Glenn Hampton v. Flav-O-Rich Dairies

RENDERED: FEBRUARY 18, 2016
TO BE PUBLISHED
oi5uprrnit Court of 3fitufurkv
2015-SC-000095-WC
GLENN HAMPTON APPELLANT
ON APPEAL FROM COURT OF APPEALS
V. CASE NO. 2014-CA-000409-WC
WORKERS' COMPENSATION BOARD NO. 11-WC-98603
FLAV-O-RICH DAIRIES;
HONORABLE WILLIAM J. RUDLOFF,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS' COMPENSATION BOARD APPELLEES
OPINION OF THE COURT BY JUSTICE KELLER
REVERSING AND REMANDING
The Administrative Law Judge (ALM found Glenn Hampton to be
permanently totally disabled. Flav-O-Rich appealed to the Board arguing, in
pertinent part, that the ALJ's opinion lacked sufficient findings to permit a
meaningful review. The Board agreed, vacating the ALJ's opinion and
remanding for additional findings of fact. Hampton filed a petition for review
with the Court of Appeals, which the Court dismissed as prematurely filed from
a non-final Board opinion. We disagree with the Court of Appeals that the
Board's opinion was not final; therefore, we reverse and remand to the Court of
Appeals for consideration of the merits of Hampton's appeal.
I. BACKGROUND.
The parties stipulated that Hampton suffered a work-related injury on
December 30, 2010. Following the presentation of evidence and a hearing, the
ALJ awarded Hampton permanent total disability benefits. Flav-O-Rich filed a
petition for reconsideration asking the ALJ to make 25 additional findings of
fact to justify his award. The ALJ denied Flav-O-Rich's petition, stating that he
had "thoroughly discuss[ed] the contested issues raised by the parties . . . ."
Flav-O-Rich appealed to the Board arguing that: the AW failed to make
sufficient findings of fact to permit meaningful appellate review; the ALJ did not
consider all of the evidence; and the ALJ's opinion was not supported by
evidence of substance. The Board summarized the evidence but only
addressed the first issue, finding that the ALJ's summary of the evidence and
findings of fact were not sufficient to permit the Board "to discern the basis of
the ALJ's decision." Therefore, the Board vacated the ALJ's opinion and
remanded the claim to him for additional findings of fact sufficient to inform
the parties "of the basis for [his] decision and permit meaningful appellate
review" and "for additional proceedings." Furthermore, the Board stated that,
because it was remanding for additional fact finding and proceedings, "it would
be premature to address Flav-O-Rich's additional arguments."
Hampton filed a petition for review with the Court of Appeals, arguing, in
pertinent part, that the ALJ had made sufficient findings of fact to support his
finding of permanent total disability. Flav-O-Rich argued that the Board's
opinion was not final and appealable and therefore asked the Court to dismiss
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Hampton's appeal. The Court of Appeals agreed with Flav-O-Rich, finding that,
because the Board's opinion did not divest Hampton of a vested right and it did
not direct or authorize the ALJ to enter a different award on remand, it was not
final. Hampton appeals, arguing that the Board's opinion was final and
appealable.
II. STANDARD OF REVIEW.
Whether the Board's opinion is final and appealable is a question of law,
and we review questions of law de novo. See Saint Joseph Hosp. v. Frye, 415
S.W.3d 631, 632 (Ky. 2013).
III. ANALYSIS.
As noted above, the sole issue before us is whether the Board's opinion is
final and appealable. The Court of Appeals, relying on our holding in Whitaker
v. Morgan, 52 S.W.3d 567 (Ky. 2001), held that the Board's opinion is not final
and appealable because it simply required the ALJ to make sufficient findings
of fact to permit a meaningful review. The Board did not, according to the
Court, direct or authorize the ALJ to alter his ultimate finding of permanent
total disability. We disagree.
The seminal case involving the finality of a Board decision is Davis v.
Island Creek Coal Co., 969 S.W.2d 712 (Ky. 1998). In Davis, the claimant was
awarded retraining incentive benefits when the employer failed to timely
contest his claim. Id. at 713. The Board reversed and remanded the claim to
the ALJ with instructions to find whether the employer had asserted "good
cause" for its failure to timely contest the claim. Id. The Court of Appeals held
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that this decision by the Board was not final and appealable "because it did not
finally dispose of the claim." Id.
Citing to case law dealing with the finality of circuit court decisions in
workers' compensation claims, we held that the test for determining finality is:
(1) If the circuit court order either set aside the board's award or
authorized the board to enter a different award, then the order
deprived a party of a vested right and was final and appealable[;]
[however,'
(2) [i]f the circuit court order only remanded the case to the board
with directions to comply with statutory requirements without
authorizing the taking of additional proof or the entry of a different
award, the order was interlocutory and not appealable.
Davis, 969 S.W.2d at 713-14 (citations omitted).
We cited the following as examples of non-final circuit court orders:
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remanding for compliance with the requirement that opinions set forth
separate findings of fact and conclusions of law, Green River Fuel Co. v. Sutton,
260 Ky. 288, 84 S.W.2d 79 (1935); and remanding for a finding of fact
regarding the date of last injurious exposure, Wagoner v. Mills, 566 S.W.2d 159
(Ky. App. 1977).
Applying the preceding to Davis's claim, we concluded that the Board's
decision was final and appealable. Id. at 714. In doing so, we noted that:
[T]he board's order set aside an award in favor of Appellant and
remanded the case with directions to determine whether the
employer's failure to file a timely notice of resistance was for "good
cause," and, presumably, if so, to take additional proof and enter a
new order. Since this order allowed the ALLI on remand to divest
Appellant of his vested right to a RIB award, it was final and
appealable to the Court of Appeals.
In Whittaker v. Morgan, 52 S.W.3d 567, 569 (Ky. 2001) we somewhat re-
worded the rule from Davis as follows:
[W]here a decision of the Board sets aside an ALJ's decision and
either directs or authorizes the ALJ to enter a different award upon
remand, it divests the party who prevailed before the ALJ of a
vested right and, therefore, the decision is final and appealable to
the Court of Appeals.
Whittaker v. Morgan, 52 S.W.3d 567, 569 (Ky. 2001) (emphasis added).
The Court of Appeals cited to the preceding language in support of its
opinion. However, the Court of Appeals's reliance on Morgan is misplaced
because the preceding language in Morgan is dicta. In Morgan, the claimant
settled his coal workers' pneumoconiosis claim with the employer and the
Special Fund for a 75% occupational disability. Id. at 568. Several years later,
the claimant reopened his claim, and an ALJ made a total occupational
disability award with no credit for overlapping benefits. Id. The Special Fund
appealed to the Board, which reversed the AL J. Id. The Board then remanded
the claim to the ALJ for additional findings and for calculation of the Special
Fund's credit pursuant to Kentucky Revised Statute (KRS) 342.125(2)(b). Id.
The Special Fund appealed to the Court of Appeals, arguing that the credit
should be calculated pursuant to Whitaker v. Rowland, 998 S.W.2d 479 (Ky.
1999). Id. Apparently relying on Hook v. Hook, 563 S.W.2d 716 (1978), the
Court of Appeals held that the Board's opinion was not final and appealable.'
Id. at 569.
'We do not have available a copy of the Court of Appeals opinion in Morgan;
however, from this Court's opinion it appears that the Court of Appeals erroneously
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We reversed the Court of Appeals, finding that, while "the Board's
decision divested the claimant of his victory before the ALJ on the question of
credit . . . [it] did not divest the Special Fund of anything that the ALJ had
previously decided in its favor." Id. Because the appellant, the Special Fund,
had not been divested of anything by the Board's decision, we concluded that
the Davis analysis did not apply. Id. Rather, we stated that the finality of the
Board's decision turned on whether, absent an appeal, it would have become
the law of the case, thus barring the Special Fund from questioning the Board's
conclusion that the credit should be calculated pursuant to KRS 342.125(2)(b).
Id. at 569-70. We determined that the Board's decision was final because,
absent an appeal, the credit calculation decision by the Board would have
become the law of the case. There is no law-of-the-case issue herein, thus
Morgan is not applicable.
We believe that Sidney Coal Co., Inc./ Clean Energy Mining Co. v.
Huffman, 233 S.W.3d 710 (2007) is more nearly on point. Huffman suffered a
crush injury to his right little finger and another crush injury to his left foot,
which he alleged resulted in physical and psychological impairment. The
medical proof was a mixed-bag with widely varied opinions regarding
Huffman's impairment rating and restrictions. Based on that evidence, the Al.,J
determined that Huffman's finger injury had resolved, and he assigned
Huffman no impairment rating for that injury. As to Huffman's foot injury, the
applied Hook v. Hook's Kentucky Rule of Civil Procedure 54 finality analysis to the
Board's opinion.
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ALJ believed Huffman's physician had made the correct diagnosis but had
assigned a "suspect" impairment rating for that injury. Therefore, he adopted
the impairment rating from one of the employer's evaluators and, because he
believed Huffman's psychological evidence, the AliJ assigned an impairment
rating accordingly. Huffman filed a petition for reconsideration arguing, in
pertinent part, that the ALJ had ignored unrebutted medical proof regarding
his finger-related impairment and a related period of temporary total disability.
The ALJ denied the petition, and Huffman appealed to the Board, which
"determined that [Huffman] was entitled to findings that appropriately
addressed his theory of the case and demonstrated that the ALJ considered the
evidence . . . and it held that the claim must be remanded for that purpose."
Huffman at 714 (citations omitted). The Court of Appeals held that the
Board's opinion was not final and appealable, nonetheless, it affirmed the
Board.
This Court agreed with the Board that Huffman "was entitled to at least
some indication that the ALJ considered his theory of the case." Id. at 714.
Furthermore, this Court noted that "[t]he Board's order of remand did not limit
the ALJ to stating the reasons for awarding partial disability benefits but [it]
permitted the ALJ to enter a different award after analyzing the issue." Id.
While it is unclear from our opinion in Huffman whether the Board vacated the
ALJ's opinion or whether it specifically stated that the ALJ could enter a
different award on remand, it is clear that the ALJ's ability to do so was a key
factor in determining finality.
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Herein, the Board vacated the ALJ's opinion and remanded for additional
proceedings. However, the Board did not specifically order or authorize the
ALJ to reach a different result. Therefore, we must determine if, absent that
specific order or authorization, the Board's opinion was final.
Initially, we note and adopt, with modification for current practice, the
holding from Davis that a Board opinion is final if it divests a party of a vested
right by setting aside an ALJ's award or by authorizing or requiring the entry of
a different award on remand. The substitution of and for or by the Court in
dicta in Morgan was a misstatement of the holding from Davis, and we hereby
correct that misstatement.
Next, we note that, when 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. Therefore, under what we believe to be the proper test from
Davis, the Board's opinion was final and appealable.
Finally, we note that, even if we believed that finality requires two
findings - divestment of a vested interest and the authorization or requirement
of a different award on remand - the Board's opinion met the second
requirement. 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 prevent the ALJ from
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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, thereby meeting the second alternative test for finality in Davis.
IV. CONCLUSION.
For the foregoing reasons, we reverse the Court of Appeals. Because the
Court of Appeals did not address the substance of Hampton's appeal, which we
believe was simply that the ALJ's award was not deficient, we remand so that
the Court of Appeals can do so. In the event the Court of Appeals agrees with
the Board that the ALJ's opinion is deficient, it is free to affirm the Board's
opinion. However, in the event that the Court of Appeals disagrees with the
Board regarding the sufficiency of the ALJ's opinion, it must remand to the
Board for consideration of the substantive issues raised by Flav-O-Rich before
the Board.
All sitting. All concur.
COUNSEL FOR APPELLANT:
McKinnley Morgan
Morgan Collins 86 Yeast
COUNSEL FOR APPELLEE, FLAV-O-RICH DAIRIES:
Berlin Tsai
Lynch, Cox, Gilman 86 Goodman, PSC
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