Opinion ID: 2539627
Heading Depth: 1
Heading Rank: 2

Heading: blackstone was entitled to summary judgment

Text: Blackstone contends that the Court of Appeals erroneously reversed the trial court's award of summary judgment. It argues that, in light of the signed rejection notices, the burden on summary judgment shifted to Travelers to produce affirmative evidence demonstrating that the rejections were not made voluntarily, and that Travelers failed to do so. 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. Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky.App.1996); CR 56.03. 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. Lewis v. B & R Corp., 56 S.W.3d 432, 436 (Ky.App.2001) (citing Steelvest, 807 S.W.2d at 480-82). The moving party bears the initial burden of showing that no genuine issue of material fact exists, and then the burden shifts to the party opposing summary judgment to present `at least some affirmative evidence showing that there is a genuine issue of material fact for trial.' Id. at 436 (citing Steelvest, 807 S.W.2d at 482). The trial court must examine the evidence, not to decide any issue of fact, but to discover if a real issue exists. Steelvest, 807 S.W.2d at 480. The word impossible, as set forth in the standard for summary judgment, is meant to be used in a practical sense, not in an absolute sense. Lewis, 56 S.W.3d at 436 (citing Perkins v. Hausladen, 828 S.W.2d 652, 654 (Ky.1992)). 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. Id. at 436. With the foregoing summary judgment standards in mind, we now turn to the merits of the case. We first examine KRS 342.395, which provides the method by which employees may opt to reject workers' compensation coverage. The statute provides as follows: (1) Where an employer is subject to this chapter, then every employee of that employer, as a part of his contract of hiring or who may be employed at the time of the acceptance of the provisions of this chapter by the employer, shall be deemed to have accepted all the provisions of this chapter and shall be bound thereby unless he shall have filed, prior to the injury or incurrence of occupational disease, written notice to the contrary with the employer; and the acceptance shall include all of the provisions of this chapter with respect to traumatic personal injury, silicosis, and any other occupational disease. However, before an employee's written notice of rejection shall be considered effective, the employer shall file the employee's notice of rejection with the Office of Workers' Claims. The executive director of that office shall not give effect to any rejection of this chapter not voluntarily made by the employee. If an employee withdraws his rejection, the employer shall notify the executive director. (2) An employer shall not require an employee to execute a rejection of this chapter as either a condition to obtain employment or a condition to maintain employment. An employer shall not terminate an employee for refusal to execute a rejection of this chapter. (3) Until notice to the contrary as specified in subsection (1) of this section is given to the employer, the measure of liability of the employer shall be determined according to the compensation provisions of this chapter. Any employee, may, without prejudice to any existing right or claim, withdraw his election to reject this chapter by filing with the employer a written notice of withdrawal, stating the date when the withdrawal is to become effective. Following the filing of that notice, the status of the party withdrawing shall become the same as if the former election to reject this chapter had not been made, except that withdrawal shall not be effective as to any injury sustained or disease incurred less than one (1) week after the notice is filed. (emphasis added). Central to an employee's rejection of workers' compensation benefits under the statute is that the rejection be voluntary. [F]or a rejection to be voluntary, a worker must have a substantial understanding of the nature of the action and its consequences. Watts v. Newberg, 920 S.W.2d 59, 61 (Ky.1996) (holding that an employer's requiring an employee to choose whether to take a twenty percent cut in pay and keep workers' compensation benefits or choose to reject statutory coverage and substitute lesser benefits to keep same wages was not a substantial or meaningful choice and rendered the employee's rejection of workers' compensation coverage involuntary and in violation of the principle that the employer bear responsibility for paying workers' compensation insurance coverage, particularly when employee thought substitute coverage was as good as workers' compensation coverage); Karst Robbins Machine Shop, Inc. v. Caudill, 779 S.W.2d 207, 209 (Ky. 1989) (holding that a rejection notice filed by an illiterate employee was not voluntary because he did not understand the nature and consequences of his actions); see also Tri-Gem Coal Co. v. Whitaker, 661 S.W.2d 785 (Ky.App.1983) (evidence that indicated that employment was conditioned upon rejection of the Workers' Compensation Act was of sufficient quality and quantity to support decision of the Workers' Compensation Board that employee's rejection was not voluntary). It is not disputed that twenty-three Blackstone Mining employees executed the proper Department of Workers' Claims forms to reject workers' compensation coverage, and that the forms were properly filed with the agency and recorded. [4] It is the settled law in Kentucky that one who signs a contract is presumed to know its contents, and that if he has an opportunity to read the contract which he signs he is bound by its provisions, unless he is misled as to the nature of the writing which he signs or his signature has been obtained by fraud. Clark v. Brewer, 329 S.W.2d 384, 386 (Ky.1959). This principle has been applied in the workers' compensation context. Kentucky Road Oiling Co. v. Sharp, 257 Ky. 378, 78 S.W.2d 38, 42 (1934) (It is a rule in this state that a party who can read and has an opportunity to read the contract which he signs must stand by the words of his contract, unless he is misled as to the nature of the writing which he signs, or his signature is obtained by fraud.). It follows that substantial weight must be accorded to the signed rejection forms executed by the twenty-three employeesweight at least equal to a presumption of validity. As previously noted, the rejection forms signed by the employees included the language I Hereby Notify My Employer ... That I do not accept, and do not want to work under the provisions of Kentucky Revised Statutes Chapter 342, commonly known as the Workers' Compensation Act of Kentucky. The import of this language could not be clearer, and there is no reason to suppose that any employee did not understand the provisions of the rejection notice. Without the presumption of validity, the signed rejection notices on file with the Department of Workers' Claims could not be considered a reliable or useful indicator of who was covered under the workers' compensation statutes, and in each instance some additional evidence from the employee would have to be gathered before the Department could place any degree of confidence in rejection forms filed with it. Through the signed rejection forms, Blackstone met its initial burden of showing that no genuine issue of material fact exists, Lewis, 56 S.W.3d at 436, on the issue of whether the relevant employees had voluntarily rejected workers' compensation coverage. Given the presumptive validity of the signed rejection forms, Blackstone had no burden, as suggested by the Court of Appeals, of producing [any additional] evidence that each of the twenty-three employees possessed a substantial understanding of the nature of the action (rejection of coverage) and its consequences. The Court of Appeals erred in concluding that Blackstone failed to prove that these employees voluntarily rejected workers' compensation coverage. To the contrary, by introducing the signed notices alone, Blackstone's motion for summary judgment was properly supported. It was then incumbent upon Travelers to come forward with some evidence casting doubt on the validity of the rejection notices. [A] party opposing a properly supported summary judgment motion cannot defeat it without presenting at least some affirmative evidence showing that there is a genuine issue of material fact for trial. Steelvest, 807 S.W.2d at 482. In opposition to Blackstone's motion for summary judgment, and in support of its own motion, Travelers did little more than criticize the circumstances surrounding the rejections. Specifically, Travelers alleged that the employees were designated as officers of the company solely to qualify for the Mass Mutual coverage, and that the appointments were therefore invalid, thus nullifying coverage under the policies; that the employees were subjected to a presentation in support of the policy by a Mass Mutual sales agent which, it speculates, may have been misleading; and that Blackstone was engaging in an improper scheme to reduce its workers' compensation premiums. Such allegations, while perhaps identifying an unorthodox approach to satisfying the requirements of KRS Chapter 342, do not amount to affirmative evidence against the presumptive validity of the signed notices so as to raise a genuine issue of fact about the matter. Designed to be narrow and exacting so as to preserve one's right to trial by jury, summary judgment is nevertheless appropriate in cases where the nonmoving party relies on little more than speculation and supposition to support his claims. O'Bryan v. Cave, 202 S.W.3d 585, 588 (Ky.2006). The party opposing summary judgment cannot rely on their own claims or arguments without significant evidence in order to prevent a summary judgment. Wymer v. JH Properties, Inc., 50 S.W.3d 195, 199 (Ky.2001). Travelers's arguments amount to no more than speculation and reliance on its own unsupported claims. It has identified no specific employee who claims that his rejection was not voluntary, nor has it presented any affirmative evidence that any employee was subjected to fraud or coercion that may have rendered his rejection invalid, or that any employee was illiterate, incompetent, or otherwise unable to understand the consequences of his rejection. In support of its position, Travelers directs our attention to Watts, 920 S.W.2d 59, and Karst Robbins, 779 S.W.2d 207; however, those cases are distinguishable. Both Watts and Karst involved an employee asserting on his own behalf that his formal rejection of workers' compensation benefits was not voluntary. As illustrated by those cases and Tri-Gem Coal Co., 661 S.W.2d 785, in the usual situation, if accompanied by circumstances which demonstrate illiteracy, fraud, coercion, or a lack of understanding, an employee's averment that his rejection was not voluntary will, by itself, be sufficient to defeat summary judgment. Even in those cases, however, the presumed validity of the formal rejection notice will prevail unless refuted by affirmative evidence to the contrary. Ordinarily, such evidence is easily supplied by the employee himself. In this case, however, no employee claimed that his rejection was not voluntary, and Travelers's opposition to Blackstone's motion depended on its own speculations and interpretations of the facts, none of which demonstrated the existence of a genuine issue of fact regarding the validity of the employees' rejection of workers' compensation coverage. We do not, as the dissent asserts, find that the rejections were voluntarily made. We simply state that Blackstone met its threshold burden for obtaining summary judgment by proffering the twenty-three presumptively valid notices of rejection of workers' compensation coverage. Travelers presented nothing to affirmatively establish the existence of a genuine issue of material fact concerning the voluntariness of the rejection notices. Therefore, Blackstone was properly granted summary judgment. As a final observation, we highlight the fact that this opinion addresses only certain procedural elements of summary judgment under CR 56, and the allocation of the burden attendant thereto. The conclusion that Blackstone was entitled to summary judgment should not be construed as an endorsement of Blackstone's method of avoiding the apparently more costly premiums of a true workers' compensation policy, nor should it be construed as a finding that the Mass Mutual policy is a desirable or acceptable substitute for the workers' compensation coverage as mandated by KRS Chapter 342. Such a comparison is beyond the scope of our review. We express no opinion on the wisdom of rejecting the protections and benefits provided under the Worker's Compensation Act.