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
COUNSEL FOR APPELLEE: LEGGETT 85 PLATT Frederick Allon Bailey
Patrick Joseph Murphy II Casey, Bailey 8b Maines, PLLC
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
FACTUAL AND PROCEDURAL BACKGROUND.
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
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.
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. .
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.
KRS 342.320 Authorizes the Discount.
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. 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 ...