Gould v. Wright Tree Service ( 2020 )

NOT DESIGNATED FOR PUBLICATION
No. 120,540
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
ROBERT TAYLOR GOULD,
Appellee,
v.
WRIGHT TREE SERVICE, INC.
and
ZURICH AMERICAN INSURANCE COMPANY,
Appellants.
MEMORANDUM OPINION
Appeal from Leavenworth District Court; DAVID J. KING, judge. Opinion filed June 19, 2020.
Affirmed.
Jennifer M. Hill and Brock J. Baxter, of McDonald Tinker PA, of Wichita, for appellants.
John G. O'Connor, of Robb, Taylor & O'Connor, of Kansas City, for appellee.
Before BUSER, P.J., SCHROEDER and WARNER, JJ.
BUSER, J.: Robert Taylor Gould sustained serious injuries from an occupational
accident in 2013. In 2015, Gould sought a workers compensation award against his
employer, Wright Tree Service, Inc., and its insurance carrier, Zurich American
Insurance Company (Wright). The Kansas Workers Compensation Board (Board) granted
the award to Gould, but Wright did not pay the amount and, instead, appealed the award
to the Kansas Court of Appeals. See Gould v. Wright Tree Service Inc., No. 114,482,
2016 WL 2811983 (Kan. App. 2016) (unpublished opinion) (Gould I).
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Invoking K.S.A. 44-512a, Gould filed a lawsuit in district court seeking to collect
a money judgment based on the amount of past due medical expenses awarded by the
Board. This lawsuit was filed after Wright failed to respond within 20 days to Gould's
demand letter. At the time the lawsuit was filed, Wright had not paid these past due
medical expenses.
After more than two years of litigation, the parties filed motions for summary
judgment. When Wright filed its motion, it had paid two of Gould's medical providers
and his health insurance carrier. As a result, the past due medical bills were no longer
outstanding. The district court granted Gould summary judgment in the amount of
$104,774.53 in past due medical expenses awarded by the Board but not paid in a timely
manner. Wright appeals.
FACTUAL AND PROCEDURAL BACKGROUND
In 2013, Robert Gould suffered serious injuries that arose out of and in the course
of his employment with Wright. Gould sought workers compensation benefits from
Wright. On March 12, 2015, the administrative law judge (ALJ) found Gould's injuries
were not work related and denied compensation. Gould appealed the ruling, and on
August 28, 2015, the Board reversed the ALJ's decision and issued an award in favor of
Gould. The Board awarded Gould $11,250.83 in past due partial disability compensation
and payment for medical expenses related to his accident which were incurred prior to the
regular hearing.
On September 22, 2015, Wright filed a notice of appeal with our court. While this
appeal was pending, on October 8, 2015, Gould served Wright with a 20-day demand
letter seeking payment of the August 28, 2015 workers compensation award. In
particular, the demand was for $11,250.83 in permanent partial disability payments and
$106,886.98 in past due medical expenses. On October 15, 2015, Wright filed a motion
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with the Board to stay the award. The Board denied the motion. On January 5, 2016, our
court summarily denied Wright's motion to stay the award. About two years later, upon
Wright's appeal, our court affirmed the denial of the stay and the denial of a supersedeas
bond. Gould v. Wright Tree Service Inc., No. 116,008, 2018 WL 1545789 (Kan. App.
2018) (unpublished opinion) (Gould II).
On January 11, 2016, Gould filed a petition pursuant to K.S.A. 44-512a(b) in the
district court seeking a judgment against Wright to collect past due medical expenses
awarded by the Board. It is undisputed that Wright had not paid the amount of the award
at the time this lawsuit was filed. The petition was amended one month later.
Shortly thereafter, Gould also sought civil penalties in the workers compensation
proceedings. On February 22, 2016, the ALJ awarded penalties to Gould based on
Wright's failure to timely pay him the compensation awarded by the Board. The Board
ruled that any attempt to stay proceedings did not invalidate the original award; therefore,
the award was still owed by Wright and was past due beyond the 20 days permitted by
statute. Consequently, the ALJ imposed statutory penalties of 10 percent of the past due
amount.
On May 13, 2016, our court affirmed the Board's decision in the original workers
compensation case, finding that Gould's injury was work related and upholding the
Board's award of compensation. Gould I, 2016 WL 2811983.
After our court's adverse decision in the workers compensation case, on June 3,
2016, Wright issued three checks to Gould. The first check was for $11,250.83 in
permanent partial disability compensation. The second check was for $10,688.69 in
medical special payments. The third check was for $3,500 in permanent partial disability
penalties. Wright did not tender payment to Gould, however, of the past due medical
expenses of $106,886.98 awarded by the Board. During the ensuing district court
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litigation, Wright made direct payments to two medical providers and then reimbursed
Gould's health insurance provider, Humana, which had paid other medical providers.
On May 23, 2018, Gould filed a motion for summary judgment asking the district
court to grant judgment against Wright in the amount of $106,886.98 for past due
medical expenses that were not timely paid under K.S.A. 44-512a. Wright also filed a
motion for summary judgment. In the motion, Wright acknowledged that an employer is
liable for civil penalties if it fails to pay past due compensation within 20 days of
receiving a demand letter under K.S.A. 44-512a(b). Wright interpreted this statute to
mean that "past due amounts" are past due medical expenses that have not been paid to
service providers and are still outstanding prior to any entry of judgment under K.S.A.
44-512a.
Wright claimed that summary judgment was proper because Gould had no
outstanding or past due balances with any health care provider at the time it filed its
summary judgment motion. Wright reasoned that it was not required to pay the award
mandated by K.S.A. 44-512a before exhausting its appeals. Having exhausted its appeals,
however, Wright promptly paid the remaining balances to the health care providers and
reimbursed Gould's health insurance provider, Humana. As a result, Wright contended it
did not owe Gould any amount in unpaid medical expenses and the judgment would
simply constitute a windfall for Gould.
In response, Gould countered that any payments made to the service providers
were not for the economic benefit of Gould and the ALJ award did not authorize Wright
to pay the providers or Gould's health insurance carrier. Rather, the Board ordered Wright
to pay Gould directly. Gould argued that Wright did not have the legal authority to pay
the service providers directly.
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After a hearing on the competing motions for summary judgment, the district court
filed a journal entry of judgment. In this journal entry the district court made seven
factual findings:
(1) On August 28, 2015, the Board awarded Gould benefits which included
payment of medical expenses for his on-the-job injury.
(2) In postaward penalty proceedings, the correct amount of past due medical
expenses owed to Gould was found by the ALJ, Board, and Kansas Court of Appeals to
be $106,886.98.
(3) In postaward penalty proceedings, Gould was awarded a $1,500 penalty for the
nonpayment of permanent partial disability compensation of $11,250.83 and a penalty of
$10,688.69, representative of 10 percent of the medical bills awarded. The penalties were
paid and are no longer part of the litigation.
(4) The only payments made by Wright to Gould's health care providers was a
payment in the amount of $1,317.10 made to Lawrence Memorial Hospital and a
payment of $795.35 made to Lawrence-Douglas County Fire Department, with both
payments made in July 2016.
(5) The district court has no authority under K.S.A. 44-512a(b) to determine that
the amount of medical expenses owed by Wright is a different figure than the
$106,886.98 determined by the ALJ, Board, and the Kansas Court of Appeals.
(6) Gould concedes Wright is entitled to a $2,112.45 credit against its liability for
medical expenses based on Wright's actual payments to health care providers, thus
amending Gould's claim to $104,774.53.
(7) Wright is not entitled to a credit against its liability owing to their voluntary
payment of $56,347.23 made to Humana, Gould's health insurer.
Based on these findings, the district court granted Gould's motion for summary
judgment and denied Wright's motion for summary judgment. The district court found
that Gould was entitled to judgment in the amount of $114,721.53, which was comprised
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of $104,774.53 for past due medical expenses and $9,947 in attorney fees and costs.
Wright filed a timely notice of appeal.
SUMMARY JUDGMENT
For the most part, the parties reprise the arguments they made in the district court.
Wright acknowledges that after Gould filed his lawsuit in district court to collect on his
workers compensation award, our court affirmed the Board's award from the workers
compensation proceedings. After our opinion was filed but before the filing of Wright's
summary judgment motion, Wright paid the remaining balances to two of Gould's
medical providers and reimbursed his insurance carrier, Humana, for payments it made to
medical providers. Based on these facts, Wright argues that the company satisfied the
award owed to Gould before he filed his motion for summary judgment and the district
court's adverse ruling.
Wright reasons that it simply exercised its right to exhaust all remedies under the
Workers Compensation Act, and when it was unsuccessful on appeal, it complied with
the award and compensated Gould by paying off his unpaid past due medical expenses.
Because all of Gould's past due medical expenses were paid prior to Gould's filing of his
motion for summary judgment, Wright contends that Gould's award for past due medical
expenses is no longer "past due" within the meaning of K.S.A. 44-512a. Wright submits
that because the award has been satisfied, the district court's entry of judgment for the
amount of the award is reversible error.
On the other hand, Gould contends that under K.S.A. 44-512a Wright was
required to pay Gould his award within 20 days of service of the demand letter requesting
payment. Wright's failure to pay the amount of the award within 20 days allowed Gould
to file a lawsuit in district court to obtain a money judgment in the amount of the Board's
award, despite any appeal of the award. Gould argues that the plain language of K.S.A.
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44-512a provides a workers compensation claimant with the right to collect a judgment
for the amount of the unpaid medical compensation included in the Board's award. In
Gould's view, the amount owed became "past due" at the time the Board entered the
award.
Lastly, Gould argues that Wright may not be credited with any amounts it has paid
to Humana in an untimely manner because K.S.A. 44-512a(b) mandates that the
employee maintain the cause of action for the collection of the medical compensation, not
that the employer reimburse the employee's health insurance carrier for payments made to
the employee's medical providers.
Our standard of review provides:
"'"Summary judgment is appropriate when the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, show that there is no
genuine issue as to any material fact and that the moving party is entitled to judgment as
a matter of law. The trial court is required to resolve all facts and inferences which may
reasonably be drawn from the evidence in favor of the party against whom the ruling is
sought. When opposing a motion for summary judgment, an adverse party must come
forward with evidence to establish a dispute as to a material fact. In order to preclude
summary judgment, the facts subject to the dispute must be material to the conclusive
issues in the case. On appeal, we apply the same rules and when we find reasonable
minds could differ as to the conclusions drawn from the evidence, summary judgment
must be denied."' [Citation omitted.]" Patterson v. Cowley County, Kansas, 307 Kan.
616, 621, 413 P.3d 432 (2018).
When there is no factual dispute, appellate review of an order regarding summary
judgment is de novo. Martin v. Naik, 297 Kan. 241, 246, 300 P.3d 625 (2013). In this
case on appeal, there is general agreement regarding the undisputed material facts.
Neither party disputes the amount of unpaid medical expenses awarded to Gould by the
Board. The parties agree that Wright exhausted its appeals of the Board's adverse
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decision, and the amount awarded to Gould for past medical expenses was affirmed by
our court. The parties also agree that Wright did not pay the amount of the award within
20 days of Gould's demand letter and that the amount of unpaid medical expenses
remained unpaid at the time Gould filed his K.S.A. 44-512a lawsuit in the district court.
It is also uncontroverted that at the time Gould filed his motion for summary judgment,
the medical expenses incurred for Gould's medical treatment relating to his work accident
had been paid in full. Finally, the parties agree that the amount of past due medical
expenses claimed by Gould for which the district court ordered judgment is $104,774.53.
While the material facts are not in dispute, the application of K.S.A. 44-512a to
those facts is clearly in controversy. Since resolution of this issue involves interpretation
of a statute, our appellate review is de novo. Neighbor v. Westar Energy, Inc., 301 Kan.
916, 918, 349 P.3d 469 (2015).
K.S.A. 44-512a provides:
"(a) In the event any compensation, including medical compensation, which has
been awarded under the workers compensation act, is not paid when due to the person,
firm or corporation entitled thereto, the employee shall be entitled to a civil penalty, to be
set by the administrative law judge and assessed against the employer or insurance carrier
liable for such compensation in an amount of not more than $100 per week for each week
any disability compensation is past due and in an amount for each past due medical bill
equal to the larger of either the sum of $25 or the sum equal to 10% of the amount which
is past due on the medical bill, if: (1) Service of written demand for payment, setting
forth with particularity the items of disability and medical compensation claimed to be
unpaid and past due, has been made personally or by registered mail on the employer or
insurance carrier liable for such compensation and its attorney of record; and (2) payment
of such demand is thereafter refused or is not made within 20 days from the date of
service of such demand.
"(b) After the service of such written demand, if the payment of disability
compensation or medical compensation set forth in the written demand is not made
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within 20 days from the date of service of such written demand, plus any civil penalty, as
provided in subsection (a), if such compensation was in fact past due, then all past due
compensation and any such penalties shall become immediately due and payable. Service
of written demand shall be required only once after the final award. Subsequent failures
to pay compensation, including medical compensation, shall entitle the employee to
apply for the civil penalty without demand. The employee may maintain an action in the
district court of the county where the cause of action arose for the collection of such past
due disability compensation and medical compensation, any civil penalties due under this
section and reasonable attorney fees incurred in connection with the action." (Emphases
added.)
The question is presented: What is the meaning of the statutory language, "The
employee may maintain an action in the district court . . . for collection of such past
due . . . medical compensation"?
To answer this question, we employ well-known rules of statutory construction.
The most fundamental rule of statutory construction is that the intent of the Legislature
governs if that intent can be ascertained. Harsay v. University of Kansas, 308 Kan. 1371,
1381, 430 P.3d 30 (2018). Towards that end, an appellate court must first attempt to
ascertain legislative intent through the statutory language enacted, giving common words
their ordinary meanings. Nauheim v. City of Topeka, 309 Kan. 145, 149, 432 P.3d 647
(2019). Finally, when a statute is plain and unambiguous, an appellate court should not
speculate about the legislative intent behind that clear language, and it should refrain
from reading something into the statute that is not readily found in its words. Harsay, 308
Kan. at 1381.
At the outset, it is apparent that "K.S.A. 44-512a(a) does not allow a claimant to
demand payment of a compensation award, or seek a penalty for nonpayment of an
award, until payment has become due." (Emphasis added.) Aikens v. Gates Corp., 57
Kan. App. 2d 875, Syl. ¶ 4, 462 P.3d 189 (2020). Moreover, "[t]he right to an action
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under K.S.A. 44-512a occurs when an award becomes the final award" of the Board.
"This structure thus allows the Board to conduct its review, and alter any award
accordingly, before an employer's payment obligations begin." (Emphasis added.) 57
Kan. App. 2d 875, Syl. ¶ 5. See K.S.A. 2019 Supp. 44-551(l)(1) ("[T]he board shall have
authority to grant or refuse compensation, or to increase or diminish any award of
compensation . . . .").
Here, Gould's award for medical expenses was due on August 28, 2015, when the
Board reversed the ALJ's denial of compensation and awarded Gould payment for his
unpaid medical expenses. After the Board's final award, unpaid medical compensation
was past due for purposes of K.S.A. 44-512a.
It is uncontroverted that Gould complied with the procedural requirements of
K.S.A. 44-512a by sending a demand letter to Wright on October 5, 2015. When Wright
did not pay the award within 20 days, as required by statute, but attempted to obtain a
stay while appealing the Board's ruling, Gould filed this lawsuit in district court seeking
civil penalties and a judgment in order to collect on the award.
What effect, if any, did Wright's appeal of the award have on Gould's ability to
prosecute a collection action to enforce the award in the district court? Kansas courts
have held that an employer's time spent prosecuting an appeal of a workers compensation
award does not render the award unenforceable during that time: "The right to an action
under K.S.A. 44-512a occurs when an award becomes the final award of the Board. An
appeal of the award to the appellate courts does not stay the operation of the statute."
Acosta v. National Beef Packing Co., 273 Kan. 385, 398, 44 P.3d 330 (2002).
As a result, while Wright was appealing the Board's award, it was still subject to
collection of the amount of the award as provided by K.S.A. 44-512a(b). In fact, Wright
acknowledged in district court that it failed to make the payments within 20 days and that
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Gould was rightfully entitled to civil penalties due to the delay in payment. At the hearing
on the motions for summary judgment, Wright's counsel said, "That's his take home for
being denied medical and being delayed medical."
Resolution of this appeal turns on whether Gould is still entitled to a judgment if
Wright did not pay the award before Gould filed his collection lawsuit under K.S.A. 44-
512a, but it paid the past due medical expenses prior to the filing of Gould's summary
judgment motion and entry of the adverse summary judgment order. Wright argues it
satisfied the award by paying two medical providers directly and reimbursing Humana
for payments made to other medical providers, once Wright exhausted the appeals
process.
Kansas caselaw supports Gould's position that he was entitled to collect the
judgment despite Wright's untimely payment of the unpaid medical expenses. "The
overriding purpose of the Workers' Compensation Act is to secure prompt payment to
injured employees of the benefits provided for under its terms." Hatfield v. Wal-Mart
Stores, Inc., 14 Kan. App. 2d 193, 196-97, 786 P.2d 618 (1990). K.S.A. 44-512a
implements this overriding purpose by providing procedures to secure prompt payment
for injured employees awarded compensation under the Act. As our Supreme Court held
almost 50 years ago: "Use of this statute, in our opinion, is the means by which the
legislature intended all compensation due and payable should be enforced, including that
which is due pending appeal." (Emphasis added.) Kissick v. Salina Mfg. Co., 204 Kan.
849, 856, 466 P.2d 344 (1970).
Our Supreme Court's opinion in Acosta provides valuable precedent in resolving
this appeal. See 273 Kan. 385. Highly summarized, in Acosta, Victoria Acosta, an
employee of National Beef Packing Company (NBP) brought a workers compensation
claim against NBP after an employment injury. The ALJ awarded Acosta $57,936.72,
which constituted temporary total and permanent partial general disability compensation.
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NBP appealed the award to the Board, which affirmed the ALJ's ruling. There was no
appeal of the Board's decision.
Shortly thereafter, Acosta, complying with the provisions of K.S.A. 44-512a sent
NBP a demand letter for the entire amount due. NBP failed to make the payment within
20 days of the demand but it filed an application for review and modification of the final
workers compensation award. See K.S.A. 44-528. The ALJ declined to grant relief
finding there was no jurisdiction. Both Acosta and NBP appealed to the Board.
Meanwhile, invoking K.S.A. 44-512a(b) Acosta filed a lawsuit in the district court
to collect the past due compensation awarded by the Board.
Three months later, in the workers compensation case, the Board reversed the ALJ
and remanded the case for the ALJ to consider fraud or serious misconduct by Acosta.
Upon remand, the ALJ found fraud and serious misconduct relating to Acosta's claim and
modified the Board's prior award by dismissing the case and ruling that the original
award was void ab initio. On appeal, the Board affirmed in part and reversed in part the
ALJ's ruling, finding that because Acosta refused to testify about material and relevant
facts, the original award was obtained either fraudulently or through serious misconduct.
The Board set aside the award, declared it void ab initio, and ordered that Acosta should
not receive an award "'until . . . she is forthright and an award can be entered in a just
amount based upon the facts.'" 273 Kan at 391.
In the interim, both parties moved for summary judgment on Gould's K.S.A. 44-
512a(b) lawsuit to collect on the original award. The district court concluded, however,
that it did not have jurisdiction and sought appellate court assistance in answering this
question:
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"'Whether the parties to a workers compensation action may bring, and a district
court has jurisdiction to hear, an action under K.S.A. 44-512a when, at the same time, a
motion for review and modification, brought under K.S.A. 44-528, to modify the award
upon which the K.S.A. 44-512a action is based is pending in the underlying workers
compensation case?'" 273 Kan at 392.
Our court declined the interlocutory appeal. Subsequently, the district court
answered its own question in the affirmative, granting Acosta's motion for summary
judgment and entering judgment in favor of Acosta and against NBP for $57,936.72.
NBP and its insurance carrier appealed from the district court's adverse summary
judgment ruling in favor of Acosta.
In upholding the district court's entry of summary judgment in favor of Acosta, our
Supreme Court provided the following detailed analysis of the application of K.S.A. 44-
512a to an underlying workers compensation proceeding:
"[T]he Board awarded the claimant $57,936.72, due from the date of the accident. At that
point, the claimant had a right to that sum. Appellants did not pay that sum and the
claimant issued a demand letter pursuant to K.S.A. 44-512a. There is no dispute
concerning the validity of the demand made. The 20 days provided for in the statute
elapsed without payment from the appellants. Upon the elapse of that 20-day period, the
past due amount payable to the plaintiff became immediately due and payable, and the
claimant had the right to enforce this award in the district court. At that point, the K.S.A.
44-512a proceeding superseded the original award from the Board and made moot any
proceedings with regard to that amount past due. As a result, the fact the award was later
set aside on appeal and modification does not matter. The failure of the appellants to pay
the amount due gave the claimant rights as to that amount from the expiration of the 20
days following the demand under K.S.A. 44-512a." (Emphasis added.) 273 Kan. at 399.
Acosta noted the statute is remedial in nature and "the employer has the choice of
protecting his or her vested rights by merely complying with the terms and requirements
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of the award until it is set aside, modified, paid, or redeemed, or to permit the worker to
invoke the statute." 273 Kan. at 398.
On appeal, Wright makes only a passing reference to Acosta, asserting it is
distinguishable because "Acosta was solely a dispute over unpaid disability benefits—it
had nothing to do with unpaid medical expenses." While true, this is a distinction without
a difference. K.S.A. 44-512a relates to "any compensation, including medical
compensation, which has been awarded under the workers compensation act" that is not
paid when due. (Emphasis added.) As our Supreme Court emphasized in Acosta, K.S.A.
44-512a "applies to all awards and judgments without qualification." (Emphasis added.)
273 Kan. at 398-99.
Wright also argues that unlike the present case on appeal where it ultimately paid
Gould's past due medical expenses 7 to 10 months after the expiration of the 20-day grace
period provided in Gould's demand letter, in Acosta, no payments were made to the
employee during the litigation. But this misses the point of Acosta: "The only question to
be considered in the action is whether the respondent has failed to pay amounts past due
within 20 days of a proper demand pursuant to K.S.A. 44-512a." (Emphasis added.) 273
Kan. 385, Syl. ¶ 13. In Acosta and the case on appeal, the employer failed to comply with
the statute's directive to make timely payment of compensation to the injured employee.
Under either circumstance, the employer failed to comply with the mandate of K.S.A. 44-
512a. And implementation of the statutory mandate is important because "[e]nforcement
of the award encourages the employer and insurer to actually pay the award when it
becomes due in order to retain their rights, in accordance with the declared public policy
of the State of Kansas." (Emphasis added.) 273 Kan. at 400.
Wright cites Hatfield in support of its position. In summary, Diene Hatfield was
injured while working for Wal-Mart. Wal-Mart was dilatory in paying past due workers
compensation awarded to Hatfield. After sending a demand letter to Wal-Mart and
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receiving no reply within the 20-day time period, Hatfield's guardian sought civil
penalties from the ALJ. After Wal-Mart did not pay the unpaid medical expenses, civil
penalties, and attorney fees, Hatfield's guardian filed a lawsuit in district court pursuant to
K.S.A. 44-512a(b) seeking relief. At trial, it was stipulated that two payments made about
the time the lawsuit was filed were not received by the guardian prior to the filing of the
petition. The district court subsequently found that more than $30,000 in compensation
had been paid by Wal-Mart after the filing of the lawsuit. As our court summarized the
matter: "The sole issue at the trial on October 28, 1988, was the amount of attorney fees
to be awarded the guardian." 14 Kan. App. 2d at 195.
Wright argues:
"As was the case in Hatfield, all amounts due to Gould and his medical providers
have been paid. Though the bills were not paid until after Gould filed this lawsuit, they
were paid in full literally years before the district court entered judgment to Gould. . . .
[I]n accordance with [the] Hatfield decision, this Court should enter judgment for the
Appellants, determining that no further award is due and owing to Gould."
Hatfield provides scant support for Wright's argument. First, Hatfield only dealt
with the proper calculation of attorney fees in a lawsuit brought under K.S.A. 44-512a(b).
Second, Hatfield's guardian simply accepted the late payments from Wal-Mart and did
not litigate the matter further, except in the context of the amount of attorney fees. In this
way, Hatfield's guardian did not present the litigation position taken by Gould in this
case—which is to demand full compensation that was not timely made and litigate the
issue. As a result, the district court and our court in Hatfield were not called upon to
render conclusions of law that are sought by Gould in this appeal.
A caveat: In this case Gould did not seek judgment for late direct payments by
Wright to two medical providers totaling $2,112.45. Instead, Gould opted to pursue the
other past due medical expenses amounting to $104,774.53—the balance of the amount
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approved by the Board—that were satisfied by Wright's reimbursement of $56,347.23 to
Humana (which obviously paid the providers at a discounted rate). Importantly, however,
at the hearing on the summary judgment motions, Gould argued that despite his voluntary
withdrawal of the request for collection of the $2,112.45 directly paid by Wright, the
operation of K.S.A. 44-512a would have still allowed for collection of that sum.
On a related matter, Wright cites to various decisions issued by the Board for
support of the proposition that an award may be satisfied by the employer paying medical
providers instead of the employee directly. See Morse v. Sunshine Biscuits, Inc. and
Transportation Insurance Co., No. 228,888, 2000 WL 1929338, at *1 (Kan. Work.
Comp. App. Bd. December 22, 2000). Wright argues that "Gould is not entitled to direct
payment of his medical expenses because at the time of the argument before the district
court, his employer had already paid his providers or personal health insurance carrier
with direct payment or reimbursement."
Gould counters that "none of the Board cases cited has anything to do with K.S.A.
44-512a(b) or a District Court's authority under that statute to grant a civil judgment to
enforce a workers' compensation award."
We think Gould has the better argument. The Board's decisions cited by Wright do
not discuss the legal effect of K.S.A. 44-512a(b), because none of those decisions
involved an employer's failure to pay unpaid medical expenses within 20 days after
service of the employee's demand letter. Wright or its insurer did not pay Gould, Gould's
medical providers, or Gould's health insurance carrier the unpaid medical expenses
totaling $106,886.98 within 20 days of the service of Gould's demand letter. Timely
payment of the unpaid medical expenses was required under K.S.A. 44-512a. Given that
no payment was made in a timely manner, the source of those late payments is not at
issue.
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In summary, Wright failed to compensate Gould for his unpaid medical expenses
in a timely manner. Wright's failure to do so allowed Gould to enforce the past due award
by invoking K.S.A. 44-512a and obtaining a money judgment against Wright in the
district court. Accordingly, the district court did not err in granting summary judgment
for Gould in the amount of $114,721.53.
Finally, citing K.S.A. 44-510i(e), Wright asserts that it is only liable to pay
Gould's medical expenses up to the amount allowable by the Kansas fee schedule. Wright
argues that "the evidence proves Appellants satisfied their obligation to pay medical
expenses in accordance with the [f]ee schedule." Wright's claim that it ultimately paid the
past due medical expenses in accordance with the fee schedule may be true. But it is
irrelevant to the district court's application of K.S.A. 44-512a in granting summary
judgment to Gould for the past due medical expenses that Wright did not pay within 20
days of service of Gould's demand letter.
In conclusion, Gould followed the statutory procedure set forth in K.S.A. 44-512a
by serving his demand letter for unpaid medical expenses on Wright. Upon the expiration
of 20 days, Gould was entitled to seek civil penalties and enforce the workers
compensation award in the district court. For its part, upon receipt of the demand letter,
Wright had the choice of making a timely payment or having Gould invoke the
enforcement provisions of the statute. Wright chose the latter course of action.
As a result, "[t]he only question to be considered in the action is whether the
respondent has failed to pay amounts past due within 20 days of a proper demand
pursuant to K.S.A. 44-512a." Acosta, 273 Kan. 385, Syl. ¶ 13. We hold the district court
correctly applied the plain language of K.S.A. 44-512a and did not err in granting
summary judgment in favor of Gould.
Affirmed.
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