Tractor Supply v. Patricia Wells ( 2022 )

RENDERED: JUNE 16, 2022
TO BE PUBLISHED
Supreme Court of Kentucky
2021-SC-0286-WC
TRACTOR SUPPLY APPELLANT
ON APPEAL FROM COURT OF APPEALS
No. 2021-CA-0296
WORKERS’ COMPENSATION BOARD
No. 2019-WC-88426
V.
PATRICIA WELLS; APPELLEES
HONORABLE STEPHANIE L. KINNEY,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS’ COMPENSATION BOARD
OPINION OF THE COURT BY JUSTICE CONLEY
AFFIRMING
This case is before the Court on appeal as a matter of right1 by Tractor
Supply, the Appellant, from the Court of Appeals’ ruling declining to extend the
holding in Livingood v. Transfreight, LLC, 467 S.W.3d 249 (Ky. 2015) to KRS
342.730(1)(c)1, colloquially known as the three-multiplier. The only issue
presented is whether this Court should now decide, as a matter of public
policy, whether our holding “that the legislature did not intend to reward an
employee's wrongdoing with a double benefit[,]” Livingood, 467 S.W.3d at 259,
should now be extended to preclude application of the three-multiplier when a
1 Ky. Const. § 115.
claimant has been terminated for misconduct. Having reviewed the statute, the
decision of the Court of Appeals, and the record, we decline to extend Livingood
to the three-multiplier.
I. Facts and Procedural Posture
Because this appeal presents a narrow legal question, we omit the
superfluous facts as to the injury of Patricia Wells, the Appellee. It suffices to
note the ALJ did make a finding of fact that Wells sustained a right shoulder
and cervical spine work injury on August 16, 2018, and that she retains a 15%
permanent impairment. This was primarily based on the medical opinion of Dr.
Ballard, who was the most recent doctor to evaluate Wells prior to the closing
of evidence and who evaluated Wells on behalf of Tractor Supply. The ALJ cited
Dr. Farrage’s opinion in support as well. The ALJ made a finding of fact that
Wells’ pre- and post-injury average weekly wage was not the same or greater
precluding application of the two-multiplier. Although the ALJ commented that
Tractor Supply had failed to submit a full 52 weeks of wage records prior to
Wells’ injury, she calculated the pre- and post-injury wages according to the
wage records that were submitted. Finally, the ALJ made a finding of fact that
Wells did not have the physical capacity to perform her pre-injury work, based
on Dr. Ballard’s opinion, justifying application of the three-multiplier. Wells
continued to work until January 24, 2019, when, according to Tractor Supply,
she was fired for allegedly filing false information on a company report.
The ALJ rendered her decision, and Tractor Supply requested additional
findings of fact from the ALJ considering the holding in Livingood. The ALJ
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determined no additional findings were necessary because that case applies to
the two-multiplier, KRS 342.730(1)(c)2. On appeal to the Workers’
Compensation Board, the Board similarly determined Livingood did not apply
to the three-multiplier. Tractor Supply appealed to the Court of Appeals.
The Court of Appeals affirmed, holding the two- and three-multipliers
had distinct purposes—"When examining the two statutes together, KRS
342.730(1)(c)1. is focused on an employee's physical abilities in determining
whether a multiplier is appropriate and KRS 342.730(1)(c)2. is concerned with
whether an employee leaves his employment.” Therefore, because
KRS 342.730(1)(c)2. is related to leaving employment, it is entirely
reasonable for the Kentucky Supreme Court to determine that
when an employee loses his job due to reckless misconduct,
awarding him or her a double benefit would be unreasonable and
against public policy. We decline to extend the Livingood reasoning
to KRS 342.730(1)(c)1. Whether Wells continued in her
employment with Tractor Supply is irrelevant when it comes to the
three-multiplier because the increase in benefits is not tied to
continued employment. Due to Wells’ injury and work restrictions,
she was unable to return to the type of work she performed pre-
injury. “To determine if an injured employee is capable of returning
to the type of work performed at the time of injury, an ALJ must
consider whether the employee is capable of performing ‘the actual
jobs that the individual performed.’” Trane Commercial Systems v.
Tipton, 481 S.W.3d 800, 804 (Ky. 2016) (citing Ford Motor Co. v.
Forman, 142 S.W.3d 141, 145 (Ky. 2004)). Once Wells was injured
and her doctors put her on work restrictions, she was unable to
perform the job she had pre-injury, namely unloading trucks and
lifting heavy boxes. At this point she was entitled to the three-
multiplier. Her later termination is irrelevant.
Tractor Supply now appeals to this Court.
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II. Standard of Review
This appeal presents a question of law and there is no appeal of any
factual findings by the ALJ, therefore our review is de novo. Consol of Ky., Inc.
v. Goodgame, 479 S.W.3d 78, 81 (Ky. 2015). Appellant asserts that this Court
should, as a matter of public policy, extend Livingood to the three-multiplier.
But that argument fundamentally mistakes the nature of this Court’s
authority, and the basis upon which Livingood was decided. We have
previously explained,
The Commonwealth's power to legislate public policy in the area of
employer/employee relations derives from its police power as well as the
community interest in regulating the safety of the workplace and in
requiring employers to provide for injured workers and their dependents
so that they do not become a burden on the community.
Johnson v. Gans Furniture Indus., Inc., 114 S.W.3d 850, 856 (Ky. 2003) (citing
Workmen's Compensation Board of Kentucky v. Abbott, 278 S.W. 533 (1925)).
This Court is imbued neither with policymaking nor police powers. Instead, our
function is to interpret what a statute says and apply it to a particular set of
facts.
When interpreting a statute, “[a] well-established rule of statutory
construction is that the courts will consider the purpose which the statute is
intended to accomplish—the reason and spirit of the statute—the mischief
intended to be remedied.” City of Louisville v. Helman, 253 S.W.2d 598, 600
(Ky. 1952) (citations omitted). On the other hand, “[i]t is neither the duty nor
the prerogative of the judiciary to breathe into the statute that which the
Legislature has not put there. The humane spirit of the statute does not
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warrant its extension beyond its legitimate scope.” Faust v. Commonwealth,
142 S.W.3d 89, 94-95 (Ky. 2004) (quoting Gateway Constr. v. Wallbaum, 356
S.W.2d 247, 248–49 (Ky. 1962)). As we recently stated, “Legislative intent is
paramount when construing a statute.” Martin v. Warrior Coal, LLC, 617
S.W.3d 391, 394 (Ky. 2021).
III. Analysis
The pertinent statutory provisions of KRS 342.370(1) read
(c) 1. If, due to an injury, an employee does not retain the physical
capacity to return to the type of work that the employee performed
at the time of injury, the benefit for permanent partial disability
shall be multiplied by three (3) times the amount otherwise
determined under paragraph (b) of this subsection, but this
provision shall not be construed so as to extend the duration of
payments; or
2. If an employee returns to work at a weekly wage equal to or
greater than the average weekly wage at the time of injury, the
weekly benefit for permanent partial disability shall be determined
under paragraph (b) of this subsection for each week during which
that employment is sustained. During any period of cessation of
that employment, temporary or permanent, for any reason, with or
without cause, payment of weekly benefits for permanent partial
disability during the period of cessation shall be two (2) times the
amount otherwise payable under paragraph (b) of this subsection.
This provision shall not be construed so as to extend the duration
of payments.
In Livingood, we concluded
that the legislature did not intend to reward an employee's
wrongdoing with a double benefit. We hold that KRS 342.730(1)(c)2
permits a double income benefit during any period that
employment at the same or a greater wage ceases “for any reason,
with or without cause,” except where the reason is the employee's
conduct [is] shown to have been an intentional, deliberate action
with a reckless disregard of the consequences either to himself or
to another.
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467 S.W.3d at 259. This ruling was based not on any specific language in KRS
342.730(1)(c)2 but rather on the general thrust of the entire Workers’
Compensation statute. “KRS Chapter 342 evinces a legislative intent that an
employee should not benefit from his own wrongdoing.” Id. at 258. We then
cited several provisions2 of KRS Chapter 342 to demonstrate this general
intent. Id. Thus, our holding in Livingood was not a usurping act of
policymaking by this Court but was grounded in the text of KRS Chapter 342.
It was necessary to declare this general rule since we determined we had
erred in our prior interpretation of KRS 342.730(1)(c)2, in the now-overruled
case of Chrysalis House, Inc. v. Tackett, 283 S.W.3d 671 (Ky. 2009), which held
when applying the two-multiplier “the cessation of employment at the same or
greater wage must relate to the disabling injury.” Livingood, 467 S.W.3d at 257.
Livingood recognized the plain language of KRS 342.730(1)(c)2 did not include
any “due to an injury” language like that found in KRS 342.730(1)(c)1. Instead,
KRS 342.730(1)(c)2 declares “During any period of cessation of that
employment, temporary or permanent, for any reason, with or without cause . .
.” the two-multiplier shall be applied. In restoring the purpose of KRS
2 Specifically, we cited to KRS 342.165(2) which “bars compensation where an
employee knowingly and willfully makes a false representation regarding his or her
physical condition or medical history in writing at the time of entering employment[,]”
Livingood, 467 S.W.3d at 258; KRS 342.610(3) which bars compensation where the
injury, occupational disease, or death was willfully intended by the claimant; KRS
342.035(3) which bars compensation when a claimant’s injury is aggravated or
continued by an unreasonable failure to follow surgical or medical advice; KRS
342.205(3) which bars recovery if a claimant refuses to submit to an independent
medical exam; and KRS 342.710(5) which reduces compensation by 50% for each
week a claimant refuses to attend vocational rehabilitation ordered by an ALJ.
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342.730(1)(c)2, however, we also recognized “a literal construction of KRS
342.730(1)(c)2 would lead to an unreasonable result if an employee like the one
in Chrysalis House is allowed to benefit from his own wrongdoing.” Livingood,
467 S.W.3d at 257.
KRS 342.730(1)(c)1 does not provide for consideration of continuing
employment, or the reasons underlying a termination, when determining
whether the three-multiplier should be applied. It is concerned with
compensating a claimant for the injury suffered that has reduced their ability
to do the same type of work as they did pre-injury. In contrast, KRS
342.730(1)(c)2
is to keep partially disabled workers in the habit of working and
earning as much as they are able. It creates an incentive for them
to return to work at which they will earn the same or a greater
average weekly wage by permitting them to receive a basic benefit
in addition to their wage but assuring them of a double benefit if
the attempt proves to be unsuccessful.
Toy v. Coca Cola Enters., 274 S.W.3d 433, 435 (Ky. 2008). Thus, the two-
multiplier only applies when there is a cessation of employment; justifying
Livingood’s holding that a claimant would profit by his or her misconduct if the
two-multiplier were applied to a claimant whose employment was terminated
as a result of misconduct.
Such an unjust profit cannot occur with regard to KRS 342.730(1)(c)1
because the three-multiplier only ever applies when “due to an injury, an
employee does not retain the physical capacity to return to the type of work
that the employee performed at the time of injury[.]” There is not an incentive
structure in the three-multiplier analogous to the two-multiplier; thus, the
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Court of Appeals’ reasoning is sound. The three-multiplier benefit is concerned
with a finding of disability, and not tied to any condition of employment.
Therefore, application of the general rule that no claimant should profit by his
or her misconduct serves no substantive purpose regarding the three-
multiplier. Wells was unable to return to her pre-injury work after August 16,
2018, and her firing, even if for misconduct, did not increase or prolong the
income benefits she would otherwise receive. In fact, applying the Livingood
rule to the three-multiplier would create a mischievous incentive for employers
to concoct reasons to fire those employees who are receiving three-multiplier
benefits to reduce their payments.
Finally, one could argue that an employee might intentionally and
deliberately, with reckless disregard for himself or others, injure himself; and
because so, a three-multiplier would be unjust if his injury would otherwise
call for it. We agree, but only because the General Assembly has already
provided for that exact scenario in KRS 342.610(3), stating, “Liability for
compensation shall not apply to injury, occupational disease, or death to the
employee if the employee willfully intended to injure or kill himself, herself, or
another.” Thus, we find no statutory basis to extend Livingood to application of
the three-multiplier.
IV. Conclusion
Wells suffered a permanent injury in 2018 that physically prevented her
from performing the same work she performed prior to the injury. She was later
terminated in 2019 due to an unrelated incident allegedly involving the
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inclusion of false information on a work report. KRS 342.730(1)(c)1 does not
provide for consideration of post-injury conduct at work when applying the
three-multiplier. It calls only for a determination of whether the claimant could
return to the type of work performed pre-injury. Since the treble increase in
benefits is not tied to a claimant being employed, the statutory prohibition that
a claimant should not profit by their misconduct is not applicable—the
claimant has not gained anything as a proximate result of their misconduct
that would trigger application of the rule. Thus, nothing in the statute or the
facts below requires extension of Livingood to KRS 342.730(1)(c)1. The Court of
Appeals is affirmed.
All sitting. All concur.
COUNSEL FOR APPELLANT:
Walter E. Harding
Boehl Stopher & Graves, LLP
COUNSEL FOR APPELLEE:
Michael D. Lindsey
ADMINISTRATIVE LAW JUDGE:
Stephanie L. Kinney
WORKERS’ COMPENSATION BOARD:
Michael Wayne Alvey,
Chairman
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