Opinion
NO. 2018-CA-000647-WC
06-21-2019
SLATER FORE CONSULTING, INC. APPELLANT v. LESLIE B. RIFE; TANYA PULLIN, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD APPELLEES
BRIEF FOR APPELLANT: Carl M. Brashear Lexington, Kentucky BRIEF FOR APPELLEE: Christopher P. Evensen Louisville, Kentucky
NOT TO BE PUBLISHED PETITION FOR REVIEW OF A DECISION OF THE WORKERS' COMPENSATION BOARD
ACTION NO. WC-12-70061 OPINION
AFFIRMING
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BEFORE: LAMBERT, MAZE, AND TAYLOR, JUDGES. TAYLOR, JUDGE: Slater Fore Consulting, Inc. (Slater Fore) appeals from an opinion rendered by the Kentucky Workers' Compensation Board (Board) on March 30, 2018, affirming an award by the Administrative Law Judge (ALJ) on remand, that included interest on the benefits awarded to former employee Leslie B. Rife. For the reasons stated, we affirm.
I. BACKGROUND
Rife sustained a workplace injury on June 10, 2012, and was awarded permanent total disability income and medical benefits beginning on September 9, 2012. When Rife sustained "the injury or disability resulting from an occupational disease," the applicable rate of interest on unpaid benefits in Kentucky Revised Statutes (KRS) 342.040(1) was twelve percent (12%). During the pendency of his claim, KRS 342.040(1) was amended, and the interest rate was reduced to six percent (6%) effective June 29, 2017. As such, the ALJ's December 15, 2017, opinion applied the twelve percent (12%) interest rate to all unpaid installments of compensation payable between September 9, 2012, and June 28, 2017, and applied the six percent (6%) interest rate to all installments payable after June 29, 2017, until paid.
This case has previously been considered by the Kentucky Supreme Court on the merits of the underlying claim for benefits in an opinion rendered August 24, 2017. Slater Fore Consulting, Inc. v. Rife, 2016-SC-000131-WC, 2017 WL 3634211 (Ky. 2017).
The sole issue before the Board was whether KRS 342.040(1), as amended effective June 29, 2017, required the ALJ to award six percent (6%) interest on all past-due benefits awarded to Rife. On March 30, 2018, the Board affirmed the ALJ's interpretation of the statute and application of the interest rates based on the following reasoning:
In [Stovall v. Couch,] 658 S.W.2d 437 (Ky. App. 1983), the Court of Appeals clarified that the interest rate set forth in KRS 342.040(1) is controlled by the date of accrual and not by the date a judgment is rendered. The ALJ determined Rife's award of income benefits should commence on September 9, 2012, which has not been appealed. Therefore, Rife's entitlement to income benefits vested on this date. As such, from September 9, 2012 through June 29, 2017, Rife is entitled to 12% interest on all unpaid benefits. He is entitled to 6% interest on income benefits accrued after June 29, 2017.Board's Opinion at 4-5. This appeal followed.
II. ANALYSIS
The sole issue on appeal concerns the rate of interest applicable to unpaid installments of workers' compensation income benefits due to Rife when the applicable statute, KRS 342.040(1), was amended after Rife sustained a compensable injury but before he received an award.
Slater Fore asserts that the Board erred in affirming the ALJ's decision to award Rife 12 percent (12%) interest on installments payable before June 29, 2017, and 6 percent (6%) interest on and after that date. Slater Fore argues that the interest rate in effect on the date the ALJ's order was rendered should be applied to all payments. Kentucky workers' compensation law deems work-related injuries compensable as of the date the injury is sustained or as the date of the worker's last injurious exposure to the cause of an occupational disease. Accordingly, those dates - not the date that a claim is filed or the date that an award is entered - are the starting points for when installments of workers' compensation income benefits are considered due and when interest on unpaid installments of income benefits begins to accrue. See KRS 342.040(1) and KRS 342.316(5)(b).
In Stovall v. Couch, 658 S.W.2d 437 (Ky. App. 1983), a case involving facts that were the reverse of the situation presented here, this Court explained that where KRS 342.040(1) initially provided for a six percent (6%) rate of interest on past due installments of benefits during the pendency of a claim, but was later amended prior to the ultimate award to provide for a twelve percent (12%) rate of interest, the amendment could not be applied retroactively. We reached this conclusion because changes in the statutory interest rates are presumed to apply prospectively, absent an explicit statement to the contrary from the legislature. Id. at 438. Based on the plain wording of KRS 342.040(1), the amendment could not be applied retroactively because interest is "due from the date the claim for compensation was filed." Id. at 438 (citing Campbell v. Young, 478 S.W.2d 712, 713 (Ky. 1972)).
Slater Fore argues House Bill 223, Section 5, which effectuated the June 29, 2017, amendment of KRS 342.040(1), intended the amendment "apply to all workers' compensation orders entered or settlements approved on or after [June 29, 2017]." Slater Fore's Brief at 5. However, this language is not included in KRS 342.040. KRS 446.080(3) provides, "[n]o statute shall be construed to be retroactive, unless expressly so declared." The Supreme Court of Kentucky has held "the law in effect on the date of the injury or the date of the last exposure . . . is the law that fixes the rights of the claimant," not the date of the order. Maggard v. Int'l Harvester Co., 508 S.W.2d 777, 783 (Ky. 1974), superseded by statute on other grounds; see also William A. Pope Co. v. Howard, 851 S.W.2d 460, 463 (Ky. 1993); Vater v. Newport Bd. of Educ., 511 S.W.2d 670, 671 (Ky. 1974). Since the statute does not expressly provide for retroactive application of the new interest rate, the controlling authority in Kentucky is that the date of the injury fixes a claimant's rights. Thus, the Board correctly affirmed the ALJ's application of the twelve percent (12%) interest rate to payments due prior to June 29, 2017, and the six percent (6%) interest rate after that date.
III. CONCLUSION
For the foregoing reasons, we affirm the opinion of the Workers' Compensation Board.
ALL CONCUR. BRIEF FOR APPELLANT: Carl M. Brashear
Lexington, Kentucky BRIEF FOR APPELLEE: Christopher P. Evensen
Louisville, Kentucky