RENDERED: JANUARY 8, 2021; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-0251-WC
BRENDA MARKS APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-17-93657
BAPTIST HEALTHCARE SYSTEM,
INC.; HONORABLE BRENT
DYE, ADMINISTRATIVE LAW
JUDGE; KENTUCKY WORKERS’
COMPENSATION BOARD; AND
HONORABLE DANIEL CAMERON,
ATTORNEY GENERAL OF KENTUCKY APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: LAMBERT, MCNEILL, AND TAYLOR, JUDGES.
TAYLOR, JUDGE: Brenda Marks petitions this Court to review a January 24,
2020, Opinion of the Workers’ Compensation Board (Board) affirming the
Administrative Law Judge’s (ALJ) award of permanent partial disability benefits
and permanent total disability benefits for two separate work-related injuries. We
affirm.
Marks was employed by Baptist Healthcare, Inc., as a housekeeper.
She suffered two separate work-related injuries; the first injury was to her right
shoulder on June 24, 2016, and the second was to her left shoulder on February 11,
2017.
As a result of these injuries, Marks filed claims for workers’
compensation benefits. In an Opinion, Award, and Order rendered February 22,
2019, the ALJ awarded Marks permanent partial disability benefits for the June 24,
2016, right shoulder injury and permanent total disability benefits for the February
11, 2017, left shoulder injury. The ALJ also concluded that Kentucky Revised
Statutes (KRS) 342.730(4), as amended on July 14, 2018, retroactively applied to
Marks’ claims.1
Marks sought review with the Board. Marks argued that the ALJ
erred by retroactively applying the amended version of KRS 342.730(4) and the
retroactive application of KRS 342.730(4) was unconstitutional. By Opinion
entered January 24, 2020, the Board affirmed the ALJ’s award. The Board
concluded that the ALJ properly applied KRS 342.730(4) retroactively to Marks’
1
Brenda Marks was born on August 12, 1951.
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claims and cited as authority Holcim v. Swinford, 581 S.W.3d 37 (Ky. 2019). As
the Board lacked authority to pass upon the constitutionality of a statute, the Board
did not reach the merits of Marks’ constitutional challenge to the retroactive
application of the amended version of KRS 342.730(4). This review follows.
Marks contends that retroactive application of the amended KRS
342.730(4) is unconstitutional. In particular, Marks argues that retroactive
application of the amended KRS 342.730(4) violates the Contract Clause set forth
in Article 1, Section 10 of the United States Constitution and in Section 19 of the
Kentucky Constitution:
The retro-active [sic] provisions of KRS 342.730(4)
significantly decrease the benefits available to an injured
worker. Here, the provisions arguably decrease Brenda’s
benefits by her life expectancy after she reaches age 70.
Pursuant to the life expectancy tables of 803 KAR 25:036
used in workers’ compensation claims, that is 15.5 years
for a 70-year-old-woman. Therefore, the retro-active
[sic] provisions impair the obligation of the contract for
workers’ compensation benefits. These retroactive
provisions did not remedy a broad and general social or
economic problem. . . .
The injured worker is not allowed to reject the
exclusivity provisions of workers’ compensation after the
injury, and the injured worker’s benefits are set as of the
date of the injury. Accordingly, the retroactive
provisions of KRS 342.730(4) should be voided. . . .
Marks’ Brief at 9.
We begin by setting forth KRS 342.730(4), as amended July 14, 2018:
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All income benefits payable pursuant to this chapter
shall terminate as of the date upon which the employee
reaches the age of seventy (70), or four (4) years after the
employee’s injury or last exposure, whichever last
occurs. In like manner all income benefits payable
pursuant to this chapter to spouses and dependents shall
terminate as of the date upon which the employee would
have reached age seventy (70) or four (4) years after the
employee’s date of injury or date of last exposure,
whichever last occurs.
The Kentucky Supreme Court has set forth the following standard to
determine whether a statute violates the Contract Clause:
(1) whether the legislation operates as a substantial
impairment of a contractual relationship; (2) if so, then
the inquiry turns to whether there is a significant and
legitimate public purpose behind the regulation, such as
the remedying of a broad and general social or economic
problem; and (3) if, as in this case, the government is a
party to the contract, we examine “whether that
impairment is nonetheless permissible as a legitimate
exercise of the state’s sovereign powers,” and we
determine if the impairment is “upon reasonable
conditions and of a character appropriate to the public
purpose justifying its adoption.”
Maze v. Bd. of Dirs. for Commonwealth Postsecondary Educ. Prepaid Tuition
Trust Fund, 559 S.W.3d 354, 369 (Ky. 2018). Our analysis shall proceed
accordingly.
First, as to whether the amended KRS 342.730(4) substantially
impairs the contractual relationship, we believe that it does not. In determining
whether a contractual relationship is substantially impaired, the Kentucky Supreme
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Court has instructed that “[a] significant consideration . . . is the extent to which
the industry . . . [has been] subject to the contract . . . [being] regulated in the past.”
Maze, 559 S.W.3d at 370 (citations omitted). Emphasizing this point of law, the
Supreme Court noted that “[o]ne whose rights, such as they are, are subject to state
restriction, cannot remove them from the power of the State by making a contract
about them.” Id. (quoting Hudson Water Co. v. McCarter, 209 U.S. 349, 357
(1908)). The rights of workers’ compensation claimants are subject to legislative
enactment, including the duration of income benefits. Consequently, we think that
Marks’ contractual rights were not substantially impaired by retroactive application
of KRS 342.730(4).
Second, we must examine whether there is a legitimate public purpose
that supports the retroactive application of KRS 342.730(4). By limiting the
duration of income benefits, the amended KRS 342.730(4) decreases the
duplication of benefits by limiting the amount of time a worker receives both
income benefits and social security benefits, and it results in significant savings to
the workers’ compensation system. We, thus, conclude that a legitimate public
purpose exists for retroactive application of KRS 342.730(4).
Third, we must determine “whether the adjustment of ‘the rights and
responsibilities of contracting parties [is based] upon reasonable conditions and [is]
of a character appropriate to the public purpose justifying [the legislation’s]
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adoption.’” Maze, 559 S.W.3d at 372 (quoting U.S. Trust Co. of New York v. New
Jersey, 431 U.S. 1, 22 (1977)). And, “[w]hen the state itself is not a contracting
party, ‘[a]s is customary in reviewing economic and social regulation, . . . courts
properly defer to legislative judgment as to the necessity and reasonableness of a
particular measure.’” Maze, 559 S.W.3d at 372 (quoting United States Trust, 431
U.S. at 22-23)). As the state is not a party to the contract herein, we must defer to
legislative judgment. Accordingly, we are of the opinion that retroactive
application of KRS 342.730(4) does not offend the Contract Clause of the United
States Constitution or the Kentucky Constitution.
We view any remaining contentions as moot.
In sum, we cannot conclude that the Board misconstrued controlling
statutes or precedent or committed an error in assessing the evidence. W. Baptist
Hospital v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992).
For the foregoing reasons, we affirm the Opinion of the Workers’
Compensation Board.
ALL CONCUR.
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BRIEF FOR APPELLANT: BRIEF FOR APPELLEE BAPTIST
HEALTHCARE SYSTEM, INC.:
Scott F. Scheynost
Louisville, Kentucky Douglas A. U’Sellis
Louisville, Kentucky
BRIEF FOR APPELLEE
HONORABLE DANIEL CAMERON,
ATTORNEY GENERAL OF
KENTUCKY:
S. Chad Meredith
Matthew F. Kuhn
Frankfort, Kentucky
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Brenda Marks v. Baptist Healthcare System, Inc.
Combined Opinion