author: Justice COOPER.

text:
    COMMONWEALTH of Kentucky, TRANSPORTATION CABINET, DEPARTMENT OF HIGHWAYS, Appellant, v. Robin L. BABBITT, Special Administrator of the Estate of Michael Roy Bender; Larry Logsdon; Jane Foley Nash, Special Administrator of the Estate of Cecilia Ann Bender; and Kentucky Board of Claims, Appellees, and Brandon Taylor, Personal Representative of the Estate of Sherry Taylor, Appellant, v. Commonwealth of Kentucky, Department of Highways, Transportation Cabinet; and Commonwealth of Kentucky, Board of Claims, Appellees.
    Nos. 2003-SC-0556-DG, 2003-SC-0586-DG.
    Supreme Court of Kentucky.
    Sept. 22, 2005.

      Stewart Burch, Kevin Patrick Fox, Logan and Gaines, Frankfort, Counsel for Appellant Commonwealth of Kentucky, Transportation Cabinet, Department of Highways (2003-SC-0556-DG).
    James T. Gilbert, Coy, Gilbert and Gilbert, Richmond, Counsel for Appellees Robin L. Babbitt, Special Administrator of the Estate of Michael Roy Bender; Larry Logsdon; and Jane Foley Nash, Special Administrator of the Estate of Cecilia Ann Bender (2003-SC-0556-DG).
    G. Mitchell Mattingly, Legal Counsel, Board of Claims, Frankfort, Counsel for Appellee Kentucky Board of Claims (2003-SC-0556-DG).
    Charles E. Moore, Travis Leon Holtrey, Moore, Malone, and Safreed, Owensboro,
    Counsel for Appellant Brandon Taylor, Personal Representative of the Estate of Sherry Taylor (2003-SC-0586-DG).
    James R. Wood, General Counsel, Transportation Cabinet, Frankfort, Frank Miller, Jr., Weber & Rose, Louisville, Counsel for Appellee Commonwealth of Kentucky, Department of Highways, Transportation Cabinet (2003-SC-0586-DG).
    G. Mitchell Mattingly, Legal Counsel, Board of Claims, Frankfort, Counsel for Appellee Commonwealth of Kentucky, Board of Claims (2003-SC-0586-DG).
   Opinion of the Court by

Justice COOPER.

These two appeals are from separate decisions of the Board of Claims, KRS 44.070, et seq., denying claims for damages allegedly caused by the Transportation Cabinet’s failure to provide warnings and/or erect guardrails at the scenes of two different single-vehicle accidents. In each case, the Board concluded that the negligence of the vehicle’s operator was the sole cause of the accident without addressing whether any negligence on the part of the Cabinet was a contributing cause of the damages sustained because of the accident. In the Babbitt case, the Madison Circuit Court reversed and remanded with directions to apportion causation and award damages, and the Court of Appeals affirmed. In the Taylor case, both the Daviess Circuit Court and the Court of Appeals affirmed the Board’s denial of the claim. Perceiving an inconsistency in the respective decisions of the Court of Appeals, we granted discretionary review of both cases.

I. BABBITT.

The accident in Commonwealth, Transportation Cabinet v. Babbitt, et al., NO.2003-SC-0556-DG, 172 S.W.3d 786 (Ky.2005) occurred on Interstate Highway 75 (1-75) in Madison County, Kentucky, at approximately 6:10 p.m. on November 17, 1989. Judy Logsdon was operating a Skamper motor home in the right southbound lane of 1-75 with her husband, Larry Logsdon, her daughter and son-in-law, Cecelia and Michael Bender, and the Benders’ two infant children as passengers. Logsdon encountered a construction zone between mile point (M.P.) 88 and M.P. 77 where Allen Company, a paving contractor, was repaving the southbound lanes pursuant to a contract with the Transportation Cabinet. The paving of the highway, itself, had been completed, and both southbound lanes were open to traffic. However, reconstruction of the right shoulder of the highway was incomplete, and the white edge line between the right southbound lane and the ten-foot-wide paved shoulder had not been repainted. An acceleration lane from a roadside rest area merges with the right southbound lane just prior to M.P. 82. There were no “rumble strips” at the point of merger or on the paved portion of the shoulder for 310 feet south of that point. To the right of the paved shoulder is a five-to-six-foot-wide earthen shoulder, then a drop-off to a ditch at the base of a rough-cut rock wall. The total distance from the outside edge of the right southbound lane to the rock wall is twenty-seven feet.

Mrs. Logsdon testified that she perceived the acceleration lane leading from the rest area to be a third southbound lane of highway and began driving to the right to make room for faster-moving traffic. She drove across the paved shoulder onto the earthen shoulder, then into the ditch where the motor home impacted with the rock wall. The mostly plywood body of the vehicle essentially disintegrated as it scraped along the rock wall before its chassis returned to the traveled portion of the highway. Larry Logsdon, Cecelia Bender, and Michael Bender were ejected from the vehicle, causing serious physical injuries to Mr. Logsdon and the deaths of Cecelia and Michael Bender. Mr. Logs-don and the Benders’ estates brought civil actions in the Madison Circuit Court against Mrs. Logsdon, Allen Company, and Skamper Corporation, the manufacturer of the motor home, and this action in the Board of Claims against the Transportation Cabinet. The claimants alleged that the Cabinet was negligent in failing to repaint the right edge line of the highway and replace the rumble strips, both of which would have warned Mrs. Logsdon that she was driving on the shoulder of the highway, and in failing to erect a guardrail between the shoulder and the drop-off to the ditch, which may have prevented the motor home from impacting the rock wall.

In 1989, the Transportation Cabinet generally adhered to guardrail guidelines established in the Guide for Selecting, Locating, and Designing Traffic Barriers, published in 1977 by the American Association of Highway and Transportation Officials (AASHTO), and the more recent Roadside Design Guide published in 1988 by AASHTO. However, since neither publication was officially adopted by statute or regulation, adherence to the guidelines was both unofficial and unrequired. AASHTO recommends a minimum “clear zone” of thirty feet between the edge of the roadway and a roadside hazard, a distance deemed sufficient to permit the operator of a “run-off-road” vehicle to regain control of the vehicle before reaching the hazard. The clear zone at the site of Logsdon’s accident was only twenty-seven feet — and that included the ditch line. The Cabinet’s expert testified that AASH-TO recommends that guardrails not be erected if the surface of the rock wall is smooth, because an impact with the wall would cause no more damage than an impact with a guardrail, and the presence of the guardrail, itself, further reduces the width of the clear zone. He further testified that if the surface of the rock wall is rough-cut, as here, AASHTO provides that whether to erect a guardrail is a “judgment call.”

AASHTO also recommends erection of a guardrail between the roadway and a drop-off within the clear zone if the slope of the drop-off exceeds a ratio of 4:1, the degree of slope from which a vehicle is deemed unable to recover. There was evidence that portions of the drop-off to the ditch adjacent to the rock wall at this accident site exceeded a slope ratio of 4:1. The Cabinet argued that the shoulders were still under construction and that the contract called for a final slope ratio of 4:1. The Board of Claims found that the Roadside Design Guide “required” the Cabinet to erect a guardrail between the highway and the rock wall, and that its failure to do so constituted negligence. Babbitt v. Commonwealth, Transp. Cabinet, No. 90-1813, slip op. at 8 (Ky. Bd. of Claims, July 15, 1999). However, at another point, the opinion states that “[t]he Plaintiffs have not proven negligence on the part of the Defendant.” Id. at 10. The Board also concluded that Mrs. Logsdon’s negligence was a superseding cause that relieved the Cabinet of any liability. Id. The Madison Circuit Court reversed and remanded with directions to make findings with respect to damages and comparative fault, concluding that the Board was bound by its apparent previous findings of negligence on the part of both Mrs. Logsdon and the Cabinet. Babbitt v. Commonwealth, Transp. Cabinet, No. 99-CI-00892, slip op. at 2-3 (Madison Cir. Ct., June 5, 2002). The Court of Appeals affirmed the judgment and order of the Madison Circuit Court.

II. TAYLOR.

The accident in Taylor v. Commonwealth, Transportation Cabinet, No.2003SC-0586-DG, occurred at approximately 10:30 p.m. on April 1, 1999, when Sherry Taylor drove her 1992 Dodge Shadow automobile directly into the headwall of a concrete culvert located approximately three feet from the edge of the paved roadway at M.P. 5.620 on U.S. Highway 231 in Daviess County, Kentucky. Taylor died as a result of the collision. The culvert is located on a long, straight stretch of two-lane highway that Taylor had traversed many times in the past. The weather was clear and the road was dry. There was a black and orange striped “object sign” located directly in front of the headwall. There is no explanation for why Taylor’s vehicle left the traveled portion of the roadway. Taylor’s estate brought this action in the Board of Claims asserting that the Cabinet was negligent in failing to install a guardrail that would have deflected Taylor’s vehicle away from the head-wall, thus perhaps reducing her injuries and saving her life.

There was testimony in Taylor that thousands of existing roadside hazards in Kentucky could be made more safe by the erection of guardrails. While guardrails are always installed when highway sections are newly constructed or reconstructed, many more roadside hazards exist on roadways that, like highway 231, were constructed decades ago. Appellant concedes that deficits in both money and manpower make it impossible to immediately erect guardrails at all of those sites. In fact, there was evidence that in one recent fiscal year, no money at all was available for guardrail improvements in Kentucky. To accommodate this fiscal limitation, the Transportation Cabinet attempts to identify and prioritize all existing roadside hazards that could be improved by guardrails and to erect those guardrails piecemeal as funds become available. Taylor’s estate argues that the Cabinet was negligent in not giving this particular headwall a higher priority. Specifically, it identifies eight similar headwalls alongside highway 231, all located within four miles of M.P. 5.620, against which the Cabinet erected guardrail protections in 1996, leaving only the headwall at M.P. 5.620 unprotected.

In June 1989, Jerry G. Pigman (the Commonwealth’s expert in Babbitt) and Kenneth R. Agent (the Commonwealth’s expert in Taylor), both research engineers at the Kentucky Transportation Center, completed a research project requested by the Transportation Cabinet, the purpose of which was to establish a logical approach to the identification and prioritization of Kentucky’s guardrail needs based on degree of hazard and available funds. The project produced a report entitled Warrants and Guidelines for Installation of Guardrail (“Warrants & Guidelines ”). The report was never officially adopted by statute or regulation; however, it was “implemented” by a letter dated May 17,1990, from the Kentucky State Highway Engineer to the Division Administrator for the Federal Highway Administration. The letter contains a disclaimer that the implementation applies “only to maintenance activities and new installations of guardrail on existing roadways. Guardrail standards for new construction and for reconstruction, rehabilitation and restoration are not affected.”

The Warrants & Guidelines created a hazard-index point system for evaluating the degree of hazard, consisting of a maximum of 100 possible points broken down as follows:

Charles Briggs, engineering branch manager of the Cabinet’s division of operations in Frankfort, testified that each local district identifies and creates a hazard-index rating for each roadside hazard in the district. (There are twelve districts; Sherry Taylor’s accident occurred in district 2.) The district engineer then submits a list of the district’s guardrail priorities to the division of operations. The list may or may not correlate with the hazard-index points assigned to each hazard. In other words, the district engineer may give a hazard with fewer index points a higher priority than a hazard with more index points. The Cabinet has a policy that each proposed budget will include at least one guardrail project in each of the twelve districts. The Cabinet admits the policy is politically motivated to facilitate adoption of its proposed budget by the General Assembly. To that extent, a project with fewer hazard-index points in one district may receive a higher priority than a project with more hazard-index points in another district. Further, a district with a mountainous terrain will naturally have more hazardous roadside conditions than a district with a relatively flat terrain. Thus, a hazard given a tenth priority in a mountainous district might have more hazard-index points than a fourth priority in, e.g., district 2, where the terrain is relatively flat, thus posing fewer roadside hazards. However, the projects approved within each district are prioritized solely on the basis of the hazard-index points. Only if two projects within the same district have the same hazard-index points does the district engineer’s personal priority receive preference.

Other considerations in prioritizing guardrail needs are available funds and cost-effectiveness, ¿a, how much improvement can be accomplished with the funds available. The Warrants & Guidelines summarize the procedures for identifying and prioritizing locations in need of guardrails as follows:

1) Development of critical numbers and rates of run-off-road accidents;
2) Preparation of a list of locations with critical rates of run-off-road accidents;
3) Development of a hazard-index point system;
4) Conducting a field survey;
5) Tabulation of hazard-index points;
6) Determination of improvement costs;
7) Determination of improvement benefits;
8) Analysis of cost-effectiveness.

On February 1, 1996, Hosea Brown, a civil engineer and Cabinet employee assigned to district 2, conducted a field survey of the roadside hazard presented by the culvert at M.P. 5.620 on highway 231. He gave the culvert and headwall only forty hazard-index points, primarily because there had been no prior run-off-road accidents at the site, thus no points could be assigned for the first two categories, i.e., number of accidents and accident rate. When the district engineer submitted his priority list to the division of operations, he listed the culvert headwall at M.P. 5.620 and the three headwalls to the north of the culvert jointly as his fourth priority. The five headwalls to the south of M.P. 5.620 were listed jointly as his tenth priority. When the division of operations released its guardrail budget for fiscal year 1996-1997, it included only three projects for district 2. The three headwalls to the north of the culvert at M.P. 5.620 were jointly listed as its first priority and the five headwalls to the south of the culvert were jointly listed as its second priority. (The third and last priority was a nine-mile stretch of guardrail in Union County.) Briggs explained that the three headwalls north of the culvert were located between 3.2 and 3.8 miles north of M.P. 5.620, but within 0.6 miles of each other, so that one span of guardrail 0.6 miles in length would provide protection against all three; and that the other five headwalls were located between 1.3 and 1.8 miles south of M.P. 5.620, but within 0.5 miles of each other, so that one span of guardrail 0.5 miles in length would provide protection against all five.

On the basis of this evidence, the Board of Claims could have resolved whether the Cabinet had a duty to erect a guardrail at M.P. 5.620 prior to April 1, 1999, and whether its failure to do so constituted negligence. Instead, the Board interpreted language in Commonwealth Transportation Cabinet v. Shadrick, 956 S.W.2d 898 (Ky.1997), as holding that the Cabinet has no duty whatsoever to protect negligent motorists from colliding with roadside hazards that are in plain view. “There was no evidence in the record that would indicate that Sherry Taylor’s leaving the roadway was due to anything other than her failure to exercise due care for her own safety.” Taylor v. Commonwealth, Transp. Cabinet, No. 99-1035, slip op. at 4 (Ky.Bd. Claims, Dec. 20, 2001) (emphasis added). The Daviess Circuit Court and the Court of Appeals both affirmed.

III. SUBCONTRACTOR DEFENSE.

The Cabinet’s first defense in Babbitt was premised upon KRS 44.073(15), which provides:

Neither the Commonwealth nor any of its cabinets, departments, bureaus, or agencies or any officers, agents, or employees thereof shall be liable under a respondeat superior theory or any other similar theory for the acts of independent contractors, contractors, or subcontractors thereof or anyone else doing work or providing services for the state on a volunteer basis or pursuant to a contract therewith.

That may very well have been a valid defense to the claim pertaining to the absence of rumble strips, because there was evidence that Allen Company had paved over the 310 feet of missing strips. However, the Cabinet’s witnesses admitted that it was the duty of the Cabinet, not Allen Company, to repaint the right edge line between the right southbound lane and the paved shoulder. The Board made no findings with respect to either of these claims of negligence. The Cabinet’s contract with Allen Company did not call for the erection of a guardrail between the shoulder of the road and the ditch adjacent to the rough-cut rock wall. The Cabinet’s defense to this issue was that its failure to erect a guardrail at that location did not constitute negligence. As noted earlier, the Board found both ways on this issue.

IV. LIABILITY.

KRS 44.120 provides that the Board of Claims may make an award to a claimant if “the damage claimed was caused by such negligence on the part of the Commonwealth or its agents as would entitle the claimant to a judgment in an action at law if the state were amenable to such action.” (Emphasis added.) KRS 411.182(2) requires the trier of fact to determine the extent of “the causal relation between the conduct of each party ... and the damages [sustained] .... ” (Emphasis added.) Thus, the Board was required to determine whether the Cabinet had a duty to install guardrails at either accident site, and/or to place rumble strips and a right edge line at the 1-75 accident site; and, if so, whether its failure to do so constituted negligence; and, if so, the percentage of causation of each claimant’s damages (not causation of the accident) attributable to its failure to do so. Obviously, the failure to erect a guardrail did not cause either of these vehicles to leave the highway, though the absence of rumble strips and/or a right edge line could be found to have contributed to cause Logsdon’s vehicle to have done so. However, the failure to erect a guardrail might have contributed to the degree of damages sustained in either or both accident(s). While there is some language in Commonwealth Transportation Cabinet v. Shadrick, 956 S.W.2d 898 (Ky.1997), that could be interpreted otherwise, comparative fault, as defined in KRS 411.182, applies to actions brought in the Board of Claims.

Shadrick upheld a finding by the Board of Claims that the Transportation Cabinet owed no duty to traveling motorists to remove a vehicle parked by someone else within the right-of-way, but some eight and one-half feet from the traveled portion of the highway. Finding negligence only on the part of the party who parked the vehicle and the operator of the vehicle that struck it, Shadrick held that “[i]t would be unreasonable and impractical to hold the Department responsible for the negligence of others.” Id. at 901. Shadrick did state that “[t]he Department’s duty with respect to the maintenance of roads is to maintain them in a reasonably safe condition for those members of the traveling public exercising due care for their own safety.” Id. at 900 (emphasis added). In the context of the facts in Shadrick, that meant only that the Department was not required to remove vehicles parked by someone else in the right-of-way unless they obstructed the traveled portion of the highway where persons exercising due care for their own safety would be operating their vehicles. It did not mean that the long-discarded doctrine of contributory negligence as a complete defense applies to claims against highway authorities in Kentucky. The cases sub judice are easily distinguishable from Shadrick because the Commonwealth presumably created the ditch and the rough-cut rock wall struck by Logsdon when it constructed 1-75, and it clearly erected the culvert headwall struck by Taylor.

We also agree with the Madison Circuit Court and the Court of Appeals that the Board of Claims misapplied the concept of superseding cause. “A superseding cause is an act of a third person or other force which by its intervention prevents the actor from being liable for harm to another which his antecedent negligence is a substantial factor in bringing about.” Donegan v. Denney, 457 S.W.2d 958, 958 (Ky.1970) (quoting Restatement (Second) of Torts § 440 (1965)). The Board reasoned that Judy Logsdon’s negligence in driving the motor home off the roadway superseded any negligence on the part of the Cabinet, thus precluding any liability of the Cabinet for the damages sustained by Larry Logsdon and the Benders’ estates. We disagree. In the first place, the rationale for the doctrine of superseding cause has been substantially diminished by the adoption of comparative negligence.

The advent of more refined tools for apportionment of liability — comparative responsibility, comparative contribution, and substantial modification of joint and several liability — also has undermined one important rationale for these rules: the use of scope of liability to prevent a modestly negligent tortfeasor from being held liable for the entirety of another’s harm when the tortious acts of other, more culpable persons were also a cause of the harm.

Restatement (Third) of Torts, Liab. for Phys. Harm § 34 cmt. a (Proposed Final Draft No. 1, 2005). Secondly, if the Cabinet was negligent in failing to replace the rumble strips or right edge line, or in failing to erect a guardrail where Logs-don’s motor home struck the rock wall, Logsdon’s negligence was “precisely the risk[] that render[s] tortious [the Cabinet’s] failure to adopt adequate precautions.” Id. at cmt. d. After all, a motorist who drives his or her vehicle off the traveled portion of the highway will almost always be deemed to have been contribu-torily negligent to some extent.

Our earliest line of cases on the subject of guardrails and barriers held that they were intended as warnings and that the highway authority had no duty to erect such obstacles for the purpose of preventing motorists from driving into rivers, off cliffs, or into roadside obstacles. E.g., Christopher’s Adm’r v. Louisville & Nashville R.R. Co., 259 Ky. 166, 82 S.W.2d 282, 283 (1935) (“Neither the ordinances of the city under which the highway was reconstructed, nor the statutes, required the railroad company to erect or maintain a guard along the side of the highway or at the top of the embankment, or at all.”); City of Ludlow v. Albers, 253 Ky. 525, 69 S.W.2d 1051, 1056 (1934) (“The city was not duty bound to erect and maintain a barrier along the edge of the embankment to prevent vehicles while using the street, going over it.”); City of Catlettsburg v. Sutherland’s Adm’r, 247 Ky. 540, 57 S.W.2d 512, 514 (1933) (“[Wjhere the condition is obvious and the elements of concealment of the danger or notice thereof are not involved, it is held that there is no duty to maintain a barrier of sufficient strength to resist the force of an automobile or to prevent it from going over an embankment alongside the highway, even though at a curve, presenting a hazardous condition.”); Watkins’ Adm’r v. City of Catlettsburg, 243 Ky. 197, 47 S.W.2d 1032, 1034 (1932) (same). Not only were those cases decided in an era when contributory negligence was a complete bar to recovery, they were decided in an era when vehicles were slower, traffic volume was lighter, and highways were not designed with interstate travel in mind. Thirty-six years later, our predecessor court expressed a different view about this issue.

In Commonwealth, Department of Highways v. Automobile Club Insurance Co., 467 S.W.2d 326 (Ky.1971), our predecessor court upheld a Board of Claims award against the Department of Highways for its failure to erect “signs, guardrails, or barriers” at or near a sharp curve where the vehicle in which the deceased was a passenger left the roadway. Id. at 330. In doing so, it held as follows with respect to the duty of the highway authority to provide warnings and barriers for the protection of motorists:

There were no signs or guardrails or other barriers such as posts at or near the curve where the accident occurred. Appellant Department contends that it is under no compulsion to place guardrails or curve signs at every curve along its highways. We agree. But it is also true that the public authority having control over a highway has a duty to keep it in a reasonably safe condition for travel, to provide proper safeguards, and to give adequate warning of dangerous conditions in the highway. This includes the duty to erect warning signs and to erect and maintain barriers or guardrails at dangerous places on the highway to enable motorists, exercising ordinary care and prudence, to avoid injury to themselves and others. The appellant is under no duty to provide warning signs, guardrails, or barriers when an unusual or dangerous condition does not exist. Neither is it appellant’s duty to erect guardrails or barriers of sufficient strength to withstand any degree of force. However, it is appellant’s duty to furnish adequate protection for the general traveling public and users of the highway facilities.

Id. at 328.

Thirty-four years later, we conclude that this analysis remains sound (except for the implication that the duty is owed only to persons who are not contributorily negligent) and is in accordance with the general rule.

The exercise of due care by highway authorities may require them to safeguard dangerous places by barriers or guard rails, but only where their absence renders the highway unsafe for travel or the road presents an extraordinary hazard.
The general rules as to liability for injury arising from a failure to maintain guard rails or barriers apply as to liability for damage to motor vehicles or injury to their occupants.... [T]he due care owed to motorists by the highway authorities may require the safeguarding of a dangerous place by the construction and maintenance of suitable barriers, guard rails or fences. While the failure to erect a barrier might not cause the accident, such a failure might be a substantial factor in aggravation of the injuries and, in that event, with proof of causation and negligence, the State will be liable.
The exercise of ordinary care is required, and guard rails need be erected only where their absence renders the highway unsafe for ordinary travel; the road presents an extraordinary condition or unusual hazard; the situation is inherently dangerous; a duty was voluntarily assumed; or the duty arises at common law or is specifically required by statute. Barriers need not be maintained where a dangerous or unusual condition does not exist.
All the circumstances are to be considered in determining whether the failure to maintain barriers or guard rails is negligence, including whether this is the accepted practice or meets relevant design standards, and the character of the road or the thinly settled nature of the community. The test is not the distance of the dangerous object or place from the highway .... Ordinarily, the authorities are not required to provide barriers to prevent travelers from straying off the way to adjoining lands upon which there may be dangerous places.
60A C.J.S. Motor Vehicles § 457 (2005) (footnotes omitted).

Said another way, a highway authority is not automatically Hable every time a motorist drives his vehicle off the traveled portion of the highway and strikes a roadside hazard. Nor does the failure to follow design guidelines, such as those recommended by AASHTO or the Warrants & Guidelines, constitute the equivalent of negHgence per se (as impHed by the Board in the Babbitt case). Whether the failure to provide warnings or to erect a guardrail at a particular location constitutes negH-gence on the part of the highway authority is a fact-intensive inquiry for which the various design guidelines, as well as available funds and cost effectiveness, may be considered. If a determination is made that the failure to provide warnings or to erect a guardrail constitutes negHgence, the factfinder must then determine from the evidence whether the presence of warnings or a guardrail would have prevented or reduced the damages sustained by the claimant and apportion liability in accordance with KRS 411.182.

In Babbitt, the Board reached contradictory conclusions with respect to the issue of the Cabinet’s negHgence and an erroneous conclusion that Judy Logsdon’s negH-gence was a superseding cause. It made no findings with respect to the missing rumble strips and right edge line. In Taylor, the Board misinterpreted Shadrick as completely exonerating the Cabinet when the hazard is in plain view and the driver is contributorily negligent, compelHng the erroneous conclusion that Sherry Taylor’s own negHgence obviated any need to consider whether the Cabinet had a duty to erect a guardrail at M.P. 5.620 and, if so, whether its failure to do so contributed to cause Taylor’s death, which would require an apportionment of damages.

Accordingly, we affirm in part the Court of Appeals’ decision to reverse and remand Babbitt, but reverse that decision insofar as it concludes that the Board is bound on remand to deem the Cabinet negligent. We reverse the Court of Appeals’ decision in Taylor. We remand both cases to the Board of Claims with directions to reconsider its decisions in accordance with the principles set forth in this opinion.

All concur.

      . This person's name was spelled "Cecelia” in both the caption and body of the original complaint filed in the Board of Claims, and throughout the transcript of evidence. It is spelled "Cecilia” in the Motion for Discretionary Review. We assume the original spelling is correct.

      . "Rumble strips” are ridges on the paved portion of the shoulder that cause the vehicle s tires to bump up and down ("rumble”) to warn the driver that the vehicle is no longer on the traveled portion of the roadway.

      .The delay in the resolution of this claim was apparently due to the pendency of the Madison Circuit Court civil actions against the other defendants, all of which were ultimately settled.

      . No evidence was adduced as to the hazard-index points assigned to the other headwalls alongside highway 231 that were guardrailed in 1996.

      . Automobile Club was also decided prior to the adoption of comparative negligence in Kentucky. However, contributory negligence was not a factor in that case because the injured party was a passenger in the vehicle that left the roadway. His estate had already recovered from the driver’s insurance company, which brought the Board of Claims action seeking contribution from the Department of Highways.


source: Caselaw Access Project

author: TACKETT, Judge.

license: Public Domain

text:
    Dennis HEIZER, Personal Representative of the Estate of James Heizer, Deceased, Appellant, v. CINCINNATI, NEW ORLEANS AND PACIFIC RAILWAY CO.; Norfolk Southern Railway Co.; and CSX Transportation, Inc., Appellees.
    No. 2003-CA-000922-MR.
    Court of Appeals of Kentucky.
    Aug. 6, 2004.
    Discretionary Review Denied by Supreme Court Oct. 12, 2005.

      John D. Roven, Roven, Kaplan & Wells, L.L.P., Houston, TX, Steven T. McMurtry, Ft. Mitchell, KY, for appellant.
    Kendra L. Smith, Burns, White & Hick-ton, LLC, Pittsburgh, PA, James F. Brockman, Lindhorst & Dreidame, Cincinnati, OH, for appellees.
    Before COMBS, Chief Judge; TACKETT and VANMETER, Judges.
   OPINION

TACKETT, Judge.

Dennis Heizer (hereinafter referred to as “Dennis”), the personal representative of the estate of James Heizer (hereinafter referred to as “James”), appeals from an order entered on April 16, 2003 by the Campbell Circuit Court that granted summary judgment in favor of the appellees, Cincinnati, New Orleans and Pacific Railway Company; CSX Transportation, Inc.; and Norfolk Southern Railway Company (hereinafter referred to as “the Railroads”).

On appeal, Dennis argues that the trial court erred when it found that James, the decedent, possessed actual knowledge that his cancer was work-related and that the trial court erred when it found as a matter of law that James possessed constructive knowledge that his cancer was work-related. Dennis argues that the trial court erred when it ruled that the accrual of a survival claim pursuant to the Federal Employers’ Liability Act, 45 U.S.C. § 51-GO (hereinafter referred to as “FELA”), could not be tolled by mental incapacity. Lastly, Dennis argues that the trial court erred when it found the three-year statute of limitations, set forth in FELA, 45 U.S.C. § 56, barred the wrongful death claim filed on behalf of James’s children. Finding that the trial court did not err regarding the dismissal of the survival action, this Court affirms in part the trial court’s order of April 16, 2003. However, finding that the trial court did err regarding the dismissal of the wrongful death claim, this Court reverses in part the trial court’s order and remands with instructions.

FACTS

At various times in the 1940’s and 1950’s, James Heizer worked either for the Railroads or for their predecessor companies. On December 26, 1998, James died from mesothelioma, a cancer which is almost exclusively connected to prolonged exposure to asbestos. On January 19, 2001, Dennis Heizer, one of James’s sons and the executor of his estate, filed, pursuant to FELA, a survival action and a wrongful death claim against the Railroads alleging that they had negligently exposed James to asbestos while he had worked for them.

On December 19, 2002, the Railroads collectively filed a motion for summary judgment. They argued that the three-year statute of limitations found in 45 U.S.C. § 56 barred both the survival action and the wrongful death claim. The Railroads argued that the discovery rule applied to the FELA claims and argued that James either actually knew his meso-thelioma was work-related or should have reasonably known it was work-related by January of 1997. The trial court agreed and found that, no later than January of 1997, James possessed actual knowledge that he had mesothelioma and it was work-related. The trial court also concluded that, no later than January of 1997, James possessed constructive knowledge that he had cancer and it was work-related. Thus, the trial court granted summary judgment in favor of the Railroads. Dennis then appealed to this Court.

ACTUAL KNOWLEDGE

Dennis argues that the Campbell Circuit Court erred when it found that James had actual knowledge that his mesothelioma was occupationally related. Further, he contends the trial court erred when it found that James had acquired this knowledge in January of 1997 and when it concluded that the three-year statute of limitations had begun to run in January of 1997. In support of this position, Dennis argues that the trial court not only ignored the testimony contained in his deposition but also ignored the affidavits of his brothers, David Heizer (hereinafter referred to as “David”) and R.J. Heizer (hereinafter referred to as “R.J.”). In David’s affidavit, he stated that he accompanied James to a Veteran’s Administration medical facility on two different occasions when biopsies were performed. The first biopsy was performed in 1995, and the result was negative for cancer. The second was performed in November of 1996, and the result indicated cancer. According to David’s affidavit, James was told that the second biopsy showed that he had cancer. Later, David accompanied James to a follow-up meeting in January of 1997 where James was told that the cancer was incurable. David stated in his affidavit that he never heard anyone mention asbestos to James. R.J. also stated in his affidavit that no one ever mentioned asbestos to James. In addition, R.J. stated that James always referred to his illness as lung cancer not mesothelioma. Furthermore, R.J. stated that, after James’s death, a nurse mentioned asbestos to the family for the first time and suggested that they should consider an autopsy. According to R.J.’s affidavit, an autopsy was performed and it revealed the presence of asbestos in James’s lungs. Dennis contends the family learned at that time that James’s mesothelioma was caused by his past exposure to asbestos.

Dennis also argues that the medical documents found in the record do not indicate that any medical personnel ever explained to James the link between asbestos exposure and mesothelioma. According to Dennis, the record contains abundant evidence that James never knew that his mesothelioma was related to asbestos.

This Court has previously stated that, “[t]he standard of review on appeal of a summary judgment is whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law. There is no requirement that the appellate court defer to the trial court since factual findings are not at issue.” (Citations omitted.) Scifres v. Kraft, Ky.App., 916 S.W.2d 779, 781 (1996).

This Court agrees with Dennis that the trial court erred when it found that James possessed actual knowledge regarding the causal connection between his former occupation and his cancer. The Railroads rely heavily on a discharge summary from December 9, 1996 in which a physician stated that James most likely suffered from mesothelioma due to his past exposure to asbestos. However, neither this medical document nor any other found in the record contains any evidence that any medical personnel ever explained to James the connection between asbestos exposure and mesothelioma. Nor does the record contain any evidence that James ever read this discharge summary or any of the other medical documents contained in the record. However, while the trial court erred, this Court concludes it was harmless error since James possessed constructive knowledge as discussed below.

CONSTRUCTIVE KNOWLEDGE

Dennis argues that the Campbell Circuit Court erred when it concluded that James possessed constructive knowledge that his mesothelioma was work-related and that James should have known this no later than January of 1997. In support of this position, Dennis argues that both James and the family had always assumed that James’s cancer was caused by smoking. Dennis contends that R.J.’s affidavit supports this contention since R.J. stated that James always referred to his disease as lung cancer not mesothelioma.

Furthermore, Dennis cites Bath Iron Works Corp. v. U.S. Dept. of Labor, 336 F.3d 51 (1st Cir.2003) a non-FELA meso-thelioma case. In Bath Iron Works, decedent, a retired longshoreman had contracted anaplastic mesothelioma after prolonged exposure to asbestos. Id. at 53, 58. The decedent’s wife discovered three years after his death that his cancer was related to asbestos exposure and filed suit. Id. at 57. The employer argued that the wife’s claim was barred by the two-year statute of limitations set forth in 33 U.S.C. § 913 since she failed to exercise reasonable diligence and failed to discover the cause of her husband’s cancer. The 1st Circuit stated that the word “mesothelioma” conveyed no special meaning to decedent’s wife other than what she already knew; i.e., cancer. Id. at 58. Furthermore, because of the remoteness of decedent’s exposure compared to the manifestation of the disease, there was no logical reason for his wife to exercise due diligence earlier. Id. at 59.

Dennis also cites Shesler v. Consolidated Rail Corp., 151 Ohio App.3d 462, 784 N.E.2d 725 (2003). In Shesler, the Ohio Appellate Court determined that the plaintiff was under no duty to know what “pleural plaques” were. Furthermore, the plaintiff did not learn of the relationship between the plaques and asbestos until 1998 when a specialist explained the causal connection to plaintiff.

Dennis argues there is no evidence in the record that James “constructively knew” of the causal connection between his mesothelioma and his exposure to asbestos. Dennis contends there is no evidence in the record to conclude that the word “mesothelioma” held any special meaning for James other than “lung cancer”.

In 45 U.S.C. § 59, Congress provided that an injured employee’s cause of action would survive the employee’s death and that the employee’s personal representative may maintain a survival action for the benefit of the employee’s surviving spouse and children. Congress set forth in 45 U.S.C. § 56 that “[n]o action shall be maintained ... unless commenced within three years from the day the cause of action accrued.” Such an action accrues when the injured employee knows about both the injury and its cause. Fries v. Chicago & Northwestern Transportation Company, 909 F.2d 1092, 1094 (1990) citing Urie v. Thompson, 337 U.S. 163, 69 S.Ct. 1018, 93 L.Ed. 1282 (1949). However, when the exact date of an injury is indeterminate because it was the result of continual exposure to a harmful substance, such as in the instant case, the injured employee’s action accrues when the injury manifests itself. Id.

For the purpose of the three-year statute of limitation set forth in 45 U.S.C. § 56, an injured employee’s survival action accrues,

when a reasonable person knows or in the exercise of reasonable diligence should have known of both the injury and its governing cause. Both components require an objective inquiry into when the plaintiff knew or should have known, in the exercise of reasonable diligence, the essential facts of injury and cause. Moreover, the injured plaintiff need not be certain which cause, if many are possible, is the governing cause but only need know or have reason to know of a potential cause. [T]his rule imposes on injured plaintiffs an affirmative duty to investigate the potential cause of his injury[.] (Citations omitted.)

Id. at 1095.

Dennis concedes that James knew in January of 1997 that he had been diagnosed with mesothelioma. There can be no question that James possessed actual knowledge that he had an injury. The next question is: when should James have known the essential facts regarding the cause of his illness? Once he was diagnosed, James had an affirmative duty to exercise reasonable diligence to investigate the cause of his cancer. The record shows that James was preliminarily diagnosed with mesothelioma in December of 1996 and an oncologist consulted with him concerning potential treatments. The record shows that James subsequently met with physicians in January of 1997. He was conclusively diagnosed with mesothelioma and told it was incurable. Despite this prognosis, the record shows that in March of 1997 James had sought treatment options from at least one other physician.

Given the record, this Court concludes that with the exercise of reasonable diligence, James should have known about the causal connection between his mesothelio-ma and his exposure to asbestos while working for the Railroads no earlier than December of 1996 but no later than March of 1997. The trial court determined that the cause of action accrued in January of 1997, and this Court agrees with that finding. This means that James’s children had until January of 2000 to file their survival action before the statute of limitations barred it. However, Dennis did not file the survival action until January 19, 2001, after the three-year statute of limitations had run. Furthermore, he has failed to raise any genuine issue regarding the accrual of the survival action and the running of the statute of limitations. Thus, the trial court did not err when it concluded that James possessed constructive knowledge regarding the cause of his illness and did not err when it dismissed the survival action as barred by the statute of limitations.

MENTAL DISABILITY

Dennis argues that the Campbell Circuit Court erred when it concluded that FELA’s three-year statute of limitations was not tolled by a finding that James was mentally disabled. Dennis points out that the record contains medical documents that indicate that James had difficulties with his memory and reasoning abilities after suffering a stroke in the early 1990’s. In addition, in August of 1998, a few months prior to his death, James was admitted to St. Elizabeth South Hospital. Dennis points out that the admitting doctor noted that the nursing home in which James had been previously staying had stated that James had dementia. Also, Dennis calls attention to a patient transfer document that indicates that one month before James died, he had impaired memory and had periods of confusion. Dennis argues that the state of Arizona has determined that mental incompetency can toll the statute of limitation in a FELA action. Brooks v. Southern Pacific Company, Ariz., 105 Ariz. 442, 466 P.2d 736 (1970). He urges this Court to adopt Arizona’s ruling and reverse the trial court.

While Dennis’s position is not without merit, this Court declines to adopt it at this time. Even if this Court did, it would afford Dennis no relief. The record contains no evidence that James was mentally disabled at the time he was diagnosed with mesothelioma. In fact, the record indicates quite the opposite. In Dennis’s own deposition, he paints a picture of James as a vibrant individual who was both mentally and physically active. Moreover, medical documents found in the record indicate that James was keenly interested in his health.

The record does indicate that approximately five months before his death, James may have experienced some mental difficulties. However, the record does not indicate whether such problems were so severe that they would justify tolling the statute of limitations. Even if they were, the statute would only have been tolled for approximately five months, extending it to June of 2000. Since Dennis filed the survival action in January of 2001, the statute of limitations would have still barred the survival action.

WRONGFUL DEATH CLAIM

Dennis argues that the Campbell Circuit Court erred when it concluded that the wrongful death claim was barred by the three-year statute of limitations. The trial court held that the wrongful death claim was dependent on the viability of the survival action. Dennis points out that 45 U.S.C. § 51 established wrongful death actions for the benefit of the surviving spouse and children of a railway worker. Furthermore, the three-year statute of limitations for a wrongful death claim begins to run at the time of the worker’s death. 45 U.S.C. § 51. While Dennis acknowledges that a FELA wrongful death claim is derivative of a survival claim, he cites both Flynn v. New York, N.H. & H.R. Co., 283 U.S. 53, 51 S.Ct. 357, 75 L.Ed. 837 (1931) and McGhee v. Chesapeake & Ohio Railroad Co., 173 F.Supp. 587 (W.D.Mich.1959) for the proposition that a FELA wrongful death claim is extinguished only when the three-year statute of limitations regarding the survival claim has run during the lifetime of the injured employee. Dennis points out that James died on December 26, 1998. Even if the three-year statute of limitations regarding the survival action had begun to run in January of 1997, James’s claim had not expired by the time of his death. Dennis points out that he filed the wrongful death claim within three years of James’s death.

This Court agrees. In Michigan Central Railroad Company v. Vreeland, 227 U.S. 59, 68, 33 S.Ct. 192, 195, 57 L.Ed. 417 (1913), the United States Supreme Court determined that the Federal Employers’ Liability Act created a new cause of action for the wrongful death of an injured employee. This cause of action may be brought by the personal representative of the deceased employee for the benefit of the employee’s surviving spouse and children. Id., 45 U.S.C. § 51. The Supreme Court held,

[T]he foundation of the right of action is the original wrongful injury to the decedent, it has been generally held that the new action is a right dependent upon the existence of a right in the decedent immediately before his death to have maintained an action for his wrongful injury. (Citations omitted.)

Michigan Central Railroad Company v. Vreeland, supra at 70, 33 S.Ct. 192. The United States District Court for the Western District of Michigan stated the Supreme Court’s holding more clearly,

(1) that the Federal Employers’ Liability Act, Title 45 U.S.C.A. § 51, et seq., establishes two separate and distinct causes of action; (2) that the statute of limitations found in § 56 of the cited statute does not apply to a claim for damages resulting from an occupational disease until the injured employee has some reason to discover the existence of the occupational disease; (3) that the personal representative of a decedent is barred from instituting an action for wrongful death because of the statute of limitations contained in § 56 only if such statutory three year period expires during the lifetime of the decedentf.]

McGhee v. Chesapeake & O.R. Co., 173 F.Supp. 587, 590 (W.D.Mich.1959). In January of 1997, a FELA negligence action accrued in James’s favor, although he never exercised his right to file such a claim. At that time, the three-year statute of limitations began to run. This means that immediately prior to his death in December of 1998, James possessed the right to file a FELA action against the Railroads. Since James still had this right at the time of his death, his children’s right to bring a FELA wrongful death claim was not extinguished by James’s death. They had three years from the day of James’s death, until December 26, 2001, to file such a claim against the Railroads. Since Dennis filed the wrongful death claim on January 19, 2001, the three-year statute of limitations did not bar the claim. Thus, the trial court erred when it dismissed the wrongful death claim.

CONCLUSION

Therefore, for the foregoing reasons, this Court affirms in part the Campbell Circuit Court’s order of April 16, 2003 to the extent that it dismissed the survival action. However, this Court reverses in part regarding the wrongful death claim; remands to the Campbell Circuit Court and orders the trial court to reinstate this claim for further proceedings not inconsistent with this opinion.

ALL CONCUR.


author: SCHRODER, Judge.

text:
    William E. DEATON, Appellant, v. KENTUCKY HORSE RACING AUTHORITY, Successor to the Kentucky Racing Commission, Appellee.
    No. 2003-CA-002485-MR.
    Court of Appeals of Kentucky.
    Dec. 3, 2004.
    Discretionary Review Denied by Supreme Court Oct. 12, 2005.

      Charles W. Curry, Lexington, KY, for Appellant.
    Frank T. Becker, Lexington, KY, amicus curiae filed on behalf of Kentucky Horsemen’s Benevolent and Protective Association.
    J. Bruce Miller, Louisville, Spencer D. Noe, Lexington, KY, for Appellee.
    Before JOHNSON, SCHRODER, and TACKETT, Judges.
   OPINION

SCHRODER, Judge.

A licensed thoroughbred trainer appeals an order of the Franklin Circuit Court which affirmed an opinion of the Kentucky Racing Commission which affirmed and adopted a hearing officer’s recommendation to suspend the trainer for 150 days after one of his horses tested positive for Prozac. The trainer did not overcome the presumption created by 810 KAR 1:018 Section 3(3), nor did he show the penalty was unreasonable. Hence we affirm.

William E. Deaton (Deaton) is a licensed thoroughbred trainer with a contract to train and race horses owned by Dr. Joseph E. Kutz. Deaton and Kutz considered the possibility that one of their horses, Explo-do Red, expended too much energy prior to races due to his nervous nature. They also discussed possible solutions, including the possibility of using tranquilizers to improve the horse’s performance. Dr. Kutz placed Prozac into some liquid glucosamine and gave the mixture to Deaton, who fed it to Explodo Red (in with his feed), three times daily, for approximately ten days. On February 17, 2002, Explodo Red was entered into a claiming race at Turfway Park, where he finished second. The standard testing of his urine sample revealed the Prozac, which is a prohibited substance for horses in racing.

The Racing Stewards disqualified Explo-do Red’s second place finish and suspended Deaton for 150 days. Dr. Kutz was also disciplined but that case is not before this Court. Deaton appealed his suspension. Dr. Kutz wrote a letter to the Commission in which he confessed to placing Prozac into the Equinyl bottle that Deaton fed to Explodo Red. Dr. Kutz also maintained that Deaton did not know the Prozac was in the mixture. The hearing officer for the Commission found that Deaton did not know the mixture contained Prozac. Nevertheless, the hearing officer also concluded that:

6. Under 810 ICAR 1:008, section 3 subsection (4) the trainer bears primary responsibility for the condition of all horses trained by him to ensure that no horse will race with prohibited drugs or medication.
7. Under 810 KAR 1:018, Section (3), subsection (2) a trainer is subject to disciplinary action if he participated in any manner in the administration of a banned substance.
8. In light of the stipulations, William Deaton violated regulations of 810 KAR 1:008, Section 3, subsection (4) and 810 ICAR 1:018 Section (3), subsection (2).
9. Deaton asserts that the penalty imposed by the Stewards is inappropriate for the misconduct because Dr. Kutz added the Prozac to the feed mixture he gave to Deaton. If the Kentucky Racing Commission were to accept the assertion 810 KAR 1:008 Section (3) subsection (4) would be rendered meaningless. The regulation was promulgated to stop the very abuse, which occurred in this case. Deaton is responsible for the care of the horses he races and it is his responsibility to be sure that those horse [sic] race free of prohibited drugs or medications. If Deaton is to accept any mixture to be given to the horse from any other person, even the owner of the horse, he is under an obligation to be sure that the mixture does not contain any prohibited drug or medication which would be in the horse’s system on race day.
10. The Stewards are given the authority to suspend a licensee for violation of an administrative regulation as may be deemed appropriate in keeping with the seriousness of the violation. Prozac is a Class 2 drug, which has a high potential for affecting the outcome of a race. As most other Class 2 drugs [Pjrozac is intended to alter the consciousness or the psychic state of humans, and has no approved or indicated use in a horse....

The Commission adopted the hearing officer’s findings of fact and conclusions of law and upheld the 150-day suspension.

On appeal to the circuit court, Deaton contended the burden of proof was wrongly placed upon him and the penalty was not justified. Deaton argued that the burden of proof was improperly shifted from the Commission to the trainer, asserting that 810 KAR 1:018, Sections 1 and 3 conflicts with KRS 13B.090, which puts the burden of proof in administrative hearings on the Commission. The Amicus Brief also stresses this argument. The circuit court affirmed, reasoning that the regulations did not amount to “burden shifting” but created an affirmative defense, and that the evidence showed Deaton did not exercise reasonable care, much less a high degree of care, in safeguarding the horse.

On appeal to this Court, Deaton alleges the Commission’s findings of fact are arbitrary and the conclusions of law were erroneous. Specifically, he contends 810 KAR 1:018, Section 3, subsection (3)(a) requires the Commission to show that Deaton failed to exercise a “high degree of care” in safeguarding the horse from tampering, that the Commission’s ruling made Deaton an insurer.

It is important for our analysis to review the administrative regulations involved. 810 KAR 1:008, Section 3, states, in part: “A licensed trainer shall bear primary responsibility for the proper care, health, training condition, safety, and protection against the administration of prohibited drugs or medication of horses in his charge.” 810 KAR 1:018, Section 1 provides, in part: “(1) While participating in a race, a horse shall not carry in its body any medication, drug, substance, or metabolic derivative, that: ... (b) Could serve as a ... tranquilizer....” 810 KAR 1:018, Section 3(3) provides, in part:

If the commission determines that a horse had been administered a medication, drug, substance, or metabolic derivative thereof in violation of Section 1 or 2 of this administrative regulation, a licensed trainer, assistant trainer, groom, stable watchman, or other person having the immediate care and custody of a horse governed by the provisions of this administrative regulation shall be subject to disciplinary action if he does not establish that he had:
(a) Not been negligent by failing to exercise a high degree of care in safeguarding the horse from tampering....

This last section creates a presumption the trainer has to rebut. It does not change the burden of proof in 810 KAR 1:018, Section 3(3), or even KRS 13B.090(7). In a similar case involving harness racing (governed by Title 811 of the KAR), a panel of this Court dealt with similar regulations. Allen v. Kentucky Horse Racing Authority, Ky.App., 136 S.W.3d 54 (2004), involved a harness race at the Red Mile Racetrack in Lexington and a horse named CR Commando. Urine tests after two races revealed flunixin (an anti-inflammatory drug) in CR Commando’s urine and the purse money in both races was ordered returned and the owner/trainer fined. 811 KAR 1:090, Section 5 also creates a presumption:

If the post-race test or tests prescribed in Section 1 of this administrative regulation disclose the presence in a horse of any medication, stimulant, sedative, depressant, local anesthetic, or any foreign substance except as provided by Sections 14 and 15 of this administrative regulation, in any amount, it shall be presumed that the substance was administered by the person having control, care, or custody of the horse.

Also, 811 KAR 1:090, Section 7 provides, in part: “(1) A trainer shall be responsible at all times for the condition of all horses trained by him.” The Allen Court referred to this as the “trainer responsibility rule.” Allen, 136 S.W.3d at 61. In approving the creation of the presumption, the Allen Court cited with approval, the case of Casse v. New York State Racing & Wagering Bd., 70 N.Y.2d 589, 523 N.Y.S.2d 423, 517 N.E.2d 1309 (1987). Allen noted the New York Court upheld the validity of the trainer responsibility rule and quoted from that opinion, with approval:

Moreover, the trainer responsibility rule is a practical and effective means of promoting these State interests — both in deterring violations and in enforcing sanctions. The imposition of strict responsibility compels trainers to exercise a high degree of vigilance in guarding their horses and to report any illicit use of drugs, medications or other restricted substances by other individuals having access to their horses. Additionally, the rebuttable presumption of responsibility facilitates the very difficult enforcement of the restrictions on the use of drugs and other substances in horse racing. Indeed, it would be virtually impossible to regulate the administering of drugs to race horses if the trainers, the individuals primarily responsible for the care and condition of their horses, could not be held accountable for the illicit drugging of their horses or for the failure either to safeguard their horses against such drugging or to identify the person actually at fault. It is not surprising, therefore, that trainer responsibility rules have been upheld, almost without exception, in other jurisdictions.

Allen at 62, quoting Casse, 523 N.Y.S.2d 423, 517 N.E.2d at 1312. The Allen Court also cited with approval, decisions from Ohio and California which upheld the trainer responsibility rule and its presumption. We believe the reasoning of the Allen Court in upholding the presumption in 811 KAR 1:090, Section 5 for harness racing would apply to the presumption created by 810 KAR 1:018, Section 3(3) as to thoroughbred racing.

Deaton also contends there was no finding that Prozac was a substance banned by 810 KAR 1:018, Section 3(2). The hearing officer’s recommendation of June 10, 2002, states in paragraph six of the findings of fact that the parties stipulated Prozac is a prohibited substance. The circuit court opinion entered September 17, 2003, discusses the burden of proof in administrative hearings and assumes the horse tested positive for a prohibited substance under 810 KAR 1:018, Sections 1 and 3. Based on the earlier stipulations and on the fact that the distinction Deaton wants to make in this Court was not raised in the court below, the issue was not preserved and we decline to address the issue on appeal. Phelps v. Louisville Water Co., Ky., 103 S.W.3d 46, 56 (2003); Com., Revenue Cabinet v. St. Ledger, Ky.App., 955 S.W.2d 539, 545 (1997).

Finally, Deaton contends the ruling was arbitrary and should be voided because it clearly was not commensurate with the crime, if any. He points out that the hearing officer found he had no knowledge that the owner spiked the bottle of liquid glucosamine with Prozac, that Dea-ton was suspended for 150 days while the owner/perpetrator of the crime only received a 30-day suspension. The appellee asserts that the owner also received a $25,000.00 fine in addition to his suspension. The appellant asserts the fine was imposed for attending the Kentucky Derby during his 30-day suspension and not for the Prozac incident. The circuit court did not compare the owner’s penalty with the trainer’s penalty but focused on the trainer’s crime and the range of penalty, “not less than five (5) days nor greater than five (5) years.... ” 810 KAR 1:028, Section 3(2). The circuit court did not disagree with the hearing officer’s finding that Dea-ton did not know the liquid glucosamine contained Prozac. Instead, the circuit court concentrated on the trainer’s negligence, the lack of reasonable care, much less a high degree of care, in safeguarding the horse. The circuit court concluded that with the trainer’s earlier discussions with the owner about the possibility of using tranquilizers, specifically Prozac, to improve the horse’s performance, the trainer was not without fault in administering the laced medicine. The circuit court concluded the penalty was not arbitrary and affirmed. KRS 13B.160 allows for an appeal to this Court. Allen, 136 S.W.3d at 57, recognized “[o]ne of the purposes of the horse racing statutes is to give the KHRA ‘forceful control of horse racing in the Commonwealth and “to give the KHRA the power ‘to regulate and maintain horse racing ... free of any corrupt ... or unprincipled horse racing practices, and to regulate and maintain horse racing ... so as to dissipate any cloud of association with the undesirable and maintain the appearance as well as the fact of complete honesty and integrity of horse racing in the Commonwealth.’ KRS 230.215(2).” Obviously, the horse industry is a major part of our economy which needs to not only enforce its regulations, but needs to deter violations in order to promote the Commonwealth’s interest.

Realizing the State has a major industry involved in this case, we have to ask whether a five-month suspension is reasonable for a trainer’s negligence in allowing one of his charges to be drugged. Under 810 KAR 1:028, Section 3(2), the range of disciplinary measures range from a five-day suspension up to five years. In the present case, the Commission imposed a 150 day, or five-month suspension, which amounts to a little over eight percent of the maximum penalty possible. We see no evidence in the record indicating the penalty was excessive. Even considering the trainer’s conduct was negligent and not intentional does not make the penalty unreasonable. ‘While the fines imposed may be intended to punish appellants, they are also designed to deter similar conduct in the future.” Vanhoose v. Commonwealth, Ky.App., 995 S.W.2d 389, 393 (1999). “The assessment of a penalty is particularly delegated to the administrative agency. Its choice of sanction is not to be overturned unless ‘it is unwarranted in law or ‘without justification in fact.’ The assessment is not a factual finding but the exercise of a discretionary grant of power.” Id., quoting Panhandle Coop. Ass’n v. Environmental Protection Agency, 771 F.2d 1149, 1151 (8th Cir.1985) (citations omitted).

For the foregoing reasons, the judgment of the Franklin Circuit Court is affirmed.

ALL CONCUR.

      . Kentucky Horse Racing Authority is the successor to the Kentucky Racing Commission.


author: GUIDUGLI, Judge.

text:
    KENTUCKY RETIREMENT SYSTEMS, Appellant, v. Nancy HEAVRIN, Appellee.
    No. 2004-CA-000238-MR.
    Court of Appeals of Kentucky.
    Feb. 4, 2005.
    Discretionary Review Denied by Supreme Court Oct. 12, 2005.

      Brown J. Sharp, II, Louisville, KY, for appellant.
    Christina Heavrin, James K. Murphy, Louisville, KY, for appellee.
    Before COMBS, Chief Judge; GUIDUGLI and SCHRODER, Judges.
   OPINION

GUIDUGLI, Judge.

Kentucky Retirement Systems (hereinafter “the Systems”) appeals from an order of the Franklin Circuit Court that granted Nancy Heavrin’s appeal from an administrative proceeding and overruled the Systems’s final order. In doing so, the circuit court determined that the Systems’s final order denying Heavrin’s appeal and adopting the Systems’s hearing officer’s recommended order should be reversed. The effect of this order is that Heavrin will be permitted to purchase five years of non-qualified service credit at a price reflective of her actual salary and the Systems must refund any excess payment made by her, plus interest. We affirm.

The facts of this case are not in serious dispute; however, the interpretation of the applicable statute is. The facts disclose that at the time of her request to purchase the non-qualified service credit, Heavrin was employed by the Oldham County Health Department with twenty years of service in the Systems. While employed with the Health Department, Heavrin worked eight hour days, three days per week. Her rate of pay was $25.26 per hour. The Systems requested written verification from the Health Department as to Heavrin’s specific rate of pay and regular hours worked. In reply, the Health Department verified that as of August 30, 1999, Heavrin’s rate of pay was $25.26 per hour and that she worked 24.5 hours per week. Based upon this information, the Systems calculated that Heavrin could purchase the five years of non-qualified service credit for $18,041.70. The purchase amount was based upon an annual salary of $31,813.94 per year. It appears that the annual salary was calculated in the following manner: $25.26 x 8 hours per day x 3 days per week x 52 weeks per year. Heavrin purchased the five extra years of service on September 6, 1999.

Following an audit of her account, Heav-rin was notified by the Systems that her final compensation had been erroneously determined and that to purchase the service time would cost her a total of $26,202.10. This resulted in her owing an additional $8,160.40. According to the Systems, the audit revealed that the cost to purchase the service time should have been based on her working full-time not part-time. As such, her annual salary was determined to be $52,540.50 ($25.26 x 8 hours per day x 260 days) and not her actual salary of $31,813.94. Heavrin contested the method of determining her annual salary but paid the additional amount allegedly owed and subsequently retired.

Heavrin continued to contest the additional funds paid and the matter was set for a hearing before Paul F. Fauri, a hearing officer with the Systems. Following discovery and briefing of the issues, the parties agreed to forego an evidentiary hearing and submitted the matter to Fau-ri. On September 5, 2000, Fauri filed his report and recommended order. Fauri determined that the Systems had followed all applicable statutes and regulations and upheld the Systems’s calculation of Heavrin’s annual salary and total cost to purchase the additional service. Heavrin filed exceptions to the finding and order, which were dismissed in a letter from the Deputy Commissioner of Benefit Services, William P. Hanes, on October 13, 2000.

Heavrin next filed a petition for judicial review in the Franklin Circuit Court. On May 16, 2001, Judge Roger L. Crittenden entered an opinion and order which granted Heavrin’s petition and ordered “the Systems to calculate the appropriate purchase price based upon a 52 week conversion rate.” In his order the Franklin Circuit Judge reviewed KRS 61.510(15) and determined that Heavrin’s annual salary was actually $32,181.24, not the $52,540.80 the Systems had determined. The court stated:

K.R.S. 61.510( [15]) provides:
[t]he following equivalents shall be used to convert the rate to an annual rate: two thousand eighty (2,080) hours for eight (8) hour workdays, nineteen hundred fifty (1,950) hours for seven and one-half (7½) hour workdays, two hundred sixty (260) days, fifty-two (52) weeks, twelve (12) months, one (1) year.
The Respondent’s application of the statute authorized and mandated the an-nualizing of the Petitioner’s hourly rate resulting in a calculation derived from a yearly salary of $52,540.80, a significantly larger amount than Heavrin’s actual yearly salary of $32,181.24. This calculation is illogical because its basis does not contemplate the Petitioner’s actual earnings. In the interest of fairness, the Systems must base its calculations on the actual earnings of Heavrin by using a 52 week conversion rate. K.R.S. 61.510( [15]) explicitly provides the Systems several alternative conversion rates permitting them the ability to maximize the purchase price for non-qualified service credit based upon a chent’s actual income rather than speculative unearned income. The integrity of K.R.S. 61.510( [15]) will not be jeopardized under the present circumstances, given the fact Heavrin has retired and does not seek employment at a forty hour a week position. In this particular instance it was appropriate to use the 52 week standard as provided in K.R.S. 61.510( [15]) to formulate the purchase price.

The Systems appealed from that order. On appeal, this Court granted a motion to remand based upon the recently rendered case of Baker v. Commonwealth of Kentucky, Kentucky Retirement Systems, 50 S.W.3d 770 (Ky.App.2001). The Baker case held that the Board of Trustees of the Systems had no authority to delegate its authority to enter a final order to a subcommittee of the Board, at least not where the subcommittee constituted less than a quorum of the entire Board. This Court then held that an order signed by the subcommittee was not a “final order from which an appeal could be taken.” See KRS 13B.030(1); KRS 61.665(4). This Court vacated the judgment of the Franklin Circuit Court and the order entered by the Administrative Appeals Committee of the Board of Trustees of the Systems and remanded the matter back to the Board of Trustees for entry of a final decision.

On remand, the Board determined that an additional hearing was necessary and referred the matter again to hearing officer Fauri. Following additional briefing and an evidentiary hearing, Fauri rendered his report and recommended order on June 14, 2002. Fauri again held that the Systems had followed the law and properly determined that Heavrin’s annual salary should be based upon her hourly rate of pay ($25.26), times the hours worked per day (8), then multiplied by the 260 days reflective of a full-time employee (40 hours per week). In his recommended order, Fauri made the following findings in making his determination:

The position of the Claimant in this matter is that her actual salary was not used in the calculation because the Systems calculated her salary at a rate of 40 hours per week at her hourly rate of $25.26, when in fact she was working only 24.5 hours a week and that this was the information provided by the Oldham County Health Department. The calculations result in approximately a $20,000 difference. That is, Ms. Heavrin was basically earning $32,000 a year for her approximately 106 hours of work a month, but based on the calculation on a 40-hour a week basis, she would be making about $52,000 a year. Obviously, in actuality, she did not receive the $52,000 salary, but the Systems takes the position that this was her current rate of pay and, as Mr. Gagel [an actuary] testified and has set forth in his letter (Exhibit 12), the Systems was obligated to utilized (sic) the higher of the member’s current rate of pay, final rate of pay, or final compensation in order to protect the Retirement Systems from possible manipulation by the member.
In addition, this case does not appear to have been a manipulation in any way by Ms. Heavrin due to the fact that, after she received her additional five years of service, she retired as of December of 1999. There is also the fact that the purchase of this additional time resulted in her being able to retire and not having to wait until age 55. Mr. Gagel, in both his testimony and letter, indicated that Ms. Heavrin would also be receiving additional benefit by the ability to retire prior to age 55. In his calculations, he determined that this value would be approximately $90,000. The assumption was made that, if she had terminated as of December 1999, she would have to wait until she was age 55 to retire and the present value as of December 1999 without the purchase would be $22,900 and after the purchase was $113,800. Mr. Gagel made it clear that the methodology must reflect the potential liability to the Retirement Systems. Therefore, that is why the Systems has utilized the purchase of service set forth for military purchase by Samuel Rosenbloom in the March 12, 1974 letter to the Kentucky Employees Retirement Systems General Manager, George R. Arvin. (Exhibit 10, p. 29).
In addition to the testimony of Mr. Gagel, Ms. Rebecca Stephens testified and indicated in her testimony that the Systems was obligated to use the calculation of $25.26 an hour times eight hours times 260 days as set forth on Exhibit 5. Basically, the information as to Ms. Heavrin’s rate of pay was hourly and it was not provided as 5 hours per day per week, but simply as a total number of hours per week. As noted above, Ms. Heavrin takes the position that the Systems should have used her hourly rate of $25.26 times 8 hours a day 3 days a week to arrive at her weekly income, and multiply this figure by 52 weeks to arrive at her current rate of pay. As previously noted, the Systems has taken the position that her hourly rate of pay should be times 8 hours and then 260 days a year. This is the result of the $20,000 difference indicated above.
The Claimant further argues that the action herein by the Agency is in violation of Section 2 of the Kentucky Constitution, that it fails to follow statutory construction, and that the determination is arbitrary, capricious, as well as a denial of equal protection and, therefore, the method applied to establish the cost of the service is unconstitutional. Of course, the Systems takes just the opposite position and further states that it has to be actuarially sound and must follow the statutory mandate.
In reviewing this matter, first and foremost, the statute which permits Ms. Heavrin to purchase this non-qualified service is KRS 61.552(26). The statute specifically provides, after setting forth that the employee must have 240 months of service credit and that the service is not otherwise purchasable under any provisions of Chapters 16, 61 or 78 as follows:
... The purchase price of the retirement service credit shall be calculated and paid for based on the full actuarial cost as determined by the Systems. [Emphasis in original].
The Systems has determined that the calculation should be based on the current rate of pay, final rate of pay, or final compensation at the time of the date of purchase, whichever is greatest. [Emphasis in original]. Accordingly, the Systems has performed the calculations in this matter and determined that the Claimant’s final compensation would be less than the current rate of pay, that her final rate of pay would be less than her current rate of pay, and that her current rate of pay, as set forth in KRS 61.510(25), would be the member’s actual hourly, daily, weekly, bi-weekly, monthly or yearly rate of pay converted to an annual rate as defined in the final rate of pay.
Obviously, the current rate of pay would be higher than Ms. Heavrin’s final compensation and her final rate of pay due to the fact that her current rate of pay is to be converted to an annual rate based on the factors that have been set forth under final rate of pay, KRS 61.510. Due to the fact that Ms. Heav-rin did not work a full work week, the Systems was obligated to calculate her salary on a yearly basis, not on her actual earnings. Accordingly, while she argues that the 24.5 hours at $25.26 is weekly, the Systems was obligated to convert her income into an annual current rate of pay. Certainly, this seems harsh. If in fact the Oldham County Health Department had reported her income as working three days a week for a total of eight hours a day, and that she had a weekly income of $25.26 times 3 times 8, and that she did not work any more, or could not work any more, then that would be both her final rate of pay and her current rate of pay. However, it is clear that her income was not reported this way, and further, as set forth on Exhibit 13, it was indicated that Exhibit 4 would not be changed to reflect a weekly income and that Ms. Heavrin could work more than the 100 hours a month. Therefore, her income was reported as an hourly income, as Ms. Stephens testified, and even though calculations could be made to attempt to show a weeHy income, it was not so reported, and accordingly, the calculations for current rate of pay was based on an hourly rate annualized on a 40-hour-a-week basis.
As the undersigned Hearing Officer has indicated in the previous Report and Recommended order, Ms. Heavrin’s benefits would not change if the $32,000 figure or the $52,000 figure was used. The only issue is if she would be refunded about $8,000. The Systems has made it perfectly clear that they must comply with the law and, further, they must ensure the integrity of the fund and no refund is due.
Certainly, the arguments of Ms. Heavrin as to her situation being separate and distinct from other hourly employees are understandable. However, the Systems must take the information as provided and apply the proper actuarial bases for determining purchase of non-qualified service credit. Clearly, KRS 61.552(26) mandates that the Systems determine the purchase price based on the full actuarial cost. The testimony of Stephen Gagel clearly indicates that the Systems has made a proper determination to obtain the full actuarial cost. Any other calculation would be contrary to this statute.

Heavrin filed exceptions to the recommended order, but the Board of Trustees of the Systems again adopted the hearing officer’s recommended order as its final order. Heavrin thereafter, again, petitioned the Franklin Circuit Court for judicial review. This time the case was assigned to Circuit Judge William L. Graham. After reviewing the petition, the Systems’s response, the administrative record and the parties’ briefs, Judge Graham entered his opinion and order on January 26, 2004. In its order, the Franklin Circuit Court granted Heavrin’s appeal and reversed the Systems’s final order. The court further ordered the Systems to “1) calculate [Heavrin’s] purchase price to reflect her actual income, and 2) refund [Heavrin’s] excess payment plus interest.” This appeal by the Systems followed.

In his opinion, Judge Graham discussed Heavrin’s cost to purchase her non-qualified service credit in the following terms:

B. Cost Calculation
The Court overrules the Respondent’s final order because [the Systems] misapplied the statutory formula for calculating the cost of [Heavrin’s] non-qualified service credit. See KRS 13B.150.
KRS 61.552(26) states that “[t]he purchase price for the retirement service credit shall be calculated and paid for based on the full actuarial cost as determined by the system.” To derive the purchase price, [the Systems] uses the greatest of the employee’s “current rate of pay,” “final rate of pay,” or “final compensation,” as the terms are defined in KRS 61.510. See KRS 61.5525 (codified in 2001 but followed by [the Systems] since 1974). [The Systems] then multiplies the number by a rate factor determined by actuaries. In this instance [the Systems] used the “current rate of pay,” which “means the member’s actual hourly, daily, weekly, biweekly, monthly, or yearly rate of pay converted to an annual rate as defined in final rate of pay.” KRS 61.510(25). The definition of “Final rate of pay” states:
the following equivalents shall be used to convert the rate to an annual rate: two thousand eighty (2,080) hours for eight (8) hour workdays, nineteen hundred fifty (1,950) hours for seven and one-half (7-1/2) hour workdays, two hundred sixty (260) days, fifty-two (52) weeks, twelve (12) months, one (1) year.
KRS 61.510(15). The “current rate of pay” definition also requires the employer to certify the employee’s rate, and [Heavrin’s] employer certified her rate as $25.26 an hour for 24.5 hours per week. See KRS 61.510(25). The facts also suggest that [Heavrin] worked three days a week for eight hours each day.
[The Systems] erroneously calculated [Heavrin’s] “current rate of pay.” [The Systems] multiplied [Heavrin’s] hourly wage, $25.26, by 2080 to yield about $52,000. This number is supposed to represent [Heavrin’s] annual salary, but [Heavrin] in reality only made about $32,000 a year. The calculation is illogical and unfair to [Heavrin] because it does not contemplate her actual earnings. The 2080 number, used to annualize [Heavrin’s] salary from an hourly wage, is equivalent to 260 days times 8 hours a day. The problem is that [Heavrin] did not work 260 days each year, which is the equivalent of five days a week. Since she worked 3 days a week, she only worked 156 days a year. KRS 61.510(15) and KRS 61.510(25) give [the Systems] several options for calculating the base for the “current rate of pay,” such as hourly or weekly rate, and for annualizing the base. [The Systems] originally derived the base by multiplying $25.26 per hour times 8 hours per day times 3 days per week. The agency then annualized that base by multiplying it by 52 weeks per year. This equation yielded approximately $32,000, about [Heavrin’s] actual salary, and seems more appropriate to formulate the purchase price.
[The Systems] contends that the actuarial soundness of the purchase credit system will be jeopardized if [Heavrin] does not pay the higher amount. [The Systems] is concerned that employees will take advantage of the system by purchasing credit when their salary is low and subsequently take a higher salary. That worry is unfounded here because [Heavrin] retired after she made the purchase and did not subsequently seek a higher salary.

We agree with the circuit court that the Systems misapplied the statutory formula for calculating the cost of Heavrin’s non-qualified service credit.

The circuit court correctly noted the standard of review applicable to an appeal from an administrative agency. In citing Kentucky Unemployment Insurance Commission v. King, 657 S.W.2d 250 (Ky.App.1983), the circuit court stated that the function of the court in an appeal from an administrative agency is to ensure that the agency did not act arbitrarily and that its decision is based on substantial evidence in the record and that the agency did not apply the wrong rule of law. Substantial evidence is defined as evidence that “when taken alone or in the light of all the evidence it has sufficient probative value to induce conviction in the minds of reasonable men.” As to the issue of whether an agency acts in an arbitrary manner, the court, citing Bourbon County Bd. of Adj. v. Currans, 873 S.W.2d 836, 838 (Ky.App.1994), held that an agency acts arbitrarily when it denies relief to a party and “the record compels a contrary decision in light of substantial evidence therein.”

In Johnson v. Galen Health Care, Inc., 39 S.W.3d 828 (Ky.App.2001), this Court, again, addressed the standard of review from both the circuit court and appellate court standpoint. In Johnson, 39 S.W.3d at 833, this Court stated:

Our standard of review of a circuit court’s review of an administrative action was set forth in Jones. v. Cabinet for Human Resources, [Ky.App., 710 S.W.2d 862, 866 (1986) ], as follows:

In an appeal of an administrative action by an agency, the circuit courts are to provide review, not reinterpretation. Kentucky Unemployment Insurance Commissioner v. King, Ky. App., 657 S.W.2d 250 (1983). Thus, when substantial evidence exists in the record to support an administrative agency’s action, the circuit court has no authority to overturn it. Kentucky State Racing Commission v. Fuller, Ky., 481 S.W.2d 298 (1972). Our task is to determine whether or not the circuit court’s findings upholding the Cabinet are clearly erroneous. CR 52.01. [See also Kirk v. Jefferson County Medical Society, Ky.App., 577 S.W.2d 419 (1978) ].
Thus, at this level of appellate review, Dr. Johnson has the very high burden as to the factual issues of showing that the circuit court was clearly erroneous in finding that the Executive Committee’s decision was supported by substantial evidence.

In this case, the high burden of showing that the Systems’s decision was not supported by substantial evidence was placed upon Heavrin. We believe Heavrin has successfully carried that heavy burden by showing that the Systems’s decision was not supported by substantial evidence nor legally sound. See KRS 13B.150. Heavrin contended and the circuit court agreed that the Systems had misapplied the statutory formula for calculating the cost of her non-qualified service credit. We agree.

The parties agree that Heavrin’s cost to purchase the service credit is to be based upon the “final rate of pay.” Final rate of pay is defined in KRS 61.510(15) as:

“Final rate of pay” means the actual rate upon which earnings of an employee were calculated dining the twelve (12) month period immediately preceding the member’s effective retirement date, including employee contributions picked up after August 1,1982, pursuant to KRS 61.560(4). In the case of members of the General Assembly, the “final rate of pay” shall be the creditable compensation. The rate shall be certified to the system by the employer and the following equivalents shall be used to convert the rate to an annual rate: two thousand eighty (2,080) hours for eight (8) hour workdays, nineteen hundred fifty (1,950) hours for seven and one-half (7-1/2) hour workdays, two hundred sixty (260) days, fifty-two (52) weeks, twelve (12) months, one (1) year.

The Systems contends that since Heav-rin worked 8 hour days, it must calculate her final rate of pay at 8 hours times 2,080 hours or 260 days. This, however, does not reflect her actual hours or days worked. Her employer, the Oldham County Health Department, certified that she worked an 8 hour day but only 24.5 hours per week. The Systems verified this information and knew that Heavrin was a permanent part-time employee working only 100 hours per month and her yearly salary was approximately $32,000 per year. The Systems’s first calculation was based upon this information. It was only upon review that the Systems recalculated Heavrin’s cost to be based upon the mythical $52,000 annual salary. The Systems claims this figure must be used because the cost to purchase the service time must be based on the full actuarial cost as determined by the Systems. While this is certainly a correct statement of the law, the testimony before the hearing officer does not support the Systems’s method of calculating the costs in this particular case.

The hearing officer made the following findings on this issue:

Obviously, the current rate of pay would be higher than Ms. Heavrin’s final compensation and her final rate of pay due to the fact that her current rate of pay is to be converted to an annual rate based on the factors that have been set forth under final rate of pay, KRS 61.510. Due to the fact that Ms. Heav-rin did not work a full work week, the Systems was obligated to calculate her salary on a yearly basis, not on her actual earnings. Accordingly, while she argues that the 24.5 hours at $25.26 is weekly, the Systems was obligated to convert her income into an annual current rate of pay. Certainly, this seems harsh. If in fact the Oldham County Health Department had reported her income as working three days a week for a total of eight hours a day, and that she had a weekly income of $25.26 times 3 times 8, and that she did not work any more, or could not work any more, then that would be both her final rate of pay and her current rate of pay. However, it is clear that her income was not reported this way, and further, as set forth on Exhibit 13,[] it was indicated that Exhibit 4 would not be changed to reflect a weekly income and that Ms. Heavrin could work more than the 100 hours a month. Therefore, her income was reported as an hourly income, as Ms. Stephens testified, and even though calculations could be made to attempt to show a weekly income, it was not so reported, and accordingly, the calculations for current rate of pay was based on an hourly rate annualized on a 40-hour-a-week basis.
As the undersigned Hearing Officer has indicated in the previous Report and Recommended Order, Ms. Heavrin’s benefits would not change if the $32,000 figure or the $52,000 figure was used. The only issue is if she would be refunded about $8,000. The Systems had made it perfectly clear that they must comply with the law and, further, they must ensure the integrity of the fund and no refund is due.
Certainly, the arguments of Ms. Heavrin as to her situation being separate and distinct from other hourly employees are understandable. However, the Systems must take the information as provided and apply the proper actuarial bases for determining purchase of non-qualified service credit. Clearly, KRS 61.552(26) mandates that the Systems determine the purchase price based on the full actuarial cost. The testimony of Stephen Gagel clearly indicates that the Systems has made a proper determination to obtain the full actuarial cost. Any other calculation would be contrary to this statute.
Accordingly, it is again the recommendation that the administrative determination be affirmed.[]

In reviewing the hearing officer’s report, we first note that the Systems and the hearing officer were given information of Heavrin’s actual hours worked. There is no doubt that both knew that Heavrin was a permanent part-time employee working only 100 hours per month and had done so for a significant period of time. However, each ignored this information in reaching its decision as to Heavrin’s actual hours worked. Both knew that Heavrin’s actual salary was approximately $32,000, not the $52,000 used to calculate her cost to purchase the service time. Both admitted that her retirement benefits would be based upon the $32,000 actual salary and not the $52,000 fictional figure. Both admitted that the actual actuarial cost of any other person working 24.5 hours per week or 100 hours per month and earning the same hourly wage as Heavrin would be based upon $32,000. It did not matter if that individual worked 5 hours, 5 days per week or 4 hours, 6 days per week or any other hours/days combination that totaled 24.5 per week or 100 hours per month. The argument that if one worked an 8 hour day, then the cost must be based on full-time annual salary is ridiculous. If the system is actuarially sound under similar fact patterns (any combination equaling 24.5 hours per week or 100 hours per month), then it is certainly actuarially sound in this case and reliance upon the $52,000 full-time annual salary is unfounded.

Having thoroughly reviewed this case, the Franklin Circuit Court’s opinion and order granting Heavrin’s appeal is affirmed. The Systems’s determination that purchase of non-qualified service time must be based on the full actuarial cost as determined by the system is correct. However, in this case it erred both factually and legally in basing the purchase cost upon a full-time annual salary when Heav-rin was employed as a permanent part-time employee.

ALL CONCUR.

      . It should be noted that the Systems audited Heavrin’s account prior to this hearing and determined it had made another calculation error (it used the wrong rate factor) which resulted in Heavrin owing an additional $3,593.80. Heavrin does not contest that the wrong rate factor was used and this is not an issue on appeal.

      . See also, American Beauty Homes Corp. v. Louisville & Jefferson Cty. Planning and Zoning Commission, 379 S.W.2d 450 (Ky.1964).

      . Kentucky State Racing Commission v. Fuller, 481 S.W.2d 298, 308 (Ky.1972).

      . Exhibit 13 is the Kentucky Retirement Systems’s folder comments for Heavrin. We do not believe this exhibit supports the hearing officer’s finding that the Systems was obligated to use the $50,000 annual salary.

      . Hearing Officer’s Report and Recommended Order of June 14, 2002, pp. 6-8.