FORBES (ANDREW), ET AL. VS. DIXON ELECTRIC, INC.
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RENDERED: APRIL 30, 2010; 10:00 A.M
NOT TO BE PUBLISHED
Commonwealth of Kentucky
Court of Appeals
NO. 2009-CA-000834-MR
ANDREW FORBES AND
BETTY JUNE FORBES
v.
APPELLANTS
APPEAL FROM FAYETTE CIRCUIT COURT
HONORABLE JAMES D. ISHMAEL, JR., JUDGE
ACTION NO. 05-CI-04637
DIXON ELECTRIC, INC.
APPELLEE
OPINION
AFFIRMING
** ** ** ** **
BEFORE: CLAYTON AND NICKELL, JUDGES; KNOPF,1 SENIOR JUDGE.
KNOPF, SENIOR JUDGE: Andrew and Betty June Forbes have appealed from a
summary judgment of the Fayette Circuit Court in favor of Dixon Electric, Inc.
1
Senior Judge William L. Knopf sitting as Special Judge by assignment of the Chief Justice
pursuant to Section 110(5)(b) of the Kentucky Constitution and Kentucky Revised Statutes
(KRS) 21.580.
The circuit court held that Dixon Electric was entitled to up-the-ladder immunity
afforded by KRS 342.610 of Kentucky’s Workers’ Compensation Act. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Dixon Electric is a corporation based in Lexington, Kentucky, that is
involved in the business of designing and installing commercial electrical systems.
The company has an exclusive contract with Lexington-Fayette Urban County
Government to provide for the installation of and repairs to traffic signals.
Pursuant to that contract, Dixon Electric was to provide for any traffic control
needed. In the event that it needed assistance with traffic control, due to a busy
intersection for example, Dixon Electric would request the assistance of the
Lexington Police Department. While there was no set number of times assistance
was needed, Dixon Electric foreman Greg Tuttle testified by deposition that he
would request flagging assistance several times per month.
On the evening of September 21, 2005, Dixon Electric was replacing
wood poles with steel poles at the intersection of New Circle Road and North
Broadway, a busy intersection in Lexington. In order to complete a job such as
this, Dixon Electric employees would cut traffic signal wires and then reattach
them to the new poles. Because this was a busy intersection, Dixon Electric
requested assistance from the police department, and Officers Andrew Forbes (the
appellant herein) and Ron Keaton were assigned to provide manual traffic control.
During this procedure on the night in question, Stephen Hill was driving his
vehicle westbound on New Circle Road, failed to stop behind a car already stopped
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at the intersection, and swerved to miss that car. Hill’s vehicle hit Forbes, causing
him to fly through the air and incur substantial injuries. Forbes sought and
received workers’ compensation benefits through the police department for
medical expenses and costs to modify his home.
As a result of the accident, Forbes and his wife filed a civil suit
against Hill in Fayette Circuit Court, seeking compensatory and punitive damages.
The Forbeses later sought and received leave to file an amended complaint to name
Dixon Electric as a defendant, alleging that Dixon Electric was negligent in failing
to provide notice and warning to oncoming traffic of the non-working traffic
signals at the intersection. Discovery began, and six months later, Dixon Electric
filed a motion for summary judgment arguing that it was entitled to up-the-ladder
immunity. In support of its motion, Dixon Electric argued that traffic control is a
crucial part of its work for the LFUCG, and accordingly it was Forbes’s statutory
employer at the time of the accident and entitled to immunity. After the circuit
court permitted additional discovery on the issue, Dixon Electric renoticed its
motion for summary judgment. The Forbeses responded, asserting that Dixon
Electric was not entitled to immunity.
After initially denying the motion, the circuit court later granted
summary judgment in an opinion and order entered July 19, 2007. The circuit
court found that traffic control, whether performed by Dixon Electric employees or
by police officers, was a regular and recurrent part of Dixon Electric’s work as the
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exclusive traffic signal installer and repair provider for LFUCG. Thus, Dixon
Electric was a “contractor” and entitled to up-the-ladder immunity.
The Forbeses later moved the circuit court to reconsider its ruling in
light of the Supreme Court of Kentucky’s recent decision of General Electric Co.
v. Cain, 236 S.W.3d 579 (Ky. 2007), which was released a month after the opinion
and order was entered. They argued that Cain created a new test to determine
whether up-the-ladder immunity applied.
The circuit court opted to reconsider the prior ruling in an order
entered June 10, 2008. It first noted the undisputed facts related to the issue of upthe-ladder immunity:
It is undisputed that Dixon Electric had a written
Contract with LFUCG to perform repair and maintenance
work on traffic control devices in Lexington. As part of
that Contract, it was the obligation of Dixon Electric, at
no cost to LFUCG, to maintain traffic control at any
intersections at which Dixon is performing work under
the Contract. Pursuant to that contractual obligation, it is
undisputed that from time to time Dixon would employ
police officers from the LFUCG Division of Police to
direct traffic at intersections which, in the discretion of
the Dixon employee, required such direction. It is
equally undisputed that from time to time Dixon
employees would direct traffic at intersections not
requiring direct law enforcement activity.
The circuit court then addressed the holding in Cain, as well as the
cases cited by the Supreme Court supporting its decision. After thoroughly
analyzing those cases, the circuit court determined that Cain did not alter the law
as set forth in prior opinions. It held that traffic control was a “regular” or
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“recurrent” part of Dixon Electric’s contractual obligations to LFUCG, bringing it
within the ambit of the holdings in Cain and Daniels v. Louisville Gas & Electric
Co., 933 S.W.2d 821 (Ky. App. 1996).
The circuit court disagreed with the Forbeses’ argument that traffic
control at major intersections could not be considered regular or recurrent work of
Dixon Electric because its employees could not legally direct traffic, stating that
“[e]ven if the Dixon employees could not have directed traffic on the evening in
question, traffic control was still a regular or recurrent part of its contractual
obligation with LFUCG.” Citing the holding in Daniels by way of analogy, the
circuit court stated:
Daniels would teach us that it is the obligation, whether
contractual or as a matter of law, that is the issue to see if
an owner or party can be deemed to be a contractor. The
expertise or unique qualifications of the sub-contractor is
not the ultimate criteria. If a uniquely qualified
emissions testing company (and its employees) are
performing work for a company with a contractual
obligation to perform said testing, and the original
company is not qualified to do the emissions testing,
Daniels holds that the original company is still deemed to
be a contractor, and the emissions testing company is
deemed to be a sub-contractor, then the same analogy
applies in the case at bar.
Turning to Dixon Electric, the circuit court went on to hold as follows: “Even
assuming . . . that only police officers could conduct traffic control at busy
intersections with the traffic signals inoperable, because traffic control was a
contractual obligation of Dixon Electric with LFUCG, said traffic control was a
‘regular’ or ‘recurrent’ part of Dixon’s work for LFUCG.” Therefore, the circuit
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court held that Dixon Electric was entitled to up-the-ladder immunity. This appeal
followed.2
On appeal, the Forbeses raise four arguments: 1) that Dixon Electric
is not entitled to up-the-ladder immunity pursuant to Cain; 2) that Dixon Electric
did not plead protection under the Workers’ Compensation Act and therefore
waived application of the Act; 3) that Dixon Electric did not meet its burden of
proving that it had workers’ compensation insurance in place to cover Forbes; and
4) that KRS 342.160 violates public policy and is unconstitutional. In its brief,
Dixon Electric disputes each of the Forbeses arguments.
STANDARD OF REVIEW
The standard of review for 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.” The trial
court must view the evidence in the light most favorable
to the nonmoving party, and summary judgment should
be granted only if it appears impossible that the
nonmoving party will be able to produce evidence at trial
warranting a judgment in his favor. . . . Because
summary judgment involves only legal questions and the
2
Neither the July 19, 2007, opinion and order nor the June 10, 2008, order was made final and
appealable at the time of entry. On April 16, 2009, the circuit court entered an agreed order of
partial dismissal when the Forbeses settled their claims against Hill. In an order entered April
24, 2009, the circuit court made the summary judgment final and appealable as of April 16,
2009, the date the partial dismissal was entered. The Forbeses timely filed their notice of appeal
on May 1, 2009.
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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 v. B & R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001) (citations omitted).
We agree with the circuit court that no disputed issues of material fact exist with
respect to the issues before the Court. Therefore, we shall review the circuit
court’s legal decision de novo.
ANALYSIS
We shall first address the Forbeses’ up-the-ladder immunity
argument. We 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 343.690(1) details the exclusive remedy protection afforded to employers
subject to the Act and 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.
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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.
The Supreme Court of Kentucky has recently revisited the issue of upthe-ladder immunity in General Electric Co. v. Cain, supra. The Court first briefly
explained up-the-ladder immunity 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
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“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.
The Court then extensively reviewed existing state and federal case
law interpreting KRS 342.610(2)(b) as well as Larson’s Workers’ Compensation
Law. It concluded as follows:
Work of a kind that is a “regular or recurrent part of the
work of the trade, business, occupation, or profession” of
an owner does not mean work that is beneficial or
incidental to the owner’s business or that is necessary to
enable the owner to continue in business, improve or
expand its business, or remain or become more
competitive in the market. Larson’s, supra, at §
70.06[10]. It is work that is customary, usual, or normal
to the particular business (including work assumed by
contract or required by law) or work that the business
repeats with some degree of regularity, and it is of a kind
that the business or similar businesses would normally
perform or be expected to perform with employees.
The test is relative, not absolute. Factors relevant to the
“work of the . . . business,” include its nature, size, and
scope as well as whether it is equipped with the skilled
manpower and tools to handle the task the independent
contractor is hired to perform. Larson’s, supra, at §
70.06 [5]. Employees of contractors hired to perform
major or specialized demolition, construction, or
renovation projects generally are not a premises owner’s
statutory employees unless the owner or the owners of
similar businesses would normally expect or be expected
to handle such projects with employees. Employees of
contractors hired to perform routine repairs or
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maintenance that the owner or owners of similar
businesses would normally be expected to handle with
employees generally are viewed as being statutory
employees. Whether a project is customized to the
premises owner’s needs is irrelevant.
Id. at 588.
Finally, the Court distilled its ultimate holding: “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.
The Forbeses assert that in Cain, the Supreme Court created a twopart test; namely, the work must be: 1) customary to the business or repeated with
a degree of regularity; and 2) of a kind normally performed or expected to be
performed by employees. We do not believe that the Supreme Court created a new
test, but rather it summarized the existing test. Furthermore, we agree with Dixon
Electric that the facts of this case fall squarely within the application of Cain and
KRS 342.610. By virtue of its contract with LFUCG to install and repair traffic
signals throughout the city, Dixon Electric had to provide for traffic control, which
was done either by its employees or by Lexington police officers. Traffic control
is unquestionably a regular and recurrent part of Dixon Electric’s business.
Therefore, Dixon Electric took on the role of contractor while the Lexington Police
Department took on the role of sub-contractor at the time and place of the accident,
and Dixon Electric was entitled to up-the-ladder immunity. The circuit court did
not commit any error in so holding.
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The Forbeses remaining three arguments are also without merit, and
we shall only briefly address them. Dixon Electric’s failure to plead protection
under the Workers’ Compensation Act in its answer to the complaint was remedied
by the extension of the discovery period so that the parties could take depositions
related to the issue, giving the Forbeses sufficient opportunity to obtain discovery
on this defense. As to the Forbeses’ argument concerning proof of workers’
compensation coverage, we are persuaded by Dixon Electric’s response that there
is no merit to this issue. The record reflects that Officer Forbes received workers’
compensation benefits from the police department, and Dixon Electric was
required to have workers’ compensation coverage in order to be awarded the
LFUCG contract. Finally, the Supreme Court addressed and again upheld the
constitutionality of KRS 342.610 in Cain. See Cain, 236 S.W.3d at 605-07.
For the foregoing reasons, the summary judgment of the Fayette
Circuit Court is affirmed.
ALL CONCUR.
BRIEFS FOR APPELLANTS:
BRIEF FOR APPELLEE:
Charles C. Adams, Jr.
Herren & Adams
Lexington, Kentucky
Daniel E. Murner
Elizabeth Winchell
Landrum & Shouse LLP
Lexington, Kentucky
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