Opinion
Civil Action No. 3:01-CV-614-H.
April 25, 2002.
MEMORANDUM OPINION
Defendant Encompass Mechanical Services ("Encompass") has moved the Court to dismiss Plaintiff's civil rights and tort claims, and to deny Plaintiff's motion to amend her complaint. On September 21, 2001, Plaintiff filed this action against Encompass, her former employer, and Sam Martin III, her supervisor at Encompass. Plaintiff has alleged that in May 2000, Martin sexually harassed her, and that both defendants later retaliated against her for complaining of the harassment. Previously, Plaintiff had taken these claims to the United States Equal Employment Opportunity Commission ("EEOC"), which declined to proceed on them and issued Plaintiff a right-to-sue letter. Plaintiff then brought suit in Jefferson Circuit Court, asserting harassment and retaliation claims under the Kentucky Civil Rights Act, K.R.S. §§ 344.010 et seq. ("KCRA"), and tort claims for outrageous conduct, assault, battery, fraudulent misrepresentation, and negligence in hiring, supervision and retention.
Encompass, after removing the action to this Court, has moved to dismiss the KCRA claims as insufficiently pleaded, and the tort claims as untimely under the one-year statute of limitations at K.R.S. § 413.140(1)(a). Encompass also argues that the KCRA and Kentucky Workers' Compensation Act, K.R.S. §§ 342.0011 et seq. ("KWCA"), preempt Plaintiff's claims for outrageous conduct and fraud. Finally, Encompass contends that Plaintiff failed to state her fraud claims with particularity, and that the Court consequently must dismiss them.
I.
K.R.S. § 413.140(1)(a) provides that an action for "an injury to the person of the plaintiff" shall be brought within one year. The statute applies to "cases where the personal injury is the gist of the action, such as actions for assault and battery, and the like." Resthaven Memorial Cemetery, Inc. v. Volk, 150 S.W.2d 908, 911 (Ky.Ct.App. 1941). This statute also governs claims of negligent hiring, supervision and retention. See Roman Catholic Diocese of Covington v. Secter, 966 S.W.2d 286, 287-88 (Ky.Ct.App. 1998). However, K.R.S. § 413.120(12) specifically places a five-year limitations period on "action[s] for relief or damages on the ground of fraud or mistake." The five-year limitations period also applies to the judicially created tort of outrage. See Craft v. Rice, 671 S.W.2d 247, 249-51 (Ky. 1984).
Craft adopted Restatement (Second) of Torts § 46, "Outrageous Conduct Causing Severe Emotional Distress." 671 S.W.2d at 251. Subsequently, Kentucky courts have used the terms "tort of outrageous conduct," "tort of outrage," and "tort of intentional infliction of emotional distress" interchangeably. See, e. g., Banks v. Fritsch, 39 S.W.3d 474, 480 (Ky.Ct.App. 2001); Brewer v. Hillard, 15 S.W.3d 1, 8 (Ky.Ct.App. 1999).
Plaintiff argues that K.R.S. § 413.270 tolls the limitation period on her assault, battery and negligence claims. This statute gives a plaintiff ninety days to commence a new action in the proper court after another court has dismissed for lack of jurisdiction that plaintiff's previous action. Even assuming, arguendo, that the EEOC might qualify as a court under the statute, this tolling provision cannot apply here. In its right-to-sue letter, the EEOC stated that it was "unable to conclude that the information obtained establishes violations" of federal civil rights law; thus, the EEOC dismissed Plaintiff's complaint for lack of evidence, not lack of jurisdiction. Cf. Milby v. Wright, 952 S.W.2d 202, 204-05 (Ky. 1997) (administrative law judge's ruling that plaintiff's injury was noncompensable under workers' compensation law was a judgment on the merits, not dismissal for lack of jurisdiction, and thus did not operate under § 413.270 to toll the applicable limitations period). In any event, Plaintiff's EEOC complaint alleged violations of federal civil rights law, not Kentucky tort law.
"As used in this section, `court' means all courts, commissions, and boards which are judicial or quasi-judicial tribunals authorized by the Constitution or statutes of the Commonwealth of Kentucky or of the United States of America." K.R.S. § 413.270(2).
Therefore, the statute of limitations bars Plaintiff's assault, battery and negligence claims.
II.
Encompass argues that the Kentucky Workers' Compensation Act forecloses Plaintiff's remaining tort claims for outrageous conduct and fraud. The KWCA's purpose "is to compensate workers who are injured in the course of their employment for necessary medical treatment and for a loss of wage-earning capacity, without regard to fault." Adkins v. R S Body Co., 58 S.W.3d 428, 430 (Ky. 2001). "Each employer subject to the Act agrees to pay both lost wages and medical expenses to an employee injured on the job. In return, each employee subject to the Act relinquishes all common law claims against the employer arising out of a work-related injury." Philadelphia Indemnity Ins. Co. v. Morris, 990 S.W.2d 621, 624 (Ky. 1999) (citations omitted). The KWCA defines "injury" as "any work-related traumatic event or series of traumatic events, including cumulative trauma, arising out of and in the course of employment which is the proximate cause producing a harmful change in the human organism evidenced by objective medical findings." K.R.S. § 342.0011.
In support of its contention that the KWCA forecloses all common-law tort claims, Encompass cites K.R.S. § 342.690(1):
If an employer secures payment of compensation as required by this chapter, the liability of such employer under this chapter shall be exclusive and in place of all other liability. . . . The exemption from liability given an employer by this section . . . shall not apply in any case where the injury or death is proximately caused by the willful and unprovoked physical aggression of [an] employee, officer or director.
Encompass has not secured compensation for Haggard; she has not filed for it. Encompass argues, however, that because Haggard has not specifically opted out of the workers' compensation system, she is obligated to pursue remedies within its framework rather than in a court of law.
The Court finds this argument unpersuasive for two reasons. First, as noted above, the workers' compensation system exists to compensate physical injuries, not injuries that are primarily emotional or pecuniary. It follows logically that the KWCA should not bar actions for such injuries, because it offers no remedy for them. See Columbia Sussex Corp. v. Hay, 627 S.W.2d 270, 278-79 (Ky.Ct.App. 1981) (holding that the KWCA does not bar a plaintiff from stating slander per se and false imprisonment claims which arose out of the course of her employment because "there is nothing for which the Workers' Compensation Act would compensate."). A learned treatise on workers' compensation lays out the proper standard:
If the essence of the tort, in law, is non-physical, and if the injuries are of the usual non-physical sort, with physical injury being at most added to the list of injuries as a makeweight, the suit should not be barred. But if the essence of the action is recovery for physical injury or death, including in "physical" the kinds of mental or nervous injury that cause disability, the action should be barred even if it can be cast in the form of a normally non-physical tort.
6 Larson's Workers' Compensation Law § 104.05 (2000) (italics omitted).
Second, "the workers' compensation system is the exclusive remedy for any injuries falling within its purview, except for intentional injuries caused by the employer." Edwards v. Louisville Ladder, 957 S.W.2d 290, 294 (Ky.Ct.App. 1997) (emphasis added); accord Morrison v. Carbide Carbon Chemicals Corp., 129 S.W.2d 547, 550 (Ky.Ct.App. 1939) ("The only exception [to KWCA exclusivity] is in cases where injury or death of an employee results through deliberate intention of the employer to produce same and in which event resort may be had to courts of law.") (emphasis added). The KWCA's exclusivity provisions do not apply here because Haggard has alleged intentional infliction of emotional distress and intentional fraudulent misrepresentation.
In support of its argument that the KWCA bars outrage claims, Encompass cites Shamrock Coal Co. v. Maricle, 5 S.W.3d 130 (Ky. 1999), a case which, at first glance, appears to embrace Encompass's position. In Maricle, the Supreme Court of Kentucky rejected an outrage claim as barred by the KWCA. In the course of their employment, the plaintiff coal workers had contracted pneumoconiosis, and they alleged that their employer had been "negligent, careless and reckless" in its mining operations and had intentionally violated safety regulations. The Court cited the exclusivity exception for "willful and unprovoked physical aggression" in K.R.S. § 342.690(1), and stated that because "the legislature has specified that the only exception to the [KWCA's] exclusive remedy is for . . . willful and unprovoked physical aggression by an employee, officer, or director, [absent such aggression] there is no exception to the exclusive liability provision of the Workers' Compensation Act." Id. at 135 (quotation, citation omitted).
Neither the General Assembly nor any Kentucky court has given a precise meaning to this term "willful and unprovoked physical aggression." However, in Zurich Ins. Co. v. Mitchell, 712 S.W.2d 340 (Ky. 1986), the Supreme Court, in rejecting an outrage claim based on allegations that an employer delayed workers' compensation benefits in bad faith, took care to distinguish between "refusal to make timely payment of benefits" and "affirmative acts of harassment," implicitly suggesting that an outrage claim alleging actual harassment would have been permissible. Id. at 343. More recently, in Brewer v. Hillard, supra, the Court of Appeals of Kentucky concluded that acts of sexual harassment may constitute "willful and unprovoked physical aggression," and thus permit a plaintiff to state a claim of outrage, notwithstanding the KWCA's exclusivity provision. Id. at 8-9. The Court reads this precedent to suggest that even if Plaintiff's injuries fall within the purview of the KWCA, they lie within the statutory exception for injuries caused by "willful and unprovoked physical aggression."
While basing its holding on the appellee's failure to state an outrage claim, the Court also observed that the KWCA "provides several safeguards to [redress] alleged misconduct or delay" in payment of benefits. Id. at 341; compare with Hay, supra.
Arguing that the KWCA forecloses fraud claims, Encompass cites Wymer v. JH Properties, Inc., 50 S.W.3d 195 (Ky. 2001), in which the Supreme Court affirmed dismissal of outrage and fraud claims arising out of an injury the plaintiff sustained in the course of her employment. However, the Court did not reject these claims as barred by the KWCA; rather, it affirmed their dismissal for lack of evidence. Id. at 200. Encompass also cites General Accident Ins. Co. v. Blank, 873 S.W.2d 580 (Ky.Ct.App. 1993), in which the Court of Appeals reversed a plaintiff's verdict on fraud claims based on allegations of bad-faith failure to pay workers' compensation benefits. However, the Court based its decision on the holding on Zurich, supra, that the KWCA forecloses tort claims based in allegations of bad faith in payment of benefits because it specifically provides avenues for redress. 873 S.W.2d at 582. The fraud alleged here, though it arose in the course of Plaintiff's employment, has nothing to do with workers' compensation benefits, nor does it relate to any physical injury Plaintiff sustained. Cf. Larson, supra, at § 104.03 (distinguishing "those [cases] in which the deceit precedes and helps produce the injury, and those in which the deceit follows the injury and produces a second injury or loss. In the first category, a tort action has usually been found barred, since the deceit, so to speak, merges into the injury for which a compensation remedy is provided."). In short, the KWCA, in purpose and in application, does not apply here.
III.
Citing Rigazio v. Archdiocese of Louisville, 853 S.W.2d 295 (Ky.Ct.App. 1993), Encompass argues that Plaintiff's outrageous conduct claim does not meet the "gap-filler" requirement. Rigazio established the rule that "where an actor's conduct amounts to the commission of one of the traditional torts such as assault, battery, or negligence for which recovery for emotional distress is allowed, and the conduct was not intended only to cause extreme emotional distress in the victim, the tort of outrage will not lie." Id. at 299. Rigazio held that an outrage claim can exist only if the alleged misconduct was intended solely to cause extreme emotional distress in the victim. 853 S.W.2d at 299. Consequently, the Rigazio court affirmed dismissal of an outrage claim where the plaintiff had failed to show that acts of sexual abuse by the defendant's employee had been intended solely to inflict extreme emotional distress; rather, the employee's motive had been sexual gratification.
On the other hand, in Brewer, supra, the Court of Appeals found an outrage claim to lie where the jury had found that the defendant's motive had been to harass and intimidate the plaintiff, rather than to obtain sexual gratification. 15 S.W.3d at 8. Judges in the Western District of Kentucky, as well as a panel of the Court of Appeals of Kentucky, have observed these distinctions when applying Rigazio and Brewer. See, e. g., Hamilton v. City of Louisville, 2001 U.S. Dist. LEXIS 9998, at *13-*14 (W.D.Ky. 2001); Boone v. Kent Feeds, Inc., 2001 U.S. Dist. LEXIS 9616, at *4-*5 (W.D.Ky. 2001); Banks, supra, at 481. But see Messick v. Toyota Motor Mfg., Ky., Inc., 45 F. Supp.2d 578, 582 (E.D.Ky. 1999) (holding that, because the KCRA offers recovery for emotional distress, any supplemental claim of outrageous conduct must be dismissed).
It will be difficult for an outrage claim to co-exist as a gap-filler alongside a claim of discrimination. Because the Kentucky Civil Rights Act and the tort of outrage both permit recovery for emotional injury, Rigazio and its progeny create a virtual legal minefield between Plaintiff and a successful outrage claim. The Court cannot yet say that it is impassable. Brewer demonstrates that it is possible. To succeed Plaintiff faces a high barrier of proof to show that Defendants' conduct was intended solely to cause her severe emotional distress. One cannot say at this early stage in the proceedings that "it appears beyond doubt that the plaintiff can prove no set of facts in support of [her] claim which would entitle [her] to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). With discovery in this action yet to commence and no proof yet adduced, it would be premature to dismiss Plaintiff's claim of outrageous conduct.
One of the KCRA's explicitly stated purposes is to protect individuals' "interest in personal dignity and freedom from humiliation," K.R.S. § 344.020(1)(b), and the KCRA "allows claims for damages for humiliation and personal indignity . . ." McNeal v. Armour Co., 660 S.W.2d 957, 958 (Ky.Ct.App. 1983); accord Kentucky Comm'n on Human Rights v. Fraser, 625 S.W.2d 852, 855 (Ky. 1981) ("Humiliation and embarrassment lie at the core of the evil which the Kentucky Civil Rights Act was designed to eradicate.").
IV.
Plaintiff concedes that she failed to plead her sex discrimination and fraud claims with adequate specificity, and moves the Court for permission to amend her complaint under Fed.R.Civ.P. 15(a), which allows amendment once as a matter of course "at any time before a responsive pleading is filed." Encompass objects, noting that it has already moved to dismiss the complaint. However, as the Sixth Circuit has held, a Rule 12(b)(6) motion to dismiss does not qualify as a "responsive pleading" within the meaning of Rule 15(a). Pertuso v. Ford Motor Credit Co., 233 F.3d 417, 420 (6th Cir. 2000). There is no reason, then, for the Court to prevent Plaintiff from amending her complaint.
The Court will enter an Order consistent with this Memorandum Opinion.
ORDER
Defendant Encompass Mechanical Services, Inc., has moved the Court to dismiss Plaintiff Mary K. Haggard's claims of sex discrimination, outrageous conduct, assault, battery, negligence, and fraud. Being otherwise sufficiently advised,
IT IS HEREBY ORDERED that Defendant's motion to dismiss Plaintiff's claims of assault, battery and negligence is SUSTAINED and those claims are DISMISSED WITH PREJUDICE.
IT IS FURTHER ORDERED that Defendant's motion to dismiss Plaintiff's sex discrimination, fraud and outrageous conduct claims is DENIED.
IT IS FURTHER ORDERED that Plaintiff's motion for leave to amend her complaint is SUSTAINED.