Opinion
NO. 2016-CA-000854-MR
01-26-2018
BRIDGETT WRIGHT APPELLANT v. RUSSELL A. SWIGART; OR SOLUTIONS, INC; MEDICAL COMPANY, INC.; AND ECOLAB, INC. APPELLEES
BRIEFS FOR APPELLANT: James W. Morgan, Jr. Steven R. Dowell Covington, Kentucky BRIEF FOR APPELLEE: Kathleen B. Wright Richard S. Cleary Griffin Terry Sumner Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM KENTON CIRCUIT COURT
HONORABLE PATRICIA M. SUMME, JUDGE
ACTION NO. 09-CI-03566 OPINION
AFFIRMING
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BEFORE: CLAYTON, DIXON AND THOMPSON, JUDGES. THOMPSON, JUDGE: Bridget Wright appeals from an order of the Kenton Circuit Court granting summary judgment to OR Solutions, Inc. (ORS), Medical Company, Inc. (successor to ORS) (collectively the corporate appellees) and Ecolab, Inc. (the purchaser of ORS's assets) on her claims under the Kentucky Civil Rights Act (KCRA) and her common-law claims for negligence, intentional infliction of emotional distress and wrongful discharge. The circuit court ruled that ORS did not meet the definition of "employer" under the KCRA and Wright's common law claims are barred by the one-year statute of limitations for personal injury contained in Kentucky Revised Statutes (KRS) 413.140(1)(a). We agree with the trial court that the KCRA does not apply and affirm the trial court's ruling that Wright's common law claims based on negligence are barred by the one-year statute of limitations.
The corporate appellees are corporations formed under the laws of states other than Kentucky. ORS and Medical Company, Inc. are formed under the laws of Virginia with their principal places of business in Virginia. Ecolab, Inc. is a Delaware corporation with its principal place of business in Minnesota.
ORS sold substantially all its assets to Ecolab, Inc. in March 2011. In that same month and year, ORS changed its name to Medical Company, Inc. The facts giving rise to this action occurred before 2011, when Wright was employed by ORS as a medical product salesperson.
In January 2007, Russell Swigart, a district sales manager for ORS who lived in Virginia, met with Wright in Northern Kentucky to interview her for the position of medical product sales specialist serving the southern area of Ohio, Kentucky and portions of West Virginia. Wright accepted the position on January 9, 2007, and began work on January 29, 2007. Wright resided in Lakeside Park, Kentucky, and traveled to various hospitals within her territory to sell ORS products.
According to Wright, within weeks of her employment, Swigart made sexual advances toward her and threatened her employment if she did not submit to those advances. Soon thereafter, Wright and Swigart had a sexual relationship which they concealed from their co-workers and ORS.
In 2008, after their sexual relationship ended, Swigart engaged in harassing and erratic behavior including sending Wright vulgar, threatening and insulting text messages and emails. On February 28, 2008, Wright informed ORS President, Steve Hannes, of Swigart's behavior and requested that she be assigned a different manager. On April 3, 2008, Swigart resigned from ORS and Wright continued to be employed by ORS.
Swigart's threatening and erratic behavior continued and he eventually moved from Virginia to Northern Kentucky. On September 25, 2008, while Wright was away from her home on business, Swigart sent her threatening and disturbing text messages. On that same night, it was discovered that Swigart had broken into her home, killed her cats and spread their carcasses throughout her home. Later that evening, Swigart sent additional text messages in which he admitted killing Wright's cats and again threatened her.
Wright notified the police. That same evening, she called Hannes and informed him of Swigart's horrific crime. She also sent ORS General Counsel, Tracy Augustine, an email stating she was severely frightened and emotionally disturbed because of Swigart's actions. On November 23, 2009, Wright filed an action against Swigart alleging outrageous conduct and intentional infliction of emotional distress.
Wright continued to work for ORS but suffered from post-traumatic stress disorder and depression. After taking a twelve-week leave of absence, on January 8, 2010, she sent ORS a letter of resignation effective two weeks from that date. In that letter, Wright thanked ORS for the opportunities and experiences during her employment but stated she "no longer [felt] able to perform [her] duties to the high degree [she] functioned at before the events of 9.25.08." ORS accepted Wright's resignation.
In 2011, Wright learned that in 2006, a former ORS manager informed upper management of Swigart's inappropriate sexual behavior with female co-workers at ORS. The same manager has also informed ORS upper management that Swigart's background check revealed a history of domestic violence, alcohol related offenses, a carrying a concealed deadly weapon conviction, and indecent exposure. On July 1, 2011, Wright amended her complaint against Swigart to name the corporate appellees alleging her statutory claim under the KCRA and common law claims. Following discovery, the trial court issued its summary judgment.
A motion for summary judgment is proper only "if the pleadings and all relevant discovery indicate that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Palmer v. Int'l Ass'n of Machinists & Aerospace Workers, AFL-CIO, 882 S.W.2d 117, 120 (Ky. 1994). The trial court is required to review the record "in the light most favorable to the party opposing the motion and all doubts are to be resolved in his favor." Id. Summary judgment shall be granted "only if it appears that it would be impossible for the respondent to produce evidence warranting a favorable judgment against the movant." Id.
Wright's statutory claim is governed by KRS Chapter 344. "Under the [KCRA], it is unlawful for an employer, on the basis of sex, to 'discriminate against an individual with respect to compensation, terms, conditions, or privileges of employment . . . [or] to limit, segregate, or classify employees in any way which would . . . tend to deprive an individual of employment opportunities or otherwise adversely affect status as an employee.'" Ammerman v. Bd. of Educ., of Nicholas Cty., 30 S.W.3d 793, 797 (Ky. 2000) (quoting KRS 344.040)). "[A] sexual harassment claim can be brought based upon a hostile or abusive work environment." Id. at 798. To be actionable, the sexual harassment "must be sufficiently severe or pervasive so as to alter the conditions of the plaintiff's employment and create an abusive working environment." Id.
The KCRA does not have unlimited application. As a threshold, an employer must have "eight (8) or more employees within the state in each of twenty (20) or more calendar weeks in the current or preceding calendar year and an agent of such a person[.]" KRS 344.030(2). Where there is no material issue of fact that an employer does not meet the statutory definition of employer, summary judgment in the employer's favor is proper. Palmer, 882 S.W.2d at 120.
The limitation of the KCRA to employers with eight or more employees "within the state" in the required time precludes the KCRA from having extraterritorial application. Union Underwear Co. v. Barnhart, 50 S.W.3d 188, 191-93 (Ky. 2001). Under the terms of the statute, to be counted as an employee, physical presence "within the state" of Kentucky is required. KRS 344.030(2). In Union Underwear, the Court stressed that the KCRA is a supplement to the protections afforded employees under the federal law and cautioned that the KCRA must be interpreted to "avoid running afoul of the Commerce Clause of the United States Constitution." Union Underwear Co., 50 S.W.3d at 193. The express language of the statute excludes the argument that merely because a company conducts business in Kentucky it is subject to the provisions of the KCRA.
Although under certain circumstances, the number of affiliated organizations may be aggregated to meet the minimum number, Palmer, 882 S.W.2d at 119, Wright does not contend that any of the employees of Medical Company, Inc. or Ecolab, Inc. should be considered, nor could she reasonably make such a claim. The undisputed facts are that neither of these companies had any established relationship with ORS until 2011, long after Swigart and Wright were no longer employed at ORS.
The relevant time in this case for determining whether the KCRA applies to Wright's statutory claim is from January 2007, when Wright was hired, and April 3, 2008, when Swigart resigned. Augustine, now general counsel for Medical Company, Inc. and who had been general counsel for ORS since 2005, submitted an affidavit wherein she states that ORS had only two sales representatives and a regional sales manager who worked in Kentucky during the years from 2006-2010.
Wright does not dispute that affidavit but argues more than eight employees of ORS serviced accounts in Kentucky, although physically located outside Kentucky. She argues that all customer service agents, clerical support, shipping employees, sales representatives and management who worked with her to service accounts should be included in the employee count. While Wright may be correct that the physical presence requirement of KRS 344.030(2) is antiquated because technology has made it less likely that employers will have employees physically located in a single state, to accept her argument would expand the reach of the KCRA beyond that expressly stated in KRS 344.030(2) and ignore our Supreme Court's decision in Union Underwear. This Court is not empowered to do either. We affirm the dismissal of Wright's KCRA claims.
The trial court dismissed Wright's common-law claims based on the one-year statute of limitations for causes of action based on negligence for personal injury found in KRS 413.140(1)(a). The corporate appellees argue that because Wright does not challenge the application of the one-year statute of limitations but only advances various theories as to why the statute should be tolled, she has waived any argument that a longer statute of limitations applies.
The corporate appellees argue that if the claims are not barred by the statute of limitations, the claims are precluded because both are subsumed by the KCRA claims against the corporate appellees or the exclusive remedy provision of the Workers' Compensation Act. Although thoughtful arguments are presented, we affirm based on the statute of limitations and do not address their arguments.
Generally, we will not address issues not briefed on appeal and affirm as to such issues. As stated in Milby v. Mears, 580 S.W.2d 724, 727 (Ky.App. 1979): "An appellant's failure to discuss particular errors in his brief is the same as if no brief at all had been filed on those issues." Notably, Wright makes no argument in her original brief that the trial court erred by applying the one-year statute of limitations, and omits such argument in her reply brief. Likewise, Wright does not argue that the amended complaint can relate back to the original complaint against Swigart under Kentucky Rules of Civil Procedure 15.02. Therefore, we limit our discussion to the issues raised by Wright.
A five-year statute of limitations applies to claims for intentional infliction of emotional distress. Craft v. Rice, 671 S.W.2d 247 (Ky. 1984). The same statute of limitations was held to apply to wrongful discharge actions. Pike v. Harold (Chubby) Baird Gate Co., 705 S.W.2d 947, 948 (Ky.App. 1986). However, the trial court ruled and Wright apparently concedes that based on the undisputed facts, Wright's claims are based on negligence and the one-year statute applies. --------
A limited exception to the general rule that a cause of action accrues when the injury occurs is the discovery rule. Roman Catholic Diocese v. Secter, 966 S.W.2d 286, 288 (Ky.App. 1998). "The discovery rule [is] a means by which to identify the "accrual" of a cause of action when an injury is not readily ascertainable or discoverable[.]" Wiseman v. Alliant Hosps., Inc., 37 S.W.3d 709, 712 (Ky. 2000). Under the rule, "the statute begins to run on the date of the discovery of the injury, or from the date it should, in the exercise of ordinary care and diligence, have been discovered." Hackworth v. Hart, 474 S.W.2d 377, 379 (Ky. 1971). In McLain v. Dana Corp., 16 S.W.3d 320, 326 (Ky. App. 1999) (footnotes omitted), this Court explained:
[T]he discovery rule does not operate to toll the statute of limitations to allow an injured plaintiff to discover the identity of the wrongdoer unless there is fraudulent concealment or misrepresentation by the defendant of his role in causing the plaintiff's injuries. A person who has
knowledge of injury is put on "notice to investigate" and discover, within the statutory time constraints, the identity of the tortfeasor.Our Supreme Court has held that "[t]he discovery rule is available only in cases where the fact of injury or offending instrumentality is not immediately evident or discoverable with the exercise of reasonable diligence, such as in cases of medical malpractice or latent injuries or illnesses." Fluke Corp. v. LeMaster, 306 S.W.3d 55, 60 (Ky. 2010).
The injury alleged to have been caused by ORS is not latent. According to Wright, Swigart sexually pursued her within weeks of being hired in 2007 and Swigart broke into her home in 2008. She knew she had been injured and had a duty to discover the identity of any possible tortfeasors, including ORS, within the statutory time constraints.
Wright argues the merits of her claim, including that ORS had a duty to control Swigart to prevent his outrageous conduct and to warn her of Swigart's history. However, even if true, her injury was not latent. If the discovery rule applied to every case where there is a duty owed by the defendant, then it would apply to virtually every negligence case because duty is an element of the cause of action. The discovery is not applicable under the facts.
Wright also argues KRS 413.190(2) tolls the statute of limitations period. That statute provides:
When a cause of action mentioned in KRS 413.090 to 413.160 accrues against a resident of this state, and he by absconding or concealing himself or by any other indirect means obstructs the prosecution of the action, the time of the continuance of the absence from the state or obstruction shall not be computed as any part of the period within which the action shall be commenced. But this saving shall not prevent the limitation from operating in favor of any other person not so acting, whether he is a necessary party to the action or not.This "tolling statute has been on our books for many years" and "is essentially a recognition in law of an equitable estoppel or estoppel in pais to prevent a fraudulent or inequitable resort to a plea of limitations." Emberton v. GMRI, Inc., 299 S.W.3d 565, 573 (Ky. 2009) (quoting Adams v. Ison, 249 S.W.2d 791, 793 (Ky. 1952).
The statutory language is unequivocal, and our Supreme Court has expressly held that KRS 413.190(2) does not apply to a company that "is not a resident of Kentucky." Fluke, 306 S.W.3d at 62 n.9. Moreover, absent a duty to speak or disclose imposed by law, the concealment envisioned by KRS 413.190(2) must be an affirmative act and mere silence is insufficient. Emberton, 299 S.W.3d at 573. To establish an equitable estoppel against the corporate appellees, Wright must show: "(1) lack of knowledge or means of knowledge of the truth; (2) reliance, in good faith, based on something [the corporate appellees] did or did not do or state; and (3) resulting action or inaction on [Wright's] part that somehow changes [her] position or status for the worse." Fluke, 306 S.W.3d at 62. The act alleged against the corporate appellees was the failure to disclose their alleged knowledge of Swigart's history. Wright's interpretation of KRS 413.190(2) would negate Wright's "duty to exercise reasonable diligence to investigate apparent possible causes of [her] injuries." Id. at 63. There is no evidence that the corporate appellees did anything to prevent Wright from discovering ORS's knowledge regarding Swigart's history.
Wright argues that the statute should be tolled because ORS did register with Kentucky Secretary of State. KRS 14A.9-020(5) expressly provides that "the failure of a foreign corporation's entity to obtain a certificate of authority shall not . . . prevent it from defending any proceeding in this Commonwealth."
Regardless of whether the statute was complied with, we agree that the statute of limitations was not tolled. In Munday v. Mayfair Diagnostic Laboratory, 831 S.W.2d 912, 915 (Ky. 1992), the Court held that the defendants' failure to comply with KRS 365.015, requiring the filing of a certificate of an assumed name, was sufficient to create an estoppel under KRS 413.190(2) where such failure denied the plaintiffs information essential to the commencement of the litigation. Here, ORS's failure to register with the Secretary of State, even if required, did not deny Wright any information essential to commencing this litigation against the corporate appellees. She knew the identity of her employer, ORS, and could have initiated any action against ORS within the limitations period.
For the reasons stated, the summary judgment of the Kenton Circuit Court is affirmed.
ALL CONCUR. BRIEFS FOR APPELLANT: James W. Morgan, Jr.
Steven R. Dowell
Covington, Kentucky BRIEF FOR APPELLEE: Kathleen B. Wright
Richard S. Cleary
Griffin Terry Sumner
Louisville, Kentucky