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Tryon Trucking, Inc. v. Medlin

Supreme Court of Kentucky

September 26, 2019

TRYON TRUCKING, INC. APPELLANT
v.
RANDY MEDLIN, HON. BRENT E. DYE, ADMINISTRATIVE LAW JUDGE, WORKERS' COMPENSATION BOARD, DAVID O. GRIFFITH, DAVID O. GRIFFITH, d/b/a DAVID GRIFFITH TRUCKING, ORLA L. SMITH d/b/a O.L. SMITH TRUCKING, COMMONWEALTH OF KENTUCKY, UNINSURED EMPLOYERS FUND and MIKRON INDUSTRIES APPELLEES

          ON APPEAL FROM COURT OF APPEALS CASE NO. 2018-CA-001076-WC WORKER’S COMPENSATION BOARD NO. 14-WC-00873

          COUNSEL FOR APPELLEE, RANDY MEDLIN: John F. Kelley, Jr. William & Towe Law Group, PLLC

          COUNSEL FOR APPELLEE, WORKERS’ COMPENSATION BOARD: Michael W. Alvey

          COUNSEL FOR APPELLEE, DAVID O. GRIFFITH and DAVID O. GRIFFITH d/b/a DAVID GRIFFITH TRUCKING: James A. Ridings Hamm, Milby & Ridings, PLLC

          COUNSEL FOR APPELLEE, ORLA L. SMITH d/b/a O.L. SMITH TRUCKING: David Howard

          COUNSEL FOR APPELLEE, COMMONWEALTH OF KENTUCKY, UNINSURED EMPLOYERS’ FUND: Charles Davis Batson Assistant Attorney General

          COUNSEL FOR APPELLEE, MIKRON INDUSTRIES: Kimberly K. Van Der Heiden Van Der Heiden Law Firm, PLLC Hon. Brent E. Dye, Administrative Law Judge Not Represented by Counsel

          OPINION

          BUCKINGHAM JUSTICE.

         Tryon Trucking, Inc., appeals from an opinion of the Court of Appeals affirming a Workers' Compensation Board (Board) opinion that affirmed in part, vacated in part, and remanded the opinion and order of the Administrative Law Judge (ALJ) for further findings of fact concerning whether Tryon was, pursuant to KRS[1] 342.610(2), an up-the-ladder employer of Randy Medlin, who (Matter Not Available).

         Tryon contends that the portion of the ALJ's opinion and order finding that Tryon was not an "up-the-ladder" employer pursuant to KRS 342.610(2) was based on substantial evidence and, accordingly, pursuant to the applicable standards of review, the Board erred when it remanded the decision to the ALJ with a request for further findings of fact rather than affirming the ALJ's decision.

         Because we agree with the Board and conclude that the ALJ's determination that Tryon was not an up-the-ladder employer of Medlin was based upon a misconstruction of Uninsured Employers' Fund v. Ritchie, No. 2012-SC-00746-WC, 2014 WL 1118201 (Ky. Mar. 20, 2014), we affirm the Board and Court of Appeals' decisions to remand the case to the ALJ for a reexamination based upon a correct construction of that decision.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         On July 25, 2013, Medlin suffered multiple serious work-related injuries in a motor vehicle accident while driving a tractor-trailer truck leased by Tryon, including an injury which required amputation of his left leg below the knee, hearing loss, and numerous laceration injuries. At the time of the accident, Medlin was operating a truck owned by David O. Griffith, who was determined by the ALJ to be Medlin's employer at the time of the accident.

         Griffith, whose business is located in Corbin, Kentucky, owned several tractor-trailer trucks that he leased to Tryon pursuant to a 2013, "Equipment and Service Agreement Between Independent Contractor (David O. Griffith) and Carrier (Tryon)."

         On this occasion Griffith had leased the truck to Tryon and had hired Medlin, whom he often used as a driver, to drive a cargo of windows owned by Mikron Industries, Inc., to Texas. Griffith believed he had hired Medlin as an independent contractor and that, therefore, Medlin was not his employee. It is now uncontested that Griffith was Medlin's employer at the time of the accident.

         Tryon, a Pennsylvania company, is a company whose business model is to contract with businesses needing cargo moved by truck (such as Mikron), then contract to lease semi-trucks from trucking operators (such as Griffith), and then coordinate the transportation of the cargo in the trucks it leases. Thus, Tryon is both a transportation broker that locates cargo in need of hauling and a carrier, though its carrier operations are not performed through its own trucks and employees but rather by the equipment and employees of third-party trucking firms.

         The end result is that Tryon is the intersection between those who need cargos hauled and trucking operators looking for loads to haul. Under this model Tryon has a contract with both of those parties. In contrast to other business models, Tryon does not simply bring the cargo owner and trucking company together for those two third-parties to contract between themselves to complete the haul; rather, Tryon further interjects itself into the process by leasing the equipment that will accomplish the hauling job.

         As a result of his work-related accident, Medlin filed a claim for benefits with the Department of Workers' Claims. In his claim Medlin alleged that his employers at that time of the accident were David O. Griffith d/b/a David Griffith Trucking; David E. Griffith d/b/a David Griffith Trucking; O.L. Smith Trucking; and Tryon[2]. When it became apparent that there might not be workers' compensation coverage available through any of these entities, Medlin added the Uninsured Employers' Fund (UEF) as a party. Medlin later added Mikron, the owner of the cargo that Medlin was transporting, as an alleged employer. Each alleged employer contended that Medlin was either not its employee at the time of the accident or that he was driving as an independent contractor.

         Medlin's case was initially assigned to ALJ Otto Wolff. At the outset of the proceedings, Tryon filed a motion requesting that ALJ Wolff resolve whether any of the defendants were Medlin's employer before the claim proceeded any further. On January 11, 2016, ALJ Wolff entered an "Interlocutory Opinion and Order" addressing Medlin's employment status concerning the potential employers named in the litigation. In the order ALJ Wolff found that Medlin was an employee and not an independent contractor on the day of the accident; that David O. Griffith was Medlin's employer and did not have workers' compensation insurance coverage when the accident occurred; and that the facts did not support a finding that either Tryon or Mikron was a statutory "up-the-ladder" employer under KRS 342.610(2).

         In his decision ALJ Wolff cited extensively to this Court's unpublished opinion in Uninsured Employers' Fund v. Ritchie, No. 2012-SC-00746-WC, 2014 WL 1118201 (Ky. Mar. 20, 2014), [3] in support of his conclusion that neither Tryon nor Mikron had up-the-ladder responsibility as an employer. ALJ Wolff stated that "[t]he facts and working relationships in this claim are almost identical to the facts and working relationships addressed in [Ritchie]." (emphasis added). It is ALJ Wolff's extensive reliance on this decision and his finding that the two cases are "almost identical, " and the Board's disagreement with his interpretation of the case and its conclusion that the cases are not "almost identical, " that resulted in the Board's remand for additional findings of fact and discussion by ALJ Wolff's successor, ALJ Brent Dye.

         ALJ Wolff further found that Griffith was liable for payment of Medlin's workers' compensation benefits and that if Griffith either did not pay the benefits or filed bankruptcy, ...


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