RENDERED: OCTOBER 23, 2025 TO BE PUBLISHED
Supreme Court of Kentucky 2024-SC-0547-WC
ENCOVA MUTUAL INSURANCE GROUP APPELLANT (FORMERLY BRICKSTREET MUTUAL INSURANCE COMPANY)
ON APPEAL FROM COURT OF APPEALS V. NO. 2024-CA-01021 WORKERS’ COMPENSATION BOARD NO. WC-15-01407
KENTUCKY EMPLOYERS’ MUTUAL APPELLEES INSURANCE; ROGER HALL; LETCHER COUNTY BOARD OF EDUCATION; HONORABLE CHRIS DAVIS, ADMINISTRATIVE LAW JUDGE; AND WORKERS’ COMPENSATION BOARD
OPINION OF THE COURT BY JUSTICE CONLEY
AFFIRMING
This case is on its the third appeal to this Court and concerns the
application of the Workers’ Compensation Act (“Act” or “Chapter 342”). Encova
Mutual Insurance Group (“Encova”) appeals as a matter of right from the Court
of Appeals’ decision reversing the Workers’ Compensation Board’s (“Board” or
“WCB”) dismissal of Kentucky Mutual Insurance Company’s (“KEMI”) appeal
seeking certification of the proper insurance carrier on the risk, after the
Administrative Law Judge (“ALJ”) determined a last date of injurious exposure
that differed from the date originally alleged. That change in date prompted a corresponding change in the liable
insurance carrier. The ALJ, however, denied certification primarily on the
ground that the motion was untimely brought, and he lacked the authority to
resolve it. On appeal to the WCB, it affirmed on different grounds, ruling that
neither KEMI nor Encova had standing to bring certification as neither had
been formally joined as parties prior to that appeal. The Court of Appeals
reversed the Board.
Encova’s principal contention is that the Court of Appeals erred in
holding that the Board must certify insurance coverage under KRS 1
342.316(10). Encova argues the ALJ and the Board properly declined to shift
liability to Encova after years of litigation, asserting that KEMI and the other
parties had long been on notice of the claim but failed to timely raise the issue
of coverage, and that fairness and procedural concerns should bar certification
at this stage. In essence, Encova maintains that it should not bear liability
despite the ALJ’s finding that the last injurious exposure occurred in 2014,
when it was the applicable insurer, because KEMI’s delay in raising
certification effectively waived any such transfer of responsibility.
For the following reasons, we affirm the decision of the Court of Appeals.
I. Factual Background and Procedural Posture As this is the third time this case has come before this Court, we will not
recount the full procedural history of this now decade-old workers’
compensation dispute. Letcher Cty. Bd. of Educ. v. Hall, 576 S.W.3d 123 (Ky.
1 Kentucky Revised Statutes.
2 2019) (“Hall I”); Letcher Cty. Bd. of Educ. v. Hall, 671 S.W.3d 374 (Ky. 2023)
(“Hall II”). Instead, we summarize only the background necessary to
contextualize this appeal and the facts relevant to the legal issues before us.
Roger Hall (“Hall”) retired from Letcher County High School in 2003 after
working as a full-time teacher since 1976. After retiring, he continued work as
a substitute teacher until 2014. In September 2015, Hall filed a Form 102
workers’ compensation application, alleging he developed mesothelioma due to
asbestos exposure during his employment at the school. He listed the Letcher
County School Board (“Letcher”) as his employer, named KEMI as Letcher’s
1990 insurer, and identified his last date of exposure to asbestos as “gradual,”
stemming from his full-time employment from 1976 to 2003. KEMI, having
been identified as the carrier on the risk, retained counsel to defend Letcher
throughout the proceedings.
In November 2015, Letcher moved for a more definite statement
regarding Hall’s listed date of last exposure and renewed the motion in March
2017. In 2017, the ALJ ordered Hall to supplement the application with a
specific date, which Hall eventually listed as April 18, 2014, the last day he
worked for Letcher as a substitute. In October 2017, the ALJ dismissed Hall’s
claim, concluding he was barred by the statute of limitations after finding that
all asbestos was likely removed from the school in 1990.
Hall appealed to the WCB, which reversed, concluding that Hall had in
fact been exposed to asbestos until 2003. The Court of Appeals and this Court
affirmed the WCB’s ruling due to compelling evidence demonstrating the
3 presence of asbestos to 2003, at the least. See Hall I, 576 S.W.3d at 127 (“It is
abundantly clear from the evidence that Letcher County failed to eradicate all
asbestos containing material from the school building. It is also clear that this
material . . . was present in the school until 2003 and beyond. This evidence
compels reversal of the ALJ's order.”). The matter was then remanded for the
first time.
In July 2019, the ALJ on remand issued an interlocutory order which
amended the last date of exposure but set it aside just a few weeks later. In
April 2020, after considering additional evidence, the ALJ found Hall to be
totally disabled, and determined his last date of asbestos exposure to be April
18, 2014; the date he stopped substitute teaching, rather than his 2003
retirement date. The ALJ ultimately awarded income and medical benefits
against “[Letcher] and/or its insurance carrier.” Consequentially, the ALJ did
not identify the responsible insurance carrier with the new findings. Both Hall
and Letcher sought review with the WCB, which affirmed the ALJ’s findings on
the date of last exposure and average weekly wage but reversed and remanded
over the ALJ’s assessment of certain unpaid bills. Hall did not appeal the
WCB’s decision.
Letcher, however, appealed to the Court of Appeals, arguing that the
Board of Claims—not the Department of Workers’ Claims (“DWC”)—had
exclusive jurisdiction over Hall’s case, asserting that Letcher is a state agency.
In August 2021, while that appeal was pending, KEMI formally attempted to
enter the case. KEMI filed a notice of representation with the DWC as well as a
4 motion to intervene and motion for partial remand with the Court of Appeals,
requesting certification of insurance. KEMI argued it was not the carrier on the
risk on April 18, 2014, which became final when Hall declined to appeal the
WCB decision. KEMI contended that Encova was Letcher’s insurer in 2014 and
asked the court to partially remand for carrier certification.
The Court of Appeals denied KEMI’s motions, noting the absence of legal
authority permitting a partial remand to the ALJ given that appellate review is
limited to matters heard by the WCB. On the merits, the panel then rejected
Letcher’s jurisdictional argument, holding that the DWC—not the Board of
Claims—had jurisdiction over the case because school boards are employers for
the purposes of the Act. In affirming the WCB decision, the case was remanded
for additional findings of certain medical bills and interest rates. Letcher
appealed to this Court solely on the issue of whether the DWC had jurisdiction
over Hall. Therein we held that because Hall was not suing Letcher for
negligence or damages as required by KRS 49.020, he was entitled to the
Workers’ Compensation Act’s exclusive remedies. Hall II, 671 S.W.3d at 381.
There again, this Court declined KEMI’s request for partial remand as it was
never an issue in front of the Board. As such, the June 2023 Hall II opinion left
the question of carrier certification unresolved upon remand.
In July 2023, once the matter turned to the ALJ, KEMI renewed its
motion to intervene and again requested certification of coverage. KEMI
reiterated that it was not Letcher’s insurer on the now final 2014 date of last
exposure and cited DWC records reflecting Encova was in fact the carrier on
5 the risk at that time. KEMI asked the ALJ to order the DWC commissioner to
certify coverage accordingly. However, the ALJ addressed only some of the
compensability issues, denying KEMI’s attempt for carrier certification. Up to
this point in the litigation, the only parties to the claim had been Hall and his
employer, Letcher.
While the ALJ acknowledged KEMI moved to certify coverage as soon as
it was notified, he nonetheless found its motion untimely. The ALJ reasoned
that KEMI, as the named carrier, “solely” had the responsibility to seek
certification due to KEMI’s belief that it “should not be on the risk.” He further
“doubt[ed]” his authority to grant the motion on remand, interpreting the Court
of Appeals’ and this Court’s refusal to grant KEMI’s earlier partial remand
motion as the equivalent to denying its request for intervention and
certification on the merits. Offering few specifics, the ALJ further reasoned that
granting the motion would prejudice Hall by causing additional delay, citing
the eight-year duration of the litigation.
By October 2023, both KEMI and Encova appealed to the WCB. KEMI
argued that the ALJ erred as a matter of law in refusing to certify the
responsible insurer. Specifically, KEMI asserted it did not bear the burden of
joining the responsible carrier, its motion was timely sought, the prior remand
did not preclude the ALJ from resolving the certification issue, and that
certifying the proper insurer would not prejudice Hall. In its cross-appeal,
Encova contended that the ALJ did not err in refusing to certify coverage. It
argued that KEMI was responsible for identifying and joining Encova, and there
6 was no determinative authority indicating whether KEMI’s motion was timely
or not. Encova echoed the ALJ’s finding that he was directed to only decide
attorney fees and compensability disputes on remand. Encova further asserted
that the relief KEMI sought should also barred by the doctrine of laches.
In July 2024, the WCB dismissed KEMI’s and Encova’s appeal, holding
neither insurance carrier had standing:
[N]either KEMI nor Encova have ever been properly joined as a party to this claim. As such, neither has standing to pursue this appeal. The parties to this action are, and always have been, Hall and Letcher. There is no remaining dispute of whether Hall contracted mesothelioma due to his exposure to asbestos while employed by Letcher. Notably, the WCB reached the same conclusion as the ALJ—denying
certification—but for a different reason, lack of standing. The Board ruled that
because carrier certification amounted to a “disagreement between two
insurers,” it should therefore be resolved in circuit court, not by the DWC.
Although dismissing on standing grounds, the Board addressed other issues,
including the timeliness of KEMI’s efforts and which party bore the ultimate
burden of certification:
KEMI, who did not attempt to certify coverage until over two years after the ALJ’s initial determination, seeks to deflect responsibility to another insurer that has never been joined as a party. Since KEMI is seeking to avoid payment, it should have promptly sought a certification of coverage rather than sitting idle.
The Board also sympathetically viewed Encova’s laches argument,
addressing KEMI’s delay in seeking certification as unreasonable and
prejudicial to Hall:
7 [KEMI] did not raise the coverage issue, nor did it file a request for certification of coverage, for more than two years. While this was not a primary argument during the second appeals process, the delay has now manifested by Hall still having not received benefits for more than nine years after his claim was filed. KEMI did not timely file a request for certification of coverage when ALJ Hajjar made her initial determination. By the time KEMI “realized” there may be a coverage issue, the claim was already before the Kentucky Court of Appeals.
Following the WCB’s dismissal, KEMI appealed to the Court of Appeals,
once again asserting that the proper insurer, not KEMI, should be held
responsible for Hall’s benefits. While acknowledging neither KEMI nor Encova
were formal parties, KEMI argued that certification of the correct carrier falls
squarely within the DWC’s obligations under Chapter 342, and both insurers
had voluntarily appeared by filing pleadings before the Board. Encova, by
contrast, contended that the WCB did not err in ruling that the certification
dispute should be resolved in circuit court and that the ALJ lacked authority to
certify coverage at that stage in the proceeding. Letcher, the employer, also
joined KEMI’s appeal, requesting certification for the correct carrier.
In a thoughtful and well-reasoned opinion, the Court of Appeals panel
reversed the Board and the ALJ’s refusal to certify the responsible insurer.
Applying the framework of the Workers’ Compensation Act and this Court’s
precedent, it held:
The Kentucky Supreme Court held that the Act grants an ALJ the authority to decide insurance coverage issues that affect the benefits received by the claimant. The ALJ has the authority to decide whether an employer's workers' compensation carrier covered the employer at the time of the employee's injury. Just as the Board can determine "whether an employment relationship
8 existed between the claimant and the alleged employer, so also may it determine an insurance company's rights in a compensation proceeding." Ky. Emp’rs' Mut. Ins. v. Hall, No. 2024-CA-1021-WC, 2024 Ky. App. LEXIS 100,
at *21 (Ky. App. Nov. 8, 2024) (quoting Motorists Mut. Ins. Co. v. Terry, 536
S.W.2d 472, 473 (Ky. 1976)) (citations omitted).
The Court of Appeals’ decision was founded on the broad scope of the
Act, and the wide-ranging authority conferred upon both the ALJ and WCB to
decide all issues arising under it. In applying the Act’s beneficent purpose, the
Court of Appeals panel reasoned: “The coverage of employers in Kentucky
through an insurance policy is tantamount to accomplishing the underlying
purpose of the Act; it provides the guarantee of payment of benefits to an
injured worker. We submit that, as such, coverage questions are properly and
necessarily justiciable by an ALJ.” Id. at *5. Now seeking review of that
decision, Encova primarily reiterates its prior objections and defenses.
First, Encova contends that it was the responsibility of either Hall,
Letcher, or KEMI to identify and formally join Encova as the carrier on the risk
and therefore should not be bound by the untimely or lack of action by those
parties. Second, Encova argues that KEMI failed to timely move to certify
coverage, thereby leaving the issue unpreserved. Third, Encova maintains in
the alternative that the ALJ, on remand, was instructed to resolve only specific
issues which thereby precluded decisions on outside disputes, i.e., carrier
certification. Finally, Encova asserts that any attempt to certify coverage at this
stage should be barred under the doctrines of equitable estoppel and laches,
9 while adding that allowing such certification now would violate its due process
rights by depriving it of notice and an opportunity to be heard before being
subjected to financial liability to compensate Hall.
II. Standard of Review The question presented in this appeal concerns which insurer—after a
change in coverage date from the initial application—is responsible for paying
workers’ compensation benefits. Resolving this question implicates issues of
subject matter jurisdiction, standing, joinder, laches, and statutory
construction of the Act, among others. Here, the dispositive issue is not one of
fact, but a matter of law: whether the ALJ misapplied Chapter 342. Anderson v.
Mountain Comprehensive Health Corp., 628 S.W.3d 10, 14 (Ky. 2021).
On review, this Court considers new or novel questions of statutory
construction, reconsiders precedent, and reviews questions of constitutional
magnitude. W. Baptist Hosp. v. Kelly, 827 S.W.2d 685, 687-88 (Ky. 1992).
While we do not revisit the ALJ’s factual determinations, we are not bound by
the ALJ’s conclusion on questions of law or the application of law to the facts.
Ford Motor Co. v. Jobe, 544 S.W.3d 628, 631 (Ky. 2018). Accordingly, a
determination that a claim was untimely sought—when based on the ALJ’s
interpretation of the Act—is reviewed as a question of law. Anderson, 628
S.W.3d at 14. Thus, the appropriate standard of review for the issues before us
is de novo.
Because resolution of these legal issues depends on statutory
interpretation, this Court must,
10 look first to the plain language of a statute and, if the language is clear, our inquiry ends. We hold fast to the rule of construction that “[t]he plain meaning of the statutory language is presumed to be what the legislature intended, and if the meaning is plain, then the court cannot base its interpretation on any other method or source.” In other words, “we assume that the [Legislature] meant exactly what it said, and said exactly what it meant.” Univ. of Louisville v. Rothstein, 532 S.W.3d 644, 648 (Ky. 2017) (citations
omitted).
As we explained in Hall II, the “Workers’ Compensation Act . . . is a
statutory system specifically designed to compensate an injured worker for
economic loss sustained as a result of work-related injury or disease.” 671
S.W.3d at 379. Therefore, in discerning the legislature’s intent from the plain
statutory language, we must interpret the Act in accordance with its beneficent
purpose:
The primary purpose of the Workers' Compensation Act is to aid injured or deceased workers and statutes are to be interpreted in a manner that is consistent with their beneficent purpose. The overarching purpose of the workers' compensation chapter is to compensate workers who are injured in the course of their employment for necessary medical treatment and for a loss of wage-earning capacity, without regard to fault, thereby enabling them to meet their essential economic needs[.] Kindred Healthcare v. Harper, 642 S.W.3d 672, 679 (Ky. 2022) (quotation and
citations omitted).
III. Analysis Turning to the merits of this appeal, we begin by addressing the
procedural threshold issue of the ALJ’s and Board’s scope of authority and
jurisdiction on remand, followed by the question of standing. Specifically, we
11 first consider whether the ALJ and Board retained subject matter jurisdiction
to certify coverage on remand and then whether the carriers had standing to
seek or contest certification despite not being formal parties.
The ALJ concluded that this Court’s denial of KEMI’s motion for partial
remand precluded an administrative determination of insurer certification,
reasoning that the ALJ was only tasked with resolving interest rates and
compensability issues. That conclusion, however, misreads the procedural
history of Hall II, the scope of administrative jurisdiction under the Act, and the
nature of relief sought.
First, in Hall II, we explicitly confined our review to a single issue: “[t]he
sole issue presented in this appeal is whether the Department of Workers’
Claims has jurisdiction[.]” 671 S.W.3d at 379. Because insurer certification
had not been raised before the ALJ or the Board, no appellate court had
jurisdiction to consider it at that stage. It is well-settled that a party’s failure to
raise an issue before an administrative body precludes asserting that issue
upon judicial review. Urella v. Ky. Bd. of Med. Licensure, 939 S.W.2d 869, 873
(Ky. 1997). Thus, although this Court and the Court of Appeals declined to
grant a partial remand during the prior appeal, that procedural limitation did
not prevent the ALJ or Board from addressing insurer certification once the
matter returned.
Encova argues that the Court of Appeals’ statement, “[o]n remand, the
only issue to be reviewed concerns the interest rate to be applied” effectively
12 resolved the legal question of certification, and that this Court’s affirmance
foreclosed further consideration of the issue. We disagree.
Our decision in Hall II did not address any question of carrier
certification, as that issue was not in the record, thus, not before the Court. It
is certainly true the law-of-the-case doctrine requires adherence to legal
determinations made in prior appeals, but it does not extend to questions
never actually decided. We reaffirmed in Puckett v. Cabinet for Health & Family
Servs.: “[I]f an appellate court has passed on a legal question and remanded
the case to the court below for further proceedings, the legal questions thus
determined by the appellate court will not be differently determined on a
subsequent appeal in the same case.” 621 S.W.3d 402, 409 (Ky. 2021) (quoting
Inman v. Inman, 648 S.W.2d 847, 849 (Ky. 1982)).
The only legal question properly presented and actually decided in Hall II
was whether the Department of Claims had jurisdiction over Hall’s claim.
Because the issue of certification had not yet been raised—and because
appellate review is statutorily limited to issues presented to the Board—neither
appellate court ruled on the legal question by declining KEMI’s partial remand.
Accordingly, our refusal to grant KEMI’s motion for partial remand in Hall II
was not a legal conclusion on the merits of carrier certification.
Next, because administrative bodies are creatures of statute—confined to
powers expressly conferred—the heart of this dispute is whether the ALJ and
WCB retained authority to determine the responsible carrier at this stage.
Critically, Chapter 342 delegates broad powers to the ALJ and WCB for the
13 purpose of adjudicating claims. KRS 342.275 empowers the ALJ to be the
factfinder and decision-maker, while KRS 342.325 authorizes the ALJ to decide
“[a]ll questions arising under this chapter.” KRS 342.285(2) then charges the
Board to review the same evidence that was before the ALJ, except in cases of
fraud or misconduct. More generally, KRS 342.285(2)(a)-(e) authorizes the WCB
to reverse or remand based on several criteria, including:
(a) The administrative law judge acted without or in excess of his powers; (b) The order, decision, or award was procured by fraud; (c) The order, decision, or award is not in conformity to the provisions of this chapter; (d) The order, decision, or award is clearly erroneous on the basis of the reliable, probative, and material evidence contained in the whole record; or (e) The order, decision, or award is arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion. This statutory grant of jurisdiction necessarily includes authority to determine
which insurer bears responsibility for payment of benefits. The question of
whether the ALJ and Board have the authority to certify coverage turns on
whether that issue arises under Chapter 342. Numerous statutory provisions
within the Act specifically address the obligations and responsibilities of
insurance carriers; confirming that insurer certification is not collateral, but
rather central to the promotion of an efficient workers’ compensation system.
For example, KRS 342.340 requires employers to obtain coverage or self-
insure and mandates proof of coverage filings with the DWC commissioner.
KRS 342.375 confirms that any liability imposed under an award must be fully
14 covered by the insurer on the risk. As discussed further below, KRS 342.360
provides that jurisdiction over the employer is jurisdiction over the insurer and
binds the insurer to awards rendered against the employer, even where notice
is defective. KRS 342.365 construes any workers’ compensation insurance
policy as a direct promise between carrier and employee and imposes an
obligation onto the carrier to promptly pay all benefits due under the Act. KRS
342.690(1) limits an employer’s and insurer's liability exclusively to what is
provided in the Act, unless otherwise stated in the policy. As to the Board’s
powers on review, KRS 342.228 further obligates the DWC to enforce these
coverage-related provisions under Chapter 342.
Additionally, the regulatory scheme further reinforces this administrative
authority. 803 KAR 25:010 Section 23 provides a mechanism for the DWC to
certify the proper insurer at the outset of a claim. Similarly, 803 KAR 25:010
Section 2(3) allows for necessary parties to be joined as defendants when relief
under the Act is sought against them.
Although Chapter 342 is ambiguous regarding a procedure for re-
certifying a new carrier follow a change in the date of last exposure, the
comprehensive statutory framework makes clear that questions of coverage
must be resolved within the jurisdiction of the DWC. The ALJ and WCB are not
only empowered to adjudicate the compensability of a claim, but also to ensure
that payment is made by the responsible carrier under the Act. This authority
to resolve and certify insurer liability in a pending claim is fundamental to the
Act’s beneficent purpose—securing a timely, predictable compensation for
15 injured workers. Ky. Uninsured Emp’rs' Fund v. Hoskins, 449 S.W.3d 753, 762-
63 (Ky. 2014).
With this foundation established, we now turn to the WCB’s grounds for
dismissal: neither insurer had standing to seek or contest coverage at this
stage because neither had been formally joined as parties to Hall’s claim. That
conclusion cannot be reconciled with the structure and purpose of the Act or
the case law interpreting it. When read as a whole, Chapter 342 contemplates
that insurers are not only bound by the adjudication of claims but are also
necessary parties in disputes concerning whether coverage liability exists.
Accordingly, our analysis proceeds in two parts: the precedential and statutory
foundation confirming an insurers’ standing and interest to participate in
workers’ compensation coverage disputes.
The WCB dismissed the appeal on the grounds that neither KEMI nor
Encova had standing, reasoning that the dispute amounted to a disagreement
between insurers which belonged in circuit court under KRS 342.305. In doing
so, the WCB relied on Custard Ins. Adjusters, Inc. v. Aldridge, 57 S.W.3d 284
(Ky. 2001). As the Court of Appeals correctly explained, that reliance was
misplaced. Aldridge involved a post-award dispute solely between two insurers
regarding contract interpretation over reimbursement; one which had “no effect
whatsoever” on the relationship between the employer, insurance carrier, and
the injured worker. Id. at 287-88. Here the context is fundamentally different.
This is not a collateral contract dispute between two carriers. It is a
question of coverage obligations under Chapter 342 which directly affect the
16 final disposition of Hall’s claim. The present issue differs from a “simple
attempt to enforce a final award” in circuit court and is not a dispute between
two carriers over reimbursement of previously paid-out benefits unrelated to
the Act. Zurich Am. Ins. Co. v. Journey Operating, LLC, 323 S.W.3d 696, 701
(Ky. 2010) (holding that coverage disputes implicating a carrier’s obligation to
pay benefits arise under the Act because it affects the integrity of the judgment,
rejecting circuit court as the proper venue). Transferring this case to circuit
court would thwart the Act’s purpose of providing Hall an exclusive remedy; the
claimant “should not be required to fight on two fronts.” Terry, 536 S.W.2d at
474. Contrary to the Board’s ruling, the ALJ’s reasoning, and Encova’s
position: the statutory framework plainly allows for insurer participation
directly in workers’ compensation proceedings where coverage liability is in
question.
As discussed, Chapter 342 imposes direct legal obligations on insurers
when entering an agreement with the employer, mandating that the agreement
is directly between the carrier and employee, and binds such insurers to
awards entered by the ALJ. KRS 342.360. The Court of Appeals correctly
recognized that insurers and the insured are inextricably linked: “jurisdiction
of the insured . . . [is] jurisdiction of the insurer.” Id.
Under 803 KAR 25:010 Section 23, the DWC must initially identify the
carrier on the risk when the claim is filed. Although the regulations do not
specifically address what happens after a change in the last date of exposure
shifts the risk policy, the law for more almost seventy years has been “the
17 insurance carrier can raise for determination the question as to whether or not
there was at the time a valid, outstanding policy issued by it covering the
employer.” Lawrence Coal Co. v. Boggs, 218 S.W.2d 670, 672 (Ky. 1949).
Moreover, Aldridge, when properly applied, supports insurers’
participation in proceedings where their interests are at stake. There, we
explicitly held that: “an insurance carrier may be made a party to the
administrative proceeding and that the fact-finder has jurisdiction to decide
questions affecting the insurer's obligation to pay workers' compensation
benefits on behalf of its insured.” Aldridge, 57 S.W.3d at 287 (citing Lawrence
Coal, 218 S.W.2d at 671-72).
Once joined, it then “may question whether or not it had issued a valid,
outstanding Policy . . . at the time of the worker’s injury.” Id. If the ALJ finds
coverage to exist, the carrier must pay the award. These principles, rooted in
the plain language of the Act and confirmed by precedent, recognize that
insurers may be made parties and have standing to assert defenses or request
a determination of liability under the Act.
Standing requires a judicially recognizable interest in the subject matter,
one that is present and substantial in the outcome of the case. City of Louisville
v. Stock Yards Bank & Trust Co., 843 S.W.2d 327, 328-29 (Ky. 1992). Both
KEMI and Encova have a direct financial interest in the certification decision—
one that will determine which entity is obligated to pay Hall’s benefits under
Chapter 342. This is not a contractual dispute between insurers, but an
ongoing, dispositive issue for the disposition of Hall’s claim under Chapter 342.
18 See KRS 342.340; KRS 342.360; KRS 342.365. By ruling otherwise, the Board
and ALJ disregarded the legal posture of this case, the statutory authority for
insurers participation, and the clear precedent recognizing an insurer’s
interests in disputed coverage determinations. The Board therefore erred in
concluding the insurers lacked standing to raise coverage certification.
We now address if the ALJ, procedurally, can determine which insurer is
statutorily responsible under the Act based on the amended finding that Hall’s
last injurious exposure occurred in April 2014. This is not a question of party
conduct or strategic delay. It is a matter of straightforward statutory
application.
KRS 342.316(10) governs the determination of the responsible carrier,
binding the carrier to the last date of exposure. It provides:
the employer in whose employment [the worker] was last injuriously exposed to the hazard of the disease, and the employer's insurance carrier . . . at the time of the exposure, shall alone be liable therefor, without right to contribution from any prior employer or insurance carrier, except as otherwise provided in this chapter. The ALJ found that Hall’s exposure to asbestos continued on April 18,
2014, when he ceased substitute teaching for Letcher, after substantial
evidence showed the asbestos was not fully removed by that time. Therefore,
under the plain language of KRS 342.316(10), Encova is the liable carrier,
consistent with Encova and Letcher’s insurance agreement. The statute
expressly forecloses liability for any prior carrier once a subsequent, injurious
exposure is established.
19 This Court has repeatedly reaffirmed this interpretation. In Brummitt v.
Se. Ky. Rehab. Indus., we held that the existence of an earlier exposure that
caused a gradual injury, does not relieve a latter insurer of responsibility when
the injured worker continues working under a different carrier. 156 S.W.3d
276, 279 (Ky. 2005). In that case, the ALJ erred by attempting to impose full
liability on the prior carrier based on the worker’s initial employment date,
even though the injurious exposure continued during a later coverage period.
Id. If the injury was sustained during a carrier’s coverage period, the ALJ is not
precluded from assigning liability to ensure the proper carrier is responsible.
Id. 2
To avoid this, Encova also argues it is inequitable to impose liability
upon it because it did not participate in, or have knowledge of, the earlier
proceedings. In essence, Encova contends it cannot be bound by an award
rendered in a proceeding in which it had no timely involvement. That
argument, however, fails under the plain language and purpose of the Act.
Although the Act does not specify which party must notify an insurer
when a claim’s exposure date changes mid-litigation, its framework does not
condition insurer liability on joinder or notice. Rather, Chapter 342 reflects the
legislature’s intent to ensure that coverage obligations are based on the
insurance contract, the period and existence of employment, and the timing
2 The “last exposure rule” codified in KRS 342.316(10) has been bedrock to the
Kentucky workers’ compensation system for decades, existing even under prior versions of the statute. See e.g., Osborne Mining Co. v. Davidson, 339 S.W.2d 626, 629 (Ky. 1960). 20 exposure—not procedural irregularities. While insurers are certainly
empowered to play an active role in compensation proceedings, as they often
do, the absence of such participation is not fatal under the Act’s statutory
scheme.
KRS 342.360 mandates that workers compensation insurance policies
include a clause binding the insurer to any judgment against the insured
employer, treating notice to the employer as equivalent to notice to the insurer.
The statute provides:
All policies . . . shall contain a clause . . . [that] notice to or knowledge of the occurrence of the injury on the part of the insured shall be considered notice or knowledge . . . on the part of the insurer; . . . the insurer shall in all things be bound by and subject to the awards, judgments or decrees rendered against the insured. Similarly, KRS 342.365 provides that insurance obligations remain
enforceable even where notice may be defective or delayed:
No policy of insurance . . . arising under this chapter shall be issued unless it contains the agreement of the insurer that it will promptly pay . . . all benefits conferred by this chapter and all installments of the compensation that may be awarded . . . and that the obligation shall not be affected by any default in the giving of any notice required by such policy, or otherwise. This agreement shall be construed to be a direct promise by the insurer to the person entitled to compensation, enforceable in his name. These provisions unequivocally bind the insurer to the acts and
knowledge of its insured, foreclosing any defense based on defective or delayed
notice. Once the ALJ found that Hall’s last injurious exposure occurred during
Letcher’s period of coverage with Encova, the statutory liability followed. Even
though Encova had not yet been joined, its policy came into effect upon that
21 finding and Encova became legally bound. See KRS 342.365; KRS 342.360;
KRS 342.316(10).
Encova nevertheless invokes procedural due process, essentially arguing
that notice was constitutionally deficient, and its late involvement denied it a
meaningful opportunity to be heard. But that argument is incompatible with
the Act’s express treatment of insurers and employers as a single entity for
notice purposes. See KRS 342.360 (“[N]otice to or knowledge of the occurrence
of the injury on the part of the insured shall be considered notice or knowledge
. . . on the part of the insurer[.]”); KRS 342.365 (“[T]he obligation [to promptly
pay awards] shall not be affected by any default in the giving of any notice
required by such policy, or otherwise.”). Under this statutory regime, an
insurer cannot claim surprise when its insured was timely notified of the injury
and had participated throughout the proceedings.
In fact, Encova at this stage does not argue that its policy is invalid,
ambiguous, or that Letcher did not pay the premiums. Encova was not
blindsided by some unforeseeable development, nor will it be subjected to
retroactive liability. Encova knew from the time it entered the policy that it
would be obligated to pay awards for injuries arising during its coverage period.
Thus, Encova’s alleged liability arises directly from its own contractual and
statutory obligations irrespective of personal service or actual notice. KRS
342.360; KRS 342.365.
Further, to the extent that Encova’s arguments implies a constitutional
challenge to the notice provisions contained in Chapter 342, that challenge is
22 not properly before this Court. KRS 418.075 requires that the Attorney General
be notified in any appeal involving a challenge to the constitutionality of a
statute. Strict compliance with these requirements is mandatory. A.H. v.
Louisville Metro Gov't, 612 S.W.3d 902, 913 (Ky. 2020). Because the record does
not establish compliance with KRS 418.075, any ruling on constitutional
grounds would be void. Id. (citing Maney v. Mary Chiles Hosp., 785 S.W.2d 480,
482 (Ky. 1990)).
In short, the Act binds Encova by operation of law once the last date of
exposure was finally adjudicated. The only remaining question is whether the
mechanism for raising that liability—namely joinder, on remand—was timely
and properly pursued. The ALJ denied the joinder motion as untimely, and the
WCB further reasoned that KEMI was seeking to “deflect responsibility to
another insurer” by avoiding payment. Encova argues that legal grounds for
recertification existed, at least, as soon as the ALJ’s 2019 interlocutory order
and that the two-year delay renders the motion untimely.
Notably, Chapter 342 does not specify who must move for carrier
certification after a later change in exposure date. The ALJ determined that
KEMI, as the current responsible insurer, bore the burden of certification.
Additionally, Encova, the ALJ, and seemingly the WCB viewed KEMI’s motion
as untimely. However, 803 KAR 25:010 Section 2(3) sets forth the applicable
joinder standard:
(a) All persons shall be joined as defendants against whom the ultimate right to relief pursuant to KRS Chapter 342 may exist, whether jointly, severally, or in the alternative. An administrative
23 law judge shall order, upon a proper showing, that a party be joined or dismissed. (b) Joinder shall be sought by motion as soon as practicable after legal grounds for joinder are known. Notice of joinder and a copy of the claim file shall be served in the manner ordered by the administrative law judge. As to timing, there is no fixed statutory or regulatory deadline for when a
party must move to certify a new carrier after a change in exposure date.
Rather, the motion must be brought “as soon as practicable” after legal
grounds are known. Id. The facts and circumstances of a case control this
determination. Trico Cty. Dev. & Pipeline v. Smith, 289 S.W.3d 538, 542 (Ky.
2008). Here that analysis turns on when the legal basis for certification first
arose. Importantly, the issue must be evaluated in light of the Act’s beneficent
purpose and the duty to do justice to both the employer and employee. Harper,
642 S.W.3d at 680.
The ALJ acknowledged that KEMI’s original motion to certify coverage
when the appeal was pending came “as soon as [it was] notified” of the issue,
yet still found the subsequent motion on remand untimely. This was error. A
foundational principle of appellate procedure is that a trial court loses
jurisdiction once a notice of appeal is filed. Wright v. Ecolab, Inc., 461 S.W.3d
753, 758 (Ky. 2015). This principle applies with equal force to administrative
proceedings. See KRS 342.290; KRS 342.300; Jerry’s Drive In, Inc. v. Young,
335 S.W.2d 323 (Ky. 1960). As such, neither the WCB nor ALJ could act on
any motion during the pendency of that appeal. Also, an appellate court could
not have addressed KEMI’s partial remand motion while pending because the
24 issue was not preserved under KRS 342.290, as discussed above. See also
Urella, 939 S.W.2d at 873. Accordingly, legal grounds for KEMI to pursue
carrier certification did not yet exist prior to the resolution of the previous
appeal.
Contrary to the WCB’s assertion that KEMI sat “idle” while “seeking to
deflect responsibility,” KEMI moved to certify coverage just thirty days after
Hall II became final. That was the first point at which both jurisdiction and
procedural opportunity were properly aligned. With the case returned to the
ALJ on remand, joinder became procedurally viable. KEMI’s motion was
therefore made at the earliest practicable moment, after jurisdiction returned.
The ALJ’s conclusion that thirty days was untimely lacked any legal
foundation.
As to who must move for carrier certification, neither 803 KAR 25:010
Section 2(3) nor any other provision assigns that obligation to a specific party.
Rather, any interested party—employer, insurer, or injured worker—may raise
coverage issues. Nothing in the statute or case law supports the notion that
only KEMI bore the burden to move for certification; Encova does not even
advance that position. Despite the ALJ’s and WCB’s view that these
circumstances warranted KEMI to bear the burden to seek joinder, there is no
statutory or regulatory text to impose such a requirement. Nor do any statutes
or regulations provide that Encova had to be joined to the proceeding to be
bound by the award. Accordingly, we will not circumvent the Act’s beneficent
purpose by supplying words the legislature did not include. Fox v. Grayson,
25 317 S.W.3d 1, 8 (Ky. 2010) (“It is well settled law that a court may not add
language to the written law to achieve a desired result.”).
Encova argues, in the alternative to joinder being improper, that
certification of coverage must be barred on equitable grounds; specifically,
under the doctrines of laches or equitable estoppel. Encova contends that Hall,
Letcher, or KEMI should have notified it as early as 2017, when Hall amended
his last exposure date to April 2014. Encova claims they engaged in
“purposeful silence.” Due to this lack of notice, Encova asserts it was denied
any opportunity to participate in discovery, hire counsel, or otherwise defend
its interests yet is now bound by an adverse award and legal fees. On that
basis, Encova urges this Court to bar certification altogether. We disagree.
Neither laches nor estoppel provide a viable defense here.
Equitable estoppel operates to prevent a party from benefiting from its
own misconduct. Akers v. Pike Cty. Bd. of Educ., 171 S.W.3d 740, 743 (Ky.
2005). Laches, by contrast, applies when a party unreasonably delays asserting
a right to the prejudice of another. Plaza Condo. Ass’n, Inc. v. Wellington Corp.,
920 S.W.2d 51, 54 (Ky. 1996). We address these arguments in turn, beginning
with laches.
First, long-standing precedent requires two core considerations in
applying laches:
[T]here are two elements to be considered. As to what is unreasonable delay is a question always dependent on the facts in the particular case. Where the resulting harm or disadvantage is great, a relative brief period of delay may constitute a defense while
26 a similar period under other circumstances may not. What is the equity of the case is the controlling question. City of Paducah v. Gillispie, 115 S.W.2d 574, 575 (Ky. 1938). When measuring the delay against the complex procedural history and
the nature of the alleged harm, there is no basis to apply laches. As previously
discussed, the record confirms that KEMI moved to certify coverage just thirty
days after Hall II became final and jurisdiction returned to the ALJ. While the
appeal was pending, any effort to raise coverage issues there would have been
jurisdictionally improper. See Wright, 461 S.W.3d at 758. While it would have
been prudent for Letcher to notify Encova immediately once the date was
conclusively determined, the fact remains that any alleged harm to Encova
from certifying coverage is non-existent.
Specifically, Encova’s claimed prejudice does not stem from some
purposeful delay, but from the statutory consequence of the ALJ’s finding that
Hall’s last injurious asbestos exposure occurred during Encova’s coverage
period. Encova’s potential liability is not tied to participation, but rather to
being the carrier on the risk for Letcher’s policy on the date of the ALJ’s
finding. See KRS 342.316(10). By coupling Encova’s clear statutory and
contractual liability with the complex procedural history, we conclude that this
scenario is not the kind of prejudicial delay laches is meant to ameliorate.
Encova’s estoppel argument does not fare any better. The elements of
estoppel are:
1.) acts, language, or silence amounting to a representation or concealment of material facts; 2.) the facts are known to the estopped party but unknown to the other party; 3.) the estopped
27 party acts with the intention or expectation that the other party will rely on its conduct; and 4.) the other party does so to its detriment. Hitachi Auto. Prods. USA, Inc. v. Craig, 279 S.W.3d 123, 126 (Ky. 2008).
Like laches, estoppel depends on context. The particularities of each case
determine whether estoppel is warranted, as this Court further explained: “The
facts and circumstances of a case determine the propriety of resorting to an
equitable remedy. Conduct that works a fraud or constructive fraud on the
tribunal and has a detrimental effect on the accuracy and integrity of a
judgment warrants such a remedy.” Zurich Am. Ins. Co., 323 S.W.3d at 701-02
(citation omitted). Here, Encova identifies no affirmative concealment or
misrepresentations, no detrimental reliance, and no conduct arising to fraud,
constructive or otherwise. Its position is founded on silence. Given the
circumstances of this complex litigation with no statutory violation or duty to
notify, silence alone cannot constitute misconduct sufficient to warrant
estoppel. As already discussed, the Act itself is silent as to both who must
notify the responsible carrier and when, after the judicially established
exposure date shifts the carrier on the risk mid-litigation.
Critically, an insurer’s liability under the Act is not conditioned on
notice, timely joinder, or participation to be bound by an injured workers’
award. See Fruchtenicht v. United States Fid. & Guar. Co., 451 S.W.2d 835, 838
(Ky. 1969). Rather, it arises from the existence of an employment relationship,
a valid insurance policy, and the timing of exposure, all of which are present
here. Once the ALJ concluded Hall’s exposure continued into April 2014—
28 during Encova’s coverage period—Chapter 342 imposed liability on Encova. See
KRS 342.316(10); KRS 342.360; KRS 342.365.
Ultimately, the only parties with the statutory obligation to pay benefits
for Hall’s asbestos exposure related injuries are Letcher and the carrier on the
risk. Yet, without certification, KEMI, no longer the statutory carrier, will be
forced to bear the financial burden. In sum, the Board’s refusal to certify
coverage contradicts the law, and “[l]aw trumps equity.” Bell v. Commonwealth,
423 S.W.3d 742, 748 (Ky. 2014).
IV. Conclusion Accordingly, and for the foregoing reasons, the Court of Appeals is
affirmed. We remand this case to the Workers’ Compensation Board for
proceedings consistent with this opinion.
All sitting. All concur.
29 COUNSEL FOR APPELLANT: Ronald J. Pohl Pohl Aubrey & Gray, P.S.C. R. Tyler Hurst Burns White LLC
COUNSEL FOR APPELLEE, KEMI:
James G. Fogle Fulton, Devlin & Powers, LLC
COUNSEL FOR APPELLEE, LETCHER COUNTY BOARD OF EDUCATION:
W. Barry Lewis Lewis & Lewis Law Offices
COUNSEL FOR APPELLEE, ROGER HALL:
Daniel Fayne Dotson Daniel F. Dotson, P.S.C.
WORKERS’ COMPENSATION BOARD: Michael Wayne Alvey Chairman
ADMINISTRATIVE LAW JUDGE: Hon. Chris Davis