McLain v. Dana Corp.

• Decision Date: 15 October 1999
• Docket Number: No. 1998-CA-002831-MR.,1998-CA-002831-MR.
• Citation: 16 S.W.3d 320
• Parties: Ralph McLAIN, Appellant, v. DANA CORPORATION; Bay Design, Inc.; The Paslin Company; and I.S.I. Industries, Appellees.
• Court: Kentucky Court of Appeals

16 S.W.3d 320

Ralph McLAIN, Appellant, v. DANA CORPORATION; Bay Design, Inc.; The Paslin Company; and I.S.I. Industries, Appellees.

No. 1998-CA-002831-MR.

Court of Appeals of Kentucky.

October 15, 1999.

Discretionary Review Denied by Supreme Court May 10, 2000.

John W. Bland, Jr., Elizabethtown, for Appellant.

Steven D. Goodrum, Lexington, for Appellee, Dana Corporation.

David J. Kellerman, Louisville, for Appellee, The Paslin Company.

O. Lee Cave, III, Debbie D. Sandler, Louisville, for Appellee, Bay Design, Inc.

Before: JOHNSON, McANULTY, and MILLER, Judges.

OPINION

JOHNSON, Judge:

Ralph McLain's tort claim against his employer, Dana Corporation, and his products liability claims against Bay Design, Inc. and The Paslin Company were summarily dismissed by the Hardin Circuit Court. Since all of McLain's arguments concerning the constitutionality of the workers' compensation laws have either already been rejected by the Supreme Court of Kentucky or are not ripe for our review, and since his products liability claims were not timely filed, we affirm.

On January 3, 1997, McLain was injured at work when he was hit in the head by a piece of machinery that allegedly malfunctioned. McLain, who was employed by the appellee, Dana Corporation, applied for and obtained workers' compensation benefits.¹ McLain also filed a lawsuit in the Hardin Circuit Court in which he named as defendants, Dana Corporation and the appellee, I.S.I. Industries, the alleged manufacturer of the defective equipment.

With respect to his employer, McLain alleged that Dana Corporation "negligently operated, maintained and controlled [its] business by failing to provide [him] with a safe place to work and with safe equipment to operate." The remainder of his complaint alleged that Chapter 342 of the Kentucky Revised Statutes, "as rewritten M 1996," violated several sections of the Kentucky Constitution; that the "`new' workers' compensation law [KRS 342] no longer provides adequate, sufficient, equitable and/or fair benefits" to workers so as to be a "valid alternative to [his] rights [] under traditional tort law and under the Constitution of Kentucky"; and, that the manner in which benefits are currently calculated is "arbitrary, unjust, against public policy, vague, inconsistent with the traditional policy objectives of compensating injured workers, unconstitutional, illegal, immoral and a total sham."

In its answer, Dana Corporation claimed that McLain had failed to exhaust his administrative remedies; that McLain's claim against it was barred by the exclusive remedy provisions of the workers' compensation scheme; and that McLain's injuries were caused by his "own negligence" or by "the breach of warranty or other contract or duty of defendant ISI [sic] Industries or some other manufacturer of the product in question...." Dana Corporation also filed a cross-claim against. I.S.I. to recover payments made to, or on behalf of, McLain within the context of McLain's workers' compensation claim.

With respect to I.S.I., McLain alleged in his complaint that the manufacturer "negligently designed, manufactured, assembled, tested, inspected, warranted, instructed ultimate users, warned of dangers, repaired and provided a piece of equipment located at the Dana Corporation." McLain further alleged that I.S.I. breached its warranties "both express and implied" and, that I.S.I. was strictly liable to him for selling a machine which "was in a defective condition and which was dangerous and defective" and "unreasonably dangerous to the user."

I.S.I. denied these allegations and claimed that McLain's own negligence was the "cause of his alleged injuries" and that the machine "was not in its original, unaltered and unmodified condition at the time of the subject accident."

On April 20, 1998, Dana Corporation moved for a partial summary judgment and sought a dismissal of that portion of McLain's tort action that alleged it was negligent in failing to provide him with a safe place to work. It argued that regardless of the constitutionality of the 1996 amendments to KRS Chapter 342, McLain's tort claim was barred by the exclusivity provisions contained in KRS 342.690(1), a statute not among those changed by the Legislature in 1996.² The trial court agreed with the employer and summarily dismissed McLain's negligence claim against Dana Corporation on October 20, 1998.

Meanwhile, McLain learned through the discovery process that I.S.I. had not manufactured the machine that caused his head injury, but merely had made one of its components. On May 18, 1998, McLain filed an amended complaint to add as defendants the entities which designed, manufactured, and installed the machine at Dana Corporation, the appellees, Bay Design and Paslin. McLain made the same allegations against these defendants that he had previously asserted solely against I.S.I. Both new defendants moved for summary judgment on the grounds that McLain's claims of negligence and strict liability were barred by the one-year statute of limitations, KRS 413.140(1)(a),³ and that his breach of warranty claim was barred by lack of privity.

McLain responded to these motions by arguing that he filed his amended complaint as soon as he discovered the actual designers and manufacturers of the alleged defective machine. He contended that as to his negligence and strict liability claims he should be given the benefit of the "discovery rule" as defined in Louisville Trust Co. v. Johns — Manville Products Corp., Ky., 580 S.W.2d 497 (1979). He contended that his breach of warranty claim was timely filed because of the fouryear statute of limitations provided in KRS 355.2-725. He claimed he should come within the coverage of the language of KRS 355.2-318 for breach of warranty "to the buyer of the defective product and to any natural person who is in the family or household of the buyer or who is a guest in his home." McLain argued that to give the statute the interpretation urged by Bay Design and Paslin would result in the statute becoming "meaningless" when the injured party is an employee of a corporation/buyer of the defective product.

On October 20, 1998, the trial court granted Bay Design's and Paslin's motions for summary judgment. The order dismissing McLain's complaint against these defendants, as well as the summary judgment in favor of Dana Corporation, included finality language which allowed McLain to proceed with this appeal.

I. CONSTITUTIONALITY OF THE WORKERS' COMPENSATION ACT

McLain advances several arguments in support of his contention that the Workers' Compensation Act is unconstitutional. He argues that the Act impairs an employee's jural rights to recover against his employer for his injury or death and claims support from the recent Supreme Court case of Williams v. Wilson, Ky., 972 S.W.2d 260 (1998). However, as the Dana Corporation correctly asserts, McLain's constitutional attack on the Workers' Compensation Act is not new. Certainly, if the Act were mandatory, the jural rights doctrine would be implicated, as was reflected in our highest Court's review of the original act passed in 1914.⁴ We recognize that "[t]he right of every individual in society to access a system of justice to redress wrongs is basic and fundamental to our common law heritage, protected by Sections 14, 54, and 241 of our Kentucky Constitution."⁵ However, when the Legislature re-enacted the Worker's Compensation Act in 1916, it provided that coverage under the Act is not compulsory, but rather allows a worker to reject participation in the no-fault scheme and to maintain his right to seek common law remedies. Since this 1916 enactment, our courts have consistently held the Workers' Compensation Act to be constitutional.⁶ This Court is, of course, bound by this precedent.⁷ Furthermore, there is nothing in the Supreme Court's discussion of jural rights in Williams v. Wilson, supra, a case which held that KRS 411.184(1) offended the constitutional right to seek punitive damages, that implicates the viability of the Workers' Compensation Act, or that would justify this Court's failure to follow the settled precedent concerning the Act's constitutionality.

McLain also specifically challenges the constitutionality of KRS 342.395(1), the "opt-out" provision of the Act, which provides, in part, as follows:

Where an employer is subject to this chapter, then every employee of that employer, as a part of his contract of hiring ... shall be deemed to have accepted all the provisions of this chapter and shall be bound thereby unless he shall have filed, prior to the injury or incurrence of occupational disease, written notice to the contrary with the employer; and the acceptance shall include all of the provisions of this chapter with respect to traumatic personal injury, silicosis, and any other occupational disease. However, before an employee's written notice of rejection shall be considered effective, the employer shall file the employee's notice of rejection with the Department of Workers' Claims.

In his brief, McLain claims that he did not know that he could reject coverage under the Act. He argues that since the statute provides for a worker's implied consent to the statutory scheme, the election was not, in fact, voluntary.

Dana Corporation claims that by accepting temporary total disability income benefits and medical benefits totaling nearly $60,000, McLain has "waived any constitutional challenge" in this regard. It also points to cases upholding the implied consent aspects of the Act, particularly Wells v. Jefferson County, supra, n. 6, in which Kentucky's highest Court unanimously endorsed the Legislature's 1952 amendment to provide for implied consent to inclusion in the scheme:

[T]he opportunity of the employe to reject the Act by affirmative action on his part assures him adequate freedom of choice as to whether he will accept or reject the Act.

In those states in which compulsory...