Blackstone Mining Co. v. Travelers Insurance Co.
351 S.W.3d 193
Ky.2011Background
- Blackstone purchased two workers' compensation policies from Travelers for 1992–93 and 1993–94.
- Twenty-three Blackstone employees executed Form 4 rejection notices and filed them with the Department of Workers' Claims to opt out of workers' compensation in favor of Mass Mutual policy.
- Travelers audited and determined 14 employees were omitted from policies, seeking $474,870 in additional premiums; Blackstone counterclaimed overpayment of $120,861.00.
- Trial court granted Blackstone summary judgment that 23 employees voluntarily rejected coverage; damages issue reserved.
- Court of Appeals reversed, holding genuine issues remained for 22 employees beyond Thacker's testimony; Kentucky Supreme Court granted discretionary review.
- This decision reinstates summary judgment for Blackstone and remands for other issues including black lung premiums and prejudgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether signed Form 4 rejections have presumptive validity for summary judgment | Blackstone—rejections presumptively valid, shifting burden to Travelers | Travelers—must show affirmative evidence of lack of voluntariness | Presumption of validity; Travelers must produce affirmative evidence to create a genuine issue |
| Whether Travelers failed to present evidence defeating summary judgment | Blackstone—Travelers did not negate validity of notices | Travelers—insufficient evidence to show lack of voluntariness | Travelers did not meet burden; summary judgment proper for Blackstone |
| Whether the black lung and prejudgment interest issues should be addressed on remand | Travelers preserved these issues; Court should decide | Remand appropriate due to procedural posture | Remand to Court of Appeals to address remaining issues not decided on appeal |
| Whether the court properly applied Steelvest burden-shifting framework | Majority misapplied burdens; shifted too easily | Recognized burdens require presumptive validity and affirmative evidence | Court correctly applied Steelvest framework in context of signed notices |
Key Cases Cited
- Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476 (Ky.1991) (establishes summary judgment burden-shifting standard)
- Watts v. Newberg, 920 S.W.2d 59 (Ky.1996) (voluntariness requires substantial understanding of consequences)
- Karst Robbins Mach. Shop, Inc. v. Caudill, 779 S.W.2d 207 (Ky.1989) (voluntariness includes substantial understanding of action and consequences)
- Tri-Gem Coal Co. v. Whitaker, 661 S.W.2d 785 (Ky.App.1983) (rejection of Act may be involuntary if conditions indicate coercion or conditioning)