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RENDERED: MAY 19, 2017; 10:00 A.M.
NOT TO BE
PUBLISHED
Commonwealth of Kentucky
Court of Appeals
middletown heating and air APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-13-86565
MICHAEL K.
KLIMKO;
HON. STEPHANIE L. KINNEY,
ADMINISTRATIVE LAW JUDGE;
AND WORKERS’ COMPENSATION BOARD APPELLEES
OPINION
AFFIRMING
AND REMANDING
** ** ** ** **
BEFORE: COMBS, MAZE, AND STUMBO, JUDGES.
MAZE, JUDGE: Middletown Heating and Air (Middletown) petitions for review
from an opinion of the Workers’ Compensation Board (Board) that affirmed in
part, reversed in part, and remanded an award by the Administrative Law Judge
(ALJ) to Michael Klimko. Middletown
argues that the ALJ clearly erred in holding that Klimko was not disqualified
from receiving double income benefits for the period following the termination
of his employment. We conclude that the
ALJ did not clearly err in finding that Klimko’s conduct did not amount to an
intentional, deliberate action with a reckless disregard of the consequences to
himself or another. Therefore, the ALJ properly
held that Klimko’s award of permanent partial disability benefits was subject to
the 2x multiplier. Hence, we affirm, and
remand to the ALJ for additional findings as set forth in the Board’s opinion.
On April 16, 2013, Klimko
sustained an injury to his low back, accompanied by right-leg pain. At the time of his injury, Klimko was working
as a Heating, Ventilation, and Cooling (HVAC) technician for Middletown. He returned to light-duty work in September
of 2013, but earning the same wages and working the same number of hours. On June 19, 2014, Klimko left his employment
with Middletown. Shortly thereafter, he
began working for AirStream Technologies, with similar job duties but with
fewer hours and less physically demanding job duties.
Ultimately, the ALJ assessed
Klimko with an 11% impairment rating and awarded benefits accordingly. The ALJ also found that Klimko was entitled
to a double income benefit from September 20, 2013, through March 20, 2014, and
from June 20, 2014, forward. On appeal,
the Board found that the ALJ erred by awarding double income benefits for the
former period because Klimko returned to work at an equal or greater average
weekly wage than he earned prior to his injury.
However, the Board found that the ALJ properly awarded double income
benefits for the period after June 19, 2014, because Klimko’s actions did not
amount to an “intentional, deliberate action with a reckless disregard of the
consequences either to himself or to another.”
Finally, the Board remanded the matter to the ALJ with directions to
award permanent partial disability benefits on the date of injury, but
suspended for any period that temporary total disability benefits were
paid. Middletown now petitions for
review of this decision.
The sole question on review
is whether Klimko’s income benefits should be enhanced by the 2x multiplier of
KRS[1]
342.730(1)(c)2. That statute permits a
double income benefit for any period that employment at the same or a greater
wage ceases “for any reason, with or without cause.” Prior to 2015, the Kentucky Supreme Court
interpreted KRS 342.730(1)(c)2 as permitting a double income benefit during any
period that employment at the same or a greater wage ceases “for any reason,
with or without cause,” provided that the reason be related to the disabling
injury. Chrysalis House, Inc. v. Tackett, 283 S.W.3d 671, 674 (Ky.
2009).
However, the Court recently revisited
this holding in Livingood v.
Transfreight, LLC, 467 S.W.3d 249 (Ky. 2015). In Livingood,
the employee returned to work at the same wages, but was subsequently
terminated when a forklift that he was operating accidentally bumped into a
pole. Based on Chrysalis House, the ALJ denied the double income benefit, noting
that the employee was terminated for reasons unrelated to his injury. On subsequent review, the Supreme Court
concluded that its prior interpretation of the statute in Chrysalis House misinterpreted the legislature’s intent.
The Court first noted that
the purpose of KRS 342.730(1)(c)2 is to keep partially disabled workers in the
habit of working and earning as much as they are able. “It creates an incentive for them to return
to work at which they will earn the same or a greater average weekly wage by
permitting them to receive a basic benefit in addition to their wage but
assuring them of a double benefit if the attempt proves to be
unsuccessful.” Id. at 256 (citing Toy v.
Coca Cola Enters., 274 S.W.3d 433, 434-35 (Ky. 2008)). The Court went on to point out that the
statute also discourages an employer from continuing to employ an injured
worker at the same or a greater wage for the sole purpose of securing a finding
of partial rather than total disability or a finding under KRS 342.730(1)(c)2
rather than a triple benefit under KRS 342.730(1)(c)1. Id.
(citing Chrysalis House, 283 S.W.2d
at 675). Based on this legislative
intent, the Court overruled Chrysalis
House to the extent that it interpreted the statute to require that the
cessation of employment at the same or greater wage must relate to the
disabling injury.
Nevertheless, the Court held
a literal construction of KRS 342.730(1)(c)2 would allow an employee, such as
the one in Chrysalis House, to
benefit from his own wrongdoing.
Similarly, the Court noted that such a result would be inconsistent with
other provisions of KRS Chapter 342, which evince a legislative intent that an
employee should not benefit from his own wrongdoing. Id.
at 258. Therefore, the Court concluded
that KRS 342.730(1)(c)2 permits a double income benefit during any period that
employment at the same or a greater wage ceases “for any reason, with or
without cause,” except where the reason for the reduction in income is shown to
be the employee’s intentional, deliberate action with a reckless disregard of
the consequences either to himself or to another. Id.
In Livingood, the Court found that the employee’s conduct, which was
at most negligent, did not rise to this level.
However, the Court noted that the employee’s conduct in Chrysalis House, which involved theft,
would meet this standard. Id.
In the current case, Klimko
left his employment with Middletown following an incident that occurred on June
19, 2014. While servicing an air
conditioner at a customer’s house, Klimko found that the coil was leaking
refrigerant. He called his manager to
get a price on a replacement coil.
During that call, he had a disagreement with his manager about
Middletown’s down-payment policies. The
argument became heated, and Klimko told his manager that he was quitting. The manager asked Klimko to return to the
office to discuss the matter, but Klimko again stated that he was going
home. The customer called Middletown later
to say that she had asked Klimko to leave because of his behavior. Middletown had to send another HVAC
technician to the house because the customer’s air conditioner was not
functioning. Middletown retrieved
Klimko’s work truck later that day, and he returned his tools the following
day.
Middletown argues that
Klimko’s misconduct precludes application of the 2x multiplier. The ALJ disagreed, stating:
The
ALJ does not view Plaintiff’s resignation as an intentional, deliberate action
with reckless disregard of the consequences to himself or another. In this case, substantial evidence does not
establish Plaintiff’s conduct was of that nature. Plaintiff resigned his position with the
Defendant on June 19, 2014. Plaintiff
resigned out of frustration on June 19, 2014.
He voluntarily quit and returned the Defendant’s equipment[.] Because Plaintiff stopped earning a same or
greater wage, he is entitled to the 2x multiplier during this period.
Middletown takes issue with
this conclusion, pointing out that Klimko deliberately quit in the middle of a
job. Klimko’s actions damaged
Middletown’s relationship with its customer and forced it to send out another
HVAC technician to complete the work.
Middletown also had to retrieve Klimko’s work truck and equipment. Middletown argues that the ALJ clearly erred
in finding that Klimko’s conduct did not amount to an intentional, deliberate
action with reckless disregard of the consequences to himself or another.
The Board conceded that
Klimko’s behavior was “reprehensible.”
But the Board also noted that the ALJ, as fact-finder, has the sole
discretion to determine the quality, character, and substance of the evidence. Square D
Co. v. Tipton, 862 S.W.2d 308, 309 (Ky. 1993). Since Klimko, the party with the burden of
proof before the ALJ, was successful, the question on appeal to the Board was
whether the ALJ’s finding was supported by substantial evidence. Wolf
Creek Collieries v. Crum, 673 S.W.2d 735, 736 (Ky. App. 1984). The Board concluded that there was substantial
evidence to support the ALJ’s finding that Klimko’s behavior on June 19, 2014,
did not meet the standard for “intentional, deliberate action” set out in Livingood.
The function of this Court’s
review of the Board is to correct the Board only where the Court perceives that
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). We conclude that the ALJ and the Board
correctly applied Livingood to the
facts of this case. In Livingood, the Court found that the 2x
multiplier applies even if the employee is terminated for good cause. Livingood,
467 S.W.3d at 257. But the Court also
noted the strong statutory and public policy against rewarding an employee for
his own misconduct. In order to balance
these competing interests, the Court adopted the “intentional, deliberate
action” standard. The Supreme Court
later noted that this is a high standard, and basic bad behavior will not bar
application of the 2x multiplier. Fuertes v. Ford Motor Co., 481 S.W.3d
808, 810 (Ky. 2016).
Here, the ALJ found that
Klimko merely resigned out of frustration, and not with any subjective intention
to deliberately disregard the consequences of his action. Klimko’s conduct was clearly unacceptable and
would have been grounds for termination if he had not resigned first. Furthermore, the ALJ would have been within
her discretion to find that it amounted to “intentional, deliberate action with
reckless disregard of the consequences to himself or another.” However, we agree with the Board that there
was substantial evidence to support that ALJ’s conclusion to the contrary. Therefore, the ALJ did not clearly err in
finding that Klimko remained eligible for the double income benefit.
Accordingly, we affirm the
August 26, 2016 opinion and order of the Board insofar as it held that that the
ALJ did not clearly err in holding that Klimko remained eligible for double
income benefits after June 19, 2014. We
remand this matter to the ALJ for further proceedings in accord with the
Board’s order.
ALL
CONCUR.
|
BRIEF FOR APPELLANT: Rodney J. Mayer Louisville, Kentucky |
BRIEF FOR APPELLEE: Wayne C. Daub Louisville, Kentucky |
