Kentucky Employers Mut. Ins. v. Coleman, 2006-SC-000608-MR.

• Citation: 236 S.W.3d 9
• Decision Date: 23 August 2007
• Docket Number: No. 2006-SC-000608-MR.,2006-SC-000608-MR.
• Parties: KENTUCKY EMPLOYERS MUTUAL INSURANCE, Appellant v. Hon. Eddy COLEMAN, Judge, Pike Circuit Court and Paul Tackett (Real Party in Interest), Appellees.
• Court: United States State Supreme Court — District of Kentucky

236 S.W.3d 9

KENTUCKY EMPLOYERS MUTUAL INSURANCE, Appellant v. Hon. Eddy COLEMAN, Judge, Pike Circuit Court and Paul Tackett (Real Party in Interest), Appellees.

No. 2006-SC-000608-MR.

Supreme Court of Kentucky.

August 23, 2007.

Mindy Barfield, Whitney Howard Mendiondo, Dinsmore & Shohl, Lexington, KY, Counsel for Appellant.

Eddy Coleman, Judge, Pike Circuit Court, Pikeville, KY, pro se.

Michael Fleet Johnson, Clark & Johnson, Jim G. Vanover, Vanover, Hall & Bartley, Pikeville, KY, Counsel for Paul Tackett, Real Party in Interest.

Opinion of the Court by Justice NOBLE.

This appeal is before the Court from the denial of a petition for a writ of prohibition or mandamus by the Court of Appeals. Kentucky Employers Mutual Insurance (KEMI) sought the writ to bar further circuit court proceedings on a tort action related to a workers' compensation claim, arguing that the exclusive remedy provisions of the Workers' Compensation Act barred that court from exercising jurisdiction. Because the Court of Appeals erred as a matter of law in refusing to grant the writ, its order is reversed.

I. Background

Paul Tackett was injured at work when an eighteen-wheel coal truck he was repairing fell on him. He suffered serious injuries to his face, skull, and right upper body, which required multiple surgeries and continued to require extensive medical treatment. Mr. Tackett filed a workers' compensation claim, which was settled in November 2003. The settlement was approved by an Administrative Law Judge (ALJ) and required that KEMI pay all reasonable and necessary medical expenses incurred as a result of Mr. Tackett's work-related injury.

About ten months after the settlement, Mr. Tackett began having trouble getting coverage for some of his medical treatment. KEMI delayed payments for some of the medications and supplies used to treat the injuries to Mr. Tackett's face, specifically his eyes and ears; at other times, KEMI refused to pay at all, leading Mr. Tackett to pay for the drugs and supplies with his own money. KEMI also required the substitution of generic versions of some drugs, though Mr. Tackett claimed they were not as effective. KEMI also ceased paying for treatment related to the injuries to the right side of Mr. Tackett's upper body. Mr. Tackett claimed that the delays, refusals to pay, and other difficulties with KEMI forced him to use his own limited resources and exacerbated his medical problems.

In response to KEMI's behavior, Mr. Tackett sought to reopen his workers' compensation claim and to compel KEMI to pay for his medical care. He alleged that KEMI's refusal to pay some medical expenses and delay in paying for others (including prescription medications, travel expenses, and medical equipment), and refusal to approve name brand drugs were in violation of KEMI's obligations under the Workers' Compensation Act. He also alleged that KEMI's actions constituted unfair claims practices. KEMI responded in part by arguing that the injuries to Mr. Tackett's right upper body were caused by a car accident after his work-related accident, thus it was not responsible for medical care for those injuries.

The case was assigned to an ALJ who held entirely in Mr. Tackett's favor. The ALJ found that the injuries to Mr. Tackett's upper body were clearly caused by the work-related accident, and required that KEMI pay for medical expenses related to the injuries. The ALJ also found that KEMI was responsible for timely payment for the prescriptions and equipment that Mr. Tackett needed. The ALJ referred the unfair claims practice claim to the Executive Director of the Office of Workers' Claims for investigation and any further action.¹ Finally, the ALJ held that KEMI had "defended unreasonably." As a result, the ALJ imposed costs against KEMI, including but not limited to deposition costs, court reporter fees, and associated expenses incurred by Mr. Tackett, under KRS 342.310. The ALJ also directed Mr. Tackett's attorney to file a motion for "the attorneys fee which he considers reasonable," and noted that a reasonable fee "shall . . . be assessed against [KEMI] pursuant to 342.310." According to Mr. Tackett's brief, the ALJ's decision is currently being appealed to the Workers' Compensation Board.

Following the ALJ's ruling, Mr. Tackett filed suit against KEMI in Pike Circuit Court.² His complaint alleged that KEMI had engaged in bad faith in refusing to pay and delaying payments for treatment of the injuries to his eyes, ears, and upper body. The complaint also alleged that KEMI's bad faith actions had worsened his injuries and required additional medical treatment. Mr. Tackett subsequently amended his complaint to include what is mistakenly described as a claim of abuse of process, alleging that KEMI's actions forced him to reopen the workers' compensation claim. However, the amended complaint also includes an allegation that KEMI's actions caused Mr. Tackett severe emotional distress.

KEMI moved to dismiss the lawsuit for lack of jurisdiction. KEMI argued that the exclusive remedy provisions of the Workers' Compensation Act extend to the insurance carrier, meaning that any claims related to the workers' compensation insurance had to be handled within the administrative framework provided by the Act. The trial court summarily denied the motion by written order with no explanation of its legal reasoning.

KEMI filed a petition for a writ of prohibition or mandamus with the Court of Appeals, claiming that the trial court, by allowing the lawsuit to continue, was acting outside its jurisdiction. The Court of Appeals found that KEMI had not provided a sufficient record to allow it to determine the legal basis of the trial court's decision. Based on this finding, the court declined to exercise its writ jurisdiction and denied the petition.

The writ proceedings having been an original action at the Court of Appeals, the current appeal to this Court followed as a matter of right. Ky. Const. § 115.

II. Analysis

KEMI asks this Court to reverse the denial of the writ by the Court of Appeals. Before proceeding, it is necessary to note once again that the writs of prohibition and mandamus are extraordinary in nature, and the courts of this Commonwealth "have always been cautious and conservative both in entertaining petitions for and in granting such relief." Bender v. Eaton, 343 S.W.2d 799, 800 (Ky. 1961).

This careful approach is necessary to prevent short-circuiting normal appeal procedure and to limit so far as possible interference with the proper and efficient operation of our circuit and other courts. If this avenue of relief were open to all who considered themselves aggrieved by an interlocutory court order, we would face an impossible burden of nonappellate matters.

Id. This policy is embodied in a simple statement from a recent case: "Extraordinary writs are disfavored . . . ." Buckley v. Wilson, 177 S.W.3d 778, 780 (Ky.2005).

Despite this, petitions for the extraordinary writs are still common in the appellate courts. In order to facilitate review of petitions for the extraordinary writs without examining the merits of a writ claim in depth, petitioners are required to satisfy one of two tests to determine whether the remedy of a writ is even available. Those tests, which essentially break writs down into two distinct classes, are as follows:

A writ of prohibition may be granted upon a showing that (1) the lower court is proceeding or is about to proceed outside of its jurisdiction and there is no remedy through an application to an intermediate court; or (2) that the lower court is acting or is about to act erroneously, although within its jurisdiction, and there exists no adequate remedy by appeal or otherwise and great injustice and irreparable injury will result if the petition is not granted. Hoskins v. Maricle, 150 S.W.3d 1, 10 (Ky. 2004). KEMI claims that it is entitled to a writ under the lack of jurisdiction class.

KEMI argues that the circuit court has no jurisdiction to hear Mr. Tackett's tort claims because they are related to his workers' compensation claim. The Court of Appeals declined to determine whether the no jurisdiction prerequisite was met because the record did not include the circuit court's legal reasoning for denying the motion to dismiss and KEMI did not take steps to make sure that such reasoning was included in the record. This approach might be appropriate if the Court of Appeals had been charged with addressing factual findings of the trial court or a holding that was subject only to abuse-of-discretion review, but the question presented — whether the circuit court has jurisdiction — is purely a question of law, which is reviewed de novo. Rehm v. Clayton, 132 S.W.3d 864, 866 (Ky.2004); see also Kentucky Labor Cabinet v. Graham, 43 S.W.3d 247, 251 (Ky.2001) ("As the issues on this appeal are to be decided as a matter of law, our review of the Court of Appeals decision is not confined to an abuse of discretion inquiry."). While the decision whether to grant the writ lies within the discretion of the reviewing court, even if the no-jurisdiction prerequisite has been shown, that discretion is not an absolute bar to further review. It is appropriate for this Court to at least examine whether the prerequisite is met, especially when it consists of an allegation that the lower court is proceeding without jurisdiction.

The question of jurisdiction in this matter depends largely on the Workers' Compensation Act. The Act provides the exclusive remedy for work-related injuries, assuming certain requirements, such as securing workers' compensation insurance by the employer, are met. Specifically, the first sentence of KRS 342.690(1) provides,

If an employer secures payment of compensation as required by this chapter, the liability of such an employer under this chapter shall be exclusive and in place of all other such liability of such employer to the employee, his legal...