Bill Wilder v. Muhlenberg County Coal Co. ( 2022 )

RENDERED: JULY 1, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2021-CA-1499-WC
BILL WILDER APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NOS. WC-20-00810 AND WC-20-00811
MUHLENBERG COUNTY COAL CO.;
HONORABLE MONICA RICE-
SMITH, ADMINISTRATIVE LAW
JUDGE; MURRAY ENERGY
CORPORATION; AND WORKERS’
COMPENSATION BOARD APPELLEES
OPINION
AFFIRMING IN PART, REVERSING IN PART AND REMANDING
** ** ** ** **
BEFORE: CETRULO, LAMBERT, AND MCNEILL, JUDGES.
LAMBERT, JUDGE: Bill Wilder petitions for review of a decision of the
Workers’ Compensation Board (the “Board”) which reversed an administrative law
judge’s (“ALJ”) award of benefits to Wilder for his hearing loss. We affirm in
part, reverse in part, and remand.
Wilder worked in the coal mining industry for many years. Relevant
here, Wilder worked for Ken America Resource, sometimes called Ken American
in the record, (“Ken America”) from April 2013 to February 2019. From February
2019 until December 2019, Wilder worked for Muhlenberg Coal Company
(“Muhlenberg Coal”). Murray Energy Corporation (“Murray Energy”) owns Ken
America and Muhlenberg Coal.
Wilder, via counsel, filed two applications for workers’ compensation
benefits in June 2020 – one for hearing loss and one for cumulative trauma,
naming “Murray Energy Corp./Pride Mine” as the defendant in each claim. In
August 2020, Murray Energy filed a terse “notice of correct employer” which “for
clarification purposes, notifies the parties that [Wilder] last worked for Muhlenberg
County Coal Company, as insured by Zurich. This employment lasted from
February 2019 through December 28, 2019, at which point he [Wilder] was laid
off.” Record (“R.”) at 84. That notice did not seek to have Murray Energy
dismissed as a defendant. An ALJ issued an order providing in relevant part that
Wilder’s “claim is amended to include Muhlenberg County Coal.” R. at 96. Thus,
Wilder’s claim proceeded against both Muhlenberg Coal and Murray Energy, who
generally made little distinction between themselves.
An ALJ held a combined final hearing/benefit review conference
(“BRC”) in March 2021. The transcript of that proceeding shows that when the
-2-
ALJ asked if pre-existing impairment was a contested issue, defendants’ counsel
responded: “Yes, pre-existing impairment and also benefits applicability of
[Kentucky Revised Statute] KRS 342.7305, the hearing loss.” R. at 338. In
relevant part, KRS 342.7305(4) states that “the employer with whom the employee
was last injuriously exposed to hazardous noise for a minimum duration of one (1)
year of employment shall be exclusively liable for benefits.” It is undisputed that
Wilder worked for Muhlenberg Coal for less than a year.
Soon thereafter, that ALJ’s term of office expired, so Wilder’s claims
were assigned to a second ALJ, who held her own final hearing in April 2021. At
the beginning of that hearing, the ALJ noted that the evidence included a transcript
of the BRC/final hearing held by the first ALJ. In their post-hearing brief,
defendants repeated their assertion that Wilder’s employment with Muhlenberg
Coal “does not meet the minimum one-year requirement for hearing loss liability
pursuant to KRS 342.7305. As a result, Plaintiff’s hearing loss claim against
Muhlenberg County Coal Company should be dismissed.” R. at 471. Again,
however, Murray Energy did not seek dismissal as a defendant.
In June 2021, the ALJ issued a decision awarding Wilder benefits on
his hearing loss claim. The ALJ noted the parties’ stipulation that an employment
relationship existed between Wilder and “the defendant/employer . . . .” R. at 484.
Thus, the opinion did not analyze whether Murray Energy was Wilder’s employer.
-3-
The ALJ ordered “Murray Energy/Muhlenberg County Coal” to pay disability
benefits and related medical expenses to Wilder. Though the opinion and award
listed “[b]enefits per KRS 342.7305” as a contested issue, it contained no
substantive discussion thereof. R. at 485.
Muhlenberg Coal filed a petition for reconsideration; Murray Energy
did not. Muhlenberg Coal argued that Wilder “did not work for the
Defendant/Employer for more than one year, which precludes the award of any
benefits for alleged hearing loss against Muhlenberg.” (Emphasis added.) The
petition for reconsideration did not facially allege that Murray Energy was not
Wilder’s employer. Toward that end, in his response to the petition, Wilder
maintained that he worked for Murray Energy and had done so long enough to
meet the requirements of KRS 342.7305(4).
The ALJ held that Wilder had “established he worked in excess of one
year for Murray Energy.” R. at 500. So, the ALJ amended the opinion and award
to reflect that Murray Energy alone was responsible for paying Wilder’s disability
benefits. In other words, the ALJ relieved Muhlenberg Coal from being
responsible for Wilder’s disability benefits. However, likely by oversight, the ALJ
did not concomitantly amend the portion of the opinion and award making
Muhlenberg Coal and Murray Energy jointly liable for Wilder’s compensable
medical expenses.
-4-
Muhlenberg Coal appealed to the Board; neither Wilder nor Murray
Energy did. Murray Energy’s lack of active participation in Muhlenberg Coal’s
appeal is highlighted by the fact that Muhlenberg’s brief to the Board stated that its
author “represents Muhlenberg not Murray . . . in this action.”1 R. at 549.
Muhlenberg Coal’s main argument was that it had to be dismissed as Wilder
“should not be allowed to recover from Muhlenberg [Coal] as the language in KRS
342.7305(4) clearly precludes the same.” R. at 542. But, as Muhlenberg Coal
noted in its brief, the ALJ on reconsideration had amended the opinion and award
to “only include Murray Energy[,]” as being responsible for paying Wilder’s
disability benefits. Id.
In November 2021 the Board issued an opinion purporting to reverse
the ALJ’s decision to require Muhlenberg Coal to pay disability benefits to Wilder.
The gist of the Board’s conclusion was that Wilder had not worked for Muhlenberg
Coal for one year, as required by the plain language of KRS 342.7305(4). Of
course, the ALJ had already amended the opinion and award to reflect that
Muhlenberg Coal was not responsible for Wilder’s disability benefits. Next, the
1
The same counsel repeats that assertion in this Court in the response to Wilder’s petition for
review. The assertions are dubious. As the ALJ noted, it appeared all along as if Murray Energy
and Muhlenberg Coal shared counsel. Indeed, both the brief to the Board and the response in
this Court to Wilder’s petition for review contain the electronic signature of Attorney Taylor L.
Oldham immediately above the printed names of both Oldham and Attorney Donald J. Niehaus.
Niehaus submitted documents during the administrative process which stated that he represented
both Murray Energy and Muhlenberg Coal. R. at 476-80.
-5-
Board remanded the matter to the ALJ to “determine whether Murray Energy
constitutes the employer with whom Wilder was last injuriously exposed to
hazardous noise and was employed for a minimum of one year.” R. at 605.
Wilder then filed this petition for review.
Briefly, we agree with the Board that Muhlenberg Coal adequately
preserved its arguments regarding KRS 342.7305(4) by, for example, raising the
issue at the first BRC and in its post-hearing brief. We also agree with the Board
that the plain language of KRS 342.7305(4) meant that Muhlenberg Coal cannot be
responsible for Wilder’s hearing loss since he worked for Muhlenberg Coal for less
than a year. But those are academic concerns, given the fact that the ALJ’s
decision on reconsideration no longer required Muhlenberg Coal to pay Wilder’s
disability benefits.
We also agree with the Board that the ALJ erred by making
Muhlenberg Coal and Murray Energy jointly responsible for paying Wilder’s
compensable medical expenses. As the Board aptly noted, Muhlenberg Coal
cannot be held financially responsible at all for matters stemming from Wilder’s
hearing loss under the plain language of KRS 342.7305(4). Thus, when the ALJ
relieved Muhlenberg Coal from its responsibility for making income payments to
Wilder, the ALJ should concomitantly have relieved Muhlenberg Coal from its
joint responsibility for Wilder’s compensable medical expenses.
-6-
We now turn to the heart of this petition for review, Wilder’s
challenge to the Board’s decision to remand the matter to the ALJ to analyze
further whether Murray Energy was Wilder’s employer. The potential impact of
that remand upon Wilder is obvious. Without that remand, he was entitled to
recover benefits and related medical expenses from Murray Energy. On remand,
however, his ability to receive those benefits could be eliminated if the ALJ were
to determine that Murray Energy was not his employer. We agree with Wilder’s
bottom-line argument that the remand was improper, though our analysis does not
precisely track the contents of his petition for review.
For reasons not apparent from the face of the record, Wilder never
named Ken America as a defendant.2 Consequently, only Murray Energy could be
responsible for paying benefits to Wilder. And, in turn, Murray Energy could only
be responsible if it had been Wilder’s employer since KRS 342.7305(4) provides in
relevant part that “the employer with whom the employee was last injuriously
2
Murray Energy strenuously argues that Ken America was the sole proper defendant as it was
the last employer for whom Wilder worked for one year. It is undisputed that Wilder worked
directly for Ken America, which is owned by Murray Energy. Thus, under Murray Energy’s
view, Wilder’s last employer was Ken America. In turn, since Ken America was not a named
defendant, Wilder cannot receive benefits under KRS 342.7305, which places liability for
hearing loss claims on the last employer for whom the claimant worked at least one year. It
would have been better practice for Wilder to have named Ken America as a defendant. See 803
Kentucky Administrative Regulations (“KAR”) 25:010 § 2(3)(a) (“All persons shall be joined as
defendants against whom the ultimate right to relief pursuant to KRS Chapter 342 may exist,
whether jointly, severally, or in the alternative.”). But, as we shall discuss, Murray Energy
stipulated to having an employment relationship with Wilder and did not raise this precise
argument timely and directly. Therefore, under the unique facts of this case, we reject Murray
Energy’s argument that Wilder’s failure to name Ken America as a defendant is dispositive.
-7-
exposed to hazardous noise for a minimum duration of one (1) year of employment
shall be exclusively liable for benefits.” (Emphasis added.)
In a typical case involving similar facts, an ALJ would have to engage
in rigorous analysis to determine whether the parent entity could be deemed the
employer, for workers’ compensation purposes, of someone who worked directly
for one of the parent’s subsidiaries. See, e.g., Inter-Tel Techs., Inc. v. Linn Station
Properties, LLC, 360 S.W.3d 152, 163-64 (Ky. 2012) (discussing some factors to
be considered when determining whether a parent may be deemed liable for the
acts of its subsidiary in the context of determining whether to pierce a corporate
veil). Here, however, there are three main reasons why there was no need for the
ALJ to conduct that additional analysis, even though there is almost nothing in the
record describing Wilder’s relationship with Murray Energy or Murray Energy’s
relationship with Muhlenberg Coal or Ken America.
First, Murray Energy stipulated to having an employment relationship
with Wilder. In its updated notice of disclosures submitted before the combined
BRC/final hearing held before the first ALJ, defendants listed “[e]mployment
relationship” as a stipulated issue. R. at 326. In addition, the first ALJ’s order
memorializing the BRC/final hearing stated that the parties had stipulated that
“[a]n employment relationship existed between the Plaintiff and Defendant-
Employer at all relevant times.” R. at 328. Third, at that first hearing,
-8-
defendant(s)’ counsel also orally agreed that there was such an employment
relationship. Counsel did not distinguish between Murray Energy and Muhlenberg
Coal vis-à-vis the stipulation(s), which would have been necessary to do if the
stipulation was intended to apply to only one of the two defendants.
The Board thus required the ALJ to analyze a matter to which the
parties had stipulated, contrary to the rule that only matters which were contested
after the BRC may be addressed in further proceedings. See 803 KAR 25:010 §
13(12) (“Only contested issues shall be the subject of further proceedings.”); Hale
v. CDR Operations, Inc., 474 S.W.3d 129, 139-40 (Ky. 2015) (discussing the
binding nature of stipulations in workers’ compensation proceedings). Remanding
to the ALJ to address a stipulated issue was improper and manifestly unfair to
Wilder.
The second, closely related, main reason the Board erred is that
Murray Energy did not timely contest before the ALJ whether it had an
employment relationship with Wilder, likely due to the stipulation. Thus, we agree
with Wilder that Murray Energy waived the issue of whether it was Wilder’s
employer. 803 KAR 25:010 §13(12). And Wilder consistently testified at both
hearings that he was employed by Murray Energy, so there is substantial evidence
in the record to support the ALJ’s finding that Murray Energy was his employer.
Wal-Mart v. Southers, 152 S.W.3d 242, 245 (Ky. App. 2004) (internal quotation
-9-
marks and citation omitted) (“If a decision is made in favor of the claimant, the
question on appeal is whether the decision . . . is supported by substantial
evidence.”).
Third, the Board’s remand for additional analysis was improper
because Murray Energy did not file for reconsideration, nor did it appeal to the
Board. The ALJ’s decision thus was final regarding Murray Energy’s status as
Wilder’s employer, just like Wilder’s failure to appeal made final the ALJ’s
decision denying his cumulative trauma claim. See, e.g., Wheatley v. Bryant Auto
Service, 860 S.W.2d 767, 768 (Ky. 1993) (citations omitted) (holding that
“res judicata applies to workers’ compensation awards, if those awards are not
appealed within the thirty-day period and are not subject to a proper reopening
under KRS 342.125.”).3
In short, in requiring the ALJ to analyze whether Murray Energy was
Wilder’s employer, the Board “overlooked or misconstrued controlling statutes or
precedent” and “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).
3
Wheatley was superseded in part by statute on other grounds, as stated in Burroughs v. Martco,
339 S.W.3d 461, 464 (Ky. 2011). Here, there was no reopening, nor have the parties argued
there were proper grounds to reopen under the factors listed in KRS 342.125(1) (fraud, newly
discovered evidence, mistake, or a change in Wilder’s disability).
-10-
The net effect of the foregoing is as follows. We affirm the Board to
the limited extent that it remanded the matter to the ALJ to dismiss Muhlenberg
Coal as a party. The Board must direct the ALJ to amend the opinion and award
by dismissing Muhlenberg Coal and making plain that Murray Energy, not
Muhlenberg Coal, is responsible for paying both Wilder’s disability benefits and
related medical expenses. We reverse the Board’s decision to remand the matter to
the ALJ to examine whether Murray Energy was Wilder’s employer. When the
ALJ receives the matter on remand from the Board, no additional analysis
regarding whether Murray Energy was Wilder’s employer is necessary.
For the foregoing reasons, the Workers’ Compensation Board is
affirmed in part and reversed in part, and the matter is remanded to the Board with
directions to remand it to the ALJ to make the limited changes in the opinion and
award discussed herein.
ALL CONCUR.
BRIEF FOR APPELLANT: BRIEF FOR APPELLEE
MUHLENBERG COUNTY COAL
Thomas E. Springer, III CO.:
Madisonville, Kentucky
Donald J. Niehaus
Taylor L. Oldham
Lexington, Kentucky
-11-