*1 KRAHWINKEL, Jr., F. Lewis
Appellant/Cross-Appellee,
COMMONWEALTH ALUMINUM
CORPORATION, Appellee/Cross-
Appellant. 2003-SC-0708-DG,
No.
2004-SC-0219-DG.
Supreme Kentucky. Court of
Aug. 2005.
As Rehearing Modified Denial of
Feb. Miller, Owensboro,
Jeanie Owen Coun- Appellant/Cross-Appellee. sel for McCarroll, Nunley, Nunley Marvin P. & Owensboro, Hartz, Appel- Counsel for lee/Cross-Appellant.
COOPER, Justice. Aluminum Appellee, Commonwealth (“Commonwealth”) Corporation contracted - Technology, with Intech-Industrial Inc. (“Intech”) purchase and installation *2 negligent acts or omis- capture system in its indus- fall was caused of a new fluid inter- Intech trial The contract Intech of plant. required sions Commonwealth. of large a tank in the basement its statu- to install civil action to assert vened 342.700(1), claim, contain- plant groundwater into which KRS tory subrogation for contain- ing pumped PCBs would be intervening voluntarily dismissed 24, 1996, January disposal. ment and On complaint prior trial. from an Intech tank was unloaded Agreement an as to Com- According to by permanently truck a install- and moved 5, 2001, February Appel- dated pensation ed crane across motor room overhead successfully his workers’ prosecuted lant to a room con- plant of Commonwealth’s an against Intech to claim through a hole in the floor taining large February and award dated “opinion was tank lowered base- $18,240.57 tempo- He received 1998.” normally The grate ment. that covered (TTD)1 (57 rary disability total benefits purpose. the hole for this was removed week) x and per addition- weeks2 $320.01 Krahwinkel, Jr., Appellant, Lewis F. permanent for a weekly al benefits 50% Intech, assigned of task was (PPD).3 disability Pursuant partial guiding through tank the motor insurer, 342.020, Underwrit- Intech’s using room a lead line. He testified that Claims, bills also medical Safety ers & large grease, of oil and as much as amount $15,292.15 up to Appellant incurred thick, portion an inch was on agreement. The remainder the date of motor room floor on which he was re- claim Appellant’s workers’ tank, quired guide to walk order to $39,956.68, lump for a sum of was settled and his grease that the oil adhered to itemized as follows: into boots. After tank was lowered — $30,456.68 payment lump PPD sum 50% hole, Appellant remained on the award ground passing floor tools to other Intech — 4,500.00 buyout of future medical — 4,000.00 reopen waiver of employees in the basement. so en- While — 1,000.00 waiver of vocational rehabilitation gaged, slipped through and fell the hole $39,956.68
approximately sixteen feet to the basement floor, seriously injuring his right knee civil action Appellant’s trial of At the opined He the oil and ankle. later Commonwealth, intro- Appellant grease that adhered to his boots while he protec- were no duced evidence there tank guiding through motor (“fall around guardrails prevention”) tive slip room caused his feet to out from under safety place hole and tie off Holtzman, him. Gene Commonwealth’s restraint”) (“fall normally worn harness administrator, at trial that safety admitted vicinity open working in the while grease oil floor in the there was Appellant asserted that Com- floor hole. area around the hole. occupational violation of safe- monwealth’s requiring these ty regulations and health filed Appellant negligence per se brought protections constituted claim Intech. He also jury that the should be instructed civil in the Hancock Court action Circuit Commonwealth, degree Appellant’s his determine the alleging 342.730(1)(b). 342.730(1)(a). 1. 3.KRS (8 weeks); January 25 — March weeks); (342Aths August January 3— (14 weeks). July 20 —October s/7ths fault, if any, apportioned and render an jury with respect issue to Commonwealth’s pursuant Instead, verdict causation, KRS 411.182. negligence and rendering it un- the trial court instructed the jury necessary to address whether Intech had *3 Commonwealth had a duty to contractually exercise or- assumed responsibility to dinary care to maintain prem- its business provide guardrails safety or harnesses for reasonably (2) ises in a safe condition. employees;4 an owner is not jury returned finding a verdict both par- injuries liable for parties to third arising ties fault fixing at and Appellant’s dam- out of performed by work independent ages $44,971.02, at itemized as follows: contractor unless the work constitutes a —(cid:127) $10,000.00 permanent power impairment of or inherently nuisance dangerous, and money to earn performed that work Intech fell — 7,300.00 past pain suffering and future and — (cid:127) (3) into categories; neither those 17,671.02 and expenses medical incurred — 10,000.00 wages lost even if the work inherently dangerous, was
$44,971.02 liability of an owner to employees of an Because the jury independent also fault contractor is apportioned pay- limited to against 75% ment Commonwealth and of workers’ compensation 25% benefits. 342.700(2). Appellant, the trial See court Appellant reduced Since had judgment lump $33,728.27 to a sum of already recovered workers’ 0.75). ($44,971.02 x Applying Intech, the appor- benefits from he had no claim separate tionment to each item of damages Having Commonwealth. thus dis- yields the following itemization: posed case, Appeals the Court of did — 7,500.00 permanent impairment $ not recovery. reach the issue — 5,475.00 pain suffering and — Appellant discretionary moved re- 13,253.27 medical — 7,500.00 wages lost view and filed a cross mo-
$33,728.27
tion for
solely
preserve
review
the issue
Commonwealth,
recovery.
of double
appeal
On
to the Court of Appeals, Com-
Taub,
Transp.
49,
(1)
Cabinet v.
monwealth
the trial
asserted
court
(Ky.1988).
pertaining
should have
Since issues
sustained its motion for a
(a)
negligence
Commonwealth’s
and
directed verdict
causa-
presence
because
(b)
preserved
review,
tion
obvious,
of the hole
were
for further
open
Appellant’s
pursuant
Intech,
argument
that Common-
its contract with
alleged
latter assumed
wealth’s
violation of administrative
responsibility
safety
or,
regulations
of its
employees;
adopted pursuant
own
to the Ken-
alterna-
tive,
Act,
tucky Occupational Safety
trial court should have
Health
vacated
portions
of the judgment
dupli-
negligence per
se are
constituted
cated
Appellant
amounts
moot.
of Ap-
his
We now reverse the Court
providers
medical
pursuant
peals
to his
Appellant’s
insofar as it vacated
prevent
entirety,
claim so as to
dou-
in its
and remand this
recovery.
ble
Appeals
The Court of
held
case to the Hancock Circuit
with
Court
(1) Appellant’s
testimony that
fall
appropriate
directions to determine an
his
was caused by the oil and grease
computation
total credit due to
adhered
his boots while
guiding
light
employ-
he was
Commonwealth in
through
the tank
the motor
room created a
to assert
failure
er’s/insurer’s
Commonwealth,
&
(Ky.2002);
Dix Assocs.
third-party
did not
file a
S.W.3d
Contractors,
Pipeline
complaint
Key,
Intech
Inc.
for contribution.
S.W.2d
Bush,
Compare
AIK Selective
Ins. Fund v.
(Ky.1990).
Self
[owner], in
Shelby
judg-
subrogation and enter an amended
be limited
case his
with that
computation.
ment
accordance
provid-
question to the benefits
without
I. LIABILITY OF OWNER FOR
Act.
ed
Workmen’s
OF
INJURIES TO EMPLOYEES
why
Conversely,
reason
we see
valid
INDEPENDENT CONTRACTOR.
subjected to more lia-
Shelby should be
Appeals’ reliance
Sim
the ser-
engaged
The Court of
bility simply because
Co., 426
Constr.
contrac-
mons Clark
of a qualified
vices
Adm’x,
Jennings
(Ky.1968),
v. Vincent’s
tor.
(1940),
S.W.2d 537
Simmons,
*4
However, King, like
at 663.
Id.
Browning,
were because of defective scaffold negli- liability Shelby of [T]he by by the ing erected not the owner but independent contractor of the gence independent general contractor. Sim employees to the of the does not extend mons, Clemons, 931; 715 426 S.W.2d at independent contractor. The in explosion S.W.2d at 246. fatal Jen nings by caused of negligence was subsequently at 664. As King, 502 S.W.2d contractor, employees independent v. Caskey in Hammonds Con- explained at Jennings, not the owner. 145 S.W.2d struction, Inc., (Ky.1976), 536 S.W.2d Here, was held King not hold that opinion ] does “[t]he [in vicariously negligence liable because independent an contractor employee an of employees. of It was held direct Intech’s may not from the owner recover ly liable of negligence. because its own of the own- negligence where the instances injury or of the em- causes the death er holding liability In that the of contractor.” Id. independent ployee employees independent of an owner held that an owner is Caskey at 451. payment contractor is limited to of work injuries by employ- an liable for sustained benefits, the Court ers’ contractor were independent ee of its v. King Appeals language relied negligence. own Id. caused the owner’s Shelby Coop. Corp., Elec. Rural which, if out (Ky.1973), taken compensation coverage is Workers’ context, support would seem voluntary between contract position, viz: de employee, the terms of which are the Act. provisions why fined appellant,
We can see
reason
Harris,
Const. Co.
simply
employee
he
an
McNeese
because
contractor,
(Ky.1954).
employer gives
The
defenses,
to claim certain
position
up
than if he had
placed in a better
842.610(1),
in exchange for the em-
ages,
he
shall not collect
both.
from
ployee’s agreement
accept
If
injured
limited bene-
employee
pro-
elects to
fits in
lieu of
ceed at
law
civil
action
342.690(1).
other person
It is
voluntary
damages,
recover
nature of
give
shall
due and
statutory
timely
this
notice to
contract
renders the
employer and the special fund of
Act
constitutional.
generally
See
Greene
filing of the
Caldwell,
action.
If
Ky. 571,
159 (“The (1924) 480, 74, Ky. 265 S.W. 481 205 part has been a our The statute reading its initial Compensation thing Act since one certain from Workers’ Bush, 74 quoted in 1916. See AIK v. is that enactment statute above section of the 254, statutory history. a brief S.W.3d have full com injured employee cannot enactment, predeces our Shortly after its judgment on a money collect pensation and statute allowed the sor Court held That injury. for the same for full claims both the assert compensation.”). would be double tortfeasor, third-party Buley, v. 634 S.W.2d In Davis forums, “to the ex albeit different Appeals Court of held App.1982), the may one he not collect tent collectsfrom 342.700(1) legisla a clear expresses “KRS City Book v. other.” from injured employee that an should tive intent 449, Henderson, Ky. 197 S.W. from both the not be allowed recover added). (1917) (emphasis also S. See third-party carrier and Quarries Contracting Hensley, & Co. v. Re Id. at 163. See also Old tortfeasor.” Ashley, public Ins. Co. (“[I]f compensa employer, having paid (“The policy behind negligent (Ky.App.1986) tion, makes claim 342.700(1) injured employee that an party, the latter is entitled third com from both the workers’ on the rendered not recover credited injured employee third-party him favor of carrier and a tortfea- pensation compensation may by Kentucky such have been long recognized has sor employee by employer.”); Dill courts.”); such Lex K. Lar Arthur Larson & Co., Diebold & Stone man John Sons son, Law Larson’s Workers’ *6 631, 581, Ky. 2004) 241 44 583 (Matthew S.W.2d 110.02, § Bender (“Dillman, principal the (“It claim elementary the equally contractor, may maintain his action for keep to ant not be allowed damages against subcontrac appellee, the compen or her entire both of his amount tor, notwithstanding fact that had dam and of the common law sation award paid compensation by the insurer of not to age recovery.”). say That is however, employer, subject, his immediate assign could employer/insurer of a appellee’s right to event recov worker, subrogation rights to the as was by ery to have the credited Crenshaw, Weinberg v. 896 S.W.2d done in paid.”); Napier so v. John However, no 22 there was (Ky.App.1995). Co., 127, Ky. P. Coal 242 45 Gorman only by a assignment in this decision case— (1931) (“The 1064, 1065 amount of S.W.2d Intech, reason, forego to for whatever compensation received em subrogation rights. or, injury, by in the event of fatal ployee, In the Chief Jus separate opinion, his upon dependents, must credited or when the tice would hold wrongdoer, from amount recovered KRS to under carrier entitled damages only over the excess 342.700(1) pursue not to its subro- decides is recovera collected law the common collateral Irwin, gation rights, ble.”); 224 6 Berry v. 411.188(2)assigns (1928) (same source rule KRS quote as and/or S.W.2d Brown, as matter Quarries); rights v. those to worker Southern Williams S.W.3d at deducted from the amount recovered Bush, employer/insurer. See AIK v. Post, However,
law. at 162-68. recovery neither In denying double to the work- 342.700(1) 411.188(2) 342.700(1) er, nor KRS so pro operates similarly as only vides. Both statutes provide 304.39-060(2)(a), that the KRS which abolishes tort subrogee failure of the rights assert its recovery by person injured in an automo- rights. results in the loss of those Neither bile rejected accident who has not provides that rights those are thereby provisions Repara- of the Motor Vehicle subrogor transferred in order to Act paid payable tions for amounts or permit recovery. In Zurich Am. reparations benefits. Haile,
Ins. Co. (Ky. v. S.W.2d The effect of this statute is to abolish 1994), specifically rejected we such an in the claims lost wages for and medical terpretation of KRS 411.188: person injured of a auto- Had this case not been settled forthwith person mobile accident who under excluding terms the amounts paid injury caused the to the extent that ba- Zurich, dismissing Zurich’s subroga- reparations sic are payable therefor. resulted, tion claim would have quite injured person assert claim can possibly, a windfall for verdict those which exceeded plaintiff, very same double payable the amounts reparation as basic 342.700(1) which KRS was written to so, benefits. it elects to do the basic If prevent. We are not inclined or re- reparations obligor may intervene as quired interpret the statute [KRS real party interest recover permit such absurdity. 411.188] payable by reparation sums it as bene- Id. at 686. fits. Nor is the common law collateral source Dale, Carta
rule relevant this issue. 1986) added) (internal (emphasis citations that, But suggested it is under the omitted). See also Ohio Ins. Cas. Co. law, appellee common have been Ruschell, (Ky.1992) entitled to recover for the combined re- (claimant has tort claim whatsoever accident, sults of the disease and the payable elements of *7 many compensation that acts have been statute). under the no-fault having construed as the same effect. Any by obtained Common- windfall supersedes The act the common law and wealth from forego Intech’s decision to its creates a different standard of rights subrogation rights is no than if different obligations and covering the entire field Intech had filed com- intervening never personal injury in as defined the act. in plaint way, this action. Either It provides for and not for 342.700(1)precludes Appellant from recov- damages, principles and common-law ering from Commonwealth those elements fixing inju- measure of the already that he had recovered by negligence longer ries are no caused by way from Intech compensa- applicable controlling. or tion benefits. Robinson-Pettet Co. Workmen’s Comp. Bd., Accordingly, 258 S.W. the Court of we reverse (1924). See also Evansville as it Printing Appeals insofar vacates the entire Commonwealth, Corp. Sugg, judgment against but we (Workers’ App.1991) Compensation Act ev remand cause the circuit court supersedes idences legislative policy appropriate computation and of the total law). in light common credit due to Commonwealth of the Act the constitu- contract that renders assert failure to employer’s/insurer’s tional. subrogation and to enter right of in with accordance
amended accurate state- foregoing Despite the remand, parties the computation. Upon majority perplexingly the of the ment taken, if neces- may heard and evidence be provi- rely on one of the Act’s proceeds to sary, proper as to the determination by the party not covered to protect sions credit. aforementioned tortfeasor, As a Act, the Commonwealth. Act, faulty application
result of this GRAVES, J., jury’s damages concurs. reduces the majority the nonparty negligent gives award and C.J., LAMBERT, and part concurs in affords, Act advantage that the the same by separate opinion, in with part dissents employer. solely, party’s WINTERSHEIMER, JJ., SCOTT, and that the relation- question There is opinion. joining dissenting (Intech) and ship employer between (Krahwinkel) governed by COOPER, J., part concurs in Act. Compensation As by separate opinion, in the Workers’ part with dissents na- voluntary JOHNSTONE, ROACH, JJ., majority recognizes, it is joining renders ture of the contract opinion. Act constitutional. Workers’ SCOTT, J., in and dissents part concurs employee’s The limitation by opinion, part separate with invoked can be LAMBERT, C.J., and liability entity arises another whose J., WINTERSHEIMER, joining that compen- virtue of the contract for workers’ opinion. coverage. sation parties and Intech Krahwinkel were J., LAMBERT, part concurring Act’s giving to the contract rise dissenting Part. thus, gov- application; relationship their analysis agree majority’s I with the According- provisions. Act’s erned jury must conclusion that verdict party had to remain a ly, Intech chosen if However, analysis reinstated. this same Compensa- litigation, Workers’ opposition to the one compels result have governed tion Act would has reached on issue Intech Krahwinkel and recovery between recovery. tortfeasor, party Common- via third following excerpt from the However, dispute absent wealth. explains why may opinion rights or remedies between Krahwinkel *8 provisions not invoke of the Workers’ the Intech, rise to giving no contract Act to a windfall: Compensation receive this implicated. is Once application Act’s court that Commonwealth’s determined coverage a is Workers’ of tortfea- status was voluntary employer contract between sor, the employer, than an Workers’ rather the of which are employee, terms to Compensation Act irrelevant became Act. The provisions the of the defined against law claim Krahwinkel’s common up right to claim employer gives Commonwealth. defenses, exchange certain allowing is majority agreement accept Essentially, to limited employee’s a com- to enforce workers’ of at law. It is Commonwealth benefits in lieu Krahwinkel, pensation agreement statutory nature this voluntary of though it or party beneficiary majority even is not a failed to statute has read the as a law, agreement. Kentucky whole Under and focuses instead on the first sen- person is not party before a third who a to tence to the exclusion of the remainder. a can contract derive benefit from that The outcome of the majority decision is to contract, person grant wrong i.e., the third must show a to party, windfall the contract was made entered into the tortfeasor who the harm in- inflicted directly primarily injured or for the benefit of the stead of the worker. As a matter person.1 wrongful third An employer employee policy, conduct should not be who to choose enter into workers’ com- rewarded. pensation coverage agreement do so for 342.700(1) issue, The statute at KRS benefit, their own not for the benefit of a attempt codify an inartful to the well-set- negligent party. sugges- third There is no principle tled common-law that a tortfea- tion that was intended to duty sor not be of a relieved third-party beneficiary be a of the work- compensate for harm because inflicted A ers’ contract. person who injured party already has received pay- third-party is neither nor a party benefi- ment from another source. What contract, ciary may enforce it.2 attempts statute provide do is that a may Accordingly, Commonwealth not in- covered workers’ compensation provisions
voke of the Compen- Workers’ injured negligence a third party sation Act or benefit it in from the instant have a workers claim and a case. negli- common law civil action gent
The common
than the
It
party.
rather
Work
third
mandates
Act,
Compensation
governs
employer
given
ers’
its
insurance carrier
Krahwink-
el’s claim
party
Commonwealth. The
notice of the third
claim and author-
rule,
common
purpose
law
known
the collateral
ized to intervene
of assert-
rule,
ing
procedure
source
states
it is the
That
right.
“that
tortfea-
its
However,
responsibility
compensate
sor’s
here.
during
all
followed
for.
causes,
unknown,
litigation,
harm that he
not confined to
are
for reasons that
injured
net
forgo
subroga-
loss that the
receives.”3
decided to
party
Long
followed in
tion
Kentucky,4
right,
giving up
collateral
thus
to ob-
injured plaintiff
source rule allows an
tain
the negligent
reimbursement
from
party. Astonishingly,
seek sufficient
to make him
third
whole
regard
payments
forego
without
made
in-
concludes that
election
injured
wrongdoer
party
someone other than the
ures to the
the sole
benefit
I
tortfeasor.5
and not to the
worker.
see it
differently.
Moreover,
if,
even
as the
con-
342.700(1)
tends,
By
controlling,
interpretation
a reasonable
342.700(1)
statute,
in-depth
entirety
same
obtains from an
anal-
result
ysis
entirety
protects
of the statute.
carri-
the Workers’
Reiss,
Corothers,
Long v.
The proper result in this case would be
ministrative
Judge
jurisdiction
Law
had
party
and not
party
make those findings under KRS 342.325.
who inflicted
injury
to receive the ben-
Id. at 499. Mastin
appeal
was an
from a
Accordingly,
efit.
I would reinstate the
circuit court order denying enforcement
jury
entirely.
verdict
Mastin,
compensation
workers’
award.
WINTERSHEIMER,
JJ„
SCOTT and
both of
1982).
hold that
the plaintiff
Mastín,
In
employer
was not a
entitled to have a trier of fact allocate
party
settlement,
to the tort
thus had not
elements of damages that should be credit
concurred
damages.
allocation of
Whittaker,
ed.
498; Mastin,
Mastín held that
was enti
Whittaker was an appeal from a work
order to determine the amount creditable
ers’
case in which the em
against the
award.
ployer/insurer sought credit for amounts
Mastin,
Accordingly, I would not remand this case, between the Appellant and the em- case to the Hancock Circuit Court but ployer (through compensation carrier), simply would vacate portions clearly which envisioned that Appellant judgment that duplicate workers’ compen- get benefits the subrogation payments sation received, leaving a total items, though even specific written as- $9,084.16, plus costs in- signment was prepared or terest. executed. The civil courts and administrative tri- JOHNSTONE, ROACH, JJ., join bunals of this depend on opinion. this “settlements” as much to manage and al- SCOTT, leviate their Justice, dockets as do our criminal concurring part “plea courts on dissenting part. bargains.” Undue interfer- ence with these depletes mechanisms our I concur with the on the issue resources and ultimately redounds to the of liability, and with the modifications to detriment of our citizens. The settlement Opinion to the extent it recognizes the between Appellant employ- and the trial court’s to make the initial “cred- met the goals settlement er/insurer set it decision.” I disagree and dissent how- each Board; and was acceptable to the ever, Appellees’ on the right to any offset that is until this “stumbling block.” of the Workers’ Compensation settlement join amounts. I also pointed Chief As out Appellant’s Justice Lam- counsel at berts’ arguments dissent. oral opinion —had law the time—there would have In dissenting, I would ask how would an been no settlement to start with! This is assignment of an employer/insurer’s “sub- the wrong way go to get to the right rogation rights” to the Appellant make place. (as difference in this instance suggested), just since the I logic of the dissent. majority opinion gives pre-eminence to the language of LAMBERT, C.J., and 342.700(1), “[b]ut, which states WINTERSHEIMER, joins opinion. J. this both,” shall not collect from and then al- lows the defendant/obligor to “offset” the subject items they —since
weren’t claimed the subrogor (pursuant settlement).
to the compensation log- This (Plaintiffs expenses. item, ture medical exhibit no. credit for this supplement- it could have apparently contained an itemization ed appeal the record on with that informa- expenses, of medical is not in the record on tion. It By remanding chose not to do so. appeal. case, possible This is the issue majority opinion this gives modified might However, be resolved on remand. if Commonwealth a apple second bite at the issue.) Commonwealth believed it was entitled to