2018 WL 3320932
Unpublished Disposition
This decision without published opinion is referenced in the Pacific Reporter. See Kan. Sup. Ct. Rules, Rule 7.04.
NOT DESIGNATED FOR PUBLICATION
Court of Appeals of Kansas.
MARIO CASTANEDA, Appellant,
v.
ALG TRANSPORT SERVICES, INC.
and
KANSAS WORKERS COMPENSATION FUND, Appellees.
No. 118,182
|
Opinion filed July 6, 2018.
Appeal from Workers Compensation Board.
Reversed and remanded with directions.
Attorneys and Law Firms
Kip A. Kubin, of Bottaro, Kubin & Yocum, P.C., of Leawood, for appellant.
Ronald P. Wood, of Clyde & Wood, L.L.C., of Overland Park, for appellee Kansas Workers Compensation Fund.
No appearance by appellee ALG Transport Services, Inc.
Before HILL, P.J., PIERRON and MALONE, JJ.

MEMORANDUM OPINION
PER CURIAM:
*1 Mario Castaneda was injured on the job. As a result of his injury, an administrative law judge (ALJ) awarded Castaneda temporary total disability (TTD) compensation in the amount of $14,105.22. But on administrative appeal, the Kansas Workers Compensation Board (Board) reversed the TTD award because of insufficient evidence. Castaneda appeals the Board’s decision and argues that the Board lacked authority to set aside the TTD award because the respondent had failed to contest that award before the ALJ. We agree with Castaneda’s claim, reverse the Board’s decision to set aside the TTD award, and remand with directions to reinstate the TTD award.

FACTS
In December 2014, Castaneda worked for ALG Transportation Services, Inc. (ALG), a Kansas corporation, located in Overland Park, Kansas. ALG is a small trucking company that transports cargo. Alberto Lizarazo owns ALG.

On December 18, 2014, Castaneda wrecked an ALG truck while hauling a load in Johnson County, Kansas. The icy and snowy weather conditions contributed to the accident. Castaneda injured his ribs in the accident and he was taken to the emergency room for treatment. He immediately reported the accident to Lizarazo. All parties later stipulated that Castaneda was injured from the accident, the accident occurred in the scope of employment, and Castaneda and ALG were in an employee and employer relationship when the accident occurred.

On April 2, 2015, Castaneda filed an application for hearing with the Division of Workers Compensation. ALG did not carry workers compensation insurance, so Castaneda impleaded the Kansas Workers Compensation Fund (Fund). ALG did not provide Castaneda with medical care following his injury. Then, on April 28, 2015, Castaneda filed an application for a preliminary hearing.

At the preliminary hearing on June 30, 2015, Castaneda and the Fund were represented by counsel but Lizarazo appeared pro se on behalf of ALG. The ALJ directed the Fund to compensate Castaneda for his TTD and also authorized Dr. Vito Carabetta to treat Castaneda at the Fund’s expense. These orders were not contested by any of the parties. The ALJ filed a preliminary order dated July 1, 2015, that stated: “Temporary Total Disability benefits to be paid at the weekly rate of $400 commencing April 7, 2015 and continue until released to substantial, gainful employment or at MMI by Dr. Vito J. Carabetta.”

As the case progressed, the parties deposed many people, including Carabetta and Lizarazo. In addition, the ALJ conducted a regular hearing on November 22, 2016, in which Castaneda was the only witness. At the time of the regular hearing, ALG was represented by counsel. Castaneda, ALG, and the Fund all filed submission letters to the ALJ, and none of the parties indicated in their submission letters that the TTD award was an issue at the regular hearing. In fact, each submission letter stipulated “[t]hat the Fund has paid 47 weeks of temporary total compensation at the rate of $400.00 for a total payment of $18,804.00.”

*2 On March 6, 2017, the ALJ rendered a final decision. Based on Carabetta’s unrefuted testimony that Castaneda suffered a 15 percent impairment under the AMA Guides to the Evaluation of Permanent Impairment (4th ed. 1995), the ALJ awarded Castaneda permanent partial disability payments totaling $18,697.24. The ALG also awarded Castaneda TTD for 43.71 weeks at $322.70 per week for a total of $14,105.22. Because the Fund had already paid Castaneda $18,804 in TTD compensation, the ALJ ordered that the excess TTD award be deducted from the permanent partial disability award. The ALJ directed the Fund to pay the entire compensation award, as ALG could not pay.

ALG appealed the ALJ’s decision to the Board. After filing the application for review by the Board, ALG’s counsel withdrew from the case. In a pro se brief to the Board filed by Lizarazo, ALG argued that the TTD award should be reversed because of insufficient evidence. Castaneda’s brief to the Board argued that the Board should not address the TTD award because the award had not been contested before the ALJ. The Fund’s brief to the Board took no position on the TTD issue.

On August 3, 2017, the Board issued its order modifying the ALJ’s award. In the order, the Board increased the total permanent partial disability compensation from $18,697.24 to $20,088.08. The Board, however, reversed the TTD award. The Board’s order acknowledged that ALG had the opportunity to dispute Castaneda’s request for TTD, but did not do so. The Board stated that “Lizarazo knew about the preliminary hearing and proceeded on a pro se basis. Respondent had the opportunity to be heard and present arguments [about whether the claimant is entitled to compensation for TTD], consistent with K.S.A. 2014 Supp. 44-534a(a)(2), but opted not to take advantage of the chance.” Nevertheless, the Board found that Castaneda did not prove his entitlement to TTD based on the record. The Board offset Castaneda’s $20,088.08 award for permanent partial disability by $18,804 paid for TTD and $100 in unearned wages, reducing Castaneda’s final award to $1,184.08. Castaneda timely appealed the Board’s order.

ANALYSIS
On appeal, Castaneda argues that the Board lacked authority to set aside the TTD award because that award had not been contested before the ALJ. Castaneda contends that the parties stipulated that he was entitled to TTD compensation at the regular hearing before the ALJ. Castaneda further contends that under K.S.A. 2017 Supp. 44-555c(a), the Board obtains jurisdiction only over issues raised before the ALJ.

The Fund’s four-page brief does not directly address Castaneda’s argument about the language of K.S.A. 2017 Supp. 44-555c(a). After reciting the facts and the applicable standard of review, the Fund argues: “This is a difficult case for all parties involved. The Respondent did not hire an attorney even though he was told he needed one.” The Fund then states: “It is not clear whether the Respondent knew what he was stipulating to or had an idea what the stipulations meant. However, the Respondent did object to any compensation being paid to the Claimant in this case and that was made clear from the start.” Notably, ALG filed no brief in this appeal.

K.S.A. 2017 Supp. 44-556(a) directs that final orders of the Board are subject to review under the Kansas Judicial Review Act (KJRA), K.S.A. 77-601 et seq. The standard of review will vary depending on the issue raised. See K.S.A. 2017 Supp. 77-621 (defining and limiting scope of review of administrative decisions under KJRA). Resolution of the issue raised in this appeal comes down to whether the Board exceeded its jurisdictional boundaries when it reversed the TTD award. Whether jurisdiction exists is a question of law subject to unlimited review. Norris v. Kansas Employment Security Bd. of Review, 303 Kan. 834, 837, 367 P.3d 1252 (2016).

*3 As administrative agencies, like the Board, are created by statute, their authority is only as broad as the statute creating the agency specifies. Stated differently, all administrative agencies’ jurisdiction is statutorily limited. See Ft. Hays St. Univ. v. University Ch., Am. Ass’n of Univ. Profs., 290 Kan. 446, 455-56, 228 P.3d 403 (2010).

For the Board, K.S.A. 2017 Supp. 44-555c(a) grants it jurisdiction to hear appeals from decisions by the ALJ. This statute states in relevant part:
“The board shall have exclusive jurisdiction to review all decisions, findings, orders and awards of compensation of administrative law judges under the workers compensation act. The review by the appeals board shall be upon questions of law and fact as presented and shown by a transcript of the evidence and the proceedings as presented, had and introduced before the administrative law judge.” (Emphases added.) K.S.A. 2017 Supp. 44-555c(a).

Based on this statute, the Board obtains jurisdiction only over issues raised before the ALJ. See Sachs v. City of Topeka, No. 110,872, 2014 WL 5849254, at *2-3 (Kan. App. 2014) (unpublished opinion) (finding that the Board lacked jurisdiction to consider issues not raised before the ALJ); see also Linenberger v. Kansas Dept. of Revenue, 28 Kan. App. 2d 794, 797, 20 P.3d 1290 (2001) (limiting parties to raising issues on appeal to this court to issues raised at the administrative hearing).

Here, the ALJ held a preliminary hearing on June 30, 2015. Castaneda and the Fund were represented by counsel but ALG appeared pro se. At the preliminary hearing, the ALJ directed the Fund to compensate Castaneda for his TTD and also authorized Dr. Carabetta to treat Castaneda at the Fund’s expense. These orders were not contested by any of the parties.

The ALJ conducted a regular hearing on November 22, 2016. Castaneda, ALG, and the Fund all filed submission letters to the ALJ, and none of the parties indicated in their submission letters that the TTD award was an issue at the regular hearing. In fact, each submission letter stipulated that the Fund had paid 47 weeks of temporary total compensation at the rate of $400 per week for a total payment of $18,804. The ALJ modified the TTD award to $14,105.22, but only because of an adjustment in the number of weeks covered by the award and the average weekly wage.

Lizarazo’s pro se brief to the Board argued that the TTD award should be reversed because of insufficient evidence. Castaneda’s brief to the Board argued that the Board should not address the TTD award because the award had not been contested before the ALJ. The Board’s order acknowledged that ALG had the opportunity to dispute Castaneda’s request for TTD, but did not do so. Nevertheless, the Board found that Castaneda did not prove his entitlement to TTD based on the record. The Board’s order did not cite or discuss K.S.A. 2017 Supp. 44-555c(a), and the Board did not explain its jurisdiction to set aside the TTD award.

Castaneda argues that the parties stipulated that he was entitled to TTD compensation. Technically, this assertion is incorrect. The parties stipulated that the Fund had paid 47 weeks of temporary total compensation at the rate of $400 for a total payment of $18,804, but the parties did not stipulate to the legitimacy of this award.

*4 That being said, the record supports Castaneda’s assertion that the TTD award was not contested before the ALJ. The ALJ’s decision identified the “nature and extent of claimant’s disability” as an issue, referring to Castaneda’s claim for permanent partial disability. The ALJ modified the TTD award to $14,105.22, but only because of an adjustment in the number of weeks covered by the award and the average weekly wage. The ALJ made no other findings to support the TTD award because none of the parties had indicated in their submission letters that the TTD award was an issue.

On September 8, 2016, Lizarazo sent a letter to counsel of record, with a copy to the Kansas Division of Workers Compensation, stating that he completely disputed any compensation being paid to Castaneda as a result of his work-related accident. Lizarazo’s pro se brief to the Board also made it clear that he objected to any compensation being paid to Castaneda. Lizarazo argued that Castaneda should not have been driving the truck on the date of his injury because of the adverse weather conditions, so ALG was not responsible for the claims. But these general denials of any liability do not change the fact that Castaneda’s TTD award was not specifically contested before the ALJ. The Board set aside the TTD award because of insufficient evidence, but the only reason there was insufficient evidence was because the TTD award was not challenged at the regular hearing before the ALJ.

We conclude that under K.S.A. 2017 Supp. 44-555c(a), the Board lacked jurisdiction to set aside the TTD award because ALG had failed to contest that award before the ALJ. The Board’s order acknowledged as much when it found that ALG had the opportunity to dispute Castaneda’s request for TTD, but failed to do so. Thus, we reverse the Board’s decision to set aside the TTD award, and we remand with directions for the Board to reinstate Castaneda’s TTD award in the amount of $14,105.22.

Reversed and remanded with directions.

All Citations
Slip Copy, 2018 WL 3320932 (Table)

KeyCite Red Flag – Severe Negative Treatment
Unpublished/noncitable
2018 WL 3450523
Unpublished Disposition
(This disposition by unpublished memorandum decision is referenced in the North Eastern Reporter.)
Court of Appeals of Indiana.
J.B. Hunt Transport, Inc., and Terry L. Brown, Jr., Appellants-Defendants,
v.
The Guardianship of Kristen Zak, Appellee-Plaintiff.
Court of Appeals Case No. 45A03-1710-CT-2429
|
July 18, 2018
Appeal from the Lake Superior Court
The Honorable Diane Kavadias Schneider, Judge
Trial Court Cause No. 45D11-0610-CT-190
Attorneys and Law Firms
ATTORNEYS FOR APPELLANTS, Bruce D. Jones, Keith A. Gaston, Cruser Mitchell Novitz Sanchez Gaston & Zimet, LP, Indianapolis, Indiana
ATTORNEYS FOR APPELLEE, Timothy S. Schafer, Timothy S. Schafer II, Todd S. Schafer, Schafer & Schafer, LLP, Merrillville, Indiana, Gregory W. Brown, Brown & Brown, P.C., Merrillville, Indiana

MEMORANDUM DECISION
Friedlander, Senior Judge.
*1 [1] J.B. Hunt Transport, Inc. and Terry L. Brown, Jr. (collectively, “the Appellants”) appeal the trial court’s order awarding the Guardianship of Kristen Zak (“the Guardianship”) $4,810,000 in prejudgment interest. We affirm.

[2] On January 17, 2006, Zak was seriously injured when the car in which she was a passenger struck a semi tractor-trailer that had been wrecked approximately one hour earlier by Brown, a driver employed by Hunt. J.B. Hunt Transp., Inc. v. Guardianship of Zak, 58 N.E.3d 956 (Ind. Ct. App. 2016), trans. denied. On October 26, 2006, the Guardianship filed a complaint against the Appellants, alleging that they were negligent and that their negligence caused Zak’s injuries. Id. The matter proceeded to a jury trial, after which the jury returned a verdict in favor of the Guardianship and awarded the Guardianship $32,500,000 in damages.1 Id. We subsequently affirmed the jury’s verdict. Id. The matter returned to the trial court, after which the trial court awarded the Guardianship $4,810,000 in prejudgment interest.

[3] On appeal, the Appellants contend that the trial court abused its discretion in awarding the Guardianship prejudgment interest. Specifically, the Appellants argue that the trial court abused its discretion because (1) the Guardianship failed to satisfy the requirements of the Tort Prejudgment Interest Statute (“TPIS”) and (2) the Guardianship’s request for prejudgment interest was untimely.

[4] Prejudgment interest represents an element of complete compensation. Johnson v. Eldridge, 799 N.E.2d 29 (Ind. Ct. App. 2003), trans. denied. As such, it “is not simply an award of interest on a judgment, but rather is recoverable as additional damages to accomplish full compensation.” Id. at 32 (internal quotation omitted). The TPIS “permits a trial court to award prejudgment interest to the party that prevails at trial, so long as that party has made a timely offer of settlement according to terms specified in the statute.” Id.
We evaluate the award of prejudgment interest under an abuse of discretion standard. The decision to award prejudgment interest rests on a factual determination, and this court may only consider the evidence most favorable to the judgment. An abuse of discretion occurs when the trial court’s decision is clearly against the logic and effect of the facts and circumstances before the court, or if the court has misinterpreted the law.
Id. at 33 (internal citations omitted).

[5] The TPIS provides that a party is not entitled to prejudgment interest if:
(1) within one (1) year after a claim is filed in the court, or any longer period determined by the court to be necessary upon a showing of good cause, the party who filed the claim fails to make a written offer of settlement to the party or parties against whom the claim is filed;
(2) the terms of the offer fail to provide for payment of the settlement offer within sixty (60) days after the offer is accepted; or
*2 (3) the amount of the offer exceeds one and one-third (11//3) of the amount of the judgment awarded.
Ind. Code § 34-51-4-6 (1998) (emphasis added). “If the court awards prejudgment interest, the court shall determine the period during which prejudgment interest accrues. However, the period may not exceed forty-eight (48) months.” Ind. Code § 34-51-4-8(a) (1998). Prejudgment interest begins to accrue on the latest of either (1) fifteen months after the cause of action accrued or (2) six months after the claim is filed in the court. Id.

1. Whether the Guardianship Satisfied the Requirements of the TPIS
[6] The Appellants argue that the trial court abused its discretion in awarding prejudgment interest to the Guardianship because the Guardianship failed to satisfy the requirements of the TPIS.

A. Settlement Offer
[7] The Appellants claim that the Guardianship should not have been awarded prejudgment interest because it failed to establish that there was good cause for its failure to make a settlement offer within one year of initiating suit. The record reveals that the Guardianship’s delay can, at least in part, be attributed to the actions of the Appellants. The Appellants withheld certain critical documents relating to the Appellants’ fault during the discovery phase.2 In fact, the Appellants did not provide the Guardianship with some of these critical documents until being ordered to do so by the trial court. Prior to receiving these documents, the Guardianship lacked the ability to accurately assess the merits of its case.3 The record further reveals that the Guardianship made a settlement offer six days after receiving the last of the critical documents. The trial court, being in the best position to gauge the importance of the critical documents to the case, found that the Guardianship made its settlement offer within a reasonable time after receiving the last of the documents. The Indiana Supreme Court has held:
[t]he TPIS is not intended to serve as a trap for the unwary. It is designed to put the adverse party on notice of a claim and provide them with an opportunity to engage in meaningful settlement and if they do not do so, they run the risk of incurring the additional obligation of prejudgment interest.
Wisner v. Laney, 984 N.E.2d 1201, 1212 (Ind. 2012). The trial court acted within its discretion in determining that the Guardianship established that there was good cause for its delay in tendering its settlement offer.

B. The Sixty-Day Settlement Requirement
[8] The Appellants also claim that the Guardianship “violated the TPIS by failing to allow [them] 60 days to pay the demand.”4 Appellants’ Br. p. 17. In Cahoon v. Cummings, 734 N.E.2d 535, 547 (Ind. 2000), the Indiana Supreme Court held that “[t]he whole point of [Indiana Code section 34-51-4-6] is to address the cost of delay in payment” and “an offer to settle ‘now’ is an offer to settle by payment within sixty days.” In Wisner, the Indiana Supreme Court held that an “offer to solve this matter at this time” was sufficient to satisfy Indiana Code section 34-51-4-6 as “[t]he key is to include the time-limiting language in the offer.” 984 N.E.2d at 1211. The settlement offer at issue in this case was sent to the Appellants on January 25, 2011. It indicated that the offer would “stay open only until the pre-trial conference set for February 3, 2011.” Appellants’ App. Vol. 3, p. 138. Consistent with the Indiana Supreme Court’s decisions in Cahoon and Wisner, we conclude that because the settlement offer included time-limiting language, the trial court acted within its discretion in determining that the offer satisfied Indiana Code section 34-51-4-6.

2. Whether the Guardianship’s Request for Prejudgment Interest was Untimely
*3 [9] The Appellants also argue that trial court abused its discretion in awarding prejudgment interest because the Guardianship failed to make a timely request. In support, the Appellants cite to case law from jurisdictions outside Indiana and point to the fact that the Guardianship did not make a request for prejudgment interest until ten months after the final judgment was entered. The Appellants’ reliance on the opinions of courts from jurisdictions other than Indiana is misplaced, however, as these opinions are not binding upon this court. Further, the Indiana Supreme Court has held that “the comprehensive nature of the TPIS” clearly indicates “that the legislature intended the statute to be the exclusive source governing the award of prejudgment interest in cases falling within its ambit” and, as a result, the TPIS “abrogates and supplants” the common law prejudgment interest rules. Kosarko v. Padula, 979 N.E.2d 144, 149, 147-48 (Ind. 2012). While the TPIS sets forth the requirements to ensure that a party qualifies for prejudgment interest, it does not contain the requirement that a request for prejudgment interest be filed prior to judgment being entered.

[10] Further, even though a delay of ten months before making the request for prejudgment interest might be unreasonable in some cases, it does not seem unreasonable in this case. Review of the record indicates that the Appellants were not harmed as result of the Guardianship’s delay. Although the trial court had entered its judgment, the litigation was ongoing as the Appellants appealed the jury’s verdict and the trial court made it clear that it would not rule on any additional motions or requests filed by the parties until after the Appellants’ appeal was resolved. As such, given that the relevant statutory authority does not provide a time limit for filing a request for prejudgment interest together with the facts and circumstances of this case, we cannot say that the trial court abused its discretion in awarding prejudgment interest to the Guardianship.

[11] Judgment affirmed.

Pyle, J., and Barnes, Sr. J., concur.
All Citations
Slip Copy, 2018 WL 3450523 (Table)

Footnotes

1
Approximately $19,500,000 of the award was allocated to the Appellants.

2
These documents included the Safety Event Review completed in connection to the initial accident, J.B. Hunt’s Driver’s Manual which outlined the steps that should have been taken if a driver was involved in an accident, the accident kit prepared in connection to the accident, and three event logs relating to the accident.

3
This seems especially true given that both Zak and the driver of the vehicle in which she was a passenger suffered significant head injuries in the crash and neither has any memory of the crash.

4
We note that while the Appellants seem to argue that the statute indicates that the Guardianship should have granted them at least sixty days to accept and satisfy the tendered settlement offer, Indiana Code section 34-51-4-6 actually provides that the tendered settlement offer must make it clear that such acceptance and payment must be made within sixty days.