REVIEW FROM COURT OF APPEALS CASE NOS. 2016-CA-000709,
2014-CA-000022, KENTON CIRCUIT COURT NO. 14-CR-00088,
COUNSEL FOR APPELLANT: John Douglas Hubbard Fulton, Hubbard
85 Hubbard James Wendell Taylor Taylor Law Group, PLLC John
Choate Roach Ransdell, Roach 85 Royce, PLLC Ryan Richard
Loghry Loghry Law, PLLC.
COUNSEL FOR APPELLEES JOSEPH HERMAN NALLEY; MARY NALLEY; AND
STEPHANIE NALLEY: Kevin Crosby Burke Jamie Kristin Neal
Burke, Neal, PLLC Michelle Buckley Sparks Keith Allen Sparks
McCoy 86 Sparks, PLLC.
COUNSEL FOR APPELLEES JEWISH HOSPITAL AND ST. MARY'S
HEALTHCARE INC., D/B/A FRAZIER REHAB INSTITUTE: Brian Scott
Katz Law Office of Brian S. Katz.
COUNSEL FOR APPELLEE UNIVERSITY MEDICAL CENTER, INC., D/B/A
UNIVERSITY OF LOUISVILLE HOSPITAL: John Byron Moore.
COUNSEL FOR APPELLANT: Andy Beshear, Attorney General of
Kentucky, Leilani K.M. Martin Assistant Attorney General
COUNSEL FOR APPELLEE: Kathleen Kallaher Schmidt Assistant
MINTON, CHIEF JUSTICE
Auslander Properties, LLC (the LLC), appeals from a Court of
Appeals' decision affirming a judgment of the Nelson
Circuit Court in favor of Appellee, Joseph Herman Nalley
(Nalley). Nalley was awarded compensatory damages
for serious personal injuries he sustained while working on a
roof at property owned by the LLC. Consistent with the
rulings of the trial court, the Court of Appeals determined
that the LLC was an "employer" and was, therefore,
subject to certain employee safety regulations promulgated
pursuant to KRS Chapter 338, the Kentucky Occupational Safety
and Health Act (KOSHA), and the federal Occupational Safety
and Health Act (OSHA); and that the LLC had violated duties
owed to Nalley under KOSHA. Upon discretionary review, for
reasons stated below, we reverse the Court of Appeals and
remand the case to the Nelson Circuit Court for dismissal of
FACTUAL AND PROCEDURAL BACKGROUND.
time of Nalley's injury, the LLC owned three residential
properties and a two-tenant commercial building in Bardstown,
Kentucky, and one residential property in Louisville. Steve
Auslander (Auslander), a retired dentist, and his wife were
the sole members of the LLC and they had no employees.
Auslander managed the business, performing the ordinary tasks
of a landlord such as keeping the books, collecting rent,
paying bills, communicating with tenants, and negotiating
leases. He performed some basic maintenance and repair work
on the LLC's properties, and he arranged for others to
perform more demanding tasks.
one of the LLC's Bardstown tenants complained that tree
limbs overhanging the building were causing a problem,
Auslander contacted Nalley. Nalley was an experienced
handyman who had occasionally performed maintenance and
repair work for the LLC. His experience included trimming
trees for other property owners, and he had done so while
working from a rooftop. He had also built porches and
additions on homes, including building a garage and porch on
his own home. Additionally, he had painted houses working
from ladders. So, Auslander hired Nalley to remove the
offending branches from three trees.
viewing the job to be done, Nalley determined that the roof
of the building provided the best approach to the branches he
needed to cut. He brought his own ladder and his own tools.
Nalley climbed to the roof with his saw. He tied a rope to
the limb he intended to cut and dropped the end of the rope
to the ground. As Nalley sawed the limb, Auslander assisted
by pulling the rope to guide the limb's fall. No problem
was encountered with the first tree. However, while working
on the second tree, Nalley stepped from the roofs solid
shingled surface onto a section of decorative wooden rafters
that was not designed to support his weight. Consequently, he
fell eleven feet onto a concrete surface and sustained
severely disabling injuries, including fractures to his spine
and traumatic brain injury.
filed suit alleging the LLC was negligent in breaching the
common law duties owed by a landowner to invitees on the
property. He also alleged that the LLC was negligent per se
because it failed to comply with KOSHA regulations requiring
employers to provide safety equipment for employees working
at heights above 10 feet. The trial court overruled the
parties' competing motions for summary judgment on the
negligence per se claim. The case was ultimately submitted to
the jury on both theories of liability.
respect to the common law negligence claim, the jury answered
special interrogatory instructions determining that: 1) the
cosmetic nature of the exposed decorative rafters was either
obvious to, or was known by, Nalley; and 2) in the exercise
of ordinary care, the LLC should not have anticipated that
Nalley might rely upon the load-bearing capability of the
decorative rafters and fall as a result thereof.
jury also determined by special interrogatory instructions
the largely uncontested material facts pertaining to
Nalley's KOSHA claim. Specifically, the jury found that
Nalley was working at a height of more than 10 feet when he
fell; that the LLC had not provided safety equipment that
would have prevented his fall; and that the lack of such
equipment was a substantial factor in causing Nalley's
injuries. Consistent with those findings, the trial court
entered judgment for Nalley.
Court of Appeals affirmed the trial court's conclusion
that the LLC was an "employer" as defined by KOSHA,
and was, therefore, subject to KOSHA regulations, and that
Nalley was within the scope of persons protected by the KOSHA
regulations applicable to the LLC. The Court of Appeals
relied primarily upon Hargis v. Baize, 168 S.W.3d 36
(Ky. 2005), and Pennington v. MeadWestvaco Corp.,
238 S.W.3d 667 (Ky. App. 2007).
the appeal was pending, this Court decided McCarty v.
Covol Fuels No. 2, LLC, 476 S.W.3d 224 (Ky. 2015). In a
footnote, the Court of Appeals factually distinguished
McCarty from the instant case and noted that
McCarty did not implicate KOSHA.
argued in the Court of Appeals that the LLC had not
effectively preserved its argument against the applicability
of the KOSHA regulations. Because that court decided and
rejected the LLC's argument on the merits, it declined to
address the preservation issue. On discretionary review,
Nalley reasserts his preservation argument. Since it is
potentially dispositive, we address it first.
THE LLC PROPERLY APPEALED THE DENIAL OF SUMMARY JUDGMENT
SEEKING REVERSAL OF THE TRIAL COURT JUDGMENT.
raises a number of procedural grounds upon which he contends
this Court should dismiss the LLC's appeal. He notes that
the LLC fails to specify whether its appeal was taken from
the trial court's order denying summary judgment or the
trial court's failure to grant its motion for a directed
verdict. With respect to the former, Nalley argues that the
order denying the LLC's motion for summary judgment is
not appealable. With respect to the latter, Nalley argues
that because the LLC failed to follow up its directed verdict
motion with a post-trial motion for judgment notwithstanding
the verdict (JNOV), the only appellate relief available is a
persuaded by neither of those arguments. The LLC's notice
of appeal following entry of judgment in the trial court
plainly shows that it appealed from the final judgment and
the trial court's orders denying the LLC's motions
for summary judgment and directed verdict.
support of its claim that the LLC is improperly attempting to
appeal the denial of a summary judgment motion, Nalley cites
a familiar line of cases following Gumm v. Combs,
302 S.W.2d 616 (Ky. 1957). "An order denying a motion
for summary judgment is not appealable. Nor is such
a denial reviewable on an appeal from a final order
or judgment where the question considered is whether or not
there exists a genuine issue of a material fact."
Id. at 616-617 (internal citations omitted).
Gumm and its progeny further explain the exception
to that general rule:
[T]here is an exception to the general rule found in
[Gumm] and subsequently approved in Loy v.
Whitney and Beatty v. Root. The
exception applies where: (1) the facts are not in dispute,
(2) the only basis of the ruling is a matter of law, (3)
there is a denial of the motion, and (4) there is an entry of
a final judgment with an appeal therefrom. Then, and only
then, is the motion for summary judgment properly reviewable
on appeal under Gumm.
Transportation Cabinet, Bureau of Highways v.
Leneave, 751 S.W.2d 36, 37 (Ky. App. 1988); see also
Abbott v. Chesley, 413 S.W.3d 589, 602 (Ky. 2013).
four elements comprising the exception are clearly met here.
First, the facts material to Nalley's negligence per se
claim are not in genuine dispute and, although they were
submitted to the jury, the findings were never in doubt.
Nalley was working more than 10 feet off the ground and he
was not provided safety equipment to prevent his fall.
Second, Nalley's status as an employee or an independent
contractor was clearly a matter of law. The LLC's only
basis for summary judgment was that the KOSHA regulations
pertaining to employees working from heights did not apply
because the LLC was not an "employer" and Nalley
was an independent contractor. Third, the trial court denied
the LLC's motion. And fourth, the LLC appealed from a
synthesis of the Gumm rule provides that when the
material facts were not genuinely disputed and summary
judgment was denied purely as a matter of law, an order
denying summary judgment is properly reviewable on an appeal
from an adverse final judgment, the same as any other
interlocutory ruling by the trial court on a question of law.
302 S.W.2d at 617. Thus, we conclude that the denial of the
summary judgment motion was a proper basis for the LLC's
also contends that the LLC cannot seek appellate relief from
the trial court's failure to grant its motion for a
directed verdict because the LLC failed to state grounds for
the motion with sufficient specificity to present the issue
to the trial court. Upon review of the record, we are
satisfied that the LLC's motion for directed verdict was
plainly understood to be based, among other things, upon the
same rationale as its motion for summary judgment. The trial
court was fully apprised of the issue being raised.
citing Eades v. Stephens and Flynn v.
Songer,  Nalley asserts that by failing to move for
judgment notwithstanding the verdict (JNOV) under CR 50.02,
the LLC waived its right to any appellate relief other than a
retrial. We do not disagree with the principle for which
those cases are cited but they are not applicable here. The
limiting principle described in Eades and
Songer does not constrain the appellate court to
ordering a retrial when other procedural avenues properly
before it authorize more complete relief, such as dismissal
of the underlying claim.
its earlier motion for summary judgment, the LLC's motion
for a directed verdict, with respect to the negligence per se
claim, was not based upon disputed evidentiary issues to be
resolved by the jury. It, too, was purely based upon an
argument of law pertaining to the applicability of KOSHA
regulations with which the LLC admittedly did not comply. If
the LLC was entitled to the dismissal of Nalley's
negligence per se claim due to the inapplicability of the
KOSHA regulations, it is not subsequently deprived of that
remedy because it failed to move for JNOV. The LLC's
summary judgment motion arguing for dismissal based upon a
matter of law rather than the nonexistence of disputed
material facts properly preserved the right on appeal to
demand dismissal of the negligence per se claim. A motion for
judgment notwithstanding the verdict was not necessary for
the preservation of a remedy otherwise available through
another issue on appeal. See Gumm, 302 S.W.2d 616.
raises other procedural points as grounds for dismissing the
LLC's appeal, including the LLC's failure to secure
an express ruling of the trial court denying its directed
verdict motion and presenting arguments for reversal on
appeal not pressed at an earlier stage in the litigation. We
need not address the intricacies of these procedural
arguments. It is clear that the LLC preserved its right to
appeal the trial court's application of KOSHA regulations
and its judgment of liability based thereon.
AUSLANDER PROPERTIES, LLC IS ENTITLED TO DISMISSAL OF THE
NEGLIGENCE PER SE CLAIM.
was enacted for the purpose of "preventing any detriment
to the safety and health of all employees, both public and
private, covered by this chapter, arising out of exposure to
harmful conditions and practices at places of work." KRS
338.011. KRS 338.O3l(1)(a) imposes a duty on "each
employer" to furnish "his employees with employment
and a place of employment which are free from recognized
hazards that are causing or are likely to cause death or
serious physical harm to his employees." Subsection (b)
of that statute requires employers to "comply with
occupational safety and health standards promulgated under
this chapter." The same duties are imposed verbatim
under OSHA, 29 U.S.C. Section 654(a). As defined by KRS
338.015(1), "employer" means "any entity for
whom a person is employed."
asserts that the Court of Appeals' opinion must be
reversed because, having no employees, Auslander Properties,
LLC could not be an "employer" as defined by KRS
338.015(1). The LLC further asserts that even if it is an
"employer" generally subject to KOSHA, it is
subject only to the specific regulations applicable to its
function as a landlord and property owner, which does not
include the regulations cited by Nalley for the protection of
independent contractors working on rooftops or other high
places. All grounds for reversal cited by the LLC involve
matters of law which we review de novo. Penix v.
Belong, 473 S.W.3d 609, 612 (Ky. 2015).
acknowledged at trial that he was an independent contractor
rather than an employee of the LLC, and the relevant facts in
the record all confirm that point. He argues, as the trial
court concluded, that the LLC was an employer for KOSHA
purposes because Auslander was an "employee"
personally performing the work needed to conduct the
LLC's property rental business.
not accept Nalley's characterization of Auslander's
status. Nothing in the record suggests that Auslander was an
employee of his own LLC. The employer-employee relationship
is a familiar and well-established species of agency
relationship. It carries with it a wide range of specific
legal obligations applicable in circumstances far beyond the
KOSHA regulations now before us. We decline to stretch the
traditional conception of that relationship so that Auslander
may be deemed an employee of the LLC. A member of an LLC
conducting business and performing work as an agent of the
LLC does not automatically become an employee of the
determination alone does not resolve the issue before the
Court. We allow that circumstances could arise in which an
LLC with no employees is, nevertheless, bound to comply with
certain KOSHA regulations inherently applicable to the core
function of the LLC's business. We make no attempt to
define those circumstances, but we remain open to the
possibility that they exist.
Nalley's status as an independent contractor rather than
an employee of the LLC does not automatically defeat his
claim. We recognized in Hargis v. Baize that an
employer subject to KOSHA regulations for the protection of
its own employees is also bound to comply with the same
regulations for the benefit of an independent contractor
performing on the employer's premises the same work as
the employer's employees. 168 S.W.3d at 43. Consequently,
in Hargis, a lumber mill operator was negligent per
se for failing to provide KOSHA protections to an independent
contractor performing the same job of hauling and unloading
logs as its own employees. Hargis rests largely upon
the rationale expressed by the Sixth Circuit Court of Appeals
in Teal v. E.I. DuPont de Nemours & Co., 728
F.2d 799 (6th Cir. 1984), holding that the OSHA (or KOSHA)
regulations applicable to an employer's own employees are
equally applicable to employees of independent contractors
working on the premises doing the same kind of work.
Hargis added that protections owed to employees of
an independent contractor under Teal are also owed
to the independent contractor himself.
Teal, an employee of an independent contractor fell
from a ladder at a DuPont plant. The ladder was affixed to
the structure for use by DuPont employees. The Teal
court held that the injured worker was within the class of
workers that the OSHA ladder regulations were intended to
protect, and that DuPont was already subject to those
regulations for its employees using ladders at that
workplace. Id. at 805.
Teal and Hargis make it clear that an
employer's KOSHA responsibility can extend beyond its own
employees to include others, such as independent contractors
and their employees. The Teal/Hargis extension,
however, is governed by a limiting rule explained in
Ellis v. Chase Communications, Inc., 63 F.3d 473
(6th Cir. 1995), and further addressed by this Court in
McCarty v. Covol Fuels No. 2, LLC.
Ellis, an independent contractor's employee fell
to his death while painting a television tower owned by Chase
Communications. Unlike the worker in Teal, who was
entitled to the same workplace protections that DuPont
already owed to its employees on that site, there was no
evidence in Ellis that climbing the television tower
for any purpose was a function ever performed by any
employees of Chase Communications. 63 F.3d at 478.
Court of Appeals addressed a similar issue in Pennington
v. MeadWestvaco Corp.: whether the owner of a
manufacturing plant was responsible for complying with
specific KOSHA regulations applicable to the work of a
subcontractor's employee performing renovation work at
the plant. The Pennington court applied the analysis
of Ellis v. Chase Communications, noting that Chase
Communications "was not considered an 'employer'
with respect to the tower site so as to render it subject to
OSHA requirements. The particular safety violation at issue
was not one for which Chase Communications would normally be
responsible in the usual course of its operations." 238
S.W.3d at 671.
McCarty, an employee of a commercial garage door
contractor was killed while installing a heavy garage door at
a building under construction at the site of a coal mine. The
worker's estate brought a wrongful death action claiming
that the mine operator was negligent per se because it
permitted the garage door installation to proceed despite a
lack of compliance with regulations generally applicable to
large garage door installations and regulations pertaining to
coal mine safety.
explained in McCarty that it was unreasonable to
expect a coal mine operator to inspect the safety habits of
independent contractors installing a garage door and be
otherwise knowledgeable about "the special techniques,
requirements, and hazards of the various construction
trades" such as commercial garage door installations.
476 S.W.3d at 232-233. Indeed, we noted that an
employer's unfamiliarity with the hazards and regulations
of work activities beyond its core function was "a major
reason for using specialized outside contractors instead of
in-house laborers." Id. at 232.
agree that when an employer sends its own employees into
harm's way to perform any task regardless of the
nature of the business, the employer must apprise itself of,
and comply with, any safety regulation applicable to that
task. The law requires such compliance. But when the employer
engages the services of an independent contractor for a task
alien to the core function of the employer's business,
the employer is relying upon the special expertise and
ability of the contractor to know and obey the applicable
safety standards of that activity.
Hargis, the independent contractor was injured at
the employer's workplace, performing work that was an
ordinary part of the employer's sawmill operation and was
regularly performed by the employer's own workers. In
contrast, the injured workers in Ellis and
McCarty, respectively, were engaged in work not
ordinarily associated with Chase Communications'
television communications services or Covol Fuels' coal
mining operation. Like the workers in Ellis and
McCarty, Nalley was an independent contractor
performing a specialized service not typically associated
with the routine functions of the LLC's property rental
Court of Appeals accepted Nalley's argument that cutting
away high branches from the tops of trees was an ordinary
component of the LLC's business as an owner and manager
of rental property. We disagree. Certainly, some basic
aspects of routine landscape maintenance fall within the core
functions of managing and renting real estate, but
specialized work like climbing rooftops and ladders, or
climbing into the tree itself, to cut branches requires
specialized knowledge and skills beyond what is reasonably
expected of an ordinary property rental business.
employer who uses a specialized independent contractor rather
than his own employees to perform those activities properly
relies upon the contractor's skill and superior knowledge
of the risks inherent in the work and the safety equipment
and techniques required by applicable regulations for
minimizing those risks. The LLC was not in the tree trimming
business and it was not an employer of tree trimmers, rooftop
workers, or workers using ladders for whom it must comply
with KOSHA's standards designed to prevent falls from
ladders and rooftops. As succinctly stated in Pennington
v. MeadWestvaco Corp.: "If an independent
contractor undertakes duties unrelated to the normal
operations of an employer, the responsibility for violation
of safety standards associated with those separate functions
falls upon the independent contractor." 238 S.W.3d at
672 (citing Ellis, 63 F.3d 473).
Court of Appeals distinguished Pennington based upon
what it perceived as Auslander's control and supervision
of the work being done by Nalley. Its characterization of
Auslander's involvement in Nalley's work is not
supported by the record. Auslander assisted Nalley by
providing an extra set of hands to handle the detached
branches, but Nalley decided how, when, and where he would
cut the branches and where he would stand while doing so.
Auslander did not control the manner and method of
time of his injury, Nalley was an independent contractor
rather than an employee of the LLC, and he was performing
specialized work unrelated to the normal operations of the
LLC's property rental business. The responsibility for
complying with safety laws applicable to that specialized
work was upon Nalley. Since the LLC had no duty of
compliance, Nalley's negligence per se claim fails as a
matter of law.
the LLC argues that the trial verdict should be reversed
because of the improper admission of testimony by
Nalley's expert witness. Based upon our disposition of
the other issues, we need not address the merits of this
NALLEY WAS NOT ENTITLED TO A DIRECTED VERDICT ON HIS COMMON
LAW NEGLIGENCE CLAIM.
also argues that the trial court judgment should be affirmed
based upon his alternative common law negligence claim.
Specifically, Nalley contends that he was entitled to a
directed verdict on that claim because "undisputed
testimony reveal[ed] that the condition of the roof presented
an unreasonable risk of harm" and that "Auslander
knew about ...