Mendez v. Atlantic Painting Company, Inc., 01-09-2888 (Neville)
Facts: Plaintiff’s decedent, Jaime Mendez, was an employee of Eagle Painting and Maintenance which was a sub-contractor to the defendant, Atlantic Paining Company, on a job painting bridges over the Ohio River between Kentucky and Indiana. Plaintiff died as a result of a fall due to faulty scaffolding. The incident took place in Kentucky but Plaintiff was an Illinois resident, and both his employer and the defendant were Illinois corporations. Plaintiff filed a workers compensation claim in Illinois and also a third party action against the the general contractor. Defendant moved for summary judgment on the basis that Kentucky’s substantive law should apply to the case thereby barring the claim due to Kentucky’s workers compensation statute which allows for “up-the-ladder” immunity within its exclusive remedy provision. Plaintiff argued that Illinois had the most significant relationship to the case and therefore Illinois substantive law should apply. The trial court applied Kentucky law and granted defendant’s motion for summary judgment.
Holding: Unlike Illinois, the Kentucky workers’ compensation statute does not permit third party claims by an employee of a sub-contractor against the general contractor and therefore pursuant to Section 184 of the Restatement (Second) of Conflict of Laws (1971), which pertains to cases in which workers’ compensation insurance covers an injured employee, Kentucky’s substantive laws govern the cause of action and thereby the claim against the general contractor was properly barred.
Filed in Trial Book Under: Workers’ Compensation, Conflict of Laws
Commentary: Illinois’ approach to third party cases in the construction setting seems to be an anomoly (and pro-plaintiff), as many states employ “up-the-ladder” immunity to the exclusive remedy provisions of their workers’ compensation statutes that serve to bar third party claims brought by a sub-contractor against the general contractor. In this case, the plaintiff hoped to apply Illinois substantive law, which would have permitted the cause of action, and argued that Illinois law should apply because it has the most significant relationship to the case. Although the appellate court disagreed with this argument and determined that Kentucky had the most significant relationship to the case, the crux of the opinion is the application of section 185 of the Restatement (Second) of the Conflict of Laws, which states:
Recovery for tort or wrongful death will not be permitted in any state if the defendant is declared immune from such liability by the workmen’s compensation statute of a state under which the defendant is required to provide insurance against the particular risk and under which (a) the plaintiff has obtained an award for the injury, or (b) the plaintiff could obtain and ward for the injury, if this is the state (1) where the injury occurred, or (2) where employment is principally located, or (3) where the employer supervised the employee’s activities from a place of business in the state, or (4) whose local law governs the contract of employment.
Even though the plaintiff did not bring the workers’ compensation claim in Kentucky, the fact that he could have done so is sufficient to have Kentucky’s substantive laws apply to this claim. This is unfortunate because it sets the default on these cases to the state that is most restrictive of third party claims and therefore more protective to the business interest rather than that of the injured party.