Commonwealth of Kentucky Court of Appeals

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1 RENDERED: AUGUST 9, 2013; 10:00 A.M. NOT TO BE PUBLISHED Commonwealth of Kentucky Court of Appeals NO CA WC FRANK J. CROUCHER APPELLANT PETITION FOR REVIEW OF A DECISION v. OF THE WORKERS COMPENSATION BOARD ACTION NO. WC CROUCHER EXCAVATING, INC; KENTUCKY EMPLOYERS MUTUAL INSURANCE; WORKERS COMPENSATION BOARD APPELLEES OPINION AFFIRMING ** ** ** ** ** BEFORE: DIXON, MOORE, AND TAYLOR, JUDGES. TAYLOR, JUDGE: Frank J. Croucher petitions this Court to review a September 20, 2012, Opinion and Order of the Workers Compensation Board affirming the

2 Administrative Law Judge s dismissal of Croucher s claim for workers compensation coverage. We affirm. Croucher is the president, sole officer, and sole shareholder of Croucher Excavating, Inc. Croucher had obtained workers compensation insurance coverage through Kentucky Employers Mutual Insurance (Mutual Insurance). On December 4, 2010, Croucher sustained a work-related injury to his left hand. Consequently, Croucher filed a claim for workers compensation benefits. Mutual Insurance alleged that Croucher had voluntarily and knowingly rejected workers compensation coverage and was not entitled to benefits for his work-related injury. The Administrative Law Judge (ALJ) ultimately found that Croucher knowingly and voluntarily waived workers compensation coverage and dismissed his action. Being unsatisfied with the ALJ s decision, Croucher sought review before the Workers Compensation Board (Board). By Opinion entered September 20, 2012, the Board affirmed the ALJ s dismissal, thus precipitating our review. Croucher contends that the Board erroneously affirmed the ALJ s dismissal of his claim for coverage under the Kentucky Workers Compensation Act (Act). In particular, Croucher argues: (1) Whether KEMI s [Kentucky Employers Mutual Insurance] admitted practice of excluding corporate officers from coverage is contrary to Kentucky s Workers Compensation Act? -2-

3 Croucher s Brief at 5-6. (2) Whether KEMI s practice of having small business owners sign rejection forms in order to effectuate that exclusion is voluntary where an insurer is one of the last resort? (3) Whether KEMI is estopped from denying coverage where it assessed a premium from Mr. Croucher based upon audit of his company s unemployment records? As an appellate court, we will only reverse the Board s opinion if it has overlooked or misconstrued the law or flagrantly erred in its evaluation of the evidence causing gross injustice. W. Baptist Hosp. v. Kelly, 827 S.W.2d 685 (Ky. 1992). To do so, we must necessarily review the ALJ s opinion. Abbott Labs. v. Smith, 205 S.W.3d 249 (Ky. App. 2006). It is well within the sole province of the ALJ as fact-finder to determine the credibility and weight of evidence. Id. Moreover, this Court reviews issues of law de novo. Com., ex rel. Stumbo v. Ky. Pub. Serv.Comm n, 243 S.W.3d 374 (Ky. App. 2007). In this case, we have reviewed the record on appeal and relevant case and statutory law. Having done so, we conclude that the Board correctly decided the issues presented and adopt its opinion herein: Although Croucher did not file a petition for reconsideration, on questions of law, or mixed questions of law and fact such as in the case sub judice, this Board s standard of review is de novo. See Bowerman v. Black Equipment Co., 297 S.W.3d 858 (Ky. App. 2009). When considering questions of law, or mixed questions of law and fact, the reviewing court has greater latitude to determine whether the findings below were sustained by -3-

4 evidence of probative value. Uninsured Employers Fund v. Garland, 805 S.W.2d 116 (Ky. 1991). Croucher was 100% owner of Croucher Excavating. However, the record also indicates Croucher was the president of Croucher Excavating at the time of the December 4, 2010, injury and, thus, an employee pursuant to KRS (2). Consequently, in order for Croucher to be excluded from the KEMI workers compensation policy, he was required to sign a Form 4, Rejection of Coverage. Croucher did so, and the ALJ determined his rejection was knowing and voluntary based upon the evidence in the record and Croucher s unambiguous testimony at the final hearing regarding his reading and understanding of the Form 4. Croucher s testimony at the final hearing along with the above-cited Form 4, endorsements, and insurance quote filed in the record constitute substantial evidence in support of the ALJ s determination Croucher s election was knowingly and voluntarily executed. As noted by the ALJ in the March 30, 2012, opinion and order, Croucher had three years of college. Croucher testified he can read. Croucher acknowledged that he had an opportunity to read the Form 4 before signing it and understood it. As stated by the Court in Karst Robbins Machind Shop v. Caudill, supra, a rejection is knowing and voluntary if it comes with a substantial understanding of the nature of the action and its consequences. Id. at 209. In addition, Croucher testified that he was not turning in his payroll records until after the federal work started in Unfortunately there is no documentary evidence in the record to substantiate Croucher s testimony regarding his payroll records submitted in Croucher s testimony regarding who was covered by the policy in 2005 is ambiguous at best. In his deposition, Croucher testified that his business had only one employee himself. Therefore, the coverage was meant for him. However, at the final hearing, Croucher testified that he might have had one or two people working for him in Croucher also testified that he was aware that the endorsement excluded him as an officer of the -4-

5 corporation and he had no reason to think he was covered by the policy. The ALJ determined Croucher s rejection was knowingly and voluntarily executed, and the record does not compel a different result..... As the issue of whether KEMI charged premiums based upon Croucher s earnings prior to the December 4, 2010, accident is a purely factual inquiry and Croucher failed to file a petition for reconsideration challenging the ALJ s findings, the ALJ s findings on this issue must stand. We also approvingly quote from the ALJ s opinion disposing of Croucher s claim that Mutual Insurance required him to sign a rejection form before issuing workers compensation insurance coverage: [Croucher] argues that KEMI, as an insurer of last resort under KRS and , should not be permitted to require an owner to reject coverage in order to obtain coverage for other employees of the company. Aside from Mr. Croucher s testimony that he was handed the rejection form and told that he must sign it, there is no evidence in the record of this claim to substantiate that such conversation occurred between Mr. Croucher and his agent, Diana, or that his understanding of the conversation was accurate. Whereas, the ALJ does not really doubt the word of Mr. Croucher, having found him to be credible throughout this matter, but does have questions as to whether or not Mr. Croucher and his agent understood and comprehended the conversation in the same manner. Mr. Croucher testified as to his understanding, but no further evidence was introduced. As fact-finder, it was well-within the province of the ALJ to discount Croucher s testimony that he was forced to reject workers compensation coverage by Mutual Insurance. And, we believe, as did the Board, that substantial evidence supported the ALJ s finding that Croucher s rejection of workers compensation -5-

6 coverage was knowing and voluntary as required by KRS Indeed, the ALJ believed that Croucher possessed a substantial understanding of the rejection and of its consequences. See Blackstone Mining Co. v. Travelers Ins. Co., 351 S.W.3d 193 (Ky. 2011). The ALJ cited directly to Croucher s testimony as support. Upon the whole, we cannot say that the Board overlooked the law or erred in its evaluation of the evidence. Thus, we conclude that the Board properly affirmed the ALJ s dismissal of Croucher s claim of workers compensation coverage. For the foregoing reasons, the Opinion of the Workers Compensation Board is affirmed. ALL CONCUR. BRIEF FOR APPELLANT: John F. Kelley, Jr. London, Kentucky BRIEF FOR APPELLEES: W. Barry Lewis Hazard, Kentucky -6-

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