
February 12, 2012. The ALJ found that Holguin had not reached maximum
medical improvement and that he was not able to physically perform his
customary work during that time period. See Central Kentucky Steel v. Wise,
19 S.W.3d 657 (Ky. 2000). The ALJ further stated:
The next question is whether [Quad] is entitled a credit for
the continuation of wages or pay that was paid by [Quad] to
[Holguin] against the [TTD] benefits owed to [Holguin]. [Quad]
acknowledged that the continuation of pay was for 40 hours only
and that no overtime was permitted. It is undisputed that
[Holguin] previously worked substantial overtime . . . [Quad]
argues that [Holguin's] work assignments did not constitute bona
fide work and thus argued that the principles enunciated in
Millersburg Military Institute v. Puckett, 260 S.W.3d 339 (Ky. 2008)
are not applicable. [Quad] argues that the pay received by
[Holguin] was a gift.
2
The burden is on the employer when seeking a credit against
its workers' compensation liability. The Act contains two bases for
an offset of the employer's liability to pay workers' compensation
income benefits by non-compensation income benefits paid to the
employee. KRS 342.730(5) provides for an offset or credit for
unemployment benefits paid to the employee. Clearly, this
exception is not applicable in this case. KRS 342.730(6) provides
that certain payments made under a non-compensation disability
plan funded solely by the employer may offset the employer's
statutory obligation to pay [TTD] benefits. However, the plan must
qualify and comply with the statute. In the case at hand, the
policy or program of [Quad] does not comply with this statutory
provision. [Quad] makes no attempt to show that its light duty
policy bears any resemblance with a program that is attempting
compliance with the statute. Based on the facts and
circumstances of this case, the ALJ finds that the money paid by
[Quad] to Mr. Holguin during the period of time in question cannot
possibly qualify for a credit against the obligatory payments of
[TTD] benefits to which [Holguin] was entitled.
(Emphasis in original). A petition for reconsideration was filed by Quad but
denied.
Quad appealed the denial of an offset for the wages it paid Holguin to the
Board. The Board affirmed and found as a matter of law that Holguin was paid
bona fide wages.' The Court of Appeals affirmed, and this appeal followed.
The ALJ has the sole discretion to determine the quality, character, and
substance of the evidence and to draw all reasonable inferences from that
evidence. Paramount Foods, Inc. v. Burkhardt, 695 S.W.2d 418 (Ky. 1985). The
Board's review of the ALJ's opinion was limited to determining whether the
1 The Board determined Holguin received bona fide wages because to be paid he had to
show up for work. However. we note that Millersburg Military Institute states that
wages are bona fide when "they were paid ostensibly for labor and because the
evidence did not permit a reasonable finding that the employer intended to pay
them in lieu of workers' compensation benefits." 260 S.W.3d at 342 (emphasis
added).
evidence was sufficient to support his findings, or if the evidence compels a
different result. Western Baptist Hospital v. Kelly, 827 S.W.2d 685, 687 (Ky.
1992). "The function of further review of the [Board] in the Court of Appeals is
to 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." Id. at 687-88.
Additionally, "an employer seeking credit against its workers' compensation
liability has the burden to show a proper legal basis for the request."
Millersburg Military Institute, 260 S.W.3d at 342.
KRS 342.730 provides two circumstances where an employer can receive
a credit against its TTD benefits obligation. KRS 342.730(5) allows an offset for
unemployment benefits paid during a period in which TTD or permanent total
disability benefits were paid. KRS 342.730(6) provides for an offset for
payments made under a qualifying employer-funded disability or sickness and
accident plan. Quad does not argue it is entitled to a credit under these
statutes and the AU found that neither provision applied in this matter.
Those findings are supported by the record.
However, Quad does argue that it should receive an offset against the
TTD benefits obligation it owes Holguin for the period he received light duty
wages because the work he performed was not bona fide. Quad argues that it
voluntarily paid Holguin his regular salary and benefits in lieu of paying him
TTD benefits and should receive a credit as granted in Triangle Insulation and
Sheet Metal Co. v. Stratemeyer, 782 S.W.2d 628 (Ky. 1990). In that matter a
4
credit for voluntary payments paid against past-due income benefits on a dollar
for dollar basis was allowed as long as future income benefits were not affected.
See Millersburg Military Institute, 260 S.W.3d at 342. Quad argues that if it
does not receive the offset, Holguin receives an unfair and unnecessary
windfall. Quad contends that without an offset for the light duty wages,
employers will stop placing its injured employees on light duty work and the
result will force employees to live off of reduced TTD benefits.
While Quad makes a good Public policy argument in favor of receiving an
offset, the workers' compensation statutes do not allow for a credit like the one
requested in this situation. "Workers' compensation is a statutory creation.
Thus, the proper forum for the argument is the legislative." Rager v. Crawford
& Co., 256 S.W.3d 4, 6 (Ky. 2008). Quad has failed to satisfy its burden to
present a proper legal basis for its offset request. Millersburg Military Institute,
260 S.W.3d at 342.
Thus, for the above stated reasons, we affirm the opinion of the Court of
Appeals.
All sitting. All concur.
5
COUNSEL FOR APPELLANT,
QUAD/GRAPHICS, INC.:
Jo Alice Van Nage11
Lori VanHoose Daniel
Patrick Joseph Murphy, II
COUNSEL FOR APPELLEE,
MARIO HOLGUIN:
Larry Duane Ashlock
6