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Uninsured Employers Fund v. Acahua

Supreme Court of Kentucky

September 28, 2017



          COUNSEL FOR APPELLANT: Andy Beshear Attorney General of Kentucky James Robert Carpenter Assistant Attorney General.

          COUNSEL FOR APPELLEE, ISAIAS SILVA-LAMAS: Charles E. Jennings Joy Buchenberger Jennings Law Offices Jose Acahua, Pro se, Luis Lopez, Pro se.



         An Administrative Law Judge (ALJ) found that Isaias Silva-Lamas became permanently and totally disabled as a result of a work-related injury that he suffered while employed by Luis Lopez, an uninsured employer. Those findings are not disputed. However, the Uninsured Employers Fund (UEF) contests whether Lopez was properly notified of Silva-Lamas's claim. The ALJ, the Workers' Compensation Board (the Board), and the Court of Appeals held that notice was properly given. We agree and affirm.

         I. BACKGROUND.

         On April 11, 2012, Silva-Lamas, who was a month away from his 29thbirthday, was working as a brick mason's helper when he fell from a ladder and suffered multiple cervical fractures. As a result, Silva-Lamas has no use of his legs, very limited use of his arms, and little to no use of his hands. In his initial application for resolution of injury claim, Silva-Lamas named Jose Acahua as his employer. Acahua did not have any workers' compensation insurance; therefore, the Chief ALJ joined the UEF as a party.

         During the course of discovery, the parties determined that, at the time of his injury, Silva-Lamas was working on a house owned by Barry Chaney. Chaney and his wife decided to put a "brick and wood" porch on the back of their house. Chaney hired a contractor named Timberwolf to perform the framing and carpentry, and he intended to hire his brother-in-law, Stonie Newsome, to perform the masonry work. However, by the time Timberwolf completed its part of the construction, Newsome was too busy with other projects to do the masonry work. Therefore, Newsome had one of his employees, Jose Acahua, contact Luis Lopez to see if Lopez could do the work. Following some negotiations, Lopez agreed to do the work, and he enlisted Silva-Lamas and two others to assist him. Acahua did not perform any work on the job but acted as an interpreter among Lopez, his helpers, and Chaney, and Acahua apparently handled some of the monetary transactions between Chaney and Lopez, who acted as the "boss" on the job.

         Based on the preceding evidence, Silva-Lamas moved to join Newsome and Lopez as defendant/employers. The ALJ denied Silva-Lamas's motion as to Newsome but granted it as to Lopez and sent a copy of the joinder order to Lopez by first-class mail. Following the ALJ's joinder order, Silva-Lamas filed a second Application for Resolution of Injury Claim, naming Lopez as his employer. The Commissioner of the Department of Workers' Claims (the DWC), pursuant to 803 KAR 25:010 Section 3, sent a copy of that application to Lopez via first class mail. The postal service returned that mailing stamped "undeliverable." Because it appeared that Lopez never received notice of the claim, the UEF contested the DWC's jurisdiction to proceed against him, and by extension, against the UEF. The ALJ rejected the UEF's argument, finding that, because Silva-Lamas had done all that was required of him to file his claim, the DWC had jurisdiction over Lopez.

         The UEF appealed to the Board, which affirmed, agreeing with the ALJ that Silva-Lamas acted appropriately pursuant to 803 KAR 25:010 in filing his claim. The Board also found that the DWC acted appropriately pursuant to the regulation by serving the application on Lopez via first class mail. The UEF then sought review by. the Court of Appeals, which affirmed.

         As it did below, the UEF argues that, pursuant to Kentucky Revised Statute (KRS) 342.135, the commissioner of the DWC was required to serve notice of Silva-Lamas's claim by registered mail. According to the UEF, the commissioner's failure to do so deprived the ALJ of jurisdiction over Lopez and, by extension, over the UEF. For the reasons set forth below, we disagree and affirm, albeit for different reasons than those expressed by the Board and the Court of Appeals.


         As a general rule, we grant deference to the findings of an ALJ; however, when the issue is purely a question of law, as this is, We review the matter de novo. See Saint Joseph Hosp. v. Frye, 415 S.W.3d 631, 632 (Ky. 2013).

         III. ANALYSIS.

         KRS 342.270(1] states that, if the parties fail to reach an agreement as to compensation, "either party may make written application for resolution of claim." 803 KAR 25:010 Section 3(2) provided at the time that the application . had to be "filed [with the DWC] with sufficient copies for service on all parties."[1]Once an application is filed, the commissioner of the DWC is required to "issue notice of the filing to all parties and" to "promptly assign the claim to an administrative law judge." KRS 342.270(2). Pursuant to 803 KAR 25:010 Section 3(2), the commissioner then serves the application "by first class mail."

         As the UEF notes, the service provision of the preceding regulation appears to be at odds with KRS 342.135, which states in pertinent part that:

Any notice required to be given under this chapter shall be considered properly given and served when deposited in the mail in a registered letter or package properly stamped and addressed to the person to whom notice is to be given at his last known address and in time to reach him in due time to act thereon. Notice may also be given and served like notices in civil actions.

         The UEF argues that KRS 342.135 requires that notice of a claim be served on the employer by registered mail, and that the DWC did not have jurisdiction over Lopez because the Commissioner failed to serve Lopez by registered mail. However, the UEF's interpretation of KRS 342.135 is faulty for two reasons.

         First, the first sentence of KRS 342.135 states that notice given or served by registered mail is deemed adequate. That sentence does not state it is mandatory for notice to be given or served by registered mail or that registered mail is the only method by which notice may be given or served. If the General Assembly had wanted registered mail to be the only acceptable method to give or serve notice, it would have made that method mandatory; which leads us to the second reason the UEF's interpretation is faulty.

         We presume that the General Assembly intended for the statute to be construed as a whole, and for all of its parts to have meaning. Hall v. Hospitality Resources, Inc., 276 S.W.3d 775 (Ky.20Q8); Lewis v. Jackson Energy Cooperative Corporation, 189 S.W.3d 87 (Ky.2005). Looking at KRS 342.135 as a whole, it is clear that the General Assembly intended to provide two methods for notices to be given or served. The first is by registered mail, the second is pursuant to whatever method the civil rules deem adequate. We cannot, by adopting the UEF's interpretation, simply negate this second method by which notice may be given or served.

         The UEF argues that this Court's opinion in Nat. Resources. & Environmental Protection Cabinet v. Pinnacle Coal Corp.,729 S.W.2d 438 (Ky. 1987) is on "all fours" with this matter. The UEF is mistaken. In Pinnacle, the Cabinet, pursuant to a regulation, served Pinnacle's attorney with the hearing officer's final report. Id. Pinnacle contested the adequacy of that service, noting that the relevant statute required service on the party, not on its attorney. Id. The Cabinet argued that service was adequate because it complied with the regulation, which required service on a represented party's attorney rather than on the party. Id. The Court held that service by the Cabinet was not adequate because the statute, not the regulation, controlled. Id. at 439. Unlike the statute at issue in Pinnacle, which made ...

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