ALJs Must Certify the Correct Workers’ Compensation Carrier After a Changed Exposure Date: Insurers Have Standing Without Formal Joinder and Statutory Duties Trump Equitable Defenses

Introduction

In Encova Mutual Insurance Group (Formerly Brickstreet Mutual Insurance Company) v. Roger Hall, the Supreme Court of Kentucky affirmed a Court of Appeals decision that reshapes the handling of insurer liability questions within Kentucky’s workers’ compensation system. This third trip to the high court in the same case answers a persistent problem: when the Administrative Law Judge (ALJ) later determines a different “last injurious exposure” date than originally alleged—one that changes which insurer is on the risk—who decides the proper carrier and when?

The Court holds that coverage certification is an issue that arises under the Workers’ Compensation Act (KRS Chapter 342); that ALJs and the Workers’ Compensation Board (WCB) have both the authority and the obligation to determine and certify the proper insurer—including on remand; that insurers have standing to seek or contest coverage even if not previously formally joined; and that statutory allocation of liability under KRS 342.316(10) controls over equitable defenses such as laches and estoppel. The Court rejects arguments premised on timeliness, lack of formal joinder, and due process notice concerns, emphasizing that the Act binds insurers to awards against their insureds and treats notice to the employer as notice to the insurer.

The parties include Encova Mutual Insurance Group (the later carrier), Kentucky Employers’ Mutual Insurance (KEMI) (the earlier carrier that had been defending), Roger Hall (the claimant), the Letcher County Board of Education (the employer), and the administrative tribunals. The core dispute: whether Encova must be certified as the liable carrier after the ALJ fixed Hall’s last injurious exposure as April 18, 2014—a date during Encova’s coverage.

Summary of the Opinion

The Supreme Court affirms the Court of Appeals and directs that the WCB proceed consistently with this opinion. The Court’s principal holdings are:

Coverage certification is within the ALJ’s and WCB’s jurisdiction because it is a question “arising under” KRS Chapter 342. The ALJ’s refusal to address certification on remand misread the prior appellate proceedings and the scope of administrative authority.
Insurers have standing to raise and contest coverage questions in the workers’ compensation proceeding even if not formally joined earlier, because they have a direct, substantial interest and are statutorily bound to awards against the insured employer.
The “last injurious exposure” rule in KRS 342.316(10) controls insurer liability: the insurer on the risk at the time of the last injurious exposure “shall alone be liable,” without contribution from prior carriers. Because the ALJ fixed the exposure date in 2014, Encova is the liable carrier as a matter of law.
Timeliness is measured by the “as soon as practicable” standard in 803 KAR 25:010 § 2(3). KEMI’s motion to certify the correct carrier, filed thirty days after the prior appeal became final and jurisdiction returned to the ALJ, was timely. No party bears a special, exclusive burden to seek certification; any interested party may move.
Equitable defenses (laches, equitable estoppel) cannot override the Act’s statutory allocation of liability. No prejudice or misconduct supports their application here. “Law trumps equity.”
Due process/notice arguments fail under KRS 342.360 and KRS 342.365, which treat notice to the employer as notice to the insurer and bind the insurer to awards against the insured. Any constitutional challenge was not preserved under KRS 418.075.
Law-of-the-case does not bar certification because prior appellate proceedings never adjudicated the coverage question; earlier refusals to “partially remand” were procedural, not merits determinations.

Analysis

Precedents Cited and Their Influence

Letcher County Board of Education v. Hall (Hall I), 576 S.W.3d 123 (Ky. 2019) and Hall II, 671 S.W.3d 374 (Ky. 2023): These earlier decisions established the presence of asbestos through at least 2003 and confirmed the Department of Workers’ Claims (DWC) jurisdiction over Hall’s claim. Importantly, Hall II confined its review to DWC jurisdiction and did not reach insurer certification; thus, law-of-the-case did not control the certification question.
Motorists Mut. Ins. Co. v. Terry, 536 S.W.2d 472 (Ky. 1976): Recognized that coverage determinations that affect benefits belong in the workers’ compensation process and that the claimant should not be forced to litigate on two fronts. This reinforced the panel’s and Supreme Court’s view that certification is not a collateral dispute suitable for circuit court while the comp case is pending.
Lawrence Coal Co. v. Boggs, 218 S.W.2d 670 (Ky. 1949): Established long-standing authority for insurers to raise whether a valid policy covered the employer at the time of injury/exposure within the administrative proceeding. The Court leans on this to confirm insurers’ participation rights and the ALJ’s authority.
Custard Ins. Adjusters, Inc. v. Aldridge, 57 S.W.3d 284 (Ky. 2001): The Board relied on Aldridge to shunt the dispute to circuit court, but the Supreme Court distinguishes Aldridge as involving a post-award, purely inter-insurer contract dispute that had “no effect whatsoever” on the employer/employee/benefits triangle. By contrast, identifying the liable carrier here directly affects the award’s payor and the integrity of the compensation judgment.
Zurich Am. Ins. Co. v. Journey Operating, LLC, 323 S.W.3d 696 (Ky. 2010): Clarifies that coverage disputes affecting a carrier’s obligation to pay benefits arise under the Act and implicate the integrity of the workers’ compensation judgment; they should be resolved in the workers’ compensation forum, not the circuit court.
Brummitt v. Southeast Kentucky Rehab Industries, 156 S.W.3d 276 (Ky. 2005): Reaffirms the last-exposure allocation of insurer responsibility: later injurious exposure under a different carrier places liability on that later carrier notwithstanding earlier exposures.
Puckett v. Cabinet for Health & Family Services, 621 S.W.3d 402 (Ky. 2021): Confirms law-of-the-case applies only to issues actually decided; prior refusals to partially remand did not decide certification, so the ALJ was free to address it on remand.
Wright v. Ecolab, Inc., 461 S.W.3d 753 (Ky. 2015) and Jerry’s Drive In, Inc. v. Young, 335 S.W.2d 323 (Ky. 1960): Establish that the trial/administrative tribunal lacks jurisdiction during an appeal; thus, KEMI could not seek certification while the case was on appeal and acted “as soon as practicable” once jurisdiction returned.
Fruchtenicht v. United States Fid. & Guar. Co., 451 S.W.2d 835 (Ky. 1969): Supports that an insurer’s obligation is tied to the policy and exposure timing, not to formalities of notice or joinder in the comp proceeding.
Kindred Healthcare v. Harper, 642 S.W.3d 672 (Ky. 2022) and Ky. Uninsured Employers’ Fund v. Hoskins, 449 S.W.3d 753 (Ky. 2014): Reinforce the Workers’ Compensation Act’s beneficent purpose—prompt, predictable payment without fault—and the administrative system’s broad authority to effectuate it.
City of Paducah v. Gillispie, 115 S.W.2d 574 (Ky. 1938) and Hitachi Auto. Prods. USA, Inc. v. Craig, 279 S.W.3d 123 (Ky. 2008): Provide the standards for laches and equitable estoppel. The Court finds those equitable doctrines inapplicable given the statutory regime and lack of prejudice or misconduct.

Legal Reasoning

1) Administrative Authority and Jurisdiction

The Court roots its analysis in the expansive statutory grants to the ALJ and WCB:

KRS 342.325 authorizes ALJs to decide “all questions arising under this chapter.”
KRS 342.285(2) empowers the WCB to review, reverse, or remand where an ALJ’s order is not in conformity with the Act, exceeds powers, or is arbitrary or erroneous.
KRS 342.228 and KRS 342.285 collectively position the WCB and DWC to enforce the Act’s provisions, including those related to coverage.

The coverage question is not collateral: multiple provisions—KRS 342.340, 342.360, 342.365, 342.375, 342.690—embed insurer obligations into the compensation system, confirming that identifying the correct carrier is central to ensuring payment of benefits. The regulatory scheme (803 KAR 25:010 § 23, initial coverage certification; § 2(3), joinder “as soon as practicable”) augments this authority. Even though Chapter 342 lacks an explicit “re-certification” protocol after a changed exposure date, the statutory structure compels resolution by the ALJ and WCB.

2) Standing of Insurers Without Formal Joinder

Standing requires a present, substantial interest. Both KEMI and Encova face direct financial consequences from the certification decision. The Court rejects the WCB’s view that this is a “disagreement between two insurers” for circuit court resolution under KRS 342.305. Coverage certification determines who must pay a pending workers’ compensation award. That goes to the heart of the Act, not to post-award, collateral reimbursement disputes. The Court’s reliance on Terry, Lawrence Coal, and Zurich confirms that insurers may be parties in the administrative proceeding and the ALJ may decide their obligation to pay benefits.

3) The Last Injurious Exposure Rule Controls Allocation

KRS 342.316(10) provides that the employer and “the employer’s insurance carrier … at the time of the [last injurious] exposure, shall alone be liable,” with no contribution from prior carriers. Once the ALJ fixed the last injurious exposure as April 18, 2014, the statute assigned liability to Encova. Brummitt reinforces that later harmful exposure under a new carrier shifts responsibility to that carrier, even if earlier exposures also contributed.

4) Timeliness and Joinder

The governing timeliness standard is 803 KAR 25:010 § 2(3): move to join “as soon as practicable after legal grounds for joinder are known.” While the case was on appeal, the ALJ and WCB lacked jurisdiction to act, and the certification question was not preserved for appellate relief. KEMI moved within thirty days of Hall II becoming final. The Court rejects the ALJ’s and WCB’s timeliness objections and clarifies that the rule imposes no special duty on one party (e.g., KEMI) to seek certification—any interested participant (employer, carrier, or claimant) may do so.

5) Statutory Notice and Due Process

KRS 342.360 and KRS 342.365 bind insurers to awards against their insured employers, treat notice to the employer as notice to the insurer, and provide that the insurer’s obligation to promptly pay benefits is not affected by any default in giving notice. Thus, Encova’s lack of early participation or personal notice does not defeat its obligation under the policy and the Act. Any constitutional notice challenge was not preserved under KRS 418.075 (no Attorney General notice), rendering such an argument unavailable on appeal.

6) Equity Cannot Override Statute

The Court rejects laches and equitable estoppel. The “delay” was driven by appellate jurisdictional constraints; KEMI moved promptly after remand. There was no concealment, detrimental reliance, or prejudice that would justify estoppel. Ultimately, statutory allocation governs: “law trumps equity.”

Impact

This decision has immediate and practical consequences for Kentucky workers’ compensation practice:

ALJs/WCB: Must decide and, where appropriate, certify the correct carrier whenever a last injurious exposure finding shifts the risk—even late in the proceedings or on remand. Coverage disputes affecting who pays the award are not to be offloaded to circuit court while the claim is pending.
Insurers: Have standing to participate in coverage disputes without prior formal joinder when their obligation may be determined. Lack of early notice or participation does not bar liability if the last exposure falls within the policy period. Insurers should monitor DWC coverage filings and, upon learning of a changed exposure date, be prepared to engage quickly on remand.
Employers and Claimants: Either may move to certify the proper carrier. This decision streamlines award enforcement and reduces the risk of duplicative or bifurcated litigation. It safeguards the Act’s beneficent purpose by ensuring that the correct insurer—not an incorrect earlier carrier—bears the statutory burden.
Procedure and Preservation: Parties should recognize that the ALJ/WCB cannot act on certification while an appeal is pending. The right moment to seek joinder/certification is after jurisdiction returns. Moving “as soon as practicable” post-remand meets the regulatory standard.
Equity vs. Statute: Equitable defenses like laches and estoppel will rarely forestall statutory carrier allocation under KRS 342.316(10), 342.360, and 342.365 absent clear misconduct or prejudice undermining the integrity of the judgment.
Boundary with Circuit Court: Post-award, purely inter-insurer contract disputes that do not affect the employer-employee-benefits triad may proceed in circuit court (Aldridge). But questions about who is obligated to pay benefits under an extant claim arise under the Act and belong with the ALJ/WCB (Zurich; Terry).

Complex Concepts Simplified

Last injurious exposure: In occupational disease cases, the liability falls on the employer and its insurer at the time the worker was most recently exposed to the hazardous condition in a way that contributed to the disease. If the last exposure happens under a later insurer, that later insurer pays, even if earlier exposures occurred.
“Arising under” the Act: If an issue directly affects whether, how, or by whom workers’ compensation benefits are paid, it is considered to arise under KRS Chapter 342 and should be decided by the ALJ/WCB, not the circuit court.
Standing vs. Joinder: Standing is the right to be heard because you have a real stake in the outcome. Joinder is the procedural step of making someone a formal party. Here, insurers have standing to be heard on coverage because they may have to pay; formal joinder can be ordered by the ALJ “as soon as practicable,” but liability does not hinge on early joinder given the statutory scheme.
Law-of-the-case: Prior appellate decisions bind later proceedings only as to issues actually decided. Refusing a partial remand on procedural grounds is not a merits decision about coverage, so it does not bar later certification on remand.
Notice under KRS 342.360 and 342.365: The law treats notice to the employer as notice to the insurer, and insurers agree to be bound by awards against their insured. Failure to give personal notice to the insurer does not void its obligation to pay.
“As soon as practicable” standard: The time to move for joinder/certification depends on context. If an appeal strips the ALJ of jurisdiction, it is practicable to move soon after remand, which is what KEMI did here.
Laches and estoppel: Laches bars claims when an unreasonable delay prejudices another. Estoppel prevents a party from benefitting from its misleading conduct. Neither applies simply because an insurer did not participate earlier when the statutory framework binds the insurer and jurisdictional realities prevented earlier motions.

Conclusion

Encova v. Hall clarifies and strengthens Kentucky’s administrative handling of workers’ compensation coverage disputes. The Supreme Court confirms that:

ALJs and the WCB have the authority and duty to determine and certify the correct insurer whenever that question affects who pays the award—even late in the case or on remand;
Insurers have standing in the administrative proceeding without prior formal joinder when their obligation to pay is at stake;
The last injurious exposure rule in KRS 342.316(10) squarely assigns liability to the carrier on the risk at the time of the last exposure, displacing earlier carriers and foreclosing contribution;
Procedural hurdles like appeals and preservation shape when, not whether, parties can seek certification; moving promptly on remand satisfies the “as soon as practicable” standard;
Statutory notice rules bind insurers to awards against their insured employers, and equitable defenses cannot override the Act’s allocation of responsibility.

By insisting that coverage certification be resolved within the workers’ compensation system, the Court reduces fragmented litigation, accelerates benefit delivery, and vindicates the Act’s beneficent purpose. The decision provides clear guidance going forward: when a changed exposure finding shifts the risk, ALJs must certify the proper carrier, and the insurer on the risk at the last injurious exposure must pay.