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Benson''s v. Fields3/27/1997
OPINION OF THE COURT
REVERSING
This appeal by an employer concerns whether KRS 342.1202(2), the 1994 amendment to KRS 342.1202, was remedial in nature and may be applied retroactively to a claim which arose before its effective date.
Claimant injured her back at work in April, 1993. After reviewing the evidence, the Administrative Law Judge (ALJ) determined that claimant was totally, occupationally disabled as a result of the injury. The ALJ found that, absent claimant's preexisting psychiatric condition, the subject injury would have caused no permanent occupational disability. The entire occupational disability was attributable to the preexisting psychiatric condition. The ALJ further determined that one-third of the disability was active at the time of the back injury and that the remaining two-thirds of the disability was due to the arousal of the preexisting psychiatric condition by the back injury. All liability for the compensable portion of the award was apportioned to the Special Fund pursuant to KRS 342.120 and the decision in Accuride v. Donahoo, Ky., 865 S.W.2d 652 (1993).
In its petition for reconsideration, the Special Fund argued that the dollar amount of the weekly benefit had been miscalculated and requested a correction. The Special Fund also argued that KRS 342.1202, as amended effective April 4, 1994, was remedial legislation which applied to the claim. Therefore, the Special Fund could not be held liable for more than 50% of the award. The weekly amount of the award was corrected, but the petition was otherwise overruled.
The Special Fund appealed, arguing that since the award was based in part on a preexisting condition of the back, it could not be held liable for more than 50% of the award. KRS 342.1202(1). As further evidence that the automatic apportionment provision of KRS 342.1202(1) rather than KRS 342.120 controlled the issue of apportionment, the Special Fund emphasized that the psychiatric condition was superimposed on or occurred in combination with the back injury, citing Heartland Health Care Center v. Maupin, Ky., 887 S.W.2d 553 (1994), and Fischer Packing Co. v. Lanham, Ky., 804 S.W.2d 4 (1991). The Special Fund's second argument was that the 1994 amendment to KRS 342.1202, which became effective while the claim was pending before the ALJ and which provided that the Special Fund's liability shall not exceed 50% of a permanent disability award, was remedial and applied to the subject claim.
The Workers' Compensation Board (Board) rejected both arguments and affirmed the ALJ in that regard. The Board emphasized that claimant's award was not based on a preexisting condition of the back but on a preexisting psychiatric condition. Therefore, the ALJ did not err in failing to apply the automatic apportionment provisions of KRS 342.1202. Furthermore, the Board noted that application of the 1994 amendment, which became effective more than one year after the subject injury, would impair the employer's vested rights since the amendment placed greater liability on the employer than did the law in effect on the date of injury. See Inland Steel Co. v. Mullins, Ky., 367 S.W.2d 250 (1963).
The Special Fund appealed concerning the applicability of the 1994 amendment to the claim. Whereupon, the Court of Appeals reversed the decision of the Board, relying upon KRS 446.080(1); Thornsbury v. Aero Energy, Ky., 908 S.W.2d 109 (1995); Peabody Coal Co. v. Gossett, Ky., 819 S.W.2d 33 (1991); and Kentucky Insurance Guaranty Association v. Conco, Inc., Ky. App., 882 S.W.2d 129 (1994). The Court of Appeals then stated its opinion that the amendment did not "impair the vested rights of the employer, but merely adjus
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