IMPORTANT NOTICE NOT TO BE PUBLISHED OPINION
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1 IMPORTANT NOTICE NOT TO BE PUBLISHED OPINION THIS OPINION IS DESIGNATED "NOT TO BE PUBLISHED." PURSUANT TO THE RULES OF CIVIL PROCEDURE PROMULGATED BY THE SUPREME COURT, CR 76.28(4)(C), THIS OPINION IS NOT TO BE PUBLISHED AND SHALL NOT BE CITED OR USED AS BINDING PRECEDENT IN ANY OTHER CASE IN ANY COURT OF THIS STATE ; HOWEVER, UNPUBLISHED KENTUCKY APPELLATE DECISIONS, RENDERED AFTER JANUARY 1, 2003, MAY BE CITED FOR CONSIDERATION BY THE COURT IF THERE IS NO PUBLISHED OPINION THAT WOULD ADEQUATELY ADDRESS THE ISSUE BEFORE THE COURT. OPINIONS CITED FOR CONSIDERATION BY THE COURT SHALL BE SET OUT AS AN UNPUBLISHED DECISION IN THE FILED DOCUMENTAND A COPY OF THE ENTIRE DECISION SHALL BE TENDERED ALONG WITH THE DOCUMENT TO THE COURT AND ALL PARTIES TO THE ACTION.
2 RENDERED : May 24, 2007 NOT TO BE PUBLISHED LEADING EDGE INSURANCE GROUP, INC. AND INNOVATIVE RISK MANAGEMENT, INC. APPELLANTS APPEAL FROM COURT OF APPEALS 2006-CA WC WORKERS' COMPENSATION NO TONY HART ; MAXIMUM TRANSPORTATION, INC. ; ADMINISTRATIVE EMPLOYER GROUP, INC. ; AMERICAN STAFFING, INC. ; UNINSURED EMPLOYER'S FUND ; APL LOGISTICS ; IRENE STEEN, ADMINISTRATIVE LAW JUDGE ; AND WORKERS' COMPENSATION BOARD APPELANTS MEMORANDUM OPINION OF THE COURT AFFIRMING The Workers' Compensation Board (Board) and the Court of Appeals have affirmed an Administrative Law Judge's (ALJ's) finding that Leading Edge Insurance Group, Inc. (Leading Edge) was the carrier at risk for the claimant's injury. Leading Edge and its third-party administrator, Innovative Risk Management (Innovative) appeal, asserting that the ALJ erred by requiring Leading Edge to prove the responsible party, by refusing to consider certain evidence in its favor, and by failing to determine that its liability ended before the injury occurred. Because we are not convinced that the decision resulted from an abuse of discretion regarding the taking of proof or from a misapplication of the law, we affirm.
3 On April 3, 2004, the claimant was injured while working at Maximum Transportation, Inc., a trucking company that leased its workforce. This appeal concerns the dates upon which the company's contract with Administrative Employee Group (AEG) ended and its contract with American Staffing, Inc. (American Staffing) began. Leading Edge supplied AEG with a certificate of insurance.' The record indicates that AEG prepared a first report of injury on April 6, 2004, and began to pay the claimant TTD and medical benefits voluntarily. Yet, in a letter dated April 16, 2004, AEG informed Maximum that their service agreement was terminated effective April 1, It continued paying voluntary benefits through May 22, In September, 2004, the claimant filed an application for benefits, naming as defendants : AEG, Leading Edge, Innovative, Maximum, American Staffing, and the Uninsured Employers' Fund (UEF). The UEF was later permitted to join APL Logistics as a potential up-the-ladder employer. On October 8, 2004, the Office of Workers' Claims issued the scheduling order stating that the defendants had 45 days to file a notice of claim denial or acceptance (Form 111). Consistent with the regulations, all parties received 60 days from the date of the order to take proof, followed by 30 days for the defendants and 15 days thereafter for rebuttal by the claimant. The benefit review conference was scheduled for February 8, AEG did not enter an appearance. Counsel for Leading Edge and Innovative denied that AEG was liable, maintaining that its contract with Maximum ended on April 1 AEG was not registered with the Executive Director of the Office of Workers' Claims as required by KRS and the applicable regulations. Although Leading Edge supplied AEG with a certificate of insurance, it was not licensed to write workers' compensation insurance policies in Kentucky.
4 1, 2004, and that American Staffing was the employer thereafter. American Staffing denied that it was the employer on the date of injury, and the UEF agreed. KEMI denied liability because its policy did not become effective until April 16, Michael D. Ferrell, the president of American Staffing, testified that he agreed to a leasing arrangement with Maximum on April 7, 2004, and that the parties executed a contract on April 13, Appended to his testimony was a copy of the agreement. He stated that American Staffing never paid the claimant. His company processed the first payroll for Maximum on April 16, 2004, which was for the pay period of April 5-11, Ferrell explained that pay periods began at 12:01 AM on Monday and ended at midnight on Sunday. Leading Edge objected to the testimony concerning the date that the contract with Maximum began, asserting that the copy in evidence was illegible. Angela Davis was Maximum's safety manager, its bookkeeper, and the owner's daughter. She testified that AEG was the company's leasing service on April 3, 2004, and that AEG paid wages and benefits to the claimant and other employees through April 4, She identified a bank statement indicating that AEG debited Maximum's account for payroll services on April 9, 2004, and stated that the debit covered payroll for the period ending on April 4, She also stated that she received AEG's April 16, 2004, letter but that the terms of their contract prevented AEG from terminating the agreement until April 9, 2004, the last day that it was paid for its services. She introduced a copy of the contract, Clause 5.8 of which provides that upon termination of the agreement, employees are deemed to be the client's employees as of "the last date AEG was paid by the client for its services." In an order dated February 21, 2005, the AL ordered Leading Edge to produce certain documents that American Staffing had been attempting to obtain since October, -3-
5 2004. On April 28, 2005, American Staffing moved to bifurcate the claim and submit it for a decision. On May 5, 2005, Leading Edge fled a notice of substitution of counsel. On May 6, 2005, it objected to the motion to bifurcate and requested additional time to respond. On May 23, 2005, the AU sustained American Staffng's motion to bifurcate and ordered the parties to submit briefs within 30 days, after which the claim would stand submitted. Also on May 23, 2005, Leading Edge requested an additional 90 days to complete the record. On June 9, 2005, Leading Edge responded to the request for the production of documents. On June 23, 2005, it submitted its brief and filed an offer of proof. Noting specifically that AEG's notice of termination to Maximum was not prepared until April 16, 2004, the ALJ found that AEG was the claimant's employer on the date of the injury and that Leading Edge provided coverage on that date. Leading Edge's petition for reconsideration asserted that the ALJ had based the decision on an incomplete record and ignored substantial evidence. The AU noted, however, that Leading Edge had again attached purported evidence to its pleadings, outside proof time. Leading Edge had also failed to respond to the other defendants' requests for the production of documents, causing unnecessary delay. After summarizing Leading Edge's arguments and the tendered proof, the ALJ denied the petition. Leading Edge complains that the ALJ rushed to judgment and failed to consider all relevant evidence. Although the regulations provide a schedule for taking proof and holding the benefit review conference, an ALJ also has broad discretion to control the taking and presentation of proof. See Searcy v. Three Point Coal Co., 280 Ky. 683, 134 S.W.2d 228 (1939). After proof time had closed and after Leading Edge had failed to comply with the ALJ's order to produce documents, American Staffing moved to
6 bifurcate the claim. Leading Edge then substituted counsel and sought additional proof time. Under the circumstances, we see no abuse of discretion in the ALJ's failure to grant the request. Itwas the claimant's burden to prove the identity of his employer on the date of his injury. Because KRS designates the ALJ as the finder of fact, the Board and reviewing courts may not reweigh the evidence regarding a question of fact. Their review is limited to determining whether the decision was erroneous as a matter of law. Because the ALJ determined that the claimant satisfied his burden of proof and that AEG was the employer on the date of injury, the issue on appeal is whether substantial evidence supported the decision, in other words, whether it was reasonable. Special Fund v. Francis, Ky., 708 S.W.2d 641, 643 (1986). Although a party may note evidence that would have supported a different conclusion, such evidence is not an adequate basis for reversal on appeal. McCloud v. Beth-Elkhorn Corp., Ky., 514 S.W.2d 46 (1974). Under Special Fund v. Francis, supra 643, the crux of the inquiry is whether the ALJ's finding was so unreasonable under the evidence that it must be viewed as being erroneous as a matter of law. The claimant was injured on April 3, AEG prepared a first report of injury, listing itself as the claimant's employer, and it paid voluntary income and medical benefits. AEG's contract with Maximum provided that it was the employer until the last date that Maximum paid for its services. That occurred on April 9, AEG's letter terminating the contract effective April 1, 2004, was not dated April 16, Although Leading Edge argues that testimony from Mr. Farrell and Ms. Davis does not constitute substantial evidence regarding the date that American Staffing became the employer of Maximum's workforce, counsel attended their depositions and raised no objection to
7 their competence. Although American Staffing's contact with Maximum was largely illegible and did not contain a start date, Farrell testified that itbegan after April 3, Under the circumstances, it was reasonable for the ALJ to conclude that AEG employed the claimant on April 3, The decision of the Court of Appeals is affirmed. All concur. COUNSEL FOR APPELLANT, LEADING EDGE INSURANCE GROUP, INC. AND INNOVATIVE RISK MANAGEMENT, INC. : DAVID C. TRIMBLE FROST BROWN TODD, LLC 250 WEST MAIN STREET 2700 LEXINGTON FINANCIAL CENTER LEXINGTON, KY TONY HART : NEIL S. WEINER THE LANDWARD HOUSE 1387 SOUTH FOURTH STREET LOUISVILLE, KY MAXIMUM TRANSPORTATION, INC. : ANN MICHELLE TURNER CARLA FOREMAN DALLAS TURNER, KEAL & DALLAS, PLLC 5924 TIMBER RIDGE ROAD SUITE 102 PROSPECT, KY 40059
8 AMERICAN STAFFING, INC. : JUDSON F. DEVLIN FULTON & DEVLIN BROWENTON PLACE SUITE WARRINGTON WAY LOUISVILLE, KY UNINSURED EMPLOYERS' FUND : ROBERT W. HENSLEY ASSISTANT ATTORNEY GENERAL UNINSURED EMPLOYERS' FUND 1024 CAPITAL CENTER DRIVE FRANKFORT, KY APL LOGISTICS, INC. : MICHAEL P. NEAL SEWELL, O'BRIEN & NEAL, PLLC ONE RIVERFRONT PLAZA 401 WEST MAIN STREET SUITE 1800 LOUISVILLE, KY
IMPORTANT NOTICE NOT TO BE PUBLISHED OPINION
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