Court Opinion

ID: 4696400
Source: CourtListenerOpinion
Date Created: 2021-06-17 15:07:38.309281+00
Date Added: 2024-06-11T08:05:40.407743
License: Public Domain

RENDERED: JUNE 17, 2021
                                                          TO BE PUBLISHED

               Supreme Court of Kentucky
                               2019-SC-0208-DG

CLARA SUSAN SHEETS, EXECUTRIX OF                                     APPELLANT
THE ESTATE OF STEVEN RAY SHEETS

                  ON REVIEW FROM COURT OF APPEALS
V.                        NO. 2018-CA-0044
               JEFFERSON CIRCUIT COURT NO. 15-CI-003525

FORD MOTOR COMPANY                                                    APPELLEE

               OPINION OF THE COURT BY JUSTICE KELLER

                         VACATING AND REMANDING

      Steven Ray Sheets filed suit against Ford Motor Company alleging Ford

was one of the parties responsible for causing his malignant mesothelioma.

Approximately two years after the suit was filed, and after extensive discovery

was conducted, Ford moved the trial court to grant summary judgment in its

favor. The trial court denied Ford’s motion in a one-sentence hand-written

order. Ford appealed to the Court of Appeals, which vacated the trial court’s

order and remanded for the trial court to enter another order with a basis for

its determination. This Court then granted Sheets’s motion for discretionary

review to determine whether Ford had a right to an interlocutory appeal of the

trial court’s denial of its summary judgment motion. After review, because

neither the Court of Appeals nor this Court has appellate jurisdiction of this
unauthorized interlocutory appeal, we vacate and remand to the trial court for

further proceedings in this case.

                                   I. BACKGROUND

      In 2015, Sheets was diagnosed with malignant mesothelioma. Shortly

thereafter, he filed suit in Jefferson Circuit Court against Ford and multiple

other defendants alleging that he had contracted mesothelioma as a result of

his exposure to asbestos and that the defendants were the cause of his

exposure. Tragically, within two weeks of the filing of his suit, Sheets died of a

self-inflicted gunshot wound. Clara Susan Sheets, executrix of his estate, was

substituted as plaintiff, thereby reviving his lawsuit.1

      Just over two years after suit was filed, Ford filed a motion for summary

judgment, making three arguments. First, Ford argued it was immune from

tort liability as an “up-the-ladder,” or statutory employer, under Kentucky

Revised Statute (KRS) 342.610(2)(b) of the Kentucky Workers’ Compensation

Act (Act). Second, Ford argued that it had no duty to warn independent

contractors. Finally, Ford argued there was a lack of proof of causation. The

trial court denied Ford’s motion for summary judgment in a one-sentence

hand-written order that contained no analysis or reasoning.

      Ford appealed to the Court of Appeals arguing it was entitled to “‘up-the-

ladder’ immunity” under the exclusive remedy provision of the Act found in

KRS 342.690. Ford alleged it had a matter of right appeal on this issue under

      1 In Estate of Benton v. Currin, 615 S.W.3d 34 (Ky. 2020), we clarified that KRS
395.278 and CR 25.01 operate jointly, and that substitution, CR 25.01, within the
statutory time period, KRS 395.278, accomplishes revival.

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Ervin Cable Construction, LLC v. Lay, 461 S.W.3d 422 (Ky. App. 2015). Sheets

filed a motion to dismiss Ford’s appeal arguing that the trial court’s order

denying summary judgment was interlocutory and not appealable. The Court of

Appeals denied Sheets’s motion to dismiss but held that “any jurisdictional

issues may be revisited by the panel . . . considering the merits of the appeal.”

      Subsequently, the merits panel of the Court of Appeals held that it had

“jurisdiction under Ervin to review an order denying summary judgment in a

case where the trial court has determined that the defendant is not entitled to

up-the-ladder immunity as a matter of law.” The Court of Appeals went on to

note, however, that the trial court’s order lacked any basis for its ruling, and

therefore the Court of Appeals could not determine if it had jurisdiction to

review the order. Accordingly, the Court of Appeals vacated the trial court’s

order denying Ford’s motion for summary judgment and remanded the matter

to the trial court “with direction to enter an order specifically setting forth the

basis for its determination.”

      Sheets then moved this Court for discretionary review to determine

whether the Court of Appeals had jurisdiction to review the trial court’s denial

of summary judgment, as Sheets argued it was a non-final, non-appealable

interlocutory order. We granted Sheets’s motion.

                                   II.   ANALYSIS

      Under Kentucky law, an injured worker’s recovery from his employer is

limited to workers’ compensation benefits unless he has expressly opted out of

the workers’ compensation system. Under Kentucky’s exclusive remedy

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provision found in KRS 342.690, the injured worker is not entitled to tort

damages from the employer or its employees for work-related injuries. Further,

under this statute, the term “employer” is construed broadly to include not

only the worker’s direct employer, but also a “contractor” utilizing the

employee’s direct employer as a subcontractor. Beaver v. Oakley, 279 S.W.3d

527, 530 (Ky. 2009) (footnote omitted). This exclusive remedy provision is often

referred to as providing “up-the-ladder” immunity for contractors.2

      Ford argues that it is entitled to “up-the-ladder” immunity because it

subcontracted with Sheets’s direct employer. It further argues that the trial

court’s denial of its summary judgment motion was a denial of a substantial

claim of immunity that is immediately appealable under this Court’s decision

in Breathitt County Board of Education v. Prater, 292 S.W.3d 883, 886 (Ky.

2009), and the Court of Appeals’ decision in Ervin Cable, 461 S.W.3d 422.

      Generally, Kentucky Rule of Civil Procedure (CR) 54.01 limits “appealable

judgment[s]” to “final order[s] adjudicating all the rights of all the parties in an

action or proceeding.” However, there are exceptions to this final judgment

rule. For example, CR 54.02 permits the trial court to designate as “final” and

hence appealable a “judgment upon one or more but less than all of the claims

or parties” upon a determination that “there is no just reason for delay” in

cases involving multiple claims or multiple parties. CR 65.07 permits an

interlocutory appeal from an order “grant[ing], den[ying], modif[ying], or

      2 There is some dispute as to whether KRS 342.690 actually confers immunity
from suit, as opposed to immunity from liability, on employers. We need not, and do
not, decide that issue today.

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dissolv[ing] a temporary injunction[.]” KRS 22A.020(4) permits the

Commonwealth an interlocutory appeal under certain circumstances in

criminal cases. KRS 417.220 allows for interlocutory appeals of certain orders

regarding arbitration, and KRS 425.600(1) deems any “order of a court

appointing or refusing to appoint a receiver . . . a final order for the purpose of

an appeal.”

      This Court recognized an application of the federal collateral order

doctrine as another exception to the final order rule in Prater, 292 S.W.3d 883.

We acknowledged that some non-final orders “address substantial claims of

right which would be rendered moot by litigation and thus are not subject to

meaningful review in the ordinary course following a final judgment.” Id. at

886. In the context of that case, we held that “an order denying a substantial

claim of absolute immunity is immediately appealable even in the absence of a

final judgment.” Id. at 887.

      Since our Prater decision, we have refined our application of its

principles. In Commonwealth v. Farmer, 423 S.W.3d 690 (Ky. 2014), we

explained that merely being denied a claimed “immunity” was not necessarily

sufficient to invoke the doctrine as an exception to the final order rule. We

explained that the collateral order doctrine requires an order that (1)

conclusively decides an important issue separate from the merits of the case;

(2) is effectively unreviewable following final judgment; and (3) involves a

substantial public interest that would be imperiled absent an immediate

appeal. Id. at 696-97. In Farmer, we quoted from the United States Supreme

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Court’s decision in Will v. Hallock, 546 U.S. 345 (2006), when discussing “the

driving force of collateral order jurisprudence.” That Court stated,

      In each case, some particular value of a high order was marshaled
      in support of the interest in avoiding trial: honoring the separation
      of powers, preserving the efficiency of government and the initiative
      of its officials, respecting a State's dignitary interests, and
      mitigating the government's advantage over the individual. That is,
      it is not mere avoidance of a trial, but avoidance of a trial that would
      imperil a substantial public interest, that counts when asking
      whether an order is “effectively” unreviewable if review is to be left
      until later.

Will, 546 U.S. at 352-53 (emphasis added). We noted that in Prater, “the

threatened disruption of government services due to the costs and burden of

litigation presented a compelling public interest sufficient to entitle the

Breathitt County Board of Education to immediate review of the trial court's

denial of absolute immunity.” Farmer, 423 S.W.3d at 697 (citing Prater, 292

S.W.3d at 887). We went on to hold that Farmer’s claim of immunity from

prosecution under KRS 503.0853 did not involve such a substantial public

interest, as his “interest in asserting immunity and avoiding prosecution . . . is

purely personal in nature.” Id.

      The year after Farmer was decided, the Court of Appeals, in Ervin Cable,

461 S.W.3d 422, was tasked with answering the exact question before us today

– whether, under the collateral order doctrine, an appellate court has

jurisdiction to review a trial court’s denial of a motion for summary judgment

which relies on the exclusive remedy provision of the Act. Relying on Prater, but

      3KRS 503.085 states, in relevant part, “A person who uses force as permitted in
KRS 503.050, 503.055, 503.070, and 503.080 is justified in using such force and is
immune from criminal prosecution and civil action for the use of such force . . .”

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without mentioning Farmer, the Court of Appeals held that it had jurisdiction

to review the denial of summary judgment because “the denial of a substantial

claim of immunity is an exception to the finality rule that interlocutory orders

are not immediately appealable.” Id. at 423 (citing Prater, 292 S.W.3d 883). In

Ervin Cable, the Court of Appeals did not consider the three-part test described

in Farmer.

      Five years after Farmer, this Court again sought to clarify the application

of the collateral order doctrine in two cases rendered just months apart. First,

in Maggard v. Kinney, 576 S.W.3d 559 (Ky. 2019), we were tasked with

determining whether the denial of a judicial statements privilege in litigation

between two physicians fell within the collateral order doctrine. We

acknowledged that “[a] claim of sovereign or governmental immunity satisfies

the criteria” of the collateral order doctrine, but that “many other theories

couched as immunity will not.” Id. at 566. In a footnote, we noted that “[t]his

Court has generally limited interlocutory jurisdiction to sovereign,

governmental and official immunity claims,” id. at 566 n.8, but that “Kentucky

courts have in some instances allowed the collateral order doctrine to expand

beyond its logic” and the criteria as laid out in Farmer. Id. (internal quotation

marks and citation omitted). We further noted that “no governmental entity or

official is a party to this long-running litigation and thus the prospects of

immunity justifying a collateral order interlocutory appeal are slim to none.” Id.

      We went on to hold that the judicial statements privilege was not a form

of immunity and did not allow for an interlocutory appeal under the collateral

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order doctrine. Id. We cited to the Sixth Circuit’s decision in Kelly v. Great

Seneca Financial Corp., 447 F.3d 944 (6th Cir. 2006), which relied heavily on

Will, 546 U.S. 345, for its emphasis “on limiting the collateral order exception

to cases involving a substantial public interest that would be threatened by a

trial or other proceedings on the merits of the full case.” Id. at 568. Finally, we

held that a denial of the judicial statements privilege, or even witness

immunity, “does not merit immediate appellate review because it does not

satisfy the collateral order doctrine requirements of an order involving a

substantial public interest that will be imperiled if appellate review is delayed

until after further proceedings and final judgment.” Id. (emphasis added).

      Two months after Maggard, we rendered our decision in Hampton v.

Intech Contracting, LLC, 581 S.W.3d 27 (Ky. 2019), in which we had to

determine whether a trial court’s grant of partial summary judgment in a

workers’ compensation enforcement action was immediately appealable in the

absence of CR 54.02 finality language. We repeated our observation from

Maggard that “Kentucky courts have in some instances allowed the collateral

order doctrine to expand beyond its logic” and the criteria as laid out in Farmer

and expressly concluded “that Ervin Cable is such a case.” Id. at 36. We went

on to hold that “[w]hether or not the circuit court had jurisdiction to consider a

workers’ compensation enforcement action against Intech/Zurich is not a

matter of ‘substantial public interest’” and accordingly determined that the

Court of Appeals lacked jurisdiction to consider the interlocutory order in that

case. Id.

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      As the foregoing case recitations illustrate, this Court has spent

considerable effort over the last several years clarifying and limiting the

collateral order doctrine as an exception to the final judgment rule for appeals.

A few things become clear in reviewing the progression of our jurisprudence in

this area. First, all three elements of the collateral order doctrine as laid out in

Farmer must be met before an appellate court has jurisdiction to review an

interlocutory order. Those three elements are as follows: the interlocutory order

must (1) conclusively decide an important issue separate from the merits of the

case; (2) be effectively unreviewable following final judgment; and (3) involve a

substantial public interest that would be imperiled absent an immediate

appeal. Farmer, 423 S.W.3d at 696-97. Next, we have been placing an

increasing emphasis on the third element—that the interlocutory order must

involve a substantial public interest that would be imperiled absent an

immediate appeal. Finally, not all denials of a claim of immunity meet this

element. In fact, in instances when no governmental entity or official is a party

to the case and there is no concern with “preserving the efficiency of

government,” it is unlikely that a denial of a party’s claim of immunity will meet

this final element. See Maggard, 576 S.W.3d at 566; Will, 546 U.S. at 352-53.

      In applying this framework to the case at bar, we conclude that the trial

court’s denial of up-the-ladder immunity in this case does not meet the three-

element test articulated in Farmer, as it does not involve a substantial public

interest that would be imperiled absent an immediate appeal. No governmental

entity or official is a party to the action. There is no concern with government

                                         9
efficiency, the disruption of government services due to the costs and burden of

litigation, or public coffers placed at risk. The interests at stake in this case are

purely personal to Ford and Sheets without an impact on the greater public

interest. Because the interlocutory order at issue in this case does not meet the

requirements of the collateral order doctrine, the Court of Appeals lacked

jurisdiction to hear the appeal, as do we. Accordingly, we vacate the Court of

Appeals’ decision and remand to the trial court for further proceedings.

      In vacating and remanding, we recognize that we must address the Court

of Appeals’ holding in Ervin Cable as it stands directly contrary to what we hold

today. We reaffirm the sentiment we expressed in Hampton that the Court of

Appeals in Ervin Cable “allowed the collateral order doctrine to expand beyond

its logic” and the criteria as laid out in Farmer. Hampton, 581 S.W.3d at 36. As

such, we expressly overrule Ervin Cable’s holding that under the collateral

order doctrine, an appellate court has jurisdiction to review a trial court’s

denial of a motion for summary judgment based on up-the-ladder immunity.

      Finally, in further support of our conclusion today, we note that the

legislature did not see fit to include a right to an immediate appeal of a denial

of up-the-ladder immunity in the Workers’ Compensation Act. KRS 342.690

includes no such provision. This stands in stark contrast to other instances in

which our General Assembly has expressly provided for a right to an immediate

appeal in certain situations. Some examples, as mentioned before, include KRS

22A.020(4) (permitting the Commonwealth an interlocutory appeal under

certain circumstances in criminal cases), KRS 417.220 (allowing for

                                         10
interlocutory appeals of certain orders regarding arbitration), and KRS

425.600(1) (deeming any “order of the court appointing or refusing to appoint a

receiver . . . a final order for the purpose of an appeal”). Accordingly, we see no

statutory authorization for an immediate interlocutory appeal of a denial of up-

the-ladder immunity.

                                III.   CONCLUSION

      For the foregoing reasons, we vacate the opinion of the Court of Appeals

and remand this matter to the trial court for further proceedings.

      All sitting. All concur. VanMeter, J., concurs by separate opinion in

which Nickell, J., joins.

      VANMETER, J., CONCURRING: I fully concur with Justice Keller’s well-

reasoned opinion. I write separately since we are overruling Ervin Cable

Construction, LLC v. Lay, 461 S.W.3d 422 (Ky. 2015), as to which I was the

presiding judge and primary author of that opinion; one of my colleagues on

that panel was Justice Nickell. The Ervin Cable opinion relied exclusively on

this Court’s opinion in Prather v. Breathitt County Board of Education, 292

S.W.3d 883 (Ky. 2009) and that opinion’s broad statements regarding

interlocutory appeals on denials of immunity. While Prather addressed a

government entity’s claim of immunity, the portion of the opinion addressing

that Board of Education’s entitlement to an interlocutory appeal spoke of

immunity with no indication that immunity claims, other than governmental,

were not included. Id. at 886-87. Since Prather, however, this Court has

further clarified the parameters of interlocutory appeals regarding immunity.

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Hampton v. Intech Contracting, LLC, 581 S.W.3d 27 (Ky. 2019); Maggard v.

Kinney, 576 S.W.3d 559 (Ky. 2019); Commonwealth v. Farmer, 423 S.W.3d 690

(Ky. 2014).4

      While Ford argues that Ervin Cable was correctly decided,

notwithstanding the Farmer three-part test, our more recent decisions have

clearly moved to reaffirm our longstanding prohibition of piecemeal appeals,

and interlocutory appeals in particular, absent compelling reasons. While

consistency of thought or point of view can be a virtue, especially for judges, at

some point a body of jurisprudence leads to the inescapable conclusion that

adherence to a former view is no longer tenable. For me, this is such a point.

Justice Nickell has authorized me to state that he joins in this concurrence.

      Nickell, J., joins.

      4  The majority opinion points out that Ervin Cable did not consider Farmer.
This failure was apparently due to the fact, as disclosed by the parties’ briefs in Ervin
Cable, that the employer seeking interlocutory review cited only to Prather and
Kentucky Employers Mutual Insurance v. Coleman, 236 S.W.3d 9 (Ky. 2007).
Additionally, the employee, Lay, did not contest that issue.

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COUNSEL FOR APPELLANT:

Joseph Donald Satterley
James Garrett Cambron
Paul James Ivie
Paul Jason Kelley
James Eric Kiser
Satterley & Kelley PLLC

Kevin Crosby Burke
Jamie Kristin Neal
Burke Neal PLLC

COUNSEL FOR APPELLEE:

Robert Thaddeus Keal
Turner, Keal & Button, PLLC

Paul D. Hudson
Miller, Canfield, Paddock and Stone, PLC

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