Opinion
NO. 2013-CA-001153-WC
05-30-2014
HARDIN COUNTY BOARD OF EDUCATION APPELLANT v. TOMMY THURMAN; HON. DOUGLAS W. GOTT, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD APPELLEES
BRIEF FOR APPELLANT: Carl M. Brashear Elizabethtown, Kentucky BRIEF FOR APPELLEE, TOMMY THURMAN: Danny E. Darnall Elizabethtown, Kentucky
NOT TO BE PUBLISHED
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-09-82357
OPINION
AFFIRMING IN PART;
REVERSING IN PART; AND REMANDING
BEFORE: ACREE, CHIEF JUDGE; DIXON AND THOMPSON, JUDGES. ACREE, CHIEF JUDGE: The Hardin County Board of Education seeks review of an opinion and order of the Workers' Compensation Board. Hardin County argues that the Board erred: (1) in affirming a holding by the Administrative Law Judge (ALJ) that appellee Tommy Thurman's claim for a shoulder injury was not barred by a prior settlement with Hardin County; and (2) in its instruction to the ALJ on remand regarding the calculation of the benefits for Thurman's shoulder injury. For the foregoing reasons, we affirm in part, reverse in part, and remand for additional proceedings consistent with this Opinion.
On July 8, 2009, Thurman, a mechanic for Hardin County, injured his low back and left shoulder while removing a hood from a school bus. He entered into a settlement agreement with Hardin County that provided for a lump sum payment of $31,730.71, comprising of $28,230.71 for permanent partial disability (PPD) benefits based upon a 10% low back impairment, and $3,500 for waivers of his right to indemnity benefits, vocational rehabilitation, and the right to reopen. The ALJ approved the settlement on June 18, 2010.
Thurman was not represented by counsel during the settlement process.
On May 10, 2012, Thurman filed a Form 101 Application for Resolution of Injury Claim for the injury to his left shoulder. In his testimony at the subsequent hearing, Thurman explained that he understood the settlement agreement to apply only to his back injury.
The ALJ agreed with Thurman that the settlement agreement did not dispose of the shoulder claim, and held that he was entitled to benefits for that injury. The ALJ calculated Thurman's PPD benefits based on his combined low back and shoulder impairment of 16%, for a total weekly amount of $71.88. The ALJ also held that Hardin County was entitled to a credit of $28,230.71 for the back injury benefits that had been paid under the settlement agreement.
Both parties appealed to the Board, which affirmed the ALJ's holding that the claim for the shoulder injury was not barred by the prior settlement, but reversed the ALJ's calculation of credit for the prior award. The Board held that the shoulder injury should be treated as an entirely separate claim, and that therefore the ALJ had erred by calculating benefits for a combined back and shoulder injury and then crediting Hardin County for the amount paid pursuant to the settlement agreement for the back injury. The Board held that Thurman was entitled to keep the full amount of the settlement agreement, and remanded the case for a recalculation of the benefits for the shoulder injury alone, based on a 6% impairment rating multiplied by a factor of 1.00 pursuant to KRS 342.730(1)(b). This appeal by Hardin County followed.
Kentucky Revised Statute
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The function of further review of the WCB [Workers' Compensation Board] in the Court of Appeals is to correct the Board only where the Court perceives 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.Western Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992).
Hardin County argues that the claim for the shoulder injury was barred by the prior settlement agreement, and that the Board's interpretation involved going beyond the "four corners" of the agreement and considering parol evidence. Hardin County points out that the settlement agreement contains no language indicating that it was a partial settlement of the injuries stemming from the July 8, 2009 incident, or that any rights were reserved. We are not convinced.
The agreement clearly states that the affected body part was "lumbar" and does not mention the shoulder condition at all. We agree with the ALJ that, had the agreement contained language to the effect that Thurman was settling any and all claims arising from the July 8, 2009 incident, his shoulder claim would be barred. But the agreement does not contain such broad, inclusive language. The fact that the back and shoulder injuries arose from the same occurrence is not sufficient to overcome the plain language of the agreement referring only to the lumbar injury.
Hardin County further argues that the Board's treatment of the shoulder injury as an independent claim violates KRS 342.270(1), which states:
If the parties fail to reach an agreement in regard to compensation under this chapter, either party may make written application for resolution of claim. The application must be filed within two (2) years after the accident, or, in case of death, within two (2) years after the death, or within two (2) years after the cessation of voluntary payments, if any have been made. When the application is filed by the employee or during the pendency of that claim, he or she shall join all causes of action against the named employer which have accrued and which are known, or should reasonably be known, to him or her. Failure to join all accrued causes of action will result in such claims being barred under this chapter as waived by the employee.
Hardin County argues that this rule should apply to pre-claim settlements, because Thurman's claim arose from one incident involving both his back and shoulder. We decline to extend the scope of the statute in this manner. The settlement agreement pertaining to the lumbar condition was approved and finalized before Thurman sought any benefits for the shoulder injury. We agree with the Board that the merger provision of the statute, requiring joinder of all accrued causes of action, is inapplicable because the settlement was approved and benefits paid before the claim for the shoulder injury was filed. Similarly, Thurman's Form 101 did not constitute a reopening simply because the injury to the shoulder occurred at the same time as the injury to the lumbar region. Hardin County was free to negotiate a settlement with Thurman that would encompass both injuries, but it did not. Instead, Hardin County drafted an agreement that referred only to the lumbar injury.
Finally, Hardin County contends that, even if the Board correctly decided that a separate claim for the shoulder injury was permissible, it erred in directing the ALJ to calculate the amount of the PPD benefits using the statutory factor for the combined lumbar and shoulder impairment of 16%, rather than the factor appropriate for the 6% shoulder impairment alone.
The relevant statute provides that income benefits for PPD shall be paid to the employee as follows:
For permanent partial disability, sixty-six and two-thirds percent (66-2/3%) of the employee's average weekly wage but not more than seventy-five percent (75%) of the state average weekly wage as determined by KRS 342.740, multiplied by the permanent impairment rating caused by the injury or occupational disease as determined by the "Guides to the Evaluation ofKRS 342.730(1)(b).
Permanent Impairment," times the factor set forth in the table that follows:
AMA Impairment Factor
0 to 5% 0.65
6 to 10% 0.85
11 to 15% 1.00
16 to 20% 1.00
21 to 25% 1.15
26 to 30% 1.35
31 to 35% 1.50
36% and above 1.70
The Board found Thurman sustained 6% shoulder impairment. The Board then directed the ALJ to multiply by a factor of 1.00, rather than the 0.85 which is appropriate for a 6% impairment rating. We agree with Hardin County that this was an error of law. Thurman argues that this issue is unpreserved for our review because Hardin County never raised it in its appeal to the Board. But the Board's approach of treating the shoulder injury as an entirely separate claim could not necessarily have been foreseen by Hardin County, because the ALJ treated the claims jointly for purposes of calculated PPD benefits.
Therefore, we reverse the Board's opinion and order only as to the means of calculating PPD benefits for the shoulder injury, and remand for a recalculation of those PPD benefits using the correct 0.85 factor applicable to a 6% impairment rating. The opinion and order of the Board is affirmed in all other respects.
DIXON, JUDGE, CONCURS.
THOMPSON, JUDGE, DISSENTS AND FILES SEPARATE OPINION.
THOMPSON, JUDGE, DISSENTING: Respectfully, I dissent. I would reverse on the basis that the settlement agreement encompasses all claims pertaining to Thurman's injury sustained on July 8, 2009. Workers' compensation settlement agreements are no different than settlement agreements in any civil litigation.
An agreement to settle a workers' compensation claim is a contract between the parties. Questions concerning the construction and interpretation of contractual terms are legal in nature as are questions regarding the existence of an ambiguity. An ambiguous contract is one that is capable of multiple, reasonable interpretations.Richey v. Perry Arnold, Inc., 391 S.W.3d 705, 709 (Ky. 2012) (footnotes omitted). Here, no ambiguity exists.
The settlement agreement states: "Plaintiff agrees to dismiss his claim against Defendant-Employer and its workers' compensation carrier with prejudice, including waiver of right to reopen, waiver of vocational rehabilitation." The injury claim arises from one specific incident, not separate incidents for the back injury and shoulder injury. I am not aware of any requirement that a settlement agreement specify each type of injury compensated to effectuate a release of claims pertaining to a single incident. Although he filed a Form 101, Thurman's claim is essentially a reopening seeking increased permanent partial disability benefits resulting from the same work-related injury which he previously settled. In that same agreement, he unambiguously waived any right to reopen.
I would reverse. BRIEF FOR APPELLANT: Carl M. Brashear
Elizabethtown, Kentucky
BRIEF FOR APPELLEE, TOMMY
THURMAN:
Danny E. Darnall
Elizabethtown, Kentucky