Opinion
No. 111888.
2015-03-6
Frances R. DAVENPORT, Appellee/Cross-appellant, v. MARCON OF KANSAS, INC., and Bankers Standard Insurance Co., Appellants, and Western Agricultural Insurance Co., Appellee/Cross-appellee.
Appeal from Workers Compensation Board.Douglas M. Greenwald and Jodi J. Fox, of McAnany, Van Cleave & Phillips, P.A., of Kansas City, for appellants.Paul D. Post, of Topeka, for appellee/cross-appellant Frances R. Davenport.
Appeal from Workers Compensation Board.
Douglas M. Greenwald and Jodi J. Fox, of McAnany, Van Cleave & Phillips, P.A., of Kansas City, for appellants. Paul D. Post, of Topeka, for appellee/cross-appellant Frances R. Davenport.
Matthew S. Crowley, of Crowley Law Office, LLC, of Topeka, for appellee/cross-appellee Western Agriculture Insurance Co.
Before ARNOLD–BURGER, P.J., PIERRON and BUSER, JJ.
MEMORANDUM OPINION
PER CURIAM.
In 2005, Marcon of Kansas, Inc. (Marcon) employee Frances R. Davenport suffered injury to her lower back while at work. She filed a workers compensation claim regarding this injury in 2007. Shortly after the award was issued, Davenport filed an application for modification to that award and also a second claim, all alleging that her symptoms had increased. In the interim, Marcon's insurance carrier had changed, and the administrative law judge (ALJ) consolidated the two claims for pretrial purposes.
In September 2013, the ALJ heard the two claims separately and later issued a ruling. Because the ALJ reasoned that Davenport's continued symptoms stemmed from the original injury rather than from a new one, the order modified the earlier claim and rejected the second new injury claim. Marcon's former insurance carrier appealed the modification order, and over objection from the second carrier, the Workers Compensation Board (Board) scheduled both claims for review. The Board ultimately found that Davenport suffered a new injury, not increased consequences from her original injury, thereby implicating the second carrier. The second carrier appeals this ruling, and Davenport cross-appeals. Because Davenport did not appeal the ALJ's denial of her claim of a new injury, we find that the Board lacked jurisdiction over the new injury claim and the second carrier. Accordingly, we remand the case to the Board for a review of the ALJ's decision as it relates solely to the modification claim. The Board shall also consider Davenport's counsel's claim for attorney fees at that time.
Factual and Procedural History
This appeal concerns two separate workers compensation claims: one filed in 2007 and assigned docket number 1,034,647, and one filed in 2009 and assigned docket number 1,043,900. For ease of reading, the two claims will be referred to by the year Davenport filed them ( e.g., the 2007 claim and the 2009 claim).
Marcon bakes and distributes a wide variety of pies to grocery and convenience stores in Kansas, Missouri, and Nebraska. In approximately 1995, the company hired Davenport as part of its pie-making operation, where Davenport ran the ovens as a pie baker. As part of her employment, she was required to clean the ovens every Friday.
In 2005, while cleaning the ovens, Davenport twisted to replace an oven side rail and felt “a real sharp pain” in her back. She filed the 2007 claim in order to address this injury. At the hearing on this claim, the parties agreed to a number of stipulations, including the date of injury, the employer/employee relationship between Davenport and Marcon, and the fact that the injury arose in the course of Davenport's employment. The parties also stipulated that Marcon's insurance carrier was Western Agricultural Insurance Co. (Western) at the time of the accident. Ultimately, the ALJ handling the 2007 claim determined that Davenport's injury resulted in a 9 percent permanent partial impairment. Neither party appealed this ruling.
A short time later, Davenport filed applications for postaward medical treatment as well as for review and modification of the award. She alleged that her impairment had increased and worsened over time. At around the same time, Davenport also submitted a new workers compensation claim. In this, the 2009 claim, she alleged that she suffered a second accidental injury in September 2008 while “doing her usual work activities” and that her ongoing work at Marcon “continue[d] to aggravate [her] injuries.” By this time, Marcon's insurance carrier had changed to Bankers Standard Insurance Company (Bankers).
Because the two injuries—that is, the injury underlying the 2007 claim and that underlying the 2009 claim—appeared to be related, the ALJ ordered that Davenport undergo an independent medical evaluation. This order spawned a deluge of objections and motions that resulted in a clarified order and a dismissal of an appeal to the Board; however, none of these issues are germane to the present appeal.
After disposing with the independent medical evaluation issue, the ALJ entered an order consolidating the 2007 claim and the 2009 claim “for pretrial procedures.” Pretrial proceedings took several months and appear from the record to have been rather contentious. Eventually, the ALJ conducted hearings in both claims in September 2013.
The ALJ ultimately issued rulings for both the 2007 and 2009 claims in a single order, although she made separate rulings on each award. Specifically, the ALJ determined that the worsening of Davenport's symptoms in September 2008 did not result from a new injury but rather constituted a “natural and probable consequence of the 2005 accidental injury.” Accordingly, the ALJ denied the 2009 claim and modified the award in the 2007 claim to account for the increase in Davenport's disability.
Davenport did not appeal the ALJ's award for either claim. However, Western appealed the modified award for the 2007 claim to the Board. Shortly thereafter, the Board sent Bankers a scheduling order which included the 2009 claim. Surprised by its inclusion in a case it did not appeal, Bankers filed a motion to quash the Board's scheduling order. Bankers reasoned that because no one appealed the 2009 claim, it did not belong on the scheduling order. In other words, Bankers argued that the Board had no jurisdiction to make any decision regarding the 2009 claim and Bankers' liability therefore. Unlike Bankers, Davenport did not object to the scheduling order as she “was not concerned with which insurance carrier prevailed, as long as she received compensation.”
After filing the motion to quash, Bankers received an e-mail from Sara Johnson, an administrative specialist with the Board informing Bankers that the motion was not necessary:
“While the heading on the Application for Review contains both docket numbers, rest assured the Board will consider only [the 2007 claim] appealed. For tracking purposes in instances where there are two or more claims combined, and two or more docket numbers, the Board routinely lists all the claims and docket numbers in one heading. The motion to quash is unnecessary and the Board will consider only [the 2007 claim] appealed.
“If any party believes [the 2009 claim] appealed to the Board, please let me know.”
In spite of these assurances, 3 days later and after finding that the order entered by the ALJ in December 2013 constituted one award across the two claims (rather than two separate awards), the Board denied the motion and proceeded to review both claims. It stated its rationale as follows:
“In the past, the Board has held that where there is a single award entered in two or more docketed claims, all docketed claims are subject to review by the Board. Carmen v. Best Buy, Nos. 201, 566, 204, 207 & 210,069, 1997 WL 703726 (Kan. WCAB Oct. 27, 1997). Absent an agreement between the parties to the contrary, the Board adheres to such past policy.”
The Board entered an order in May 2014. In disposing of Bankers' jurisdictional objection, the Board determined that Kansas Supreme Court precedent, along with its own precedent, allowed it to consider both claims despite the fact that only Western appealed. The Board concluded that the claims had been consolidated for all purposes, including the award, and that the two cases were “ ‘inextricably intertwined.’ “ Regarding the actual outcome of the awards, the Board essentially reversed the ALJ's ruling and determined that the symptoms underlying the 2009 claim stemmed from a new injury rather than a continuation of the 2005 injury. The new award also adjusted computational errors present in the original award. One Board member dissented from the result, arguing that strict interpretation of the workers compensation statutes required that the 2009 claim be specifically appealed in order for the Board to review it. Because the ALJ never fully consolidated the two claims and the awards constituted “separate and distinct orders,” the dissenting Board member determined that each required separate appeals.
Bankers timely petitioned this court to review the Board's ruling. Davenport timely cross-petitioned. Additional facts will be supplied as needed for analysis.
Analysis
The Board did not have jurisdiction to review the 2009 claim.
Bankers first argues that the Board lacked jurisdiction to review and reverse the ALJ's award for the 2009 claim. Bankers reasons that because the ALJ never fully consolidated the claims, Western's appeal limits the Board to review of the 2007 claim rather than both.
Preliminarily, K.S.A.2013 Supp. 44–556(a) directs that all final orders from the Board are subject to review under the Kansas Judicial Review Act (KJRA), K.S.A. 77–601 et seq. The KJRA defines and limits the scope of review to eight specific grounds for relief, including when “the agency has acted beyond the jurisdiction conferred by any provision of law.” K.S.A.2013 Supp. 77–621(c)(2). Whether jurisdiction exists is a question of law over which this court's scope of review is unlimited. Frazier v. Goudschaal, 296 Kan. 730, 743, 295 P.3d 542 (2013).
K.S.A.2013 Supp. 44–551(1)(1) provides that the Board may review an ALJ's orders and awards “upon written request of any interested party within 10 days.” In the instant case, Western—an interested party to the 2007 claim—provided a written request within 10 days. The parties all agree that this action by Western provided the Board jurisdiction over the 2007 claim. The dispute arises only when considering whether this request also conferred jurisdiction over the 2009 claim-a claim that did not involve Western at all. In rejecting Bankers' argument, Davenport essentially adopts the language from the Board's award and argues that the ALJ consolidated the claims in their entirety. As cross-appellee, Western offers no position in the matter, but it notes only that, like Bankers, it never considered the two matters consolidated when before the ALJ.
This issue of claim consolidation and jurisdiction was directly addressed by our Supreme Court in Solis v. Brookover Ranch Feedyard, Inc., 268 Kan. 750, 999 P.2d 921 (2000). There, a feed mill employee whose hand prosthetic needed repairs pursued two different workers compensation claims against his employer's two different insurance carriers after one carrier attempted to transfer liability to the other. Although the two claims were originally addressed separately, they were eventually consolidated for hearing before the Assistant Director of Workers Compensation, who found that the original insurance carrier needed to handle the repairs and absolved the other carrier of liability. The responsible carrier appealed to the Board. Although the carrier only appealed the first claim, the Board considered both claims and the arguments of all the parties in affirming the award.
On appeal, the original carrier argued that because no one requested review of the claim in which the other carrier was absolved of liability, the Board could not consider the arguments raised by that carrier because it was no longer a party to the case. Our Supreme Court disagreed. 268 Kan. at 753. First, the court reasoned that “[b]ecause the two cases were never severed, the Board had jurisdiction to address any of the issues raised in the consolidated cases” and that the other carrier remained a party to the action. 268 Kan. at 753. Moreover, because the result in one claim naturally implied the result in the other, the court determined that the two claims were “inextricably intertwined,” further justifying the Board's decision to consider both claims and the arguments of all the parties. 268 Kan. at 754. As such, the court upheld the Board's review of both claims. 268 Kan. at 754. In sum, because the claims in Solis were clearly and explicitly consolidated, an appeal allowed consideration of all issues in the consolidated cases even though only one carrier appealed.
Relying heavily on Solis, this court reasoned similarly in Magana v. IBP, Inc., No. 92,323, 2005 WL 824073 (Kan.App.2005) (unpublished opinion). There, the claimant filed three separate workers compensation claims against the same employer. The record revealed that the ALJ consolidated two of the claims but remained silent on the claimant's motion to also consolidate the third. Regardless, the ALJ entered separate findings and awards for all three claims. The employer requested the Board review only the unconsolidated claim; no one sought review of the two consolidated claims. But the Board reviewed all three, reasoning that the ALJ had consolidated them even though it made no formal order and that the issues within the claims were inextricably intertwined. When the claimant appealed, the employer cross-appealed, objecting to the Board's review of the two unappealed claims.
After a brief review of the holding in Solis, this court rejected the employer's argument that the ALJ never intended to consolidate the third claim with the first two. 2005 WL 824073, at *3. The court noted that the ALJ held only one hearing for the three claims and filed “but one document setting forth the ALJ's award.” 2005 WL 824073, at *3. Moreover, the court found the ALJ's decision to separate out the three awards insignificant as the first two claims had already been formally consolidated and the ALJ likely did not intend to deconsolidate them when entering its order. 2005 WL 824073, at *3.
Additionally, this court also determined that, like in Solis, the three claims were inextricably intertwined. 2005 WL 824073, at *4. Although the result in any one claim failed to effect the results in the other, the court observed that “[t]he three claims, when considered together, essentially alleged a series of repetitive use injuries from 1997 until [the claimant's] last day of work.” 2005 WL 824073, at *4. Because of “the similarities in the nature of the injuries alleged, as well as the manner in which the claims were considered and characterized by the ALJ,” the court agreed with the Board that the claims were inextricably intertwined. 2005 WL 824073, at *4. In sum, this court found that even though there was no consolidation order including all three cases, they were de facto consolidated or consolidated by implication so that an appeal of one was an appeal of all.
Although the ultimate issue differs somewhat, the facts of Poff v. IBP, Inc., 33 Kan.App.2d 700, 106 P.3d 1152 (2005), also provide some limited guidance. There, the claimant filed four separate workers compensation claims alleging four separate injuries from his activities at a single workplace. Despite handling all four cases at the same time, the ALJ consistently treated each claim as separate and independent from the others. In fact, at the regular hearing, the ALJ noted an intent “ ‘to go down docket by docket ... to address each issue and each docket as we go through’ “ and that “ ‘[t]hese are all apparently separate or alleged separate injuries.’ “ 33 Kan.App.2d at 703. The ALJ also assigned four separate awards, one for each claim. When the Board reviewed and affirmed those awards, however, the claimant appealed, arguing that the ALJ needed to consider “the cumulative effect of all injuries and vocation factors” and should have rendered only one award.
This court rejected the claimant's argument. 33 Kan.App.2d at 704. Noting first that the claimant never requested that the ALJ either consolidate the cases or “consider permanent total disability based on all claims cumulatively,” this court then turned to the language of what is now K.S.A.2013 Supp. 44–523(a) in determining whether the ALJ needed to enter a single award. 33 Kan.App.2d at 703–04. Both at the time and today, K.S.A.2013 Supp. 44–523(a) provided that an ALJ “shall not be bound by technical rules of procedure” but instead “shall give the parties reasonable opportunity to be heard and to present evidence, ensure the employee and the employer an expeditious hearing and act reasonably without partiality.” See Poff, 33 Kan.App.2d at 704 (“[T]he ALJ ... is required to ensure that all parties are essentially provided due process.”). This court determined that the ALJ complied with this requirement. 33 Kan.App.2d at 704. Further, this court likened the issue of consolidation in workers compensation cases to that in general civil practice, where consolidation is at the discretion of the district court judge. 33 Kan.App.2d at 704. With this standard in mind, the court found no abuse of discretion in the ALJ's decision to issue separate rather than consolidated awards. 33 Kan.App.2d at 704. In sum, the mere fact that the ALJ considered all the evidence at that the same time—in an apparent effort to expedite the hearing process for all claims—did not prevent the ALJ from issuing separate and distinct awards.
Here, Davenport filed two separate claims, a modification claim of the 2007 award and a new claim based on the 2008 injury, approximately 4 months apart. It does not appear that Davenport ever requested that the cases be consolidated. Both Western and Bankers believed that the cases were not consolidated and prepared and presented their respective cases accordingly. The ALJ clearly consolidated the two cases specifically for pretrial purposes only.
But Davenport now urges this court to adopt the Board's reasoning and consider the 2007 and 2009 claims consolidated, however informally, for all purposes. In other words, Davenport urges the court to find a de facto consolidation. In fact, the Board found that “[d]espite no formal consolidation order, the cases were de facto consolidated”—and portions of the record support this position. The ALJ heard the two claims on the same day and adopted the direct examination from the regular hearing on the 2009 claim as part of the record for the 2007 claim. The two cases concerned much of the same evidence, doctors' examinations, and deposition testimony. And although the ALJ's order separated out the awards, she relied on the same findings of facts and legal analysis for both cases.
But the ALJ's actions mirror those of the ALJ in Poff as well. On the date of the hearings, the ALJ called the cases separately and asked the parties to enter separate appearances. Two separate transcripts were prepared. Because of the procedural posture of the two claims, the ALJ entered separate stipulations into the record at the regular hearing for the 2009 claim. Moreover, and as explained above, the ALJ separated out the awards for the two claims in the order. The ALJ's actions, as well as her failure to enter an order consolidating the cases for all purposes, support a finding that the ALJ was not consolidating the cases for all purposes.
Bankers maintains that without formal consolidation Western was an interested party only for the 2007 claim and that reviewing both runs afoul of the plain language of the Board's jurisdictional statute. We find this argument persuasive. Because administrative agencies and boards have no common-law powers, their authority is conferred either by authorizing statutes “or by clear implication from the express powers” in those statutes. Clawson v. Kansas Dept. of Agriculture, 49 Kan.App.2d 789, Syl. ¶ 10, 315 P.3d 896 (2013). Accordingly, if the agency lacks “specific statutory authority to retain jurisdiction,” it cannot then exercise that same jurisdiction. 49 Kan.App.2d 789, Syl. ¶ 10. K.S.A.2013 Supp. 44–551(1)(1) clearly confers jurisdiction on the Board only when an interested party files a written request for review. The most fundamental rule of statutory construction is that the intent of the legislature governs if that intent can be ascertained. Bergstrom v. Spears Manufacturing Co., 289 Kan. 605, 607, 214 P .3d 676 (2009). In fact:
“When a workers compensation statute is plain and unambiguous, this court must give effect to its express language rather than determine what the law should or should not be. The court will not speculate on legislative intent and will not read the statute to add something not readily found in it.” 289 Kan. at 607–08.
Moreover, courts owe “ ‘[n]o significant deference’ “ to the agency's or Board's interpretation or construction of a statute. Ft. Hays St. Univ. v. University Ch., Am. Ass'n of Univ. Profs., 290 Kan. 446, 457, 228 P.3d 403 (2010).
Here, the claims were consolidated explicitly only for pretrial purposes. There was never an order of consolidation for all purposes, and we are not prepared to imply one into existence. As noted by the dissenting Board member, there is no statutory basis for an “implied consolidation” doctrine or, as the majority stated, a “ de facto ” consolidation. Even though a panel of this court essentially recognized such doctrine in Magana, the Magana case was decided before our Supreme Court's clear direction in Bergstrom to “refrain from reading language into the statutes that the legislature did not include.” 289 Kan. at 609; see also Supreme Court Rule 7.04(g)(2)(A) (2014 Kan. Ct. R. Annot. 62) (unpublished opinions are not binding precedent). K.S.A.2013 Supp. 44–551(1)(1) indicates in part that final awards are “subject to review by the [board] upon written request of an interested party within 10 days.” An appeal of the 2009 award was not filed by any party within 10 days. Therefore, under the plain and unambiguous language of the statute, the Board did not have jurisdiction over the 2009 case.
We recognize that the individual facts of the case demonstrate the close relationship between the two claims. Both Bankers and Western acknowledge that Davenport's symptoms and disability increased on or around the September 2008 date at issue. Neither denies that this change is compensable; instead, each denies insurance liability for that increase by arguing that the other is responsible. As such, this case closely mirrors the mutually exclusive outcomes discussed in Solis: either Western remains liable because the 2007 claim requires modification (absolving Bankers of any liability for a new accident) or Bankers is liable for a new injury in the 2009 claim (absolving Western of any additional liability for the original accident). Because the result in one claim necessarily implicates the other, each insurer's interest is affected by outcome in the opposing claim. Apparently, because of this relationship, the ALJ specifically consolidated the claims in Solis. But the mere fact that the cases are intertwined does not provide an exception to the clear statutory language already cited. Absent a general order of consolidation by the ALJ, as was the case in Solis, the claims remain separate and distinct for appellate purposes.
Accordingly, the decision of the Board in this case is reversed and the matter is remanded for consideration of the 2007 claim only. Although the Board clearly has jurisdiction over the parties that appealed the ALJ award in the 2007 case—namely Marcon of Kansas, Inc. and Western Agricultural Insurance Company—it has no jurisdiction to enter any orders related to Bankers Standard Insurance Company or Davenport's 2009 claim or to consider any evidence related solely to the 2009 claim.
In light of this ruling, we need not address the issue of the sufficiency of the evidence raised by Davenport in her cross-appeal. The Board must consider the issue of attorney fees on remand.
As a final matter, Davenport raises the issue of attorney fees. Davenport essentially argues that her counsel is entitled to attorney fees in whichever of the two claims prevails on appeal.
K.S.A.2013 Supp. 44–536(a) allows for attorney fees in “any and all proceedings in connection with any initial or original claim for compensation.” However, these authorized fees are not limitless. Instead, and regardless of how compensation is secured, the attorney fees shall not “exceed a reasonable amount for such services or 25% of the amount of compensation recovered and paid, whichever is less, in addition to actual expenses incurred and subject to the other provisions of the attorney fees statute. K.S.A.2013 Supp. 44–536(a). Moreover, such attorney fees must be “fixed pursuant to a written contract” that is subject to the approval by the director of workers compensation, who “shall review each such contract and the fees claimed thereunder” and “shall approve such contract and fees only if both are in accordance with” the statute. K.S.A.2013 Supp. 44–536(b). The statute also includes several considerations relevant to whether attorney fees are reasonable. See K.S.A.2013 Supp. 44–536(b)(l)–(8).
Davenport's counsel submitted two separate written attorney fee contracts, one for the 2007 claim and one for the 2009 claim. However, because the ALJ denied the 2009 claim in its entirety, the final award order never addressed the issue of attorney fees as to that claim. The ALJ also denied the motion for attorney fees related to the 2007 claim on the grounds that counsel had not separately set forth the hours and expenses incurred solely on the 2007 claim. It appears that Davenport subsequently submitted an affidavit and detailed billing statements related solely to the 2007 claim. However, Western filed an objection with the ALJ and requested a hearing. A hearing was held, and the ALJ denied Davenport's request for attorney fees associated with the 2007 claim, finding in part that the request was premature given the pending appeal before the Board.
When responding to Western's appeal to the Board, Davenport never reraised the issue of attorney fees for the 2009 claim, presumably because Davenport never in fact appealed that claim. And although the Board issued an award in the 2009 claim, it never examined or considered attorney fees for the 2009 claim; instead, it indicated that it was affirming the ALJ's order related to “the post-award attorney fees,” which at that point was zero.
Because we are remanding this case to the Board for reconsideration of the 2007 claim, the issue of attorney fees both before the Board and on appeal must also be remanded to the Board for its full consideration.
Reversed and remanded with directions.