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BRANDT v. KANSAS WORKERS COMPENSATION FUND12/20/1994
Harold K. Brandt appeals the denial of his application for review and modification of his workers compensation award under K.S.A. 1992 Supp. 44-528. Brandt contends he can proceed directly against the Workers Compensation Fund in a proceeding to review and modify his original award after having settled with his employer. He argues that he seeks only to increase the amount owed by the Fund, not to adjust the Fund's previously determined percentage of liability under K.S.A. 1992 Supp. 44-567. The issue Brandt presents is an issue of first impression. We affirm.
After a work-related injury in 1982, Brandt was awarded compensation for permanent partial disability under the Workers Compensation Act (K.S.A. 44-501 et seq. [Ensley]). Brandt's employer, Bell Motor Company (Bell), impleaded the Fund pursuant to 44-567, and the Fund was apportioned 80 percent of the liability.
In March 1990, Brandt applied for review and modification of the award under 44-528, alleging increased disability. He named both Bell and the Fund in his application for review and modification. Brandt sought modification of the original award to reflect a permanent total disability. In 1991, Brandt settled his claim with Bell and its insurance carrier and then proceeded solely against the Fund. The Administrative Law Judge (ALJ) denied Brandt's application for modification, ruling that the Fund's liability was derived from the employer's liability and that Brandt could not proceed directly against the Fund after having settled with Bell. The Workers Compensation Director and the district court affirmed the ALJ's decision.
As Brandt raises a question of law, this court may substitute its judgment for that of the district court. See Reeves v. Equipment Service Industries, Inc., 245 Kan. 165, 173, 777 P.2d 765 (1989). Key to our resolution of the question presented is our interpretation of two statutes: 44-567, which allows an employer to shift responsibility for workers compensation to the Fund if a handicapped employee is injured; and 44-528, which provides for
the review and modification of prior workers compensation awards.
NATURE OF THE FUND'S LIABILITY UNDER K.S.A. 1992 SUPP. 44-567
K.S.A. 1992 Supp. 44-567(a) provides that an employer who knowingly employs a handicapped employee "shall be relieved of liability for compensation awarded or be entitled to an apportionment of the costs thereof" when the Director finds that the employee's preexisting impairment caused or contributed to the employee's injury or disability. The compensation attributable to the preexisting impairment "shall be paid from the workers' compensation fund." K.S.A. 1992 Supp. 44-567(a)(1). Under subsection (d) of the statute, however, to be relieved of liability or be entitled to an apportionment, the employer must implead the Fund "prior to the first full hearing" in any proceedings to determine the compensation to be awarded.
Under 44-567, the employer's liability is direct; the liability of the Fund is derivative of the employer's. Accordingly, an employee cannot seek an original award of compensation directly from the Fund after settling with the employer and its insurance carrier. Arduser v. Daniel International Corp., 7 Kan. App. 2d 225, Syl. 3, 640 P.2d 329, rev. denied 231 Kan. 799 (1982). However, once liability is apportioned under 44-567, the Fund bears primary liability for the percentage of the award attributable to the employee's preexisting impairment. See Nuttle v. Certain Teed Corp., 10 Kan. App. 2d 225, 696 P.2d 415 (1985).
Arduser and Nuttle establish that until an employer proves the percentage of the award for which the Fund is responsible unde
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