Bryant v. Old Republic Insurance , 431 F.2d 1385 ( 1970 )

PHILLIPS, Chief Judge

(dissenting).

I respectfully dissent.

This Court is obligated to apply the State law of Kentucky in the present case. The majority opinion recognizes that there is no reported decision by any court of the Commonwealth of Kentucky determining the question presented on this appeal, and that Peters v. Radcliff Ready Mix Concrete, Inc., 412 S.W.2d 854 (Ky.1967) is not dispositive.

As stated accurately in the majority opinion, we are required under Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L.Ed. 1188, to decide this case as we believe the Court of Appeals of Kentucky would have done. Having examined the Kentucky Workmen’s Compensation Act and the authorities referred to in the opinion of the District Judge, I doubt that the Court of Appeals of Kentucky would reach the result pronounced by the majority opinion. To the contrary, I believe the Kentucky courts would agree with the decision of District Judge James F. Gordon. The effect of the majority opinion is to construe the State statute so as to permit this Court to recognize an obligation growing out of inspections by workmen’s compensation insurance carriers in Kentucky that is not expressly required by statute nor imposed by any reported decision of the Commonwealth. To prescribe and expand duties and liabilities under the Workmen’s Compensation Law of the Commonwealth is the prerogative of the Legislature and Courts of Kentucky.

As author of the opinion in Ruth v. Bituminous Casualty Corp., 427 F.2d 290 (6th Cir.), a Michigan diversity case, I refused to follow the earlier decision of this Court in Kotarski v. Aetna Casualty & Surety Co., 372 F.2d 95 (6th Cir.), affirming 244 F.Supp. 547 (E.D.Mich.), which was relied upon by Judge Gordon. The opinion in Ruth v. Bituminous Casualty Corp., supra is grounded on the decision of the Court of Appeals of Michigan in Ray v. Transamerica Insurance Co., 10 Mich.App. 55, 158 N.W.2d 786, leave to appeal denied, 381 Mich. 766. I find no Kentucky decision expressing thinking analogous to Ray and believe Judge Gordon’s analysis of Kentucky law to be correct. The opinion of Judge Gordon is made an appendix to this dissenting opinion.

APPENDIX TO DISSENTING OPINION

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF KENTUCKY AT OWENSBORO

OPINION AND ORDER

* * *

(Filed October 1, 1969)

This matter comes on before the Court on the motion of the defendant, Old Republic Insurance Company, pursuant to Rule 12(b) (6), Federal Rules of Civil Procedure, to dismiss this action against it for failure to state a claim upon which relief can be granted. Having heard oral arguments by counsel at a hearing on September 9, 1969, and having considered the authorities submitted by counsel for the parties, it is the Court’s opinion that this controversy resolves itself simply to a determination of whether or not Old Republic Insurance Company is “some other person” within the contemplation of the Kentucky Workmen’s Compensation Act, KRS 342.055, and, therefore, subject to common law tort liability.

It is alleged in the complaint that the plaintiffs’ decedents were employees in the River Queen Mine of Peabody Coal Company in Muhlenberg County, Kentucky on August 7, 1968 and that while in the course of their employment each was killed by reason of an explosion occurring in said mine. It is further alleged in the complaint that the defendant, Old Republic Insurance Company, was the workmen’s compensation insurance carrier for Peabody Coal Company at the mine in question at the time of the explosion in question; that said defendant had the duty, or assumed the duty, to make safety inspections in the mine; that it negligently made and/or failed to make such inspections; and that it negligently failed to take proper action after making inspections.

The plaintiffs in this action are not suing Old Republic Insurance Company to collect the sums due them under the Kentucky Workmen’s Compensation Act, but rather their suit is predicated on the ground of common law negligence under the third-party liability provision of KRS 342.055. The Kentucky Court of Appeals in McEvilly v. L. E. Myers Co., 211 Ky. 31, 276 S.W. 1068, has instructed that the Workmen's Compensation Act of Kentucky, KRS 342.001 et seq., entitles the personal representative of a deceased employee, fatally injured in the course of his employment, to certain, but limited, compensation benefits and deprives that party of his common law right of action against the employer or anyone else except “a third party having no connection with the general work.” We find that the workmen’s compensation insurance carrier is not a third person within the contemplation of the Workmen’s Compensation Act of Kentucky.

Under the provisions of the Workmen’s Compensation Act of Kentucky the insurance carrier, in reference to compensa-ble injuries, is equated with the employer and has a primary and direct obligation to injured employees or their dependents enforceable by them against said carrier. KRS 342.015; 342.055; 342.340; 342.360; 342.365; McEvilly v. L. E. Myers Co., 211 Ky. 31, 276 S.W. 1968; Davis v. Solomon, Ky., 276 S.W.2d 674; Miller v. Scott, Ky., 339 S.W.2d 941. As pointed out in Kotarski v. Aetna Casualty and Surety Co., 244 F.Supp. 547 (E.D.Mich.1965), affirmed per curiam 372 F.2d 95 (C.A.6th 1967), “[i]t is this primary, unvariable responsibility which makes the workmen’s compensation insurance carrier so vital to the effectiveness of the Michigan workmen’s compensation scheme, and which militates against holding the insurer liable to suit as a third-party without the express authorization of the legislature.” (At p. 557.)

We are fortified in our opinion that the workmen’s compensation insurance carrier is immune from liability as a third party tort feasor by the following decisions applying workmen’s compensation acts of various states similar in their compensatory scheme to the Kentucky Act: Williams v. United States Fidelity and Guaranty Co., 358 F.2d 799 (C.A.4th 1966) (Virginia Workmen’s Compensation Act); Mustapha v. Liberty Mutual Insurance Co., 387 F.2d 631 (C.A. 1st 1967) (Rhode Island Workmen’s Compensation Act); Bartolotta v. United States, 276 F.Supp. 66 (D.Conn.1967) (Connecticut Workmen’s Compensation Act); Donohue v. Maryland Casualty Co., 248 F.Supp. 588 (D.Md.1965) (Maryland Workmen’s Compensation Act); Horne v. Security Mutual Casualty Co., 265 F.Supp. 379 (E.D.Ark.1967) (Arkansas Workmen’s Compensation Act); and Clark v. Employers Mutuals of Wausau, 297 F.Supp. 286 (E.D.Pa.1969) (Pennsylvania Workmen’s Compensation Act).

Accordingly, it is hereby ordered that the motion of the defendant, Old Republic Insurance Company, to dismiss the complaint as to it, be and the same is hereby sustained, and the said Old Republic Insurance Company be and the same is hereby dismissed.

This 29th day of September, 1969.

/s/ JAMES F. GORDON

United States District Court Judge