Scotty's Contracting and Stone, LLC v. Ashley Graves

Opinion

RENDERED: AUGUST 28, 2026; 10:00 A.M.

TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2024-CA-0287-MR

SCOTTY’S CONTRACTING AND STONE, LLC APPELLANT

APPEAL FROM BARREN CIRCUIT COURT v. HONORABLE JOHN T. ALEXANDER, JUDGE ACTION NO. 13-CI-00487

ASHLEY GRAVES; DARYL PRICE; GREG MEREDITH; JAMIE GROCE; JOHN MCINTOSH; JON LAM; KENTUCKY ASSOCIATED GENERAL CONTRACTORS SELF INSURANCE FUND; KEVIN GERALDS; MARK LOVE; STEVE NELSON; STEVEN NELSON, ADMINISTRATOR OF THE ESTATE OF LINDA NELSON; TOM LAPHAM; VANMETER CONTRACTING, INC.; VELMA DECKER, EXECUTRIX OF THE ESTATE OF KENNETH DECKER; AND VELMA DECKER, INDIVIDUALLY APPELLEES

AND NO. 2024-CA-0352-MR

SCOTTY’S CONTRACTING AND STONE, LLC APPELLANT

APPEAL FROM BARREN CIRCUIT COURT v. HONORABLE JOHN T. ALEXANDER, JUDGE ACTION NO. 13-CI-00487

ASHLEY GRAVES; DARYL PRICE; GREG MEREDITH; JAMIE GROCE; JOHN MCINTOSH; JON LAM; KENTUCKY ASSOCIATED GENERAL CONTRACTORS SELF INSURANCE FUND; KEVIN GERALDS; LINDA NELSON; MARK LOVE; STEVE NELSON; STEVEN NELSON, ADMINISTRATOR OF THE ESTATE OF LINDA NELSON; TOM LAPHAM; VANMETER CONTRACTING, INC.; VELMA DECKER, EXECUTRIX OF THE ESTATE OF KENNETH DECKER; AND VELMA DECKER, INDIVIDUALLY APPELLEES

OPINION

REVERSING AND REMANDING WITH INSTRUCTIONS

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BEFORE: ACREE, MCNEILL, AND TAYLOR, JUDGES. ACREE, JUDGE: Scotty’s Contracting and Stone, LLC (Scotty’s) appeals the Barren Circuit Court’s December 11, 2023 judgment as amended by Order entered February 1, 2024, and the interlocutory orders and judgments made final by the

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final judgment as amended.1 We reverse the judgment and remand with instructions to dismiss all claims.

BACKGROUND AND PROCEDURE

In 2011, the Kentucky Transportation Cabinet (KTC) awarded a contract to Scotty’s for a road construction project. Scotty’s subcontracted with VanMeter Contracting, Inc. (VanMeter) to build retaining walls using large premanufactured forms. The workplace accident and pursuit of workers’ compensation VanMeter employees successfully constructed several sections of retaining wall before October 8, 2012. On that date, they were pouring concrete into a form they placed for the next section when it raised, toppled, and collapsed, killing VanMeter employee Kenneth Decker and injuring three of his co-workers2 (Plaintiffs/Appellees). Meredith v. Decker, No. 2016-CA-000721-MR, 2018 WL 4054940, at *1 (Ky. App. Aug. 24, 2018).

1 Included were: April 18, 2016 Order; May 13, 2016 Order; April 23, 2021 Order; April 30, 2021 Consent Judgment, Assignment, and Forbearance; October 14, 2022 Order; March 9, 2023 Calendar Order, all made final and appealable by the trial court’s December 11, 2023 Findings of Fact, Conclusions of Law, and Judgment. Both Scotty’s and Plaintiffs/Appellees filed motions to amend the December 11, 2023 Judgment. The trial court granted only the Plaintiffs/Appellees’ motion and amended the judgment by Order entered February 1, 2024. Scotty’s moved to amend the new judgment, and the trial court denied that motion by Order entered March 11, 2024. 2 Those injured were John McIntosh, Steve Nelson, and Jamie Groce. With the Estate of Kenneth Decker and the loss-of-consortium claimants Velma Decker and Linda Nelson (substituted by her estate), this group is referred to as Plaintiffs/Appellees when not identified individually.

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Scotty’s and VanMeter had “secure[d] payment of compensation as required by” the Kentucky Workers’ Compensation Act, KRS3 342.0011 et seq. (the Act). KRS 342.690(1). No Plaintiff/Appellee opted out of the Act’s coverage and all of them pursued its benefits. The Act was thus Plaintiffs/Appellees’ “exclusive” remedy against their employer, “in place of all other liability of such employer . . . at law or in admiralty on account of” the workplace accident. Id.

Each Plaintiff/Appellee received workers’ compensation from VanMeter through its insurer. Plaintiff/Appellee Jamie Groce is an example.

As with all Plaintiffs/Appellees’ claims, there was never an issue about work-relatedness, typically analyzed in the context of causation. See, e.g., Vacuum Depositing, Inc. v. Dever, 285 S.W.3d 730, 732 (Ky. 2009) (discussing Workman presumption4). The Administrative Law Judge (ALJ) awarded Groce benefits based on a 54% permanent total disability rating. Groce v. VanMeter Contracting, Inc., 539 S.W.3d 677, 681 (Ky. 2018) (quoting KRS 342.165(1)).

But Groce placed the question of what actually caused the accident (primary and efficient cause) directly before the ALJ by “assert[ing] a claim for the 30% benefit enhancement . . . for a workplace injury ‘caused in any degree by the

3 Kentucky Revised Statutes.

4 In Kentucky, there is “a presumption that an unexplained workplace fall arises out of the employment unless the employer presents substantial evidence to show otherwise.” Vacuum Depositing, 285 S.W.3d at 733 (citing Workman v. Wesley Manor Methodist Home, 462 S.W.2d 898, 900 (Ky. 1971)).

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intentional failure of the employer to comply with any specific statute or lawful administrative regulation made thereunder, communicated to the employer and relative to installation or maintenance of safety appliances or methods.’” Id.

Groce bore the burden of proving KRS 342.165(1)’s elements, but she failed to carry it. The ALJ “methodically examined the evidence supporting Groce’s allegations of a safety violation and was unconvinced.” Id. at 684. But the Supreme Court went further, affirming the ALJ’s factual finding that VanMeter’s employees did properly secure the form. The Court said:

the ALJ did not merely conclude that Groce had failed to meet her evidentiary burden of proving that VanMeter violated 29 CFR[5] 1926.703(a)(1) [OSHA regulation governing “General requirements for formwork”] by failing to use the required push-pull pipe bracing and by failing to properly space the anchor bolts on the concrete forms; rather, the ALJ found from the evidence that VanMeter had used push-pull pipe bracing and had spaced its bolts within four-foot intervals. Thus, the ALJ affirmatively found that these alleged violations did not occur. Groce directs us to no evidence that compels a finding in opposition to the ALJ’s determination.

The ALJ also expressly rejected the safety deficiencies identified by Groce’s co-worker, Steve Nelson, relating to the anchor bolt spacing and the use of tie-downs.[6]

5 Code of Federal Regulations. Kentucky incorporates this federal law. 803 Kentucky Administrative Regulations (KAR) 2:416. 6 Nelson did not testify in Groce’s workers’ compensation case. Support for Groce’s claim of VanMeter’s wrongdoing came from “the deposition testimony of Groce’s co-worker, Steve Nelson, taken from Nelson’s own worker[s’] compensation claim.” VanMeter Contracting, Inc. v. Groce, No. 2016-CA-000776-WC, 2017 WL 1369977, at *5 (Ky. App. Apr. 14, 2017), aff’d, 539 S.W.3d 677 (Ky. 2018).

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Id. at 683–84 (emphasis added) (double emphasis original).

In Groce, the Supreme Court affirmed this Court’s intermediate appellate review in which we cited evidence the ALJ received identifying a potential alternative cause of the accident—a product defect. VanMeter Contracting, Inc. v. Groce, No. 2016-CA-000776-WC, 2017 WL 1369977, at *6 (Ky. App. Apr. 14, 2017), aff’d, 539 S.W.3d 677 (Ky. 2018).

VanMeter’s president testified at Groce’s hearing “that after the incident, the manufacturer of the forms reviewed the incident and stated that [VanMeter employees had used] even more anchor bolts than recommended. He testified that the wall collapsed because the anchor bolts going into the footer failed, but he did not know why this happened.” Id. In Groce, the Supreme Court quoted the investigation report of the Kentucky Labor Cabinet, Office of Occupational Safety and Health (KOSHA), which found, consistently with a failed anchor bolt, that “[a]s the employees were topping off the fill, they heard a loud pop and the entire form raised and toppled to the east toward the crane.” Groce, 539 S.W.3d at 680.7 The affirmative finding that VanMeter complied with the

7 In Groce, the Supreme Court identified this agency as the Kentucky Occupational Safety and Health Administration and using the acronym KOSHA. 539 S.W.3d at 680. Therefore, we use the same acronym.

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federal and state safety standards made it impossible for Groce to prove an intentional disregard of those standards and the ALJ denied enhanced benefits. Plaintiffs/Appellees sue KTC engineers as third-party tortfeasors Before the ALJ ruled on Groce’s claim in December 2015, every Plaintiff/Appellee sought additional compensation in civil court, invoking jurisdiction pursuant to KRS 342.700(1) to sue the seven Kentucky Transportation Cabinet (KTC) engineers (Engineers) associated with the project.8 The complaint alleged generally that “a culture of neglect, complacency, and disregard for the safety of the public has pervaded the Kentucky Department of Highways . . . .” (Complaint ¶ 2). They said each one “negligently, carelessly, recklessly, and maliciously allowed the hazardous and unsafe conditions at The Project to continue . . . [and] should have shut the project down.” (Complaint ¶¶ 4–10). That sufficed to state a negligence claim that: (1) the Engineers had a primary duty to inspect VanMeter’s employees’ work and a second duty to shut down the project under circumstances Plaintiffs/Appellees alleged were dangerous; (2) the Engineers’ failures of both duties were alleged to have been breached; and (3) but for those breaches, Plaintiffs/Appellees would not have suffered their injuries.

8 Greg Meredith, Chief District Engineer; Kevin Geralds, Engineer Supervisor; Ashley Graves, Transportation Engineering Supervisor; Tom Lapham, Transportation Engineer; Mark Love, Tech. Transportation Engineer; Jon Lam, Staff Engineer; and Daryl Price, Project Engineer.

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Engineers claim qualified immunity In addition to denying the allegations, the Engineers argued they were entitled to qualified official immunity. The trial court ruled they were not. In Meredith v. Decker, supra, this Court affirmed the trial court, stating the Engineers’ primary “duty to inspect the concrete forms prior to the pouring of the concrete” was ministerial. 2018 WL 4054940, at *3.

However, there was the secondary duty to “shut the construction project down due to said unsafe work conditions[.]” Id., at *2. Such a duty was conditioned on a predicate fact—that if the Engineers had satisfied their primary duty to inspect, they would have discovered “a recognized danger . . . to be imminent, . . . in the opinion of the SE [Section Engineer].” Id. (quoting trial court order (quoting KTC Construction Guidance Manual (May 2009), p. 1 of 2) (hereafter CGM)).

When the trial court ruled on the Engineers’ immunity claim on April 18, 2016, the predicate fact of VanMeter employees’ failure to secure the concrete form was not established. Therefore, to determine whether the duty to shut down the project was ministerial or discretionary, the trial court had to assume VanMeter employees committed a discoverable violation of a CGM requirement that established the duty. (Order, Apr. 18, 2016). As said in Meredith, this Court had to indulge the same assumption to review the trial court’s order on appeal.

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Bound in Meredith by the narrow scope of interlocutory appeal jurisdiction, this Court was appropriately circumspect. We did not decide, nor did we need to decide, whether the assumed predicate fact actually existed as the parties asked us to do. Meredith, 2018 WL 4054940, at *1 (“[W]e lack jurisdiction to resolve most of the arguments presented” as summary judgment grounds.). “To be clear,” we said, “whether the KTC Engineers failed to perform within the scope of their duties, or proximately caused any legally cognizable damages cannot be addressed at this point because doing so would determine the substantive claims of negligence asserted in this litigation.” Id., at *3 (emphasis original).

The arguments we could not reach in the five appeals consolidated in Meredith were returned to the trial court, resolved, appealed, and are now properly before us. Hence, we need to set out the background to those arguments here. Engineers pursue third-party claims against Scotty’s and VanMeter Soon after the Engineers filed their answer denying the allegations of Plaintiffs/Appellees’ complaint, the trial court allowed them to bring third-party claims against Scotty’s and VanMeter for contractual and common law indemnity. As motion practice proceeded, they based the contractual indemnity claim on their interpretation of Kentucky’s Standard Specifications for Road and Bridge Construction, section 107.13.9 Section 107.13 reads in its entirety:

9 The trial court dismissed KTC Engineers’ claim for common law indemnity against Scotty’s.

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107.13 RESPONSIBILITY FOR DAMAGE CLAIMS.

The Contractor shall indemnify and save harmless the Commonwealth, the Department [of Highways], and all its officers, agents, and employees from all suits, actions, or claims of any character brought on account of any of the following:

1) injuries or damages sustained by any person or property resulting from the Contractor’s act;

2) neglecting safeguarding the work;

3) acts, omissions, neglect, or misconduct;

4) claims or amounts recovered from any infringement of patent, trademark, or copyright; and

5) claims or amounts arising or recovered under Workers Compensation Act, or any other law, ordinance, order, or decree.

The Department will retain money due the Contractor in amounts sufficient to cover the cost of such suits, actions, or claims for the use of the Commonwealth.

By executing this Contract, the parties do not intend to create for the public or any of its members a third party beneficiary, or to authorize anyone not a party to the Contract, a suit for personal injuries or property damage.[10]

VanMeter answered the third-party complaint. Scotty’s answered and filed a cross-claim against VanMeter for indemnity. Motion practice then ensued.

10 None of the briefs quote section 107.13 in full. They all exclude the last two unnumbered paragraphs.

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In the same April 18, 2016 order we reviewed, in part, in Meredith, the trial court addressed summary judgment motions filed by the parties to the third-party claims. The court denied the Engineers’ motion for summary judgment on Plaintiffs/Appellees’ claim after seeing “evidence that could lead a reasonable juror to find that the failure of the [Engineers] to comply with the Construction Guidance Manual and the Kentucky Standard Specifications for Road and Bridge [Construction11] was a proximate cause of [their] injuries.” (Order, Apr. 18, 2016).

When the Engineers suggested section 107.13 (incorporated by reference in both Scotty’s contract and VanMeter’s subcontract) required Scotty’s and VanMeter to indemnify the Engineers for the Engineers’ own negligence, both responded with summary judgment motions.

When VanMeter disputed that interpretation, the Engineers changed their approach, stating “Standard Specification 107.13” grants the Engineers a right “to be reimbursed in amounts sufficient to cover the costs of such suits, actions, or claims” brought against them by reason of Scotty’s or VanMeter’s actions (or of their respective employees) and “that these expenses should be recovered from VanMeter through a claim of indemnity at the end of this action.” (Id.)

11 The trial court cited Kentucky Standard Specification 601.03.12(A) that prohibits “deposit[ing] concrete in forms until . . . the Engineer has inspected forms and materials.” See Meredith, 2018 WL 4054940, at *3 (“KTC employees had a duty to inspect the concrete forms prior to the pouring of the concrete.”).

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In ruling on VanMeter’s summary judgment motion, the trial court rejected the Engineers’ argument that section 107.13 requires VanMeter to indemnify them for their own breaches of duty when sued in their individual capacity. It said, “when there is a doubt as to the meaning of an indemnity clause the construction should be against the contention that the contract was meant to indemnify against an indemnitee’s own negligence.” (Order, Apr. 18, 2016) (citing Fosson v. Ashland Oil and Refining Co., 309 S.W.2d 176, 178 (Ky. 1957)). The trial court dismissed the Engineers’ contractual indemnity claim against VanMeter. VanMeter remained in the case to defend Scotty’s pending cross-claim.

Scotty’s too moved for summary judgment on the same ground as VanMeter. This time, the trial court interpreted section 107.13 differently. The trial court cited subsection (2) of section 107.13 which says the “Contractor shall indemnify and save harmless the Commonwealth, the Department [of Highways], and all its officers, agents, and employees from all suits, actions, or claims of any character brought on account of . . . (2) neglecting safeguarding the work . . . .” (Order, May 13, 2016). Attempting to clarify, the trial court said Scotty’s “is not being asked to indemnify” the Engineers for their negligence but “with respect to loss caused by its own alleged negligence.” (Id.) It only ruled it was not impossible for Scotty’s to be found liable. (Order, Apr. 23, 2021). The trial court said, “the duty to ‘safeguard the work’ would appear to encompass a responsibility

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to see that safety standards were met[,]” but expressly questioned “[i]f there is such a duty[.]” (Id.) Still, it denied Scotty’s summary judgment motion.

This is the point at which the Engineers claimed qualified immunity in Meredith v. Decker. Upon that opinion’s remand of the case, the parties commenced a new round of motion practice.

Amid this second round, and outside the proceedings, counsel for the Engineers and Plaintiffs/Appellees negotiated an assignment of claims, a consent judgment, and a forbearance and indemnity agreement. Assignment of claims and consent judgment The Assignment of Rights of Claims identifies the Engineers as “Assignors” and the Plaintiffs/Appellees as “Assignees” and, in pertinent part, states as follows:

• “Assignors may possess certain claims, including, but not limited to, indemnity against Scotty’s . . . and VanMeter . . . [and] desire to convey, transfer, and assign to Assignees all of Assignors’ whatever rights . . . .”

• “. . . for good and valuable consideration, . . . Assignors and Assignees hereby agree as follows:

o Assignors hereby assign to Assignees whatever claims, rights, title, and interest in, to, and arising from their claims[;]

o “Assignees further agree . . . to further indemnify and forever hold harmless all Assignors . . . [against all claims relating to the subject legal action] but not specifically limited to any claim attempting to be asserted by Scotty’s . . . or VanMeter[.]”

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(Assignment of Rights of Claims, tendered Aug. 26, 2020).

In addition to the assignment of claims, Plaintiffs/Appellees and the Engineers also tendered a consent judgment. It says, in pertinent part:

• “While [Engineers] deny liability . . . [they] recognize that they may be subject to liability, . . . may be uninsured and have insufficient assets to satisfy a potential judgment . . . [and] have some risk of being bankrupted[;]”

• “In determining the extent of Plaintiffs’ compensatory damages, evidence may be submitted by affidavits or reports[;]”

• “In consideration of the Assignment of Claims, . . . [Plaintiffs/Appellees]

agree to forbear any and all attempts to collect from [Engineers] any judgment or award on any claims asserted against [Engineers] in this action . . . and to forbear any and all attempts to collect from or proceed against [Engineers] for any damages awarded[;]”

• “. . . [Engineers] make no promises, assurances, or representations as to any claims or rights they may have against said parties and their insureds.”

• “[Plaintiffs/Appellees] agree to forbear execution against the [Engineers], on any and all claims or awards[;]”

• “[Plaintiffs/Appellees] shall dismiss, without prejudice, their claims against [Engineers], subject to the Assignment of Rights of Claims[;]”

• “If it is ultimately determined that [Engineers’] claims against Scotty’s . . .

and/or VanMeter . . . are not valid or [Plaintiffs/Appellees] cannot recover thereon for any reason, this Order and the forbearance contained therein are still to be given its full force and effect, and [Plaintiffs/Appellees] shall have no further cause of action against [Engineers].”

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(Consent Judgment, Assignment, and Forbearance, tendered Aug. 26, 2020).

Scotty’s and VanMeter objected and filed new motions for summary judgment. Plaintiffs/Appellees responded with their own motions to modify previous orders and to enter the assignment and the consent judgment. Trial court rules on flurry of motions The trial court’s April 23, 2021 order began by deciding Scotty’s summary judgment motion. Contrary to the trial court’s prior ruling that section 107.13 does not indemnify the Engineers for their own negligence, the Engineers were again making that very argument. In response, Scotty’s cited KRS 371.180 which prohibits provisions in construction services contracts indemnifying the party letting the contract or its employees and agents for their own negligence.

The trial court denied Scotty’s motion, reiterating its previous holding that the Engineers “have a viable contractual indemnification claim under § 107.13(1) and (2) . . . based on Scotty’s alleged negligence, not that of the KTC [Engineers] themselves.” (Order, Apr. 23, 2021) (emphasis added). The trial court then cited subsection (3) of section 107.13 and ruled in a completely contradictory way.

The Engineers persuaded the trial court that section 107.13(3) does authorize what KRS 371.180 prohibits. Disregarding the statute and its own immediately preceding ruling, the trial court said:

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For subsection (3) to have meaning, it must provide for indemnity by Scotty’s to the KTC [Engineers] for their own negligence, as it refers to “all . . . claims of any character brought on account of . . . [a]cts, omissions, neglect, or misconduct.” While this type of provision is disfavored, it is not against public policy.

(Order, Apr. 23, 2021) (citing Speedway Superamerica, LLC v. Erwin, 250 S.W.3d 339, 342 (Ky. App. 2008)) (emphasis added).

The trial court attempted to explain that its ruling did not conflict with KRS 317.180 by citing the Engineers’ follow-up argument “that they are not properly considered contractors within the meaning of KRS 371.180(1)(b) [because] . . . [t]he Transportation Cabinet is the contractor in this instance[,]” not its employees. (Id.) “Accordingly,” the order continues, “the Court grants the motion to modify the May 13, 2016 order to clarify that Scotty’s has a contractual obligation to indemnify the [Engineers] for . . . negligence on the part of the [Engineers] themselves.” (Id.) (emphasis added).

Finally, the order addressed Plaintiffs/Appellees’ and the Engineers’

motion to enter the consent judgment. Scotty’s and VanMeter opposed its entry on collusion grounds. The trial court did not perceive the risk of collusion “to be so great as to automatically invalidate an otherwise valid assignment of claims.” (Id.) (quoting Associated Ins. Serv., Inc. v. Garcia, 307 S.W.3d 58, 69 (Ky. 2010)).

The trial court found that Kentucky law favors “claim assignments coupled with a consent judgment or other settlement arrangement and a covenant

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not to execute, subject to some assessment that the settlement reflects a reasonable calculation of damages.” (Id.) (quoting Garcia, 307 S.W.3d at 68). The trial court said, “Presumably [the trial court itself] could ensure . . . a reasonable damages determination . . . [or] a better way . . . would be to review a damages award arising from arbitration.” (Id.) Therefore, Scotty’s and VanMeter’s “assertion that a calculation of damages is or would be unreasonable is not a basis to deny entry of a proposed judgment.” (Id.)

The trial court next rejected Scotty’s argument that “the effect of the proposed consent judgment is to permit [VanMeter’s] employees to circumvent the exclusive-remedy policy of the Workers’ Compensation Act as reflected in KRS 342.690(1).” (Id.) Scotty’s expressly pleaded the Act as an affirmative defense to the third-party complaint. “[U]nder the facts of the instant case,” said the trial court, “neither an employer nor its insurer is liable to a covered employee if the consent judgment is entered. Scotty’s would, at most, be liable to the KTC [Engineers] to whom they theoretically owe a duty of indemnity.” The trial court found the Act “was not a bar to entry of the [consent judgment].” (Id.)

Scotty’s was concerned the Engineers would be ill-motivated to mount a defense because Plaintiffs/Appellees agreed to forbear all collection efforts against them. Scotty’s filed a motion “to participate in further proceedings regarding liability and damages.” (Order, Oct. 14, 2022). Plaintiffs/Appellees

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responded that “Scotty’s is only involved in this case to the extent that it owes a contractual duty to indemnify the KTC [Engineers]; that contract does not provide Scotty’s a right to be involved in the tort claim between [Plaintiffs/Appellees] and the KTC [Engineers].” (Id.) The trial court said it found no authority “that a party without a duty to defend has a right to do so, particularly when the indemnitees (in this action, the KTC [Engineers]) are already represented . . . .” (Id.)

Scotty’s further pressed its argument that comparative fault and apportionment issues must still be considered. The Engineers themselves demanded apportionment in their answer to Plaintiffs/Appellees’ complaint, obviously to lessen their share of damages in any judgment that might be obtained against them. They repeated that demand in the consent judgment.

Still, the trial court rejected the demands and arguments for apportionment, saying, “The arguments about comparative negligence and apportionment are not compelling because, as [Plaintiffs/Appellees] note, Scotty’s has no direct liability due to the exclusive-remedy effect of the Workers’ Compensation Act.” (Id.) The trial court further said, “Scotty’s motion to participate in the determination of damages is denied to the extent Scotty’s seeks to put on evidence or cross-examine witnesses.” (Id.)

Scotty’s fears were confirmed when the Engineers “gave notice . . .

[they] would no longer be actively participating and/or defending against

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[Plaintiffs/Appellees’] claims as a result of the Court’s Order of April 23, 2021,” approving the consent judgment that included Plaintiffs/Appellees’ agreement to forbear from collecting the judgment against the Engineers from the Engineers. (Engineers’ Notice of Non-Participation, Nov. 16, 2022).

At the hearing to set trial, the court disregarded Scotty’s demand for a jury trial,12 stating it would conduct a bench trial “[u]nder the procedure contemplated by Garcia, [supra,] [to] determine the existence and amount of compensatory damages for each [of the Plaintiffs/Appellees], and to ascertain whether punitive damages are warranted.” (Judgment, Dec. 11, 2023). Over Scotty’s objections, the court scheduled the bench trial. (Order, Nov. 17, 2022). Trial court conducts trial with only Plaintiffs/Appellees’ participation Trial commenced on March 8, 2023, as scheduled and is generally noteworthy for its non-adversarial nature. Only Plaintiffs/Appellees participated. Most sat in the gallery with relatives who would testify. Plaintiffs/Appellees’ counsel discussed with the trial court the rule regarding separation of witnesses,

12 Plaintiffs/Appellees also demanded a trial by jury in their complaint. The Engineers too demanded a trial by jury in their third-party complaint. As far as our review reveals, no party waived their jury trial demand. Failure to object to a bench trial does not constitute a waiver of the right to a jury trial, even after also participating in the bench trial to its conclusion. Hazard Coal Corporation v. Knight, 325 S.W.3d 290 (Ky. 2010).

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KRE13 615, but did not invoke it. The judge said it was his practice not to invoke the rule sua sponte, and he did not. Witnesses heard one another’s testimony.

After an opening statement, counsel for Plaintiffs/Appellees presented evidence of duty, breach, and causation by calling an expert never disclosed to any other party, engineer Harold Deatherage.14 Plaintiffs/Appellees and their families were the only other witnesses to testify. No one cross-examined any witness. No one presented countervailing evidence responsive to Plaintiffs/Appellees’ evidence. After the trial, the court reviewed several exhibits and depositions before making its findings of fact as set out in the following paragraphs. Recognizing the duties the Engineers owed during trial According to Mr. Deatherage, Greg Meredith, as Chief District Engineer, and his subordinate Engineers “had safety responsibilities with respect to, inter alia, the project at the heart of this case . . . [and were] obligated to comply with the applicable construction standards.”15 That duty to inspect was not

13 Kentucky Rules of Evidence.

14 We viewed the trial video transcript and do not question or have reservations about Mr. Deatherage’s qualifications as an expert or the veracity of his testimony. As explained in our analysis, however, his opinions are based on the assumption, not a proven fact that VanMeter failed to comply with federal and state safety regulations. 15 The trial court identified these as “OSHA [federal Occupational Safety and Health Administration] regulations, the Kentucky Standard Specifications for Road and Bridge Construction (the Standard Specifications), and the Kentucky Construction Guidance Manual (CGM).”

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conditioned upon any fact other than that VanMeter employees were proceeding with their work. However, the trial court found the secondary duty—the duty to stop work—was conditioned upon certain facts.

The trial court said the Engineers “had the ability to shut down the project if standards were not being followed” by VanMeter’s employees. (Id.) (emphasis added). They only owed a duty “to stop work on the project if they observed unsafe conditions.” (Judgment, Dec. 11, 2023). Thus, the existence, danger, and observability of such predicate conditions needed to be proved. But the court received no evidence to establish those necessary predicate facts that would have given rise to the Engineers’ duty to shut down the project. That is, there was no evidence that VanMeter employees failed to comply with standards which an inspection would have revealed as “a recognized danger” that was “imminent, . . . in the opinion of the SE [Section Engineer].” (KTC Construction Guidance Manual (May 2009), p. 1 of 2).

To find a breach of duty to shut down the project and the duty itself, Mr. Deatherage assumed the cause of the accident was VanMeter’s employees’ violation of safety standards, just as the trial court did before him. Finding breach The court held the Engineers breached the duty to inspect as follows:

13. The proof identified five primary failures on this project:

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a. Failure to enforce strict compliance with applicable safety procedures . . . ;

b. Failure to require certified engineering plans before allowing work to proceed on the retaining wall . . . ;

c. Failure to enforce OSHA regulations regarding the shoring of retaining walls . . . ;

d. Failure to inspect anchoring before allowing the wall to be poured . . . ; and

e. Failure to ensure that VanMeter had competent personnel on site to make certain that the retaining wall was being safely constructed according to standards.

(Id.) The finding of breach here was not because the Engineers tried and negligently failed, but because they did not try at all. They did not inspect.

Assumption rather than determination of facts was the basis of finding a duty to shut down the project. All that was factually established was that the Engineers did not shut down the project before the accident occurred. As we discuss in the analysis, there was insufficient evidence either to prove the fact that VanMeter employees improperly anchored the form or to deem the testimony in depositions to constitute a judicial admission to that effect. Finding causation The trial court concluded the seven Engineers’ “failure to enforce strict compliance with safety laws, rules, and regulations was a substantial contributing factor to the collapse of the wall.” (Id.) But the trial court found no

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party at fault other than the Engineers. The court apportioned 100% of the fault among the Engineers only, effectively finding their breach of duty to inspect to be the sole proximate cause. See KRS 411.182. The trial court determined VanMeter, its employees including Plaintiffs/Appellees, and Scotty’s bore no responsibility or fault for the collapse at all. (Judgment, Dec. 11, 2023). Findings of damages The trial court’s judgment then turned to proof of damages reiterating the consent judgment’s ruling “that [Plaintiffs/Appellees] could submit written reports to prove damages.” (Judgment, Dec. 11, 2023). Scotty’s and VanMeter were prohibited from submitting such reports and so the trial court considered only the reports submitted by Plaintiffs/Appellees.

The court accepted the written reports of an economics professor, an orthopedist, and an individual with a master’s degree in Rehabilitation Counseling. They did not testify and only submitted reports, but the trial court found “[t]hese witnesses qualify as experts in their respective fields.” (Id.). After summarizing the Plaintiffs/Appellees’ current circumstances, the trial court awarded each one significant compensatory damages.

The trial court then moved on to address why the Engineers’ conduct justified making an example of them with an award of punitive damages, stating:

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This case presents clear and convincing evidence of gross negligence, which makes an award of punitive damages appropriate . . . .

Given the roles of these [Engineers] as the supervisors of highway construction in southern Kentucky, it is relevant to consider the elements of both punishment and deterrence when determining punitive damages in this matter. . . . A punitive damages award would be appropriate to deter the type of gross negligence in evidence here. The hope would be to deter gross negligence on the part of these named [Engineers], those similarly situated, as well as others performing ministerial duties on behalf of the public.

(Id.) The trial court set exemplary damages at $10,000,000.00.

The court knew its prior order approved of Plaintiffs/Appellees’

agreement to forbear collecting any damages from the Engineers. The court was aware of its other order that Scotty’s must indemnify the Engineers for those same damages—compensatory and punitive damages alike.16 On February 1, 2024, the court entered its final judgment against Scotty’s, as follows:

1. The Estate of Kenneth Decker shall recover of Scotty’s the sum of $437,587.00;

2. Velma Decker shall recover of Scotty’s the sum of $2,000,000.00 for loss of consortium;

3. John McIntosh shall recover of Scotty’s the sum of $1,684,234.92;

4. Jamie Groce shall recover of Scotty’s the sum of $4,730,084.98;

5. Steve Nelson shall recover of Scotty’s the sum of $2,731,823.00;

16 The December 11, 2023 Judgment “incorporates all conclusions of law set out in prior orders[.]”

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6. Linda Nelson shall recover of Scotty’s the sum of $1,000,000.00 for loss of consortium;

7. Plaintiffs shall recover punitive damage from Scotty’s in the amount of $10,000,000.00 to be prorated among Plaintiffs in the same proportion as each Plaintiff’s share of the total compensatory damages awarded[.]

Following entry of that order, Scotty’s brought this timely appeal.

STANDARD OF REVIEW

When reviewing a judgment after a bench trial, “[f]indings of fact, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses.” CR17 52.01. “[R]eview of legal determinations and conclusions from a bench trial is de novo.” Kentucky Properties Holding LLC v. Sproul, 507 S.W.3d 563, 569 (Ky. 2016).

Statutory interpretation is a legal question reviewed de novo. Estate of Benton v. Currin, 615 S.W.3d 34, 36 (Ky. 2021). The same is so regarding regulations. Wonderfoil, Inc. v. Russell, 630 S.W.3d 706, 709 (Ky. 2021). “[I]nterpretation and legal effect of a contract is a matter of law” and is likewise subject to de novo review. Speedway, 250 S.W.3d at 341.

Proximate cause becomes a question of law when no facts are disputed “and but one conclusion may reasonably be drawn from the evidence.”

17 Kentucky Rules of Civil Procedure.

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Patton v. Bickford, 529 S.W.3d 717, 731 (Ky. 2016) (quoting McCoy v. Carter, 323 S.W.2d 210, 215 (Ky. 1959)).

ANALYSIS

Scotty’s Prehearing Statement identifies thirty-two issues. We address those issues argued in the briefs and those that otherwise are essential to our review, starting with the issue of subject matter jurisdiction. Understanding the proper role of subject matter jurisdiction pursuant to which this case was or should have been adjudicated provides a roadmap of sorts to our review. Subject matter jurisdiction “Kentucky’s Workers’ Compensation Board is vested with exclusive jurisdiction to decide matters within the purview of the Workers’ Compensation Act.” Hardin v. Action Graphics, Inc., 57 S.W.3d 844, 845 (Ky. App. 2001) (citing Shamrock Coal Co., Inc. v. Maricle, 5 S.W.3d 130 (Ky. 1999)). The Act’s purview is administering claims resulting from “a risk peculiar to the employment[.]” Smith v. Klarer Co., 405 S.W.2d 736, 738 (Ky. 1966). See Warrior Coal Co., LLC v. Stroud, 151 S.W.3d 29, 31 (Ky. 2004) (claims “aris[ing] from a peril that is related to the employment[.]”). Where the Act applies, as it does here, “[t]rial courts . . . are deprived of jurisdiction by the explicit language of KRS 342.690(1), the exclusive liability provision of the Workers’ Compensation Act.” Hardin, 57 S.W.3d at 845.

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That explicit language does more than limit an employer’s liability to its employee. It also limits an employer’s liability to third parties. Specifically, another part of KRS 342.690(1) says:

The liability of an employer to another person who may be liable for or who has paid damages on account of injury or death of an employee of such employer arising out of and in the course of employment and caused by a breach of any duty or obligation owed by such employer to such other shall be limited to the amount of compensation and other benefits for which such employer is liable under this chapter on account of such injury or death, unless such other and the employer by written contract have agreed to share liability in a different manner.

KRS 342.690(1) (third sentence) (emphasis added).

Given this liability limiting provision and the Board’s exclusive subject matter jurisdiction over workplace accidents, we must ask the question— “what is the source of the trial court’s subject matter jurisdiction over: (1) Plaintiffs/Appellees’ tort claim against the Engineers, and (2) the Engineers’ indemnity claims against Scotty’s and VanMeter?” We start with what is typical.

Typically, personal injury actions are the “kind of case that comes within a circuit court’s subject matter jurisdiction.” General Elec. Co. v. Cain, 236 S.W.3d 579, 589 (Ky. 2007). The Act, however, abrogated Kentucky common law when the subject matter is a claim or claims arising out of a workplace accident. When a party’s injuries result from a risk peculiar to his employment, “that

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jurisdictional fact would deprive the circuit court of subject matter jurisdiction by operation of KRS 342.690(1).” Id. That deprivation of jurisdiction is broad.

When our legislature adopted the Act, it had a choice from among “the three general types of ‘exclusive liability’ clauses prevalent in workers’ compensation statutes[.]” Hardin, 57 S.W.3d at 845 n.1 (citing ARTHUR LARSON, LARSON’S WORKERS’ COMPENSATION—DESK EDITION § 66.10 (2000)). Kentucky’s choice was “the broadest, excluding the widest array of actions” that are typically pursued in civil courts. Id. at 845.

Liability under the Act “shall be exclusive . . . of all other liability of such employer to the employee . . . and anyone otherwise entitled to recover damages from such employer at law or in admiralty” stemming from a workplace injury. KRS 342.690(1) (emphasis added). If the Act stopped there, the trial court here would have been stripped of all subject matter jurisdiction to address Plaintiffs/Appellees’ tort claim against the Engineers and the Engineers’ indemnity claims against Scotty’s and VanMeter. The Board would have had exclusive jurisdiction to address those claims. But there is further legislation.

Immediately after KRS 342.690 is another statute that says, when a workplace injury “has been sustained under circumstances creating in some other person than the employer a legal liability to pay damages, the injured employee may . . . proceed at law by civil action against the other person to recover damages

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. . . .” KRS 342.700(1) (emphasis added). That statute, not KRS 23A.010(1), grants the trial court subject matter jurisdiction to adjudicate such claims as Plaintiffs/Appellees brought against the Engineers.

The same provision grants a trial court subject matter jurisdiction to address an employer’s subrogation claim against a party referred to as “some other person than the employer[.]” KRS 342.700(1) (“the employer . . . may recover . . . from the other person”). However, the “subrogation claim depends entirely on the plaintiff’s [employee’s] claims against the defendant [other person than the employer].” Clarendon Nat. Ins. Co. v. Vetor, 165 S.W.3d 484, 490 (Ky. App. 2005). That is, an employer cannot bring a subrogation claim against a non- employer tortfeasor independently of the employee’s claim. If the employee files a claim in civil court, the employer (or his insurer) often intervenes against the “other person.” See, e.g., Bowlin Group, LLC v. Rebennack, 626 S.W.3d 177, 183 (Ky. App. 2020).

Correspondingly, the Supreme Court acknowledged that the Act grants trial courts subject matter jurisdiction over claims by “the other person” for indemnity against the employer. Dix & Associates Pipeline Contractors, Inc. v. Key, 799 S.W.2d 24, 25 (Ky. 1990) (employee’s tort claim defendants “filed a third-party complaint naming [employer] as a third-party defendant”). See also id.

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at 30 (further addressing procedure “if the employer is made a third-party defendant in the tort action” under KRS 342.700(1)).

The “other person’s” indemnity claim against the employer cannot yield more than an offset against the employee’s judgment equal to the amount the employer paid under the Act. Dix, 799 S.W.2d at 26. See also id. at 33 n.1 (Liebson, J., dissenting). That is so because in the employee’s action “against the other person . . . he shall not collect from both” the other person and the employer. KRS 342.700(1). But there is an exception to that limitation as noted above.

If the other person “and the employer by written contract have agreed to share liability in a different manner” than the Act allows, the trial court can exercise subject matter jurisdiction pursuant to the Act to make that determination. KRS 342.690(1). Its enforcement would be an exception to the offset limitation of KRS 342.700(1). The Engineers believed they had such an agreement, even if they failed to understand the trial court’s basis of subject matter jurisdiction to rule. Plaintiffs/Appellees sought to do indirectly what the Act directly prohibits There is an ancient legal maxim the Supreme Court of the United States calls, “the maxim of common sense and good morals, that what the law will not allow you to do directly, you shall not attempt to do indirectly.” Kendall v. United States ex rel. Stokes, 37 U.S. 524, 605, 9 L. Ed. 1181 (1838). See Allen v. Canal Ins. Co., Greenville, S.C., 433 S.W.2d 352, 354 (Ky. 1968) (not allowing

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insurer to “accomplish indirectly what the law does not permit to be done directly” (internal quotation marks and citation omitted)).

Plaintiffs/Appellees and the trial court ignored this maxim and accomplished indirectly what the legislature directly prohibited—a judgment finding Scotty’s liable for Plaintiffs/Appellees’ workplace injuries in contravention of the exclusiveness and limitations of liability the legislature established in KRS 342.690(1). That resulted in exactly what the Act forbids—recovery of twice the medical costs and lost earnings the Act allows, plus pain and suffering and punitive damages the Act prohibits. See, e.g., Stacy v. Noble, 361 S.W.2d 285, 287 (Ky. 1962) (“there is no allowance for pain and suffering under the . . . Act”). Exclusiveness of employers’ liability under the Act is clear We read the Act’s exclusiveness of liability provision as quite clear and comprehensive. “[T]he liability of such employer under this chapter shall be exclusive and in place of all other liability of such employer to the employee . . . and anyone otherwise entitled to recover damages from such employer at law or in admiralty . . . .” KRS 342.690(1) (emphasis added). There is no ambiguity. The statute limits the recovery of anyone to what is allowed by the Act.18 For the

18 As previously noted, that includes a third party’s pursuit of a contract claim pursuant to KRS 342.690(1) (third sentence).

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actual employer and any qualifying up-the-ladder employer like Scotty’s,19 there is no further employer liability for the workplace accident.

Regardless of how circuitously they prosecuted their claim against Scotty’s, Plaintiffs/Appellees should not have been permitted to succeed on a claim against Scotty’s, an up-the-ladder employer whose liability to them is limited to the benefits of the Act and whose immunity from further claims is secured by the same law. KRS 342.690(1).

However, the trial court properly allowed Plaintiffs/Appellees to pursue the Engineers as non-employer third-party tortfeasors.

19 The Supreme Court explained:

In Kentucky, “up-the-ladder immunity” refers to a contractor’s immunity from tort lawsuits where the plaintiff was injured at work and workers’ compensation benefits are the plaintiff’s exclusive remedy under Kentucky Revised Statutes (KRS) 342.690. See General Elec. Co. v. Cain, 236 S.W.3d 579, 585 (Ky. 2007)

(“If premises owners are ‘contractors’ as defined in KRS 342.610(2)(b), they are deemed to be the statutory, or ‘up-the-ladder,’ employers of individuals who are injured while working on their premises and are liable for workers’ compensation benefits unless the individuals’ immediate employers . . . have provided workers’

compensation coverage. If deemed to be ‘contractors,’ the owners, like any other employers, are immune from tort liability [exclusive remedy immunity] with respect to work-related injuries whether or not the immediate employer actually provided workers’ compensation coverage.”).

Beaver v. Oakley, 279 S.W.3d 527, 528 n.1 (Ky. 2009). Hereafter, because of Scotty’s status as an up-the-ladder employer entitled to the Act’s protection, we are referring to Scotty’s when we use the term “employer.”

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Plaintiffs/Appellees properly pursued claim against the Engineers KRS 342.700(1) tells the employee that exhausting the limits of his employer’s liability under the Act need not end his pursuit of compensation. He can sue a non-employer tortfeasor he believes was at fault. The statute is designed to benefit both the employee and the employer.

For over a hundred years since its prior iteration became part of our Workers’ Compensation Act, KRS 342.700(1) has been interpreted as:

defin[ing] the respective rights of the injured employee and the employer/insurer when the employee’s injuries were caused by the negligence of a third party. The employer/insurer “owns” a subrogation right to the amount of compensation it paid to the injured employee, and the employee “owns” the right to any other damages for which the third-party tortfeasor is legally liable.

Krahwinkel v. Commonwealth Aluminum Corp., 183 S.W.3d 154, 158 (Ky. 2006), abrogated on other grounds by Dowell v. Matthews Contracting, 627 S.W.3d 890 (Ky. 2021) (decrying Krahwinkel’s reference to the Act as a voluntary contract between employer and employee rather a voluntary election to participate in a statutory alternative to tort litigation). In such a civil action against non-employer third parties, the employer whose obligation to the employee has been fixed by the Board “occupie[s] the same position as a settling tortfeasor[.]” Owens Corning Fiberglas Corp. v. Parrish, 58 S.W.3d 467, 481 (Ky. 2001). Fortunately, the apportionment statute, “KRS 411.182(4)[,] covers the workers’ compensation

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situation[.]” Ingersoll-Rand Co. v. Rice, 775 S.W.2d 924, 930 (Ky. App. 1989), abrogated on other grounds as recognized in Cont’l Marine, Inc. v. Bayliner Marine Corp., 929 S.W.2d 206 (Ky. App. 1996).

“KRS 411.182 does not require as a prerequisite for apportionment that the settling person be joined as a party to the action. In fact, it implies that the settling person will not be named a party to the action.” Parrish, 58 S.W.3d at 480. This case might have proceeded with Plaintiffs/Appellees, the Engineers, and two “empty-chair” defendants. CertainTeed Corp. v. Dexter, 330 S.W.3d 64, 68 (Ky. 2010). That did not happen. Faced with potential liability, the Engineers pursued their third-party claim for indemnity against Scotty’s and VanMeter. Legal error from failing to enforce KRS 371.180 Once the Engineers argued that Standard Specifications section 107.13 required Scotty’s to indemnify them for their own negligence, Scotty’s responded that such an interpretation violates KRS 371.180. We agree.20 The trial court committed reversible error by denying Scotty’s motion for summary judgment based on KRS 371.180.

20 We are not persuaded by Plaintiffs/Appellees’ argument that KRS 371.180 constitutes an affirmative defense that Scotty waived by not asserting in its answer. The third-party complaint does not allege section 107.13 requires Scotty’s to indemnify KTC for its or its employees’ own negligence. Affirmative defenses are assertions “constituting an avoidance” of an allegation. CR 8.03. Should we fault Scotty’s for not presuming the Engineers alleged a species of indemnification prohibited by law? When the Engineers finally argued section 107.13 indemnified them from their own rather than Scotty’s negligence, Scotty’s promptly raised the statute. Until then, KRS 371.180 did not “constitute an avoidance” of the claim of indemnification.

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KRS 371.180 is not difficult to understand. It declares “void and wholly unenforceable” any provision in a “construction services contract purporting to indemnify or hold harmless a contractor from that contractor’s own negligence or from the negligence of his or her agents, or employees . . . .” KRS 371.180(2). The contract KTC let to Scotty’s is “[a] contract or agreement relating to the construction . . . [of a] highway . . . or other structure, project, development, or improvement attached to real estate . . . .” KRS 371.180(1)(a)1. As the statute’s terms are defined, KTC is the “contractor.” KRS 371.180(1)(b) (“‘Contractor’ means the person offering a contract for services provided.”). Scotty’s was the “contractee.” KRS 371.180(1)(c) (“‘Contractee’ means the person providing services under a contract.”). The Engineers were KTC’s “agents, or employees[.]”

Plaintiffs/Appellees’ argument that KRS 371.180 does not apply to the Commonwealth because “the Commonwealth is not a ‘person’” is simply wrong. We have a definition in KRS 446.010 for “person” when that term is used in a statute and not specifically defined in the relevant chapter, as here. The term “person . . . may extend and be applied to bodies-politic . . . .” KRS 446.010(33). That definition applies to the term “person” as used in KRS 371.180.

Additionally, consider KRS 371.180 itself. It expressly refers to contracts for highway construction and improvement. KRS 371.180(1)(a)1. Contracts between KTC and entities such as Scotty’s are essential to KTC’s

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“mission of providing a safe and reliable highway system . . . .” Ky. Exec. Order No. 2008-529 (Jun. 16, 2008). KTC carries out that mission pursuant to construction services contracts. It would be nonsensical to assume the statute does not apply to contracts awarded by KTC to carry out its mission.

Similarly, we are unpersuaded by the argument that the statute only makes the provision void as to KTC and “not the KTC employees.” When the legislature declared all such provisions void rather than voidable, the only rational interpretation is that the provision was void from the moment it was created. Being void ab initio, such a provision creates no rights in anyone, starting with those identified in the statute—“the Commonwealth, the Department, and all its officers, agents, and employees[,]” and by necessary implication, the Engineers.

Although Plaintiffs/Appellees occasionally argued the provision required Scotty’s to indemnify KTC for Scotty’s employees’ negligent acts, that is not how the trial court interpreted and enforced it against Scotty’s. Even if not a tactic intentionally pursued, it was a bait-and-switch outcome the court allowed.

Plaintiffs/Appellees’ original complaint sought to hold the Engineers individually liable for their own negligence. That was, in fact, the result of the consent judgment and the result of the bench trial. If there is evidence in this record of Scotty’s negligence, it was not brought to our attention. More

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importantly, Scotty’s negligence was never adjudicated, nor was VanMeter’s, nor was Plaintiffs/Appellees. In fact, the trial court found them all to be faultless.

This Court cannot conclude other than that the trial court interpreted the provision as indemnifying the Engineers for their own negligence. The trial court thus committed legal error by enforcing a contract provision the legislature prohibited by enacting KRS 371.180 declaring such a provision void. Indemnity provision lacks required clarity to be enforced as it was in this case Even without the clear prohibition of KRS 371.180, section 107.13 falls far short of clearing our jurisprudential hurdle for enforcing a provision indemnifying the indemnitee against his own negligence. “[S]uch contracts are disfavored and are strictly construed against the parties relying upon them.” Hargis v. Baize, 168 S.W.3d 36, 47 (Ky. 2005).

If a party intends to hold another to such a contract provision, it “must contain utmost clarity in order to be enforceable. Its wording must be ‘so clear and understandable that an ordinarily prudent and knowledgeable party to it will know what he or she is contracting away; it must be unmistakable.’” Speedway, 250 S.W.3d at 341 (quoting Hargis, 168 S.W.3d at 47). Even the trial court struggled early to read section 107.13 the way the Engineers and the Plaintiffs/Appellees wanted. The obvious lack of clarity makes section 107.13 unenforceable. The trial court erred when it ruled Standard Specifications section 107.13 was sufficiently

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clear that the Engineers could enforce it and compel Scotty’s to indemnify them for the damages they caused by their own breach of duty.

That brings us to the assignment. And that begs a question Justice Noble once posed in Associated Insurance Service, Inc. v. Garcia, supra. “[M]y first question[,]” she said, “was whether there was anything to assign to the Appellees[.]” 307 S.W.3d at 70 (Noble, J., concurring). Engineers possessed nothing assignable to Plaintiffs/Appellees The assignment that accompanied the consent judgment was in the nature of a “mere quitclaim[]” that transferred “such rights, title and interest as belonged to the assignors at the time of the making of the several assignments and no more[.]” Arnett v. Stephens, 251 S.W. 947, 950 (Ky. 1923). The Engineers used language in the assignment and consent judgment, as set forth above, indicating at least their suspicion that what they were assigning might be illusory. See id. at 951 (quitclaim places “grantee upon notice . . . his grantor has doubts”). Indeed, it was.

KTC had no indemnity claim to assign, statutorily prohibited and judicially incognizable as it was. Claiming indemnity derivatively from KTC did not spontaneously generate a right the Engineers could claim from the nothing KTC possessed. Creatio ex nihilo does not apply in the law any more than it applies in any other field but theology.

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Because the indemnity provision was void under KRS 371.180 and voidable under Hargis, supra, the claim Engineers assigned to Plaintiffs/Appellees never existed. Plaintiffs/Appellees, therefore, had no claim against Scotty’s for indemnity and the trial court committed reversible error by holding Scotty’s liable for the judgment Plaintiffs/Appellees obtained against the Engineers. The irregularities of the trial constituted reversible error Scotty’s politely characterizes the improper ex parte trial in this case as the trial court’s “departure from the traditional adversarial process[.]” (Scotty’s Br., p. i). Specific arguments that the process violated due process are less subtle.

Had the trial court not committed the legal errors already discussed, it might not have proceeded as it did, erroneously, “[u]nder the procedure contemplated by Garcia”—an opinion that had nothing to do with the Act and, therefore, did not proceed within the scope of its subject matter. Trial court conducted improper, non-adversarial, ex parte proceeding The court in Garcia did not conduct an ex parte trial, nor can the Supreme Court’s opinion be read as approving of such a trial.

True ex parte trials are not unheard of in our jurisprudence, being defined as “[a] trial in which only one side of the case is heard, usu. because the opposing party is not present.” Trial, BLACK’S LAW DICTIONARY (12th ed. 2024) (defining “ex parte trial” within this definition). However, permissible ex parte

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trials are also defined as “trials in absentia,” meaning, “A trial held without the accused being present. In the United States, a trial may be held in absentia only if the accused has either voluntarily left after the trial has started or else so disrupted the proceedings that the judge orders the accused’s removal as a last resort.” Id. (defining “trial in absentia” within this definition).

This was not a trial in absentia. Scotty’s and VanMeter wanted to participate, and the trial court refused to allow it despite their clear right to do so. G & J Pepsi-Cola Bottlers, Inc. v. Fletcher, 229 S.W.3d 915, 918 (Ky. App. 2007) (discussing “the law regarding an employer’s subrogation rights as set out in State Farm [Mut. Ins. Co.] v. Fireman’s Fund [American Ins. Co., 550 S.W.2d 554 (Ky. 1977)]”). This general condemnation of the non-adversarial proceeding is supported by the trial court’s specific due process violations. We do not address all the due process violations but enough to compel reversal of the judgment. Trial court violated Scotty’s due process by denying right to be heard As discussed above in the section on subject matter jurisdiction, our statutes and jurisprudence clearly entitle an employer to participate in trials conducted pursuant to KRS 342.700(1). See Dix, 799 S.W.2d at 30. The trial court erred when it prohibited Scotty’s and VanMeter’s trial participation because it deprived them of their due process right to be heard. Ford Motor Company v.

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Duckworth, 615 S.W.3d 26, 33 (Ky. 2021) (“fundamental requirement of due process is the opportunity to be heard”). That fundamental error justifies reversal. Trial court erred by failing to conduct a jury trial The trial court also refused Scotty’s demand for a jury trial. Our Supreme Court, emphasizing the sanctity and inviolability of the right to trial by jury in one of its most consequential opinions, declared: “Henceforth, legislation and civil rules of practice shall be construed strictly and observed vigilantly in favor of the right and is not to be abrogated arbitrarily by the courts. The constitutional right to a jury trial cannot be annulled, obstructed, impaired, or restricted by legislative or judicial action.” Steelvest, Inc. v. Scansteel Service Center, Inc., 908 S.W.2d 104, 108 (Ky. 1995).

Scotty’s never waived its jury trial demand. For that matter, we do not know that Plaintiffs/Appellees or the Engineers ever waived their jury demand. The trial court erred in conducting a bench trial in violation of Scotty’s rights to a jury trial guaranteed by the Seventh Amendment to the United States Constitution and Section 7 of the Kentucky Constitution. That error justifies reversal. Trial court erred by finding the Engineers’ negligence the sole proximate cause Beyond procedural error and even the KRS 342.700(1) jurisprudence that prohibits an employee from “recover[ing] all of his loss from a negligent third party[,]” Dix, 799 S.W.2d at 30 (emphasis added), there is another reason

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apportioning all fault to the Engineers requires reversal of the judgment. It is logically and legally impossible for the Engineers to be the sole proximate cause of Plaintiffs/Appellees’ injuries.

The trial court failed to recognize the legal effect of finding the Engineers’ breach of duty to inspect not merely a substantial cause of the accident, but the only cause, by apportioning 100% of the fault to them. That made their negligence the only possible, and therefore the sole, proximate cause.

As a simple matter of physics, the Engineers’ breach of their duty to inspect, or even a breach of duty to stop work, could not have caused the form and concrete to rise and fall on the workers. Therefore, as a matter of logic and law, the Engineers’ negligence could not have been “the primary and efficient cause of the injury[.]” Memorial Sports Complex, LLC v. McCormick, 499 S.W.3d 700, 703 (Ky. App. 2016) (citation omitted). See also id. at 705 (distinguishing conduct that was “‘the primary and efficient cause of the injury’” from a third-party defendant whose remote conduct was not).

In prior cases where the injured party was alleged to have been “negligent in inspection . . . it could not be said that the defendant’s negligence was primarily the cause of the trouble.” Cumberland Tel. & Tel. Co. v. Mayfield Water & Light Co., 179 S.W. 388, 389 (Ky. 1915). In Cumberland Telephone, the court summarized several cases in which one party owed a duty to warn or inspect

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or discover a danger created by the negligence of another party that, left uncorrected, resulted in the injuries of a claimant. Id. at 388–89. “In all of these cases it will be observed that the primary and efficient cause of the injury was the negligence of one party, and that the other party [who failed to inspect and otherwise intercede] was held liable to the injured party for negligence of a lesser degree and of a different character.” Id. at 389 (emphasis added).

The Engineers’ breach of duty to inspect cannot be, either rationally or legally, the primary and efficient cause of the accident. But the trial court never found any other party liable much less the actual primary and efficient cause of Plaintiffs/Appellees’ injuries. Occasional reference to safety regulations was as far as the quest for that cause went. The trial court relied solely on assumption.

In Meredith, this Court identified the basis for the trial court’s assumption of VanMeter’s breach of duty. It was Plaintiffs/Appellees’ “alleg[ations] that Defendants [Engineers] were negligent, . . . as evidenced by the [KOSHA] citations, even though the parties concur that the cited violations were not directly related to the collapse of the concrete forms.” Meredith, 2018 WL 4054940, at *2 (quoting the trial court’s order). As the Supreme Court noted in Groce, the safety citations and VanMeter’s settlement agreement after challenging them “precludes the use of the [settlement] agreement as a conclusive judicial admission of a safety violation.” Groce, 539 S.W.3d at 682.

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“Even without the express admission-disclaimer language, . . . an adjudicative determination by an administrative tribunal does not preclude relitigation in another tribunal . . . .” Id. (internal quotation marks and citations omitted). Relitigation of the issue, which might have found the necessary facts in this distinct tribunal, never occurred. No other evidence this Court has seen in its review satisfies the standard for recognizing a judicial admission of VanMeter’s employees’ negligence.21 Nevertheless, the trial court treated the allegations, evidence, and the assumption of negligence as fact.

Adversarial adjudication and judicial determination of that predicate fact was essential to finding the Engineers’ negligence was also a proximate cause

21 Inexplicably, VanMeter’s own counsel states in its brief, “VanMeter, in its filings and depositions below, admitted that the accident occurred because of its own failure to use appropriate anchoring [which] did not fall within the supervision or control of [KTC] or its Employees.” (VanMeter Br., p. 17 (citing R. 639–45)). The record reference to support that statement directs us to VanMeter’s Memorandum supporting its Motion for Partial Summary Judgment, filed July 21, 2014. In fact, it says nothing of the sort. In any event, that was eighteen months before VanMeter convinced the ALJ in Groce on December 3, 2015, that the complete opposite was true. Thereafter, VanMeter said in a subsequent Memorandum to the trial court, “There is no evidence in the record that these violations [relating to improper fall protection and inadequate trenching] contributed to the failure of the form.” (VanMeter Memorandum, Jan. 21, 2016). More importantly, nothing we saw in the record justifies treating the mere assumption as a judicial admission, i.e., a “formal act” having “the effect of waiving or dispensing with the necessity of producing evidence by the opponent . . . .” Reece v. Dixie Warehouse and Cartage Co., 188 S.W.3d 440, 448 (Ky. App. 2006). Nothing indicates the trial court deemed it so. Regardless, “[w]hether a statement is a judicial admission is a question of law, which is reviewed de novo, ‘without deference to the interpretation afforded by the circuit court.’” Id. (citation omitted). Applying the standard set forth in Reece, supra, there is no basis for finding a judicial admission that the accident occurred because of the failures of VanMeter’s employees.

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of Plaintiffs/Appellees’ injuries, albeit of a lesser degree and different character. The trial court’s “ex parte” trial made finding that necessary fact impossible.

To this day, whether Plaintiffs/Appellees or other VanMeter employees failed to properly secure the concrete form, thereby creating the dangerous condition the Engineers allegedly failed to discover, has been adjudicated in only one forum—in the hearing before the ALJ who heard Jamie Groce’s workers’ compensation claim. In that forum, the only uncontradicted evidence regarding causation was that the accident was caused by an undiscoverable defective anchor bolt. See Memorial Sports, 499 S.W.3d at 704 (“[P]roviders of a defective product [are] primarily liable over other parties who may have failed to inspect, warn or supervise.”).

No party suggests issue preclusion should be applied here, nor do we decide—nor need decide—whether it does. What is determinative, however, is that the trial court never adjudicated this question. Without it, no percentage of fault could possibly be calculated against or attributed to the Engineers.

Determining the primary and efficient proximate cause is indispensible. The Engineers’ confession of their own negligence is not enough.

To constitute a “proximate cause” of an injury, the negligence complained of . . . must do more . . . than merely furnish the condition or give rise to the occasion by which the injury was made possible. If it is not the immediate or direct cause . . . [it] requires the intervention of an immediate or direct cause to bring about the

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result . . . .

Dixon v. Kentucky Utilities Co., 174 S.W.2d 19, 21 (Ky. 1943). The Engineers’ negligence may have given rise to the possibility of an injury but there was no determination that Scotty’s, VanMeter, or the acts of either entities’ employees intervened to bring about the result.

In sum, the trial court never found any person’s conduct was the primary and efficient cause of Plaintiffs/Appellees’ injuries. Absent that finding, we cannot, on this record, reach the legal conclusion that the Engineers’ breach was a proximate cause of Plaintiffs/Appellees’ injuries for it is just as easy to speculate that if the Engineers had inspected they would have found—as the ALJ found and the Supreme Court affirmed—that VanMeter employees did properly secure the form before pouring concrete and, therefore, breached no duty. There is no basis for believing the Engineers owed a duty to discover product defects—such as the purported defect in the anchor bolt—before they fail. The Engineers’ breach of a duty to inspect cannot constitute a proximate cause or, perhaps, any cause at all.

Therefore, having failed to establish the necessary direct, primary and efficient cause of Plaintiffs/Appellees’ injuries, we must reverse the trial court’s December 11, 2023 Findings of Fact, Conclusions of Law, and Judgment holding the Engineers liable for damages in excess of $22.5M.

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CONCLUSION

Scotty’s seeks reversal of the judgment and dismissal of the claims against it. In the alternative, Scotty’s asks for a new trial. If we grant the new trial, we will be adding more years to the nearly fourteen that have transpired since the accident, with no possibility that Plaintiffs/Appellees would be any better off, and perhaps they would be worse off, perhaps having to satisfy a subrogation obligation the Engineers might owe to VanMeter for the compensation paid to Plaintiffs/Appellees.

Perhaps a new trial would allow the court to correct its errors and perhaps the Plaintiffs/Appellees could prove the predicate fact of the VanMeter employees’ negligence, but to what end? Plaintiffs/Appellees can recover no more from VanMeter, no more from Scotty’s, and by their own agreement, they can recover no more from the Engineers. Reversal of the judgment is the only just solution.

For the foregoing reasons, we reverse the judgment and remand with instructions to dismiss all claims without exception.

ALL CONCUR.

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BRIEFS FOR APPELLANT: BRIEF AND ORAL ARGUMENTS FOR APPELLEE VANMETER

Frank Hampton Moore, Jr. CONTRACTING, INC.: Bowling Green, Kentucky Robert Jenkins

Douglas W. Langdon Meghan Goins Griffin Terry Sumner Michael P. Casey J. Kendrick Wells IV Patrick Schmeckpeper Louisville, Kentucky Lexington, Kentucky

ORAL ARGUMENTS FOR BRIEF AND ORAL ARGUMENTS APPELLANT: FOR APPELLEES MEREDITH, GERALDS, GRAVES, LAPHAM,

Griffin Terry Sumner LAM, PRICE, AND ESTATE OF J. Kendrick Wells IV MARK LOVE: Louisville, Kentucky Thomas N. Kerrick

AMICUS BRIEF ON BEHALF OF Shawn Rosso Alcott KENTUCKY ASSOCIATION OF Laura M. Hagan HIGHWAY CONTRACTORS: Bowling Green, Kentucky

Bethany Breetz BRIEF AND ORAL ARGUMENTS Steven Henderson FOR APPELLEES DECKER, Louisville, Kentucky ESTATE OF DECKER, GROCE, MCINTOSH, AND NELSONS:

Jamie K. Neal

Kevin C. Burke

Louisville, Kentucky

Mike Breen

William J. Williford

Bowling Green, Kentucky