ADVANCE AUTO PARTS PETITIONER
v.
JASPER MINIX AND HON. CHRIS DAVIS, ADMINISTRATIVE LAW JUDGE RESPONDENTS
No. 201997677
Kentucky Workers Compensation
Commonwealth of Kentucky Workers’ Compensation Board
February 5, 2021
APPEAL
FROM HON. CHRIS DAVIS, ADMINISTRATIVE LAW JUDGE.
COUNSEL FOR PETITIONER: LMS HON E SHANE BRANHAM
COUNSEL FOR RESPONDENT: LMS HON JOHN C COLLINS
BEFORE: ALVEY, Chairman, STIVERS and BORDERS, Members.
OPINION
VACATING & REMANDING
ALVEY,
Chairman.
Advance
Auto Parts (“Advance”) appeals from the September
9, 2020 Opinion, Award and Order on Remand and the October
13, 2020 Order on Petition for Reconsideration rendered by
Hon. Chris Davis, Administrative Law Judge
(“ALJ”). The ALJ allocated 1/3 of Minix’s
third party settlement to pain and suffering. In the Order on
Petition for Reconsideration, the ALJ determined the pro rata
share of attorneys’ fees and expenses as $6,289.20. The
ALJ then calculated the subrogation credit is $8,900.14.
On
appeal, Advance argues the ALJ erred in calculating the
subrogation credit. Advance argues non-duplicative damages
and pro-rata legal fees and expenses should be deducted from
the third party settlement amount to calculate its
subrogation credit. We first determine the ALJ followed the
directives of this Board in its June 12, 2020 Opinion
Affirming in Part, Vacating in Part and Remanding by
allocating damages attributable to wage loss, medical
expenses, and pain and suffering. However, the ALJ erred in
calculating the subrogation credit. Therefore, we vacate and
remand for a calculation of the subrogation credit in
accordance with the methodology set forth in Quillen v.
Tru-Check, Inc., 2009 CA-000747-WC; 2009 WL 3337239 (Ky.
App. 2009).
Jasper
Minix (“Minix”) filed a Form 101 on July 1, 2019,
alleging injuries to his back and neck from a December 11,
2018 motor vehicle accident while working as a delivery
driver for Advance. The November 6, 2019 Benefit Review
Conference Order reflects the parties stipulated Advance
voluntarily paid temporary total disability
(“TTD”) benefits from December 12, 2018 through
June 24, 2019 totaling $2,907.84 and medical expenses
totaling $12,281.50. Subrogation was identified as a
contested issue. Because the calculation of the subrogation
credit is the only issue on appeal, we will not summarize the
medical and lay evidence.
Advance
filed the Release and Indemnification Agreement, dated April
15, 2019, between Kentucky Farm Bureau Mutual Insurance
Company, as the insurer for Michelle Duff and Love Duff, and
Minix. Minix received $25,000.00 to waive his third-party
claim. That settlement was reached without litigation and the
agreement does not provide an allocation of damages. A
statement of services for the settlement indicates
attorneys’ fees were $8,333.00 and expenses were
$1,100.00, for a total of $9,433.00.
In the
January 16, 2020 opinion, the ALJ determined Minix sustained
a work-related low back injury in the December 11, 2018 motor
vehicle accident, warranting an 8% impairment rating,
increased by the three multiplier pursuant to KRS
342.730(1)(c)1. The ALJ denied Minix’s request for
vocational rehabilitation benefits. The ALJ determined
Advance was entitled to a subrogation amount of $13,439.45
from the proceeds of the $25,000.00 settlement, stating as
follows, verbatim:
The argument that the Defendant makes in its brief regarding
the relative amount of subrogation credit it is entitled to
under the current version of KRS 342.700(1) is correct. Once
the Plaintiff has been made whole from his lost wages and
medical expenses, as paid by the Defendant herein, there is
no analysis required such as the Plaintiff sets forth in his
brief.
Of his $25,000.00 civil settlement the Plaintiff has already
paid attorney fees and costs, relative to the civil
settlement, of $9433.00. His workers’ compensation PPD
award is 25.03 x 425 = 10,637.75 = a workers’
compensation attorney fee of $2127.55. 9433.00 + 2127.55 =
11,560.55. 25,000.00 (amount of the civil litigation from
KFB) – 11,560.55 (attorney’s fee and costs from
both his civil and workers’ compensation claims) =
13,439.45 as the total amount available for subrogation.
$13,439.45 therefore represents the entire amount available
for subrogation up to the point the Defendant has recouped
lost wages and medical expenses.
Lost wages already paid in the form of TTD is $2907.84.
Medical expenses already paid are $12,281.50. The total
amount already paid on behalf of the Plaintiff which can
serve as a basis for subrogation is $15,189.34. This figure
exceeds the total amount available for subrogation even
before any analysis is done of the effect of the future PPD
benefits.
Therefore, the amount the Defendant may recover in
subrogation is $13,439.45
Minix
petitioned for reconsideration arguing the ALJ failed to
allocate funds for pain and suffering from his civil
settlement, resulting in an erroneous subrogation credit
calculation. Advance argued the ALJ erred in deducting the
presumed workers’ compensation attorneys’ fee
from the civil settlement amount, and the subrogation credit,
which should be adjusted to $15,567.00.
In an
Order rendered February 17, 2020, the ALJ sustained
Advance’s petition, stating as follows regarding
subrogation:
The ALJ made an error of law in deducting the
Plaintiff’s presumed workers’ compensation
attorney fee from the amount available for subrogation.
Therefore the total amount available is $15,567.00.
. . . .
As for the amount of the subrogation credit the ALJ freely
admits that when analyzing the subrogation credit some bit of
leeway exists. However, it is worth
...
