                                                     RENDERED: MAY 14, 2015
                                                          TO BE PUBLISHED

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                              2014-SC-000401-WC


GARDENS GLEN FARM                                                    APPELLANT



                   ON APPEAL FROM COURT OF APPEALS
V.                    CASE NO. 2014-CA-000191-WC
                  WORKERS' COMPENSATION NO. 06-69845



BETHANY TAYLOR BALDERAS;
HONORABLE JANE RICE WILLIAMS,
ADMINISTRATIVE LAW JUDGE; AND
WORKERS' COMPENSATION BOARD                                          APPELLEES



                           OPINION OF THE COURT

                                  AFFIRMING

      Appellant, Gardens Glen Farm, filed this appeal from a Court of Appeals

decision to contest the Administrative Law Judge's ("ALJ") calculation of a

credit for money paid to Appellee, Bethany Balderas, pursuant to a settlement.

Gardens Glen argues that the AU erred by refusing to give it a dollar for dollar

credit based on the lump sum settlement it entered into with Balderas. For the

below stated reasons, we affirm the Court of Appeals.

      Balderas was injured when a horse she was exercising at Gardens Glen

rolled over on her. Balderas sustained two fractured vertebra and underwent

fusion surgery. She later returned to work. Balderas negotiated a lump sum
settlement of $100,000 with Gardens Glen, which reflected a 29% impairment

rating and a return to work factor of 1.5509453.

      Several years later, Balderas filed a motion to reopen alleging a

worsening of her occupational disability. The motion was sustained. The ALJ

determined that Balderas met her burden of proof to show a worsening of her

condition based on objective medical evidence. The ALJ found that the proper

return to work factor at the time of the original award was one. She then found

that Balderas's whole body impairment at the time of her settlement was 29%

and that it rose to 30% at the time of reopening. The MA . also found that

Balderas was entitled to the three multiplier, pursuant to KRS 342.730(1)(c),

on reopening because she was no longer able to work as an exercise rider. The

ALJ. made the following calculations:

      To determine the value on reopening when the original claim was
      resolved by settlement agreement, the Al..J is required to determine
      the value of the claim at the time of settlement as well as the
      current value. [Balderas] is entitled [to] the difference, with
      permanent partial disability benefits to be paid at the rate of
      $460.86 per week beginning August 19, 2011 and continuing
      thereafter for the remainder of the 425 week period per the original
      settlement agreement, with [Gardens Glen Farm] taking credit for
      the value of benefits of the original claim, calculated as follows:
             Value of original claim at the time of settlement:
             $460.86 x .29 x 1.35 x 1 = 180.42
             Calculation on reopening:
             $460.86 x .30 x 1.35 x 3 = 559.94 -9 460.86 (max)
      [Gardens Glen Farm], therefore, is entitled to a credit of $180.42
      per week with the remaining difference due and owing to [Balderas]
      to be $280.44 per week.

      Gardens Glen filed a petition for rehearing arguing that the ALJ's

calculation did not take into account the settlement reached by the parties.

Gardens Glen argued that it should receive credit for the amount it paid,

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pursuant to the settlement, because it was greater than the value of the

original claim as determined by the ALJ. The ALJ, in declining to recalculate

the credit, cited to KRS 342.125(7) and stated that "[n]ot only does the statute

clearly call for the ALJ to determine what the award should have been at the

time of settlement and not to what the parties agreed, the case law continues to

support that conclusion." However, the ALJ sustained the portion of Gardens

Glen's petition which argued the 99% cap imposed by KRS 342.730(1)(d)

should be applied and reduced Balderas's award to $456.25 per week. This did

not affect Gardens Glen's credit. The Workers' Compensation Board affirmed

the ALJ and the Court of Appeals affirmed. This appeal followed.

      The Board's review in this matter was limited to determining whether the

evidence is sufficient to support the ALJ's findings, or if the evidence compels a

different result. Western Baptist Hospital v. Kelly, 827 S.W.2d 685, 687 (Ky.

1992). Further, the function of the Court of Appeals is to "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." Id. at 687-88. Finally, review

by this Court "is to address new or novel questions of statutory construction,

or to reconsider precedent when such appears necessary, or to review a

question of constitutional magnitude." Id. As fact finder, the ALI had sole

authority to determine the weight, credibility, substance, and inferences to be

drawn from the evidence. Paramount Foods, Inc. v. Burkhardt, 695 S.W.2d 418,

419 (Ky. 1985). Using these standards, we affirm the Court of Appeals.



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      Gardens Glen argues that the AU erred by not giving it a dollar for dollar

credit for the settlement payments it made to Balderas. It cites to Crummies

Creek Coal Co. v. Hensley, 284 Ky. 243, 144 S.W.2d 206 (1940), as support for

its position. However, Hensley only stands for the proposition that the

employer is entitled to a credit on reopening. Id. at 210. It is not instructive

on how to calculate that credit. Instead Whittaker v. Rowland, 998 S.W.2d 479

(Ky. 1999), and Newberg v. Davis, 841 S.W.2d 164 (Ky. 1992), are dispositive.

      In Whittaker, the Court stated in regards to the employer's credit on

reopening:

      With regard to the question of credit, it must be remembered that
      this appeal does not concern the reopening of a litigated award.
      The parties agreed to the terms by which they would settle the
      claim for the underlying injury, and upon claimant's receipt of the
      agreed-upon sum, the liability of the employer and the Special
      Fund for whatever occupational disability existed at the time of
      settlement was extinguished. The figure for occupational disability
      which is contained in a settlement agreement represents a
      compromise and might or might not equal the worker's actual
      occupational disability at the time.

998 S.W.2d at 482. Further, as stated in Newberg, 841 S.W.2d at 166:

      The disability figure contained in a settlement agreement is a •
      negotiated figure and may or may not equal the claimant's actual
      occupational disability. Under KRS 342.125, a claimant is
      required to show that a change in his physical condition since the
      date of the settlement has produced an increase in his
      occupational disability during that period in order to reopen the
      award. The relevant change in occupational disability, therefore, is
      the difference between claimant's actual occupational disability on
      the date of the settlement, regardless of the figure for which he
      settled, and his occupational disability at the time of reopening.

Thus, when a settled claim is reopened, the monetary value of the original

negotiated settlement may not reflect the claimant's actual disability. The



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change in occupational disability should be calculated as the difference

between the actual disability on the date of the settlement, as found by the

ALJ, and the occupational disability at the time of reopening.

      In this matter, the ALJ did not err in calculating the credit owed to

Gardens Glen. The ALJ found that the rating used for the original settlement

award, 29% whole body impairment, was an accurate reflection of Balderas's

original occupational disability. She also determined that the return to work

factor at the time of the original award should be one instead of the 1.5509543

used in the settlement. The ALJ's findings are supported by the record and

indicate a credit for Gardens Glen of $180.42 per week. The ALJ then did not

abuse her discretion by finding that Balderas's whole body impairment on

reopening rose to 30%. Taking the difference between the amount Balderas

was entitled to on reopening ($456.25) and subtracting it from the value of her

original award ($180.42), then factoring in the 99% cap, lead to an increase in

her benefits of $275.83 per week. The ALJ did not abuse her discretion in so

finding.

      For the above stated reasons, we affirm the decision of the Court of

Appeals.

      All sitting. All concur.




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COUNSEL FOR APPELLANT,
GARDENS GLEN FARM:

James Gordon Fogle
Johanna Frantz Ellison


COUNSEL FOR APPELLEE,
BETHANY TAYLOR BALDERAS:

Daniel Edward Moriarty




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