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Thacker v. Old Republic Insurance Co.

United States District Court, E.D. Kentucky, Southern Division, Pikeville

September 13, 2019

DENITA THACKER, on behalf of The Estate of Geraldine Clevenger, Widow of Donald Lee Clevenger, Plaintiff,
v.
OLD REPUBLIC INSURANCE CO., et al., Defendants.

          ORDER AND OPINION

          KAREN K. CALDWELL UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on cross-motions for summary judgment. For the reasons stated below, Plaintiff's Motion for Summary Judgment (DE 14) is GRANTED, and the Defendants' Motion for Summary Judgment (DE 10) is DENIED.

         I. BACKGROUND

         This case stems from a claim under the Black Lung Benefits Act (“BLBA”), 30 U.S.C. §§ 901-945. Plaintiff, Denita Thacker on behalf of the Estate of a deceased black lung beneficiary, filed this suit under 33 U.S.C. § 921(d) claiming that American Business & Mercantile Insurance and its parent company, Old Republic, (hereinafter collectively referred to as “Old Republic”) owe her additional compensation under 33 U.S.C. § 914(f)[1] and 20 C.F.R. § 725.607. (DE 1 at 1.)

         Donald Clevenger worked for E F & B Coal in Eastern Kentucky until he retired in 1985. (DE 10-2 at 1.) Mr. Clevenger passed away in February 2010, and thereafter, his spouse, filed for survivor benefits under the BLBA. (DE 10-2 at 2.) On February 2, 2011, the U.S.

         Department of Labor's Director of the Office of Workers' Compensation Programs (“District Director”) issued a proposed decision and order finding that Mrs. Clevenger was entitled to black lung benefits going back to her husband's death in February 2010. (DE 1 at 3.) Old Republic challenged the award and sought a formal hearing before an Administrative Law Judge (“ALJ”). While Old Republic was challenging the award, the U.S. Department of Labor's Black Lung Disability Trust Fund (“Trust Fund”) stepped in and made interim payments to Mrs. Clevenger. On July 3, 2014, the ALJ awarded Mrs. Clevenger benefits going back to February 2010. (DE 1 at 4.) Thereafter, Old Republic appealed the ALJ's order to the U.S. Department of Labor's Benefits Review Board. Then, Mrs. Clevenger died on August 9, 2015, and her daughter, Denita Thacker, became heiress and executrix of her estate. (DE 10-2 at 2.) On August 31, 2015, the Benefits Review Board vacated the ALJ's July 3, 2014 order and remanded with instructions for the ALJ. (DE 1 at 4.) On June 13, 2016 the ALJ issued an order (“June 13, 2016 order”) again awarding benefits to Mrs. Clevenger with the same onset date of February 2010. (DE 14 at 5.) The District Director received the ALJ's decision on August 1, 2016 and issued a computation of benefits on August 17, 2016 (“August 17, 2016 computation of benefits”) requiring that Old Republic pay Mrs. Clevenger's benefits. (DE 14-1, 14-2.) Old Republic again appealed the ALJ's decision to the Benefits Review Board. (DE 14 at 6.) On July 16, 2017, the Benefits Review Board affirmed the ALJ's award of benefits, and Old Republic did not further challenge the award. On January 30, 2018, the District Director issued a final calculation of benefits (“January 30, 2018 computation of benefits”) stating that Old Republic owed Mrs. Clevenger's Estate $638.10 and the Trust Fund $40, 813.40, which reflected the amount of payments the Trust Fund made to Mrs. Clevenger. (DE 1 at 5.) On February 2, 2018, Old Republic paid the amounts stated in the January 30, 2018 computation of benefits.

         On August 15, 2018, Plaintiff brought suit under 33 U.S.C. § 921(d) against E F & B Coal's insurance provider, Old Republic. Plaintiff asserts that Old Republic owes additional compensation under 33 U.S.C. § 914(f) and 20 C.F.R. § 725.607, which provide that twenty percent additional compensation is owed when a compensation award is not paid within ten days after it becomes “due, ” unless the order making such award is being reviewed under 33 U.S.C. § 921 and an order staying payments has been issued by the Benefits Review Board or Court. 33 U.S.C. § 914(f); 20 C.F.R. § 725.607. Plaintiff contends that Old Republic did not timely pay the June 13, 2016 order awarding benefits once it became “due” and did not seek an order staying those payments, thus triggering the additional compensation addressed by 33 U.S.C. § 914(f) and 20 C.F.R. § 725.607.

         Old Republic filed a motion for judgment on the pleadings, or in the alternative, a motion for summary judgment asserting that Plaintiff is not entitled to additional compensation under 33 U.S.C. § 914(f). (DE 10.) Plaintiff asserts that a motion for judgment on the pleadings is inappropriate but agrees that the case is appropriate for summary judgment. Plaintiff has thus filed a cross-motion for summary judgment. (DE 14.) The issues have been fully briefed, and they are ripe for summary judgment.

         Old Republic raises several arguments against awarding additional compensation under 33 U.S.C. § 914(f) to Plaintiff: (1) this Court does not have jurisdiction under 33 U.S.C. § 921(d) because it complied with the final award issued on January 30, 2018; (2) the plain language of the Longshore and Harbor Workers' Compensation Act (“LHWCA”), the BLBA, and the Department of Labor's (“DOL”) black lung regulations preclude Plaintiff's argument that the “penalty” in 33 U.S.C. § 914(f) is applicable in this case; (3) Plaintiff's theory of recovery invites an unworkable administrative scheme and the payment procedures of the BLBA and the LHWCA are distinct; and (4) since the District Director did not indicate that any penalty was owed and the law required the District Director to do so, Plaintiff's request for additional compensation must fail. (DE 10-1 at 18 n.6; DE 19 at 8.)

         Plaintiff also raises arguments in support of her position: (1) under 20 C.F.R. § 725.502, benefits became due on September 16, 2016, and since Old Republic did not pay until February 2, 2018, it owes additional compensation under 33 U.S.C. § 914(f) and 20 C.F.R. § 725.607, which operated automatically to add twenty percent additional compensation to the June 13, 2016 order awarding benefits; and (2) Old Republic owes interest, pursuant to 20 C.F.R. § 725.608(a)(3), on the unpaid additional compensation owed to Plaintiff. (DE 14.) Plaintiff also responds to Old Republic's arguments, first asserting that Federal Rule of Civil Procedure 12(d) requires that Old Republic's motion for judgment on the pleadings be treated as a motion for summary judgment because it introduces facts and exhibits beyond the complaint. (DE 14 at 17.) Then, Plaintiff asserts that the Court does have jurisdiction under 33 U.S.C. § 921(d) because that provision is incorporated into the BLBA under 30 U.S.C. § 932(a) and she is seeking to enforce a compensation order-which includes additional compensation based on Old Republic's untimely payment and the automatic operation of 33 U.S.C. § 914(f) and 20 C.F.R. § 725.607-that has become final. Following, Plaintiff contends that her theory of recovery is supported by the BLBA, DOL's black lung regulations, and the relevant case law. Finally, Plaintiff provides several reasons why the District Director did not need to include the twenty percent additional compensation in the January 30, 2018 computation of benefits. (DE 22 at 6-9.)

         As further explained below, after careful consideration of the parties' arguments, relevant law, and applicable DOL black lung regulations, the Court finds that Plaintiff is entitled to additional compensation under 33 U.S.C. § 914(f) and 20 C.F.R. § 725.607. Although Old Republic raises several concerns about the operation of LHWCA provisions in the black lung benefits context, its concerns would be better addressed by the legislature, not the judiciary.

         II. ANALYSIS

         A motion for judgment on the pleadings is addressed under the same standard applicable to a motion to dismiss. Under that standard, unless the complaint alleges “enough facts to state a claim to relief that is plausible on its face” it must be dismissed. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). However, where “matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56.” Fed.R.Civ.P. 12(d).

         Here, both parties refer to facts and exhibits in their cross-motions that are outside the complaint. Accordingly, the cross-motions are treated as motions for summary judgment under Rule 56. See id.

         Summary judgment is appropriate where there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). “The evidence, all facts, and any inferences that may permissibly be drawn from the facts must be viewed in the light most favorable to the nonmoving party.” Combs v. Meijer, Inc., No. 5:12-CV-209-KSF, 2012 WL 3962383, at *2 (E.D. Ky. Sept. 10, 2012) (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986)).

         The parties agree that there is no genuine dispute as to any material fact, and the issues addressed in the cross-motions are ripe for summary judgment. (DE 10-1 at 5-6; DE 14 at 7.)

         A. Incorporation of LHWCA provisions into the BLBA under 30 U.S.C. § 932(a).

         The BLBA was established for the following purposes: (1) to provide benefits to coal miners who have been disabled due to pneumoconiosis; (2) to provide benefits to the miners' surviving dependents if their death was caused by pneumoconiosis; and (3) to ensure that in the future adequate benefits are provided to coal miners and their dependents in the event of their death or total disability due to pneumoconiosis. 30 U.S.C. § 901. 30 U.S.C. § 932(a) of the BLBA states that the provisions of the LHWCA-with the exception of specifically excluded provisions[2] and contrarily enacted black lung provisions and regulations[3]-shall apply to “each operator of a coal mine … with respect to death or total disability due to pneumoconiosis arising out of employment in such mine.” Id. § 932(a). § 932(a) further states:

[i]n administering this part, the Secretary is authorized to prescribe in the Federal Register such additional provisions, not inconsistent with those specifically excluded by this subsection, as he deems necessary to provide for the payment of benefits by such operator to persons entitled thereto as provided in this part and thereafter those provisions shall be applicable to such operator.

Id.

         Thus, significant provisions of the LHWCA are incorporated into the BLBA, including 33 U.S.C. §§ 914 and 921, unless they are contrary to other BLBA provisions or DOL regulations.

         B. Additional Compensation under 33 U.S.C. § 914(f) and 20 C.F.R. § 725.607.

         Plaintiff asserts that Old Republic owes her additional compensation under 33 U.S.C. § 914(f) and 20 C.F.R. § 725.607 relating to the June 13, 2016 order. The parties agree that § 914 is a LHWCA provision incorporated into the BLBA at 30 U.S.C. § 932(a), however, they disagree as to whether § 914 operates to provide additional compensation to this Plaintiff.

         § 914(f) states:

If any compensation, payable under the terms of an award, is not paid within ten days after it becomes due, there shall be added to such unpaid compensation an amount equal to 20 per centum thereof, which shall be paid at the same time as, but in addition to, such compensation, unless review of the compensation order making such award is had as provided in section 921 of this title and an order staying payment has been issued by the Board or court.

33 U.S.C. § 914(f).

         Similarly, the DOL's black lung regulations provide:

(a) If any benefits payable under the terms of an award by a district director (§ 725.419(d)), a decision and order filed and served by an administrative law judge (§ 725.478), or a decision filed by the Board or a U.S. court of appeals, are not paid by an operator or other employer ordered to make such payments within 10 days after such payments become due, there will be added to such unpaid benefits an amount equal to 20 percent thereof, which must be paid to the claimant at the same time as, but in addition to, such benefits, unless review of the order making such award is sought as provided in section 21 of the LHWCA and an order staying payments has been issued.
(b) If, on account of an operator's or other employer's failure to pay benefits as provided in paragraph (a) of this section, benefit payments are made by the fund, the eligible claimant will nevertheless be entitled to receive such additional compensation to which he or she may be eligible under paragraph (a), with respect to all amounts paid by the fund on behalf of such operator or other employer.
(c) The fund may not be held liable for payments of additional compensation under any circumstances.

20 C.F.R. § 725.607.

         To determine whether any additional compensation is owed under 33 U.S.C. § 914(f) and 20 C.F.R. § 725.607, the Court must first determine when Plaintiff's benefits became due.

         The parties agree that 20 C.F.R. § 725.502 defines when black lung benefits are due. They disagree, however, on when Plaintiff's benefits became due. Black lung benefits are due thirty days after two conditions are fulfilled: (1) an effective compensation order has been issued; and (2) the District Director computes the amount of benefits payable and provides notice to the parties. Id. § 725.502. A compensation order is the order rejecting the claim or making the award. 33 U.S.C. § 919(e)[4] (“The order rejecting the claim or making the award (referred to in this chapter as a compensation order) …”). A compensation order issued by an ALJ becomes effective when it is filed in the office of the district director. 20 C.F.R. §§ 725.479 and 725.502(a)(2). “Benefits shall be considered due after the issuance of an effective order requiring the payment of benefits by a district director, administrative law judge or an appeal to the Board or court, ” unless payment of those benefits has been appropriately stayed. Id. § 725.502(a)(1). 20 C.F.R. § 725.502(b)(2) provides that “[w]ithin 30 days after the issuance of an effective order requiring the payment of benefits, the district director shall compute the amount of benefits payable… and shall so notify the parties.” Id. § 725.502(b)(2). § 725.502(b)(2) further provides that “[b]enefits and interest payable … shall be due on the thirtieth day following issuance of the district director's computation.” Id.

         Old Republic asserts that the relevant compensation order is the January 30, 2018 computation of benefits issued by the District Director. (DE 10-1 at 7.) Old Republic states “[a]lthough the [20 C.F.R. § 725.502(a)(1)] recognizes that benefits shall be considered ‘due' after the issuance of an effective order requiring their payment, the actual compensation order that triggers the payment of those benefits is issued by the district director pursuant to 20 C.F.R. § 725.502(b).” (DE 10-1 at 16.) Old Republic argues that the computation by the District Director is the only way for the liable party to know what payment is due. Old Republic further asserts ...


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