Glenn Davis v. Blendex Company ( 2021 )

RENDERED: JUNE 17, 2021
TO BE PUBLISHED
Supreme Court of Kentucky
2020-SC-0171-WC
GLENN DAVIS APPELLANT
ON APPEAL FROM COURT OF APPEALS
V. NO. 2019-CA-1804
WORKERS’ COMPENSATION BOARD
NO. WC-16-63660
BLENDEX COMPANY, APPELLEES
HONORALBE JONATHAN R. WEATHERBY,
ADMINISTRATIVE LAW JUDGE, AND
WORKERS’ COMPENSATION BOARD
OPINION OF THE COURT BY JUSTICE LAMBERT
AFFIRMING
Glenn Davis (Mr. Davis) appeals a decision of the Court of Appeals that
affirmed the Workers’ Compensation Board’s (the Board) holding that the
Administrative Law Judge (ALJ) properly found that his claim for workers’
compensation benefits was barred by the applicable statute of limitations.
After review, we affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
The facts of this case are not in dispute. At the time of his injury, Mr.
Davis was a fifty-six-year-old high-school graduate with two years of college
education. His employer, Blendex Company (Blendex), manufactured food
goods such as biscuit mixes and cereal mixes. Mr. Davis had worked for
Blendex since 1987, and at the time of his injury he worked in product quality
control for ten hours a day, four days per week. The nature of his position
required him to stand and walk around Blendex’s factory for the majority of his
workdays.
On Monday, April 11, 2016, Mr. Davis went into one of the bathrooms at
the factory to check a piece of equipment. While he was in the bathroom, one
of his co-workers inadvertently sprayed him with a heated pressure washer
resulting in a severe burn on the top of his right foot. He immediately went to
the front office of the factory for medical treatment. When Mr. Davis’ sock was
removed, the top layer of skin on his foot peeled off. The wound was cleaned
and dressed, and he was sent home.
The following day, he received medical treatment at BaptistWorx, an
occupational health clinic, which placed him on “sit-down duty” with no
prolonged walking. Mr. Davis then worked for the remainder of that day and
then from April 13-15; April 11-14 was Mr. Davis’ regular work week, and April
15 was an “overtime day.” On the following Monday, April 18, BaptistWorx told
him he needed to be seen by a wound care specialist, as his burn had become
swollen and infected. On April 19, Mr. Davis saw Dr. Ramsey Kevin Majzoub, a
wound care specialist. Dr. Majzoub instructed him not to work until their next
appointment on April 26. Mr. Davis therefore did not work on April 19-21, nor
did he work the following Monday and Tuesday, April 25-26. He accordingly
missed a total of five workdays.
2
On April 26, Dr. Majzoub released Mr. Davis to return to work with the
conditions that he work only half-days, that he not participate in any prolonged
walking, and that he elevate his foot while sitting. Mr. Davis testified that
Blendex accommodated these conditions by having him sit at a desk, prop his
foot up, and do computer work such as entering work orders. He
acknowledged that the work was not busy work, and that someone else would
have been doing it if he was not. Mr. Davis was later medically released by Dr.
Majzoub to return to full hours and job duties on June 20.
Mr. Davis testified that Kate Claudio (Ms. Claudio), the insurance
adjuster for Blendex’s workers’ compensation insurance carrier Amerisure,
discussed his options for workers’ compensation benefits with him:
Q: Now, did your (sic) ever inquire with either Blendex or their
workers’ comp carrier about workers’ comp income benefits?
A: Kate Claudio went over some of that with me.
Q: All right. And she went over that with you and what did you all
discuss?
A: She told me I’d have to be off work 21 days minimum and that I
would draw a portion of my salary after that.
But rather than taking a reduction in income, Mr. Davis chose to work half
days and supplement his income using his previously accrued paid time off
(PTO) hours and vacation pay. Accordingly, Mr. Davis never sought or received
any temporary total disability (TTD) benefits prior to the applicable statute of
limitations expiring. There is no evidence in the record that Blendex coerced or
fraudulently induced Mr. Davis into using his PTO or vacation hours in lieu of
seeking TTD benefits.
3
After Mr. Davis was medically released to full duty, he continued to
experience burning and pain in his foot. He therefore contacted Amerisure and
requested a doctor’s appointment. Amerisure sent him to Dr. Ellen Ballard.
His first appointment with Dr. Ballard was July 20, 2016, and he saw her a
total of six times. On September 14, Dr. Ballard opined that Mr. Davis had
reached maximum medical improvement (MMI), and later determined that he
had a 3% impairment rating. Mr. Davis became displeased with Dr. Ballard’s
treatment, and began seeing Dr. Alan Mauser, a podiatrist, in November of
2016. Both Dr. Ballard’s and Dr. Mauser’s primary treatment was to prescribe
a Flector Patch.1
On November 30, Ms. Claudio offered to settle Mr. Davis’ claim. Mr.
Davis testified before the ALJ about their conversation:
Q: Do you recall a telephone conversation with Kate Claudio on
November 30th, 2016, in which you told her that you didn’t feel
that the settlement they were offering you was appropriate for an
injury that you would have [to] deal with for the rest of your life?
A: Yes.
Q: Okay. So, had she told you what the terms of the agreement
were?
A: She told me they had an impairment rating and she gave me a
dollar figure, yes.
[…]
Q: Okay. Did you tell [Ms. Claudio] at that time, November 30th,
2016, that you would speak with an attorney about the adequacy
of the settlement offer?
A: Yes.
Q: Okay.
1 A “Flector Patch (diclofenac epolamine topical patch) is a pain medication. It
helps relieve pain and inflammation (swelling) in a small area of your body, such as
from a sprain, strain, bruise, or arthritis. It contains a nonsteroidal anti-inflammatory
drug (NSAID).” https://www.mskcc.org/cancer-care/patient-education/flector-patch
(last accessed May 21, 2021).
4
A: Because the nature of the injury, I mean, that would only make
sense to consult with someone that knows more about this than I
do.
Q: Sure. And did [Ms. Claudio] tell you that the offer was based on
an impairment rating provided by Dr. Ballard?
A: Yes.
Q: Okay. And it was shortly after that phone call—it looks like
that phone call was November 30th, 2016—on January 26th, 2017
that you changed your designated physician to Dr. Mauser; is that
right?
A: Yes.
Q: Okay. And so it sounds like you weren’t satisfied with the
impairment rating that Dr. Ballard had given you; is that true?
A: I didn’t think it was adequate for the injury, yes.
Blendex and Mr. Davis never reached a settlement agreement, and on
August 10, 2018, two years and four months from the date of his injury, Mr.
Davis filed an application for resolution of his claim (Form 101). Blendex
denied Mr. Davis’ claim citing the applicable two-year statute of limitations.
The claim was thereafter bifurcated to determine the threshold issue of
whether the claim was time barred. During the formal hearing, Mr. Davis
testified that he was aware when the statute of limitations would expire:
Q: Okay. Did anyone tell you that they would continue to pay your
medical benefits after the statute of limitations expired?
A: No.
[…]
Q: Okay. How did you find out that the statute of limitations was
two years?
A: The human resources lady at work told me.
Q: Okay. And when did you have that discussion with her?
A: Golly. That wasn’t too long before it actually ran out. A week
maybe.
Q: Okay. So before the statute of limitations expired, she
explained to you that it was about to expire?
A: Yes.
5
Based on the foregoing evidence, the ALJ found that the claim was not
timely under KRS2 342.185, and that the facts did not warrant the statute of
limitations being tolled. In his findings of fact and conclusions of law, the ALJ
found:
6. KRS 342.040(1) requires an employer to notify the Department
of Workers’ Claims when it terminates TTD or fails to pay TTD to a
worker who has missed more than seven days of work due to a
work-related injury. It further requires that upon said notification,
the Department must advise the worker in writing of his right to
file a claim and of the applicable period of limitations.
7. KRS 342.185 operates together with KRS 342.040(1) and tolls
the period of limitations until after the payment of voluntary
income benefits ceases in order to protect injured workers from
being lulled into a false sense of security by receiving such
payments and, therefore, failing to actively pursue a claim. City of
Frankfort v. Rogers, 765 S.W.2d 579 (Ky. App. 1988).
8. The facts in this matter dictate that not only was there no false
sense of security created but that the Plaintiff was actually offered
a settlement by the carrier which he did not accept. The evidence
indicates that thereafter he was advised by the carrier that the
statute of limitations period was soon to expire and expressed his
plan to seek counsel and file a claim. The Plaintiff however did not
file his claim until the statute had run.
9. Additionally, Roark v. United Parcel Service, 2007 WL 4139636stands for the proposition that an employer does not become liable
to pay temporary total disability benefits until the employee misses
seven consecutive days of work which would have triggered the
obligation for the employer to pay TTD benefits and to notify the
Department of Workers’ Claims. The ALJ is therefore unable to
apply the principles of equitable estoppel in this instance because
there was no injustice to the Plaintiff and because there was no
obligation to notify the Department of Workers Claims. The
Plaintiff was also specifically aware of the applicable statute of
limitations period and merely failed to act. The ALJ therefore finds
that this matter must be dismissed as it was not filed in a timely
manner.
2 Kentucky Revised Statute.
6
After the entry of the foregoing order, Mr. Davis filed a petition for
reconsideration. In it, he argued that the ALJ
failed to address Plaintiff’s assertion that the employer should have
paid TTD benefits during that two-month period following the
injury in which the Plaintiff was limited to 5 hour work days and
was required to keep his foot elevated. Trane Commercial Systems
v. Tipton, 481 S.W.3d 800 (Ky. 2016). We request a finding from
the ALJ on the issue of whether Plaintiff was entitled to TTD
benefits during this time period.
The ALJ denied Mr. Davis’ petition for reconsideration. The ALJ reasoned:
2. The Kentucky Supreme Court has determined in Trane
Commercial Systems v. Tipton, 481 S.W.3d 800 (Ky. 2016), that it
would not be reasonable and it does not further the purpose for
paying income benefits, to pay TTD benefits to an injured employee
who has returned to employment simply because the work differs
from what she performed at the time of injury. Therefore, absent
extraordinary circumstances, an award of TTD benefits is
inappropriate if an injured employee has been released to return to
customary employment, i.e. work within her physical restrictions
and for which she has the experience, training, and education; and
the employee has actually returned to employment.
3. The Plaintiff in this matter returned to work without a loss of
pay and was able to work within his stated restrictions until
ultimately being returned to regular duty. The extraordinary
circumstances referred to in Tipton, supra, were not specifically
identified but the ALJ finds that the Plaintiff was able to continue
in his job within the stated restrictions without a loss of income
and as such his situation falls short of the extraordinary
circumstances [contemplated] by the Kentucky Supreme Court.
4. The Kentucky Supreme Court also specifically identified in
Double L Constr. v. Mitchell, 182 S.W.3d 509 (Ky. 2005), that the
general purpose for awarding income benefits such as TTD is to
compensate workers for income that is lost due to an injury,
thereby enabling them to provide the necessities of life for
themselves and their dependents. The ALJ finds that this purpose
has been achieved in this matter and as such the Petition is
DENIED.
7
Mr. Davis then appealed the ALJ’s rulings to the Board, which affirmed the
ALJ. In relevant part, the Board held:
we find no abuse of discretion in the ALJ’s conclusion that Davis’
light duty work constituted a return to employment within the
meaning of KRS 342.0011(11)(a) and applicable case law. Davis
performed data entry concerning Blendex’s sales and purchasing
orders. He acknowledged the office work was not “made-up” work,
and would be completed by someone else had he not done so.
There was no evidence that this office work was outside Davis’
experience and training at Blendex.
Further, the ALJ enjoys the discretion to determine whether
extraordinary circumstances exist such that an award of TTD
benefits would be warranted despite the injured worker’s return to
employment. The ALJ articulated his reasoning on this issue,
taking into account that the purpose of TTD benefits is to protect
the injured worker’s income and Davis was able to maintain his
income by using vacation time. Under these circumstances, we
cannot conclude the ALJ abused his discretion.
A unanimous Court of Appeals panel affirmed the Board in the appeal that
followed,3 and Mr. Davis now appeals to this Court.
Additional facts are discussed below as necessary.
II. ANALYSIS
Mr. Davis asserts that the ALJ, the Board, and the Court of Appeals
erred by failing to hold that the two-year statute of limitations on his claim was
tolled. Mr. Davis alleges that he was entitled to TTD benefits during the two-
month period that he was released to part-time, limited-duty work, and that
Blendex’s failure to pay TTD benefits during that time should operate to toll the
two-year statute of limitations. Therefore, the dispositive issues of this case
3 Davis v. Blendex Co., 2019-CA-001804-WC, 2020 WL 1815972, at *4 (Ky. App.
Apr. 10, 2020).
8
are whether Mr. Davis was in fact entitled to TTD for that period, and, if not,
whether equitable principles nonetheless require that the statute of limitations
be tolled. Mr. Davis bore the burden of proving his entitlement to TTD, and
“[w]here the ALJ finds against the party with the burden of proof, the standard
of review on appeal is whether the evidence compelled a contrary finding.”4
Similarly, Blendex bore the burden of proof to show that Mr. Davis’ claim was
time barred.5
Mr. Davis’ primary contention is that he was entitled to TTD benefits for
the two-month period that he was released to do only part-time, limited duty
work because it did not constitute a “return to employment” under KRS
342.0011(11)(a) and, by extension, this Court’s recent holding in Tipton, supra.
KRS 342.0011(11)(a) defines a temporary total disability as a “condition
of an employee who has not reached maximum medical improvement from an
injury and has not reached a level of improvement that would permit a return
to employment.” Accordingly, an employee may receive TTD benefits until they
either (a) reach MMI, or (b) improve to the point that they can “return to
employment.” Unfortunately, KRS Chapter 342 does not specify what “return
to employment” means. This was precisely the issue that this Court addressed
in Tipton.
In Tipton, the employee worked in the control department of the
employer’s commercial air conditioning manufacturing plant where she tested
4 Livingood v. Transfreight, LLC, 467 S.W.3d 249, 254 (Ky. 2015).
5 See, e.g., Lizdo v. Genetic Equip., 74 S.W.3d 703, 705 (Ky. 2002).
9
air conditioner units.6 The employee fell and fractured her right patella while
testing an air conditioner unit.7 Due to this injury, the employee did not work
from May 6, 2010, the date of her injury, until March 22, 2011, when she was
medically released to return to “sedentary work activity with no overtime.”8 On
March 22, the employee returned to work “at a different job, assembling
electrical-circuit boards and earning the same hourly rate of pay as she had
before the injury.”9 In July of 2011, she was released to return to her pre-
injury job duties, but she did not believe she could perform them without
significant problems.10 She therefore bid on, and was permanently placed in,
her post-injury job of assembling circuit boards.11
The employer had stopped paying TTD benefits to the employee when she
returned to limited-duty work in March of 2011.12 The employee argued that
she was entitled to TTD benefits until she was released to return to her pre-
injury job duties in July of 2011.13 The ALJ denied the employee’s claim,
finding that “her release and return to ‘customary, non-minimal work’ justified
termination of TTD benefits when Tipton returned to work on March 22, 2011.”
The Board affirmed the ALJ’s finding, but the Court of Appeals reversed,
6 Tipton, 481 S.W.3d at 802.
7 Id.
8 Id.
9 Id.
10 Id.
11 Id.
12 Id.
13 Id.
10
holding that the employee “had not performed the circuit board assembly job
prior to her injury; therefore … her return to work on March 22, 2011 did not
terminate her entitlement to TTD benefits.”14
Accordingly, this Court was called upon to determine “what the phrase
‘return to employment’ as used in [KRS] 342.0011(11)(a) [meant].”15 In that
vein, the unanimous Tipton Court held:
[w]e take this opportunity…to clarify what standards the ALJs
should apply to determine if an employee “has not reached a level
of improvement that would permit a return to employment.” KRS
342.0011(11)(a). Initially, we reiterate that “[t]he purpose for
awarding income benefits such as TTD is to compensate
workers for income that is lost due to an injury, thereby
enabling them to provide the necessities of life for themselves
and their dependents.” Double L Const., Inc., 182 S.W.3d at 514.
Next, we note that, once an injured employee reaches MMI that
employee is no longer entitled to TTD benefits. Therefore, the
following only applies to those employees who have not reached
MMI but who have reached a level of improvement sufficient to
permit a return to employment.
As we have previously held, “[i]t would not be reasonable to
terminate the benefits of an employee when he is released to
perform minimal work but not the type [of work] that is customary
or that he was performing at the time of his injury.” Central
Kentucky Steel v. Wise, [19 S.W.3d 657, 659 (Ky. 2000)]. However,
it is also not reasonable, and it does not further the purpose
for paying income benefits, to pay TTD benefits to an injured
employee who has returned to employment simply because the
work differs from what she performed at the time of injury.
Therefore, absent extraordinary circumstances, an award of
TTD benefits is inappropriate if an injured employee has been
released to return to customary employment, i.e. work within
her physical restrictions and for which she has the experience,
training, and education; and the employee has actually
14 Id. at 802-03.
15 Id. at 803.
11
returned to employment. We do not attempt to foresee what
extraordinary circumstances might justify an award of TTD
benefits to an employee who has returned to employment under
those circumstances; however, in making any such award, an ALJ
must take into consideration the purpose for paying income
benefits and set forth specific evidence-based reasons why an
award of TTD benefits in addition to the employee's wages would
forward that purpose.16
The Tipton Court accordingly reversed the Court of Appeals and reinstated the
ALJ’s denial of TTD benefits during the time period at issue.17
Here, Mr. Davis’ argument does not focus on the differences in his work
duties pre and post-injury, as in Tipton. Rather, he argues that the fact that he
was a full-time employee released to only part-time work entitled him to TTD
benefits. He contends that, “the term ‘customary [employment]’ refers not only
to the type of work performed, but also the amount or duration of that work.”
To date, no cases in our jurisprudence have addressed the application of Tipton
to a decrease in the number of hours an injured employee is medically released
to work. Mr. Davis also argues that the ALJ erred by finding that he suffered
no loss of income due to his use of PTO and vacation hours to supplement his
income.
To begin, the Tipton case made it clear that it is not reasonable and it
does not further the purpose of paying income benefits “to pay TTD benefits to
an injured employee who has returned to employment simply because the
16 Id. at 807 (emphasis added).
17 Id.
12
work differs from what [he] performed at the time of injury.”18 In addition,
TTD benefits should not be paid if an injured employee is released to return to
“work within [his] physical restrictions and for which [he] has the experience,
training, and education; and the employee has actually returned to
employment.”19 Mr. Davis does not assert that his job duties were not within
his physical restrictions or that he did not have the experience, training, and
education to perform those duties. He simply asserts that the fact that his
work hours went from full-time pre-injury to part-time post-injury, alone, is
sufficient to find that he did not return to his customary employment. We
disagree.
We can discern no requirement from the language of Tipton that an
injured employee must return his pre-injury work hours in order to return to
employment. Rather, the only requirement is that he actually returned to
employment. And, under the facts of this case, simply because the number of
work hours differed from what Mr. Davis performed at the time of the injury
does not in and of itself mean that he did not return to employment. We
accordingly hold that Mr. Davis’ return to part-time employment from full-time
employment, alone, is not sufficient to constitute an “extraordinary
circumstance” warranting TTD benefits under Tipton.
In that vein, Mr. Davis further notes that “[t]he purpose for awarding
income benefits such as TTD is to compensate workers for income that is lost
18 Id. (emphasis added).
19 Id.
13
due to an injury, thereby enabling them to provide the necessities of life for
themselves and their dependents.”20 Accordingly, he argues, the ALJ erred by
finding that he suffered no lost wages due to the fact that he used his PTO and
vacation hours to supplement his part-time income. However, as Blendex
points out, Mr. Davis chose to work part time and supplement his wages with
PTO and vacation hours. Mr. Davis knew from his conversation with Blendex’s
insurance adjustor that if he chose to pursue TTD benefits, he would only
receive a portion of his salary in accordance with KRS 342.730. He therefore
opted not to pursue workers’ compensation benefits at that time. Blendex has
argued that Mr. Davis made this decision of his own volition at every stage in
these proceedings, and Mr. Davis has never claimed that the assertion is false.
Nor has Mr. Davis alleged that Blendex coerced or mislead him into using his
PTO and vacation hours so that it would not have to pay him TTD benefits, or
so that it could credit his use of those hours towards its obligation to pay him
TTD benefits.
Consequently, we affirm the ALJ’s finding that Mr. Davis did not meet his
burden of proof to demonstrate his entitlement to TTD benefits, as the evidence
does not compel a contrary finding.
Further, even assuming arguendo that the ALJ did err, we cannot hold
under these facts that tolling the applicable statute of limitations would have
been appropriate. The cases of this Court that address whether tolling a
20 Double L Const., Inc., 182 S.W.3d at 514.
14
statute of limitations was the correct remedy in a workers’ compensation case
almost invariably concern whether the employee was properly appraised of his
right to prosecute his claim and of the applicable statute of limitations for his
claim. On that front, KRS 342.040(1) directs:
Except as provided in KRS 342.020, no income benefits shall be
payable for the first seven (7) days of disability unless disability
continues for a period of more than two (2) weeks, in which case
income benefits shall be allowed from the first day of disability. All
income benefits shall be payable on the regular payday of the
employer, commencing with the first regular payday after seven (7)
days after the injury or disability resulting from an occupational
disease, with interest at the rate of six percent (6%) per annum on
each installment from the time it is due until paid, except that if
the administrative law judge determines that the delay was caused
by the employee, then no interest shall be due, or determines that
a denial, delay, or termination in the payment of income benefits
was without reasonable foundation, then the rate of interest shall
be twelve percent (12%) per annum. In no event shall income
benefits be instituted later than the fifteenth day after the
employer has knowledge of the disability or death. Income benefits
shall be due and payable not less often than semimonthly. If the
employer's insurance carrier or other party responsible for the
payment of workers' compensation benefits should terminate
or fail to make payments when due, that party shall notify the
commissioner of the termination or failure to make payments
and the commissioner shall, in writing, advise the employee or
known dependent of right to prosecute a claim under this
chapter.21
For our purposes, under KRS 342.040(1) an employer has no responsibility to
pay an injured employee income benefits until they have missed at least seven
days of work due to a work-related injury. But, if an employer is obligated to
pay benefits under the statute, it must inform the Department of Workers’
Claims (DWC) if it either fails to make payments when due, or when it
21 (emphasis added).
15
terminates benefits. The purpose of this notification is so that the DWC can
then inform the employee of his right to prosecute his claim and of the
applicable statute of limitations. However, Chapter 342 does not require notice
to the employee of his right to prosecute or his statute of limitations if TTD
benefits were neither owed nor paid.22
For many years this Court has considered an employee’s right to know
that they can file a claim and the applicable statute of limitations so vital that
it has “turned to equitable principles when the circumstances warranted and
estopped employers who failed to comply strictly with KRS 342.040(1) from
asserting a limitations defense, even in the absence of bad faith or
misconduct.”23 However, “estoppel is an equitable remedy and [the]
appropriateness of its application depends on the facts and circumstances of
each case.”24
A party may be estopped to plead a limitations defense if the
party's false representation or fraudulent concealment reasonably
induces inaction on the part of the plaintiff. Nothing requires
estoppel to be based on a statutory violation by the estopped party.
The elements of estoppel include: 1.) acts, language, or silence
amounting to a representation or concealment of material facts; 2.)
the facts are known to the estopped party but unknown to the
other party; 3.) the estopped party acts with the intention or
22 Spears v. Carhartt, Inc., 215 S.W.3d 1, 7 (Ky. 2006) (“Chapter 342 does not
require actual notice of every procedural requirement. It requires notice of the need to
file a claim and of the applicable period of limitations in cases where the employer
terminates TTD or does not pay TTD when due, but it does not require notice if TTD is
neither due nor paid.”) (citing J & V Coal Co. v. Hall, 62 S.W.3d 392, 395 (Ky.2001)).
23 Hitachi Auto. Prods. USA, Inc. v. Craig, 279 S.W.3d 123, 125 (Ky. 2008). See
also, e.g., Kentucky Container Serv., Inc. v. Ashbrook, 265 S.W.3d 793, 795-96 (Ky.
2008).
24 J & V Coal Co., 62 S.W.3d at 395 (discussing Newberg v. Hudson, 838 S.W.2d
384 (Ky. 1992)).
16
expectation that the other party will rely on its conduct; and 4.) the
other party does so to its detriment.25
Accordingly, the majority of our case law wherein tolling was held to be
appropriate involve facts where, for one reason or another, the employer failed
to meet its notice requirements under KRS 342.040(1) resulting in the
employee never being informed of his or her right to prosecute a claim or the
applicable statute of limitations.
By way of example, in City of Frankfort v. Rogers, the employer paid the
injured employee TTD benefits for a time, but altogether failed to inform the
DWC when it terminated those payments.26 The employee was therefore never
informed that he would no longer receive benefits, and the employee later filed
his Form 101 after the statute of limitations had expired.27 The Court of
Appeals ruled that tolling the statute of limitations was appropriate, and held
that “an employer cannot blatantly disregard its statutory obligation under
KRS 342.040 and thereby manufacture the defense of limitation.”28
The same rule was applied in H.E. Neumann Co. v. Lee.29 In that case,
the employee missed more than seven days of work following a heart attack
that he alleged was work-related.30 The employer both failed to submit a first
25 Craig, 279 S.W.3d at 125-26.
26 Rogers, 765 S.W.2d at 580.
27 Id.28 Id.29 975 S.W.2d 917 (Ky. 1998).
30 Id. at 919.
17
report of injury form31 and failed to inform the DWC that it would not pay the
employee benefits, as it did not believe the heart attack was work-related.32
The employee was not informed that he would no longer receive benefits until
after the statute of limitations had expired, and he filed his Form 101 a few
days after he was apprised of the denial.33 This Court estopped the employer
from asserting an SOL defense:
the failure of the employer herein, to satisfy the statutory
notification requirements, acted to toll the statute of limitations by
estopping the employer from prevailing on a statute of limitations
defense as claimant was never notified by the board regarding his
rights and the time frame in which he must act.34
Employees have also been permitted to toll an applicable statute of
limitations in cases where the employer attempted in good faith to satisfy its
notice requirements, but was unsuccessful. In Bill Baker Painting v. Barry, the
employer paid the employee TTD benefits for a time and later terminated those
benefits on the day the employee returned to work.35 The employer filed a
notice of termination of benefits form with the DWC, but the employer did not
provide the date that the benefits were terminated, i.e. the day the employee
returned to work.36 Therefore, due to a policy the DWC had at that time, it did
31 KRS 342.038(1) mandates that an employer inform the DWC when a work-
related injury causes an employee to miss work for more than one day.
32 H.E. Neumann Co., 975 S.W.2d at 919.
33 Id.
34 Id. at 921.
35 179 S.W.3d 860, 861 (Ky. 2005).
36 Id.18
not send the employee a notification letter informing him of the date of the
termination of payments and the applicable statute of limitations.37 The
employee later filed his claim for benefits outside the applicable statute of
limitations.38 This Court held that the ALJ did not err by finding that equitable
principles favored tolling:
[a]lthough the carrier continues to assert that the [form] it filed
was not deficient, the fact remains that the form did not include a
date that it concedes was mandatory. Although it is unfortunate
that the carrier was not informed of the omission on its [form] and
given an opportunity to rectify the matter, we are not convinced
that the ALJ erred by concluding that the equities favored the
claimant.39
Additionally, tolling has previously been held to be an appropriate
remedy when an employer’s workers’ compensation insurance adjuster
fraudulently induced an employee to file an untimely Form 101. In Hitachi
Auto. Prods. USA, Inc. v. Craig, “overwhelming evidence” demonstrated that the
employer’s insurance adjuster made the employee believe that a settlement
offer was forthcoming thereby inducing him not to file a Form 101 until after
the statute of limitations had expired.40 Then, after the statute of limitations
had expired, the employer terminated TTD benefits and informed the employee
37 Id. at 862.
38 Id. at 861.
39Id. 864-65. See also Ashbrook, 265 S.W.3d at 797 (holding that the
employer’s filing of a defective termination of benefits form warranted tolling because
the employee was never informed of the applicable statute of limitations until after it
had expired).
40 Craig, 279 S.W.3d at 128.
19
that the statute of limitations had expired.41 This Court held that tolling was
an appropriate remedy, noting that
[a]lthough [the adjuster] did not make a settlement offer, the
discussion led the claimant to think reasonably that she required
no further information, that she would make a settlement offer,
and that he would not need to file a claim. Thus, he took no action
until she informed him that the limitations period had expired. At
that point, he promptly obtained counsel and filed a claim…Equity
will not permit a carrier or its principal to blatantly disregard the
obligations created by 803 [Kentucky Administrative Regulation]
KAR 25:24042 and benefit from the misconduct. The employer's
carrier failed to comply with 803 KAR 25:240. Thus, equity
required the employer to be estopped from asserting a limitations
defense.43
In this case, Mr. Davis missed a total of five days of work. Therefore,
Blendex had no obligation under KRS 342.040(1) to inform the DWC that it
would not pay Mr. Davis TTD benefits. And, because TTD benefits were never
paid, it had no obligation to inform the DWC of a termination of benefits. As
discussed supra, Mr. Davis failed to demonstrate an entitlement to TTD
benefits. Therefore, there is no valid argument that Blendex failed to satisfy its
statutory requirements under KRS 342.040(1).
Further, unlike in Craig, Blendex’s insurance carrier made a settlement
offer to Mr. Davis in November of 2016, one year and five months prior to the
expiration of his statute of limitations. The settlement offer was, according to
Blendex, based on an impairment rating provided by one of Mr. Davis’ treating
41 Id. at 124.
42 803 KAR 25:240 covers unfair claims settlement practices within the realm of
workers’ compensation.
43 Craig, 279 S.W.3d at 128.
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physicians. Mr. Davis testified that he rejected the offer because he did not feel
it was sufficient and informed the insurance adjuster that he intended to
consult with an attorney about the offer.
Finally, Mr. Davis testified that Blendex informed him of the applicable
statute of limitations for his claim about a week before it expired. Yet he
waited until four months after the statute of limitations expired to file his Form
101.
III. CONCLUSION
Based on the foregoing facts and case law, we hold that the ALJ correctly
determined that equitable principles did not warrant the tolling of the statute of
limitations in this case. We accordingly affirm.
All sitting. All concur.
COUNSEL FOR APPELLANT:
Phillipe William Rich
COUNSEL FOR APPELLEE, BLENDEX COMPANY:
Stephanie Dawn Ross
Reminger, Co., LPA
COUNSEL FOR APPELLEE, WORKERS’ COMPENSATION BOARD:
Michael Wayne Alvey
ADMINISTRATIVE LAW JUDGE:
Hon. Jonathan R. Weatherby
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