Court Opinion

ID: 6800699
Source: CourtListenerOpinion
Date Created: 2022-07-22 14:05:13.291215+00
Date Added: 2024-06-11T15:02:26.446138
License: Public Domain

RENDERED: JULY 15, 2022; 10:00 A.M.
                          NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                            NO. 2020-CA-0705-MR

KRISTIAN COLLINS                                                APPELLANT

                 APPEAL FROM GRANT CIRCUIT COURT
v.               HONORABLE R. LESLIE KNIGHT, JUDGE
                       ACTION NO. 19-CI-00254

MIAMI VALLEY PAPER TUBE CO.                                       APPELLEE

                                  OPINION
                                 AFFIRMING

                                ** ** ** ** **

BEFORE: GOODWINE, TAYLOR, AND K. THOMPSON, JUDGES.

THOMPSON, K., JUDGE: Kristian Collins appeals an order of the Grant Circuit

Court dismissing her negligence action against Miami Valley Paper Tube Co.

(Miami Valley) on the grounds of workers’ compensation immunity. Upon

review, we affirm.
             The circuit court dismissed Collins’s action pursuant to Kentucky

Rules of Civil Procedure (CR) 12.02(f). For purposes of a CR 12.02(f) motion,

this Court, like the circuit court, must accept as true the plaintiff’s factual

allegations and draw all reasonable inferences in the plaintiff’s favor. Pike v.

George, 434 S.W.2d 626, 627 (Ky. 1968). As set forth in Collins’s complaint,

Miami Valley operates a facility in Grant County, Kentucky, where it

manufactures spiral wound paper tubes and paper cores that are cut into various

sizes for a variety of industrial uses. At all relevant times, appellant Kristian

Collins was an employee of Crown Services, Inc. (Crown) and, pursuant to a

“General Staffing Agreement” Miami Valley entered with Crown, Crown supplied

Miami Valley with temporary employees, such as Collins. At Miami Valley’s

facility, Collins worked with some permanent employees of Miami Valley and was

also supervised by Miami Valley’s shareholders and officers.

             On August 23, 2017, Collins was working on a cutting machine

known as “Line 2,” and another temporary employee was working on another

known as “Line 3.” While Line 2 was well guarded, Line 3 did not have a safety

guard on the part of the machine known as the spindle. The employee working

Line 3 did not know how to shut off the cutting machine, so Collins was

attempting to instruct him as to the location of the shut-off switch while the

machine was still running. Collins’s hair then became entangled in the Line 3

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cutting machine, which caused severe and permanent injuries, including a scalp

avulsion and broken neck. Collins’s injury triggered an inspection by OSHA1 and

Miami Valley was fined a significant sum as a result of its safety violations at the

plant.

                Collins filed a negligence action against Miami Valley in Grant

Circuit Court. She claimed Miami Valley “had both a contractual and common

law duty to provide adequate safety guards on the machinery” and “to properly

supervise and train its employees and other temporary workers,” and that Miami

Valley’s breach of those duties was the proximate cause of her injuries.2

                As indicated, Miami Valley responded by filing a CR 12.02 motion to

dismiss Collins’s complaint. Its motion focused upon Collins’s emphasis in her

complaint that, pursuant to Kentucky Revised Statutes (KRS) 342.615(1)(e) and

(f), she was a statutory employee of Crown, which had a statutory obligation to

provide workers’ compensation insurance for her and it did so, and the undisputed

fact that Collins was awarded workers’ compensation benefits from Crown due to

her injury. In sum, Miami Valley argued that because Collins received those

benefits, and because the applicable law regarded Crown as its subcontractor, it

1
    Occupational Safety and Health Administration.
2
 Collins also asserted but later voluntarily dismissed an intentional tort claim against Miami
Valley.

                                               -3-
was entitled to “up the ladder” immunity pursuant to the Kentucky Workers’

Compensation Act, specifically KRS 342.610 and KRS 342.690. The circuit court

agreed and granted Miami Valley’s motion to dismiss.

             We review dismissals under CR 12.02(f) de novo. Morgan &

Pottinger, Attorneys, P.S.C. v. Botts, 348 S.W.3d 599, 601 (Ky. 2011), overruled

on other grounds by Maggard v. Kinney, 576 S.W.3d 559 (Ky. 2019). CR 12.02(f)

is designed to test the sufficiency of a complaint. Pike, 434 S.W.2d at 627. It is

proper to grant a CR 12.02(f) dismissal motion if:

             it appears the pleading party would not be entitled to
             relief under any set of facts which could be proved in
             support of his claim. . . . [T]he question is purely a
             matter of law. Stated another way, the court must ask if
             the facts alleged in the complaint can be proved, would
             the plaintiff be entitled to relief?

James v. Wilson, 95 S.W.3d 875, 883-84 (Ky. App. 2002) (internal quotation

marks and citation omitted).

             Collins essentially offers three arguments on appeal regarding why, in

her view, Miami Valley was not entitled to “up the ladder” immunity. First, she

asserts that her undisputed status as a temporary worker for a temporary help

service at the time of the incident precluded Miami Valley from asserting that

defense. Second, she argues the defense could not apply because she did not

perform work at Miami Valley’s facility on a regular and recurrent basis. Third,

she argues an issue of fact existed regarding whether Miami Valley maintained a

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policy of workers’ compensation insurance that would have covered her at the time

of her injury and that without proof of such coverage, Miami Valley was legally

precluded from claiming the exclusive liability provisions of the Kentucky

Workers’ Compensation Act.

            We disagree with Collins’s first argument. “Up the ladder” immunity

largely derives from the interrelation of two sections of Kentucky’s Workers’

Compensation Act, KRS 342.610(2) and KRS 342.690(1). The former, as

paraphrased in Fireman’s Fund Insurance Company v. Sherman & Fletcher, 705

S.W.2d 459, 461 (Ky. 1986), provides:

            (1) every employer subject to the chapter shall be liable
            for compensation for injury without regard to fault, (2) a
            contractor who subcontracts any part of his contract 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 its payment as provided by Chapter 342, and
            (3) a person 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 be deemed a contractor
            and such other person a subcontractor.

The latter, KRS 342.690(1), provides in relevant part:

            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 . . . on
            account of such injury . . . . For purposes of this section,
            the term “employer” shall include a “contractor” covered
            by subsection (2) of KRS 342.610, whether or not the

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              subcontractor has in fact, secured the payment of
              compensation.

              When read in conjunction, KRS 342.690(1) and KRS 342.610(2)

provide “up the ladder” immunity to a contractor for injuries incurred by an

employee of a subcontractor. In U.S. Fidelity & Guaranty Company v. Technical

Minerals, Inc., 934 S.W.2d 266 (Ky. 1996), the Kentucky Supreme Court held that

a company that contracts with a temporary labor service for temporary employees

qualifies as a “contractor” for purposes of KRS 342.610(2) and KRS 342.690(1),

and is therefore entitled to the immunity provided by those sections.

              Arriving at that conclusion, our Supreme Court explained at length

that the term “contractor” in the Workers’ Compensation Act has a broader

meaning than that term’s “common usage” – i.e., the situation where a “principal

contractor” engages subcontractors to assist in the performance of the work or the

completion of the project which the “principal contractor” has undertaken to

perform for another. Technical Minerals, 934 S.W.2d at 267-69. In other words,

for purposes of the Act, “a person who engages another to perform a part of the

work which is a recurrent part of his business, trade, or occupation is a contractor.

Even though he may never perform that particular job with his own employees, he

is still a contractor if the job is one that is usually a regular or recurrent part of his

trade or occupation.” Id. at 269 (citation omitted).

              The Court further explained:

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                    While this is a case governed by principles of
             statutory construction, it is proper to consider whether the
             Legislature intended to adversely affect existing business
             enterprises. As a practical matter, if the statute here were
             construed to allow a common law civil action against an
             employer who obtains a temporary employee through a
             temporary services company, no employer in his right
             mind would hire such an employee. The effect of this
             would be to destroy the temporary services industry.

                    Historically, a major reason employers were
             willing to provide Workers’ Compensation benefits was
             to be free of common law civil liability. By the argument
             of the plaintiffs in this case, such would be totally
             frustrated and the plaintiff would have the best of both
             worlds, Workers’ Compensation benefits and a common
             law right of action. By contrast, the defendant/employer
             would have the worst of both worlds and this could not
             have been the legislative intent.

Id.

             Collins argues the holding of Technical Minerals does not apply

because the General Assembly enacted KRS 342.615 approximately one month

after that case was decided. In relevant part, that statute provides:

             (1) As used in this section:

             ...

                    (e) “Temporary worker” means a worker
                    who is furnished to an entity to substitute for
                    a permanent employee on leave or to meet
                    seasonal or short-term workload conditions
                    for a finite period of time; and

                    (f) “Temporary help service” means a
                    service whereby an organization hires its

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                   own employees and assigns those employees
                   to clients for finite periods of time to support
                   or supplement the client’s workforce in
                   special work situations, including employee
                   absences, temporary skill shortages, and
                   seasonal workloads.
            ...

            (5) A temporary help service shall be deemed the
            employer of a temporary worker and shall be subject to
            the provisions of this chapter.

Id. Collins’s argument is that the holding of Technical Minerals is inapplicable

because a “specific” statute dealing with “temporary workers” (KRS 342.615) was

subsequently enacted, which, in her view, now controls over the “general”

contractor/subcontractor statute (KRS 342.610).

            This argument has no merit, however, because nothing in KRS

342.615 conflicts with the core holding of Technical Minerals. When the General

Assembly enacted KRS 342.615, it was clarifying who was responsible for

workers’ compensation coverage for “leased employees” from “employee leasing

companies” and “temporary worker[s]” from “temporary help service[s],” and

imposing registration requirements on “employee leasing compan[ies].” See

generally KRS 342.615. This statute is not at odds with the Supreme Court’s

holding in Technical Minerals that a “temporary help service” is a “subcontractor”

liable for providing workers’ compensation benefits for its own employees and that

a company that contracts with a temporary labor service for temporary employees

                                         -8-
is a “contractor” for purposes of KRS 342.610(2) and KRS 342.690(1) and thus

entitled to “up the ladder” immunity. Technical Minerals, 934 S.W.2d at 286.

             Collins’s second argument is that Miami Valley was not entitled to

“up the ladder” immunity because she did not perform work at Miami Valley’s

facility on a regular and recurrent basis. According to Collins:

             A temp worker, employed by Crown, can hardly work on
             a “regular and sustained basis” if Miami Valley has the
             ability to terminate that person if it feels she cannot be a
             good permanent worker for the company. In short,
             temporary workers at Miami Valley were the equivalent
             of “walk ons” on a college football team. They were
             there for a “finite period of time” and could be cut from
             the team at 520 hours or less. If they made the team, they
             became permanent employees, but Ms. Collins never got
             to that point.

             We disagree, and we adopt the succinct reasoning of the circuit in this

respect as follows:

             This argument misreads KRS 342.610. The statute
             provides: “A person who contracts with another . . . [t]o
             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.” (Emphasis added). This
             statute describes the relationship between Defendant (the
             “contractor”) and Crown (the “subcontractor”). It does
             not describe the relationship between Crown’s individual
             temporary employees (like Plaintiff) and a contractor like
             Defendant. Put differently, what matters is that the work
             Crown’s employees did for Defendant was “a regular or
             recurrent part of [Defendant’s] . . . trade, business,
             occupation, or profession,” not whether the individual

                                         -9-
             temporary employees were a “regular or recurrent” part
             of Defendant’s workforce.

             In General Electric v. Cain, 236 S.W.3d 579 (Ky. 2007),
             the Court defined “regular and recurrent” as 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.” Id. at 588. “As long as the
             company contracts away a job it is expected to perform –
             even if it never actually performs the job – the company
             can be considered a ‘contractor’ that reassigned ‘regular
             or recurrent work.” Boyd v. Doe, No. 13-136-ART, 2014
             WL 5307951, *2 (E.D. Ky. Oct. 15, 2014) (citing
             Doctors’ Assocs. Inc. v. Uninsured Employers’ Fund,
             364 S.W.3d 88, 92 (Ky. 2011)). From the Complaint, it
             is apparent that Crown’s employees were doing work of a
             kind that was “a regular or recurrent part of
             [Defendant’s] . . . business.”

(Internal footnotes removed; text of footnotes added to block quote.)

             Lastly, Collins argues an issue of fact existed regarding whether

Miami Valley maintained a policy of workers’ compensation insurance that would

have covered her at the time of her injury. She argues that without proof of such

coverage, Miami Valley was legally precluded from claiming the exclusive

liability provisions of the Kentucky Workers’ Compensation Act.

             This argument is also the subject of a motion Miami Valley filed with

this Court to strike part of Collins’s brief. In its motion, Miami Valley correctly

noted that the circuit court dismissed Collins’s action based upon the face of her

                                         -10-
complaint pursuant to CR 12.02 – and not based upon the absence of any proof of a

material fact, which would have necessitated review pursuant to CR 56. That said,

Collins’s argument lacks merit, and we have denied Miami Valley’s motion by

separate order as moot, because the “conflict in the evidence” identified by Collins

does not relate to any material fact at issue in this appeal. To reiterate,

             [i]f a defendant qualifies as a contractor, “it has no
             liability in tort to an injured employee of a
             subcontractor.” Fireman’s Fund Ins. Co. v. Sherman &
             Fletcher, 705 S.W.2d 459, 461 (Ky. 1986). In other
             words, tort immunity under the Act extends “up the
             ladder” from the subcontractor that employs an injured
             person to the entities that contracted with the
             subcontractor, so long as the injured person’s employer
             has workers’ compensation coverage, and the up the
             ladder entities contracted “to have work performed of a
             kind which is a regular or recurrent part of the work” of
             their business. See Goldsmith [v. Allied Bldg.
             Components, Inc., 833 S.W.2d 378, 379 (Ky. 1992).]

Cabrera v. JBS USA, LLC, 568 S.W.3d 865, 869 (Ky. App. 2019).

             As previously explained, Miami Valley qualified as a “contractor”

pursuant to KRS 342.610(2), and Crown was its subcontractor. Crown employed

Collins, who was injured while, pursuant to Crown’s contract with Miami Valley,

she was performing work that was a regular and recurrent part of Miami Valley’s

business. Crown provided Collins with workers’ compensation coverage.

Therefore, tort immunity under the Act extended “up the ladder” from Crown to

Miami Valley. Simply put, that is the end of the inquiry.

                                         -11-
            We have addressed the breadth of Collins’s appellate arguments.

Finding no error, we affirm the Grant Circuit Court’s dismissal of Collins’s

negligence action against Miami Valley.

            ALL CONCUR.

BRIEF FOR APPELLANT:                      BRIEF FOR APPELLEE:

Ronald R. Parry                           Carmen Sarge
Cincinnati, Ohio                          Matthew F.X. Craven
                                          Cincinnati, Ohio
Philip Taliaferro, III
Colby Cowherd
Covington, Kentucky

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