RENDERED: NOVEMBER 26, 2014; 10:00 A.M.
NOT TO BE
PUBLISHED
Commonwealth of Kentucky
Court of Appeals
JANICE RICHMOND APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-12-82062
MASCO BUILDING
CABINET GROUP,
HON. WILLIAM J. RUDLOFF,
ADMINISTRATIVE LAW JUDGE;
AND WORKERS’ COMPENSATION BOARD APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: DIXON, LAMBERT, AND NICKELL, JUDGES.
NICKELL,
JUDGE: Janice Richmond has petitioned for review of an
opinion of the Workers’ Compensation Board (Board) vacating and remanding the
opinion and order of the Administrative Law Judge (ALJ). Having reviewed the record, we affirm.
BACKGROUND
After injuring her left knee while working at Masco
Building Cabinet Group (Masco) on November 4, 2011, Richmond applied for
workers’ compensation benefits on July 2, 2012.
A scheduling order was issued on August 14, 2012, setting a Benefits
Review Conference (BRC) on December 4, 2012.
However, because Richmond was scheduled to undergo knee surgery, her case
was placed in abeyance on September 17, 2012, until Richmond was found to be at
maximum medical improvement (MMI).
On October 8, 2012, Richmond filed a Form 107 medical
report completed by Dr. James Owen, who diagnosed a work-related left knee
injury, but declined to assess an impairment rating in light of Richmond’s
upcoming knee surgery. Richmond also
submitted treatment records from Dr. Travis Hunt. Masco filed an independent medical examination
(IME) report by Dr. Rick Lyon on December 26, 2012, and a supplemental report
on February 8, 2013. Dr. Lyon assessed a
5% permanent impairment rating in accordance with the AMA[1]
Guides[2]
due to Richmond’s work-related left knee injury.
On February 13, 2013, Richmond filed a motion to
remove the case from abeyance. In her
motion, Richmond advised she was released from Dr. Hunt’s care and the case was
ready to be re-docketed for a combined BRC and final hearing. Richmond further advised she was scheduled to
return to her physician for an IME, and expected a report within two weeks. On February 19, 2013, the ALJ removed the case
from abeyance and scheduled a combined BRC and final hearing for April 25,
2013.
On April 8, 2013, Masco moved to extend proof time
and reschedule the combined BRC and final hearing. As grounds, Masco stated it had not yet received
the IME report discussed in Richmond’s February motion. Arguing it had a right to cross-examine
Richmond and her medical expert, Masco claimed it would not be possible to obtain
this testimony prior to the hearing.
On April 10, 2013, Richmond filed a Form 107 medical
report completed by Dr. Owen. Dr. Owen
examined Richmond on March 13, 2013, and assessed an 8% permanent impairment
rating in accordance with the AMA Guides due
to the work-related injury. Dr. Owen
opined Richmond did not retain the physical capacity to return to her previous
employment, and had permanent restrictions of no bending, squatting, or stooping. Dr. Owen concluded Richmond should not engage
in prolonged walking or standing.
Objecting to Masco’s motion, Richmond argued Dr.
Owen’s report was timely filed, and claimed further delay would be financially
detrimental to her. In response, Masco
stated it was willing to withdraw its motion for an extension of proof time if
Richmond would stipulate she would not seek a permanent total disability (PTD)
award.
On April 16, 2013, the ALJ entered an order reiterating
the combined BRC and final hearing would be held on April 25, 2013, and ordering
both parties to submit proof by the date of the hearing. The combined BRC and final hearing were held as
scheduled. PTD was listed among the
contested issues on the BRC order. Masco
submitted an additional letter from Dr. Lyon. Dr. Lyon stated he reviewed Dr. Owen’s IME and
reaffirmed his previous opinion assessing a 5% permanent impairment rating
under the AMA Guides.
The ALJ issued an opinion and award on April 30,
2013. The ALJ found Richmond was
entitled to temporary total disability (TTD) and PTD benefits as a result of
the work-related left knee injury, for which he determined Richmond had
sustained an 8% permanent impairment. The
ALJ found Richmond was entitled to PTD based on
the severity of the plaintiff’s work injury,
her age, her work history, her education, her sworn testimony at the Final
Hearing, and Dr. Owen’s specific opinions.
After Masco’s subsequent petition for
reconsideration was denied, Masco appealed to the Board. On September 6, 2013, the Board entered an
opinion vacating and remanding the ALJ’s opinion and order upon concluding the
ALJ erred in failing to give Masco additional time to submit rebuttal proof
after Richmond’s proof time expired, thereby denying Masco an adequate
opportunity to present its case. The
Board held the ALJ’s proof schedule did not comply with the “60-30-15” format
set forth at 803 KAR[3]
25:010 § 8, which provides in
pertinent part:
Section 8. Discovery, Evidence, and
Exchange of Records. (1) Proof
taking and discovery for all parties shall begin from the date of issuance by
the executive director of the scheduling order.
(2)(a)
Plaintiff and defendants shall take proof for a period of sixty (60) days from
the date of the scheduling order;
(b)
After the sixty (60) day period, defendants shall take proof for an additional
thirty (30) days; and
(c)
After the defendant's thirty (30) day period, the plaintiff shall take rebuttal
proof for an additional fifteen (15) days.
Further, the Board held the
ALJ erroneously conducted a combined BRC and final hearing on the same date, in
contravention of 803 KAR 25:010 § 13. The Board held these errors violated Masco’s
due process rights.
In addition, although the ALJ had listed numerous
factors supporting his decision, the Board held his finding of PTD deficient as
a matter of law due to his failure to provide the analysis required by Ira A. Watson Department Store v. Hamilton,
34 S.W.3d 48, 51-52 (Ky. 2000), which states:
An analysis of the factors set forth in KRS
342.0011(11)(b), (11)(c), and (34) clearly requires an individualized
determination of what the worker is and is not able to do after recovering from
the work injury. Consistent with Osborne v. Johnson, [432 S.W.2d 800 (Ky.
1968),] it necessarily includes a consideration of factors such as the worker’s
post-injury physical, emotional, intellectual, and vocational status and how
those factors interact. It also includes
a consideration of the likelihood that the particular worker would be able to
find work consistently under normal employment conditions. A worker’s ability to do so is affected by
factors such as whether the individual will be able to work dependably and
whether the worker’s physical restrictions will interfere with vocational
capabilities. The definition of “work” clearly contemplates that a worker is
not required to be homebound in order to be found to be totally occupationally
disabled. See, Osborne v. Johnson, supra, at 803.
The Board held the ALJ’s
bare references to Dr. Owen’s opinions and Richmond’s age, education, work
history, severity of injury, and testimony, with no explanation of their individual
or combined occupational significance or impact, failed to comport with the
foregoing guidelines. Though superfluous
or extraneous details or discussion is not required, the Board noted an ALJ must
provide adequate facts and reasoning to apprise the parties of the basis of any
ultimate conclusion. Big Sandy Community Action Program v.
Chafine, 502 S.W.2d 526, (Ky. 1973); Cornett
v. Corbin Materials, Inc., 807 S.W.2d 56 (Ky. 1991). Thus, the Board vacated the ALJ’s finding of
PTD, and remanded for imposition of an appropriate proof schedule, conduct of a
BRC and a final hearing, and rendition of an opinion and order with adequate
findings and analysis. This petition for
review followed.
Before this Court, Richmond advances two
allegations of error in seeking reversal.
First, she argues the Board erred in determining Masco’s due process
rights had been violated. Second, she argues
the Board erred in vacating the ALJ’s finding of PTD.
STANDARD OF REVIEW
The ALJ, as fact-finder, has
sole authority to determine the weight, credibility, substance, and inferences
to be drawn from the evidence. Paramount Foods, Inc. v. Burkhardt, 695 S.W.2d 418, 419 (Ky.
1985). When conflicting evidence
is presented, the ALJ may choose whom and what to believe. Pruitt v. Bugg Brothers,
547 S.W.2d 123, 124 (Ky. 1977).
The Board is charged with deciding whether the ALJ's finding “is so
unreasonable under the evidence that it must be viewed as erroneous as a matter
of law.” KRS[4]
342.285; Ira A. Watson Department Store, 34 S.W.3d at
52. On review, the function of
this Court is to correct the Board only where the Court perceives the Board has
overlooked or misconstrued controlling statutes or precedent, or has committed
an error in assessing the evidence so flagrant as to cause gross injustice. See Western Baptist Hospital v. Kelly, 827 S.W.2d 685, 687
(Ky. 1992).
ANALYSIS
On appeal, Richmond first
alleges the Board erred in holding the ALJ violated Masco’s due process
rights. In support of her argument,
Richmond claims Masco waived any objection to the combined BRC and final hearing
and the truncated proof schedule by failing to object when the ALJ issued the
scheduling order. Richmond asserts it is
commonplace for ALJs to combine a BRC and final hearing, and to deviate from
the statutory 60-30-15 proof schedule. Further,
Richmond argues Masco could have obtained proof and taken depositions as early
as February, when the case was removed from abeyance, and there was no
legitimate reason for Masco to wait until Dr. Owen’s report was filed.
It has long been accepted
that an ALJ has broad discretion to control the taking and presentation of
proof in a workers' compensation proceeding, and this power to control
proceedings should not be usurped by reviewing courts unless the ALJ acts arbitrarily
or unreasonably so as to indicate an abuse of discretion. New Directions Housing
Authority v. Walker, 149 S.W.3d 354, 358 (Ky. 2004); Elkhorn Coal Co.
v. Bates, 236 S.W.2d 946, 949 (Ky. 1951). In the present case, we agree with the Board
in holding the ALJ abused this broad discretion by failing to afford Masco an
adequate opportunity to develop rebuttal evidence.
When the ALJ removed this
case from abeyance, he failed to issue a scheduling order pursuant to 803 KAR
15:010 § 8(2),
which would have required the granting of sixty days to Richmond for submission
of direct proof, thirty days thereafter to Masco for submission of responsive
proof, and fifteen days thereafter to Richmond for submission of rebuttal
proof. Masco sought to assert this right
by moving to extend
proof time and reschedule the BRC and final hearing—thereby preserving the
issue for appellate review. However, the
ALJ denied Masco’s request and ordered all proof to be completed by the April 25, 2013, combined BRC
and final hearing. Richmond
argues it is commonplace for ALJs to deviate from the statutory 60-30-15 proof
format and to schedule BRCs and final hearings on the same date. However, while we do not doubt such actions may
occur in other cases upon agreement of the parties, here, there was no such
agreement.[5] As such, we hold the ALJ failed to provide Masco an adequate
opportunity to rebut Richmond’s evidence.
The ALJ’s failure to give Masco
an adequate opportunity to rebut Richmond’s proof deprived
Masco of its due process right to be heard at a meaningful time and in a
meaningful manner. See Hilltop Basic Resources, Inc. v. County of Boone, 180
S.W.3d 464, 469 (Ky. 2005) (citing Mathews v. Eldridge, 424 U.S. 319,
333, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976)).
Among the proof Masco was unable to obtain due to the inadequate
rebuttal time was a cross-examination of Dr. Owen. Administrative due process requires an
opportunity to confront and cross-examine adverse witnesses. Goldberg v. Kelly,
397 U.S. 254, 90 S.Ct. 1011, 25 L.Ed.2d 287 (1970); Kaelin v. City of
Louisville, 643 S.W.2d 590, 591-92 (Ky. 1982).
We further reject Richmond’s
argument that Masco could have developed evidence well in advance of the date
Dr. Lyon’s report was submitted. The nature of rebuttal evidence is evidence “which
tends to counteract or overcome the legal effect of the evidence for the
adverse party.” Arnold v.
Commonwealth, 192 S.W.3d 420, 425 (Ky. 2006) (quoting Houser v.
Coursey, 310 Ky. 625, 221 S.W.2d 432 (1949)). Masco could not have
reasonably anticipated and responded to the contents of Dr. Owen’s examination
report until after it was submitted on April 10, 2013.[6]
The ALJ’s failure to provide Masco adequate
opportunity for submission of rebuttal evidence was compounded by the ALJ’s error
in conducting the BRC and final hearing on the same date, in contravention of 803
KAR 25:010 § 13. The purpose of the BRC
is to expedite the processing of the case by aiding settlement and narrowing
the contested issues. 803 KAR 25:010 § 13(1). The ALJ is to schedule a hearing at the
conclusion of a BRC if the parties have not reached an agreement on the issues. 803 KAR 25:010 § 13(13)(b). By rejecting Masco’s request to extend proof
and reschedule the final hearing—and proceeding to conduct the BRC and final
hearing on the same date—the ALJ’s actions defeated the BRC’s purpose of
facilitating agreement and the processing of the case, and impeded Masco’s
ability to develop rebuttal evidence.
Based on the foregoing, we
hold—consistent with the Board—that the ALJ erred by failing to grant Masco
thirty days after the completion of Richmond’s proof to submit rebuttal
evidence, and by holding the combined BRC and final hearing. We, too, are convinced these errors
effectively denied Masco its due process rights.
Next, Richmond argues the
Board erred by vacating the ALJ’s finding of PTD. Richmond claims the Board usurped the ALJ’s
role as fact finder by superimposing its own appraisals as to the weight,
credibility, and inferences to be drawn from the evidence. See
Whittaker v. Rowland, 998 S.W.2d 479, 481 (Ky. 1999). We disagree.
PTD is “the condition of an employee who, due to an
injury, has a permanent disability rating and has a complete and permanent
inability to perform any type of work as a result of an injury.”
KRS 342.0011. In determining whether an employee has
suffered PTD, the ALJ is required to consider factors “such as the worker's post-injury physical, emotional, intellectual, and
vocational status and how those factors interact.” Ira A. Watson
Dept. Store, 34 S.W.3d at
51. An ALJ is
required to support his conclusions with facts drawn from the evidence in each
case so that both sides may be dealt with fairly and be properly apprised of the basis for the decision. Id.; Shields v. Pittsburgh
& Midway Coal Mining Co., 634 S.W.2d 440, 444 (Ky. 1982). An ALJ’s opinion must not only summarize the
conflicting evidence concerning disputed facts and weigh that evidence to make
findings of fact; it must also set forth the legal significance of those findings. Arnold
v. Toyota Motor Mfg., 375 S.W.3d 56, 61–62 (Ky. 2012).
We agree with the Board, and
hold the ALJ’s opinion does not provide a sufficient factual basis to support
his award of PTD benefits. To support
his finding of PTD, the ALJ merely cites “the severity of the plaintiff’s work injury, her age,
her work history, her education, her sworn testimony at the Final Hearing, and
Dr.’s Owen’s specific opinions.” The ALJ
fails to discuss how these factual factors—in combination with Dr. Owen’s
opinions—contribute to and establish Richmond’s inability to perform any meaningful
type of work.
In particular, based on restrictions placed on her
bending, squatting, stooping, and prolonged
walking, Dr. Owen opined Richmond was unable to return to her previous
employment. However, Dr. Owen was silent
regarding other work activities, and the ALJ must address whether Richmond could
return to any gainful employment. Here,
the ALJ's opinion is conclusory, merely listing facts on which he relied without
explanation concerning their occupational significance vis-à-vis his ultimate legal determination of PTD.
As a result, though
recognizing the ALJ’s broad discretion as fact finder, we hold the record does
not contain a sufficient evidentiary basis to allow meaningful review. Even so, nothing in this opinion should be
understood to preclude the ALJ from again determining PTD—so long as all
parties are provided adequate due process and any award—or absence thereof—is
supported by adequate factual findings and legal analysis.
For
the foregoing reasons, the opinion and order of the Board is affirmed.
ALL CONCUR.
BRIEF FOR APPELLANT: McKinnley Morgan London, Kentucky |
BRIEF FOR APPELLEE, MASCO BUILDING CABINET GROUP: Walter A. Ward Donald J. Niehaus Lexington, Kentucky |
[1] American Medical Association.
[2] Guides to the Evaluation of Permanent Impairment.
[3] Kentucky Administrative Regulations.
[4] Kentucky Revised Statutes.
[5] In his May 22, 2013, opinion and order on reconsideration, the ALJ found the case was set for a combined BRC and final hearing “pursuant to agreement of the parties on April 16, 2013.” However, the Board held there was no evidence in the record of any such agreement, and we likewise find no evidence Masco ever agreed to schedule the BRC and final hearing on the same date. The order entered by the ALJ on April 16, 2013, was not an agreed order, and the record does not reflect any telephone or other conference being held prior to entry of the order. Moreover, the record indicates Masco never withdrew its request to reschedule the hearing.
[6] Although Richmond asserts she forwarded
Dr. Owen’s written report to Masco’s counsel within a few days of its receipt, well
in advance of the date it was submitted, nothing in the record suggests
Richmond exchanged or submitted this report prior to April 10, 2013.