DEBORAH WALKER v. NEW DIRECTIONS HOUSING AUTHORITY; JAMES L. KERR, Administrative Law Judge; and WORKERS' COMPENSATION BOARD
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RENDERED:
August 22, 2003; 10:00 a.m.
TO BE PUBLISHED
Commonwealth Of Kentucky
Court of Appeals
NO. 2003-CA-000332-WC
DEBORAH WALKER
APPELLANT
PETITION FOR REVIEW OF A DECISION
OF THE WORKERS’ COMPENSATION BOARD
ACTION NO. WC-00-93490
v.
NEW DIRECTIONS HOUSING AUTHORITY; JAMES
L. KERR, Administrative Law Judge;
and WORKERS' COMPENSATION BOARD
APPELLEES
OPINION
VACATING AND REMANDING WITH DIRECTIONS
** ** ** ** **
BEFORE:
BAKER, COMBS, and SCHRODER, Judges.
COMBS, JUDGE.
Deborah Walker petitions for review of a decision
of the Workers’ Compensation Board rendered January 15, 2003,
which affirmed the dismissal of her claim for occupational
disability benefits.
The Board concluded that the
Administrative Law Judge (the ALJ) had acted properly within his
discretion in dismissing Walker’s claim because of her failure
to comply with regulations in tendering her proof.
After
reviewing the record, we cannot determine whether the ALJ
deliberately exercised any discretion in dismissing Walker’s
claim or whether he mistakenly believed that dismissal was
mandatory.
Therefore, we vacate and remand.
On January 27, 2000, Walker fell into a glass window
at a bank where she was attending a work-related seminar.
She
sustained an injury to her back, which was treated
conservatively for more than two years.
On January 25, 2002,
she timely filed an application for occupational disability
benefits.
A schedule for taking proof was mailed to the parties
on February 15, 2002, by the Commissioner of the Department of
Workers’ Claims.
Walker was given sixty (60) days for taking
proof; her employer, New Directions Housing Authority, was
allotted thirty (30) days for taking proof; Walker was granted
fifteen (15) days for rebuttal.
Walker’s attorney, Eric Lamb, immediately began
collecting evidence to support his client’s claim.
He obtained
two reports from Walker’s treating physician, Dr. Paul Sherman,
dated February 21, 2002; however, neither report contained a
specific American Medical Association (AMA) impairment rating.
Because Dr. Sherman was on medical leave, Lamb scheduled an
evaluation for Walker with Dr. Warren Bilkey within the proof
time.
However, new developments indicating a change in her
medical condition occurred unexpectedly near the end of the
sixty-day proof period, raising a question as to whether she had
actually reached maximum medical improvement (MMI).
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Because Walker’s physical condition failed to respond
to conservative treatment, Dr. Wayne Villanueva, a neurosurgeon,
advised Walker to undergo new diagnostic tests, including CT
scans and myelograms.
Initially, Walker believed that she would
have the test results and an evaluation within the sixty-day
proof period.
Unfortunately, Walker did not receive the results
of the tests prior to April 16, 2002, the last day for
submitting proof.
appellee.
On that day, Walker was deposed by the
At her deposition, Lamb informed counsel for New
Directions that he would need an extension of time to submit
Walker’s proof.
Counsel for New Directions told Lamb that he
was not the employer’s primary attorney and that he could not
agree to an extension.
On that same day, Walker mailed a motion to the Board
seeking to hold the matter in abeyance, or in the alternative,
to extend the proof time.
attached to her motion.
Dr. Sherman’s medical reports were
The motion was received by the Board
and filed on April 18, 2002.
Walker noted that the workers’
compensation insurance carrier for New Directions had refused to
pay for the tests ordered by Dr. Villanueva.
This refusal
caused the delay in her undergoing the tests and getting the
results because she had to obtain the testing by recourse to her
health insurance coverage, a slower procedure than workers’
compensation insurance.
Without the test results, she could not
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obtain a medical opinion as to whether she had reached maximum
medical improvement (MMI).
Thus, the delay in the medical
testing necessitated that she postpone the impairment
evaluation.
She informed the ALJ that she had an EMG scheduled
on April 19th and that she anticipated receiving Dr. Villanueva’s
records shortly thereafter.
She requested an extension of the
proof time, at which time she believed that she would be in a
better position to know whether or not she had reached MMI and,
therefore, whether the case was ready for adjudication or should
be held in abeyance.
New Directions objected to Walker’s motion and moved
to dismiss her claim entirely.
The employer argued that it was
entitled to such relief, alleging that Walker had failed to
submit any evidence during her proof time and that she had
failed to comply with 803 KAR1 25:010(E) § 15.
This regulation
requires that a motion for extension of time to submit proof be
filed no later than five days before the deadline that is the
subject of the extension.
Relying on Cornett v. Corbin
Materials, Inc., Ky., 807 S.W.2d 56 (1991), New Directions asked
the ALJ to dismiss the claim for lack of prosecution.
In response, on April 26, 2002, Walker formally filed
the medical reports and records of Dr. Sherman as evidence.
New
Directions moved to strike the records because Walker had failed
1
Kentucky Administrative Regulations.
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to submit them during the scheduled sixty-day period for proving
her case-in-chief.
Prior to any ruling by the ALJ, Walker filed a
verified and supplemental motion to hold her claim in abeyance.
She reiterated that the delay in obtaining medical evidence was
caused by forces beyond her control – but largely within the
control of New Directions.
She argued that New Directions
should be estopped from pursuing dismissal of her claim since
the delay in obtaining medical evidence was primarily
attributable to its insurance carrier’s refusal to pay for the
tests.
She also contended that the regulation relied upon by
the appellee did not contemplate the dismissal of a claim when
proof had been taken but not submitted during the proof time.
She finally noted that her attorney had previously enjoyed a
collegial working relationship with the law firm representing
New Directions.
Consequently, she had no reason to anticipate
that the appellee’s counsel would object to a short extension of
the proof time –- especially in light of circumstances that
compelled such an extension.
On May 29, 2002, the ALJ entered the following order
dismissing Walker’s claim:
This matter comes before the
undersigned Administrative Law Judge upon
plaintiff’s motion to hold this claim in
abeyance or extend proof time. The
Administrative Law Judge notes that the
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scheduling order was entered on February 14,
2002, granting all parties 60 days for
initial proof taking. Plaintiff’s time to
submit evidence in her case in chief expired
on April 16, 2002. No proof was filed by
the plaintiff during that period. As the
plaintiff had the burden of proof to submit
evidence establishing a prima fascia [sic]
case by April 16, 2002 and no proof was
filed, plaintiff’s claim shall be dismissed
pursuant to Cornette vs. Corbin Materials,
Inc.[, Ky.,] 807 S.W.2d 56 (1991). The
Administrative Law Judge notes that the
plaintiff has tendered the records and
reports of Dr. Sherman and those were
received by the Department of Workers’
Claims on April 26, 2002, some ten days
after plaintiff’s proof time had expired.
The defendant-employer has moved to strike
Dr. Sherman’s records and reports and that
motion is GRANTED.
The Administrative Law Judge further
notes that the plaintiff has filed a motion
to hold this claim in abeyance or extend
proof time and the same was filed on April
18, 2002. However, 803 KAR 25:010(e),
section 13, requires that a motion for an
extension of time be filed no later than
five days before the deadline sought to be
extended. Wherefore, plaintiff’s motion to
hold this claim in abeyance or extend proof
time was not timely filed and must be
OVERRULED.
All other motions which have been filed
are hereby OVERRULED as moot.
Wherefore, plaintiff’s claim shall be
and hereby is DISMISSED.
Walker’s petition for reconsideration was denied.
In its review, the Board held that the ALJ “made
sufficient findings of fact to support his dismissal” and that
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it was within his discretion to dismiss the claim for failure to
prosecute.
It rejected both of Walker’s arguments:
(1) that
there is a difference between taking evidence and submitting
evidence and (2) that counsel for New Directions should be
estopped from objecting to the motion for an extension of the
proof time since its own conduct had caused most of the delay.
While expressing sympathy for Walker’s plight, the Board
reasoned that there was no excuse for her failure to seek an
extension of her proof time within five days of the original
deadline.
This appeal followed.
Walker lists ten issues that she believes are involved
in her appeal.
However, we believe that the dispositive
question is whether the Board correctly determined that the ALJ
did not abuse his discretion in dismissing Walker’s claim for
failure to prosecute.
The function of this Court in reviewing a
decision of the Board is:
to correct the Board only where the Court
perceives the Board has overlooked or
misconstrued controlling statutes or
precedent, or committed an error in
assessing the evidence so flagrant as to
cause gross injustice.
Western Baptist Hospital v. Kelly, Ky., 827 S.W.2d 685, 687-688
(1992).
We agree with the Board’s observation that the
resolution of both Walker’s motion for an extension of the proof
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time and New Dimension’s motion to dismiss Walker’s claim were
matters within the discretion of the ALJ.
S.W.2d at 59-60.
See, Cornett, 807
However, we disagree with the Board’s
conclusion that the ALJ articulated sufficient findings to allow
for meaningful review of his exercise of that discretion.
In dismissing the claim, the ALJ’s findings recited
only Walker’s failure to submit any evidence within the allotted
proof time and her failure to timely move for an extension.
The
ALJ did not address any of the extenuating circumstances set
forth by Walker in support of her motion for an extension of
time and in response to the motion to dismiss her claim.
These
were circumstances that presented compelling reasons for
imposing a less extreme sanction than dismissal -- if indeed any
sanction at all was warranted.
If her medical testing revealed
that her condition had changed, MMI may not have been reached as
a matter of law.
That medical fact was critical to the practice
of the case on both sides and needed to be determined before the
case could proceed properly.
Walker should not be penalized
because her injury flared up “out of time.”
Moreover, the ALJ did not make any findings with
respect to the prejudice -- if any -- suffered by New Directions
as a result of Walker’s failure to meet the deadline for
submitting evidence or to comply with the five-day rule.
Because there is no analysis of the highly unusual circumstances
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presented to the ALJ, we question whether his ruling was based
on his discretion.
It appears that the ALJ may have believed
that a denial of Walker’s motion and the dismissal of her claim
were beyond his discretionary intervention and were instead
mandated by Walker’s failure to comply strictly with the
deadlines for submitting her proof.
However, even if the ALJ’s ruling was the result of an
exercise of discretion, he did not set forth a reasoned analysis
for dismissing the claim in order to provide an adequate basis
for our review.
The factual situation, though similar to that
in Cornett, is sufficiently distinguishable to require some
explanation for the imposition of the ultimate sanction of
dismissal of the claim so as to allow for adequate review.
Unlike the claimant in Cornett, Walker’s attorney attempted to
obtain the evidence within the proof time; however, unexpected
developments arose in the claimant’s medical condition near the
end of her proof time.
She informed opposing counsel within the
proof time that she would be seeking an extension of time, and
it had been her counsel’s experience that such extensions were
frequently agreed to as a matter of professional courtesy
without the necessity of filing a formal motion -- or that
extensions were often routinely granted by the ALJ when such
motions were made.
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It is impossible to discern from the ALJ’s order
whether any of these factors distinguishing this case from
Cornett were considered in his ruling -— a ruling which, in
essence, awarded New Directions a default judgment and rewarded
it for its own arguably obstructionist behavior in refusing
coverage for necessary medical testing.
Due process requires
some consideration of the factual circumstances and the
necessity of imposing the ultimate sanction for noncompliance
with rules relating to procedure – especially in the area of
workers’ compensation, where a humane and beneficent purpose
underlies that procedure.
We are ever mindful that:
compensation laws are fundamentally for the
benefit of the injured workman, [and that] a
just claim must not fall victim to rules of
order unless it is clearly necessary in
order to prevent chaos.
Messer v. Drees, Ky., 382 S.W.2d 209 (1964).
Therefore, we remand this case to the ALJ for his
consideration of all the extenuating and mitigating
circumstances surrounding Walker’s failure to comply with the
scheduling order and to render an order from which effective
appellate review may be undertaken.
The decision of the Workers’ Compensation Board is
vacated, and the matter is remanded for further proceedings
consistent with this opinion.
ALL CONCUR.
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BRIEF FOR APPELLANT:
Eric M. Lamb
Louisville, Kentucky
BRIEF FOR APPELLEE NEW
DIRECTIONS HOUSING AUTHORITY:
Mark R. Bush
Louisville, Kentucky
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