Opinion
NO. 2016-CA-000974-MR
06-15-2018
RAY PINTER, D/B/A RAY PINTER CONSTRUCTION APPELLANT v. AARON JONES APPELLEE
BRIEFS FOR APPELLANT: J. Michael Wells Michael E. Krauser Louisville, Kentucky BRIEF FOR APPELLEE: Kevin C. Burke Jamie K. Neal Louisville, Kentucky Patrick S. McElhone Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE ANGELA MCCORMICK BISIG, JUDGE
ACTION NO. 14-CI-001407 OPINION
AFFIRMING
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BEFORE: COMBS, D. LAMBERT AND THOMPSON, JUDGES. THOMPSON, JUDGE: Ray Pinter, d/b/a Ray Pinter Construction appeals from the Jefferson Circuit Court's order denying his motion for summary judgment in a negligence action on the basis that factual questions remained as to whether Aaron Jones was an employee or an independent contractor. We affirm.
Pinter was hired as a contractor on a residential remodeling job to repair the roof and the soffit around the roof. Troy Pope, Mike Sanders and Jones each performed some work on this job for Pinter. On March 22, 2013, Jones was injured while working on the remodeling job. Jones did not file a claim for workers' compensation.
On March 11, 2014, Jones filed a negligence action against Pinter. Jones alleged that while performing this work, he fell from a scaffolding and received permanent injuries caused by Pinter not providing him with appropriate safety equipment or a safe work environment.
On April 1, 2016, Pinter filed a motion for summary judgment arguing that the exclusive remedy provisions of the Kentucky Workers' Compensation Act prohibited Jones's negligence action as a matter of law. Pinter argued he hired Pope as a subcontractor to replace the soffit and Pope hired Sanders and Jones, and he was entitled to up-the-ladder immunity from suit by Pope's employee. Pinter further argued:
it is immaterial whether the arrangements between Pinter and Mr. Pope and/or Pinter and Jones would justify labelling Jones as a traditional "independent contractor." The controlling factor is instead whether Pinter engaged Jones either directly or through Mr. Pope to perform work "of a kind which is a regular or recurrent part of" Pinter's "trade, business, occupation, or profession." There is no need or justification for further examination of the issue.
Jones denied that workers' compensation insurance applied because he was an independent contractor rather than an employee of either Pope or Pinter. Jones argued he was an independent contractor who put together a bid with independent contractors Pope and Sanders and had a verbal agreement with Pinter to pay him a price per day. Jones argued he was an independent contractor because while Pinter told him generally what needed to be done, he was left on his own to determine how to do the work, was unsupervised, was expected to provide his own equipment (other than scaffolding and safety equipment) and considered himself an independent contractor. He argued that the test for determining whether an injured worker is an employee or an independent contractor is not the same as the test for whether a general contractor is a statutory or up-the-ladder employer.
The circuit court denied Pinter's motion for summary judgment on the basis that a contractor's immunity from tort liability with respect to work-related injuries filed by employees under Kentucky Revised Statutes (KRS) 342.610 does not apply if the worker is found to be an independent contractor. It ruled that under the nine-factor test for determining whether a worker is an employee or independent contractor as provided in Radcliff v. Redmon, 396 S.W.2d 320, 324 (Ky. 1965), the issue of whether Jones is an employee or an independent contractor is an issue of material fact for a jury to decide.
On appeal, Pinter again asserts immunity. He argues that if Jones is a statutory employee under KRS 342.610(2)(b), this jurisdictional fact would deprive the circuit court of subject matter jurisdiction under KRS 342.690(1), because Pinter is entitled to up-the-ladder immunity.
This matter is properly before us on appeal because "an order denying a substantial claim of absolute immunity is immediately appealable even in the absence of a final judgment." Breathitt Cty. Bd. of Educ. v. Prater, 292 S.W.3d 883, 887 (Ky. 2009). Therefore, we may properly review the denial of an employer's motion for summary judgment for immunity from suit pursuant to the exclusive remedy of the Workers' Compensation Act. Ervin Cable Constr., LLC v. Lay, 461 S.W.3d 422, 423 (Ky.App. 2015).
The Workers' Compensation Act states in relevant part in KRS 342.640 that:
The following shall constitute employees subject to the provisions of this chapter, except as exempted under KRS 342.650:KRS 342.650(6) contains an exemption for "[a]ny person who would otherwise be covered but who elects not to be covered[.]"
(1) Every person, including a minor, whether lawfully or unlawfully employed, in the service of an employer under any contract of hire or apprenticeship, express or implied, and all helpers and assistants of employees, whether paid by the employer or employee, if employed with the knowledge, actual or constructive, of the employer;
. . . and
(4) Every person performing service in the course of the trade, business, profession, or occupation of an employer at the time of the injury.
It is well recognized and a longstanding rule in Kentucky that the Workers' Compensation Act does not apply to independent contractors. See Holman Enter. Tobacco Warehouse v. Carter, 536 S.W.2d 461, 462-63 (Ky. 1976); Aetna Cas. & Sur. Co. v. Petty, 282 Ky. 716, 140 S.W.2d 397, 399 (1940). Kentucky courts have provided a variety of justifications for this rule.
In Fields v. Twin City Drive-In, 534 S.W.2d 457, 459 (Ky. 1976), the Kentucky Supreme Court explained, "there is no intention manifested by the legislature to encompass an independent contractor within the definition of 'employee' as used in the Workmen's Compensation Act." Similarly, in Wright v. Fardo, 587 S.W.2d 269, 272 (Ky.App. 1979), the Court explained that the definitions of employer in KRS 342.630 and employee in KRS 342.640 "do not reach the independent contractor . . . because from the inception of workmen's compensation laws, the independent contractor . . . [is a status] outside of the employer-employee relationship embraced by the Workmen's Compensation Act." In Hubbard v. Henry, 231 S.W.3d 124, 128-29 (Ky. 2007), the Kentucky Supreme Court reasoned independent contractors are statutorily excluded based upon the KRS 342.650(6) exemption, explaining: "[a]n individual who performs service as an independent contractor in the course of an employer's trade, business, profession, or occupation has effectively elected not to be covered."
Whether an injured worker is an employee or an independent contractor is a question of fact if the facts are disputed, but a question of law if the facts are substantially undisputed. Uninsured Employers' Fund v. Garland, 805 S.W.2d 116, 117 (Ky. 1991). Therefore, summary judgment could be appropriate if there are no factual disputes and a court merely had to decide if the established facts led to the legal conclusion that the worker was an employee or an independent contractor. However, if factual issues remain, summary judgment is precluded. See Steelvest, Inc. v. Scansteel Service Center, Inc., 807 S.W.2d 476, 483 (Ky. 1991); Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky.App. 1996).
In Purchase Transp. Servs. v. Estate of Wilson, 39 S.W.3d 816, 818 (Ky. 2001), the Kentucky Supreme Court set out the standard for determining whether an injured worker was an employee covered by workers' compensation or independent contractor who could bring a negligence action by reviewing the relevant case law:
In Ratliff v. Redmon, supra, the Court emphasized that the purpose of Chapter 342 favored a different concept of the term "employee" from that which was applied at common law. In stating its approval of the trend to find employee status in instances where such protection was appropriate, the Court noted that Kentucky was not alone in limiting the scope of independent contractor status with regard to workers' compensation claims. Adopting the test set forth in Larson's Workers' Compensation Law, the Court indicated that the following nine factors were to be considered when determining whether a particular
individual is working as an employee or as an independent contractor:
(a) the extent of control which, by the agreement, the master may exercise over the details of the work;
(b) whether or not the one employed is engaged in a distinct occupation or business;
(c) The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the employer or by a specialist without supervision;
(d) the skill required in the particular occupation;
(e) whether the employer or the workman supplies the instrumentalities, tools, and the place of work for the person doing the work;
(f) the length of time for which the person is employed;
(g) the method of payment, whether by the time or by the job;
(h) whether or not the work is a part of the regular business of the employer; and
(j) whether or not the parties believe they are creating the relationship of master and servant.
Ratliff v. Redmon, 396 S.W.2d at 324-25.
In Chambers v. Wooten's IGA Foodliner, Ky., 436 S.W.2d 265 (1969), we determined that four of the nine factors were of paramount importance: the nature of the work being performed as it relates to the business of the employer; the extent of control which is exercised by the employer; the professional skill which is required of the worker; and the true intentions of the parties. Those four factors were again set forth in Husman Snack Foods Co. v. Dillon, Ky.App., 591 S.W.2d 701, 703 (1979), a decision which emphasized that an employer would not be permitted to force a worker who would normally be considered an employee outside the protection of the Workers' Compensation Act simply because the worker acquiesced in order to obtain the work. We subsequently
reiterated that a proper Ratliff v. Redmon analysis required a consideration of all four factors. Uninsured Employers' Fund v. Garland, 805 S.W.2d 118-19.The Court, consistent with earlier opinions, declined to apply any alternative test. Id. at 819.
In Carter v. Martin Petroleum Co., 460 S.W.2d 810, 813 (Ky. 1970), the Court rejected an argument that an employer-employee relationship should be found because the work of the worker was part of the regular business of the employer and this "relation must be found to properly allocate the burden of the loss." It explained, "[t]he court believes any such departure from the established law in such matters would require legislative action." Id.
Pinter's reliance on KRS 342.610(2)(b) to exclude Jones from being an independent contractor is misplaced. KRS 342.610 provides in relevant part as follows:
(2) A contractor who subcontracts all or any part of a contract and his or her 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 or her 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:
. . .
(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 personThese provisions provide when a contractor is liable to compensate employees of its subcontractor and have no bearing on whether someone is an employee of the subcontractor or an independent contractor.
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.
Pinter is making a similar argument to that considered and rejected in Carter. We decline to hold under KRS 342.610(2)(b) that, because Pinter is an up-the-ladder employer for Pope if Pope does not have workers' compensation insurance, this must mean as a matter of law that Jones is an employee of Pope or Pinter. Instead, we hold that Jones has adequately demonstrated there are contested issues of fact that must be resolved to determine as a matter of law whether he is an independent contractor or an employee of Pope or Pinter. The circuit court correctly denied Pinter's motion for summary judgment and required the contested issues of fact be determined by a jury. Only after it is resolved whether Jones is an employee or an independent contractor, will it be known whether Pinter has immunity from suit pursuant to the Workers' Compensation Act or whether Jones's negligence action can proceed.
Accordingly, we affirm the Jefferson Circuit Court's order denying Pinter's motion for summary judgment.
ALL CONCUR. BRIEFS FOR APPELLANT: J. Michael Wells
Michael E. Krauser
Louisville, Kentucky BRIEF FOR APPELLEE: Kevin C. Burke
Jamie K. Neal
Louisville, Kentucky Patrick S. McElhone
Louisville, Kentucky