Opinion
NO. 2016-CA-000643-WC
01-13-2017
JAMES RIVER COAL SERVICE CO. APPELLANT v. JENNINGS FIELDS; HONORABLE ROLAND CASE, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD APPELLEES
BRIEF FOR APPELLANT: Morgan J. Fitzhugh Lexington, Kentucky BRIEF FOR APPELLEE: McKinnley Morgan London, Kentucky
NOT TO BE PUBLISHED PETITION FOR REVIEW OF A DECISION OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-14-00515 OPINION
VACATING AND REMANDING
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BEFORE: CLAYTON, STUMBO, AND VANMETER, JUDGES. VANMETER, JUDGE: Under KRS 342.732(1)(a), workers who are diagnosed with certain low levels of occupational pneumoconiosis with little to no pulmonary impairment, are entitled to a one-time retraining incentive benefit (RIB). The issue we must resolve in this case is whether the Administrative Law Judge (ALJ) and the Workers' Compensation Board erred as a matter of law in failing to give preclusive effect to a 1994 settlement agreement entered into by Jennings Fields and Ikerd & Bandy Coal Company for Fields' RIB claim as a bar to his current claim against James River Coal Service Company. We hold that the ALJ and the Board did err and therefore vacate and remand the Board's Opinion Affirming the ALJ's Opinion, Award and Order.
Judge Laurence B. VanMeter authored this opinion prior to being elected to the Kentucky Supreme Court. Release of this opinion was delayed by administrative handling. --------
I. Factual and Procedural Background.
In 1993, Fields filed a claim for pneumoconiosis while working for Ikerd & Bandy. As found by the ALJ in the current proceeding, "[Fields] had his x-ray interpreted by three separate 'B' readers; two interpretations were read as Category 1/0 and one was read as Category 1/2. [Fields] entered into a settlement agreement whereby he agreed to resolve his pneumoconiosis claim in exchange for a lump sum RIB payment."
As to the current claim, the ALJ considered the medical evidence and entered the following findings:
Fields has established the presence of Coal Workers' Pneumoconiosis ["CWP"], Category 1/1 and no pulmonary impairment based on pulmonary function studies above 80%. [Fields] will only be entitled to a Retraining Incentive Benefit pursuant to KRS 342.732(1)(a)1. Also, since [Fields] was sixty (60) years old at the time of his last exposure, he does have the option pursuant to KRS 342.732(1)(a)7 to elect to receive, in lieu of Retraining Incentive Benefits, a 25%
disability rating from the date of last exposure until sixty-five (65) years of age.
The ALJ denied James River any credit for the prior RIB settlement between Fields and Ikerd & Bandy.
James River appealed to the Board. In summary, the Board held that the 1994 settlement agreement was based on a compromise and did not contain a determination that Fields had actually contracted Coal Workers' Pneumoconiosis, it did not constitute the "one-time only" award of RIB pursuant to KRS 342.732(1)(a). This Petition for Review follows.
II. Standard of Review.
The oft-stated standard of review for the appellate courts of a workers' compensation decision "is to correct the [Workers' Compensation] 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." E.g., W. Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992); Butler's Fleet Serv. v. Martin, 173 S.W.3d 628, 631 (Ky. App. 2005); Wal-Mart v. Southers, 152 S.W.3d 242, 245 (Ky. App. 2004). See also Special Fund v. Francis, 708 S.W.2d 641, 643 (Ky. 1986) (if the fact-finder finds in favor of the person having the burden of proof, the burden on appeal is only to show that there was some substantial evidence to support the decision); cf. Gray v. Trimmaster, 173 S.W.3d 236, 241 (Ky. 2005) (if the ALJ finds against the party having the burden of proof, the appellant must "show that the ALJ misapplied the law or that the evidence in her favor was so overwhelming that it compelled a favorable finding"). Furthermore, KRS 342.285(2) explicitly provides that "[t]he board shall not substitute its judgment for that of the [ALJ] as to the weight of the evidence on questions of fact."
III. Issue on Review.
The issue on this review is whether the Board erred in its determination that the 1994 settlement agreement did not constitute an RIB award. The Board noted that while the underlying claim was for RIB, or tier 1 CWP benefits, the settlement agreement failed to explicitly set forth what was settled. The Board's analysis was, as follows:
The language of the agreement establishe[d] ALJ Dockter could have either awarded or denied RIB benefits [sic] based on the evidence of record. However the last sentence of the agreement is troubling. The statement "This is a compromise settlement" does not definitively reflect whether or not the settlement amounts to an award of RIB benefits [sic].
If indeed the 1994 settlement agreement constituted such an award, the ALJ would be precluded from awarding RIB a second time. The statute as it existed in 1994 is consistent with the current statute limiting an individual to a one-time or single award of RIB benefits [sic]. However, the 1994 settlement contains no finding Fields had actually contracted CWP or was entitled to a RIB award. The agreement specifically states the settlement was on a compromise basis. Because the 1994 settlement agreement makes no finding, sets forth the ALJ could either award or deny benefits, and contains the compromise language, we determine it does not constitute a RIB award.
If the 1994 settlement agreement did constitute a RIB award, Fields' current claim would necessarily require dismissal because he would have already received his one-time award. Subsequent employment does not establish entitlement to an additional or second award of the one-time only benefit. The fact the current statute provides a different payout option for individuals of a certain age make no difference.
We acknowledge that the ALJ in 1994 made no specific finding of coal worker's pneumoconiosis, and that the 1994 settlement was explicitly framed as a compromise. That said, Fields brought his claim under KRS 342.732(1)(a), the settlement recites its basis as an "RIB claim[,]" evidence was presented in the 1994 case (as noted by current ALJ) that "[Fields] had his x-ray interpreted by three separate 'B' readers; two interpretations were read as Category 1/0 and one was read as Category 1/2. [Fields] entered into a settlement agreement whereby he agreed to resolve his pneumoconiosis claim in exchange for a lump sum RIB payment." (Emphasis added). The 1994 settlement also stated "[t]his amount is inclusive of all attorney fees, rehabilitation, and no medical expenses apply as this is a claim for simple coal worker's pneumoconiosis."
As noted by the Board, the 1994 settlement is ambiguous. We discern no reason why case law relating to settlement agreements in other contexts should not apply to this case.
An agreement to settle legal claims is essentially a contract subject to the rules of contract interpretation. It is valid if it satisfies the requirements associated with contracts generally, i.e., offer and acceptance, full and complete terms, and consideration. The primary object in construing a contract or compromise settlement
agreement is to effectuate the intentions of the parties. Any contract or agreement must be construed as a whole, giving effect to all parts and every word in it if possible.Cantrell Supply, Inc. v. Liberty Mut. Ins. Co., 94 S.W.3d 381, 384-85 (Ky. App. 2002) (internal quotations and citations omitted).
Where a contract is ambiguous or silent on a vital matter, a court may consider parol and extrinsic evidence involving the circumstances surrounding execution of the contract, the subject matter of the contract, the objects to be accomplished, and the conduct of the parties. Absent an ambiguity in the contract, the parties' intentions must be discerned from the four corners of the instrument without resort to extrinsic evidence. A contract is ambiguous if a reasonable person would find it susceptible to different or inconsistent interpretations. The fact that one party may have intended different results, however, is insufficient to construe a contract at variance with its plain and unambiguous terms. Generally, the interpretation of a contract, including determining whether a contract is ambiguous, is a question of law for the courts and is subject to de novo review.
We would be inclined to agree with the current ALJ and the Board, if instead of settling under the auspices of the Department of Workers' Claims, Fields and Ikerd & Bandy had agreed to dismiss Fields' claim and enter into an extrajudicial settlement. However, since the 1994 settlement agreement explicitly recites its basis as an RIB claim, the evidence at the time indicated no less than category 1/0 coal worker's pneumoconiosis, and Fields received a lump sum payment, as then permitted, as an RIB award, we conclude that Fields in fact contracted for and received an RIB award in 1994. KRS 342.732(1)(a) then provided that an employee is entitled to "a one (1) time only retraining incentive benefit." KRS 342.732(1)(a) (LexisNexis 1993). The one-time only RIB award limitation is still contained in KRS 342.732(1)(a): "1. If an employee has a radiographic classification of category 1/0, 1/1 or 1/2, coal workers' pneumoconiosis and spirometric test values of eighty percent (80%) or more, the employee shall be awarded a one (1) time only retraining incentive benefit."
IV. Conclusion.
As Fields previously received an RIB award in 1994, we conclude that the ALJ erred in awarding, and the Board erred in affirming, an additional retraining incentive benefit for Fields in the present action. We vacate the Board's Opinion and Order and remand for an appropriate Order consistent with this Opinion.
ALL CONCUR. BRIEF FOR APPELLANT: Morgan J. Fitzhugh
Lexington, Kentucky BRIEF FOR APPELLEE: McKinnley Morgan
London, Kentucky