RENDERED: MARCH 11, 2022; 10:00 A.M.
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2020-CA-0632-WC
PAMELA JOHNSON APPELLANT
PETITION FOR REVIEW OF A DECISION
v. OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-13-60999
PRESCOTECH INDUSTRIES, INC.;
DANIEL CAMERON, THE ATTORNEY
GENERAL OF KENTUCKY;
HONORABLE JANE RICE WILLIAMS,
ADMINISTRATIVE LAW JUDGE;
AND WORKERS’ COMPENSATION
BOARD APPELLEES
OPINION
AFFIRMING
** ** ** ** **
BEFORE: CLAYTON, CHIEF JUDGE; CETRULO AND GOODWINE,
JUDGES.
CLAYTON, CHIEF JUDGE: Pamela Johnson appeals from an opinion of the
Workers’ Compensation Board which affirmed in part the ruling of the
Administrative Law Judge (ALJ) that Johnson’s workers’ compensation benefits
were subject to the amended version of Kentucky Revised Statutes (KRS)
342.730(4). Johnson contends that the statutory amendment, which has the effect
of terminating her benefits when she reaches the age of seventy, should not be
applied retroactively and is unconstitutional. In light of recent Kentucky Supreme
Court precedent, we affirm.
Johnson was born in 1958 and began working for Prescotech
Industries, Inc. in 1998. She suffered a work-related back injury on November 4,
2013. On February 6, 2015, the ALJ awarded Johnson temporary total disability
benefits, permanent partial disability benefits, and medical benefits.
Johnson thereafter experienced a worsening of her condition and
underwent two surgeries. On May 12, 2016, she filed a motion to reopen, alleging
that she was now permanently totally disabled. The ALJ considered the medical
evidence and found that Johnson had proved a worsening of her condition and,
upon consideration of her age, limited vocational experience, and significant
medical restrictions, concluded it was not likely she would be able to find and
continue sustained employment. On November 20, 2018, the ALJ awarded
permanent total disability benefits to be paid beginning from the date of the motion
to reopen until Johnson reaches the age of seventy. This limitation was in
accordance with the amendment of KRS 342.739(4), which became effective on
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July 14, 2018, and provides in pertinent part: “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.”
Johnson appealed to the Board, arguing that the ALJ erred in applying
the amended version of the statute retroactively to limit the award of benefits and
that the amended statute was unconstitutional.
Relying on Holcim v. Swinford, 581 S.W.3d 37 (Ky. 2019), the Board
held that the ALJ did not err in retroactively applying the amended version of the
statute. It further held that, as an administrative body, it did not have the
jurisdiction to rule on the constitutionality of the amended statute. See Blue
Diamond Coal Co. v. Cornett, 300 Ky. 647, 649, 189 S.W.2d 963, 964 (1945).
The Board also reversed the ALJ’s award of temporary total disability benefits for
the period predating the motion to reopen, but this ruling is not at issue in this
appeal.
Johnson petitioned for review of the Board’s decision. On the
Attorney General’s motion,1 the appeal was held in abeyance pending finality in
two Kentucky Supreme Court cases which addressed identical issues. When these
1
The Attorney General was notified of the challenge to the constitutionality of the statute as
required under KRS 418.075(2).
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opinions became final, the appeal was returned to the active docket and the
Commonwealth thereafter filed a response to Johnson’s petition.
Upon review, we “correct the Board only where the . . . Court
perceives 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). Furthermore, “as an intermediate appellate court, this Court is bound by
established precedents of the Kentucky Supreme Court. [Rules of the Supreme
Court] 1.030(8)(a). The Court of Appeals cannot overrule the established
precedent set by the Supreme Court or its predecessor Court.” Smith v. Vilvarajah,
57 S.W.3d 839, 841 (Ky. App. 2000).
Johnson argues that KRS 342.730(4), the 2018 provision terminating
benefits when an employee reaches the age of seventy, should not be applied
retroactively in her case because it is not remedial. She acknowledges that the
version of KRS 342.730(4) which was in effect at the time of her injury would also
have limited her benefits by terminating them upon the date on which she qualifies
for normal old-age Social Security retirement benefits. This latter provision was
held to be unconstitutional in Parker v. Webster County Coal, LLC (Dotiki Mine),
529 S.W.3d 759, 769-70 (Ky. 2017). Johnson argues that this provision could be
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severed from the rest of the statute and that the duration of her benefits should be
controlled by KRS 342.730(1), which contains no age limitation.
We agree with the Board that we are bound in this matter by the
Kentucky Supreme Court’s opinion in Holcim, supra, which states that the 2018
amendment of KRS 342.730(4) applies retroactively to those cases which “have
not been fully and finally adjudicated, or are in the appellate process, or for which
time to file an appeal [h]as not lapsed, as of the effective date of this Act.”
Holcim, 581 S.W.3d at 44. The effective date of the statutory amendment was July
14, 2018. On that date, Johnson’s motion to reopen, which she filed on May 12,
2016, was still pending before the ALJ. Consequently, her case had not been fully
and finally adjudicated and the amendment terminating her benefits when she
reaches the age of seventy must be applied.
Next, Johnson argues that the retroactive application of the
amendment is unconstitutional as violative of the contracts clause of the United
States and Kentucky Constitutions and as an exercise of arbitrary power in
contravention of Section 2 of the Kentucky Constitution.
As noted, this appeal was held in abeyance pending the finality of two
opinions of the Kentucky Supreme Court which addressed precisely these issues.
In Dowell v. Matthews Contracting, 627 S.W.3d 890 (Ky. 2021), the Supreme
Court rejected the appellants’ argument that the amended version of KRS
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342.730(4) violated the Contracts Clause of both the United States and Kentucky
Constitution, expressly stating that the Workers’ Compensation Act “does not
constitute a contract between Kentucky workers and their employers or the state.
Instead, the [Act] is a statutory scheme that may be amended as the General
Assembly chooses, provided it fits within our constitutional framework.” Id. at
894-95. The Court stressed that the Act “provides only statutory rights, not
contractual ones.” Id. at 895.
Johnson’s argument that the retroactive application of the amended
statute constitutes an arbitrary exercise of power in violation of Section 2 of the
Kentucky Constitution was addressed and rejected by the Supreme Court in Cates
v. Kroger, 627 S.W.3d 864, 871-72 (Ky. 2021). There, the Court found “no
arbitrary exercise of legislative authority in the retroactive application of the
amendment.” Id. at 871. It deferred to the power of the legislature to “amend the
law and make the change applicable to pending cases, even when the amendment
is outcome determinative.” Id.
Under the foregoing clear and unambiguous Kentucky Supreme Court
precedent, we affirm the opinion of the Board.
ALL CONCUR.
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BRIEF FOR APPELLANT: BRIEF FOR APPELLEE
ATTORNEY GENERAL OF
Wayne C. Daub KENTUCKY:
Louisville, Kentucky
Matthew F. Kuhn
Solicitor General
Brett R. Nolan
Principal Deputy Solicitor General
Alexander Y. Magera
Assistant Solicitor General
Frankfort, Kentucky
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