*/
Workers’
Compensation Board
OPINION
ENTERED: November 20, 2015
CLAIM NO. 201001064
KOCH CORPORATION PETITIONER
VS. APPEAL FROM HON. JANE
RICE WILLIAMS,
ADMINISTRATIVE LAW JUDGE
LYNWOOD GASPARD and
HON. JANE RICE WILLIAMS,
ADMINISTRATIVE LAW JUDGE RESPONDENTS
OPINION
AFFIRMING IN PART,
VACATING IN PART & REMANDING
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* * * * *
BEFORE: ALVEY, Chairman, STIVERS and RECHTER, Members.
ALVEY,
Chairman. Koch
Corporation (“Koch”) appeals from the Opinion, Award, and Order on Remand
rendered July 6, 2015 by Hon. Jane Rice Williams, Administrative Law Judge
(“ALJ”) awarding Lynwood Gaspard (“Gaspard”) temporary total disability (“TTD”)
benefits, permanent partial disability (“PPD”) benefits enhanced by the
multipliers contained in KRS 342.730(1)(c)1, and medical benefits for a
work-related low back injury he sustained on October 6, 2008. Koch also seeks review of the August 11, 2015
order denying its petition for reconsideration. Because the ALJ’s analysis regarding the
entitlement to TTD benefits remains deficient, we affirm in part, vacate in
part and remand for further determination as set forth below.
The ALJ rendered her
original opinion on May 27, 2014, and on July 1, 2014 denied Koch’s petition
for reconsideration. Koch appealed, and
this Board affirmed in part and vacated in part in an opinion entered December
12, 2014. Koch appealed a portion of the
Board’s decision which the Kentucky Court of Appeals reversed in part, and
remanded for the ALJ to enter an amended opinion. Gaspard
filed a Form 101 on September 17, 2010 alleging he injured his low back when
carrying a large piece of glass on October 6, 2008 while working for Koch. At the time he filed the claim, Gaspard no
longer worked for Koch, but was self-employed.
The claim was assigned to Hon. Lawrence F. Smith, Administrative Law
Judge (“ALJ Smith”), and later re-assigned to Hon. Caroline Pitt Clark,
Administrative Law Judge (“ALJ Clark”).
The claim was subsequently reassigned to the ALJ on July 18, 2012.
In an interlocutory
opinion rendered September 16, 2011, ALJ Smith determined jurisdiction was
appropriate. In a subsequent
interlocutory decision, ALJ Clark found Gaspard’s low back condition was caused
by the October 6, 2008 work injury, and a proposed surgery was reasonable and
necessary. ALJ Clark placed the claim in
abeyance and awarded TTD benefits from June 9, 2010 until Gaspard reached
maximum medical improvement (“MMI”).
In his brief to the ALJ
prior to her initial decision, Gaspard stated he began distributing bread for
Flowers Baking after he was terminated from Koch, but was unable to continue to
perform the physical duties required by the bread route due to his
limitations. He stated he has been
unable to return to work since December 2010.
In its petition for reconsideration, Koch argued it was entitled to a
credit against its obligation for TTD benefits since Gaspard returned to work
as a distributor of a bread route, earning lucrative wages before and after
December 2010, as reflected in his tax records for 2009 to 2011, which it had
filed as evidence. Koch argued his “wages,
tips and other comp” from Flowers Baking totaled $71,542.94, $96,914.24, and
$101,851.22 respectively.
Gaspard argued there is
a difference between earned and unearned income, and he was unable to perform
the physical activities of the bread route.
In an order issued September 7, 2012, the ALJ denied Koch’s arguments on
reconsideration, but ordered TTD benefits beginning in December 2010.
On May 6, 2013, Koch
filed a motion to add fraud as an issue, which the ALJ sustained. Koch also filed a document from October 2009
indicating Flowers Baking sold Gaspard distribution rights to a bread route.
The facts pertinent to
this appeal have previously been outlined by the ALJ, this Board, and the Court
of Appeals, and will not be reviewed again.
In the May 27, 2014
Opinion, Award, and Order, the ALJ determined Gaspard had not made fraudulent
statements leading to payments to which he was not lawfully entitled. The ALJ found Gaspard did not have a
pre-existing, action condition at the time of the October 6, 2008 work
injury. The ALJ awarded PPD benefits
based upon a 20% impairment rating for Gaspard’s work-related injury which she
enhanced pursuant to the multipliers contained in KRS 342.730(1)(c)1. Because she determined it was inapplicable,
the ALJ did not perform an analysis pursuant to Fawbush v. Gwinn, 103
S.W.3d 5 (2003). The ALJ found Gaspard
entitled to TTD benefits from December 14, 2010, the approximate date his
treating physician restricted him from work, to July 23, 2013, the day he reached
MMI. The ALJ rejected Koch’s argument
Gaspard is not entitled to TTD benefits during this time period since he had
greater earnings post-injury through his subsequent self-employment than he
received prior to his work injury. The
ALJ declined to assess sanctions against Koch pursuant to KRS 342.310. After the ALJ issued rulings on the petitions
for reconsideration, Koch appealed alleging the ALJ had committed numerous errors.
In a decision entered
December 12, 2014, this Board first found the ALJ erroneously concluded the
amount of Gaspard’s post-injury earnings was irrelevant, but determined the
error was harmless. Financial documents
filed as evidence regarding the bread route, as well as sections of the federal
statute and Revenue Rules were reviewed.
This Board found Gaspard was a statutory employee. Therefore, he was permitted to deduct his
business expenses as reflected in the Schedule Cs, in arriving at his net
income derived from the bread route for purposes of determining the application
of KRS 342.730(1)(c)2.
The Board held, “The
amount of income Gaspard earned from the distributorship as reflected in the
Schedule Cs and the tax returns is the determinative figure in resolving the
application of KRS 342.730(1)(c)2. This
Board determined Gaspard did not have greater post-injury earnings in 2010,
2011 and 2012 based upon a review of his tax records. This Board concluded the ALJ correctly
determined Gaspard had not returned to work earning a wage equal to or exceeding
his pre-injury AWW, therefore an analysis pursuant to Fawbush was
unnecessary.
This Board next
determined the ALJ utilized the incorrect standard in analyzing Gaspard’s
entitlement to TTD benefits. Since Gaspard
was not concurrently employed at the time of his injury, the standard for
determining his entitlement to TTD benefits are outlined in Central Kentucky
Steel v. Wise, 19 S.W.3d 657 (Ky. 2000), and Magellan Behavioral Health
v. Helms, 140 S.W.3d 579 (Ky. App. 2004).
The Board noted the ALJ discussed the holdings in Double L. Const.,
Inc. v. Mitchell, 182 S.W.3d 509 (Ky. 2005), and the Board’s opinion in J.C.
Penney Co., Inc. v. Newsome, 2007-01034, rendered June 30, 2010, which
dealt with entitlement to TTD benefits when there is concurrent
employment.
The ALJ concluded
Gaspard was entitled to TTD benefits until he reached MMI on July 23, 2013, and
his income from the bread route did not preclude such award. The ALJ also found although Gaspard was able
to do some work, he did not return to employment which was customary, and operating
a bread route for Flowers Baking was not a return to employment. This Board held the ALJ did not provide any
findings supporting her conclusions, and the determination Gaspard could not
return to the type of job performed when injured was insufficient under the
statutory and case law criteria.
Therefore, the Board vacated the award of TTD benefits, and remanded for
a determination in accordance with Central Kentucky Steel v. Wise, supra,
and Magellan Behavioral Health v. Helms, supra.
With regard to the
ALJ’s analysis of fraud, the Board determined pleadings filed by Gaspard in
February and May 2013 could not represent false and material representations
resulting in wrongful payments of TTD benefits since they were filed over two
years after those benefits commenced in December 2010. However, the Board found the ALJ failed to
provide the necessary explanation for her finding, “Gaspard has not made
fraudulent statements that have led to payments to which [he] was not lawfully
entitled.” Specifically, the Board
stated the ALJ did not explain the basis for her finding Gaspar’s statements in
his tax filings did not result in payments of TTD benefits to which he was not
entitled. The claim was remanded for
additional findings on the six elements necessary for a determination of
fraud.
The ALJ’s determination
Koch failed to prove Gaspard had a pre-existing active condition meriting a
carve out in the award of PPD benefits; he was entitled to the three
multiplier; and did not return to work at equal or greater wages, noting her
failure to make a determination regarding his post-injury AWW was a harmless
error, was affirmed. The award of TTD
benefits and the finding Gaspard did not engage in fraud were vacated and remanded
to the ALJ for additional determination.
Koch appealed the
Board’s decision to the Kentucky Court of Appeals for review solely on the
issue of the application of the three multiplier and the related arguments
about Gaspard’s AWW. In a decision rendered
April 27, 2015, after reviewing KRS 342.730(1)(c) and Fawbush v. Gwinn, supra,
the Court of Appeals stated as follows:
In
the present case, we must agree with Koch that the Board far exceeded its scope
of appellate review when it deemed harmless the ALJ’s failure to make any
findings related to Gaspard’s post-injury AWW and proceeded to make its own
factual findings and apply federal tax laws.
Rather, the Board should have remanded the issue to the ALJ as it did
with the fraud and TTD issues. Therefore,
we must reverse the Board’s opinion on this issue.
On
remand, in addition to the issues that have already been remanded, the ALJ
shall also be directed to make findings related to Gaspard’s post-injury
earnings, calculate his post injury AWW pursuant to KRS 342.140 keeping in mind
the Supreme Court’s opinion in Marsh v.
Mercer Transp., 77 S.W.3d 592 (Ky. 2002), and determine whether a Fawbush v. Gwinn analysis is necessary
related to the application of KRS 342.730(1)(c). The ALJ should not rely upon federal income
tax statutes, but should rather rely upon Kentucky’s relevant statutes as set
forth in the Worker’s Compensation Act.
For
the foregoing reasons, the opinion of the Workers’ Compensation Board is
reversed, and this matter is remanded to the [ALJ] for further proceedings in
accordance with this opinion.
In the Opinion, Award,
and Order on Remand rendered July 6, 2015, the ALJ made the following analysis
regarding fraud:
The elements
of fraud are a) material representation, b) which is false, c) known to be
false or made recklessly, d) made with inducement to be acted upon, e) acted in
reliance thereon, and f) causing injury. United
Parcel Service v. Rickert, 996 S.W.2d 464 (Ky. 1999):
a) material
representation – Defendant Employer believes Plaintiff represented he had not
returned to work in order to obtain benefits.
b) which is false – Even
though Defendant Employer argues the statement was false, the facts are clear
that he had not been returned to work and although he engaged in a his own side
business, the statement he had not returned to work was not a false
statement.
At that point, the fraud
argument fails as it is found herein he did not make a false statement.
With regard to Gaspard’s
post-injury AWW and the potential need for an analysis pursuant to Fawbush,
the ALJ stated as follows:
To qualify for an award of permanent partial
benefits under KRS 342.730, the claimant is required to prove not only the
existence of a harmful change as a result of the work-related traumatic event,
he is also required to prove the harmful change resulted in a permanent
disability as measured by an AMA impairment.
KRS 342.0011(11), (35), and (36).
Furthermore, if, due to an injury, an employee does not retain the
physical capacity to return to the type of work that the employee performed at
the time of the injury, the benefit for permanent partial disability shall be
multiplied by three (3) times the amount otherwise determined. KRS 342.730 (1)(c)(1).
KRS 342.730(1) (c) (1) reads as follows:
If, due to an injury, an
employee does not retain the physical capacity to return to the type of work
that the employee performed at the time of injury, the benefit for permanent
partial disability shall be multiplied by three (3) times the amount otherwise
determined under paragraph (b) of this subsection, but this provision shall not
be construed so as to extend the duration of payments.
KRS 342.730(1) (c) (2) states, in relevant
part, as follows:
If an employee returns to
work at a weekly wage equal to or greater than the average weekly wage equal to
or greater than the average weekly wage at the time of injury, the weekly benefit
for permanent partial disability shall be determined under paragraph (b) of
this subsection for each week during which that employment is sustained. During any period of cessation of that
employment, temporary or permanent, for any reason, with or without cause,
payment of weekly benefits for permanent partial disability during the period
of cessation shall be two (2) times the amount otherwise payable under
paragraph (b) of this subsection.
Pursuant to Fawbush vs. Gwinn, 107 SW 3d 5 (Ky. 2003) the pertinent
determinations for the ALJ when considering the appropriate multiplier are:
1. That a claimant cannot
return to the “type of work” performed at the time of the injury in accordance
with KRS 342.730(1)(c)1;
2. The claimant has returned to
work at an average weekly wage equal to or greater than his pre-injury average
weekly wage in accordance with KRS 342.730(1)(c)2.
Then, when both KRS
342.730(1)(c)1 and KRS 342.730(1)(c)2 apply, the ALJ must decide whether the
claimant can continue to earn that level of wages into the indefinite future.
2. Findings of fact and conclusions of law.
Gaspard’s
impairment as a result of the work injury is 20% and he qualifies for the 3
multiplier as he did not return to work earning the same or greater wages. His AWW at the time of injury was $1,006.23
and his post injury earnings were: 2010 - $839.75; 2011 - $768.17; and, 2012 -
$875.13.
3. Evidentiary basis and analysis.
Significantly, in its brief,
Koch concedes Gaspard’s AWW was $1,006.23 yielding a yearly income of
$52,323.96. The tax returns and the
Schedule Cs reflect in 2010, 2011 and 2012, Gaspard did not have yearly
earnings in excess of his pre-injury AWW of $1,006.23.
The varying opinions on this
issue have been carefully reviewed. Dr.
Morris’ opinion, though well presented, fails to make any mention of Gaspard’s
prior surgeries. He does address the
issue of a pre-existing carve out, and does not find a carve out applicable
but, because he makes no mention at all of the past surgery, it would be
nothing more than speculation to state his opinion on the matter.
The opinion of Dr. Huhn
assessing 20% is most persuasive. His
follow up letter removes any question of doubt on his opinion regarding a carve
out, as noted in the section above.
Regarding the multiplier,
however, the opinion of Dr. Morris is relied upon as being most in line with
Gaspard’s testimony. Following a third
back surgery, lifting restrictions are not unreasonable and seem only appropriate. Gaspard’s work at the time of the injury
involved heavy lifting, much bending and twisting and the opinion that he
should avoid such activities is adopted herein.
In determining whether a Fawbush analysis is necessary, the
following questions are relevant:
1. Does Gaspard retain the physical capacity to return to the work he
was doing at the time of the injury? As explained above, no he does not.
2. Has
Gaspard returned to work at the same or greater wages? No he has not.
Therefore, the 3x multiplier
is applicable.
Calculation:
502.51 x .20 x 1.00 x 3.2 = $321.61
Finally, with regard to
Gaspard’s entitlement to TTD benefits, the ALJ stated as follows:
1. Principle of law.
Kentucky Revised Statute 342.0011(11)(a)
states that: “‘temporary total disability’ means the condition of an employee
who has not reached maximum medical improvement from an injury and has not
reached a level of improvement that would permit a return to employment.” A claimant is entitled to sixty-six and
two-thirds percent (66-2/3%) of the employee's average weekly wage but not more
than one hundred percent (100%) of the state average weekly wage and not less
than twenty percent (20%) of the state average weekly wage as determined in KRS
342.740 during that disability.
2. Findings
of fact and conclusions of law.
Plaintiff
was entitled to TTD from the date Dr. Ramos took him off work, December 14,
2010 until he reached MMI on July 23, 2013.
3. Evidentiary
basis and analysis.
TTD was ordered from the date Dr. Ramos took
Gaspard off work sometime in December 2010 although the exact date could not be
ascertained from the records. Defendant
Employer began payments on December 14, 2010 which is the date Gaspard
testified he stopped working pursuant to the instructions from Dr. Ramos. Dr. Ramos’ November 22, 2011 letter confirms
Gaspard had been under his care since 2009 for a work-related injury. Dr. Ramos states he recommended surgery on
numerous visits which the insurance carrier did not approve. Dr. Ramos believed Gaspard had been unable to
work since December 2010 and was in no condition to return to work without
surgical intervention.
Koch argues in accordance with the guidelines
of Central Kentucky Steel v. Wise, supra,
and Magellan Behavioral Health v.
Helms, supra, Gaspard did not return to minimal
work. It cites to Gaspard’s
description of the work involved in the distributorship set forth in his
December 15, 2010, deposition. In
addition to Gaspard’s W-2s, Koch cites Gaspard’s
representations in his tax returns that he “materially participated” in the
business and drove various company vehicles substantial miles for business
purposes in 2010 through 2012.
Conversely, Gaspard
provided extensive testimony that after he was taken off work in December 2010,
he was physically unable to perform this work and he had an employee or a
helper who performed almost all of the work involved in the operation of his
distributorship. Although not reflected
in the tax returns and his revenue and expense statements, Gaspard
testified he paid his employee/helper almost $1,000.00 a week in cash. In checking “yes” on the Schedule C regarding
his material participation in the business, Gaspard
explained his material participation was taking care of the payroll and
speaking with his independent contractor on a daily basis.
Gaspard was entitled to TTD benefits as he
underwent surgery either in October or August 2012, and for a period of time
was unable to perform any type of work.
Post-surgery information from Gaspard’s
treating physician regarding MMI is addressed in a letter sent via facsimile on
July 31, 2013. The letter itself is not
dated. Plaintiff indicated in his
testimony Dr. Ramos placed him at MMI on July 23, 2013. TTD was paid through that date. It appears this period is appropriate and TTD
has not been underpaid or over paid.
Defendant Employer argues a much earlier date of MMI which would not be
appropriate while Gaspard was waiting for approval for surgery.
Gaspard contends he is entitled to TTD
benefits during the same period of time he had income from his bread
route. Koch argues the opposite noting
income tax records reflect more earnings post injury than Gaspard received
prior to the injury and, therefore, he is entitled to no TTD benefits.
KRS 342.0011(a) has been interpreted by our
courts as establishing a two-pronged test for the determination of the duration
of an award of TTD. Double L Const., Inc.
v. Mitchell, 182 S.W.3d 509 (Ky. 2005).
TTD benefits are payable so long as: (1) MMI has not been reached, and
(2) the injury has not reached a level of improvement that would permit a
return to employment. Magellan Behavioral Health v. Helms, 140
S.W.2d 579 (Ky. App. 2004).
In Magellan
Behavioral Health v. Helms, supra,
the Court of Appeals stated as follows:
In order to be entitled to
temporary total disability benefits, the claimant must not have reached maximum
medical improvement and not have improved enough to return to work.
The second prong of KRS 342.0011(11)(a)
operates to deny eligibility of TTD to individuals who, though not at maximum
medical improvement, have improved enough following an injury that they can
return to work despite not yet being fully recovered. In Central
Kentucky Steel v. Wise, 19 S.W. 3d 657 (Ky. 2000) the statutory phrase
“return to employment” was interpreted to mean a return to the type of work
which is customary for the injured employee or that which the employee had been
performing prior to being injured. The
“or” implies that the employee does not have to have returned to the same job
but may be working at one that is considered customary work for the injured
worker.
Entitlement to TTD does not require a
temporary inability to perform any type of work, and a finding that claimant is
able to perform minimal work does not preclude an award of TTD, Double L Construction, Inc. v. Mitchell,
supra. The evidence establishes that
Plaintiff has never been able to return to the type of job he performed at the
time of the injury.
The more contentious part of the dispute
centers on the earnings from the bread route and whether the earnings should
preclude Gaspard’s entitlement to TTD.
On this very issue, the Supreme Court stated in Central Kentucky Steel, supra, as follows:
CKS would interpret the
statute so as to require a termination of TTD benefits as soon as the worker is
released to perform any type of work. We
cannot agree with that interpretation.
It would not be reasonable to terminate the benefits of an employee when
he is released to perform minimal work but not the type that is customary or
that he was performing at the time of his injury.
This same scenario is addressed by the
Workers’ Compensation Board in J. C.
Penny Co., Inc. vs. Newsom, Claim number 07-01034, June 30, 2010, a case
addressing Newsom’s ability to continue her sedentary job as a self-employed
editor one week after her fall at work.
Board Member Stivers pointed out (as noted above) that in Double L Construction, Inc. v. Mitchell,
supra, the Supreme Court concluded the employment
in which the injury occurred is the claimant’s “customary” type of work for
analyzing the second prong of KRS 342.011(11)(a) stating as follows:
Central Kentucky Steel v. Wise, supra,
stands for the principle that if a worker has not reached MMI, a release to
perform minimal work rather than 'the type that is customary or that he was
performing at the time of his injury' does not constitute 'a level of
improvement that would permit a return to employment' for the purposes of KRS
342.011(11)(a). [citations omitted]. The case did not involve concurrent
employments and referred only to Wise's job as a steelworker. We have concluded, therefore, that when the
decision is applied to a case in which a worker is injured in one concurrent
employment but is unable temporarily to perform another, both the customary
type of work and the work the individual was performing at the time of the
injury refer to the work performed in the employment in which the injury
occurred. We reach this conclusion,
in part, because we are convinced that a worker whose injury renders him
temporarily unable to perform the work in which the injury occurred should not
be penalized for performing what work he is able to do. Nor are we convinced
that his employer should be absolved from liability for TTD benefits. The
claimant's injury occurred in his employment as a construction carpenter;
therefore, his customary work for the purposes of KRS 342.011(11)(a) was
construction carpentry, including the duties that he was performing at the time
he was injured. It is undisputed that the injury rendered him unable
temporarily to perform his customary work until August 18, 2003; therefore, he
did not reach a level of improvement that would permit a return to employment
until August 18, 2003.
Double L. Construction at 514. (emphasis added).
As with Newsom,
there is the appearance of a distinction at first glance between Double L. Construction and the case
under submission. In Double L. Construction, the claimant was
injured at his full-time carpentry job but was able to continue working his
part-time janitorial job. In contrast,
Gaspard was injured in a job working for Koch as a glass setter, a job
involving heavy and strenuous labor on a regular basis. He testified he purchased a bread route from
Flowers Bakery in March 2009 to support his family. This is the source of his self-employment
income. It is his testimony he has been
able to continue the route only because he pays an independent contractor and
the independent contractor pays an assistant.
In Newsom, the Board
explained:
While these distinctions are
notable, they do not render inapplicable the above-cited language in Double
L. Construction, supra, concluding that a "worker whose injury
renders him temporarily unable to perform the
work in which the injury occurred should not be penalized for performing
what work he is able to do.” Id. (emphasis added). Additionally, and
critical to the case sub judice is
that in Double L. Construction, the Supreme Court never proclaimed that
which J.C. Penney asserts on appeal- that is, in cases of concurrent
employment, a claimant's "customary" type of work for purposes of
meeting the second prong of KRS 342.0011(11)(a) is the job in which the
claimant works the longest hours. Instead, the Supreme Court defines
"customary" work as the work in which the injury occurred,
"including the duties that he was performing at the time he was
injured." Id. Thus, under Double L. Construction, supra,
Newsom's "customary" type of work for purposes of satisfying the
second prong under KRS 342.011(11)(a) is her work at J.C. Penney, the job
wherein she was injured, regardless of her ability to continue working as a
self-employed editor.
The Board addressed another related point
worthy of noting herein, “…entitlement to TTD, in the context of concurrent
employment, is not contingent upon whether wages from a concurrent job are
included in AWW, again repeating language from Double L. Construction:
Having considered the
relevant statutes, we conclude that a worker is entitled to TTD benefits if a
work-related injury results in a temporary inability to perform the job in
which it occurred. If the injury also causes an inability to perform a
concurrent job of which the employer has knowledge, income benefits are based
on the wages from both employments by operation of KRS 342.140(5). If the injury does not cause an inability to perform a concurrent job, KRS 342.140(5) is
inapplicable and income benefits are based solely on the wages from the job in
which the injury occurred. In contrast, if a work-related injury does not prevent the
worker from performing the job in which it occurred, the worker is not entitled
to TTD despite an inability to perform a concurrent job.
Double L.
Construction
at 515. (emphasis added).
Case law on this issue is clear. Gaspard was entitled to TTD benefits from
Koch until he reached MMI and his income from the bread route does not preclude
his entitlement to TTD.
In a nutshell, Koch argues the amount of
income reflected on tax returns precludes TTD.
Gaspard says the tax returns are wrong and do not reflect expenses he
paid. This is not relevant. No case law stands for the proposition if
your earnings from another source are a certain amount, then no TTD.
The ALJ awarded Gaspard
TTD benefits, PPD benefits, and medical benefits. Koch filed a petition for reconsideration
raising the same arguments it now makes on appeal. The ALJ summarily denied its petition on
August 11, 2015.
On appeal, Koch argues
the ALJ did not explain how she calculated Gaspard’s post-injury earnings for
2010, 2011 and 2012, and she failed to use the standard set forth in Marsh
v. Mercer Transportation, 77 S.W.3d 592 (Ky. 2002), as directed by the
Court of Appeals. Koch argues the tax
returns show Gaspard’s post-injury AWW was greater than his pre-injury
AWW. Koch next argues the ALJ erred in
finding a Fawbush analysis unnecessary since Gaspard in fact returned to
work earning equal or greater wages.
Koch also argues the ALJ failed to follow the directives of the Board
regarding his entitlement to TTD benefits.
Koch asserts the ALJ’s explanation remains insufficient, and the
evidence shows he was working and earning equal or greater wages during the
period of time he was receiving TTD benefits.
Koch next argues the ALJ’s analysis on Gaspard’s alleged fraud is
insufficient since she did not discuss all of the elements and the evidence
does not support her ultimate determination.
Finally, Koch argues the ALJ did not determine whether Gaspard had
reached a level of improvement allowing a return to work that was customary for
him or which he was performing prior to being injured pursuant to Central
Kentucky Steel v. Wise, supra, and Magellan Behavioral Health v.
Helms, supra. Koch asserts on
remand the ALJ did not discuss whether Gaspard’s work with the bread route was
customary, and merely reiterated her conclusions in the original opinion.
Regarding the ALJ’s
analysis of TTD benefits from December 14, 2010 (the approximate date he was
restricted from work by his treating physician) through July 23, 2013 (the day he
attained MMI), as noted above, in our opinion rendered December 12, 2014, this
Board held the ALJ did not provide findings supporting her conclusions, and her
determination Gaspard could not return to the type of job performed when
injured was insufficient. Therefore, the
award of TTD benefits was vacated, and remanded for a determination in
accordance with Central Kentucky Steel v. Wise, supra, and Magellan
Behavioral Health v. Helms, supra.
In the opinion on
remand, the ALJ noted Gaspard was restricted from working in December 2010 until
he was placed at MMI on July 23, 2013.
She noted Koch paid TTD benefits from December 14, 2010 through July 23,
2013. The ALJ also summarized the
arguments by Koch and Gaspard. However,
the ALJ provided the same analysis verbatim on remand regarding Gaspard’s
entitlement to TTD benefits on pages 23 through 27 in her opinion on remand as
she did in the original opinion on pages 20 through 24. Therefore, we again find the analysis
deficient, and vacate and remand for the ALJ to provide an analysis in
accordance with Central Kentucky Steel v. Wise, supra, and Magellan
Behavioral Health v. Helms, supra.
We again note Gaspard
was not concurrently working at the time of the October 6, 2008 injury. Therefore, insofar as the ALJ addressed
concurrent employment, her analysis is incorrect. The standard for determining Gaspard’s
entitlement to TTD benefits is outlined in Central Kentucky Steel v. Wise,
supra, and Magellan Behavioral Health v. Helms, supra. Since the ALJ provided the same analysis as
in her original decision, her findings remain deficient, and she must provide
findings of fact to support her determination.
In determining Gaspard
did not perpetrate a fraud, the ALJ sufficiently followed the directives of this
Board in the opinion on remand, and substantial evidence of record supports her
determination. KRS 342.335 states as
follows:
No person shall knowingly
file, or permit to be filed, any false or fraudulent claim on his or her behalf
to compensation or other benefits under this chapter, or by fraud, deceit, or
misrepresentation procure or cause to be made or receive any payments of
compensation or other benefits under this chapter to which the recipient is not
lawfully entitled, or conspire with, aid, or abet another so to do.
The elements of fraud
are a) material representation, b) which is false, c) known to be false or made
recklessly, d) made with inducement to be acted upon, e) acted in reliance
thereon, and f) causing
injury. United Parcel Service v. Rickert, 996 S.W.2d 464 (Ky. 1999). (Emphasis added). The party alleging fraud
must establish the six elements by clear and convincing evidence. United Parcel Service v. Rickert,
supra.
KRS 342.285 grants an ALJ as
fact-finder the sole discretion to determine the quality, character, and
substance of evidence. Square D Co. v.
Tipton, 862 S.W.2d 308 (Ky. 1993). The ALJ may draw reasonable
inferences from the evidence, reject any testimony, and
believe or disbelieve various parts of the evidence, regardless of whether it
comes from the same witness or the same adversary party’s total proof.
Jackson v. General
Refractories Co., 581 S.W.2d 10 (Ky. 1979); Caudill v. Maloney’s Discount Stores,
560 S.W.2d 15 (Ky. 1977). Although a
party may note evidence supporting a different outcome than reached by an ALJ,
this is not an adequate basis to reverse on appeal. McCloud
v. Beth-Elkhorn Corp., 514 S.W.2d 46 (Ky. 1974). Rather, it must be shown there was no evidence of
substantial probative value to support the decision. Special Fund v. Francis, 708 S.W.2d
641 (Ky. 1986). The function of
the Board in reviewing an ALJ’s decision is limited to a determination of
whether the findings made are so unreasonable under the evidence that they must
be reversed as a matter of law. Ira
A. Watson Department Store v. Hamilton, 34 S.W.3d 48 (Ky. 2000). The Board, as an appellate tribunal, may not
usurp the ALJ's role as fact finder by superimposing its own appraisals as to
weight and credibility, or by noting other conclusions or
reasonable inferences that otherwise could have been
drawn from the evidence. Whittaker v. Rowland, 998
S.W.2d 479 (Ky. 1999).
The ALJ reviewed the entirety of the
record and addressed the issue of whether Gaspard falsely stated he had not
returned to work despite operating the bread route since 2009. Gaspard clearly acknowledged his
distributorship of the bread route since the inception of this claim. In fact, in the Form 101, Gaspard alleged he
was currently self-employed earning a lesser weekly wage. As noted by the ALJ, Gaspard testified at his
December 15, 2010 deposition he owned a business as an independent distributor
for Flowers Baking beginning in either 2008 or 2009. Gaspard similarly discussed the bread route
he owned at his March 2013 deposition. The ALJ also noted Gaspard provided his
year-to-date revenue and expenses and tax returns for 2010, 2011, and 2012
which Koch introduced.
The ALJ found Koch could not rely upon
Gaspard’s pleadings filed in February and May 2013 since they were filed over
two years after payment of TTD benefits commenced, and could not be considered
false and material representations resulting in the wrongful payment of TTD
benefits. The ALJ also found Gaspard’s
assertions and responses in the pleadings do not constitute false material
representations, but rather state his position relative to the assertion made
in Koch’s pleadings. Ultimately, the ALJ
was not persuaded Gaspard’s statement was made with the intent to obtain TTD
benefits which had been paid since December 2010, over two years before he
filed the first response about which Koch complained.
Based upon the above, the ALJ
specifically found the second element of fraud, a false material
representation, had not been established.
Since all elements are necessary in establishing fraud, the ALJ was not
required to address the remaining elements.
The ALJ performed the correct analysis in determining no fraud had been
perpetrated, and cited to various portions of the record supporting her
decision. Since the directives of this
Board were followed on remand, and her determination is supported by
substantial evidence, it will not be disturbed on appeal.
Finally, we find the ALJ followed the
directives of the Court of Appeals in the opinion on remand regarding Gaspard’s
post-injury AWW, and substantial evidence supports her determination. As noted above, the Court of Appeals directed
the ALJ to make findings related to
Gaspard’s post-injury earnings, calculate his post injury AWW pursuant to KRS
342.140 keeping in mind the Supreme Court’s opinion in Marsh v. Mercer
Transp., supra, and
determine whether a Fawbush analysis is necessary related to the
application of KRS 342.730(1)(c). It is
undisputed Gaspard’s pre-injury AWW was $1,006.23. In the opinion on remand, the ALJ
specifically found “his post injury earnings were: 2010 - $839.75; 2011
- $768.17; and, 2012 - $875.13.” The ALJ
also stated, “Koch concedes Gaspard’s AWW was $1,006.23 yielding a yearly
income of $52,323.96. The tax returns
and the Schedule Cs reflect in 2010, 2011 and 2012, Gaspard did not have yearly
earnings in excess of his pre-injury AWW of $1,006.23.”
Although the ALJ did not provide a
step-by-step calculation of the post-injury earnings for 2010, 2011 and 2012,
it is clear she divided by 52 the yearly business income amount indicated on
Gaspard’s Schedule C’s for each year ($43.667.00, $39,945.00, and $45,507.00
respectively). The tax records entered
into evidence regarding the income derived by Gaspard from the distributorship
constitutes substantial evidence supporting the ALJ’s findings of his
post-injury AWW. The ALJ correctly outlined
when a Fawbush analysis is necessary.
Since the ALJ determined Gaspard did not return to work at an AWW equal
to or greater than his pre-injury AWW, a Fawbush analysis was not required. Therefore, since the ALJ sufficiently
followed the directions of the Court of Appeals, and her determinations
regarding Gaspard’s post-injury AWW and the application of the three multiplier
pursuant to KRS 342.730(1)(c)1 are supported by substantial evidence, we
affirm.
Accordingly, the Opinion, Award, and Order on Remand rendered July 6, 2015 and the
August 11, 2015 order on petition for reconsideration are hereby AFFIRMED IN PART, VACATED IN PART, AND
REMANDED for entry of an amended opinion and award in conformity with the
views expressed herein.
STIVERS,
MEMBER, CONCURS.
RECHTER,
MEMBER, CONCURS IN PART, DISSENTS IN PART, AND FILES A SEPARATE OPINION.
RECHTER,
Member. I respectfully dissent from that part of the
majority’s opinion remanding this claim to the ALJ for further consideration of
the issue of TTD benefits. I believe the
ALJ analyzed this issue sufficiently, and articulated her decision, which
rested on the conclusion that Gaspard is physically unable to return to his
position at Koch. That conclusion is
well-supported by the evidence, and the ALJ explained her interpretation of the
applicable law. The question of whether
Gaspard is precluded from receiving TTD benefits by virtue of his income from
the delivery route is one of law, not fact.
Remand to the ALJ for further fact-finding is unnecessary under these
circumstances.
COUNSEL FOR PETITIONER:
HON EMILY WETMORE
300 EAST MAIN ST, STE 400
LEXINGTON, KY 40507
COUNSEL FOR RESPONDENT:
HON CHED JENNINGS
455 SOUTH FOURTH ST, STE 1450
LOUISVILLE, KY 40202
ADMINISTRATIVE LAW JUDGE:
HON JANE RICE WILLIAMS
PREVENTION PARK
657 CHAMBERLIN AVENUE
FRANKFORT, KY 40601
