Opinion
Civil Action No. 4:97-CV-172-M
December 6, 1999.
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the motion by the Defendant, Willamette Industries, Inc., for summary judgment [DN 63]. This matter is now ripe for decision.
FACTS
Danny Lee Smith was employed by Harbert-Yeargin, Inc. in an iron worker position. In 1995, Willamette contracted with Harbert-Yeargin for structural steel erection and other civil construction work on the Kentucky Mills Plant expansion project. Under the contract, Harbert-Yeargin was responsible for providing workers' compensation benefits for all its employees. On September 5, 1996, Smith was killed while working on a chip screening building when he stepped on an unsecured section of metal grating on the second level of the factory and fell 28 feet.
The original complaint named Harsco Corporation, the fabricator of the metal grating, and AFCO Steel, Inc., the company that detailed and fabricated the steel beams for the chip screen building. Harsco was dismissed by Order of the Court on April 20, 1998. [DN 29]. On March 17, 1998, Plaintiff filed an amended three (3) count complaint adding Willamette as a Defendant asserting claims for wrongful death (Count I), negligent failure to warn (Count II), and premises liability (Count III).
In May of 1998, Willamette filed a motion for summary judgment. The Court denied the motion without prejudice and granted Smith's motion to extend time to complete discovery on the issues raised in Willamette's summary judgment motion. Willamette renews its motion for summary judgment asserting that the Kentucky Workers' Compensation Act, KRS Chapter 342, operates to bar Plaintiff's action against Willamette. Both parties adopt their original briefs in support of their position. [DN 35, DN 37].
STANDARD
Fed.R.Civ.P. 56(c) provides that summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The inquiry under Fed.R.Civ.P. 56(c) is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986). See also Street v. J.C. Bradford Co., 886 F.2d 1472, 1479 (6th Cir. 1989).
"[T]he plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, the motion for summary judgment should be granted." Pitts v. Michael Miller Car Rental, 942 F.2d 1067, 1069-70 (6th Cir. 1991) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)).
DISCUSSION
Defendant asserts that the Plaintiff's complaint against it is barred by the exclusive remedy of workers' compensation. KRS 342.690(1) provides that if an employer secures payment of workers' compensation under Chapter 342, "the liability of such employer under this chapter shall be exclusive and in place of all other liability of such employer. . . . For purposes of this section, the term `employer' shall include a `contractor' covered by subsection (2) of KRS 342.610, whether or not the subcontractor has in fact, secured the payment of compensation." See Granus v. North American Philips Lighting Corp., 821 F.2d 1253 (6th Cir. 1987).
KRS 342.610(2) provides as follows:
A contractor who subcontracts all or any part of a contract and his carrier 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 the payment of compensation as provided for in this chapter. Any contractor or his carrier who shall become liable for such compensation may recover the amount of such compensation paid and necessary expenses from the subcontractor primarily liable therefor. A person who contracts with another:
To have work performed consisting of the removal, excavation, or drilling of soil, rock, or mineral, or the cutting or removal of timber from land; or
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 for the purposes of this section be deemed a contractor, and such other person a subcontractor. This subsection shall not apply to the owner or lessee of land principally used for agriculture.
"The purpose of the provision of K.R.S. 342.610 that a contractor is liable for compensation benefits to an employee if a subcontractor who does not secure compensation benefits is to prevent subcontracting to irresponsible people." Fireman's Fund Ins. Co. v. Sherman Fletcher, Ky., 705 S.W.2d 459, 461 (1986).
In Fireman's Fund Ins., 705 S.W.2d 459, the question before the Kentucky Supreme Court was whether the workers' compensation statutes precluded recovery in a wrongful death suit brought on behalf of an employee of the subcontractor against the owner/general contractor in a residential townhouse complex construction project. The subcontractor, the direct employer of the plaintiff, had contracted to perform the rough framing carpentry work on the project. The plaintiff, an employee of the subcontractor, was killed when a concrete block wall at the construction site collapsed. The insurance carrier of the subcontractor paid workers' compensation benefits to the estate of the plaintiff. The negligence attributable to the owner, acting as the general contractor, by the plaintiff was that the contractor failed to properly supervise the construction of the project and failed to require that the concrete block wall under construction be adequately braced. Id. at 460.
In Fireman's Fund Insurance, 705 S.W.2d 459, Sherman and Fletcher were the owners and developers of the residential construction complex. The Supreme Court noted that the case presented a number of questions including "the right of an injured employee of a subcontractor to recover in tort from an owner who has acted as his own contractor." Id. at 460. The Court did not discuss whether Sherman and Fletcher had acted in the past as general contractors or what their development business normally involved. Instead, the question was whether the job of rough framing carpentry is one that is usually a regular or recurrent part of the work of the business of building construction.
The Kentucky Supreme Court held that the subcontractor had agreed to perform the rough framing carpentry work on the project and that it could not "be disputed that rough framing carpentry is work of a kind which is a regular or recurrent part of the work of the occupation or trade of building construction in which [the general contractor] was engaged." Id. at 461. The Kentucky Supreme Court interpreted KRS 342.610 to mean "that 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." Fireman's Fund Ins., 705 S.W.2d at 462.
In Granus v. North American Philips Lighting Corp., 821 F.2d 1253 (6th Cir. 1987), the plaintiff, Granus, fell down a flight of steps while working at a factory owned by the defendant, Philips. The plaintiff was an employee of Corning Glass Works who had contracted with the defendant to refurbish and upgrade a glass-melting installation, or "tank," including relining of the installation's furnace with brick. Plaintiff argued that the rebricking was not a regular or recurrent part of Philips' business since Philips did not perform this task with its employees. The Sixth Circuit, relying on Fireman's Fund, held that "the relining of furnaces, required periodically as matter of regular maintenance, is likewise a `recurrent' part of the manufacturing business in which defendant Philips is engaged." Granus, 821 F.2d at 1258.
The Kentucky Supreme Court has defined recurrent and regular as follows: "`Recurrent' simply means occurring again or repeatedly. `Regular' generally means customary or normal, or happening at fixed intervals." Daniels v. Louisville Gas Elec. Co., Ky. App., 933 S.W.2d 821, 824 (1996).
In the present case, Defendant claims that it was a "contractor" under the terms of the workers' compensation statute, and as a result, the workers' compensation benefits provided by Harbert-Yeargin is the exclusive remedy for Plaintiff. KRS § 342.690(1). The Court agrees.
First, the Court finds that Willamette served as its own general contractor for the Kentucky Mills Plant expansion project. Fireman's Fund Insurance, 705 S.W.2d 459. Willamette has a corporate engineering office or department in Portland that has the responsibility of overseeing all expansion projects at various Willamette plants throughout the country. Its sole responsibility is to prepare plans, hire contractors, and oversee maintenance, construction, and remodeling projects at the company plants. The corporate engineering office has been in existence since the early 1950s. Many of the department's employees travel from one Willamette construction site to another.
At the Kentucky Mills Plant expansion project, Willamette maintained ultimate responsibility for the construction project through its Site Construction Manager, Ron Woodward, and later, Mike Singer. According to Woodward and Singer, the Site Construction Manager is responsible for recommending firms to Willamette for hiring, overseeing all contractors, coordinating work schedules of the contractors, giving directions to the contractors involving optimal crew sizes, and ultimately for the overall quality and productivity of the job. Willamette also publishes general rules for contractors and site safety rules. In addition to the site construction manager at the Kentucky Mills Plant, Willamette maintained four to six area coordinators at the site who inspected the work and made on-site decisions relating to the work.
Plaintiff argues that Willamette does not qualify as an employer and contractor pursuant to KRS 342.690 and KRS 342.610(2)(b). According to Plaintiff, at no time during the deposition of either Mike Singer or Ron Woodward did either state that Willamette was acting as a general contractor for the Kentucky Mills Plant expansion project. In fact, Plaintiff argues that Mike Singer described Willamette's role in the expansion project as a "construction manager rather than a general contractor." (Singer December 17, 1997, Dep. at 53).
The Court rejects Plaintiff's argument. Singer testified that
Willamette acts as a construction manager. We refer to it as construction manager rather than a general contractor. We are not contractors per se in that we do not physically get out and engage in hiring employees to build or construct. We manage construction projects.
(Singer December 17, 1997, Dep. at 53). Whether Willamette describes itself as a construction manager or general contractor is of no import, the Court finds that under the facts of this case both terms are synonymous. As discussed above, the record reflects that Willamette managed the entire expansion project. While it did not hire individual employees per se, it hired "contractors" to work on different aspects of the plant expansion. Plaintiff has pointed to no other general contractor on the project.
Thus, at the time of the accident, Willamette was the general contractor for the project and was engaged in the business of building construction which included the erection of steel for a chip screen building. As the Kentucky Supreme Court stated in Fireman's Fund Ins., 705 S.W.2d 459, "[e]ven though [the contractor] 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 462. The business or occupation Willamette was engaged in was building construction, and erection of steel is work of a kind which is a regular or recurrent part of the work of the business of building construction.
Second, even if Willamette did not serve as general contractor for the Kentucky Mills Plant expansion, the Court finds that maintenance and modernization of Willamette's paper plants, including the rebuilding of the chip screen building, is a regular and recurrent part of Willamette's business, manufacturing paper products. Granus, 821 F.2d 1253. As discussed above, Willamette has a specific department in Portland whose sole responsibility is to prepare plans, hire contractors, and oversee maintenance, construction, and remodeling projects at the company plants. The new chip screen building being erected was part of a six hundred million dollar construction project. Willamette was replacing an outdated chip screen building with a new one and was making allowances for added production capabilities. (Singer August 13, 1998, Dep. at 7, 17). Singer testified that the chip screening process is an integral part of the paper production process. According to Singer, Willamette has to continually keep its equipment upgraded and the technology at the highest level in order to be competitive. Singer stated that modernization of plant buildings and equipment is a continuing and ongoing part of Willamette's operation. Singer further testified, and the Court agrees, that the replacement of the chip screen building is a regular and recurrent part of Willamette's business.
For the reasons set forth above, the Court concludes that Willamette is a contractor. Pursuant to KRS 342.610 and KRS 342.690, Willamette would have been liable to the Plaintiff for workers' compensation benefits had Harbert-Yeargin failed to provide coverage. Thus, the exclusive remedy of Plaintiff against Willamette is under the Workers' Compensation Act. Workers' compensation benefits were paid on behalf of Smith by Liberty Mutual Insurance, Harbert-Yeargin's carrier. As a result, Plaintiff's claim against Willamette is barred. Finding no genuine issue of material fact, the motion by Defendant for summary judgment is granted.
For the foregoing reasons,
IT IS HEREBY ORDERED that the motion by Defendant, Willamette, for summary judgment [DN 63] is granted.