Governmental entity is not a “person” and thus “up the ladder” workers compensation liability for subcontractor does not apply: UNINSURED EMPLOYERS’ FUND V. CITY OF SALYERSVILLE (SC 6/19/2008)

UNINSURED EMPLOYERS’ FUND V. CITY OF SALYERSVILLE
WORKERS COMP:  "Up the ladder" liability does not apply to governmental entity (not a person)
2007-SC-000183-WC.pdf
PUBLISHED: AFFIRMING
OPINION OF THE COURT
FROM COURT OF APPEALS
DATE RENDERED: 6/19/2008

The Supreme Court held that statute deeming up-the-ladder contractor to be employer if claimant’s direct employer fails to provide workers’ compensation coverage does not hold governmental entity liable as up-the-ladder employer of uninsured subcontractor’s employees.

The City had maintained from the outset that it is not a contractor under KRS 342.610(2). As noted in Mitchell v. Hadl, 816 S.W.2d 183, 185 (Ky.1991), and previously in First National Bank of Louisville v. Progressive Casualty Insurance Co., 517 S.W.2d 226, 230 (Ky.1974), the court normally confines itself closely to the analysis and theories presented by the parties. To do so in the present case would, however, result in a clear misapplication of KRS 342.610(2). Substantial evidence could not support a finding against the City under a correct interpretation of either subsection of KRS 342.610(2) because the City is not a “person” and, therefore, could not be a contractor for the purposes of imposing up-the-ladder liability. It is unnecessary under the circumstances to consider whether KRS 342.610(2)(a) applies to excavation for the purpose of installing sewer lines.  Decision of Court of Appeals affirmed.

By Michael Stevens, ed.