Opinion
NO. 2018-CA-000976-WC
06-28-2019
BLACK ENERGY, INC. APPELLANT v. JAMES HIGGINS; PINE CREEK MINING; HON. R. ROLAND CASE, ADMINISTRATIVE LAW JUDGE; UNINSURED EMPLOYERS' FUND; AND WORKERS' COMPENSATION BOARD APPELLEES
BRIEF FOR APPELLANT: H. Brett Stonecipher Lexington, Kentucky BRIEF FOR APPELLEE JAMES HIGGINS: Ronnie M. Slone Prestonsburg, Kentucky BRIEF FOR APPELLEE UNINSURED EMPLOYERS' FUND: James R. Carpenter Assistant Attorney General Frankfort, Kentucky
NOT TO BE PUBLISHED PETITION FOR REVIEW OF A DECISION OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-14-00707 OPINION
AFFIRMING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; ACREE AND TAYLOR, JUDGES. TAYLOR, JUDGE: Black Energy, Inc. (Black Energy) petitions this Court to review a June 1, 2018, Opinion of the Workers' Compensation Board (Board) affirming an award of permanent total disability benefits to James Higgins. We affirm.
Higgins was employed approximately twenty-five years as a coal miner. On December 23, 2013, Higgins filed a claim for workers' compensation benefits alleging that he suffered coal-related pneumoconiosis. He claimed that his last day of employment in coal mining was on December 23, 2013, and that his employer was Black Energy, Inc./Pine Creek Mining. Subsequently, Black Energy filed a motion to be dismissed as a party. It argued that Higgins was last employed by Pine Creek Mining (Pine Creek) and that Pine Creek was the liable employer per Kentucky Revised Statutes (KRS) 342.316. Black Energy clarified that Pine Creek and Black Energy were two separate and distinct entities. Black Energy maintained that it merely provided temporary employees to Pine Creek and did carry workers' compensation coverage on those employees. As to Higgins, Black Energy admitted that he was employed by the company to work at the Pine Creek mine but only until November 5, 2013. After that date, Black Energy argued that Higgins worked directly for Pine Creek:
Black Energy, Inc., provided temporary employment services, including contract employees for coal mines throughout eastern Kentucky. --------
2. The claimant's deposition testimony was taken on 6/17/14. During the deposition, the claimant confirmed that he was paid by Black Energy up through and including 11/5/13. He further testified that he continued to work directly for Pine Creek Mining from
11/6/13 through 12/23/13. He testified that he worked in and around an active mine site between 11/6/13 and 12/23/13. He further testified that he was paid directly by Pine Creek Mining at the time of his last exposure on 12/23/13.June 24, 2014, Motion at 1. Higgins responded that the Kentucky Department of Workers' Compensation provided a Certification of Coverage which stated that Pine Creek Mining was leased under Black Energy and carried workers' compensation insurance coverage. The administrative law judge (ALJ) ultimately denied Black Energy's motion to be dismissed as a party.
Eventually, the ALJ rendered an Opinion, Award, and Order on May 2, 2016. The ALJ found Higgins to be permanently and totally disabled due to coal-related pneumoconiosis. The ALJ determined that Higgins' average weekly wage was $500. The ALJ noted that Pine Creek was uninsured but that the Pine Creek mining site was insured through a policy issued to Black Energy. In finding Black Energy to be liable for payment of benefits to Higgins, the ALJ reasoned:
Black Energy argues that [Higgins] was only working for them until approximately November 5, 2013. However, [Higgins] continued to work at the Pine Creek Mine site thereafter. His last exposure to dust was the [sic] December 23, 2013. On that date, the defendant, Pine Creek Mining, was uninsured, however, the records of the Workers' Compensation Department indicate that there was a policy of insurance in effect on that date through Black Energy, Inc. The record is clear that [Higgins] at the recommendation of the defendant, Pine Creek Mining, was employed by Black Energy, Inc.[,] to work at the Pine Creek Mining site. After a couple of
weeks, apparently the defendant, Pine Creek Mining, notified Black Energy, Inc.[,] that they were closing. However, they, in fact, did not close but continued working for several weeks thereafter and continued to employ the plaintiff, James Higgins. The evidence is undisputed that James Higgins was an employee until December 23, 2013.Opinion, Award and Order at 9-10.
The essential issue for determination is whether the employer responsible for compensation benefits is the defendant, Black Energy, Inc., or the defendant, Pine Creek Mining. On [Higgins'] last day of exposure of December 23, 2013, the Pine Creek Mining site was insured through a policy issued to Black Energy. Black Energy failed to give the requisite notice of cancellation to the Department of Workers' Claims. Although, as the Uninsured Employers' Fund indicates, there may be some contractual issues between Black Energy and Pine Creek Mining. Those do not obviate Black Energy's or their insurance carrier's statutory duty to file a notice of cancellation of coverage. Attention is directed to Traveler's Insurance Company v. Duvall, 884 S.W.2d 665 (1994) wherein the Supreme Court discusses the purpose of the statute requiring insurers to file a notice of cancellation. The defendant, Black Energy, and/or their insurance carrier, having failed to file the notice of cancellation, is the insurer of the record on [Higgins'] last date of exposure of December 23, 2013. They are therefore the responsible carrier for the award.
Black Energy then sought review with the Board. By Opinion entered June 1, 2018, the Board affirmed the ALJ's opinion and award. Our review follows.
Black Energy contends that the ALJ erroneously failed to specifically find whether Black Energy or Pine Creek was Higgins' employer on his last day of employment (December 23, 2013) in coal mining and erroneously concluded that Black Energy was responsible for payment of workers' compensation benefits to Higgins. Black Energy maintains that the evidence establishes that Pine Creek was Higgins' last employer, and as Pine Creek was uninsured, the Uninsured Employers' Fund was responsible for payment of benefits to Higgins. Black Energy points out that it last paid Higgins for working at the Pine Creek mine on November 5, 2013, and thereafter Higgins was paid directly by the owners of Pine Creek.
KRS 342.316(10) provides:
When an employee has an occupational disease that is covered by this chapter, the employer in whose employment he or she was last injuriously exposed to the hazard of the disease, and the employer's insurance carrier, if any, at the time of the exposure, shall alone be liable therefor, without right to contribution from any prior employer or insurance carrier, except as otherwise provided in this chapter.And, KRS 342.340 reads, in relevant part:
(1) Every employer under this chapter shall:
(a) Insure and keep insured its liability for compensation in some corporation, association, or organization authorized to transact the business of workers' compensation insurance in this state; or
. . . .
(2) Every employer subject to this chapter shall file, or have filed on its behalf, with the department, as often as may be necessary, evidence of its compliance with the provisions of this section and all others relating hereto. . . . Every employer who has complied with the foregoing provision and has subsequently canceled its insurance or its membership in an approved self-insured group, as the case may be, shall immediately notify, or have notice given on its behalf to the department of the cancellation, the date, and the reasons; and every insurance carrier or self-insured group shall in like manner notify the commissioner upon the cancellation, lapse, termination, expiration by reason of termination of policy period, or nonrenewal of any policy issued by it or termination of any membership agreement, whichever is applicable under the provisions of this chapter, except that the carrier or self-insured group need not set forth its reasons unless requested by the commissioner. The above filings are to be made on the forms prescribed by the commissioner. Termination of any policy of insurance issued under the provisions of this chapter shall take effect no greater than ten (10) days prior to the receipt of the notification by the commissioner unless the employer has obtained other insurance and the commissioner is notified of that fact by the insurer assuming the risk. Upon determination that any employer under this chapter has failed to comply with these provisions, the commissioner shall promptly notify interested government agencies of this failure and, with particular reference to employers engaged in coal mining, the commissioner shall promptly report any failures to the Department for Natural Resources so that appropriate action may be undertaken pursuant to KRS 351.175.
In affirming the decision of the ALJ to hold Black Energy liable, the Board reasoned:
[T]he record reveals on June 26, 2014, the Commissioner of the Department of Workers' Claims certified Pine Creek, 196 Carousel Drive, Mayking, KY 41837 had workers' compensation insurance in Kentucky on the date of the alleged injury of December 23, 2013. The Commissioner also stated Pine Creek was leased under Black Energy and the insurance carrier was Insurance Co. of the State of PA. The policy issued by AIG, introduced in the record, listed Black Energy, 198 Carousel Drive, Mayking, KY 41837 as the site afforded workers' compensation coverage. The policy is replete with notations that AIG provided workers' compensation coverage for the employees at that mine site. Further, there is no dispute that Black Energy's workers' compensation insurance policy covering the Pine Creek mine site was in effect on the date of Higgins' last injurious exposure. Unlike in [Travelers Ins. Co. v. Duvall, 884 S.W.2d 665 (Ky. 1994)] Duvall, supra, the workers' compensation policy providing coverage at the Pine Creek mine site was not cancelled, nor had coverage expired. Fultz testified the policy was not cancelled in anticipation of Pine Creek resuming mining operations. Since Black Energy did not cancel the policy providing coverage for the mining operations at the Pine Creek mine, its carrier, as found by the ALJ, is liable for the income and medical benefits due Higgins. We note the AIG policy does not limit workers' compensation coverage to specifically identified employees. Rather, the policy identifies specific locations.
Moreover, had Black Energy or AIG notified the Commissioner it was no longer providing workers' compensation coverage for the employees at the Pine Creek mining site, the appropriate action could have been taken to ensure Pine Creek had the necessary workers' compensation coverage as required by law. Since Black Energy or AIG failed to notify the Commissioner that it was cancelling the policy and no longer providing coverage for the employees at the Pine Creek mine site, Black Energy's carrier, AIG, bears the liability for
Higgins' benefits. The ALJ's determination that Black Energy and its carrier are the responsible parties for Higgins' income and medical benefits will be affirmed.Workers' Compensation Board Opinion at 25-27.
Upon the whole record, we cannot conclude that substantial evidence to support the ALJ's findings is lacking or that the Board overlooked or misconstrued the law or committed an error "so flagrant as to cause a gross injustice." W. Baptist Hospital v. Kelly, 827 S.W.2d 685, 688 (Ky. 1992). Rather, we agree with the Board that Black Energy's workers' compensation insurance must cover Higgins' coal-related pneumoconiosis.
Black Energy also asserts that the ALJ erred in determining that Higgins' average weekly wage was $500. Black Energy argues that Higgins was paid $400 for his first week of work and $300 for the second week of work. Black Energy points out that Higgins never worked five days in either week. Because Higgins had not worked for thirteen weeks in total, Black Energy maintains that his average weekly wage should be determined by only considering these two weeks of salary. Thus, Black Energy argues that Higgins' average weekly wage was $350 and that the ALJ erred by concluding otherwise.
KRS 342.140(1) reads, in relevant part:
(1) If at the time of the injury which resulted in death or disability or the last date of injurious exposure preceding death or disability from an occupational disease:
. . . .
(d) The wages were fixed by the day, hour, or by the output of the employee, the average weekly wage shall be the wage most favorable to the employee computed by dividing by thirteen (13) the wages (not including overtime or premium pay) of said employee earned in the employ of the employer in the first, second, third, or fourth period of thirteen (13) consecutive calendar weeks in the fifty-two (52) weeks immediately preceding the injury;
(e) The employee had been in the employ of the employer less than thirteen (13) calendar weeks immediately preceding the injury, his or her average weekly wage shall be computed under paragraph (d), taking the wages (not including overtime or premium pay) for that purpose to be the amount he or she would have earned had he or she been so employed by the employer the full thirteen (13) calendar weeks immediately preceding the injury and had worked, when work was available to other employees in a similar occupation[.]
KRS 342.140(1)(e) controls the computation of average weekly wage in a case where the claimant was employed fewer than thirteen weeks prior to injury. The goal of KRS 342.140(1)(e) is to obtain an average weekly wage that "is a realistic reflection of the worker's earning capacity." Huff v. Smith Trucking, 6 S.W.3d 819, 820 (Ky. 1999). Under KRS 342.140(1)(e), the average weekly wage is computed by determining "what would have been earned had the employee been employed by the employer for the full 13 calendar weeks immediately preceding the injury and had worked when work was available to other employees in a similar occupation." C & D Bulldozing Co. v. Brock, 820 S.W.2d 482, 486 (Ky. 1991). And, "the computation of average weekly wage pursuant to KRS 342.140(1)(e) must take into consideration the unique facts and circumstances of each case." Huff, 6 S.W.3d at 822.
In fixing the average weekly wage for Higgins, the ALJ specifically found that "$100.00 per day and a five (5) day work week would be an accurate reflection of [Higgins'] earning capacity." Opinion, Award and Order at 8. At the hearing, Higgins testified that he was paid a total of $100 per day and most often worked a full week. Additionally, Higgins stated that the owner of Pine Creek told him that the pay was $100 per day and that "he would pay me competitive to what the other mines was making after a few weeks." James Higgins Deposition, June 8, 2015, at 17. Although the evidence was disputed, it is within the discretion of the ALJ to judge the credibility of testimony, and in so doing, the ALJ may believe and disbelieve different aspects of a witness's testimony. See Abel Verdon Constr. v. Rivera, 348 S.W.3d 749, 753-54 (Ky. 2011). Hence, we are unable to conclude that the ALJ erred by determining Higgins' average weekly wage was $500. See Huff, 6 S.W.3d at 822.
For the foregoing reasons, the Opinion of the Workers' Compensation Board is affirmed.
ALL CONCUR. BRIEF FOR APPELLANT: H. Brett Stonecipher
Lexington, Kentucky BRIEF FOR APPELLEE JAMES
HIGGINS: Ronnie M. Slone
Prestonsburg, Kentucky BRIEF FOR APPELLEE
UNINSURED EMPLOYERS' FUND: James R. Carpenter
Assistant Attorney General
Frankfort, Kentucky