Opinion ID: 2973167
Heading Depth: 4
Heading Rank: 2

Heading: SMS Demag

Text: SMS Demag focuses primarily on producing and installing steel furnace equipment. SMS Demag agreed to provide and install such equipment at NAS’s Ghent facility. SMS Demag routinely uses subcontractors to do the “heavy lifting” in its construction projects. In this case, the company contracted with James Smith’s employer to install the equipment. James Smith suffered his fatal injuries in the course of providing those services to SMS Demag. The Plaintiffs make two arguments regarding SMS Demag’s right to “up-the-ladder” -15- No. 04-5340 Smith v. North Am. Stainless, L.P. immunity. First, the Plaintiffs argue that factual issues exist whether Artisan had entered a contract with SMS Demag to perform the work being performed at the time of the accident. Second, the Plaintiffs say that there is an issue of material fact as to whether James Smith was performing work regularly done by SMS Demag. Specifically, the Plaintiffs contend that SMS Demag installs plant equipment but evidence exists that Smith was killed during maintenance of the equipment, a function that the Plaintiffs say is not a regular SMS Demag responsibility. In support of this argument, the Plaintiffs cite to the position taken by NAS and the evidence that NAS offers to support that position. NAS says SMS Demag, through its subcontractor Artisan, was performing maintenance work: “The work SMS subcontracted to Artisan was not construction work at all but, rather, maintenance and repair work that SMS was required to provide NAS until Provisional Acceptance . . . . ” NAS brief at 8. While installation of equipment is a regular activity of SMS Demag, maintenance of already installed equipment is not. SMS Demag characterizes Smith’s work as intimately related to its installation. The Plaintiffs and NAS say it was not. Factual issues exist over whether Smith’s death occurred during installation or later maintenance and whether the work being performed by Smith and Artisan was a regular or recurrent part of SMS Demag’s business. We agree with a broad majority of the Dissent’s discussion. We agree that the “up-theladder” immunity may extend more than one level. We also agree that “up-the-ladder” immunity can extend to a party even where the party never earlier performed the work with its own employees. Most important, we agree with the Dissent that “it is the contractual relationship between SMS Demag and Artisan and whether the work Smith was performing was a ‘regular or recurrent’ part -16- No. 04-5340 Smith v. North Am. Stainless, L.P. of SMS Demag’s business that determines SMS Demag’s immunity.” SMS Demag did not expressly contract to provide maintenance services for NAS. Section 1.1 of their agreement states: The Contractor [SMS Demag] has agreed to supply in Purchaser's [NAS] Manufacturing Facility the Equipment and all constituent elements necessary for the efficient operation of the equipment; the Erection of the Equipment; to supervise and direct the Commissioning and Provisional Acceptance of the Equipment. Section 1.3 further states: The Project is the furnishing of the Equipment, together with installation, design, erection, supervision, and supervision and direction of the commission, and Provisional Acceptance Tests, and Training for the Equipment for which Contractor is responsible under the Contract Documents, including all professional design services, erection, supervision and all labor and materials required to perform the Work. SMS Demag’s written contract with Artisan was even less specific regarding the scope of work, calling only for Artisan to provide “LABOR AND MATERIAL FOR SITE TASK FORCE.” Under the contract, SMS Demag’s work focused on installation, not maintenance. While SMS Demag says Artisan’s work was installation, the Plaintiffs and NAS say it was maintenance. Smith was injured after the melt shop became operational and after hot runs had been performed but before SMS Demag received provisional acceptance. Smith was injured while working on insulators on the electrode arms of the electric arc furnace. At operating electric arc furnaces, insulators receive recurring maintenance and replacement. Work on insulators is not inherently tied to the initial installation of the equipment. At the time of the accident, the melt shop was operational and Artisan and Smith were not engaged in the original construction. The Plaintiffs-Appellants offer -17- No. 04-5340 Smith v. North Am. Stainless, L.P. evidence that Smith’s and Artisan’s work at the time of the accident was maintenance and that maintenance was not a regular or recurrent part of SMS Demag’s business. Again, under the Kentucky workers compensation scheme, a contractor is an entity who contracts with another 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.” KY. REV. STAT. ANN. § 342.610(2)(b) (2004). As Judge Merritt wrote, courts “narrowly constru[e] the immunity provisions” of Kentucky’s workers’ compensation regime. Boggs v. Blue Diamond Coal Co., 590 F.2d 655, 658-59 (6th Cir. 1979). Under these circumstances, the parties’ factual dispute over the work performed and contracted to by SMS Demag and Artisan creates a question of fact as to whether SMS Demag was a “contractor” for purposes of up-the-ladder immunity. That question of fact precludes summary judgment for SMS Demag. Because there is an issue of fact as to whether SMS Demag qualifies as a contractor, we reverse the district court’s decision granting summary judgment to SMS Demag.