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Mullins v. Leggett 85 Platt

Supreme Court of Kentucky

March 23, 2017

MARGIE MULLINS APPELLANT
v.
LEGGETT 85 PLATT, HONORABLE ROBERT L. SWISHER, ADMINISTRATIVE LAW JUDGE AND WORKER'S COMPENSATION BOARD APPELLEES

         ON APPEAL FROM COURT OF APPEALS CASE NO. 2015-CA-00814-WC WORKERS' COMPENSATION BOARD NO. 13-WC-98656

          COUNSEL FOR APPELLANT: Frank Jenkins III Frank Jenkins Law Office

          COUNSEL FOR APPELLEE: LEGGETT 85 PLATT Frederick Allon Bailey Patrick Joseph Murphy II Casey, Bailey 8b Maines, PLLC

          OPINION

          MINTON CHIEF JUSTICE

         The Chief Administrative Law Judge approved Margie Mullins's settlement of her workers' compensation claim for weekly permanent-partial disability benefits and her election to accelerate the payment of her attorney's fee to a lump-sum amount. Indisputably, the lump-sum attorney's fee payment reduced Mullins's weekly benefit amount pro-rata. But in calculating Mullins's weekly benefits remaining after deduction of the attorney's fee, the employer's workers' compensation insurance carrier applied a multiplier reflecting the future periodic payment of the attorney's fee commuted to a present value. The CALJ overruled Mullins's objection to this calculation, and the Workers' Compensation Board and the Court of Appeals upheld the CALJ's ruling. We affirm because we conclude that the Board and the Court of Appeals correctly determined that the plain text of the Workers' Compensation Statutes and regulations promulgated under those statutes contemplate the ability to deduct present-value discounts for lump-sum payments effectuated by discounting future benefits.

         I. FACTUAL AND PROCEDURAL BACKGROUND.

         Margie Mullins sustained a workplace injury during the course of her employment with Leggett 8b Platt. Through counsel, Mullins decided to settle her workers' compensation claim after negotiating with Leggett 85 Platt's insurance carrier, CCMSI. She then entered into a Form 110 Agreement as to Compensation, which was approved by the CALJ. The settlement award included permanent-partial disability benefits awarded at a weekly rate of $218.89 per week for a period of 425 weeks.

         Following approval of the settlement, Mullins moved the CALJ for attorney's fee. Her motion was sustained and counsel was awarded $9, 401.41 in fees. In her Form 109 Attorney Fee Election, Mullins elected to have this lump sum paid by Leggett and CCMSI in a single payment with her weekly benefits to be reduced pro-rata. According to Mullins, dividing the $9, 401.41 by the 373 remaining weeks yields a $25.20 reduction per week, meaning that she anticipated her reduced weekly rate would then be $193.69.

         But CCMSI indicated that her reduced weekly benefits were actually $191.36. Instead of simply dividing the fees by the remaining weeks, CCMSI calculated that based on the Workers' Compensation statute and related administrative regulations, her reduced benefits must recoup the present-day value of the lump-sum attorney's fee to account for the time-value of money. Mullins filed a Motion for Determination, disputing CCMSI's calculation and claiming that it was not authorized to take this additional discount. She claims that this $2.33 per week reduction, which totals $869.09 in sum, allowed CCMSI unilaterally to take extra money from her benefits without ALJ approval, to perform the calculation itself, and thereby breach the terms of the settlement agreement. .

         The CALJ[1] deniel her motion. He ruled that the statutory text and accompanying administrative regulations supported CCMSI's calculation. The Board affirmed the CALJ's ruling. Mullins then appealed to the Court of Appeals, which also affirmed the CALJ. She now appeals to this Court.

         II. ANALYSIS.

         A. KRS 342.320 Authorizes the Discount.

         Mullins primarily argues that the Workers' Compensation Act does not authorize attorney-fee discounts when benefits are paid periodically. Kentucky Revised Statutes (KRS) 342.320 provides that a claimant is responsible for the payment of his or her attorney's fees.[2] The statute then offers the following instructions to paying those fees:

4) Except when the attorney's fee is to be paid by the employer or carrier, the attorney's fees shall be paid in one of the following ways:
a. The employee may pay the attorney's fee out of his or her personal funds or from the proceeds of a lump ...

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