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Sergent v. ICG Knott County, LLC

United States District Court, Sixth Circuit

December 9, 2013

JARROD SERGENT, et al., Plaintiffs,
ICG KNOTT COUNTY, LLC, et al., Defendants.


AMUL R. THAPAR, District Judge.

A tragic accident at the Kathleen Mine seriously injured Jarrod Sergent. Kentucky law required his employer to provide him with workers' compensation. As part of the bargain struck between employers and employees, however, the provision of workers' compensation also immunized Sergent's employer from any tort suit. The tricky legal questions presented by this case are (1) whether Sergent can recover in tort from his employer's parent corporation, and (2) if so, whether he can recover emotional damages without expert testimony.


Sergent worked as a roof bolter at the Kathleen Mine (the "Mine") in Knott County, Kentucky. R. 34-2 at 12. A portion of the Mine's roof collapsed while Sergent was inside, severely injuring him and requiring doctors to amputate his left leg. R. 1-2 ¶¶ 9, 16. Sergent and his wife Linda initiated this action, alleging that four corporate defendants were responsible for his injuries. Id. ¶ 1. The Sergents' complaint pleads three counts against each defendant: negligence, negligence per se, and loss of consortium. Id. ¶¶ 22-30. They allege that the defendants negligently failed to maintain safely the Mine's roof. See id. The Sergents seek a variety of damages, including damages for emotional distress. Id. ¶¶ 1, 29-30.

One by one, the number of possibly culpable defendants has dwindled away. The Court dismissed Jarrod's employer-ICG Knott County, LLC ("ICG Knott")-because it secured workers' compensation benefits for him and was therefore immune from suit under Kentucky's workers' compensation statute. See R. 9; Ky. Rev. Stat. § 342.690(1). After discovery, the remaining defendants filed this motion for summary judgment. R. 34. The Sergents now concede that two of the three defendant companies, International Coal Group, Inc., and ICG, Inc. of Delaware, also should be dismissed. R. 38 at 2.

That leaves only Arch Coal, Inc. ("Arch"). Arch purchased ICG Knott shortly before the accident. R. 34-8 ¶ 4. After the purchase but before the accident, Arch's regional safety manager, Stewart Bailey, visited the Mine. R. 34-16 at 40; R. 34-6 at 7. The Sergents cannot recover from Arch merely because Arch owned ICG Knott at the time of the accident; they must show that Arch assumed a duty for the safety of the roof. The crux of this case, therefore, is whether Arch assumed such a duty during Bailey's visit to the mine. But even if Arch was responsible for the safety of the Mine's roof, it contends that it is immune from suit. For the reasons explained below, Arch is not immune, and the Sergents' negligence and loss of consortium claims may proceed to trial, but they may not recover emotional damages.


Summary judgment is appropriate where the admissible evidence demonstrates no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a); see Celotex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986). When reviewing a motion for summary judgment, the Court must view the facts in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255 (1986). Federal jurisdiction is premised upon the diversity of the parties, so Kentucky's substantive law controls. Erie R. Co. v. Tompkins , 304 U.S. 64 (1938).

I. Arch Coal Is Not Immune from Suit

Arch first contends that it is immune from suit as a "carrier" under Kentucky's workers' compensation statute (the "Act"). R. 34-1 at 24-28. The Act immunizes any "employer" who secures workers' compensation as well as the employer's "carrier." Ky. Rev. Stat. § 342.690(1). "Carrier" is defined to mean "any insurer... authorized to insure the liability of employers under this chapter and includes a self-insurer." Ky. Rev. Stat. § 342.0011(6). A "self-insurer" is "an employer who has been authorized under the provisions of this chapter to carry his own liability on his employees covered by this chapter." Id. § 342.0011(7). Arch self-insures both its own workers and ICG Knott's employees. Therefore, Arch says, it qualifies as ICG Knott's "carrier" and is immune from suit. R. 34-1 at 26-28.

Unfortunately for Arch, the Sixth Circuit has already rejected its argument. See Boggs v. Blue Diamond Coal Co. , 590 F.2d 655, 663 n.10 (6th Cir. 1979). In Boggs , a parent corporation argued that it qualified as the "carrier" of its subsidiary's workers' compensation insurance. See id. The Court held, however, that the Act exempts "a self-insur[e]r from tort liability only in connection with his own employees." Id. Although the legislature has amended the Act since Boggs , the relevant terms and definitions have remained the same. Compare Ky. Rev. Stat. § 342.0011(6), (7) (2013) with Ky. Rev. Stat. § 342.060(4), (5) (1978) (defining "carrier" and "self-insurer").

Arch notes that the Kentucky Court of Appeals recently arrived at the opposite conclusion, holding that a parent company that self-insures its subsidiary's workers' compensation liability is immune as a "carrier" under the Act. R. 34-1 at 24-25; see Falk v. Alliance Coal, LLC , Nos. 2012-CA-000624, 000625, 2013 WL 4246048, at e*3 (Ky. Ct. App. Aug. 16, 2013). Arch concedes that Boggs rejected an identical argument, but it argues that the Court should follow Falk rather than Boggs . R. 44 at 3-8. The Sixth Circuit's published decision in Boggs , however, is binding on this Court. Davis v. Brigano , 34 F.Appx. 155, 157-58 (6th Cir. 2002). So unless and until the Supreme Court of Kentucky agrees with its Court of Appeals, Boggs controls. See Kokins v. Teleflex, Inc. , 621 F.3d 1290, 1295 (10th Cir. 2010) ("When a panel of this Court has rendered a decision interpreting state law, that interpretation is binding on district courts in this circuit... unless an intervening decision of the state's highest court has resolved the issue.") (internal quotation marks and alteration omitted). Under Boggs , Arch is not immune as a "carrier" under the Act.

II. There Is a Genuine Issue of Material Fact Regarding Whether Arch Assumed a Duty to Maintain Safely the Mine's Roof

A parent corporation is not subject to respondeat superior liability for the actions of its subsidiaries. Thompson v. Superior Fireplace Co. , 931 F.2d 372, 374 (6th Cir. 1991). A parent corporation may be liable, however, if it voluntarily assumes a duty owed by the subsidiary to an employee. E.g., Boggs , 590 F.2d at 663 (explaining that a parent corporation is liable "for its independent acts of negligence which cause injury to its subsidiary's employees"). So this case turns on whether Arch assumed a duty to maintain safely the Mine's roof.

Kentucky applies § 324A of the Restatement (Second) of Torts to determine whether a parent corporation assumed a duty to its subsidiary's employees. Merrill ex rel. Estate of Merrill v. Arch Coal, Inc. , 118 F.Appx. 37, 44 (6th Cir. 2004) (holding that Kentucky would apply § 324A to a nearly identical set of facts); ...

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