Intech Contracting, LLC v. Michele L. Hampton, as Administratrix of the Estate of Geoffrey Hampton ( 2023 )

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NOT TO BE PUBLISHED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).
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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.
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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.
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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.
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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
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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.
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BRIEFS FOR APPELLANTS: BRIEF FOR APPELLEE:
Walter A. Ward Charles W. Gorham
Betsy R. Catron Lexington, Kentucky
Lexington, Kentucky
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