RENDERED: JUNE 17, 2021 TO BE PUBLISHED
Supreme Court of Kentucky 2019-SC-0208-DG
CLARA SUSAN SHEETS, EXECUTRIX OF APPELLANT THE ESTATE OF STEVEN RAY SHEETS
ON REVIEW FROM COURT OF APPEALS V. NO. 2018-CA-0044 JEFFERSON CIRCUIT COURT NO. 15-CI-003525
FORD MOTOR COMPANY APPELLEE
OPINION OF THE COURT BY JUSTICE KELLER
VACATING AND REMANDING
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
1 In Estate of Benton v. Currin, 615 S.W.3d 34 (Ky. 2020), we clarified that KRS 395.278 and CR 25.01 operate jointly, and that substitution, CR 25.01, within the statutory time period, KRS 395.278, accomplishes revival.
2 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
3 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
2 There is some dispute as to whether KRS 342.690 actually confers immunity from suit, as opposed to immunity from liability, on employers. We need not, and do not, decide that issue today.
4 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
5 Court’s decision in Will v. Hallock, 546 U.S. 345 (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 (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
3KRS 503.085 states, in relevant part, “A person who uses force as permitted in KRS 503.050, 503.055, 503.070, and 503.080 is justified in using such force and is immune from criminal prosecution and civil action for the use of such force . . .”
6 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 just months apart. First,
in Maggard v. Kinney, 576 S.W.3d 559 (Ky. 2019), we were tasked with
determining whether the denial of a judicial statements privilege in litigation
between two physicians fell within the collateral order doctrine. We
acknowledged that “[a] claim of sovereign or governmental immunity satisfies
the criteria” of the collateral order doctrine, but that “many other theories
couched as immunity will not.” Id. at 566. In a footnote, we noted that “[t]his
Court has generally limited interlocutory jurisdiction to sovereign,
governmental and official immunity claims,” id. at 566 n.8, but that “Kentucky
courts have in some instances allowed the collateral order doctrine to expand
beyond its logic” and the criteria as laid out in Farmer. Id. (internal quotation
marks and citation omitted). We further noted that “no governmental entity or
official is a party to this long-running litigation and thus the prospects of
immunity justifying a collateral order interlocutory appeal are slim to none.” Id.
We went on to hold that the judicial statements privilege was not a form
of immunity and did not allow for an interlocutory appeal under the collateral
7 order doctrine. Id. We cited to the Sixth Circuit’s decision in Kelly v. Great
Seneca Financial Corp., 447 F.3d 944 (6th Cir. 2006), which relied heavily on
Will, 546 U.S. 345, for its emphasis “on limiting the collateral order exception
to cases involving a substantial public interest that would be threatened by a
trial or other proceedings on the merits of the full case.” Id. at 568. Finally, we
held that a denial of the judicial statements privilege, or even witness
immunity, “does not merit immediate appellate review because it does not
satisfy the collateral order doctrine requirements of an order involving a
substantial public interest that will be imperiled if appellate review is delayed
until after further proceedings and final judgment.” Id. (emphasis added).
Two months after Maggard, we rendered our decision in Hampton v.
Intech Contracting, LLC, 581 S.W.3d 27 (Ky. 2019), in which we had to
determine whether a trial court’s grant of partial summary judgment in a
workers’ compensation enforcement action was immediately appealable in the
absence of CR 54.02 finality language. We repeated our observation from
Maggard that “Kentucky courts have in some instances allowed the collateral
order doctrine to expand beyond its logic” and the criteria as laid out in Farmer
and expressly concluded “that Ervin Cable is such a case.” Id. at 36. We went
on to hold that “[w]hether or not the circuit court had jurisdiction to consider a
workers’ compensation enforcement action against Intech/Zurich is not a
matter of ‘substantial public interest’” and accordingly determined that the
Court of Appeals lacked jurisdiction to consider the interlocutory order in that
case. Id.
8 As the foregoing case recitations illustrate, this Court has spent
considerable effort over the last several years clarifying and limiting the
collateral order doctrine as an exception to the final judgment rule for appeals.
A few things become clear in reviewing the progression of our jurisprudence in
this area. First, all three elements of the collateral order doctrine as laid out in
Farmer must be met before an appellate court has jurisdiction to review an
interlocutory order. Those three elements are as follows: the interlocutory order
must (1) conclusively decide an important issue separate from the merits of the
case; (2) be effectively unreviewable following final judgment; and (3) involve a
substantial public interest that would be imperiled absent an immediate
appeal. Farmer, 423 S.W.3d at 696-97. Next, we have been placing an
increasing emphasis on the third element—that the interlocutory order must
involve a substantial public interest that would be imperiled absent an
immediate appeal. Finally, not all denials of a claim of immunity meet this
element. In fact, in instances when no governmental entity or official is a party
to the case and there is no concern with “preserving the efficiency of
government,” it is unlikely that a denial of a party’s claim of immunity will meet
this final element. See Maggard, 576 S.W.3d at 566; Will, 546 U.S. at 352-53.
In applying this framework to the case at bar, we conclude that the trial
court’s denial of up-the-ladder immunity in this case does not meet the three-
element test articulated in Farmer, as it does not involve a substantial public
interest that would be imperiled absent an immediate appeal. No governmental
entity or official is a party to the action. There is no concern with government
9 efficiency, the disruption of government services due to the costs and burden of
litigation, or public coffers placed at risk. The interests at stake in this case are
purely personal to Ford and Sheets without an impact on the greater public
interest. Because the interlocutory order at issue in this case does not meet the
requirements of the collateral order doctrine, the Court of Appeals lacked
jurisdiction to hear the appeal, as do we. Accordingly, we vacate the Court of
Appeals’ decision and remand to the trial court for further proceedings.
In vacating and remanding, we recognize that we must address the Court
of Appeals’ holding in Ervin Cable as it stands directly contrary to what we hold
today. We reaffirm the sentiment we expressed in Hampton that the Court of
Appeals in Ervin Cable “allowed the collateral order doctrine to expand beyond
its logic” and the criteria as laid out in Farmer. Hampton, 581 S.W.3d at 36. As
such, we expressly overrule Ervin Cable’s holding that under the collateral
order doctrine, an appellate court has jurisdiction to review a trial court’s
denial of a motion for summary judgment based on up-the-ladder immunity.
Finally, in further support of our conclusion today, we note that the
legislature did not see fit to include a right to an immediate appeal of a denial
of up-the-ladder immunity in the Workers’ Compensation Act. KRS 342.690
includes no such provision. This stands in stark contrast to other instances in
which our General Assembly has expressly provided for a right to an immediate
appeal in certain situations. Some examples, as mentioned before, include KRS
22A.020(4) (permitting the Commonwealth an interlocutory appeal under
certain circumstances in criminal cases), KRS 417.220 (allowing for
10 interlocutory appeals of certain orders regarding arbitration), and KRS
425.600(1) (deeming any “order of the court appointing or refusing to appoint a
receiver . . . a final order for the purpose of an appeal”). Accordingly, we see no
statutory authorization for an immediate interlocutory appeal of a denial of up-
the-ladder immunity.
III. CONCLUSION
For the foregoing reasons, we vacate the opinion of the Court of Appeals
and remand this matter to the trial court for further proceedings.
All sitting. All concur. VanMeter, J., concurs by separate opinion in
which Nickell, J., joins.
VANMETER, J., CONCURRING: I fully concur with Justice Keller’s well-
reasoned opinion. I write separately since we are overruling Ervin Cable
Construction, LLC v. Lay, 461 S.W.3d 422 (Ky. 2015), as to which I was the
presiding judge and primary author of that opinion; one of my colleagues on
that panel was Justice Nickell. The Ervin Cable opinion relied exclusively on
this Court’s opinion in Prather v. Breathitt County Board of Education, 292
S.W.3d 883 (Ky. 2009) and that opinion’s broad statements regarding
interlocutory appeals on denials of immunity. While Prather addressed a
government entity’s claim of immunity, the portion of the opinion addressing
that Board of Education’s entitlement to an interlocutory appeal spoke of
immunity with no indication that immunity claims, other than governmental,
were not included. Id. at 886-87. Since Prather, however, this Court has
further clarified the parameters of interlocutory appeals regarding immunity.
11 Hampton v. Intech Contracting, LLC, 581 S.W.3d 27 (Ky. 2019); Maggard v.
Kinney, 576 S.W.3d 559 (Ky. 2019); Commonwealth v. Farmer, 423 S.W.3d 690
(Ky. 2014).4
While Ford argues that Ervin Cable was correctly decided,
notwithstanding the Farmer three-part test, our more recent decisions have
clearly moved to reaffirm our longstanding prohibition of piecemeal appeals,
and interlocutory appeals in particular, absent compelling reasons. While
consistency of thought or point of view can be a virtue, especially for judges, at
some point a body of jurisprudence leads to the inescapable conclusion that
adherence to a former view is no longer tenable. For me, this is such a point.
Justice Nickell has authorized me to state that he joins in this concurrence.
Nickell, J., joins.
4 The majority opinion points out that Ervin Cable did not consider Farmer. This failure was apparently due to the fact, as disclosed by the parties’ briefs in Ervin Cable, that the employer seeking interlocutory review cited only to Prather and Kentucky Employers Mutual Insurance v. Coleman, 236 S.W.3d 9 (Ky. 2007). Additionally, the employee, Lay, did not contest that issue.
12 COUNSEL FOR APPELLANT:
Joseph Donald Satterley James Garrett Cambron Paul James Ivie Paul Jason Kelley James Eric Kiser Satterley & Kelley PLLC
Kevin Crosby Burke 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