Sheets v. Ford Motor Co.

• Decision Date: 17 June 2021
• Docket Number: 2019-SC-0208-DG
• Court: United States State Supreme Court — District of Kentucky
• Parties: Clara Susan SHEETS, Executrix of the Estate of Steven Ray Sheets, Appellant v. FORD MOTOR COMPANY, Appellee

626 S.W.3d 594

Clara Susan SHEETS, Executrix of the Estate of Steven Ray Sheets, Appellant

v.FORD MOTOR COMPANY, Appellee

2019-SC-0208-DG

Supreme Court of Kentucky.

JUNE 17, 2021

COUNSEL FOR APPELLANT: Joseph Donald Satterley, James Garrett Cambron, Paul James Ivie, Paul Jason Kelley, Louisville, James Eric Kiser, Satterley & Kelley PLLC, Kevin Crosby Burke, Louisville, Jamie Kristin Neal, Burke Neal PLLC.

COUNSEL FOR APPELLEE: Robert Thaddeus Keal, Turner, Keal & Button, PLLC, Paul D. Hudson, Miller, Canfield, Paddock and Stone, PLC.

OPINION OF THE COURT BY JUSTICE KELLER

Steven Ray Sheets filed suit against Ford Motor Company alleging Ford was one of the parties responsible for causing his malignant mesothelioma

. Approximately two years after the suit was filed, and after extensive discovery was conducted, Ford moved the trial court to grant summary judgment in its favor. The trial court denied Ford's motion in a one-sentence hand-written order. Ford appealed to the Court of Appeals, which vacated the trial court's order and remanded for the trial court to enter another order with a basis for its determination. This Court then granted Sheets's motion for discretionary review to determine whether Ford had a right to an interlocutory appeal of the trial court's denial of its summary judgment motion. After review, because neither the Court of Appeals nor this Court has appellate jurisdiction of this unauthorized interlocutory appeal, we vacate and remand to the trial court for further proceedings in this case.

I. BACKGROUND

In 2015, Sheets was diagnosed with malignant mesothelioma

. Shortly thereafter, he filed suit in Jefferson Circuit Court against Ford and multiple other defendants alleging that he had contracted mesothelioma as a result of his exposure to asbestos and that the defendants were the cause of his exposure. Tragically, within two weeks of the filing of his suit, Sheets died of a self-inflicted gunshot wound. Clara Susan Sheets, executrix of his estate, was substituted as plaintiff, thereby reviving his lawsuit.¹

Just over two years after suit was filed, Ford filed a motion for summary judgment, making three arguments. First, Ford argued it was immune from tort liability as an "up-the-ladder," or statutory employer, under Kentucky Revised Statute (KRS) 342.610(2)(b) of the Kentucky Workers’ Compensation Act (Act). Second, Ford argued that it had no duty to warn independent contractors. Finally, Ford argued there was a lack of proof of causation. The trial court denied Ford's motion for summary judgment in a one-sentence hand-written order that contained no analysis or reasoning.

Ford appealed to the Court of Appeals arguing it was entitled to " ‘up-the-ladder’ immunity" under the exclusive remedy provision of the Act found in KRS 342.690. Ford alleged it had a matter of right appeal on this issue under Ervin Cable Construction, LLC v. Lay , 461 S.W.3d 422 (Ky. App. 2015). Sheets filed a motion to dismiss Ford's appeal arguing that the trial court's order denying summary judgment was interlocutory and not appealable. The Court of Appeals denied Sheets's motion to dismiss but held that "any jurisdictional issues may be revisited by the panel ... considering the merits of the appeal."

Subsequently, the merits panel of the Court of Appeals held that it had "jurisdiction under Ervin to review an order denying summary judgment in a case where the trial court has determined that the defendant is not entitled to up-the-ladder immunity as a matter of law." The Court of Appeals went on to note, however, that the trial court's order lacked any basis for its ruling, and therefore the Court of Appeals could not determine if it had jurisdiction to review the order. Accordingly, the Court of Appeals vacated the trial court's order denying Ford's motion for summary judgment and remanded the matter to the trial court "with direction to enter an order specifically setting forth the basis for its determination."

Sheets then moved this Court for discretionary review to determine whether the Court of Appeals had jurisdiction to review the trial court's denial of summary judgment, as Sheets argued it was a non-final, non-appealable interlocutory order. We granted Sheets's motion.

II. ANALYSIS

Under Kentucky law, an injured worker's recovery from his employer is limited to workers’ compensation benefits unless he has expressly opted out of the workers’ compensation system. Under Kentucky's exclusive remedy provision found in KRS 342.690, the injured worker is not entitled to tort damages from the employer or its employees for work-related injuries. Further, under this statute, the term "employer" is construed broadly to include not only the worker's direct employer, but also a "contractor" utilizing the employee's direct employer as a subcontractor. Beaver v. Oakley , 279 S.W.3d 527, 530 (Ky. 2009) (footnote omitted). This exclusive remedy provision is often referred to as providing "up-the-ladder" immunity for contractors.²

Ford argues that it is entitled to "up-the-ladder" immunity because it subcontracted with Sheets's direct employer. It further argues that the trial court's denial of its summary judgment motion was a denial of a substantial claim of immunity that is immediately appealable under this Court's decision in Breathitt County Board of Education v. Prater , 292 S.W.3d 883, 886 (Ky. 2009), and the Court of Appeals’ decision in Ervin Cable , 461 S.W.3d 422.

Generally, Kentucky Rule of Civil Procedure (CR) 54.01 limits "appealable judgment[s]" to "final order[s] adjudicating all the rights of all the parties in an action or proceeding." However, there are exceptions to this final judgment rule. For example, CR 54.02 permits the trial court to designate as "final" and hence appealable a "judgment upon one or more but less than all of the claims or parties" upon a determination that "there is no just reason for delay" in cases involving multiple claims or multiple parties. CR 65.07 permits an interlocutory appeal from an order "grant[ing], den[ying], modif[ying], or dissolv[ing] a temporary injunction[.]" KRS 22A.020(4) permits the Commonwealth an interlocutory appeal under certain circumstances in criminal cases. KRS 417.220 allows for interlocutory appeals of certain orders regarding arbitration, and KRS 425.600(1) deems any "order of a court appointing or refusing to appoint a receiver ... a final order for the purpose of an appeal."

This Court recognized an application of the federal collateral order doctrine as another exception to the final order rule in Prater , 292 S.W.3d 883. We acknowledged that some non-final orders "address substantial claims of right which would be rendered moot by litigation and thus are not subject to meaningful review in the ordinary course following a final judgment." Id. at 886. In the context of that case, we held that "an order denying a substantial claim of absolute immunity is immediately appealable even in the absence of a final judgment." Id. at 887.

Since our Prater decision, we have refined our application of its principles. In Commonwealth v. Farmer , 423 S.W.3d 690 (Ky. 2014), we explained that merely being denied a claimed "immunity" was not necessarily sufficient to invoke the doctrine as an exception to the final order rule. We explained that the collateral order doctrine requires an order that (1) conclusively decides an important issue separate from the merits of the case; (2) is effectively unreviewable following final judgment; and (3) involves a substantial public interest that would be imperiled absent an immediate appeal. Id. at 696-97. In Farmer , we quoted from the United States Supreme Court's decision in Will v. Hallock , 546 U.S. 345, 126 S.Ct. 952, 163 L.Ed.2d 836 (2006), when discussing "the driving force of collateral order jurisprudence." That Court stated,

In each case, some particular value of a high order was marshaled in support of the interest in avoiding trial: honoring the separation of powers, preserving the efficiency of government and the initiative of its officials, respecting a State's dignitary interests, and mitigating the government's advantage over the individual. That is, it is not mere avoidance of a trial, but avoidance of a trial that would imperil a substantial public interest, that counts when asking whether an order is "effectively" unreviewable if review is to be left until later.

Will , 546 U.S. at 352-53, 126 S.Ct. 952 (emphasis added). We noted that in Prater , "the threatened disruption of government services due to the costs and burden of litigation presented a compelling public interest sufficient to entitle the Breathitt County Board of Education to immediate review of the trial court's denial of absolute immunity." Farmer , 423 S.W.3d at 697 (citing Prater , 292 S.W.3d at 887 ). We went on to hold that Farmer's claim of immunity from prosecution under KRS 503.085³ did not involve such a substantial public interest, as his "interest in asserting immunity and avoiding prosecution ... is purely personal in nature." Id.

The year after Farmer was decided, the Court of Appeals, in Ervin Cable , 461 S.W.3d 422, was tasked with answering the exact question before us today – whether, under the collateral order doctrine, an appellate court has jurisdiction to review a trial court's denial of a motion for summary judgment which relies on the exclusive remedy provision of the Act. Relying on Prater , but without mentioning Farmer , the Court of Appeals held that it had jurisdiction to review the denial of summary judgment because "the denial of a substantial claim of immunity is an exception to the finality rule that interlocutory orders are not immediately appealable." Id. at 423 (citing Prater , 292 S.W.3d 883 ). In Ervin Cable , the Court of Appeals did not consider the three-part test described in Farmer .

Five years after Farmer , this Court again sought to clarify the application of the collateral order doctrine in two cases rendered...