Yamamoto Fb Engineering, Inc. v. Kacie Elrod, as the Personal Representative of the Estate of Kimberly Allen

RENDERED: AUGUST 12, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-1202-WC
YAMAMOTO FB ENGINEERING,
INC. AS AN INSURED OF
KENTUCKY EMPLOYERS MUTUAL
INSURANCE APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-12-96799
KACIE ELROD, AS THE PERSONAL
REPRESENTATIVE OF THE ESTATE
OF KIMBERLY ALLEN;
HONORABLE DOUGLAS W. GOTT;
ADMINISTRATIVE LAW JUDGE;
AND WORKERS’ COMPENSATION
BOARD APPELLEES
OPINION
AFFIRMING IN PART, VACATING IN PART, AND REMANDING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; K. THOMPSON AND L. THOMPSON,
JUDGES.
THOMPSON, K., JUDGE: Yamamoto FB Engineering, Inc., (Yamamoto) appeals
from the decision of the Workers’ Compensation Board which ruled that Kimberly
Allen, widow of worker Anthony Allen, was entitled to receive derivative benefits
from Anthony’s workers’ compensation settlement for the extended length of time
specified by the retroactive application of Kentucky Revised Statutes (KRS)
342.730(4). In the interim, sometime around March 2021, Kimberly passed away
and Kacie Elrod, daughter and personal representative of the Estate of Kimberly
Allen, was substituted as a party. We vacate the portion of the Board’s opinion
affirming the opinion of the chief administrative law judge (CALJ) to the extent
that the Board agreed that the amended 2018 version of KRS 342.730(4)
retroactively applied, and for the reasons provided below, require that instead the
1994 version of KRS 342.730(4) be applied. We agree it was appropriate for the
Board to vacate the CALJ’s award for a new calculation of benefits and affirm that
portion of its opinion.
In 1988, Anthony, who was born in February 1964, married Kimberly,
who was born in June 1961; they remained married until his death. On January 25,
2012, Anthony was working for Yamamoto when he was injured in a horrific work
accident, which resulted in the loss of use of his legs. In the accident,
approximately 20,000 pounds of coiled steel fell on him, amputating one leg and
crushing the other. Anthony received total temporary total disability benefits,
-2-
applied for permanent total disability benefits, and on December 16, 2013, the
Administrative Law Judge (ALJ) approved a settlement.
The disability settlement provided for periodic benefits at the rate of
$475 per week until Allen became sixty-seven years old, the date upon which he
would qualify for social security benefits. The settlement agreement provided that
his benefits were “subject to K.R.S. 342.730(3) or K.R.S. 342.750 as appropriate
should Plaintiff not live to age 67[.]”
On March 9, 2020, Anthony died at the age of fifty-six years old of
causes unrelated to his injury, and on March 26, 2020, his widow Kimberly filed
Form 11, requesting that she be substituted as a party and receive a continuation of
Anthony’s benefits by virtue of being his wife. After Yamamoto and its insurer,
Kentucky Employers’ Mutual Insurance (KEMI), failed to respond to two show
cause orders, on May 22, 2020, the CALJ issued an order directing that Yamamoto
pay Kimberly 100% of the benefits due, “at the rate of $475.00 per week, from and
after March 9, 2020, during widowhood or for the remainder of the original 937
weeks awarded December 16, 2013.”
Yamamoto did not file a petition for reconsideration by the CALJ.
Instead, Yamamoto filed a direct appeal with the Board and simultaneously
submitted a motion to file a petition for reconsideration nunc pro tunc and a
-3-
motion to hold the appeal in abeyance and to remand to the CALJ for a ruling on
the petition for reconsideration. The Board denied these motions.
On September 4, 2020, the Board issued an opinion vacating in part,
affirming in part, and remanding. The Board declined to rule, as Kimberly
requested, that Yamamoto had waived its right to challenge the CALJ’s
determination because it did not timely submit a petition for reconsideration,
explaining that “[w]hile the CALJ’s opinion regarding findings of fact may not be
disturbed on appeal, this Board is still charged with the duty of assuring the
CALJ’s opinion contains no errors of law for which the Board retains the right to
de novo review.” The Board vacated the portion of the CALJ’s award ordering the
full rate due Anthony be paid to Kimberly, explaining that KRS 342.730(3)
mandated that survivors’ benefits be paid at 50% but affirmed the award of
benefits as to the compensable period. The Board rejected Yamamoto’s argument
that Kimberly’s benefits terminate when she reaches the age of sixty1 and becomes
eligible for Social Security benefits, explaining that pursuant to Parker v. Webster,
529 S.W.3d 759 (Ky. 2017), the version of KRS 342.730(4) in effect at the time of
Anthony’s injury terminating his benefits at the time he would qualify for Social
Security benefits was declared unconstitutional; the General Assembly then passed
1
At the time Kimberly filed for Anthony’s benefits, she was under age sixty. She died a few
months after she reached the age of sixty. Therefore, at this point the parties are arguing over the
payment of a few thousand dollars.
-4-
House Bill 2 which terminated workers’ benefits when the worker reached age 70
or four years after the date of injury or last exposure, whichever last occurs; and in
Holcim v. Swinford, 581 S.W.3d 37 (Ky. 2019), the Kentucky Supreme Court
determined the amendments to KRS 342.730(4) were retroactive to all claims still
pending on the effective date of the statutory changes.
Yamamoto argues that the Board erred by: (1) applying Parker
because that decision could not be retroactively applicable, arguing “[t]he issue
presented is whether a judicial decision like Parker, decided after the final
settlement was approved on December 13, 2013 in [Anthony’s] case, can be
applied retroactively to disturb that final settlement[;]” and (2) since Parker does
not apply, the law in effect on the date of the January 25, 2012 injury is
controlling, meaning that Kimberly’s right to benefits terminated when she turned
sixty years old. Elrod argues that Woodford County Board of Education v. Coffey,
No. 2018-CA-001120-WC, 2019 WL 6248322 (Ky.App. Nov. 22, 2019)
(unpublished), allows the retroactive application of the amended version of KRS
342.730(4), allowing Kimberly to receive benefits through age seventy.
“[R]egarding questions of law, this Court is bound neither by the
decisions of an ALJ or the Board regarding proper interpretation of the law or its
application to the facts. In either case, the standard of review is de novo.” Miller
v. Go Hire Employment Development, Inc., 473 S.W.3d 621, 629 (Ky.App. 2015).
-5-
While this matter was pending on appeal, a workers’ compensation
decision with this identical issue and arguments was resolved by another panel of
our Court in Lone Mountain Processing, Inc. v. Brewer, No. 2020-CA-1452-WC,
2021 WL 1432091 (Ky.App. Apr. 16, 2021) (unpublished). In the absence of any
other precedent, our decision is controlled by this unpublished decision, which we
are entitled to rely on pursuant to Kentucky Rules of Civil Procedure (CR)
76.28(4)(c), which states in relevant part:
Opinions that are not to be published shall not be cited or
used as binding precedent in any other case in any court
of this state; however, unpublished Kentucky appellate
decisions, rendered after January 1, 2003, may be cited
for consideration by the court if there is no published
opinion that would adequately address the issue before
the court.
See Brannock v. Brannock, 598 S.W.3d 91, 97 (Ky.App. 2019) (explaining it is
proper to rely on an unpublished decision where the published decisions are
distinguishable).
In Brewer, 2021 WL 1432091, at *1, worker Harold was injured and
applied for workers’ compensation benefits in 2004, and was awarded permanent
total disability benefits in 2005, with his award thereafter becoming final as he did
not appeal. After he died at age sixty-four of unrelated causes, his widow Paula
filed a Form 11 to receive derivative benefits pursuant to KRS 342.730(3)(a). Of
note Paula was sixty-three years old when she filed the Form 11, and thus, if the
-6-
version of KRS 342.730(4) applicable at the time his award became final was
applicable, Paula had no right to benefits.
The Brewer Court analyzed the issue as follows:
Lone Mountain contends the CALJ and the Board
erred by applying the current version of KRS 342.730(4)
retroactively. It argues the law in effect at the time
Harold’s award became final governs – the version ruled
unconstitutional by Parker, 529 S.W.3d 759. We agree it
was error to apply the current version of KRS 342.730(4)
retroactively. However, we disagree with Lone
Mountain’s position that the unconstitutional version
governs. We first address the retroactivity of the current
version of KRS 342.730(4).
It is well-settled that “[n]o statute shall be
construed to be retroactive, unless expressly so declared.”
KRS 446.080(3). Our Supreme Court in Holcim v.
Swinford held that the current version of KRS 342.730(4)
applies retroactively only in certain circumstances. 581
S.W.3d 37, 44 (Ky. 2019). That Court reached its
conclusion based on Legislative Research Commission
commentary appended to the newly enacted statute. The
commentary stated:
This statute was amended in Section 13 of
2018 Ky. Acts ch. 40. . . . Subsection (3) of
Section 20 of that Act reads, “Subsection (4) of
Section 13 of this Act shall apply prospectively
and retroactively to all claims: (a) For which the
date of injury or date of last exposure occurred on
or after December 12, 1996; and (b) That have not
been fully and finally adjudicated, or are in the
appellate process, or for which time to file an
appeal has not lapsed, as of the effective date of
this Act.”
-7-
Holcim, 581 S.W.3d at 43 (emphasis added); see Lone
Mountain Processing v. Turner, 593 S.W.3d 72, 74
(Ky.App. 2020); Crittenden Cty. Fiscal Court v. Hodge,
591 S.W.3d 424, 425 (Ky.App. 2019). Because Harold’s
award became final over twelve years before the
effective date of the current version of KRS 342.730(4),
it does not apply retroactively in this instance.
The Board noted that “Paula’s rights did not vest
until Harold’s death in April 2020, at which time her
entitlement to a continuation of income benefits
accrued.” To the extent the Board relied upon this to
circumvent the Legislation’s finality limitation, this was
error. Paula’s entitlement to benefits is simply derivative
of Harold’s award and does not have any effect on its
finality.
Likewise, both the CALJ’s and the Board’s
reliance on Woodford County Board of Education v.
Coffey, No. 2018-CA-001120-WC, 2019 WL 6248322(Ky.App. Nov. 22, 2019), to conclude the current version
applies retroactively is inapposite. In Coffey, the award
of benefits to the claimant (Gary) was not final when his
widow (Dena) filed a Request to Substitute Party and
Continue Benefits. Id. The current version of KRS
342.730(4) was enacted while his case was in the
appellate process. This Court held:
Gary’s claim, pursued by Dena, falls within
the period of retroactivity expressly designated by
the General Assembly. As such, the amended
version of KRS 342.730(4) applies to this claim.
The award in this case should order Dena’s
benefits to “terminate as of the date upon which
[Gary] would have reached age seventy (70) or
four (4) years after [Gary’s] date of injury or date
of last exposure, whichever last occurs.” KRS
342.730(4).
-8-
Coffey, 2019 WL 6248322, at *2. Unlike the claim in
Coffey, this claim does not fall within the period of
retroactivity.
Because the current version of KRS 342.730(4)
does not apply retroactively in this instance, we
necessarily must determine which version of the statute is
to be applied. In this instance we are left with two
options: (1) applying the unconstitutional version in
effect at the time of Harold’s award; or (2) applying the
most recent, prior, constitutional version – the 1994
version of the statute.
Lone Mountain contends the version in effect at
the time of Harold’s award should apply. See Morsey v.
Frasier, 245 S.W. 3d 757 (Ky. 2008). It argues the
Supreme Court’s decision in Parker only found
unconstitutional the first sentence of the then-current
version of KRS 342.730(4) – the sentence terminating
employee benefits once he or she qualified for old-age
Social Security retirement benefits. But the Court did not
find unconstitutional the second sentence of that
provision – the sentence relating to the termination of
spouse and/or dependent benefits. We disagree.
Termination of spousal and dependent benefits in
that version of the statute was premised on the same
criteria as the termination of the employee’s benefits –
qualification for old-age Social Security retirement
benefits. The Supreme Court held that terminating
employee benefits based on this criterion was a violation
of the Equal Protection Clause of the United States and
Kentucky Constitutions. Parker, 529 S.W.3d at 770
(“KRS 342.730(4) violates the right to equal protection
and is constitutionally infirm.”). That Court made no
distinction between the first and second sentences of that
provision; instead it deemed KRS 342.730(4), in total,
unconstitutional. We decline to draw the distinction
Lone Mountain urges.
-9-
In effect, Lone Mountain urges us to mandate the
application of an unconstitutional statute. This we cannot
do. On remand, the ALJ shall apply the “tier-down”
provision of the 1994 version of KRS 342.730(4), which
states:
If the injury or last exposure occurs prior to
the employee’s sixty-fifth birthday, any income
benefits awarded under KRS 342.750, 342.316,
342.730, or 342.732 shall be reduced by ten
percent (10%) beginning at age sixty-five (65) and,
by ten percent (10%) each year thereafter until and
including age seventy (70). Income benefits shall
not be reduced beyond the employee’s seventieth
birthday[.]
It is this provision that applies.
Brewer, 2021 WL 1432091, at *2-4 (footnote omitted).
As noted in Parker, 529 S.W.3d at 766 n.3, the 1994 version of KRS
342.730(4) is constitutional, with the Court explaining that the unconstitutional
version of KRS 342.730(4) was adopted in 1996. The 1994 version is
memorialized in 1994 Kentucky Acts ch. 181, § 25, H.B. 928.
We agree with the reasoning in Brewer and in the absence of any
other precedent, follow it. Accordingly, we affirm the portion of the Board’s
opinion vacating the CALJ’s award to reduce Kimberly’s benefits to 50% of
Anthony’s pursuant to KRS 342.730(3)(a) but vacate the portion of the Board’s
opinion affirming the CALJ’s application of the 2018 amended version of KRS
342.730(4) in deciding what those benefits were. We direct the Board to vacate
-10-
the CALJ’s opinion in toto and remand to the CALJ with directions consistent with
this Opinion.
ALL CONCUR.
BRIEF FOR APPELLANT: BRIEF FOR APPELLEE:
W. Barry Lewis Hal Daniel Friedman
Hazard, Kentucky Louisville, Kentucky
-11-