Maria Jimenez v. Lakshmi Narayan Hospitality Group Louisville ( 2021 )


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  •                RENDERED: SEPTEMBER 10, 2021; 10:00 A.M.
    TO BE PUBLISHED
    Commonwealth of Kentucky
    Court of Appeals
    NO. 2021-CA-0515-WC
    MARIA JIMENEZ                                                        APPELLANT
    PETITION FOR REVIEW OF A DECISION
    v.              OF THE WORKERS’ COMPENSATION BOARD
    ACTION NO. WC-14-73573
    LAKSHMI NARAYAN
    HOSPITALITY GROUP LOUISVILLE;
    HONORABLE JONATHAN R.
    WEATHERBY, ADMINISTRATIVE
    LAW JUDGE; AND WORKERS’
    COMPENSATION BOARD                                                    APPELLEES
    OPINION
    REVERSING
    ** ** ** ** **
    BEFORE: ACREE, COMBS, AND MAZE, JUDGES.
    COMBS, JUDGE: This case involves the reopening of a claim in a Workers’
    Compensation case. Maria Jimenez, the Appellant, appeals from an opinion of the
    Workers’ Compensation Board that reversed an Administrative Law Judge’s award
    on the ground that it was barred by res judicata. After our review, we reverse.
    On September 22, 2015, Jimenez filed a Form 1011 in the underlying
    claim alleging that she injured her head, neck, left shoulder, and back on June 6,
    2014, when she “[s]lipped & fell while cleaning bathroom, hit head & lost
    consciousness.” At that time, Jimenez was employed as a housekeeper by the
    Appellee, Lakshmi Narayan Hospitality Group Louisville (Holiday Inn).
    The claim was litigated. At the June 20, 2016, Benefit Review
    Conference (BRC), the parties stipulated that “Plaintiff sustained a work-related
    injury or injuries on 6/6/14,” that no temporary total disability (TTD) benefits had
    been paid, and that the defendant-employer had paid $11,322.43 in medical
    expenses.
    On May 1, 2017, Chief Administrative Law Judge (CALJ) Douglas
    Gott rendered an opinion and order in the underlying claim, awarding Jimenez
    TTD benefits as follows in relevant part:
    There is no medical evidence of permanent injuries
    so there is no basis for an award of permanent income
    benefits. However, [Jimenez] claims temporary total
    disability benefits . . . . Plaintiff relies on Dr. Lisner,
    who the records show took her off work from August 15,
    2014 through April 22, 2015; the Defendant relies on Dr.
    Best, who did not believe her to have ever been
    temporarily totally disabled.
    The ALJ relies on Dr. Lisner to find Jimenez is
    entitled to TTD from August 15, 2014 through April 22,
    2015.
    1
    Application for Resolution of Injury Claim.
    -2-
    Because Jimenez does not have a permanent
    injury, or otherwise have evidence to support the need for
    permanent income benefits,[2] no such award will be
    made. F.E.I. Installation, Inc. vs. Williams, 
    214 S.W.3d 313
     (Ky. 2007).
    It is therefore ordered Jimenez shall recover TTD
    . . . from August 15, 2014 through April 22, 2015, with
    interest at 12% per annum. Jimenez’s claims for future
    medical or income benefits are dismissed.
    Neither party appealed. On July 25, 2019, Jimenez filed a Form MTR
    (motion to reopen) on the ground of change of disability as shown by objective
    medical evidence, reciting as follows in relevant part:
    3.) Since May 1, 2017, the Plaintiff has received
    treatment at the Family Health Center in Louisville
    where she was diagnosed with cervicalgia and depressive
    disorder . . . Ultimately, Plaintiff was referred to
    Leatherman Spine where she was seen on April 24, 2018
    and received a diagnosis of cervical disc disease.
    4.) Plaintiff was evaluated by Dr. Robert Byrd on
    February 25, 2019 and his report is attached to this
    Motion. Dr. Byrd has diagnosed cervical spondylosis and
    indicates that her condition has worsened from what it
    was in May of 2017.[3]
    2
    In the September 5, 2019, Order granting Jimenez’s motion to reopen, infra, CALJ Gott noted
    that the original opinion should have read as follows: “Because Jimenez does not have a
    permanent injury, or otherwise have evidence to support the need for permanent medical
    benefits . . . .” (Emphasis added.)
    3
    Jimenez explains in her petition for review that she had to obtain another evaluation from Dr.
    Gregory Nazar, whose report she filed because Dr. Byrd refused to comply with the fee schedule
    for his deposition (which Holiday Inn attempted to schedule on cross-examination). By order
    entered February 14, 2020, the ALJ granted Holiday Inn’s motion to strike Dr. Byrd’s report.
    -3-
    In her accompanying affidavit, Jimenez maintained that her condition had
    deteriorated since May 1, 2017, and that her pain level had increased.
    On July 30, 2019, Holiday Inn filed a response and objection.
    Holiday Inn submitted that Jimenez’s motion to reopen should “be dismissed based
    upon the CALJ’s previous findings, including the finding that the Plaintiff had not
    sustained a permanent injury, and the principle of res judicata.”
    By order entered on September 5, 2019, CALJ Gott granted Jimenez’s
    motion, having determined that she made a prima facie case for reopening as
    follows in relevant part:
    The CALJ recognizes Defendant’s res judicata
    argument, but, mindful of Newburg v. Cash, 
    854 S.W.2d 791
     (Ky. 1993), will allow the parties to argue before an
    ALJ whether or not Plaintiff can seek benefits for a
    permanent injury on reopening after having claims for
    permanent income and future medical benefits dismissed
    in the original action. Plaintiff is entitled to pursue her
    claim of the subsequent development of work related
    depression, and that is further reason to permit her
    accompanying attempt to prove she can maintain a claim
    for worsening of her physical injuries.
    Plaintiff’s motion to reopen, as to a prima facie
    case to proceed with assignment to an administrative law
    judge for decision on the merits, is sustained.
    (As an incidental matter, the CALJ recognizes an
    error in his 2017 Opinion. The last paragraph of page
    one should read “. . . evidence to support the need for
    future medical benefits . . .” instead of “evidence to
    support the need for permanent income benefits . . .”[ )].
    -4-
    The reopened case was assigned to ALJ Weatherby and was litigated.
    On December 10, 2020, ALJ Weatherby entered an opinion and order finding that
    res judicata was inapplicable, that Jimenez had sustained her burden on
    reopening, and that she had established a worsening of her condition. The ALJ
    found Jimenez to be credible and awarded permanent partial disability (PPD)
    benefits based upon the 4% impairment rating assigned by Dr. Nazar -- as well as
    medical expenses that might reasonably be required for the cure and relief from
    the effects of the work-related injury.
    Holiday Inn filed a petition for reconsideration on various grounds.
    By order entered on January 6, 2021, ALJ Weatherby issued an Amended
    Opinion, Award, and Order, which provides as follows:
    12. The ALJ finds that KRS[4] 342.125 renders the
    doctrine of res judicata inapplicable in this instance
    because the medical evidence that the ALJ finds
    persuasive indicates that the full nature of the Plaintiff’s
    injury was not known at the time of the award of
    temporary total disability in May of 2017.
    ...
    14. The ALJ finds that Dr. Nazar credibly related
    a portion of the Plaintiff’s permanent impairment to the
    work incident and that the matter was therefore properly
    reopened for a worsening of condition. The ALJ finds
    that because the relationship between the work incident
    and the Plaintiff’s impairment was not clear to Dr. Lisner
    at the time of the initial award of temporary total
    4
    Kentucky Revised Statutes.
    -5-
    disability and because Dr. Nazar has provided clarity to
    that issue, the matter was properly reopened. The ALJ
    finds that the same principles apply to the requirement
    for compulsory joinder.
    ...
    19. The ALJ finds that the testimony of the
    Plaintiff was credible and convincing with regard to the
    ongoing problems that she has experienced after the work
    injury. The credible testimony of the Plaintiff has lent
    credibility to the opinion of Dr. Nazar who has opined
    that the Plaintiff suffered a 4% whole person impairment
    for the work injury and issued restrictions including no
    lifting, carrying, pushing, or pulling objects greater than
    25 pounds, to avoid repetitive movements with the neck,
    and to avoid repetitive neck extension activities.
    20. The opinion of Dr. Nazar is also supported by
    the diagnostic imaging upon which his opinion is at least
    partially based. When viewing this credible assessment
    from Dr. Nazar and comparing it to the earlier Opinion
    and Award issued by ALJ Gott, it is clear that the
    Plaintiff has sustained a worsening of condition as
    established by objective medical findings including
    diagnostic imaging.
    Holiday Inn appealed to the Workers’ Compensation Board. By
    opinion entered on April 9, 2021, the Board reversed and remanded the claim to
    the ALJ with direction “to dismiss this reopening as barred by res judicata.” The
    Board explained that:
    KRS 342.125 provides, in pertinent part, as follows:
    (1) Upon motion by any party or upon an
    administrative law judge’s own motion, an
    administrative law judge may reopen and
    -6-
    review any award or order on any of the
    following grounds:
    (a) Fraud;
    (b) Newly-discovered evidence which
    could not have been discovered with
    the exercise of due diligence;
    (c) Mistake; and
    (d) Change of disability as shown by
    objective medical evidence of
    worsening or improvement of
    impairment due to a condition caused
    by the injury since the date of the
    award or order.
    (2) No claim which has been previously
    dismissed or denied on the merits shall be
    reopened except upon the grounds set forth
    in this section.
    We find the express and unambiguous language
    of KRS 342.125(2) controls. Jimenez’s original claim
    was previously dismissed on the merits as the ALJ
    found no evidence of a permanent injury. In addition,
    the ALJ considered the issue of entitlement to future
    medicals pursuant to FEI Installations v. Williams
    
    214 S.W.3d 313
     (Ky. 2007) and determined an award
    of future medicals were [sic] not appropriate.
    Therefore the award was only for a limited period of
    TTD only and no permanent benefits of any type were
    awarded. The award was for a specific closed period
    of time. Therefore, this claim is not subject to a
    reopening based upon a “Change of disability as
    shown by objective medical evidence of worsening . . .
    of impairment due to a condition caused by the injury
    since the date of the award or order.”
    -7-
    We find Jimenez’s arguments are flawed.
    Considering the ALJ’s determination as to permanency in
    the May 17, 2017 Opinion and Order dismissing
    Jimenez’s claim, the fact that more recent medical
    evidence may support a conclusion that the [sic] her neck
    condition has deteriorated since that time, does not
    constitute sufficient grounds for reopening. Neither is
    the fact her condition allegedly has become “medically
    viable” or that a physician is now apparently willing to
    provide favorable testimony regarding permanency.
    In 2017, the injuries to Jimenez’s neck as alleged
    in the original application for benefits were determined
    by the CALJ to not have caused a permanent condition.
    Rather, the CALJ held Jimenez’s injuries and any
    residuals were only temporary. . . . That determination
    was not appealed. Accordingly, as argued by Holiday
    Inn, the CALJ’s decision, with regard to permanency
    of any cervical condition, now long since final, is
    subject to the doctrine of res judicata.
    In this instance, we treat the doctrine of res
    judicata as a legal concept involving issue preclusion.
    Except as otherwise authorized under KRS 342.125,
    when an issue is fully and extensively litigated and a
    decision is reached upon the merits by the ALJ, and not
    challenged via an appeal, the issue becomes res judicata
    and law of the case. E.F. Prichard Co. v. Heidelburg
    Brewing Co., 
    314 Ky. 100
    , 
    234 S.W.2d 486
     (1950);
    Stewart v. Sizemore, Ky., 
    332 S.W.2d 281
     (1960). In
    order for res judicata to be applicable, there must be
    identity of the parties, identity of the facts, and identity of
    the issues leading to a final decision on the merits. BTC
    Leasing, Inc. v. Martin, Ky. App., 
    685 S.W.2d 191
    (1984). That is exactly what we face here. As a matter
    of law, therefore, relitigation of the underlying issue of
    permanency under the auspices of KRS 342.125 is
    precluded.
    (Underline original and bold-face emphases added.)
    -8-
    Furthermore, the Board found nothing to convince it that the CALJ’s
    determination as to permanency was substantially induced by a misconception.
    “The evidence pertaining to permanency did not exist and the CALJ, as fact-finder,
    based his dismissal on substantial evidence of record. . . . That finding is now res
    judicata.”
    Jimenez appeals. The sole issue on appeal is whether under KRS
    342.125(1)(d) and (2) a claimant can open a prior workers’ compensation claim in
    which no PPD was awarded. Holiday Inn contends that the Board’s determination
    that the reopening was barred by res judicata is consistent with KRS 342.125 and
    controlling caselaw regarding temporary injuries. We disagree. Instead, we agree
    with Jimenez that the Board erred in its analysis and that nothing in KRS
    342.125(1)(d) or (2) precludes reopening a claim where no PPD was awarded.
    “The Court of Appeals conducts a review of the Board with the
    purpose of ‘[correcting] 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.’” Jolly v.
    Lion Apparel, Inc., 
    621 S.W.3d 411
    , 417 (Ky. 2021) (quoting W. Baptist Hosp. v.
    Kelly, 
    827 S.W.2d 685
    , 687-88 (Ky. 1992)). We are constrained to conclude that a
    flagrant error has occurred in this case.
    -9-
    KRS 342.125(1) permits an ALJ to reopen a claim on the following
    grounds:
    (a) Fraud;
    (b) Newly-discovered evidence which could not have
    been discovered with the exercise of due diligence;
    (c) Mistake; and
    (d) Change of disability as shown by objective medical
    evidence of worsening or improvement of impairment
    due to a condition caused by the injury since the date of
    the award or order.
    KRS 342.125(2) governs the reopening of a claim which has been
    dismissed and provides that: “No claim which has been previously dismissed or
    denied on the merits shall be reopened except upon the grounds set forth in this
    section.” (Emphasis added.) The Board determined that the “express and
    unambiguous language of KRS 342.125(2) controls.” We agree that it does.
    However, we believe that the Board misconstrued the statute and erred in holding
    that Jimenez’s claim is not subject to reopening because her original award was
    only for a period of TTD benefits and was not appealed.
    Jimenez reopened her claim as authorized by KRS 342.125(2) based
    upon the very grounds set forth in KRS 342.125(1)(d). Nothing in the plain
    language of KRS 342.125(2) precludes reopening a TTD award. “When
    interpreting the language in a statute, we are to assume that the General Assembly
    -10-
    intended the statute to mean exactly what it says.” Witt v. E. Kentucky Univ., 
    205 S.W.3d 263
    , 265 (Ky. App. 2006).
    We conclude that the Board erred in its analysis that CALJ Gott’s
    decision in the original claim -- that Jimenez’s injury was only temporary -- is
    subject to the doctrine of res judicata so as to bar reopening under KRS 342.125.
    We are persuaded that the Board has wholly misconstrued and misapplied the
    doctrine of res judicata in the context of reopening of a workers’ compensation
    claim. As our Supreme Court explained in Whittaker v. Reeder, 
    30 S.W.3d 138
    ,
    143 (Ky. 2000):
    Workers’ compensation is a creature of statute. As
    set forth in Chapter 342, workers’ compensation
    proceedings are administrative rather than judicial.
    Although the principles of error preservation, res
    judicata, and the law of the case apply to workers’
    compensation proceedings, they apply differently than in
    the context of a judicial action. For that reason, authority
    based upon judicial proceedings is not necessarily
    binding in the context of proceedings under Chapter 342.
    The authority which the Board cites at page 10 of its opinion in discussing the
    doctrine of res judicata is based upon judicial proceedings -- not proceedings
    under KRS Chapter 342.5
    5
    All of the bases upon which the Board relied are rooted exclusively in judicial proceedings.
    Prichard, supra, involved a declaration of rights of the parties under a contract; Stewart, 
    supra,
    involved an action for damages for the destruction of a house; BTC Leasing, Inc, 
    supra,
     involved
    a mechanic’s or materialmen’s lien.
    -11-
    [I]n 3 Larson, The Law of Workmen’s Compensation §
    79.72(f) (1993), we find the following:
    It is almost too obvious for comment that
    res judicata does not apply if the issue is
    claimant’s physical condition or degree of
    disability at two different times. . . . A
    moment’s reflection would reveal that
    otherwise there would be no such thing as
    reopening for change in condition.
    Woodbridge INOAC, Inc. v. Downs, 
    864 S.W.2d 306
    , 307 (Ky. App. 1993)
    (emphasis added), superseded by statute as stated in Rister v. Scrubet, Inc., No.
    2010-SC-000296-WC, 
    2011 WL 1103895
     (Ky. Mar. 24, 2011). By its very nature,
    a reopening under KRS 342.125(1)(d) involves the issue of the claimant’s degree
    of disability at two different times -- a “[c]hange of disability as shown by
    objective medical evidence of worsening or improvement of impairment due to a
    condition caused by the injury since the date of the award or order.” (Emphasis
    added.)
    Kentucky law has long held as follows:
    Compensation cases may be reopened on grounds that
    would not be sufficient to authorize the disturbance of
    judgments in common law or equity proceedings. A
    ‘change of condition,’ for example, would not overcome
    the defense of res adjudicata in a tort case as it does in a
    compensation case. Cf. KRS 342.125. . . . Where the
    statute expressly provides for reopening under specified
    conditions, the rule of res adjudicata has no application
    when the prescribed conditions are present.
    Stambaugh v. Cedar Creek Mining Co., 
    488 S.W.2d 681
    , 682 (Ky. 1972).
    -12-
    We also note Newberg v. Cash, 
    854 S.W.2d 791
     (Ky. App. 1993).
    Although Cash was decided under a prior version of KRS Chapter 342, it is
    applicable to the case before us. In Cash, the old board determined that Cash had
    failed to establish that he suffered from occupational disability in the underlying
    claim. Upon reopening, Cash received an award of 30% PPD. “The ALJ’s
    decision that Cash had undergone a change in occupational disability, being
    supported by substantial evidence, was properly affirmed by the board.” 
    Id. at 792
    .
    We agree with Jimenez that the Board erred in concluding that her
    motion to reopen is barred by the doctrine of res judicata. Accordingly, we
    REVERSE the opinion of the Workers’ Compensation Board and direct the Board
    to reinstate the award of the ALJ.
    ALL CONCUR.
    BRIEF FOR APPELLANT:                       BRIEF FOR APPELLEE:
    Phillipe W. Rich                           E. Shane Branham
    Louisville, Kentucky                       Crystal L. Moore
    Lexington, Kentucky
    -13-