Res Judicata Does Not Bar KY Employee From Reopening Claim

Quoting Larson’s Workers’ Compensation Law, and stressing that the doctrine of res judicata should be applied differently in workers’ compensation cases than in the usual context of a judicial action, a Kentucky appellate court reversed a decision by the state’s Workers’ Compensation Board that had found an employee’s motion to reopen her claim based upon an alleged change in condition was barred by the doctrine [Jimenez v. Lakshmi Narayan Hosp. Grp. Louisville, 2021 Ky. App. LEXIS 98 (Sept. 10, 2021)]. Reopening the claim involved the issue of the employee’s degree of disability at two different times, emphasized the court. Here the employee had presented medical evidence that her condition changed and worsened over time. That an earlier decision had been entered finding that she suffered no permanent injury was no bar to her reopening the claim.

Background

The employee worked as a housekeeper for the employer on 9/22/2015, when she slipped and fell while cleaning a bathroom. She hit her head and lost consciousness. In May 2017, the Chief ALJ (“CALJ”) awarded the employee TTD benefits but, based on a lack of medical evidence, found that the employee had not suffered any permanent injury. Neither party appealed.

In July 2019, the employee sought to reopen her claim on the ground of change of disability. The employee presented a May 2017 medical report indicating that she had been diagnosed with cervicalgia and depressive disorder. She also indicated that she had been referred to a spine clinic in April 2018, and had received a diagnosis of cervical disc disease. She was also evaluated by a physician on February 25, 2019, who diagnosed the employee as having cervical spondylosis. The physician also indicated that the employee’s condition had worsened from what it was in May of 2017.

Was Res Judicata Applicable?

In September 2019, the CALJ granted the employee’s motion to reopen, having determined that she had made a prima facie case for reopening. The case was assigned to an ALJ and litigated. On December 10, 2020, an ALJ entered an order finding that res judicata was inapplicable, that the employee had sustained her burden on reopening, and that she had established a worsening of her condition. The ALJ found the employee to be credible and awarded PPD benefits based upon a 4 percent impairment rating assigned by the employee’s physician.

ALJ Reopens and Makes Award; Board Reverses

Following the employer’s petition for reconsideration, the ALJ issued an Amended Order finding that Ky. Rev. Stat. § 342.125 rendered the doctrine of res judicata inapplicable because the medical evidence that the ALJ found persuasive indicated that the full nature of the employee’s injury was not known at the time of the award of TTD in May of 2017. The ALJ recited other findings that supported the reopening of the claim and the award of PPD. The Board reversed and remanded the claim with direction that “to dismiss this reopening as barred by res judicata. The employee appealed.

Appellate Court: Board Was in Error

The appellate court concluded that the Board erred in its analysis that the CALJ’s decision in the original claim—that the employee’s was only temporary—was subject to the doctrine of res judicata so as to bar reopening under KRS 342.125. The court said the Board had “wholly misconstrued and misapplied the doctrine of res judicata in the context of reopening of a workers’ compensation claim.” Citing Whittaker v. Reeder, 30 S.W.3d 138, 143 (Ky. 2000), the court acknowledged that res judicata could apply in a workers’ compensation case. The doctrine was, however, to be applied differently than in the context of a judicial action.

Quoting Larson, the court said:

It is almost too obvious for comment that res judicata does not apply if the issue is claimant’s physical condition or degree of disability at two different times …. A moment’s reflection would reveal that otherwise there would be no such thing as reopening for change in condition [Larson, current § 127.07].

The court stressed that, by its very nature, a reopening under KRS 342.125(1)(d) involved the issue of the claimant’s degree of disability at two different times—a “[c]hange 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.” (Opinion, p. 13; Emphasis added by the Court.)

The court concluded that it agreed with the employee that the Board erred in concluding that her motion to reopen was barred by the doctrine of res judicata. Accordingly, it reversed the opinion of the Workers’ Compensation Board and directed the Board to reinstate the award of the ALJ.