Cedar Lake Park Place v. Penny Berry

• Court: Kentucky Supreme Court
• Decided: December 15, 2021
• Docket: 2021 SC 0052
• Status: Unknown

Opinion

IMPORTANT NOTICE NOT TO BE PUBLISHED OPINION

THIS OPINION IS DESIGNATED “NOT TO BE PUBLISHED.” PURSUANT TO THE RULES OF CIVIL PROCEDURE PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C), THIS OPINION IS NOT TO BE PUBLISHED AND SHALL NOT BE CITED OR USED AS BINDING PRECEDENT IN ANY OTHER CASE IN ANY COURT OF THIS STATE; HOWEVER, UNPUBLISHED KENTUCKY APPELLATE DECISIONS, RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR CONSIDERATION BY THE COURT IF THERE IS NO PUBLISHED OPINION THAT WOULD ADEQUATELY ADDRESS THE ISSUE BEFORE THE COURT. OPINIONS CITED FOR CONSIDERATION BY THE COURT SHALL BE SET OUT AS AN UNPUBLISHED DECISION IN THE FILED DOCUMENT AND A COPY OF THE ENTIRE DECISION SHALL BE TENDERED ALONG WITH THE DOCUMENT TO THE COURT AND ALL PARTIES TO THE ACTION. RENDERED: DECEMBER 16, 2021 NOT TO BE PUBLISHED

Supreme Court of Kentucky 2021-SC-0052-WC

CEDAR LAKE PARK PLACE APPELLANT

ON APPEAL FROM COURT OF APPEALS V. NO. 2020-CA-0731 WORKERS’ COMPENSATION BOARD NO. WC-12-83372

PENNY BERRY; HONORABLE CHRIS APPELLEES DAVIS, ADMINISTRATIVE LAW JUDGE; AND WORKERS’ COMPENSATION BOARD

MEMORANDUM OPINION OF THE COURT

AFFIRMING

In this medical fee dispute, Cedar Lake Park Place (Cedar Lake) appeals

the decision of the Court of Appeals, which affirmed the Workers’

Compensation Board’s (the Board) reversal and remand of the Administrative

Law Judge’s (ALJ) opinion and order finding that Penny Berry (Berry) untimely

submitted out-of-pocket medical expenses, thereby rendering those expenses

non-compensable. The sole issue on appeal is whether Berry timely submitted

her out-of-pocket medical expenses.

After thorough review, we find no error and affirm the Court of Appeals.

I. FACTUAL AND PROCEDURAL BACKGROUND

Berry was employed on a part-time basis as a Registered Nurse at Cedar

Lake beginning in 2010. She began experiencing work-related asthma, allergies, and pulmonary problems due to mold at Cedar Lake. Her last date of

exposure to the mold was October 26, 2012. On that day, she filed a Form 101

Application for Resolution of a Claim-Injury, alleging work-related injuries due

to the mold. After initially disputing her claim, Cedar Lake stipulated to the

work-related injuries. ALJ William Rudloff entered an order on June 27, 2013

finding Berry had work-related asthma and awarded her temporary total

disability, permanent partial disability, and medical benefits. Cedar Lake

appealed to the Board, which affirmed ALJ Rudloff’s opinion and order, then

again appealed to the Court of Appeals, which affirmed the Board’s opinion,

and then this Court, which likewise affirmed the Court of Appeals.

Correspondence between the parties continued throughout the pendency

of the appeal. The record reflects that Berry sent a letter to Cedar Lake that

included a spreadsheet containing an itemization and description of her out-of-

pocket expenses from September 14, 2010 through April 17, 2013. Berry sent

additional letters on June 18, 2013 and October 16, 2013 with the spreadsheet

attached that included up-to-date itemizations and descriptions of out-of-

pocket expenses for the year 2013. Cedar Lake confirmed receipt of the June

18, 2013 letter and spreadsheet in correspondence the same day. On

December 10, 2013, Cedar Lake stated in a letter to Berry that it had received

the spreadsheet and indicated that it would need a copy of the bills rather than

a description of them as contained in the spreadsheet. The December 10, 2013

letter from Cedar Lake is unclear which iteration of the spreadsheet Cedar Lake

2 received on which date. The parties continued to discuss the necessity of

procuring and providing copies of the bills throughout 2014.

Once the appeal concluded and the matter was remanded, ALJ Rudloff

entered an amended opinion and order, from which Berry appealed to the

Board, which affirmed the ALJ in early February of 2016. Berry made another

request for reimbursement of the fees now in dispute to Cedar Lake on May 3,

2016 and sent an additional request via letter on May 31, 2016. The May 3

and May 31 letters included copies of the medical bills as reflected in the

spreadsheets that Berry had been providing throughout the course of the

litigation. It is unclear whether Cedar Lake received the letter sent by Berry on

May 3, 2016, and Cedar Lake stated in subsequent correspondence that it had

not received the May 3 letter. However, the correspondence filed by Cedar Lake

on November 8, 2019 included the May 3, 2016 letter. Additionally, in a June

17, 2016 letter, Cedar Lake acknowledged that it had received the May 31,

2016 letter. Correspondence continued for two years without resolution of the

dispute.

Berry then filed a motion to reopen her claim with an accompanying

Form 112 in June of 2018, alleging that her out-of-pocket expenses had not

been paid pursuant to her award. ALJ Chris Davis held review conferences in

July of 2018, and September of 2018, and a hearing in October of 2019. The

sole issue before ALJ Davis was the timeliness of Berry's submission of her

medical bills and requests for reimbursement of her co-pays.

3 ALJ Davis entered an opinion and order in early December 2019, finding

Berry's requests for reimbursement were not submitted until the date of the

motion to reopen on June 4, 2018, which meant the request was untimely and,

thus, non-compensable. ALJ Davis noted that “the duty to submit medical bills

and requests for co-pays [begins] when a claim is final,” and the bills and

requests for co-pay reimbursement “must have been submitted 60 days from

the date of incurrence for any bills incurred on or after February 5, 2016.”

Berry petitioned the ALJ to reconsider the opinion and order asserting that the

ALJ made a number of errors.

In late December 2019, the ALJ entered an order correcting his original

finding concerning the date of Berry's first request for reimbursement to May

31, 2016, but still found Berry’s requests for reimbursement were untimely

and, therefore, non-compensable.

Berry appealed to the Board, asserting that the record clearly indicated

that the medical bills were submitted before the claim was decided, and were,

therefore, timely. The Board vacated and remanded the ALJ’s orders due to

evidence in the record indicating timely submission of request for

reimbursement. The Board stated in its order that “the record clearly indicates

at least two spreadsheets of out-of-pocket medical expenses plus certain

invoices were sent to Cedar Lake prior to May 31, 2016.” Specifically, the

Board concluded that “the record unequivocally demonstrates that Berry’s first

request for reimbursement of her out-of-pocket medical expenses took place on

June 18, 2013.” Therefore, because the record clearly indicated that Berry had

4 submitted a request for reimbursement before the ALJ’s order was final, the

Board vacated “the ALJ’s determination that Berry's out-of-pocket medical

expenses are untimely and, consequently, non-compensable and remand[ed]

the claim for additional findings.” It also vacated the ALJ’s language in the

order regarding the difficulty of ascertaining whether the expenses were

reasonable or related to her work-related injury, as the only issue was whether

the expenses were timely submitted. Further, the Board ordered the ALJ to

determine whether Cedar Lake had received the October 16, 2013 letter and to

undertake a new analysis of whether medical expenses submitted for the first

time after ALJ Rudloff’s final order was entered on February 5, 2016 were

timely and stated that whether Berry utilized a Form 114 is not determinative

on the issue of timeliness. Regarding the expenses before ALJ Rudloff’s final

order was entered on February 5, 2016, the Board determined that the sixty-

day rule contained in 803 KAR1 25:096 §11 was not applicable as established

by Garno v. Selectron U.S.A., 329 S.W.3d 301 (Ky. 2010).

The Court of Appeals then affirmed the Board. Regarding the Board’s

determination that the ALJ made findings of fact contrary to the great weight of

the evidence in the record, the Court of Appeals held as follows:

the ALJ's finding concerning the first date of request constituted an abuse of discretion because

that finding is not supported by the record and is, therefore, patently unfair and unreasonable. Contrary

1 Kentucky Administrative Regulation.

5 to Cedar Lake's contentions, the Board did not usurp the ALJ's role and make a finding of fact concerning the date(s) of requests for reimbursement but, rather, appropriately vacated and remanded these portions of the ALJ's orders for further—accurate—findings.2

Regarding the Board’s application of 803 KAR 25:096 § 11 and reliance on

Garno v. Selectron, the Court of Appeals held as follows:

Berry was awarded medical benefits via an interlocutory order entered by the ALJ on June 27, 2013. Therefore, the 60-day rule set forth in 803 KAR 25:096 § 11(2) applies to medical expenses incurred after June 27, 2013, not exclusively those incurred after the award became final.

Aside from the error concerning the date on which 803 KAR 25:096 § 11(2) became applicable to the claim herein, the remainder of the Board's interpretation of controlling precedent and the 60-day submission requirement of 803 KAR 25:096 § 11 is reasonable, and we “generally defer to an administrative agency's interpretation of its own regulations.” St. Joseph Hosp. v. Littleton-Goodan, 260 S.W.3d 826, 828 (Ky. 2008). We hold that the mandatory deadlines specified in 803 KAR 25:096 § 11 apply post-award, whether the award is final or interlocutory, as is the case here.3

This appeal followed. We discuss additional facts as necessary below.

II. ANALYSIS

Cedar Lake claims that the Board erred by exceeding its authority to

make findings of fact, which is reserved for the sound discretion of the ALJ.

Cedar Lake further alleges that both the Court of Appeals and the Board erred

2 Cedar Lake Park Place v. Berry, 2021 WL 69031, at *3 (Ky. App. Jan. 8, 2021). 3 Id. at *4.

6 in reversing ALJ Davis’s opinion because they erred in interpreting and

applying 803 KAR 25:096 §11. More specifically, Cedar Lake asserts that the

Court of Appeals erred by: (1) misconstruing KRS4 342.020 in determining how

to interpret 803 KAR 25:096 § 11; (2) ignoring the plain language of 803 KAR

25:096 §11 altogether; and (3) upholding how the Board interpreted and

applied 803 KAR 25:096 § 11, because the Board’s interpretation conflicts with

“other regulations and does not promote judicial economy.” Lastly, Cedar Lake

contends that the Court of Appeals and the Board erred by not finding that

Berry waived any out-of-pocket expenses incurred before May 10, 2013

because she failed to follow 803 KAR 25:010 § 13(9)(a)’s mandatory

requirement that she present the bills associated with those expenses at the

Benefit Review Conference (BRC) on the same day.

While the first two contentions are well taken, it appears after thorough

review of the record that the issue of waiver is being raised for the first time

before this Court. Any argument concerning whether Berry has waived

reimbursement for her out-of-pocket expenses has never been made, and

Cedar Lake has stated by counsel on the record before the ALJ, the only issue

in this case is whether the requests for reimbursement were timely—not

whether the requests were waived. Thus, it is Cedar Lake who has failed to

preserve the issue. We have long held that a “new theory of error cannot be

raised for the first time on appeal.”5 Because Cedar Lake has failed to preserve

4 Kentucky Revised Statute. 5 Springer v. Commonwealth, 998 S.W.2d 439, 446 (Ky. 1999).

7 this alleged error, we decline to address whether Berry waived any out-of-

pocket expenses incurred before May 10, 2013.

(1) Standard of Review

The Court of Appeals must “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.”6 “The function of further review in our 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.”7 “As a reviewing court, we are bound neither by an

ALJ's decisions on questions of law or an ALJ's interpretation and application

of the law to the facts. In either case, our standard of review is de novo.”8

(2) The Board did not err in remanding for additional findings of fact.

It is incumbent upon the Board “to carry out the same functions as an

intermediate court reviewing the decisions of a court of original jurisdiction, to

perform the error correcting function normally assigned to the Kentucky Court

of Appeals, lacking only the power of constitutional review.”9 The Board must

determine whether the ALJ’s “order, decision or award is clearly erroneous on

6 W. Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687–88 (Ky. 1992). 7 Id. at 688. 8 Ford Motor Co. v. Jobe, 544 S.W.3d 628, 631 (Ky. 2018) (citing Bowerman v. Black Equip. Co., 297 S.W.3d 858, 866 (Ky. App. 2009)). 9 W. Baptist Hosp., 827 S.W.2d at 687.

8 the basis of the reliable, probative and material evidence contained in the

whole record,” or “arbitrary or capricious or characterized by abuse of

discretion or clearly unwarranted exercise of discretion.”10 The Board “shall

not reweigh the evidence and substitute its judgment for that of the ALJ with

regard to a question of fact.”11 However,

if the ALJ has made all necessary findings to resolve the issue at hand and the Board has erred in remanding for additional, unneeded findings that would be of no additional value in resolving the issues in the case, if for no other reason than judicial economy alone, that decision, just as any other, is subject to review and reversal by the appellate courts.12 Thus, the converse is true: when the ALJ has not made all findings of fact

necessary to resolve the issue at hand, then the Board is well within its

authority to remand for additional findings.

In the instant case, the Board determined that the ALJ made findings of

fact that were clearly erroneous. The record clearly demonstrates that Berry

submitted her first request for reimbursement on June 18, 2013. ALJ Davis’s

determination that she did not submit her first request for reimbursement until

June 4, 2018 is against clear and convincing evidence in the record. Contrary

10 KRS 342.285 (2)(d)-(e). 11 Ira A. Watson Dep't Store v. Hamilton, 34 S.W.3d 48, 52 (Ky. 2000). 12 Tryon Trucking, Inc. v. Medlin, 586 S.W.3d 233, 238 (Ky. 2019).

9 to Cedar Lake’s assertion, the Board did not make findings of fact beyond its

authority. The Board did not “not reweigh the evidence and substitute its

judgment for that of the ALJ with regard to a question of fact.”13 It merely

examined the record and determined that the ALJ erred in making its finding of

fact as to the date of the first submission of Berry’s request for reimbursement.

The Board did not err in doing so.

Whether the remainder of Berry’s requests for reimbursement were

timely is still an open question. Additional findings of fact are necessary to

determine the timeliness of those requests. Only the ALJ has the ability to

make those findings. As a result, remand for additional findings of fact is

necessary and the Board did not err in so ordering.

(3) The Board did not misconstrue controlling statutes or precedent. Therefore, the Court of Appeals did not err in affirming the Board’s opinion. This Court recently considered at which point in the litigation process

803 KAR 25:096, § 11’s sixty-day requirement applies, and held:

the regulatory scheme governing workers’ compensation claims anticipates that medical expenses will be provided to the employer pre-award and throughout the litigation of the claim. To interpret the sixty-day submission requirement found in 803 KAR 25:096, § 11 as applying pre-award would result in a direct contradiction with 803 KAR 25:010, § 7(2)(f), which requires the claimant disclose unpaid medical bills within forty-five days of filing his claim and within ten days of receiving new bills after the initial forty-five days has passed. Accordingly, when viewed in the context of the regulatory scheme, 803 KAR 25:096, § 11's application only post-award best

13 Ira A. Watson, 34 S.W.3d at 52.

10 effectuates the intent of the Commissioner and prevents an absurd result.14

We noted in Wonderfoil15 that Garno’s holding16 that requests for

reimbursement must be submitted within sixty days of the entry of an

interlocutory order was consistent with our interpretation of the regulation.

Our holding in Wonderfoil makes clear that 803 KAR 25:096 § 11 applies only

post-award.17

Contrary to Cedar Lake’s assertion, the Court of Appeals did not

misconstrue Garno. As we noted in Wonderfoil, “Garno decided whether the

sixty-day time frame applied post-interlocutory award.”18 Though the litigants

did not have the benefit of our guidance in Wonderfoil, that opinion makes it

unequivocally clear that the sixty-day requirement contained in 803 KAR

25:096 § 11 begins once an interlocutory award or final order is entered, but

may be tolled for good cause shown.19 The Court of Appeals did not err in its

interpretation of that rule.

Further, contrary to Cedar Lake’s argument, the Court of Appeals did not

err in its interpretation of KRS 342.020 or R.J. Coleman R.R. Constr. v.

14 Wonderfoil, Inc. v. Russell, 630 S.W.3d 706, 711 (Ky. 2021) 15 Id. at 713. 16 Garno, 329 S.W.3d at 303. 17 Wonderfoil, 630 S.W.3d at 711. 18 Id. at 713. 19 Id.

11 Haddix20 by determining that medical expenses are not compensable until

either an interlocutory award or final order are entered. As this Court

explained in Wonderfoil, holding that the sixty-day requirement contained

in 803 KAR 25:096 § 11 begins once an interlocutory award or final order is

entered “is a natural and logical extension of Haddix.” 21 In Haddix, this Court

held that KRS 342.020 “applies to medical statements received by an employer

after an ALJ has determined that said bills are owed by the employer.”22

Therefore, the Court of Appeals did not err in determining that medical

expenses are not compensable until either an interlocutory award or final order

are entered under Haddix or KRS 342.020.

The Board’s determination that the sixty-day rule contained in 803 KAR

25:096 § 11(2) is not applicable to Berry’s requests for reimbursement made

before February 5, 2016 is consistent with this Court’s Opinion in Wonderfoil.

However, as the Court of Appeals correctly held, ALJ Rudloff entered an

interlocutory order awarding benefits to Berry on June 27, 2013. Therefore,

though the Board’s interpretation of 803 KAR 25:096 § 11(2) was correct, its

application of that interpretation to the facts was not.

20 864 S.W.2d 915 (Ky. 1993). 21 Wonderfoil, 630 S.W.3d at 712. 22 864 S.W.2d at 918.

12 We affirm the Court of Appeals and hold as it did that “the 60-day rule

set forth in 803 KAR 25:096 § 11(2) applies to medical expenses incurred after

June 27, 2013, not exclusively those incurred after the award became final.”23

As a result, on remand the ALJ must determine whether any requests for

reimbursement submitted for the first time after June 27, 2013 were timely,

excepting those requests procedurally waived. Further, because the record

clearly demonstrates that the first request for reimbursement was submitted

on June 18, 2013—before the interlocutory award was entered on June 27,

2013—the 60-day rule set forth in 803 KAR 25:096 § 11(2) is not applicable to

those requests.

III. CONCLUSION

Based on the foregoing, we affirm the Court of Appeals.

All sitting. All concur.

23 Cedar Lake Park Place, 2021 WL 69031 at *4.

13 COUNSEL FOR APPELLANT:

Joseph C. Klausing Priscilla C. Paige O’Bryan Brown & Toner, PLLC

COUNSEL FOR APPELLEE, PENNY BERRY:

Wayne C. Daub Wayne C. Daub Law Office

ADMINISTRATIVE LAW JUDGE: Hon. Chris Davis

WORKERS’ COMPENSATION BOARD: Michael Wayne Alvey, Chairman