RENDERED: AUGUST 26, 2021 TO BE PUBLISHED
Supreme Court of Kentucky 2020-SC-0275-WC
CHERYL CATES APPELLANT
ON APPEAL FROM COURT OF APPEALS V. NOS. 2018-CA-1027, 2018-CA-1114 WORKERS’ COMPENSATION BOARD NO. WC-17-01236
KROGER; COMMONWEALTH OF APPELLEES KENTUCKY, EX REL. DANIEL CAMERON, ATTORNEY GENERAL; HONORABLE JEFF V. LAYSON, ADMINISTRATIVE LAW JUDGE; AND WORKERS’ COMPENSATION BOARD
AND
2020-SC-0277-WC
RONNIE BEAN APPELLANTS
ON APPEAL FROM COURT OF APPEALS V. NO. 2020-CA-0321 WORKERS’ COMPENSATION BOARD NO. WC-14-84038
COLLIER ELECTRICAL SERVICE; APPELLEES COMMONWEALTH OF KENTUCKY EX REL. DANIEL CAMERON, ATTORNEY GENERAL; HONORABLE JOHN H. MCCRACKEN, ADMINISTRATIVE LAW JUDGE; AND WORKERS’ COMPENSATION BOARD OPINION OF THE COURT BY CHIEF JUSTICE MINTON
AFFIRMING
We consolidated these two workers’ compensation appeals to address
their common controlling issue: the constitutionality of the 2018 amendment to
Kentucky Revised Statute (KRS) 342.730(4), which terminates workers’
compensation income benefits when the recipient reaches the age of 70 or four
years from the date of injury or last injurious exposure, whichever event occurs
last.
Cheryl Cates and Ronnie Bean brought separate appeals in which they
argue this amendment is unconstitutional under the state and federal Equal
Protection Clauses because it discriminates based on the income-benefits
recipient’s age. They also argue the statute is unconstitutional special
legislation because it applies only to older income-benefits recipients.
In both cases, panels of the Court of Appeals upheld the constitutionality
of the statute’s age classification on equal protection grounds as being
rationally related to a legitimate state interest in preventing workers’
compensation income-benefits recipients from receiving duplicate payments in
the form of retirement benefits. The panels also rejected the special-legislation
challenges to the statute, holding that the statute treated all older income-
benefits recipients alike. We agree with the Court of Appeals and affirm.
2 I. FACTUAL AND PROCEDURAL BACKGROUND
A. Cates Cheryl Cates, at age 66, suffered a work-related injury at Kroger on
August 15, 2015, for which she filed a workers’ compensation claim. On
February 8, 2019, Administrative Law Judge (ALJ) Jeff V. Layson awarded
Cates permanent-partial disability benefits. Because at the time the ALJ
issued this award this Court had invalidated the version of KRS 342.730(4) in
effect at the time of Cates’s work-related injury,1 to calculate the duration of
Cates’s benefits the ALJ applied the prior version of the statute.2
Cates and Kroger both appealed the ALJ’s decision to the Workers’
Compensation Board. While the case was pending before the Board, the
General Assembly enacted the 2018 version of KRS 342.730(4), which became
effective July 14, 2018. Kroger argued to the Board that the 2018 version
should apply to Cates’s benefit award. Cates responded that the 2018 version
was unconstitutional and otherwise inapplicable to her claim because her
claim was governed by the law in effect at the time of her injury. In its decision
rendered June 8, 2018, the Board upheld the ALJ’s application of the 1994
version of the statute, ruling that the 2018 amendment did not affect Cates’s
award as it was not effective at the time of Cates’s injury and would not be
1 Parker v. Webster Cnty.y Coal, LLC, 529 S.W.3d 759 (Ky. 2017). 2 For clarity, three versions of KRS 342.730(4) are relevant to our discussion of this case: (1) the 1994 version, which was used by the ALJ in ordering Cates’s original award, (2) the 1996 version, which had been invalidated by this Court before Cates’s initial hearing, and (3) the 2018 amendment, which the Court of Appeals applied, and Cates now argues is unconstitutional.
3 effective as of the date of rendition of its decision. The Board declined to
address Cates’s constitutionality argument.
Kroger then appealed to the Court of Appeals, arguing that the 2018
amendment applied to Cates. The Court of Appeals held the appeal in
abeyance pending finality of our opinion in Holcim v. Swinford3 in which we
held that the 2018 Amendment to KRS 342.740(4) applied retroactively to all
pending appeals.4 Cates then argued that the 2018 amendment was arbitrary
and an unconstitutional violation of equal protection guarantees, and due
process guarantees.
The Court of Appeals’ panel found the 2018 amendment did not create
an arbitrary age classification; therefore, it did not violate the federal or state
equal protection clauses. The panel also reasoned that because the new
statute applied with equal force to an entire class of people, it was not
unconstitutional special legislation. Finally, the panel held that the retroactive
application was constitutional because Cates had no vested right to benefits
other than those allowed under the 2018 amendment to the statute. Because
of our decision in Holcim and because the panel rejected the constitutional
challenges Cates raised, the panel then held the 2018 amendment applicable to
3 581 S.W.3d 37 (Ky. 2019). 4 Id. at 42. After interpreting the statute’s unofficial version, we held that the amendment applied retroactively to all claims where (1) the injury occurred after December 1996 and (2) had not been fully and finally adjudicated, are in the appellate process, or for which time to file an appeal has not lapsed, as of the effective date of the Act which was July 14, 2018.
4 Cates and remanded the case to the ALJ to calculate Cates’s benefits under the
2018 amendment. The appeal to this Court followed.
Cates argues to this Court the ALJ’s original award, which she calculates
to allow greater benefits under the 1994 version of the statute than she can
receive under the 2018 version, must be reinstated for the same reasons she
argued in the Court of Appeals.
B. Bean Ronnie Bean filed a workers’ compensation claim for a work-related
injury he suffered at age 68 while working for Collier Electrical Service. ALJ
John H. McCracken heard this claim on July 25, 2018. The ALJ awarded Bean
permanent-partial disability benefits and applied the 2018 amendment, which
took effect on July 14, 2018. In a petition for reconsideration, Bean argued the
ALJ’s award was not supported by substantial evidence and application of the
2018 amendment was unconstitutional. Collier argued that the ALJ erred in
his calculation of the benefits award. On reconsideration, the ALJ declined to
address the constitutionality of the 2018 amendment but amended the
calculation of Bean’s benefits.
Bean appealed to the Board arguing the unconstitutionality of the
amendment and the absence of substantial evidence to support the ALJ’s
award. The Board declined to address the constitutionality of the statute,
affirmed the ALJ’s application of the 2018 amendment, and found substantial
evidence supported the benefits award.
5 Bean then appealed to the Court of Appeals raising the same issues he
argued to the Board. The Court of Appeals panel affirmed the ALJ’s award and
addressed the constitutionality of KRS 342.730(4), rejecting all constitutional
challenges to the 2018 amendment. This appeal followed.
II. ANALYSIS
A. This Court’s previous rulings on the 1996 version of KRS 342.730(4) and 2018 amendment to the statute.
Before we undertake our analysis, we review for context two of our recent
holdings addressing the General Assembly’s efforts to establish an outer limit
on the receipt of workers’ compensation income benefits. In Parker v. Webster
County Coal, LLC,5 a majority of this Court invalidated the 1996 version of KRS
342.730(4). That statute read:
All income benefits payable pursuant to this chapter shall terminate as of the date upon which the employee qualifies for normal old-age Social Security retirement benefits under the United States Social Security Act, 42 U.S.C. secs. 301 to 1397f, or two (2) years after the employee's injury or last exposure, whichever last occurs.
The majority in Parker found the statute unconstitutional for two reasons: (1)
the statute created an arbitrary classification because the benefit cut-off date
was dependent upon when the recipient received old-age social security
benefits and (2) the statute was special legislation because it favored those who
would not receive old-age social security benefits and disfavored those who
would receive such benefits.6 Importantly, even though Parker invalidated the
5 Parker, 529 S.W.3d 759 (Ky. 2017). 6 Id. at 768, 770.
6 1996 version of the statute, it reaffirmed this Court’s prior precedent in which
we consistently held that treating older injured workers differently from
younger injured workers is rationally related to the legitimate government
interests in preventing a duplication of benefits and saving money for the
workers’ compensation system.7 We said in Parker,
The rational bases for treating younger and older workers differently is (1) it prevents duplication of benefits; and (2) it results in savings for the workers compensation system. Undoubtedly both of these are rational bases for treating those who, based on their age, have qualified for normal Social Security retirement benefits differently from those who, based on their age, have yet to do so.8
Shortly after our holding in Parker, the General Assembly in 2018
enacted a new version of KRS 342.730(4) to read:
All income benefits payable pursuant to this chapter shall terminate as of the date upon which the employee reaches the age of seventy (70), or four (4) years after the employee's injury or last exposure, whichever last occurs. In like manner all income benefits payable pursuant to this chapter to spouses and dependents shall terminate as of the date upon which the employee would have reached age seventy (70) or four (4) years after the employee's date of injury or date of last exposure, whichever last occurs.9
This change purported to rectify the shortcomings of the 1996 version as
identified in Parker by untethering the cessation of a claimant’s workers’
compensation income benefits from the receipt of old-age social security
7 Id. at 768; see also Keith v. Hopple Plastics, 178 S.W.3d 463, 468 (Ky. 2005); McDowell v. Jackson Energy RECC, 84 S.W.3d 71, 74–76 (Ky. 2002); Wynn v. Ibold Inc., 969 S.W.2d 695, 697 (Ky. 1998). 8 Parker, 529 S.W.3d at 768. 9 KRS 342.730(4).
7 retirement benefits, a benefit that Parker identified as not available to
Kentucky’s retired teachers.10 The new statute now limits the duration of
benefits by linking cessation for all income beneficiaries to the later of two
events (1) reaching age 70, or (2) four years after injury or last injurious
exposure.
In Holcim v. Swinford11 we addressed retroactive application of the
2018 amendment. While not explicitly stated in the statute as codified,
we found a clear legislative intent that the amendment apply retroactively
to all claims where (1) the injury occurred after December 1997 and (2)
has not been fully and finally adjudicated through the appellate process,
or for which time to file an appeal has not lapsed, as of the effective date
of the Act, July 14, 2018.12 We declined to address the constitutionality
of its effect, or the constitutionality of the amendment’s text because
those issued were not argued until after the Court of Appeals had
rendered its opinion.13 The cases at hand now present the issue
remaining after Holcim, which is the constitutionality of the amendment
and its retroactive application.
10 Parker, 529 S.W.3d at 768. 11 Holcim, 581 S.W.3d 37 (Ky. 2019). 12 Id. at 42. 13 Id. at 44.
8 B. The 2018 Amendment to KRS 342.730(4) does not violate the Equal Protection Clause.
Cates and Bean argue here, as they did to the Court of Appeals, that the
statutory provision violates constitutional equal protection principles because
one of the terminating events is based on the recipient’s attainment of the age
of 70. Thus, they argue, the statute treats older injured workers less favorably
than younger injured workers.
We begin our analysis by noting that “acts of the legislature carry a
strong presumption of constitutionality and that the principle of reducing
workers’ compensation benefits at an age when workers typically become
eligible for alternative forms of income replacement is not new in Kentucky.”14
Doubts regarding constitutionality must be resolved in favor of upholding the
law.15 Rational-basis review is the appropriate standard.16
Under the 14th Amendment of the United States Constitution and
Sections 1, 2, and 3 of the Kentucky Constitution, this Court “is to keep[ ]
governmental decision makers from treating differently persons who are in all
relevant respects alike” while acknowledging that “nearly all legislation
differentiates in some manner between different classes of persons.”17 Because
14 Wynn, 969 S.W.2d at 696. 15 Commonwealth v. Halsell, 934 S.W.2d 552, 554 (Ky. 1996) (“We are obligated
to give [a statute], if possible, an interpretation which upholds its constitutional validity.”) (quoting American Trucking Ass'n v. Commonwealth, Transp. Cabinet, 676 S.W.2d 785, 789 (Ky. 1984)). 16See Parker at 767. See also Ballou v. Enter. Mining Co., LLC, 512 S.W.3d 724, 728–29 (Ky. 2017). 17 Vision Mining, Inc. v. Gardner, 364 S.W.3d 455, 465–66 (Ky. 2011).
9 “[w]orkers' compensation statutes concern matters of social and economic
policy” we must uphold the law at issue here if a “rational basis or substantial
and justifiable reason supports the classifications that it creates.”18 In sum,
we will uphold the age limitation here so long as it rationally relates to a
legitimate state objective.
As in Parker, we remain convinced that preventing a duplication of wage-
loss protection programs and promoting the solvency of the workers’
compensation system are legitimate state interests. We proceed with a rational
basis review of the current statute. Under the 2018 amendment to KRS
342.730(4), the statute’s age-related cut off point is 70. We find this
classification to be rationally related to preventing the state from paying
duplicate benefits. Unlike in Parker, the statute’s classification is no longer
directly related to old-age social security payments but is only related to all
benefit-recipients’ ages. Under the 2018 amendment, all workers’
compensation recipients’ benefits terminate at age 70 or four years after injury
or injurious exposure, regardless of whether the recipients are also entitled to
social security benefits. Because of this change, the fatal flaw identified by the
Parker majority–the disparate treatment of those who will receive old-age
social-security versus those not entitled to social security, for example,
teachers–is no longer an issue.19 Instead, the statute treats alike all those who
receive workers’ compensation benefits.
18 Id. at 466. 19 Id. (“Thus, a teacher who has not had any outside employment and who suffers a work-related injury will not be subject to the limitation in KRS 10 Cates contends the current statute’s classification is no different than
the 1996 version struck down by this Court in Parker. But we find the 2018
amendment classifies recipients based only on age, entirely unrelated to their
old-age social-security eligibility. This age classification prevents a duplication
of benefits, which we have found, to be a legitimate state interest and applies to
all those receiving workers’ compensation equally. So the current version of
KRS 342.730(4) is not violative of the Equal Protection Clause because the age
classification is rationally related to a legitimate state purpose.
C. The retroactive application of KRS 342.730(4) does not create an arbitrary classification of litigants.
Bean appears to argue that retroactive application of the 2018
Amendment arbitrarily discriminates against claimants who happened to be
actively litigating their claim when the statute became effective. Bean asserts
that the General Assembly had no valid reason to apply the amendment
prospectively and retroactively to affect all claims not fully adjudicated, making
retroactivity an arbitrary legislative act that unfairly discriminates against
litigants like him and overlooks claimants who may have been similarly
situated but who had fully litigated their claim in the short window of time
before the amendment became effective. We disagree.
We have never held that the legislature must articulate a basis for
declaring an emergency or a remedial reason for applying a law retroactively.
342.730(4) because that teacher will never qualify for Social Security retirement benefits. There is no rational basis for treating all other workers in the Commonwealth differently than teachers.”).
11 To Bean’s argument, we find a persuasive response to be in the reasoning of
the United States Supreme Court, where it stated:
Retroactivity provisions often serve entirely benign and legitimate purposes, whether to respond to emergencies, to correct mistakes, to prevent circumvention of a new statute in the interval immediately preceding its passage, or simply to give comprehensive effect to a new law Congress considers salutary. However, a requirement that Congress first make its intention clear helps ensure that Congress itself has determined that the benefits of retroactivity outweigh the potential for disruption or unfairness.20
We find here no arbitrary exercise of legislative authority in the
retroactive application of the amendment. After Parker, the General Assembly
acted swiftly to amend the statute to fill the statutory gap with constitutional
norms. The legislature “may amend the law and make the change applicable to
pending cases, even when the amendment is outcome determinative.”21
Because the 1996 version had been invalidated and a new version enacted, the
General Assembly was left to decide if pending claims would be governed by the
1994 version of the statute—a statute that had not been in effect for over 20
years—or to allow for current claims to be decided under the new amendment.
The legislative body apparently chose the latter, and that choice was its
prerogative.
20 Landgraf v. USI Film Prods., 511 U.S. 244, 267–68 (1994). 21 Bank Markazi v. Peterson, ––– U.S. ––––, 194 L.Ed.2d 463 (2016).
12 D. The 2018 Amendment to KRS 342.730(4) does not violate Sections 59 and 60 of the Kentucky Constitution.
Cates and Bean argue the statute’s age classification compels us to find
the statute is unconstitutional special legislation.22 Cates’s and Bean’s
arguments that the 2018 amendment to KRS 342.730(4) is special legislation
parallels their argument that the law violates equal protection. They argue that
the law’s classification applies only to older injured persons, thus applying to
“particular persons” making the amendment special legislation. The Court of
Appeals disagreed. The appellate panel found that the statute treats all older
workers alike as a class.23
In Calloway County Sheriff’s Department. v. Woodall,24 we addressed the
constitutionality of a workers’ compensation statute that disallowed death
benefit if the worker’s death occurred more than four years after the date of
injury. The statutory text at issue read:
If the injury causes death, income benefits shall be payable in the amount and to or for the benefit of the persons following, subject to the maximum limits specified in subsections (3) and (4) of this section: (1) (a) If there is a widow or widower and no children of the deceased, to such widow or widower 50 percent of the average weekly wage of the deceased, during widowhood or widowerhood. .... (6) In addition to other benefits as provided by this chapter, if death occurs within four (4) years of the date of injury as a direct
22 Ky. Const. § 59, 60. 23 Kroger v. Cates, 2018-CA-01027-WC, 2018-CA-01144-WC, 2020 WL 2511433 at *4 (Ky. App May 15, 2020). While the Court of Appeals reached the correct result, its opinion was rendered prior to our September 2020 decision in Calloway County Sheriff’s Department v. Woodall, 607 S.W.3d 557 (Ky. 2020). 24 607 S.W.3d 557 (Ky. 2020).
13 result of a work-related injury, a lump-sum payment of fifty thousand dollars ($50,000) shall be made to the deceased's estate, from which the cost of burial and cost of transportation of the body to the employee's place of residence shall be paid.25
We held that the appropriate test for determining if a law is special
legislation “is whether the statute applies to a particular individual, object or
locale.”26 We therefore upheld the statute at issue in Calloway “for the simple
reason that the statute does not apply to a particular individual, object or
locale. It applies statewide to all employers and employees.”27
The statutory text at issue here is no different—it does not identify an
individual, object or locale. Cates’s and Bean’s argument that the statute
differentiates between older and younger workers is a classification argument,
which is properly considered under sections 1, 2, and 3 of the Kentucky
Constitution.28 KRS 342.730(4) is simply not special legislation.
E. The retroactive application of KRS 342.730(4) does not take away Cates’s or Bean’s vested right to benefits.
Cates and Bean argue that applying the 2018 amendment is an
unconstitutional interference with their vested right to workers’ compensation
benefits. Cates argues that her rights to compensation vested when she was
injured in 2015; therefore, she was entitled to benefits under the version of the
statute extant when she was injured, as ALJ Layson ruled. By the time the
Court of Appeals addressed this case, the 2018 version was effective, and we
25 Id. at 562 (quoting KRS 342.750). 26 Id. at 573. 27 Id. 28 Id.
14 had ruled in Holcim that the amendment applied to all pending appeals.29 As a
result, the Court of Appeals appropriately applied the 2018 version of the
statute to Cates’s claim. We have also addressed this argument in a
companion opinion, rendered today, Dowell v. Matthews Contracting.30
Bean similarly argues that the date of his injury controls the version of
the law affecting his benefits award. Bean was injured in 2014, but his hearing
before the ALJ, his appeal to the Board, the Court of Appeals, and this Court
all occurred after the 2018 Amendment became effective. So ALJ McCracken,
the Board, and the Court of Appeals all found the 2018 amendment applied to
Bean’s claim. Specifically, the Court of Appeals reasoned that Bean did not
have a vested right to the benefits assigned to him until litigation had been
completed. We agree.
Indeed, the rights of the parties to workers’ compensation benefits
becomes fixed and vested on the date of the injury.31 So, Cates and Bean have
a right to file a claim for workers’ compensation benefits, a right that vested
upon their injury, and that right cannot be taken away from them.32 The same
vesting principle does not apply to the duration and amount of their income
29 Holcim, 581 S.W.3d at 42. 30 Dowell v. Matthews Contracting, 2020-SC-0170-WC.
31 Schmidt v. South Cent. Bell, 340 S.W.3d 591, 594 (Ky. App. 2011).
32 City of Paris v. Kentucky Utils. Co,, 133 S.W.2d. 559, 561 (Ky. 1939) (“[W]here a suit has been instituted under a statute giving a cause of action and a right to maintain such action, and once the action has been prosecuted to final judgment, and the rights of the parties fixed, such rights then become vested in the judgment, and thereafter a legislature can pass no law which impairs the validity of the vested right thus obtained.”).
15 benefits, as the date of injury only controls the law entitling a claimant to
compensation. “A right, in order to be vested (in the constitutional sense) must
be more than a mere expectation of future benefits or an interest founded upon
an anticipated continuance of existing general laws.”33 Here, Cates and Bean
only have an expectation that they will receive benefits of a certain amount and
duration. These issues are still being litigated so they will not have a vested
right to certain benefits until they have received a final judgment in their favor.
Cates and Bean correctly assert that once their right to benefits has been
fully litigated procedural due process protects their right to receive those
benefits. As the United States Supreme Court explained in Goldberg v. Kelly,34
a person receiving benefits cannot have that right terminated without certain
procedural due process requirements being satisfied. But Goldberg does not
describe the circumstances here because Cates and Bean have not received
final judgments guaranteeing them a right to receive benefits. So, instead of
looking to the date of injury to decide which version of KRS 342.730(4) applies,
we ask only if the claim was pending at a time when the 2018 amendment
became effective. Because both Bean’s and Cates’s claims were not fully
adjudicated when the 2018 amendment to KRS 342.730(4) became effective,
the amendment governs the duration of the benefits in both cases, as they had
and still do not have a vested right to benefits controlled by any other version
33LouisvilleShopping Ctr. Inc. v. City of St. Matthews, 635 S.W.2d 307, 313 (Ky. 1982) (citing 16B Am. Jur. 2d Constitutional Laws § 669 (2021)).
34 397 U.S. 254, 262 (1970).
16 of the statute.35 Cates and Bean do not have a vested right to certain benefits
until the amount and duration issues have been fully ascertained through
litigation. Because their claims are being litigated and the statute has been
declared retroactive, the 2018 version of KRS 342.730(4) applies to them.36
F. Bean’s appeal should be decided on the merits despite a poorly drafted notice of appeal.
Collier makes the additional argument that Bean’s appeal should be
dismissed because Bean’s notice of appeal failed to name the Attorney General
as a party in his appeal to this Court. In City of Devondale v. Stallings,37 we
found that failure to name an indispensable party rendered the notice of appeal
untimely and required dismissal. As the dissent points out, Stallings requires
strict compliance with Kentucky Rule of Civil Procedure (CR) 73.03.
Importantly, though, in that case the governmental entity was never made
aware of the appeal. As stated in Stallings, “There are policy considerations
that mandate strict compliance with the time limit on filing of the notice of
appeal. Potential parties to an appeal have the right to know within the time
35 Holcim, 581 S.W.3d at 42 (“This statute was amended in Section 13 of 2018 Ky. Acts ch. 40 . . . . Subsection (3) of Section 20 of that Act reads, ‘Subsection (4) of Section 13 of this Act shall apply prospectively and retroactively to all claims: (a) For which the date of injury or date of last exposure occurred on or after December 12, 1996; and (b) That have not been fully and finally adjudicated, or are in the appellate process, or for which time to file an appeal has not lapsed, as of the effective date of this Act.’”). 36 Martin v. Warrior Coal LLC, 617 S.W.3d 391, 396 (Ky. 2021) (“Thus, no matter the context – regardless of whether we are addressing substantive or remedial legislative amendments – when the General Assembly clearly states legislation is to have retroactive effect or otherwise prescribes its temporal scope or reach, we give effect to the intent of the General Assembly.”). 37 785 S.W.2d. 954 (Ky. 1990).
17 specified in the rule that they are parties.”38 Here, as the Court of Appeals
noted in rejecting a similar preservation argument concerning Bean’s failure to
raise constitutional claims below and to give notice to the Attorney General, the
Attorney General was properly added as a party in the Court of Appeals and
was listed on the Certificate of Service of the notice of appeal to this Court. The
Attorney General had notice, has not shown or argued prejudice, and filed a
timely brief. We find despite strict compliance not being satisfied, the policy
considerations behind the rule are met in this case.
This will not be the first time since Stallings that we have chosen to
overlook a party’s mistake in naming indispensable parties. In Lassiter v.
American Express Travel,39 where the Kentucky State Budget Director sought to
appeal a circuit court’s finding that a statute was unconstitutional, the Budget
Director’s notice of appeal named the Commonwealth of Kentucky and the
Kentucky Department of Treasury as defendants.40 But, the appeal was
dismissed by the Court of Appeals because the notice failed to name the State
Treasurer, who was an indispensable party.41 In contrast, on appeal to this
Court, we found naming the “Department of Treasury” in the caption to be the
functional equivalent of naming the State Treasurer.42 We applied Lassiter in
38 Id. at 957. 39 308 S.W.3d. 714 (Ky. 2010). 40 Id. 41 Id. at 716. 42 Id.
18 Flick v. Estate of Wittich,43 where we found a party substantially complied with
CR 73.03 despite their failure to name an indispensable party. Flick involved a
dispute over an estate, and in the notice of appeal the estate against which
judgment was entered was mentioned in the notice, but the co-administrators,
the actual parties representing the estate were not.44 We found that naming
the estate was the functional equivalent of naming the co-administrators.45
The inclusion of the estate’s name and sending the co-administrators the
notice of appeal allowed this Court to find that Flick substantially complied
with the requirements of CR 73.03.46 Further, in Sparkman v. Consol Energy,
Inc.47 we chose again to overlook the strict-compliance requirement for naming
indispensable parties. There, Sparkman failed to correctly name the opposing
party in the body of the notice but correctly named the party in caption. We
found because the caption listed the correct names that Sparkman had
substantially complied with CR 73.03 and dismissal of the appeal was not
required.48
43 396 S.W.3d 816 (Ky. 2013). 44 Id. at 818. 45 Id. at 820. 46 Id. at 822. 47 470 S.W.3d 321, 330-32 (Ky. 2015). 48 Id. at 331 (“While we agree that the variance in party names is both frustrating and confusing, the naming of both Sparkman and Inc. in the caption of the notice was sufficient to give fair notice to the opposing parties, CONSOL and CKI. Because the notice of the cross-appeal was sufficient under our case law and CR 73.03 to confer appellate jurisdiction, the Court of Appeals erroneously dismissed the cross-appeal on that ground.”).
19 We find here that dismissal of Bean’s constitutional arguments is not
required. The Attorney General was made a party in the Court of Appeals, was
listed on the Certificate of Service of the notice of appeal to this Court, has not
argued it was prejudiced or lacked notice of the appeal, and was able to file a
brief shortly after receiving the notice of appeal. It is true that the Attorney
General went unmentioned in the body or caption of the notice of appeal, but
we find the more critical factor-receipt of notice to be met here. Therefore, we
have chosen to address Bean’s constitutional arguments. To be clear, we
strongly caution future litigants to be more careful in the future as
jurisdictional defects are almost always fatal. But today because the party
unmentioned was aware of the arguments raised, received notice, and was not
prejudiced we have chosen to look past this flaw.
III. CONCLUSION
We affirm the decision of the Court of Appeals in both cases.
All Sitting. Minton, C.J., Conley, Hughes, Lambert, Keller, and VanMeter, JJ.,
concur. Nickell, J., concurs in part and dissents in part.
NICKELL, J., CONCURRING IN PART AND DISSENTING IN PART:
Respectfully, I concur in part and dissent in part. I agree with the majority’s
analysis regarding the constitutionality of KRS 342.730(4). However, I dissent
from so much of the majority opinion as holds Bean’s appeal should not be
dismissed for failing to name the Attorney General in his notice of appeal.
Devondale requires strict compliance with CR 73.03(1) and the failure to
name an indispensable party is a jurisdictional defect which cannot be
20 remedied. See also Browning v. Preece, 392 S.W.3d 388, 392 (Ky. 2013). Here,
the Attorney General was clearly not named in the caption nor body of Bean’s
notice of appeal. While I appreciate the majority’s policy argument, I cannot
agree Bean’s appeal can be saved.
While the Attorney General may well have been aware of Bean’s appeal,
the defective notice of appeal did not serve its intended purpose of informing
the Attorney General he was a party on appeal. I believe simply listing a
potential party in a certificate of service is insufficient to confer jurisdiction
under CR 73.03(1). Anyone can be listed on the certificate of service to receive
a copy of any pleading. However, mere receipt of a pleading is a large leap from
informing a person or entity they are being haled into an appeal as a party.
Further, CR 73.03 cannot be read in a vacuum; it must be read in
concert with the rule governing cross-appeals, CR 74.
In order that the court can determine who is entitled to the additional ten days to cross-appeal allowed by CR 74, the notice of appeal must specify all of the appellees as required by CR 73.03 as amended. If the notice of appeal designates the appellees in such a way that it is possible to determine who is entitled to prosecute a cross-appeal under CR 74, then it follows that the notice of appeal has satisfied the requirement of CR 73.03 that all appellees be specified. Yocom v. Franklin Cnty. Fiscal Ct., 545 S.W.2d 296, 297 (Ky. App. 1976). This
Court should not be required to speculate whether attaching a name to the
certificate of service was intended to notify that person or entity of their
entitlement to prosecute a cross-appeal.
The majority’s holding today carves out an exception to an otherwise
clear rule which has been consistently applied for over three decades. In so
21 doing, the majority takes a step toward permitting substantial compliance on
jurisdictional defects in the notice of appeal, a standard which is currently
permitted for nonjurisdictional defects. See Ready v. Jamison, 705 S.W.2d
479, 481-82 (Ky. 1986). The majority’s path ignores and eviscerates
Devondale’s longstanding interpretation of CR 73.03(1), seemingly to avoid an
admittedly unpleasant result. I cannot join the majority’s course because
“each time we do not strictly apply the rules we erode them.” Gambrel v.
Gambrel, 501 S.W.3d 900, 902 (Ky. App. 2016).
It has well been said that our procedural rules “are lights and buoys to
mark the channels of safe passage and assure an expeditious voyage to the
right destination.” Hallis v. Hallis, 328 S.W.3d 694, 696 (Ky. 2010) (quoting
Louisville and Jefferson Cnty. Metro. Sewer Dist. v. Bischoff, 248 S.W.3d 533,
536 (Ky. 2007) (quoting Brown v. Commonwealth, 551 S.W.2d 557, 559 (Ky.
1977))). For this reason, “[e]nforcement of procedural rules is a judicial
responsibility of the highest order because without such rules ‘[s]ubstantive
rights, even of constitutional magnitude, . . . would smother in chaos and could
not survive.’” Id. (citation omitted). If the majority does not wish to enforce
the rule as written, there are established procedures to change CR 73.03 which
do not include amendment by judicial fiat.
To justify the departure from established precedent, the majority cites
three factually distinguishable cases which make them inapposite. In
American Express Travel Related Svcs. Co., Inc., Flick, and Sparkman, the
appellant included at least some portion or version of the name of the appellees
22 in the caption or body of the notice of appeal sufficient to put the opposing
party on notice the appeal would be prosecuted against them. Nothing of the
sort happened here. Further, I am disinclined to ignore a longstanding rule
and well-established legal precedent by the majority’s citation to three
instances over the past three decades wherein this Court failed to consistently
follow its own rules.
Without directly overruling Devondale, the majority brushes its
precedential value aside to reach a palatable result. Today’s decision will either
be seen as a result-oriented outlier or it will change the landscape of appellate
practice. And not for the better. Before today, the rule was clear and its
application all but certain. While procedurally technical, CR 73.03 is
nonetheless an integral part of our body of rules effectuating the fair, orderly,
efficient, and effective appellate process.
Rules of procedure such as the one here pertinent are not mere naked technicalities. . . . [R]easonable adherence to clear, reasonable and known rules of procedure is essential to the administration of justice. Justice cannot be administered in chaos. Moreover, the administration of justice involves not only meticulous disposition of the conflicts in one particular case but the expeditious disposition of hundreds of cases. If the courts must stop to inquire where substantial justice on the merits lies every time a litigant refuses or fails to abide the reasonable and known rules of procedure, there will be no administration of justice. Litigants must be required to cooperate in the efficient disposition of their cases. United States v. Seigel, 168 F.2d 143, 146 (D.C. Cir. 1948) (citation omitted).
The majority’s abandonment of strict compliance relative to CR 73.03
may result in no prejudice, but this alone cannot justify the departure. An
ignored rule is little better than no rule. Avoiding an unappealing result today
23 will create other problems tomorrow—because what is required in one case
must be required in all. Laying aside one’s personal perspective of the
admittedly harsh result in the present case, we must require strict compliance
with CR 73.03 as it is currently written and interpreted, pending any change in
its edicts. “Unlike the majority, I am unwilling to bend—if not break—our
Rules of Civil Procedure and precedent to rectify a clear procedural error made
by Appellant’s counsel.” James v. James, 313 S.W.3d 17, 29 (Ky. 2010)
(Minton, C.J., dissenting).
For these reasons, I would dismiss Bean’s appeal for his failure to name
an indispensable party.
24 COUNSEL FOR APPELLANT, CHERYL ROBERTS:
Jeffery Allen Roberts
COUNSEL FOR APPELLANT, RONNIE BEAN:
Geordie Dean Garatt Houseman, Garatt & Duncan, PLLC.
COUNSEL FOR APPELLEE, KROGER:
Sharlott Kay Higdon Whitlow, Roberts, Houston & Straub, PLLC
COUNSEL FOR APPELLEE, COLLIER ELECTRICAL SERVICE, INC.:
Richard Brent Vasseur Boswell Sims & Vasseur
COUNSEL FOR APPELLEE COMWEALTH OF KENTUCKY EX. REL. ATTORNEY GENERAL DANIEL J. CAMERON:
Stephen Chad Meredith Matthew Franklin Kuhn Brett Robert Nolan Office of the Solicitor General Office of the Attorney General
ADMINISTRATIVE LAW JUDGES:
Hon. Jeffrey Vimont Layson, III Hon. John Hampton McCracken
WORKERS’ COMPENSATION BOARD: Michael Wayne Alvey