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FAMILY DOLLAR APPELLANT

 

ON REVIEW FROM COURT OF APPEALS
V. CASE NO. 2014-CA-001053-WC
WORKERS’ COMPENSATION BOARD NO. 06-WC-01247

MAMIE BAYTOS, WIDOW OF STEPHEN APPELLEES
BAYTOS, DECEASED

HONORABLE RICHARD M. JOINER,

ADMINISTRATIVE LAW JUDGE,

HONORABLE THOMAS G. POLITES, ADMINISTRATIVE

LAW JUDGE AND WORKERS’ COMPENSATION

BOARD
AND
20 1 5-SC-000208-WC
MAMIE BAYTOS, WIDOW OF STEPHEN CROSS-APPELLANT

BAYTOS, DECEASED

ON REVIEW FROM COURT OF APPEALS
V. CASE NO. 2014-CA-001053-WC
WORKERS’ COMPENSATION BOARD NO. 06-WC-01247

FAMILY DOLLAR CROSS-APPELLEES
HONORABLE RICHARD M. JOINER,

ADMINISTRATIVE LAW JUDGE,

HONORABLE THOMAS G. POLITES,

ADMINISTRATIVE

LAW JUDGE AND WORKERS’ COMPENSATION

BOARD

OPINION OF THE COURT BY CHIEF JUSTICE MINTON
AFFIRMING

Steven Baytos settled his workers’ compensation injury claim with his
employer, Family Dollar Stores, for a lump sum. The settlement amount
included separate consideration in exchange for Baytos’s waiver of all future
claims, specifically including future medical expenses and a “full and final
waiver of any and all rights he may have to reopen this claim under Kentucky
Revised Statute (KRS) 342.125, for any reason, including a change in
condition.” Baytos died a year later from his work-related injury; and, two
years after that, his Widow, Mamie Baytos, who was not a party to the
settlement, filed a motion to reopen Baytos’s injury claim to assert her own
claim for a workers’ compensation death benefit.

The Administrative Law Judge (ALJ) allowed Mamie to reopen Baytos’s
injury claim and awarded her death benefits. The Board reversed, and the
Court of Appeals reversed the Board. The Court of Appeals determined that,
under Brashear v. Old Straight Creek Coal Corp.,1 claims for death benefits
arising from a workers’ compensation injury are not derivative of the income
benefits the injured employee recovers from the employer. And as such, the
Board’s opinion was vacated and remanded for further proceedings.

On Family Dollar’s appeal to this Court, we agree With the Court of
Appeals that Mamie has a separate and viable claim for death benefits under

KRS 342.750, and while we make an exception in today’s case, we hold that it

 

1 32 s.w.3d 717 (Ky. 1930).

was improper for Mamie to assert her claim via reopening Baytos’s settled

claim.

I. FACTUAL AND PROCEDURAL BACKGROUND.

Baytos Was employed by Family Dollar Stores when he suffered a torn
thoracic aorta in 2006. He filed a claim for workers’ compensation benefits that
was settled and approved by an Administrative Law Judge (ALJ) in 2008.
Steven received a lump-sum payment from Family Dollar in exchange for his
Waiver of any future claims he may have against his employer. Also part of the
settlement agreement, Steven agreed to additional sums in exchange for waiver
of any future medical expenses and another sum in consideration for his “full
and final waiver of any and all rights he may have to reopen this claim under
KRS 342.125, for any reason, including a change in condition.” His wife, Mamie
Baytos, was not part of the settlement negotiations, nor did the final approved
agreement include any references to any future benefits to which she may be
entitled.

Steven died in 2009 as a result of his work-related injury. In 201 l,
Mamie filed a “Motion to Reopen and Award Survivor Benefits to Widow” to
seek death benefits. The presiding ALJ ruled that her claim was viable, but
ordered her to prove Baytos’s death was caused by a work-related injury in
order to recover death benefits under KRS 342.750. Shortly thereafter, her case
was transferred to a new ALJ, who accepted the prior ALJ’s findings of fact and
determined that Steven’s death was a result of the injury. And so the ALJ

awarded death benefits to Mamie.

Family Dollar appealed the decision to the Workers’ Compensation
Board. The employer argued that Mamie’s claims for death benefits were barred
by the settlement agreement between Baytos and Family Dollar. In turn, Mamie
filed a motion to dismiss the appeal, claiming that notice of the appeal was
defective. The Board ignored Mamie’s motion to dismiss and reversed the ALJ’s
ruling on the merits, denying her claim for benefits. Baytos appealed the
decision to the Court of Appeals.

The Court of Appeals reversed the Board’s decision. First, the panel
rejected Mamie’s argument that Family Dollar’s appeal was improperly noticed.
But on the merits, the Court of Appeals determined that under Brashear v. Old
Straight Creek Coal Corp. claims for death benefits arising from a workers’
compensation injury are not derivative of the income benefits the injured
employee recovers from his employer. And as such, the Board’s opinion was
vacated and remanded for further proceedings Family Dollar now appeals to

this Court,

II. ANALYSIS.
A. Family Dollar’s Notice of Appeal was Properly Filed.

Mamie contends that the Board erred by not dismissing Family Dollar’s
appeal following the ALJ’s findings of fact. During the pendency of her claim,
the presiding ALJ retired and Was replaced by a new ALJ. She argues that the
notice of appeal Was defective because it named the incorrect ALJ. The Court of
Appeals disagreed and determined that Family Dollar’s appeal was properly

noticed. And we concur.

In 2012, Family Dollar appealed to the Board following ALJ Joiner’s
opinion and order on the viability of her claim. The Board dismissed the appeal
as interlocutory. Shortly thereafter, ALJ Joiner was replaced by ALJ Polites,
who eventually issued a final and appealable order and opinion in favor of
Mamie’s claims. Mamie claims that Family Dollar referenced the incorrect ALJ
opinion when noticing its appeal to the Board.

Family Dollar’s notice of appeal began as follows:

[Family Dollar] requests a review by the Workers’ Compensation

Board of the opinion and award rendered herein by Honorable

Richard Joiner, Administrative Law Judge, on June 19, 2012. The

order on the petition for reconsideration was entered on July lO,

2012. This appeal was originally filed in August 2012 and was

dismissed given the interlocutory nature of the underlying

proceedings.

On February 4, 2014, Hon. Tom Polites, ALJ rendered a decision in

this claim which now makes the 2012 decision by Judge Joiner

final and appealable
Essentially, Mamie argues that because Family Dollar stated its desire to
review the “opinion and award rendered herein by Honorable Richard Joiner,”
the employer failed to notice an intention to appeal a final order from the
presiding ALJ.

Kentucky Administrative Rules (KAR) 803 KAR 25:OlO § 21 outlines the
required content of a notice of appeal taken from an ALJ to the Board. A
properly filed notice must:

1. Denote the appealing party as the petitioner;

2. Denote all parties against whom the appeal is taken as respondents;

3. Name the administrative law judge who rendered the award, order, or

decision appealed from as a respondent;

4. If appropriate pursuant to KRS 342. 120 or 342.1242, name the
Division of Workers’ Compensation Funds as a respondent; and

5. Include the claim number.
On the face of the notice it is clear that Family Dollar is appealing the final
order entered by ALJ Polites. The notice also clearly recounts the procedural
posture leading to both ALJ Polites’s ruling and Family Dollar’s appeal to the
Board. So We concur with the Court of Appeals that Family Dollar’s appeal Was
properly noticed to the Board.

B. Steven’s Settlement Does Not Prohibit Mamie from Seeking Death
Benefits.

The central substantive issue in this case is Family Dollar’s assertion
that Mamie’s claim for death benefits should be dismissed. According to the
employer, Steven completely settled his claim for all potential income benefits
relating to his workers’ compensation injury, and this settlement totally bars
Mamie from asserting any additional claims for income benefits. In essence,
Family Dollar argues that whatever benefits Mamie may be entitled to under
the Workers’ Compensation Act are derivative of Steven’s claim and that his
approved settlement preempts his Widow’s statutory benefits. The Court of
Appeals disagreed, relying on the holding in an obscure old case, Brashear v.
Old Straight Creek Coal Corp. We ultimately agree with this conclusion, but a
thorough statutory review is necessary to add context to Brashear and to
unpack the death-benefit-recovery claims under the Act.

KRS 342.7 50 provides for the recovery of income benefits for the

surviving spouse if the injured employee dies as a result of a work-related

injury.2 For surviving spouses, like Mamie, with no children, the statute
provides that she is entitled to fifty percent of Steven’s average weekly wage
during Widowhood.3 Of course, this law makes no overt reference to how to
treat these income benefits when the injured party settles his injury claim With
his employer before dying from the effects of the injury.

It is clear by the plain meaning of the text that income benefits deriving
from KRS 342.730 belong to the injured worker. Those benefits are totally
derivative from the workplace injury. This provision specifically relates to
income benefits awarded to injured Workers for workplace injuries. And sure
enough, KRS 342.730 contemplates a surviving spouse’s share of those
benefits in the event the injured spouse dies for causes unrelated to the work
injury but before the expiration of benefits still owed to the worker.4 These
surviving-spouse benefits are totally and completely derivative of the injured
spouse’s disability benefits; any surviving spouse’s share of remaining benefits
is tied to whatever the worker is awarded or obtained through settlement with
the employer. So it is easy for us to see in that context that the spouse’s claim

is dependent on the worker’s claim. But with respect to surviving-spouse

 

2 The Court of Appeals stated that surviving spouses shall receive death
benefits if the death occurs within four years of the injury. In this sense, the panel
misstated the text. The portion of this provision relating to income benefits has no
such limitation-in fact, there is no temporal limitation Whatsoever within KRS
342.750 for the recovery of death benefits. The four-year limitation the panel cites only
applies to KRS 342.750(6), a separate provision within this statute relating to an
estate’s entitlement to a $50,000 lump-sum payment to offset costs of burial and
transportation of the body.

3 KRS 342.750(1)(a).
4 KRS 342.730(3).

benefits stemming from a workplace injury resulting in death, we are given no
such luxury.

KRS 342.750 declares that if the workplace injury causes death, “income
benefits shall be payable” to the benefit of specified persons within the statute,
dependent upon the injured workers familial status. Before leaping head-first
into some sort of legal fiction, we must first realize that of course a spouse’s
claim is not a unique and separate claim totally divorced of any other actors.
For Mamie to be entitled to income benefits under the statute, Baytos must die
as a result of his work-related injury. It follows, therefore, that this claim is
created by his injury.

This is consistent with the underlying goal and purpose of the Workers’
Compensation Act: As a matter of quasi-contract law, the Act establishes a
streamlined process for quickly aiding injured Workers in exchange for the
forfeiture of whatever tort claims the injured worker may have against the
employer. Mamie, not unlike her role in Baytos’s settlement negotiations, was
not a party to this implicit agreement under the Act. Likewise, she is only
entitled to any benefits at all because of Baytos’s participation in this statutory
agreement.5 Baytos’s eligibility under the Act, and his subsequent injury and
death, are the only reasons Mamie qualifies for any benefits under the Act

whatsoever. So we reject the fantasy that Mamie has her own separate action

 

5 True enough, this begs the question of whether third-party beneficiaries like
Mamie forfeit Whatever tort rights they may possess against their spouse’s employer.
The Act clearly covers employer-employee relations through application of contract
principles, but how this impacts other relevant parties not capable of the benefit of the
bargain remains clouded in doubt. Does the Act include all tort claims from any
potential plaintiff against an employer for a singular occurrence, or could Mamie
conceivably forego the Act and file whatever survivorship or wrongful death claims she
may possess against Family Dollar in courts of common law?

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under the Act wholly Without consequence of Baytos’s claim against his
employer.

With that said, there is a mountain of old precedent throughout the
country reaching the opposite conclusion. Most notably, the Court of Appeals
relied heavily on this Court’s predecessor in Brashear v. Old Straight Creek
Corp. in reaching its holding. In Brashear, our predecessor court indicated that
the right of a surviving spouse to collect income benefits is separate from
Whatever rights her worker-husband possessed as a result of his injury. In
other words, the Court held that the “compensation due to her, if any, is quite
a different thing from the compensation paid for her husband.”6 It would
therefore appear that Brashear speaks directly to instances similar to the one
presented to us today.

But there are two legitimate critiques to Brashear that Family Dollar
invokes to caution us against our reliance in that old case. First, the Brashear
case Was published in 1930. KRS 342.750 was first adopted in 1972. It is
entirely possible the Brashear court was interpreting a statutory text markedly
different from the one in this case. Indeed, the Brashear court did not even
make passing reference to which statutory provision it was interpreting And
because of its terse, if not altogether lacking, legal analysis, this is a fair
critique.

Brashear interpreted the Kentucky Workmen’s Compensation Act as it
existed well before the legislative overhaul in 1972. However the provision at

issue_Ky. Stat. § 4893, enacted in 1922_actually bears much similarity to the

 

6 Brashear, 32 S. W.2d at 718.

language in our current statutory scheme. The statute, in relevant part, reads
as follows:

If death results within two years from an accident for which
compensation is payable under this act, the employer or his
insurer shall pay to the persons entitled to compensation, or, if
none, then to the personal representative of the deceased
employee, reasonable burial expenses of a person of the standard
of living of the deceased, not to exceed the sum of seventy-five
dollars ($75.00), and shall also pay to or for the following persons
compensation as follows, to wit:

(2) If there are one or more wholly dependent persons, sixty-five

percent (65%) of the average weekly earnings of the deceased

employee, but not to exceed twelve dollars ($12.00) nor less than

five dollars ($5.00) per Week shall be payable, all such payments

shall be made for the period between the date of death and 335

weeks after the date of the accident to the employee, or until the

intervening termination of dependency, but in no case to exceed

the maximum sum of four thousand dollars ($4,000.00).7
The following statute, Ky. Stat. § 4894, then defines a person presumed to be
wholly dependent upon a deceased employee as “A wife upon a husband whom
she had not voluntarily abandoned at the time of the accident.”8 Overall, we are
satisfied that the statutory structure the Brashear court interpreted is quite
similar to the one under which Mamie now seeks death benefits. So we are
confident that the Brashear holding accurately represents this Court’s
precedent on the nature of death-benefit claims.

Second, Family Dollar highlights that in its eighty-seven-year history,

Brashear has never been cited by another Kentucky court. However factually

and legally similar this holding may be, Family Dollar insists that its

 

7 Ky. stat § 4893 (1922).
8 Ky. stat § 4894(a) (1922).
10

precedential weight is severely diminished by its relative obscurity and that it
has been more-or-less ignored in the body of workers’ compensation law as it
has developed over the course of the last century. So Family Dollar in essence
alleges that the Brashear holding is non-representative of a prevailing or
mainstream position on forging these types of claims against employers under
the Act. We do not discount this concern; the fact that today’s case presents
such a novel issue is indeed evidence that Brashear, for whatever reason, failed
to capture the death-benefit-recovery process as settled law. And because it
has been ignored, its de minimus contribution to the predictability and
reliability of case law-critical tenets of stare decisis_fairly calls its
precedential value into question.

But before we dismiss Brashear for its obsolescence, by stepping back
and observing the larger body of Workers’ compensation law across the
country, we discover that the Brashear position is actually somewhat
congruent with the approach taken by much of the rest of the country. As the
Court of Appeals noted in reaching its conclusion, Professor Larson takes this
exact position in his comprehensive Workers’ compensation handbook. The
treatise details that “The dependent’s right to death benefits is an independent
right derived from statute, not from the rights of the decedent. Accordingly,
death benefits are not affected by compromises or releases executed by
decedent....”9 So it Would appear that the surrounding law accepts this basic
premise that the surviving spouse possesses his or her own claim independent

of the injured workers.

 

9 Arthur K. Larson, Larson’s Workers’ Compensation, Desk Edition § 98 (2007).
1 1

Family Dollar discounts reliance on Larson as a distracting influence on
the true nature of this claim. Instead, the employer Wishes us to rely upon
Tackett v. Bethenergy Minesl°, a case involving surviving spouses of former coal
miners who filed for workers’ compensation benefits under KRS 342.750’s
companion statute, KRS 342.730(3) (death resulting from non-work injury). In
that case, we dismissed the claims because no benefits were due or owed to the
workers themselves at the time of their deaths.11 This was because, “any claim
which a deceased worker’s estate might have derives from a valid claim by the
worker.”12 So, as Family Dollar frames the issue, for Mamie to bring a valid
claim for benefits she must first prove entitlement to those benefits. And
because Baytos had no benefits due to him at his death because of his fully
settled claim With Family Dollar, there are no benefits to which Mamie would
be entitled to spark her claim.

We support our ruling in Tackett as a logically consistent application of
KRS 342.730(3). Unfortunately for Family Dollar, however, this ruling truly
delineates the difference between the benefits extended in that statute and
those conferred in KRS 342.750. The Tackett benefits are indeed accurately
considered to be derivative of the injured worker’s claim. KRS 342.730(3)
benefits provide surviving spouses a continuation of benefits the worker was
currently receiving from his or her employer due to an unrelated death before

the expiration of his specified compensable period. It is sensible then to require

 

10 841 s.w.zd 177 (Ky. 1992).
111d.
12 Id. at 179.

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as prerequisite to any spousal recovery proof of the deceased’s spouse’s
entitlement to benefits.

But this stands in contrast to the benefits involved in the current case.
KRS 342.750 contemplates a wholly different scenario: death as a result of the
workplace injury. This statutory mechanism shifts entitlement of benefits from
the injured worker to his surviving spouse. Under the terms of the statute, if
the death is truly caused by the work-related injury, the Tackett test is satisfied
automatically-the spouse has a legitimate claim of entitlement to benefits. At
the time of death, the surviving spouse can point to a set of benefits designated
for him or her by a purposive act of the legislature

The form of recovery also underscores the distinction between the two
forms of death benefits. For non-injury-related death, as detailed in Tackett,
surviving spouses are afforded an award based on portions of the remaining
unpaid income benefits due to the worker at the time of death, But for workers
who die on the job, their surviving spouses are entitled to recover portions of
that worker’s average weekly wage. This form of recovery is not a continuation
of unpaid income benefits but rather mechanically recognizes the claim a
spouse may then have against an employer for the employee’s death and then
resolves that claim by statute, specifying precisely what he or she is due.
Today’s case unquestionably falls into this latter class, and as such, our
dismissal in Tackett has no bearing on Mamie’s ability to recover.

Of course, it goes Without saying that it is unlikely the legislature
contemplated a scenario like we face today when it created these two forms of
death benefits. It must be exceedingly rare for a series of events to culminate in

a claim like this-an employee living just long enough to settle his claim before
13

succumbing to the effects of his injury. The KRS 342.750 death benefits are
almost surely envisioned to aide dependents for Workers unable to live long
enough to adjudicate their own claims under the Act. But while this result
doubling the exposure to employers under the Act may be rare, we cannot say
it is an absurd one. Any other path outside the statutory text belongs in the
legislative rather than judicial province, and the burden rests solely on the
General Assembly to reform the Act to include these undoubtedly rare cases
should they continue to arise.

The text of KRS 342.750 is inescapable. The plain meaning is
unmistakably clear that if a worker dies because of a workplace injury, the
worker’s surviving spouse is entitled to income benefits in the form of 50
percent of his average weekly wage. And this Court has previously interpreted
this provision, in a manner academically favored and consistent with a majority
of other jurisdictions, to create a separate cause of action for surviving spouses
independent of the injured worker’s claim. We accordingly affirm that ruling,
and the Court of appeals’ ruling below.

We understand the implications this ruling may have on the settlement-
negotiation process and the possibility that this holding may undercut the
ability of employers and injured employees to come to an agreement with

binding finality.13 But those problems belong to the legislature to resolve and

 

13 Relevant to Family Dollar’s ability to resolve the claim with finality, Mamie
adds that even if Baytos considered her claim in his negotiation with Family Dollar, he
was unable to execute a waiver of death benefits as described in KRS 342.750. The
uncontroverted facts of the case make clear that no such express contemplation
occurred. So we need not address today the issue of whether Baytos could have
included surviving-spouse benefits in his settlement agreement with Family Dollar. We
also add that Baytos’s settlement agreement with Family Dollar included an indemnity
provision that has not been raised or addressed during the course of this appeal.

14

are beyond our constitutional prerogative of interpreting the law as presented
by the case before us.

Although we affirm the Court of Appeals’s ruling below, we must address
one issue not directly raised by the parties--whether this claim was
appropriately brought under KRS 342.125. KRS 342. 125 provides that M
may file a motion to reopen a claim; however, as we have noted and as both
parties have agreed, Mamie was not a party to her husband’s claim.
Furthermore, Baytos had waived entitlement to any additional benefits and had
no claim to reopen. Therefore, KRS 342. 125 was not the appropriate vehicle
for Mamie to pursue her independent entitlement to benefits. The appropriate
vehicle to do so would have been for Mamie to file a claim for benefits in her
own right. However, whether the parties called this a reopening or a new
independent claim, it would have been practiced the same way and would have
led to the same conclusion. Therefore, although Mamie chose the wrong
vehicle, there is no reason to disturb the ALJ’s decision herein. However, in
the future, should this situation reoccur, the party seeking benefits should file

an original action.

III. CONCLUSION.

For the foregoing reasons we affirm the Opinion of the Court of Appeals.
Minton, C.J.; Cunningham, Hughes, Keller, Venters, and Wright, JJ., sitting.

All concur. VanMeter, J., not sitting.

 

Because that issue is not within the scope of our current review, we must pass no
judgment on its possible effect in Mamie’s appeal or Family Dollar’s ability to settle
with finality all claims related to Baytos’s injury.

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COUNSEL FOR APPELLANT/CROSS-APPELLEE: FAMILY DOLLAR

Melanie Brooke Gabbard
Allen Kopet & Associates, PLLC

Lewis Paisley
Stoll Keenon Ogden, PLLC

COUNSEL FOR APPELLEE/CROSS-APPELLANT: MAMIE BAYTOS

Carl Edward Grayson
Blankenship Massey & Associates, PLLC

coUNsEL FoR AMIcUs cURIAE: KENTUCKY WoRKERs AssociATIoN
(KWA);

Jeffery Roberts
Roberts Law Office

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