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State v. Kentucky Insurance Guaranty Association5/30/1997
claim under the Compensation Act is not the prosecution of an action as defined by statute, we nevertheless reach the Conclusion that the limitation statutes apply to it. There can be no question that before the enactment of the Compensation Act a cause of action founded upon personal injury was barred in six years. What the Legislature did was to take away this cause of action and substitute for it claim and proceeding under the Compensation Act, making no change, as to this claim, when it should be barred.
When we consider the fact that the Workmen's Compensation Act was enacted to secure a certain, speedy, and inexpensive method of adjusting such claims, and that the two limitations therein contained shorten the period from six to one and two years, respectively, we cannot believe that it was the legislative intent that claims not falling within those limitations should never be barred. The claim filed with the Commission and its enforcement is the substitute for the common-law action, and, being such, it is subject to the same period of limitations in the absence of a contrary legislative provision.
201 N.W. at 262.
As in Scott Tobacco and Federal Rubber, the administrative action at issue here, a bond forfeiture proceeding before a hearing officer of the Cabinet, has no express statutory limitations period. However, a reclamation bond forfeiture proceeding is simply an administrative counterpart to a common law contract action against a surety, a proceeding plainly addressed by KRS 413.220(3). Although not literally applicable, the seven-year period in KRS 413.220(3) applies by analogy.
In the final analysis perhaps the most persuasive evidence of the invalidity of the Cabinet's attempts to limit the reach of KRS 413.220(3) to judicial proceedings is the practical application of that position. As the Cabinet acknowledges there are two routes for ultimately obtaining forfeiture of a performance bond, both of which conclude with resort to the courts. The Cabinet summarizes these routes to bond forfeiture as follows:
The Cabinet has two separate routes to bond forfeiture where there exist outstanding violations on a surface mining permit, or where criteria for bond forfeiture otherwise exist. Under the first scenario, the Cabinet sends written notification to the permittee and to the surety of the Cabinet's determination to initiate forfeiture, and advises the permittee and surety of their right to challenge such determination, if applicable. 405 KAR 10:050, Section 2. If neither the permittee nor surety request a hearing on the Cabinet's determination and the bond proceeds are not received by the Cabinet, the Secretary then enters a final order of forfeiture "and the Cabinet shall proceed in an action for collection on the bond." 405 KAR 10:050, Section 2(1)(a), (b) and (c). (emphasis added.) Alternatively, the Cabinet may initiate formal hearing procedures to forfeit a bond, pursuant to 405 KAR 7:092, Section 5, by filing a complaint with the Cabinet's Office of Administrative Hearings. Following a hearing (or in the case of default, an order to show cause), the hearing officer issues a report and recommended order to the Secretary. 405 KAR 7:091, Section 3(5); 405 KAR 7:092, Section 3(5). Following entry and service of the final order of the Secretary, the permittee or surety has thirty (30) days in which to appeal such order. KRS 350.0305. Only after the thirty (30) day period for appeal has run, without the permittee or surety remitting the bond proceeds to the Cabinet, may the Cabinet seek enforcement of its order, and only by commencement of an action in Franklin Circuit Court. KRS 350.990(3). (sic)
Although the Cabinet cites KRS 35
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