Court Opinion

ID: 9667206
Source: CourtListenerOpinion
Date Created: 2023-08-24 01:38:19.116684+00
Date Added: 2024-06-11T18:15:35.999353
License: Public Domain

LEIBSON, Justice,
dissenting.
Respectfully, I dissent.
The trial court dismissed this case on summary judgment as barred by the Kentucky Worker’s Compensation Act. Therefore, on review we must assume that the negligent acts charged against Sherman & Fletcher and its foreman, Otto Thillman,1 can be proved.
This statement of facts is that Sherman & Fletcher was an owner/developer engaged in building a residential complex consisting of townhouses for its own use. Sherman & Fletcher elected not to employ a general contractor and to supervise construction. It did so negligently in that it failed to properly arrange for the bracing of a masonry wall during construction causing its collapse. Two walls had fallen previously on this same project, and Otto Thillman, Sherman & Fletcher’s foreman, had been specifically warned of the dangerous condition of the wall several hours before it collapsed killing David George, who was employed by Elder, Inc., a company who contracted with Sherman & Fletcher to perform framing work on the project.
Thus the negligence of Otto Thillman and Sherman & Fletcher as a cause of this accident, in whole or in part, must be accepted as a given. The majority opinion embraces immunity for these wrongdoers from any responsibility for the consequences of their wrongful acts. The reasoning in the opinion defies analysis. The opinion holds that Sherman & Fletcher's liability for workers’ compensation benefits was zero and therefore its tort liability should be zero.
Almost forty years of cases, beginning with Ruby Lumber Co. v. K.V. Johnson Co., 299 Ky. 811, 187 S.W.2d 449 (1945), and continuing through to Burrell v. Electric Plant Board of the City of Franklin, Ky., 676 S.W.2d 231 (1984), both cited in Appellants’ Brief, are simply disregarded. At the least these cases recognize the right of a third party to seek indemnity and contribution from the employer of a person killed to the extent of the amount of the workers’ compensation due and payable.2 Surely this would include Sherman & Fletcher, even assuming it is an “up-the-ladder” employer as it erroneously contends. The majority opinion further holds that KRS 342.690(1) is not unconstitutional. No one ever said it was, except in one narrowly limited particular. This holding begs the point because it should not suffice to free either Sherman & Fletcher or Otto Thillman from liability in the present circumstances.
*467Because of the number and magnitude of the mistaken assumptions and erroneous conclusions in the majority opinion it is impossible to discuss them in a dissenting opinion of reasonable length. An outline of the major errors must suffice.
1) In Bright v. Reynolds Metals Co., Ky., 490 S.W.2d 474 (1973), we emphatically held that “a ‘contractor’ is one who undertakes to perform work for another,” and that this does not include an owner/builder who elects to serve as his own principal contractor, engaging subcontractors to assist in performance of the work or the completion of the project. (Emphasis original.) An owner/builder has not undertaken to perform work “for another.” Sherman & Fletcher is the owner/builder of the Wessex project, and as such is plainly included within the holding in Bright v. Reynolds Metals Co.
Contrary to the majority opinion, the statutory language was not reworked in 1972 to overrule Bright. If anything, the statutory changes effected in 1972 reinforced Bright. Dropping the word “principal” from the Section of the Act specifying that a “contractor” may be liable for workers’ compensation, reenforces Bright because, if anything, an owner/builder falls more readily under the term “principal contractor” than under the term “contractor.” The term “contractor” quite obviously refers to a general contractor who contracts with the owner to build the project for him.
2) Since an ordinary, garden variety owner/builder is not required by the Act to pay compensation, the next question is whether this particular owner/builder, Sherman & Fletcher, falls within some specialized extension of the normal definition of a “contractor” applicable to KRS 342.-610(2). Liability for workers’ compensation is extended in that section to further include:
“A person who contracts with another ... (b) 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....”
The majority opinion utilizes this phrase as a vehicle to extend statutory immunity, provided under KRS 342.690(1). In the past, Kentucky courts have “liberally” construed the “coverage provisions” of the Act and “narrowly” construed the “immunity provisions.” Boggs v. Blue Diamond Coal Co., 590 F.2d 655 (CCA 6 1979). In any usual sense, the “regular or recurrent” work of Sherman & Fletcher is managing, renting and selling real estate. This is the business from which it derives its profits. Building commercial and residential projects may or may not be incidental to that occupation. It is one of the methods Sherman & Fletcher uses to acquire property to manage, rent or sell.
Assuming it is arguable that building the Wessex project should be considered “a regular or recurrent part of the work of the trade, business, occupation or profession of” Sherman & Fletcher, it is by no means so clear as to merit summary judgment. It is at most a factual issue.
3)It is a recognized axiom of Kentucky Workers’ Compensation Law that the third party tortfeasor liable to an injured employee has a claim over against the employer for contribution or indemnity which is not barred by the Workers Compensation Act. Burrell v. Electric Plant Bd. of Franklin, supra. KRS 342.690(1) means only that Kentucky utilizes the so-called “contractor under” theory, which may limit potential liability, but it does not abolish the liability of any employer (which includes a general contractor) for contribution of indemnity to a third party who is liable to the injured employee in a tort action. Active Constructors is such a third party, and it has asserted a claim for both contribution and indemnity against Sherman & Fletcher. This claim is based on alleged negligence on the part of Sherman & Fletcher and Otto Thillman. Assuming Sherman & Fletcher is entitled to the protection afforded by KRS 342.690(1) even though it is not an employer, only the most convoluted reasoning could extend Sherman & Fletcher a greater protection than would be available to George’s employer, Elder, Inc. If Active Constructors was *468making a claim over against Elder, Inc., its claim would be limited at most to the amount of workers’ compensation due and payable. The majority opinion interprets the Act to give Sherman & Fletcher, a non-employer, complete immunity.
4) As the majority opinion states, Active Constructors does indeed assert that the time has come to determine the constitutionality of KRS 342.690(1) as amended in 1972 insofar as it attempts to limit the amount of a claim for indemnity against the employer. But Active does so only in the limited sense of whether as presently written the statute impairs the common law right of indemnity that preexisted the 1890 constitution. As stated in the majority opinion, Active relies upon Section 54 and 241 of the Kentucky Constitution for the proposition that the General Assembly has no authority to limit the right of indemnification.
The majority opinion cites Fireman’s Fund Ins. v. Gov’t Employees Ins. Co., Ky., 635 S.W.2d 475 (1982) as “controlling” on this question. This case is cited as authority for the proposition that there was no common law right to indemnity preexisting and protected by the Kentucky Constitution. This is incorrect. It misses the distinction between the common law right of indemnity based on negligence which undoubtedly preexisted the Constitution, as to which Kentucky Util. Co. v. Jackson County R.E. Coop. Corp., Ky., 438 S.W.2d 788 (1969) is controlling authority, and the unrelated right of indemnity by contract for subrogation, as to which Fireman’s Fund Ins. v. Gov’t Employees Ins. Co., supra, is indeed controlling authority.
In Fireman’s Fund Ins. v. Gov’t Employees Ins. Co., supra, an insurer who had paid no fault benefits to its injured insured sought to exercise its right of re-coupment against a third party tortfeasor. Its right of subrogation was not covered by Sections 14 and 54 of the Kentucky Constitution. Reduced to essential language, all the Fireman’s Fund Ins. case holds is that:
“It is not possible that the kind of indemnification sought in this case could have been established at common law at the time the Constitution of this state was adopted.” (Emphasis added.) 635 S.W.2d at 477.
On the other hand, in Burrell v. Electric Plant Board, supra, when referring to the indemnification between a third party tort-feasor and an employer, which is the kind of indemnity based on negligence with which we are presently confronted, we stated:
“Indemnity here, if it can be proved, has nothing to do with subrogation to a nonexistent claim, but derives from common law principles of indemnity from active wrongdoer to a passive wrongdoer, indemnity as defined at length in Brown Hotel Co. v. Pittsburgh Fuel Co., 311 Ky. 396, 224 S.W.2d 165 (1949).” 676 S.W.2d at 236.
Kentucky Utilities Co. v. Jackson County, supra, which held unconstitutional that portion of former KRS 342.690 abolishing the common law duty of indemnity for negligence owed by the employer to the third party tortfeasor was undoubtedly a proper application of Sections 54 and 241 of the Constitution. Louisville Gas & Electric Co. v. Koenig, Ky., 438 S.W.2d 791 (1968) is to the same effect. Such well-reasoned, longstanding authority as these two cases should not be shunted aside in a perfunctory manner. It is beyond cavil that our constitutional forebearers were seeking to preserve as a constitutional right the concept of liability based on negligence. Those who would destroy that right should be required to do so by constitutional change.
If there is a constitutionally acceptable limitation on the right of either indemnity or contribution imposed by KRS 342.690(1) in its present form, it is a grant of immunity against the subrogation claim of the appellant, Fireman’s Fund Ins. Co. It should not extend to Active Constructors, which states a cause of action in negligence against Sherman & Fletcher.
*4695) Certainly the 1972 rewording of KRS 342.690(1) does not expand on previous employer’s immunity from third party claims. On the contrary, the grant of immunity in the new statute is more restrictive than in its predecessor. When Active Constructors suggests that the “time has come” to decide whether the limited immunity from third party liability for the employer in the new statute is more acceptable, constitutionally, than the unlimited immunity in the old statute which was held unconstitutional, it could not have anticipated that we would seize the occasion to throw out such protection of its right to indemnity and contribution as is afforded by the statute.
6) As to the claim asserted by the Estate of David George against Sherman & Fletcher, if they have any immunity from this claim it is reciprocal to the “up-the-ladder” liability for workers’ compensation imposed on a contractor by KRS 342.700(2), which provides:
“A principal contractor, intermediate or subcontractor shall be liable for compensation to any employee injured while in the employ of any one (1) of his intermediate or subcontractors and engaged upon the subject matter of the contract, to the same extent as the immediate employer.”
This section retains the use of the term “principal contractor” which was expressly held in Bright v. Reynolds Metals Co., supra, to exclude an owner/builder. Thus Sherman & Fletcher had no liability for workers’ compensation to George’s Estate, and no reciprocal immunity.
In Ruby Lumber Co. v. K.V. Johnson Co., supra we stated:
“While we are under the duty of giving a liberal construction to the Act for the benefit of employees, we are not called upon to give the Act such a strained construction as would relieve an admitted tort feasor of liability for injury.... Repeals by implication are not favored and never declared unless clearly made to appear.” 187 S.W.2d at 453.
Our present decision repealed the cause of action on behalf of George’s Estate against Sherman & Fletcher for negligently causing his death. It does so by implication, because there is no language in the Act that calls for this result. When KRS 342.610 was amended after Bright v. Reynolds Metals Co., supra, the word owner, or owner/builder, or owner/developer, was not included in the classification of those who would owe workers’ compensation or were granted immunity. As stated in the Appellants’ Brief, if the General Assembly intended to overrule Bright, it “certainly went at it in a strange way.”
Recently in M.J. Daly Co. v. Varney, Ky., 695 S.W.2d 400 (1985), we continued our historically conservative approach in interpreting the limitations on tort liability imposed by the Act on the injured employee. We refused to extend the Act by implication to repeal the right of an employee furnished by a labor services company to sue in tort the company where he was assigned to work. We continued the humanitarian concern for the rights of the victim expressed in Ruby Lumber Co. v. K. V. Johnson, supra. It appears that we are now prepared to abandon it. I dissent.
COMMENTS ON JUSTICE VANCE’S CONCURRING OPINION
The unfairness inherent in the apportionment scheme advocated in the Concurring Opinion by Justice Vance will be evident to every lawyer who has ever tried a tort case involving an employee injured on the job who sued a negligent third party or products manufacturer for causing the injury.
The difficulty can be summed up in one sentence: There is no justice in a rule of apportionment between a negligent defendant and an empty chair. If this court should substitute apportionment for indemnity and contribution, the employer3 would have no stake in defending the defendant’s *470third party complaint charging that the employer, rather than the defendant, is responsible for the employee’s injury. Since the employer is granted immunity from liability by the Workers’ Compensation Act, there would be no incentive for the employer to spend money or effort to prove his innocence. The apportionment against him would have no financial consequences.
This scenario would almost guarantee that the negligent defendant or products manufacturer would succeed in assigning to the immune employer a disproportionate share of liability, at the injured employee’s expense.
There are sound legal reasons why the common law developed and maintains the rule providing for joint and several liability of defendants responsible for a single indivisible harm. These reasons are discussed in my Dissenting Opinions in Prudential Life Ins. Co. v. Moody, Ky., 696 S.W.2d 503 (1985) and Burke Enterprises, Inc. v. Mitchell, Ky., 700 S.W.2d 789 (1985). The members of this court, the bench and bar, and the General Assembly should give careful consideration to these reasons before they abandon longstanding common law principles which have so long served the interest of justice.
The Concurring Opinion in this case urges us “to overrule Nix v. Jordan, Ky., 532 S.W.2d 762 (1975),” which rejected extending the rule of apportioning of liability to a defendant’s claim over against a third party defendant, for good and sufficient reasons. To do so would be a harsh and unprecedented decision. To do so in present circumstances, that is, where an employee has sued a third party for negli-, gence and the defendant has made a claim over against the employer for indemnity or contribution, by rights would require the General Assembly to amend the Workers’ Compensation Law.
This apportionment issue has not been raised by the appellees in this case. This would be a drastic change which should not be considered by our court in any case where it has not been thoroughly briefed and argued.
STEPHENS, C.J., joins in this dissent.

. Otto Thillman is charged as a principal malefactor. He is not immune from liability under the Act as a "contractor” up-the-ladder from the decedent even if we extend that term to include Sherman & Fletcher. Nor is he a fellow-employee extended immunity by Miller v. Scott, Ky., 339 S.W.2d 941 (1960). He is extended immunity by the holding in this case without any discussion of the propriety of doing so, even though he was named as an appellee and the case against him is argued in the appellant’s brief. The case against him is neither abandoned nor unpreserved.

. Again, as with the claim against Thillman, this is a claim neither abandoned nor unpreserved.

. "Employer” includes a contractor who is made a statutory employer by the "contractor under” theory in the Workers’ Compensation Act.