In September, the Kentucky Commonwealth Court of Appeals rendered Jiminez v.gvb swgvc Lakshimi Narayan Hospitality Group, No. 2021-CA-0515-WC; WC-14-73573. The analysis brings interesting reminders of the doctrine of res judicata and the "reopening of a claim."
The path to the appellate court began with an administrative law judge (ALJ) granting a claim and awarding benefits. The Kentucky Workers' Compensation Board (the administrative body with primary appellate authority) reversed the ALJ and concluded that the claim was barred by res judicata. A unanimous panel of the Appeals court reversed, reinstating the ALJ's conclusions.
The accident occurred in 2014 in a slip and fall at work. The injury was a head injury with loss of consciousness. This proceeded to litigation of claims for benefits, and a process called a Benefit Review Conference (BRC) in June 2016 resulted in various stipulations of the parties: that the worker was injured, that various medical bills had been paid, but that no temporary indemnity benefits had been paid. An ALJ then rendered an order awarding temporary total disability benefits and concluded "there is no medical evidence of permanent injuries so there is no basis for an award of permanent income benefits." It is not clear whether such permanent benefits were claimed.
Years later, in 2019, the worker filed a "motion to reopen," the case alleging that there was a "change of disability as shown by objective medical evidence." The allegations were based upon medical treatment that began in 2017, and addressed a cervical injury as well as "cervical spondylosis"; there was also mention of emotional injury. The ALJ allowed the case to be reopened and noted that "the original opinion should have read" differently. Following the trial, the judge "awarded permanent partial disability (PPD) benefits," and various medical benefits.
The ALJ concluded, following a December 2020 trial, that KRS[4] 342.125 precluded the application of res judicata finding it "inapplicable in this instance" because the "medical evidence . . . indicates that the full nature of the Plaintiff’s injury was not known at the time" of the original proceeding and ALJ decision. The ALJ concluded that "the relationship between the work incident and the Plaintiff’s impairment was not clear" when the matter was initially litigated.
In early 2021, the Workers' Compensation Board reversed that conclusion. The Board concluded that res judicata did apply. and that KRS 342.125 only affords authority in specific instances including
"(a) Fraud; (b) Newly-discovered evidence which could not have been discovered with the exercise of due diligence; (c) Mistake; and (d) Change of disability as shown by objective medical evidence of worsening or improvement of impairment due to a condition caused by the injury since the date of the award or order."
The Board concluded that the circumstances in this case did not meet those requisites and thus that the statute did not allow the reopening of the case. The Board found relevant both the ALJ findings in 2017 and that the order then had not been appealed or otherwise revised in a timely manner. The Board's decision seems to follow the plain language of the statute.
The Board concluded that the permanence issue was precluded from re-litigation because the allegations were not clearly within the exception to res judicata found in KRS 342.125, citing court opinions dating to the 1950s.
The appellate court read the evidence to satisfy KRS 342.125(1)(d) and reversed the Board decision, thus agreeing with the trial judge. It concluded that the Board misconstrued the statute, and was in "flagrant error." The Court concluded that the "original award was only for a period of TTD benefits and was not appealed." It did not explain but seemed to conclude, that a finding of MMI and no impairment essentially meant no impairment at that time. It noted that workers' compensation proceedings are distinct from court proceedings, they are "administrative," therefore while
"the principles of error preservation, res judicata, and the law of the case apply to workers’ compensation proceedings, they apply differently than in the context of a judicial action."
Therefore, it explained, that precedent regarding the application of res judicata in "judicial proceedings is not necessarily binding" in workers' compensation. Furthermore, the Court explained, "all of the bases upon which the Board relied are rooted exclusively in judicial proceedings." Notably, the processes of judicial proceedings are often rooted in things like the Constitution, due process, etc. Relying on an academic workers' compensation treatise rather than precedent in the state, the Court concluded that "physical condition or degree of disability" might be different "at two different times." Thus, that "change in condition" could not ever exist if this were not true.
There is no explanation by the Court regarding the potential inverse: that res judicata could potentially not ever exist in a particular case. The human body is complex. Jane Teller is quoted that "From the moment we are born, we begin to die.” We naturally deteriorate as we age. It may be that change in condition is not only predictable in most or all cases, but perhaps inevitable. If that is accepted, then the outcome(s) may well be intriguing under the Court's analysis. Possibly, there is little to no chance of res judicata in Kentucky.
In effect, the Court concluded that Kentucky workers' compensation is bound by res judicata, subject to the exceptions in KRS 342.125. However, read in context, it is possible that with the inevitability of human aging those exceptions essentially become the rule, that the application of res judicata becomes the exception and is afforded legal significance only in the rare case that fails to demonstrate deterioration. Or, in the rare case that fails to demonstrate deterioration - yet.
Perhaps, there is no finality to a judicial determination. Had the injured worker not prevailed in that December 2020 trial, would that be the end of the analysis? Or, as the physical condition deteriorated further with advancing age, might the scenario repeat yet again? And again? Whether there is or is not finality is an interesting question. There has been a desire for an end to litigation, and thus the doctrine of res judicata. The effect is that parties generally get one shot at litigating an issue.
However, in the context of a social benefit system such as workers' compensation, the importance is perhaps muted. The cost of the benefit is widely dispersed through the mandated socialization of risk. And, the goal of these systems is ultimately the distribution of risk or cost. On the other hand, it seems that any taking of property should include at least minimal protections afforded by the due process clause. Thus, perhaps a legislature can obviate res judicata. In such instances, should the statutes they draft be given their plain meaning?
Is the real issue what was pled in Jiminez? Perhaps there was no issue of MMI or permanent benefits on the table when that first hearing occurred. That would be similar to a 2019 decision of the Florida Appellate Court. Napier v. City of Riviera Beach, 278 So. 3d 881, 882 (Fla. 1st DCA 2019). Or, perhaps the case is limited to its facts. There, the court concluded that due process protected a party from res judicata as the judge adjudicated an issue that had not been noticed for trial, essentially going beyond the record with a finding regarding an issue unpled. While there are potential similarities, that does not appear to be the case in Jiminez. Perhaps, though, such a risk explains the outcome there.
Certainly, this decision is interesting reading. The crux of it lies in statutory interpretation, Note that two appellate panels read this statute and each was unanimous in its own interpretation, though they did not agree. The process of litigation can be perilous and unpredictable.
