Industrial Track Builders of America v. Lemaster

429 S.W.2d 403, 1968 Ky. LEXIS 750
Court of Appeals of Kentucky·Decided May 31, 1968·Published·Cited by 4 cases

Opinion

PALMORE, Judge.

This is a workmen’s compensation case involving a question which appears to be of first impression in this court.

The appellee, Earnie Lemaster, a resident of Jeffersonville, Indiana, was injured in Indiana while working for the appellant, Industrial Track Builders of America, a construction company located in Louisville, Kentucky. He had been hired in Louisville and his paychecks were issued there. However, the employer had construction projects in Indiana as well as in Kentucky, and Lemaster worked about 75% of the time in Indiana.

The injury occurred on September 14, 1964. On October 16, 1964, Lemaster signed an agreement with General Accident Fire and Life Assurance Corporation, Ltd., the employer’s compensation carrier, to accept compensation at the rate of $42 per week until terminated in accordance with the Workmen’s Compensation Law of Indiana. After receiving payments for 104 weeks totalling $4368 he filed claim with the Kentucky Workmen’s Compensation Board. The jurisdictional point was raised by special answer, and after taking evidence directed to that issue the Board found that Lemaster had made an election to proceed under the Indiana act and had waived his rights under the Kentucky act. His claim was dismissed, and an appeal to the Jefferson Circuit Court resulted in a judgment reversing and remanding for further proceedings. The employer * now appeals to this court.

The agreement for compensation was executed on a standard printed form SF-4 with blanks filled in as appropriate, the name of the state being typewritten in a space left for that purpose. It was filed with and apparently approved by the Indiana Board on October 22, 1964, but was never filed with the Kentucky Board except as an exhibit in the instant proceeding. KRS 342.045 provides as follows:

“Injury out of state to person employed here. Any employer who hires employees within this state to work in whole or in part without this state, may agree in writing with such employees to exempt from the operation of this chapter injuries received outside this state. In the absence of such an agreement, the remedies provided by this chapter shall be exclusive as regards injuries received outside this state and shall be upon the same terms and conditions as if the injuries were received within this state.”

Immediately after the accident and until the agreement was executed a month later, if Lemaster’s disability was compensable he had a valid claim under the compensation law of Kentucky and the Kentucky Board had jurisdiction of it. KRS 342.265 provides that if the employe and employer reach an agreement in regard to compensation it shall be filed with the Board and unless so filed and approved shall not operate as a final settlement. “The obvious policy and purpose of this law is to discourage the making of settlements except under the protective supervision of the Board.” Kentucky Workmen’s Compensation Board v. Haungs, Ky., 373 S.W.2d 724 (1964).

We do not know whether Lemaster would receive more or less compensation under the Indiana law. In either case the agreement signed on October 16, 1964, fixed the amount of money he would receive and was in settlement, temporary or otherwise, of a claim that existed under and by virtue of KRS Ch. 342. Hence the agreement was one which could not have a binding effect in this state unless and until filed with and approved by the Kentucky Board as required by KRS 342.265. The basic purpose and policy of the statute is to prevent an employe who has a claim under KRS Ch. 342 from signing it away without the approval of the Board.

[406] As the employer contends, KRS 342.045 does not expressly require that an agreement exempting injuries occurring outside this state from the operation of KRS Ch. 342 be filed with or approved by the Board, nor does it in so many words prevent the execution of such an agreement after the occurrence of a compensable in- ■ jury. We need not explore the ramifications of these circumstances except as they affect the particular case at hand. What we hold here is simply that any agreement between employe and employer (or its insurer) with regard to an existing claim under KRS Ch. 342 is subject to the provisions of KRS 342.265. An agreement to waive the Kentucky claim and proceed under the law of some other jurisdiction, whether it be a sister state or Timbuctu, is no exception.

We do not reach the question of whether the agreement of October 16, 1964, actually would have amounted to an exemption agreement under KRS 342.045 had it been filed with and approved by the Kentucky Board.

The observation in Buckman v. Republic Structural Painting Corp., Ky., 302 S.W.2d 855 (1957), that “the mere fact that an employer and employe are subject to the workmen’s compensation law of the state in which the contract of employment was made does not preclude the employe from seeking compensation under the workmen’s compensation law of the state in which the injury occurs, if the employe and employer are in fact subj ect to the latter law,” is not inconsistent with our adherence to the policy which protects the employe against an improvident waiver of vested rights under the law of this state by requiring approval of the Board.

The really serious problem in this case, which seems to have been overlooked in the arguments, is whether an award in one state precludes recovery in another under the full faith and credit clause of the U.S. Constitution, Art. IV, § 1. In Magnolia Petroleum Co. v. Hunt, 320 U.S. 430, 64 S.Ct. 208, 88 L.Ed. 149, 150 A.L.R. 413 (1943), it was held that an employe who had been hired in Louisiana, injured in Texas, and procured a final award in Texas could not recover a second and additional award in Louisiana for the same injury. Four years later, in Industrial Commission of Wisconsin v. McCartin, 330 U.S. 622, 67 S.Ct. 886, 91 L.Ed. 1140 (1947), the Supreme Court appears to have held that “a prior compensation award would not fall under the full faith and credit provisions so as to preclude a subsequent award by a sister state where an examination of the statute and judicial decisions of the state of the first award did not indicate ‘by unmistakeable language’ an intent to make the compensation award the exclusive remedy of the injured workman, not only in that state, but every other jurisdiction.” Hudson v. Kingston Contracting Co., 58 N.J.Super. 455, 156 A.2d 491, 493 (1959). See 2 Larson’s Workmen’s Compensation Law § 85.30, p. 362.

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Industrial Track Builders of America v. Lemaster, 429 S.W.2d 403, 1968 Ky. LEXIS 750 (Ky. Ct. App. 1968).

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