Court Opinion

ID: 4572286
Source: CourtListenerOpinion
Date Created: 2020-10-02 14:06:02.716207+00
Date Added: 2024-06-11T13:30:47.269943
License: Public Domain

RENDERED: SEPTEMBER 25, 2020; 10:00 A.M.
                      NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2019-CA-0885-MR

SHARIECIA HAMILTON                                                   APPELLANT

              APPEAL FROM JEFFERSON CIRCUIT COURT
v.          HONORABLE ANGELA MCCORMICK BISIG, JUDGE
                      ACTION NO. 18-CI-000179

NORTON HEALTHCARE, INC.                                                APPELLEE

                               OPINION
                       REVERSING AND REMANDING

                                  ** ** ** ** **

BEFORE: ACREE, DIXON, AND K. THOMPSON, JUDGES.

ACREE, JUDGE: Shariecia Hamilton appeals from a summary judgment entered

by the Jefferson Circuit Court dismissing her employment-discrimination claims

against Norton Healthcare, Inc. The trial court found Hamilton’s claims brought

under the Kentucky Civil Rights Act (KCRA) were time-barred based on a

contractual six-month limitation period for bringing claims arising from the
employment. While this appeal was pending, the legislature amended KRS1

336.700 to contain language which would bar enforcement of the contractual

provision. Therefore, we conclude the provision is not enforceable with respect to

Hamilton’s KCRA claims. We reverse and remand for additional proceedings.

                                    BACKGROUND

                In 2015, Hamilton applied for a job with Norton and was hired. When

she applied, she signed a form that limited her ability to bring claims related to her

employment at Norton to six months from the date of any wrongful conduct. The

application contained the following language:

                I agree that any claim or lawsuit relating to my service
                with Norton Healthcare, Inc., or any of its subsidiaries or
                related entities must be filed no more than six (6) months
                after the date of the employment action that is the subject
                of the claim or lawsuit. I waive any statute of limitations
                to the contrary. My signature certifies that I have read and
                understand the contents of this employment application,
                and that I am fully able and competent to complete it and
                that the statements I made herein are true.

Just below the paragraph was a box with a sentence stating, “By checking this box

I acknowledge that all information submitted is true and complete.” The paragraph

also required Hamilton’s signature and a date. Hamilton checked the box and

signed the page, along with several other pages on the application.

1
    Kentucky Revised Statutes.

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             In 2017, while working as a newborn nurse for Norton, Hamilton

reported a few botched circumcisions that left the newborns with deformities.

After reporting the issue, Norton investigated Hamilton for violating policies and

procedures relating to patient and employee privacy. Following the investigation,

Norton terminated Hamilton.

             The following year, Hamilton brought an action for retaliation,

wrongful termination, and race discrimination. Norton responded by stating

Hamilton’s case should be time-barred due to the provision in her employment

application and filed a motion for summary judgment. After considering Norton’s

motion, the trial court agreed, and found Hamilton made a knowing and voluntary

waiver of the statutory limitation period when she signed the provision in her

employment application. The court further found that six months is a reasonable

amount of time to assert the claims at issue in this case. Based on these findings,

the trial court granted Norton’s motion for summary judgment.

                           STANDARD OF REVIEW

             “The proper standard of review on appeal when a trial judge has

granted a motion for summary judgment is whether the record, when examined in

its entirety, shows there is ‘no genuine issue as to any material fact and the moving

party is entitled to a judgment as a matter of law.’” Hammons v. Hammons, 327

                                         -3-
S.W.3d 444, 448 (Ky. 2010) (quoting CR2 56.03). “Because summary judgment

does not require findings of fact but only an examination of the record to determine

whether material issues of fact exist, we generally review the grant of summary

judgment without deference to either the trial court’s assessment of the record or

its legal conclusions.” Id. (citing Malone v. Ky. Farm Bur. Mut. Ins. Co., 287
S.W.3d 656, 658 (Ky. 2009)).

                Neither party disputes the facts of this case; therefore, this case only

turns on statutory interpretation. Again, our review is de novo. Wheeler &

Clevenger Oil Co., Inc. v. Washburn, 127 S.W.3d 609, 612 (Ky. 2004).

                                         ANALYSIS3

                The General Assembly recently addressed this issue through its

enactment of 2019 Ky. Acts ch. 75 (SB 7) (effective June 27, 2019). In pertinent

part, KRS 336.700(3)(c) now provides:

                Any employer may require an employee or person seeking
                employment to execute an agreement to reasonably reduce
                the period of limitations for filing a claim against the
                employer as a condition or precondition of employment,
                provided that the agreement does not apply to causes of
                action that arise under a state or federal law where an
                agreement to modify the limitations period is preempted
                or prohibited, and provided that such an agreement does
2
    Kentucky Rules of Civil Procedure.
3
  This Court entertained a strikingly similar case earlier this year, Croghan v. Norton Healthcare
Inc., --- S.W.3d ----, 2020 WL 742031 (Ky. App. Feb. 14, 2020) (designated for publication).
However, that case is currently pending discretionary review by the Supreme Court and,
therefore, is not final. Nevertheless, we draw liberally and consistently from that analysis.

                                               -4-
             not reduce the period of limitations by more than fifty
             percent (50%)[.]

By enacting the amendment to KRS 336.700, the General Assembly clearly stated

the public policy of this Commonwealth permits an employment contract requiring

an employee to accept a reduced limitation period for a cause of action arising out

of the employment. Furthermore, KRS 336.700(8) provides that “[t]his section

shall apply prospectively and retroactively.” Under the plain language of the

statute, the provision in Hamilton’s employment application is not void as against

public policy.

             But, as quoted above, KRS 336.700(3)(c) precludes enforcement of an

employment agreement which reduces the period of limitation by more than 50%

of the statutory time allowed. And, KRS 336.700(8) further provides:

             Any provision of an agreement executed prior to June 27,
             2019, that violates the requirements of subsection (3)(c) of
             this section shall be stricken from the agreement and shall
             not operate to invalidate the entire agreement.

             By its express terms, the amended version of KRS 336.700 applies to

all contracts entered before or after the statute’s effective date of June 27, 2019.

The statute prohibits shortening of the limitation period for KCRA claims to less

than two and a half years because, by statute, such claims must be brought within

five years. Any contract provision providing for a shorter limitation period is

unenforceable.

                                          -5-
             Even without the fifty-percent limitation, we concluded before, and

conclude again, that six months is not a reasonable period to bring a KCRA claim.

See Croghan, supra, 2020 WL 742031, at *5 (cited not for precedent, but to

demonstrate consistency). As a general rule, a contractual period of limitation “is

reasonable if (1) the claimant has sufficient opportunity to investigate and file an

action, (2) the time is not so short as to work a practical abrogation of the right of

action, and (3) the action is not barred before the loss or damage can be

ascertained.” Timko v. Oakwood Custom Coating, Inc., 244 Mich. App. 234, 239-

40, 625 N.W.2d 101, 104 (2001) (quoting Herweyer v. Clark Highway Services,

Inc., 455 Mich. 14, 20, 564 N.W.2d 857, 859 (1997)); see also Davies v.

Waterstone Capital Mgmt., L.P., 856 N.W.2d 711, 718 (Minn. Ct. App. 2014);

Ellis v. U.S. Sec. Assocs., 224 Cal. App. 4th 1213, 1222-23, 169 Cal. Rptr. 3d 752,

757-58 (2014); Holcomb Condo. Homeowners’ Ass’n, Inc. v. Stewart Venture,

LLC, 129 Nev. 181, 300 P.3d 124, 129 (2013); and Hatkoff v. Portland Adventist

Med. Ctr., 252 Or. App. 210, 222, 287 P.3d 1113, 1121 (2012); but see Rory v.

Cont’l Ins. Co., 473 Mich. 457, 470, 703 N.W.2d 23, 31 (2005) (rejecting a

reasonableness inquiry in a contractually-shortened limitation period). If the

amended version of KRS 336.700(3)(c) does not apply, then this test is applicable

to determine the reasonableness of the limitation period provided in Hamilton’s

employment contract.

                                          -6-
            The six-month period for bringing a claim arising out of the

employment is not enforceable with respect to Hamilton’s KCRA claim.

Therefore, the trial court erred in granting summary judgment for Norton.

                                  CONCLUSION

            Based on the foregoing, we reverse the summary judgment entered by

the Jefferson Circuit Court and we remand for additional proceedings not

inconsistent with this Opinion.

            ALL CONCUR.

BRIEFS FOR APPELLANT:                    BRIEF FOR APPELLEE:

Garry R. Adams                           Donna King Perry
Theodore W. Walton                       Jeremy S. Rogers
Abigail V. Lewis                         Matthew Barszcz
Louisville, Kentucky                     Louisville, Kentucky

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