Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

McCoy Elkhorn Coal Corporation v. Sargent

Court of Appeals of Kentucky

October 13, 2017

MCCOY ELKHORN COAL CORPORATION -INSOLVENT EMPLOYER; KENTUCKY COAL EMPLOYERSSELF-INSURANCE FUND AND ITS THIRD-PARTY ADMINISTRATOR HEALTHSMART APPELLANTS
v.
JEANNIE SARGENT, AS WIDOW, PERSONAL REPRESENTATIVE, ADMINISTRATRIX OF THE ESTATE OF FARLEY SARGENT, II (DECEASED) AND JEANNIE SARGENT AS GUARDIAN OF THE MINOR CHILDREN OF FARLEY SARGENT, II: JOSHUA SARGENT, ALYSSA SARGENT AND SARAH SARGENT; AND JOSHUA SARGENT, UPON REACHING THE AGE OF EIGHTEEN; ANDHONORABLE JEANIE OWEN MILLER, ADMINISTRATIVE LAW JUDGE; AND WORKERS' COMPENSATION BOARD APPELLEES

         PETITION FOR REVIEW OF A DECISION OF THE WORKERS' COMPENSATION BOARD ACTION NO. WC-12-80645

          Terri Smith Walters J. Gregory Allen Pikeville, Kentucky BRIEF FOR APPELLANT

          Roy J. Downey Pikeville, Kentucky BRIEF FOR APPELLEE:

          BEFORE: ACREE, DIXON, AND JONES, JUDGES.

          OPINION AFFIRMING

          DIXON, JUDGE:

         McCoy Elkhorn Coal Corporation - Insolvent Employer, Kentucky Coal Employers Self-Insurance Fund (KCESIF) and its third-party Administrator, HealthSmart, petition for review of an opinion of the Workers' Compensation Board affirming an ALJ's award of benefits to the surviving spouse and children of Farley Sargent, II (collectively Sargent). The sole issue presented is the ALJ's determination KCESIF is responsible for payment of enhanced benefits as a result of intentional safety violations by McCoy Elkhorn, which caused the accident. Finding no error, we affirm.

         Farley Sargent was killed in a mining accident while employed by McCoy Elkhorn. The Mine Safety and Review Commission issued citations to McCoy Elkhorn for violating safety regulations relating to its roof safety plan. The ALJ determined McCoy Elkhorn committed intentional safety violations that caused Sargent's death and awarded enhanced benefits pursuant to Kentucky Revised Statute (KRS) 342.165(1). The statute states, in relevant part:

If an accident is caused in any degree by the intentional failure of the employer to comply with any specific statute or lawful administrative regulation made thereunder . . . the compensation for which the employer would otherwise have been liable under this chapter shall be increased thirty percent (30%) in the amount of each payment.

         KCESIF does not dispute the ALJ's finding of intentional safety violations pursuant to KRS 342.165(1); rather, it challenges the ALJ's determination KCESIF is obligated to pay the 30% increased benefit.

         The ALJ found AIG/AIU Ins. Co. v. South Akers Mining Co., LLC, 192 S.W.3d 687 (Ky. 2006), to be applicable to the case at bar. In AIG/AIU, the insurance company challenged the finding it was liable for enhanced benefits awarded under KRS 342.165(1), relying on language in the policy requiring the employer to pay any excess benefits awarded due to the employer's non-compliance with safety regulations. Id. at 688. The Court disagreed with the insurance company's argument that enhanced benefits for a safety violation were a "penalty" to be paid by the employer rather than the insurance carrier, explaining, in relevant part:

Although KRS 342.165(1) authorizes what has commonly been referred to as a safety penalty and although the party that pays more or receives less is likely to view the provision as being a penalty, the legislature did not designate the increase or decrease as such or include it in KRS 342.990. Nor does KRS 342.165(1) imply that the legislature viewed the increase or decrease as being the equivalent of punitive damages. It authorizes an increase or decrease in compensation if an "intentional failure" to comply with a safety regulation contributes to causing an accident. Notwithstanding the use of the word 'penalty' as a metaphor in Apex Mining v. Blankenship, 918 S.W.2d 225 (Ky. 1996), Whittaker v. McClure, 891 S.W.2d 80, 84 (Ky. 1995), and Ernst Simpson Construction Co. v. Conn, 625 S.W.2d 850, 851 (Ky. 1981), it implies that the increase or decrease serves to compensate the party that benefits from it for the effects of the opponent's misconduct.

Id. at 689. The Court concluded the insurance company was liable for the award of enhanced benefits, "despite a contractual term to the contrary." Id.

         KCESIF argues AIG/AIU is inapplicable here because it is a guaranty fund rather than an insurance carrier; consequently, the assessment of the 30% enhanced benefit unfairly penalizes KCESIF because the employer is insolvent. KCESIF relies on KRS 342.910(2), which provides: "[E]ach guaranty fund shall not be liable for the payment of any penalties or interest assessed for any act or omission ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.