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Rowan v. Sunflower Electric Power Corp.

United States District Court, D. Kansas

June 15, 2017

Michael Rowan, Plaintiff,
v.
Sunflower Electric Power Corporation; Mid-Kansas Electric Company, LLC; and Power Constructors, Inc., Defendants.

          MEMORANDUM & ORDER

          JOHN W. LUNGSTRUM, UNITED STATES DISTRICT JUDGE

         On August 29, 2013, plaintiff sustained electrical injuries when he was installing a guard structure under an overhead power transmission line during a utility line construction project near Medicine Lodge, Kansas. At the time of his injury, plaintiff was employed by and performing work for his employer, Track Utilities, LLC (“Track”). In this lawsuit, plaintiff asserts negligence claims against the owner of the transmission line, Mid-Kansas Electric Company, LLC (“Mid-Kansas”); the operator of the transmission line, Sunflower Electric Power Corporation (“Sunflower”); and the contractor responsible for the utility line construction project, Power Constructors, Inc. (“Power”).

         This matter is presently before the court on numerous motions. Plaintiff has filed a motion for partial summary judgment on defendants' respective affirmative defenses that plaintiff's claims are barred by the exclusive remedy provision of the Kansas Workers' Compensation Act. Defendants have also filed motions for summary judgment on the exclusive-remedy defense as well as issues relating to foreseeability, breach of duty, intervening cause and punitive damages. In response to defendants' motions, plaintiff has filed a motion to ignore certain evidence submitted by defendants in support of their motions for summary judgment. Plaintiff has also moved to strike portions of the reply briefs filed by defendants on the grounds that those briefs rely on new evidence and arguments not addressed in defendants' motions and because defendants have impermissibly replied to plaintiff's responses to defendants' statements of uncontroverted facts.

         As will be explained, the court grants Power's motion for summary judgment because plaintiff's claims against Power are barred by the exclusive remedy provision of the Kansas Workers' Compensation Act. Plaintiff's cross-motion on that issue is denied. Factual disputes in the record preclude the court from resolving on summary judgment whether plaintiff's claims against Mid-Kansas and Sunflower are barred by the exclusive remedy provision and, accordingly, the court denies plaintiff's motion for summary judgment on that issue and the cross-motion filed by Mid-Kansas and Sunflower. The balance of the summary judgment motion filed by Mid-Kansas and Sunflower is denied because material factual issues exist concerning foreseeability, breach, proximate cause and the availability of punitive damages. The court will address plaintiff's motions concerning evidentiary issues as pertinent below.[1]

         I. Facts

         Defendant Sunflower Electric Power Corporation (“Sunflower”) provides electric and transmission services to its distribution cooperatives in central and western Kansas. Sunflower operates and maintains nearly 2300 miles of transmission line and 48 substations through an operating agreement with defendant Mid-Kansas Electric Company, LLC (“Mid-Kansas”), the owner of the transmission line. Defendant Power Constructors, Inc. (“Power”) is a construction contractor in the electrical utility industry and regularly contracts with utility companies for, among other services, the construction of transmission lines.

         In March 2008, Power entered into a Master Services Agreement with Sunflower and Mid-Kansas.[2] That agreement expressly requires Power to “perform all design and construction services, and provide all material, equipment, tools and labor, necessary to complete the Work as [Sunflower] may from time to time request.” The agreement defines the “contract documents” to include “any task orders or Change Orders modifying or setting forth a scope of Work.” The agreement further requires that Power “shall provide through itself or Subcontractors the necessary supervision, labor, inspection, testing, start-up, material, equipment, machinery, temporary utilities and other temporary facilities to permit [Power] to complete construction” of a given project.

         In 2012, Sunflower and Mid-Kansas initiated a large project which involved constructing and rebuilding over 70 miles of transmission line. That project was divided into several “smaller” projects or phases, many of which were contracted separately between Power and Sunflower/Mid-Kansas. Pertinent here, and as contemplated by the Master Services Agreement, Power and Sunflower/Mid-Kansas executed a task order covering one segment of the 70-mile project.[3] That task order defined the project as the “Harper to Barber 138kV Transmission Line Rebuild” and identified the “scope of services” to include providing “construction services to rebuild the 138kV transmission line from Harper Substation to the newly constructed Barber Substation.”[4] Paul Mehlhaff was Sunflower's project manager for the project and James Stovall was Power's “on-site representative” for the project. Power, in turn, subcontracted a portion of its work on the project-the construction of the transmission line from Barber Substation to Flat Ridge Substation-to Track Utilities, LLC.

         On August 19, 2013, a pre-construction meeting was held and was attended by representatives from Power, Sunflower and Track. Mr. Stovall attended on behalf of Power; Mr. Mehlhaff attended on behalf of Sunflower; and plaintiff, Daryl Kimmel, Randal Miller and Matt Heath attended on behalf of Track. Mr. Kimmel was the general foreman for the Track crew on the project and Mr. Heath was Track's project manager. Plaintiff and Mr. Miller were both apprentice linemen employed by Track. At the meeting, the scope of the project and the construction schedule were discussed. The project “start date” was identified as August 19, 2013 and the outage schedule for the Barber to Flat Ridge transmission line was established as October 1, 2013 through November 5, 2013. Sunflower's evidence suggests that Track was specifically instructed that it could not build or erect guard structures until the outage on October 1, 2013.[5] Plaintiff's evidence, however, suggests that Track notified Sunflower at the pre-construction meeting of its intent to build and erect guard structures prior to the outage.

         On August 29, 2013, Mr. Rowan and other members of Track's crew, in connection with the Barber to Flat Ridge project, were building a guard structure underneath an energized, uninsulated transmission line. At some point, Mr. Rowan lost control of a wooden pole that he was attempting to maneuver and the pole made contact with the overhead line. Mr. Rowan sustained electrical injuries as a result.

         Additional facts will be provided as they related to the specific arguments raised by the parties in their submissions.

         II. Summary Judgment Standard

         “Summary judgment is appropriate if the pleadings, depositions, other discovery materials, and affidavits demonstrate the absence of a genuine issue of material fact and that the moving party is entitled to judgment as a matter of law.” Water Pik, Inc. v. Med-Systems, Inc., 726 F.3d 1136, 1143 (10th Cir. 2013) (quotation omitted); see Fed. R. Civ. P. 56(a). A factual issue is genuine “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Water Pik, Inc., 726 F.3d at 1143 (quotation omitted). “The nonmoving party is entitled to all reasonable inferences from the record; but if the nonmovant bears the burden of persuasion on a claim at trial, summary judgment may be warranted if the movant points out a lack of evidence to support an essential element of that claim and the nonmovant cannot identify specific facts that would create a genuine issue.” Id. at 1143-44.

         The legal standard does not change if the parties file cross-motions for summary judgment. Each party has the burden of establishing the lack of a genuine issue of material fact and entitlement to judgment as a matter of law. Atlantic Richfield Co. v. Farm Cr. Bank, 226 F.3d 1138, 1148 (10th Cir. 2000).

         III. Exclusive Remedy/Statutory Employer

         Defendants assert that plaintiff's claims are barred by the Kansas Workers' Compensation Act, K.S.A. § 44-501 et seq. In pertinent part, the Kansas Workers' Compensation Act provides:

Except as provided in the workers compensation act, no employer, or other employee of such employer, shall be liable for any injury . . . for which compensation is recoverable under the workers compensation act nor shall an employer be liable to any third party for any injury or death of an employee which was caused under circumstances created a legal liability against a third party and for which workers compensation is payable by such employer.

K.S.A. § 44-501b(d). This section, commonly known as the exclusive remedy provision, precludes workers who can recover under the act from bringing a common law negligence action against an employer or fellow employee. See Herrell v. National Beef Packing Co., 259 P.3d 663, 674 (Kan. 2011) (quoting Hollingsworth v. Fehrs Equip. Co., 729 P.2d 1214 (Kan. 1986)). The exclusive remedy provision of the Workers' Compensation Act also applies to situations involving contractors and subcontractors. K.S.A. § 44-503(a) provides:

Where any person (in this section referred to as the principal) undertakes to execute any work which is a part of the principal's trade or business or which the principal has contracted to perform and contracts with any other person (in this section referred to as the contractor) for the execution by or under the contractor of the whole or any part of the work undertaken by the principal, the principal shall be liable to pay to any worker employed in the execution of the work any compensation under the workers compensation act which the principal would have been liable to pay if that worker had been immediately employed by the principal.

         Section 44-503(a) extends the application of the act to certain entities which are not the immediate employers of the injured worker, but rather are “statutory employers.” Robinett v. Haskell Co., 12 P.3d 411, 414 (Kan. 2000).

         All three defendants assert that plaintiff's claims are barred because they qualify as “statutory employers” under the act. Sunflower and Mid-Kansas assert in their motion for summary judgment that they qualify as statutory employers because the work that gave rise to plaintiff's injury was part of their “trade or business” under the first alternative set forth in § 44-503(a). Power asserts in its motion for summary judgment that it qualifies as a statutory employer because the work that gave rise to plaintiff's injury was work that Power had “contracted to perform” under the second alternative set forth in § 44-503(a). According to defendants, then, summary judgment is appropriate because plaintiff's claims are barred by § 44-501b(d).[6] Plaintiff, on the other hand, contends that he is entitled to summary judgment on this defense because the uncontroverted facts demonstrate that none of the defendants qualify as statutory employers. As will be explained, material fact issues exist as to whether Sunflower and Mid-Kansas are statutory employers and the court denies the parties' cross-motions for summary judgment on that issue. With respect to Power, the uncontroverted evidence demonstrates that Power was plaintiff's statutory employer such that plaintiff's exclusive remedy lies under the Workers' Compensation Act. Power's motion for summary judgment, then, is granted and plaintiff's motion with respect to Power is denied.

         A. Sunflower/Mid-Kansas

         Sunflower and Mid-Kansas (collectively, the “Utilities”) assert that they are plaintiff's statutory employer because the work that gave rise to plaintiff's injury was part of the Utilities' “trade or business” under the first alternative set forth in § 44-503(a). The Utilities and plaintiff have both moved for summary judgment on this issue and they agree on the applicable tests utilized by Kansas courts in resolving the issue. In Hanna v. CRA, Inc., 409 P.2d 786 (Kan. 1966), the Kansas Supreme Court set forth the following tests to determine whether the work being performed is a part of the principal's trade or business:

(1) Is the work being performed by the independent contractor and the injured employee necessarily inherent in and an integral part of the principal's trade or business?
(2) Is the work being performed by the independent contractor and the injured employee such as would ordinarily have been done by the employees of the principal?

Id. at 789. The Hanna court further noted that “[i]f either of the foregoing questions is answered in the affirmative the work being done is part of the principal's ‘trade or business, ' and the injured employee's sole remedy against the principal is under the Workmen's Compensation Act.” Id. The test, then, is a disjunctive one and the Utilities need only satisfy one of the Hanna tests. Price ex rel. Price v. Western Resources, Inc., 232 F.3d 779, 785 n.4 (10th Cir. 2000) (applying Kansas law).

         In Bright v. Cargill, Inc., 837 P.2d 348, 359 (Kan. 1992), the Kansas Supreme Court clarified that the question under the first Hanna test is not whether the subcontractor's work is useful, necessary or even indispensable to the principal's business. Rather, the first Hanna test is whether other similar businesses use their own employees to perform the kind of work that was being performed by the injured worker or whether similar businesses contract out that kind of work. Id. The second Hanna test is met where it is “shown that the employees of the principal ordinarily do the type of work that was being done by the injured” worker. Price, 232 F.3d at 787. Thus, the first test looks to industry practice and the second test looks at the individual principal's practice. Id. Both tests are intended to prove the same fact-that the work being done was “part of the principal's trade or business.” Id.

         1. First Hanna Test

         The court first examines the parties' arguments and evidence relating to industry practice. While the Utilities assert that they are entitled to summary judgment under both Hanna tests, they have come forward with no evidence or argument relating to industry practice under the first Hanna test. Rather, the Utilities' evidence relates solely to the Utilities' own practices. The Utilities, then, have not shown that they are entitled to summary judgment under the first Hanna test. Plaintiff's motion for summary judgment on this issue is based entirely on the affidavit and report of his liability expert, Donald R. Johnson. Mr. Johnson opines that when “smaller utilities” like Sunflower and Mid-Kansas undertake projects of the same magnitude as the 70-mile project in this case, those utilities typically do not maintain sufficient in-house resources to perform the work such that those types of projects are necessarily performed by independent contractors. Plaintiff's argument, then, broadly frames the pertinent “work” by examining the project as a whole.

         Plaintiff directs the court to no authority supporting his interpretation of the applicable “work.” Indeed, none of the parties have briefed the issue of whether that focus is appropriate or whether “the work” is more appropriately determined by examining the specific task or activity performed by plaintiff at the time of the injury. The Court in Bright, relying on Larson's ...


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