Opinion
NO. 2013-CA-001011-MR
09-05-2014
BRENDA FINLEY, ADMINISTRATRIX OF THE ESTATE OF FORREST B. FINLEY APPELLANT v. AK STEEL CORPORATION; AK STEEL HOLDING CORPORATION; AND GREG TOMLINSON APPELLEES
BRIEF FOR APPELLANT: H. Truman Chafin Letitia Neese Chafin Williamson, West Virginia BRIEF FOR APPELLEES: Carl D. Edwards, Jr. Ashland, Kentucky
NOT TO BE PUBLISHED APPEAL FROM BOYD CIRCUIT COURT
HONORABLE GEORGE W. DAVIS, III, JUDGE
ACTION NO. 12-CI-00303
OPINION
AFFIRMING
BEFORE: LAMBERT, MOORE, AND NICKELL, JUDGES. LAMBERT, JUDGE: Brenda Finley, Administratrix of the Estate of Forrest B. Finley, has appealed from the summary judgment of the Boyd Circuit Court finding that AK Steel Corporation, AK Steel Holding Corporation, and Greg Tomlinson ("AK Steel") had no liability in tort pursuant to up-the-ladder exclusive immunity and dismissed the claim. We affirm.
Mr. Tomlinson was AK Steel's General Manager for Health and Safety.
AK Steel is a fully integrated manufacturer of high quality carbon, electrical, and stainless flat rolled steel products used in the automotive, appliance, construction, and manufacturing industries. In Boyd County near Ashland, Kentucky, AK Steel performs iron and steel making operations, and it operated a coke production facility ("Coke Plant") until June 2011, when it voluntarily ceased production of coke at this site. In its brief, AK Steel details the coke-manufacturing process, which involves the use of two large "batteries" where coal is wet charged and then baked to remove impurities and combustible properties. AK Steel detailed one of the cleaning processes that involved the removal of tar aerosols from the gas stream using four electrostatic tar precipitators known as "Cottrells." Each Cottrell had insulation material protecting the power feed to the unit, which would deteriorate over time or become filled with buildup of tar precipitate and cause an arcing of the current that would ground-fault the unit. The ground-fault would cause the power to trip and disconnect. When a Cottrell faulted or tripped, a qualified technician would disconnect and lock-out the energy source to it and perform a test on the power feed at its point of entry into the unit using a portable high voltage or high potential ("Hi-Pot") testing instrument. AK Steel states that this test could be performed safely even while the Cottrell contained live coke oven gas because it was conducted on power connections on the exterior of the unit; it did not require entry into the unit, which was expressly prohibited. Bobby Barnes, the Section Manager of Maintenance of AK Steel's Steelmaking Department, testified by deposition that Hi-Pot testing was a necessary, integral, and regular part of AK Steel's business at the Coke Plant.
We have relied upon AK Steel's brief for the basic background information relating to the corporation and the production of coke.
--------
AK Steel employed a staff of qualified electricians in the Coke Plant, and one of their routine duties was to perform Hi-Pot testing of the Cottrell units. In addition, AK Steel had engaged outside electrical contractors for many years to supplement its own staff, and these contract workers would perform routine electrical maintenance services as assigned by AK Steel maintenance supervisors. However, only AK Steel maintenance personnel were permitted to shut a unit down, purge it, or gain access to the interior of a vessel. In May 2008, AK Steel entered into a Contractors and Service Providers Master Agreement ("contract") with Dixon Electrical Systems & Contracting, Inc., ("Dixon Electric"), an electrical contracting firm based in Huntington, West Virginia. Pursuant to the contract, Dixon Electric was obligated to secure, and did secure, workers' compensation coverage of all of its employees who were assigned to execute the contract work at AK Steel. When contract workers were needed, AK Steel would issue a purchase or service order specifying the electrical maintenance and repair services to be performed, including Hi-Pot testing of a failed Cottrell on specific assignment by Mr. Barnes.
Forrest Finley was employed as a journeyman electrician by Dixon Electric, and he had performed Hi-Pot testing on Cottrells as many as twenty-five times in the eighteen months prior to the date of the accident. On March 30, 2011, Cottrell #3 tripped out at 3:30 p.m., and AK Steel opted to wait until the next day to perform the Hi-Pot test and to pursue other investigations into what was wrong with it. Mr. Barnes contacted Dixon Electric's job superintendent, Kevin Mullins, and told him that Cottrell #3 needed to be Hi-Pot tested. Mr. Mullins relayed this information to Joel Gensler, one of Dixon Electric's electricians, who told him that Mr. Finley had performed this task many times. On March 31, 2011, Mr. Gensler and Mr. Finley proceeded to Cottrell #3 to perform the testing. Unable to pry open the door on the Cottrell, Mr. Gensler went to find a pry bar to force it open. While Mr. Gensler was in another building looking for a pry bar, he heard an explosion. The door they had been attempting to open was the hatch door, which had a live, pressurized coke oven behind it. Mr. Finley was killed by the explosion. The electrical panel box where they should have performed the Hi-Pot testing was located a short distance below the main hatch.
Mr. Finley's widow was appointed as the administratrix of his estate, and she filed suit against AK Steel on March 30, 2012, alleging that AK Steel negligently, carelessly, and recklessly failed to warn Mr. Finley of the dangers of working on Cottrell #3 by signs, word of mouth, or other communication, and failed to have its own personnel access Cottrell #3 prior to Mr. Finley to properly instruct and observe him in and about the performance of his job. She alleged that as a direct result of AK Steel's negligence, Mr. Finley was killed in an explosion and fire. Finley requested compensatory damages for Mr. Finley's wrongful death, and she also alleged a loss of consortium claim on her own behalf. In its answer, AK Steel pled various affirmative defenses, including that Kentucky's Workers' Compensation Act, Kentucky Revised Statutes (KRS) Chapter 342, provided a complete bar to her claims through the exclusive remedy immunity.
In February 2013, AK Steel filed a motion for summary judgment, arguing that there were no genuine issues of material fact regarding its exclusive remedy, or up-the-ladder, immunity and that it was entitled to a judgment as a matter of law pursuant to KRS 342.690(1). AK Steel argued that because the work Mr. Finley had been performing just prior to his death was a regular and recurrent part of AK Steel's business, AK Steel was his statutory or up-the-ladder employer pursuant to KRS 342.610 and was legally insulated from civil liability.
In response, Finley argued that because Dixon Electric was an independent contractor of AK Steel, Mr. Finley's death was not within the purview of the Workers' Compensation Act and up-the-ladder exclusive immunity did not apply to bar her claim. In addition, Finley contended that AK Steel did not adequately warn Mr. Finley of the risks or direct Dixon Electric in writing to perform the services on March 31, 2011, but rather did so orally. Pursuant to the terms of the agreement between AK Steel and Dixon Electric, Dixon Electric was an independent contractor unless AK Steel directed its performance in writing. Finley also contended that AK Steel violated regulations promulgated pursuant to the Kentucky Occupational Safety and Health Act ("KOSHA"), triggering the right to an action pursuant to KRS 446.070.
In reply, AK Steel argued that Finley failed to identify that any genuine issue of material fact related to the immunity defense remained to be decided. It disputed that Finley's arguments related to failure to warn or whether a KOSHA violation occurred were material to whether it was entitled to immunity. AK Steel also argued that it was the nature of the work Mr. Finley performed, rather than Dixon Electric's status as an independent contractor, that was central to its claim of immunity.
The circuit court entered an order granting Dixon Electric's motion for summary judgment on May 13, 2013. In its findings, the court stated:
5. The record convincingly demonstrates, with literally no contradiction in the evidence, that Hi-Pot testing of the electrostatic tar precipitators in the By Products Area of the Coke Plant was a regular, frequent, recurring and integral part of the daily operation of the coke manufacturing facilities. Further, the Plaintiff offers nothing to controvert the evidence of AK Steel that Hi-Pot testing was performed as often by AK Steel electricians as by those employed by outside electrical contractors.The court went on to state that the fact issues Finley identified were not material to AK Steel's argument, as AK Steel argued in its reply. Rather, the court stated that "it is the character of the work being executed by Finley at the time of the accident that determines the availability of the immunity defense asserted by AK Steel." Citing General Electric Co. v. Cain, 236 S.W.3d 579 (Ky. 2007), the circuit court set forth the applicable test: "[I]f the work is of a type which this owner, or an owner/employer in a similar business, would ordinarily perform through its own employees, then the premises owner is deemed a 'contractor' and thus is the statutory, or 'up-the-ladder,' employer of individuals working on its premises and is immune from tort liability with respect to work-related injuries." The court found that the material facts of the case were not in dispute:
It was necessary at AK Steel's Coke Plant that two (2) or more electrostatic tar precipitators be maintained and fully operational at all times. In the event one of the units experienced an electrical fault or ground fault and was no longer functional, the record is clear that it was imperative that the unit be restored to operational status. It is equally clear that the electrical diagnostic test which was employed to ascertain the reason or cause for the equipment failure was for years and on many, many occasions performed by AK Steel's own electrician workforce. Applying the general rule of General Electric Co. v. Cane [sic], supra, the work was of a nature which AK Steel would ordinarily perform, and in fact did perform, with its own direct employees.The circuit court held that the work Finley was executing on the day of the accident was a regular or recurrent part of the work of AK Steel. Accordingly, it held that AK Steel was Finley's statutory employer and had no liability in tort to his estate or surviving widow. The court went on to hold that the exclusive remedy immunity extended to both AK Steel and to its employees, including Greg Tomlinson. Therefore, the court granted the motion for summary judgment and dismissed Finley's claim in its entirety. This appeal now follows.
Our standard of review in an appeal from a summary judgment is well-settled in the Commonwealth. "The standard of review on appeal when a trial court grants a motion for 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.'" Lewis v. B & R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001), citing Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996); Palmer v. International Ass'n of Machinists & Aerospace Workers, 882 S.W.2d 117, 120 (Ky. 1994); Kentucky Rules of Civil Procedure 56.03. "Because summary judgment involves only legal questions and the existence of any disputed material issues of fact, an appellate court need not defer to the trial court's decision and will review the issue de novo." Lewis, 56 S.W.3d at 436, citing Scifres, 916 S.W.2d at 781; Estate of Wheeler v. Veal Realtors and Auctioneers, Inc., 997 S.W.2d 497, 498 (Ky. App. 1999); Morton v. Bank of the Bluegrass and Trust Co., 18 S.W.3d 353, 358 (Ky. App. 1999). With this standard in mind, we shall review the judgment on appeal.
We shall begin with the identification of the statutes relevant to our analysis of this issue. KRS 342.610(1) provides that "[e]very employer subject to this chapter shall be liable for compensation for injury, occupational disease, or death without regard to fault as a cause of the injury, occupational disease, or death." KRS 342.690(1) details the exclusive remedy protection afforded to employers subject to the Act, and it provides in relevant part as follows:
If an employer secures payment of compensation as required by this chapter, the liability of such employer under this chapter shall be exclusive and in place of all other liability of such employer to the employee, his legal representative, husband or wife, parents, dependents, next of kin, and anyone otherwise entitled to recover damages from such employer at law or in admiralty on account of such injury or death. For purposes of this section, the term "employer" shall include a "contractor" covered by subsection (2) of KRS 342.610, whether or not the subcontractor has in fact, secured the payment of compensation.Finally, KRS 342.610(2) provides in relevant part:
A contractor who subcontracts all or any part of a contract and his carrier shall be liable for the payment of compensation to the employees of the subcontractor unless the subcontractor primarily liable for the payment of such compensation has secured the payment of compensation as provided for in this chapter. Any contractor or his carrier who shall become liable for such compensation may recover the amount of such compensation paid and necessary expenses from the subcontractor primarily liable therefor. A person who contracts with another:
. . . .
(b) To have work performed of a kind which is a regular or recurrent part of the work of the trade, business, occupation, or profession of such person
shall for the purposes of this section be deemed a contractor, and such other person a subcontractor.
For her first argument, Finley addresses the proposition that violations of KOSHA regulations create a private cause of action. Based upon the preliminary report of her expert that AK Steel violated numerous KOSHA regulations that contributed to Mr. Finley's death, Finley argues that AK Steel's actions violated KRS 338.031(1)(b) requiring employers to "comply with occupational safety and health standards promulgated under this chapter." KRS 446.070, in turn, authorizes a civil action by a person injured by such a violation. In support of this argument, Finley cites to Hargis v. Baize, 168 S.W.3d 36 (Ky. 2005). However, we agree with AK Steel that Finley's citation to Hargis does not support her position. The exclusive remedy immunity was not an issue in Hargis because he was an independent contractor:
[I]f Hargis had been a direct employee of Baize, this action would be precluded; however, Appellants would have been entitled to death benefits under KRS 342.730(3) without regard to any contributory fault on Hargis's part. Since Hargis was an independent contractor, though self-employed on premises controlled by Baize, his death was not within the purview of the Workers' Compensation Act.Id. at 45-46. The Court also confirmed that "a violation of KOSHA does not affect the exclusive remedy provision of the Workers' Compensation Act." Id. at 45. Here, the circuit court concluded that Finley was the statutory employee of AK Steel at the time of the accident rather than an independent contractor based upon the undisputed facts of record.
However, Finley does not argue that Mr. Finley was an independent contractor rather than a statutory employee of AK Steel. Rather, she assumes that he was an independent contractor based upon Dixon Electric's contract with AK Steel, and her argument appears to hinge solely on the idea that AK Steel should not be permitted "to doge [sic] the responsibility of maintaining a safe work environment by hiding behind the up-the-ladder immunity defense." In other words, AK Steel should be held responsible for its KOSHA violations. Because Finley did not offer any proof to counter AK Steel's evidence that the work Mr. Finley performed was a regular and recurring part of its business, we find no merit in Finley's argument.
For her second argument, Finley contends that the exclusive remedy immunity is a question of fact for the jury to decide. Finley relies upon the Supreme Court's opinions in Gordon v. NKC Hospitals, Inc., 887 S.W.2d 360 (Ky. 1994), and Shamrock Coal Co. v. Maricle, 5 S.W.3d 130 (Ky. 1999), to argue that a premises owner who asserts the exclusive remedy immunity must both plead and prove it as an affirmative defense. While that is a correct statement of the law, we agree with AK Steel that it actually accomplished this. AK Steel asserted the exclusive remedy immunity as an affirmative defense in its answer to Finley's complaint and established through undisputed facts that it was Mr. Finley's statutory employer and therefore was entitled to immunity.
While Finley did not choose to present an argument regarding the circuit court's legal conclusion that AK Steel was Mr. Finley's statutory employer, we shall briefly address that question.
In Cain, supra, the Supreme Court of Kentucky addressed the issue of up-the-ladder immunity, explaining this defense in the context of workers' compensation and tort liability:
If premises owners are "contractors" as defined in KRS 342.610(2)(b), they are deemed to be the statutory, or "up-the-ladder," employers of individuals who are injured while working on their premises and are liable for workers' compensation benefits unless the individuals' immediate employers of the workers have provided workers' compensation coverage. If deemed to be "contractors," the owners, like any other employers, are immune from tort liability [exclusive remedy immunity] with respect to work-related injuries whether or not the immediate employer actually provided workers' compensation coverage. See Thomas M. Cooper, The "Comp" Factor in Tort Cases, 51 Ky. Bench & Bar, No. 1, Winter 1987, at 14, 37. Thus, whether an owner is entitled to "exclusive remedy" immunity depends upon whether the worker was injured while performing work that was "of a kind which is a regular or recurrent part of the work of the trade, business, occupation, or profession" of the owner. If so, the owner is immune; if not, the owner is subject to tort liability.Cain, 236 S.W.3d at 585. "Stated simply, KRS 342.610(2)(b) refers to work that is customary, usual, normal, or performed repeatedly and that the business or a similar business would perform or be expected to perform with employees." Id. at 589. See also Forbes v. Dixon Elec., Inc., 332 S.W.3d 733 (Ky. App. 2010).
In the present case, we agree with the circuit court that AK Steel presented undisputed evidence that Mr. Finley had been engaged in a regular, recurring, and integral part of AK Steel's maintenance work that had been executed for many years by its own employees. Accordingly, the circuit court properly found that no disputed questions of material fact remained and that AK Steel was entitled to the exclusive remedy immunity afforded by the Workers' Compensation Act as a matter of law.
For the foregoing reasons, the summary judgment of the Boyd Circuit Court is affirmed.
ALL CONCUR. BRIEF FOR APPELLANT: H. Truman Chafin
Letitia Neese Chafin
Williamson, West Virginia
BRIEF FOR APPELLEES: Carl D. Edwards, Jr.
Ashland, Kentucky