Jonathan Hawk v. Ms Companies ( 2022 )

RENDERED: SEPTEMBER 23, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2022-CA-0032-WC
JONATHAN HAWK APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-17-01865
MS COMPANIES; WORKERS’ COMPENSATION
BOARD; AND HONORABLE GRANT ROARK,
ADMINISTRATIVE LAW JUDGE APPELLEES
OPINION
VACATING AND REMANDING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; ACREE AND TAYLOR, JUDGES.
TAYLOR, JUDGE: Jonathan Hawk appeals from a decision of the Workers’
Compensation Board (Board) vacating and remanding a July 26, 2021, order of an
Administrative Law Judge (ALJ) that directed appellee, MS Companies, to pay
Hawk workers’ compensation benefits.1 For the reasons expressed below, we
vacate the Board’s decision and direct the Board, on remand, to dismiss MS
Companies’ underlying administrative appeal.
BACKGROUND
Express Employment Professionals (“Express”) is a temporary
employment agency; Hawk is its former employee; and when Hawk worked for
Express, Express assigned him to work for one of its clients, Faurecia. Hawk’s
employment with Express terminated in April 2017. Hawk then filed a workers’
compensation claim against Express on November 7, 2017, alleging bilateral
hand/wrist/arm injuries from repetitive motion that manifested on November 15,
2016, while he was working on Faurecia’s assembly lines manufacturing car seats.
In 2018, Hawk began his employment with MS Companies and was assigned to
work again at Faurecia. On May 3, 2018, Express moved to dismiss Hawk’s claim
based upon Hawk’s deposition testimony that he had returned to work on
Faurecia’s assembly lines, albeit on behalf of a different temporary employment
agency employer, appellee MS Companies.
Express noted in its motion that Hawk testified he had been
performing work at Faurecia – on behalf of Express on November 15, 2016 –
1
Based on our review of the record, at least three different Administrative Law Judges
participated in this case.
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where his job was to install the “side shield” on car seats approximately 35-45
times per hour on average. And, Hawk further testified that in February 2018, he
had returned to work at Faurecia – on behalf of MS Companies – once again
building car seats; this time, his job on the assembly line was to attach the “pork
chop” to the seats approximately 35-45 times per hour on average. In sum,
Express argued that because Hawk had alleged a “cumulative trauma”-type injury
caused by assembly line work, Hawk’s employer at the time of his “most recent
injurious exposure in the work place” – MS Companies – bore all liability in this
matter. Record, p. 132-34.
On July 26, 2018, MS Companies was joined to this litigation as a
defendant. On July 30, 2018, the ALJ then entered an order passing on the merits
of Express’s motion until “all proof has been developed,” explaining “[t]he fact
that the Plaintiff returned to work on the same assembly line is not dispositive of
the issues in this claim. He was performing a different job when he returned.”
On October 11, 2019, Express once again moved to dismiss; in
support, it made the same arguments and cited the same proof it had relied upon in
its prior motion. On March 6, 2020, following a telephonic status conference, the
ALJ then entered an interlocutory order granting Express’s motion.2 The ALJ’s
2
In granting Express Employment Professionals’ motion to dismiss, the Administrative Law
Judge (ALJ) did not resolve all the claims involved in this matter, and its March 6, 2020, order of
dismissal did not recite that it was “final” and that there was “no just reason for delay.”
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order contained no legal analysis or findings in support of its decision. Notably,
MS Companies did not oppose Express’s motion nor participate in the status
conference.
MS Companies did not make any attempt at litigating this matter until
July 22, 2021, when its attorney filed his first notice of appearance and, in
conjunction therewith, MS Companies’ post-hearing brief.3 Therein, MS
Companies argued in relevant part:
Even if causation is found to exist, the responsible
employer is not MS Companies. Indeed, the parties have
stipulated that the injury occurred on November 15,
2016. It is undisputed that the Plaintiff was working for
Express Employment Professionals on this date. MS
Companies acknowledges that the Plaintiff returned to
work for MS Companies after November 15, 2016;
however, there has never been an alternative injury date
alleged. As a result, MS Companies had no obligation to
defend a claim that was sustained prior to their
employment. Moreover, the simple fact that one returns
to work, does not mean that additional permanency
developed. Simply put, the Plaintiff has stipulated to a
November 15, 2016 injury date. While he returned to
work, he never pled an alternative injury date for which
an award can be generated.
Record, p. 306.
Therefore, the ALJ’s March 6, 2020, order remained interlocutory until July 26, 2021, when the
ALJ resolved the remaining issues in this matter. See 803 Kentucky Administrative Regulation
(KAR) 25:010 § 22(2)(b) (providing “a final award, order, or decision shall be determined in
accordance with Civil Rule 54.02(1) and (2)”).
3
MS Companies did not participate in the benefit review conference or the final hearing before
the ALJ, which was conducted by the ALJ on May 27, 2021.
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In an order entered July 26, 2021, the ALJ resolved the remaining
issues in this matter, ultimately directing MS Companies to pay Hawk the total
amount of his temporary total disability benefits (TTD), permanent partial
disability benefits (PPD), and his reasonable and necessary medical expenses
relating to his cumulative trauma work injury. Regarding MS Companies’
contention that it was not Hawk’s employer on the stipulated date of his injury, the
ALJ further held:
For the first time, on July 22, 2021, legal counsel
entered an appearance on behalf of the defendant
employer, MS Companies. At the same time, counsel
filed a post[-] hearing brief. In its brief, the defendant
attempts to argue plaintiff’s alleged injuries are not work-
related. However, this defendant never filed a form 111,
Notice of Claim Denial or Acceptance, and as such, all
allegations alleged in plaintiff’s form 101, including
those as amended, were deemed admitted. 803 KAR
[Kentucky Administrative Regulation] 25:010 Sec.
5(2)(b). Moreover, causation and work relatedness were
not listed as a contested issue at the benefit review
conference conducted on May 27, 2021 at the beginning
of the final hearing. Similarly, whether plaintiff was an
employee of the defendant, MS Companies the date of
the injury was also not listed as a contested issue so,
again, the defendant is precluded from making that
argument at this time. For these reasons, the defendant is
precluded from arguing causation which is now
presumed as a matter of law.[4]
4
After being named a party to this proceeding by order of the ALJ on July 26, 2018,
inexplicably, MS Companies did not participate or appear in the case for almost three years, until
the filing of its motion to file a brief on July 22, 2021.
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Record, p. 313.
Shortly thereafter, MS Companies filed a petition for reconsideration.
There, MS Companies stated it was “not asserting error in the ALJ’s finding that
the Plaintiff suffered a cumulative trauma injury.” Rather, as before, MS
Companies took issue with the ALJ’s decision to hold it liable for Hawk’s
cumulative trauma injury – either because: (1) proof of Hawk’s subsequent
injurious exposure to cumulative trauma or worsening of his cumulative trauma
injury while in its employ was non-existent; or (2) Hawk had failed to amend his
Form 101 application for benefits to encompass the time frame of his employment
with MS Companies, or to otherwise rescind his stipulation that his cumulative
trauma work injury manifested while he was employed by Express. Specifically,
MS Companies argued:
It is undisputed that the Plaintiff was working for
Express Employment Professionals on the date of injury
– November 15, 2016. There has never been an
alternative injury date alleged. As a result, MS
Companies had no obligation to defend a claim that was
sustained prior to their employment taking effect. While
the Plaintiff did return to work after November 15, 2016,
the simple fact that one returns to work, does not mean
that additional permanency developed. The fact remains
that the Plaintiff has stipulated to a November 15, 2016
injury date. While he returned to work after November
15, 2016, he never pled an alternative injury date for
which MS Companies had an obligation to defend the
claim.
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In rendering his award, the ALJ relied upon the
fact that MS Companies failed to tender a denial or
contest that an employment relationship exists. In
response, MS Companies argues that there was never an
Order requiring them to tender a response denial.
Similarly, MS Companies is unaware of any statute or
regulation requiring a response denial in this
circumstance. Moreover, MS Companies argues that it is
immaterial that they failed to submit a denial in this
claim. Indeed, while MS Companies was joined as a
party, there was no alternative injury date filed for which
MS Companies opened itself up to liability. MS
Companies had no obligation to mount a defense for an
injury date that the Plaintiff stipulated occurred prior to
the Plaintiff’s work with MS Companies. This statement
against interest requires judicial notice be taken. MS
Companies does agree that there was an employment
relationship; however, that employment relationship
began at a time after the stipulated injury date.
Therefore, MS Companies argues that they cannot be
liable in this matter.
Record, p. 320-21.
On August 30, 2021, the ALJ overruled MS Companies’ petition. MS
Companies then appealed to the Board, reasserting the substance of its argument
set forth above. Notably, however, MS Companies did not name Express as a
party to the appeal or serve Express or its counsel with a copy of the notice of
appeal.
Upon consideration, the Board vacated the ALJ’s order. In its
December 10, 2021, decision to that effect, it explained in relevant part:
We agree that an award against MS cannot be
based upon a November 15, 2016 injury date. Liability
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of MS necessarily depends on exposure to cumulative
trauma occurring during its employment period. During
litigation of this claim, no ALJ made an explicit finding
of fact that Hawk was exposed to cumulative trauma
while employed by MS. Certainly, Express raised an
issue concerning the last employer at which Hawk was
exposed to cumulative trauma in its Motions to Dismiss
and its proposed stipulations and contested issues.
However, ALJ Neal’s March 6, 2020 Order dismissing
Express as a party made no specific finding that
employment with MS produced a cumulative trauma
injury. MS is correct in noting Hawk never moved to
amend his claim to include an allegation of a cumulative
trauma injury during his employment with MS or to
allege a later injury date. ALJ Neal’s July 2, 2018 Order
states a telephonic status conference was held on that
date and indicates Hawk would amend his claim to
include the current employer. Hawk’s Motion to Join
MS was silent as to the reason for joinder.
On remand, the ALJ must determine whether
Hawk ever amended the Form 101 to include his
employment period with MS. If no such amendment was
made, MS must be dismissed. It cannot be held liable for
any injury occurring prior to employing Hawk.
...
Accordingly, the July 26, 2021 Opinion, Award
and Order and the August 30, 2021 Order on Petition for
Reconsideration rendered by Hon. Grant S. Roark,
Administrative Law Judge, are hereby VACATED. This
claim is REMANDED for additional findings consistent
with the views expressed herein.
Record p. 376-77 (emphasis added).
Hawk now appeals.
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ANALYSIS
For the reasons that follow, we must vacate the Board’s decision on a
jurisdictional ground, albeit one that the Board and parties failed to recognize.5
The thrust of MS Companies’ arguments and the Board’s opinion is that Express
could be liable for Hawk’s injuries. As MS Companies and the Board both pointed
out, no ALJ made a specific finding that employment with MS Companies had
caused Hawk to sustain a cumulative trauma injury. But, Hawk’s Form 101 – the
allegations of which the ALJ deemed MS Companies had admitted – asserted
Hawk’s injury at issue in this matter manifested on November 15, 2016, while
employed by Express. Moreover, when an employee alleging a work-related
cumulative trauma injury works for multiple employers, the employer on the date
of manifestation of the injury bears the burden of paying workers’ compensation
benefits. See Hale v. CDR Operations, Inc., 474 S.W.3d 129, 138 (Ky. 2015)
(holding that “[n]othing in KRS [Kentucky Revised Statute] Chapter 342 limits the
liability of the employer, in whose employ the date of manifestation occurred, to
5
See, e.g., Basin Energy Co. v. Howard, 447 S.W.3d 179, 187 (Ky. App. 2014) (holding that
“[a] reviewing body or court has an affirmative obligation to ensure that it is acting within its
subject-matter jurisdiction. Even if not raised by the parties, a court must dismiss if it determines
at any point in the litigation that it lacks subject-matter jurisdiction. The parties cannot confer
jurisdiction by failing to raise the issue either intentionally or unintentionally.”); Liquor World of
Corbin, LLC v. Commonwealth Dep’t of Alcoholic Beverage Control, 458 S.W.3d 814, 816 (Ky.
App. 2014) (“It is fundamental that a court must have jurisdiction before it has authority to
decide a case. . . . Each court or administrative body must determine for itself whether it has
jurisdiction.” (Internal quotation marks and citations omitted)).
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the percentage of the claimant’s work-life spent there” within the context of
cumulative trauma injuries).
By remanding for a determination of “whether Hawk ever amended
the Form 101 to include his employment period with MS,” but otherwise vacating
the ALJ’s July 26, 2021, order, the Board did not simply divest Hawk of his right
to benefits from MS Companies; it also divested Express of its right to be free of
liability in this matter by effectively permitting the ALJ to revisit its determination
that MS Companies, rather than Express, was the employer responsible for Hawk’s
benefits. The ALJ made that determination in the March 6, 2020, order granting
Express’s motion to dismiss – an order that was interlocutory and thus subject to
revision until the remaining issues were resolved through the ALJ’s July 26, 2021,
order. By vacating the ALJ’s July 26, 2021, order, the ALJ’s March 6, 2020, order
once again became subject to revision. As explained in Hampton v. Flav-O-Rich
Dairies, 489 S.W.3d 230, 234-35 (Ky. 2016):
[W]hen the Board vacates an ALJ’s opinion, it
“nullif[ies] or cancel[s]; make[s] void; invalidate[s]” that
opinion. Black’s Law Dictionary (10th ed. 2014). When
the Board vacated the ALJ’s opinion, that opinion ceased
to exist, and Hammond was divested of his permanent
total disability award. . . .
. . . Because the Board vacated the ALJ’s award, he is
required to write a new opinion on remand; he cannot, as
the Court of Appeals indicated, simply supplement his
existing opinion with additional findings of fact. In the
process of writing that new opinion, there is nothing to
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prevent the ALJ from entering a different award, nor is
there anything to compel the ALJ to enter the same
award. By vacating the ALJ’s opinion and requiring him
to make additional findings, the Board has implicitly
authorized him to enter a different award[.]
That, in turn, leads to the problem in this appeal. Express was an
“adverse party” in this matter, i.e., a party “against whom the ultimate right to
relief pursuant to KRS Chapter 342 may exist, whether jointly, severally, or in the
alternative.” 803 KAR 25:010 § 2(1) and (3)(a). Indeed, because the Board could
not vacate the ALJ’s July 26, 2021, order without affecting Express’s rights,
Express was an “indispensable” party to MS Companies’ appeal – one whose
absence prevented the Board “from granting complete relief among those already
parties.” Milligan v. Schenley Distillers, Inc., 584 S.W.2d 751, 753 (Ky. App.
1979), superseded on other grounds by statute, KRS 342.285; see also Browning v.
Preece, 392 S.W.3d 388, 391 (Ky. 2013) (holding that an “indispensable party” is
one who has an interest that would be affected by the decision of a reviewing
tribunal, “regardless of whether that interest is affected adversely or favorably”).
Accordingly, it was incumbent upon MS Companies to name Express
as a party to its administrative appeal. Specifically, within thirty days after the
ALJ’s award became final, MS Companies was required to name Express as a
party in its notice of appeal to the Board, and to serve its notice upon Express. See
803 KAR 25:010 § 22(2)(a) (specifying the thirty-day period for filing a notice of
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appeal to the Board); 803 KAR 25:010 § 22(2)(c)2. (providing “[t]he notice of
appeal shall . . . [d]enote all parties against whom the appeal is taken as
respondents”); 803 KAR 25:010 § 22(4)(a)2. (providing that “[t]he petitioner shall
specifically designate as respondents all adverse parties”); see also 803 KAR
25:010 § 22(8)(a) (“[b]efore filing a notice of appeal, cross-appeal, or any brief
with the commissioner of the Department of Workers’ Claims, a party shall serve,
in the manner provided by Civil Rule 5.02, or electronically as set forth in this
administrative regulation, a copy of the document on each adverse party”).
But, MS Companies failed to do so. And the Board nevertheless
addressed the merits of its appeal, without Express being a party or having the
opportunity to participate in the appeal.
With respect to our review of an opinion of the Board, we only
reverse when “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 Hospital v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992).
Here, when the Board rendered its opinion of December 10, 2021, it improperly
addressed the merits of a dispute relating to a notably absent indispensable party,
and thus overlooked or misconstrued the law controlling its appellate jurisdiction.
Failure to name an indispensable party in the notice of appeal is a
jurisdictional defect that cannot be remedied after the period for filing the notice
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has run. See Browning, 392 S.W.3d at 391. Moreover, “[t]his Court has often
emphasized that one seeking review of administrative decisions must strictly
follow the applicable procedures. Since an appeal from an administrative decision
is a matter of legislative grace and not a right, the failure to follow the statutory
guidelines for an appeal is fatal.” Taylor v. Duke, 896 S.W.2d 618, 621 (Ky. App.
1995) (citations omitted). Here, having failed to include Express in its notice of
appeal before the Board, MS Companies effectively deprived the Board of
jurisdiction to resolve its appeal. Accordingly, we vacate the Board’s opinion.
Upon remand, the Board is directed to dismiss MS Companies’ underlying appeal
in this matter.
For the foregoing reasons, the opinion of the Workers’ Compensation
Board is vacated and remanded to dismiss MS Companies’ appeal and affirm the
ALJ’s July 26, 2021, Opinion, Award, and Order.
ALL CONCUR.
BRIEF FOR APPELLANT: BRIEF FOR APPELLEE MS
COMPANIES:
James R. Martin
Lexington, Kentucky Donald J. Niehaus
Lexington, Kentucky
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